Crosstex Energy LP To Buy Utica-Focused Service Firm Clearfield Energy

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Estimated Price
210MM
Description

To acquire crude oil, condensate & water services company with operations in OH, KY, & WV , gaining 4,500-barrel-per-hour crude oil barge loading terminal on Ohio River, 28,000-barrel-per day crude oil rail loading terminal on Ohio Central Railroad network & 200 miles of crude oil pipelines in OH & WV.

Crosstex Energy LP, Dallas, (Nasdaq: XTEX) plans to acquire privately held, Nashport, Ohio-based Clearfield Energy Inc. for approximately $210 million in cash.

Clearfield is a 125-year-old crude oil, condensate and water services company with operations in Ohio, Kentucky and West Virginia. Clearfield currently moves approximately 30% of the oil production in Ohio and provides a solid entry into the Utica shale play where major producers have acquired significant acreage positions.

Clearfield’s assets include a 4,500-barrel-per-hour crude oil barge loading terminal on the Ohio River, a 28,000-barrel-per day crude oil rail loading terminal on the Ohio Central Railroad network which is expected to expand to a 56,000-barrel-per-day facility by end-of-year, and 200 miles of crude oil pipelines in Ohio and West Virginia.

The assets also include 100,000 barrels of above-ground storage, six existing brine water disposal wells with two under development and an extensive fleet of trucks with a total capacity of 35,000 barrels per day. In addition, Clearfield owns more than 2,500 miles of unused right of way.

Crosstex president and chief executive Barry E. Davis says, “We are extremely pleased to reach an agreement to acquire one of the largest midstream service businesses in Ohio, West Virginia and Kentucky. It is a big step in the execution of our strategy to grow and diversify our business, providing a new geographic footprint and expanded service offerings for us. Clearfield provides Crosstex with an entrance in the rapidly developing Utica Shale play, which we believe will be a strong, sustainable growth platform for us. We believe we can build upon Clearfield’s many years of great customer service and are confident in the ability to grow the business as a first mover in this rapidly developing region.

The partnership plans to fund this transaction through a combination of debt and equity.

The transaction is expected to be completed in July.