Bought gas-gathering systems and related facilities, gaining more than 200 millions of pipeline and related compression and dehydration facilities.
Houston-based Eagle Rock Energy Partners LP (Nasdaq: EROC) has acquired certain gas gathering systems and related facilities primarily in Wheeler and Hemphill counties in the Texas Panhandle from Centerpoint Energy Field Services Inc. for approximately $27 million.
The assets include more than 200 miles of gathering pipeline and related compression and dehydration facilities, together with gas-gathering contracts, rights of way and other intangible assets. The assets are in the core of the Granite Wash play and complement Eagle Rock's existing East Panhandle system.
Benefits include approximately 18,600 MMBtu/d of existing gathered volumes generating mostly fixed fee revenues; the ability to provide processing services to existing and future producers through interconnects into Eagle Rock's East Panhandle system; and the expansion of Eagle Rock's footprint in the Granite Wash play, particularly into the highly active, liquids-rich portion of the play in Wheeler County.
The purchase price for the assets reflects a 7.6 times multiple of Eagle Rock's 2011 estimated Adjusted EBITDA from the assets, in partial combination with the partnership's Phoenix Plant in Hemphill County. The acquisition is also expected to be accretive to distributable cash flow per unit in 2011 and beyond, assuming no increase in the number of outstanding common units from Oct. 4.
Additionally, the recently-installed Phoenix processing plant in the Texas Panhandle has begun commercial operations.