Chesapeake Energy Corp.’s (NYSE:CHK) subsidiary will sell its crude oil trucking assets to Rose Rock Midstream LP (NYSE: RRMS), RRMS said June 5.
The acquisition includes 124 trucks, 122 trailers and miscellaneous equipment operating in Texas, Oklahoma and Ohio. RRMS will also become the employer of 200 workers from Chesapeake Energy Marketing Inc., CHK’s subsidiary. The purchase price was not disclosed.
Chesapeake said in its first-quarter 2014 earnings report that its oilfield trucking segment would be sold by the end of the second quarter. Chesapeake said it would sell its crude hauling fleet, which included 94 fluid handling trucks and 121 trailers.
“RRMS expects the deal to be immediately accretive while expanding its operational scale and footprint. Deal price and cash flow were not disclosed, making the potential impact to RRMS and CHK unclear,” said Brian Uhlmer Senior Analyst, Global Hunter Securities.
On June 4, Chesapeake said it expects to go ahead with a spinoff of Chesapeake Oilfield Operating LLC, which will be renamed Seventy Seven Energy Inc. At the end of March, the division owned or leased 115 land rigs, nine frac fleets, a rentals business and an oilfield trucking fleet consisting of 260 rig relocation trucks, 67 cranes and forklifts and 246 fluid hauling trucks. The division had $2.2 billion in revenues in 2013.
Following the close of the acquisition, RRMS will operate a fleet of more than 250 trucks with approximately 350 employees, servicing the Bakken, D-J/Niobrara, Eagle Ford, Granite Wash, Mississippi Lime, Permian, San Juan and Utica plays.
“Crude oil trucking continues to be a crucial element of midstream infrastructure," said Carlin Conner, CEO of Rose Rock Midstream's general partner. "We anticipate this acquisition will be immediately accretive and synergistic to our existing field services business, while expanding our footprint and scale further into highly attractive areas.”
Rose Rock, based in Tulsa, Okla., is a growth-oriented limited partnership formed by SemGroup Corp. (NYSE:SEMG) to own, operate, develop and acquire a diversified portfolio of midstream energy assets.
Rose Rock Midstream provides crude oil gathering, transportation, storage and marketing services with the majority of its assets strategically located in or connected to the Cushing, Okla., crude oil marketing hub.
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