Crestwood Marcellus Midstream Announces Bolt-On Acquisition of Compression Assets Serving Antero Resources in Northern West V...
November 26 2012 - 7:00AM
Marketwired
Crestwood Midstream Partners LP (NYSE: CMLP) ("Crestwood"), as
operator and 35% owner of Crestwood Marcellus Midstream LLC
("CMM"), announced today an agreement by CMM to acquire natural gas
compression and dehydration assets from Enerven Compression, LLC
("Enerven") for approximately $95 million. The assets, located on
CMM's gathering systems in Harrison and Doddridge Counties, West
Virginia, serve the Marcellus Shale development of Antero Resources
Appalachian Corp. ("Antero"). The assets are currently operating
under a five year compression services agreement with Antero and
are expected to contribute approximately $11-12 million of
contracted earnings before interest, taxes, depreciation and
amortization ("EBITDA") to CMM in 2013. The acquisition is expected
to close before December 31, 2012 and will be financed through
CMM's existing $200 million credit facility.
Enerven Compression Assets
The Enerven assets, constructed in 2010-2012, include four
compression and dehydration stations comprised of 31 two and three
stage, reciprocating natural gas compressor units and 10 glycol
dehydration units. The compressor stations receive Antero's gas
production from CMM's low pressure gathering facilities for
redelivery to downstream high-pressure pipelines and processing
plants. CMM is acquiring 43,100 horsepower of compression designed
to provide aggregate capacity of 295 million cubic feet per day
("MMcf/d") to Antero. Currently, all of the Enerven compressor
stations are being fully utilized with ongoing projects to expand
two of the four stations by approximately 25 MMcf/d. Antero's gas
is also being compressed by third party compression not currently
owned by Enerven or CMM.
"I am pleased to announce a second bolt-on acquisition in recent
months as we execute our strategy to expand Crestwood's national
exposure to rich gas shale plays," stated Robert G. Phillips,
President and Chief Executive Officer of Crestwood's general
partner. "The Enerven assets are already connected to our Marcellus
gathering system and are under long term contract with Antero, our
largest producer in the area. When combined with our existing
assets in the Marcellus, this acquisition creates significant
operating synergies, extends the value chain to Antero, offers an
attractive purchase multiple and is forecasted to increase CMM's
2013 EBITDA by approximately 25%."
Update on Antero and Crestwood Marcellus
Activity
As discussed in Crestwood's third quarter 2012 earnings call,
Antero continues to increase its Marcellus Shale development
activity and natural gas production volumes on CMM's gathering
systems. Antero is currently running 6 rigs on the 127,000 acre
area of dedication (Eastern AOD) under CMM's 20-year gathering and
compression agreement, and up to 12 rigs in the area including the
Antero leased acreage adjacent and to the west of the Eastern AOD
where CMM holds a seven-year right of first offer to acquire
midstream assets owned by Antero. Production volumes on the Eastern
AOD have increased steadily throughout 2012 from approximately 200
MMcf/d at the beginning of 2012 to an average of 257 MMcf/d in the
second quarter 2012, an average of 289 MMcf/d in the third quarter
2012 and a spot volume of approximately 376 MMcf/d on November 1,
2012. CMM currently has two major pipeline and two major compressor
station projects with a combined capacity of 100 MMcf/d underway to
support Antero's 2013 development program which is expected to add
over 60 Marcellus Shale wells to the 100 producing wells currently
connected to the CMM gathering systems.
"We are excited to expand our relationship with Antero through
the Enerven acquisition which positions CMM to be both Antero's
gathering company and compression company of choice in this area of
the Marcellus," stated Phillips. "We believe the Enerven assets
extend our value chain and provide an excellent opportunity for
organic growth as gathering infrastructure in this rich gas region
continues to be built at an exciting pace."
About Crestwood Midstream Partners LP
Houston, Texas based Crestwood is a growth-oriented, midstream
master limited partnership which owns and operates predominately
fee-based gathering, processing, treating and compression assets
servicing natural gas producers in the Barnett Shale in north
Texas, the Fayetteville Shale in northwest Arkansas, the Granite
Wash in the Texas Panhandle, the Marcellus Shale in northern West
Virginia, the emerging Avalon Shale trend in southeastern New
Mexico, and the Haynesville/Bossier Shale in western Louisiana. For
more information about Crestwood, visit www.crestwoodlp.com.
Forward-Looking Statements
The statements in this news release regarding future events,
occurrences, circumstances, activities, performance, outcomes and
results are forward-looking statements. Although these statements
reflect the current views, assumptions and expectations of
Crestwood's management, the matters addressed herein are subject to
numerous risks and uncertainties which could cause actual
activities, performance, outcomes and results to differ materially
from those indicated. Such forward-looking statements include, but
are not limited to, statements about the future financial and
operating results, objectives, expectations and intentions and
other statements that are not historical facts. Factors that could
result in such differences or otherwise materially affect
Crestwood's financial condition, results of operations and cash
flows including, without limitation, changes in general economic
conditions; fluctuations in oil, natural gas and natural gas
liquids prices; the extent and success of drilling efforts, as well
as the extent and quality of natural gas volumes produced within
areas of acreage dedication on and within proximity of our assets;
failure or delays by our customers in achieving expected production
in their natural gas projects; competitive conditions in our
industry and their impact on our ability to connect natural gas
supplies to our gathering and processing assets or systems; actions
or inactions taken or non-performance by third parties, including
suppliers, contractors, operators, processors, transporters and
customers; our ability to consummate acquisitions, successfully
integrate the acquired businesses, realize any cost savings and
other synergies from any acquisition; changes in the availability
and cost of capital; operating hazards, natural disasters,
weather-related delays, casualty losses and other matters beyond
our control; timely receipt of necessary government approvals and
permits, our ability to control the costs of construction,
including costs of materials, labor and right-of-way and other
factors that may impact our ability to complete projects within
budget and on schedule; the effects of existing and future laws and
governmental regulations, including environmental and climate
change requirements; the effects of existing and future litigation;
risks related to our substantial indebtedness; and other factors
disclosed in Crestwood's filings with the U.S. Securities and
Exchange Commission. You should read our filings with the U.S.
Securities and Exchange Commission, including our Annual Report on
Form 10-K for the year ended December 31, 2011, and our most recent
Quarterly Reports and Current Reports for a more extensive list of
factors that could affect results.
Investor Contact: Mark Stockard 832-519-2207
mstockard@crestwoodlp.com
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