Exterran Partners LP (NASDAQ: EXLP) has returned to Chesapeake Energy Corp. (NYSE: CHK) to buy (not rent) more natural gas compression muscle from CHK’s subsidiary.
On July 14, Exterran said it is acquiring additional midstream assets from Chesapeake’s rental services subsidiary MidCon Compression LLC for $135 million. MidCon boasts the second-largest compression by horsepower among North American gas compression companies.
Earlier this year, Houston’s Exterran bought $360 million worth of assets from MidCon, which included compression units servicing gathering systems in Arkansas, Louisiana, Oklahoma, Texas and Wyoming. Chesapeake, based in Oklahoma City, continues to streamline its overall portfolio. It formed MidCon in 2003.
The July 14 acquisition includes 162 additional units with a total horsepower of about 110,000. The majority of the units are currently being used to provide compression services to BHP Billiton Petroleum (NYSE: BHP) in Arkansas’ Fayetteville Shale. In connection with the acquisition, the contract operations services agreement with BHP will be assigned to Exterran Partners effective at closing.
“We are pleased to acquire an additional fleet of modern, highly standardized assets from MidCon and continue to deliver on our strategy of growing our core contract operations business,” said Brad Childers, chairman, president and CEO of Exterran Partners’ managing general partner, in a statement.
The acquisition is expected to be financed using credit available under Exterran Partners’ revolving credit facility. Closing is expected in the third quarter of 2014.
Exterran Partners is a master limited partnership that provides natural gas contract compression services to customers throughout the U.S. Exterran Holdings Inc. (NYSE: EXH) owns an equity interest, including all of the general partner interest, in Exterran Partners.
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