Summit Midstream Closes Marcellus Acquisition

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
$210.0MM
Description

Closed the acquisition of gas gathering pipelines and compression assets.

Summit Midstream Partners LP (NYSE: SMLP) closed the acquisition of certain natural gas gathering pipelines and compression assets in the Marcellus from an affiliate of MarkWest Energy Partners LP for US $210 million in cash.

The assets are located primarily in Doddridge County, W.Va., and were acquired by Mountaineer Midstream Company LLC, an indirect, wholly owned subsidiary of Summit.

The Mountaineer system consists of over 40 miles of newly constructed, high-pressure natural gas gathering pipelines, certain rights-of-way associated with the pipeline, and two compressor stations with over 21,000 horsepower of compression. This rich-gas gathering and compression system serves as a critical inlet to MarkWest's world-class Sherwood Processing Complex, which is currently being expanded from 400 million cubic feet per day to 800 million cubic feet per day. The Mountaineer system is capable of delivering 550 million cubic feet per day to the Sherwood Processing Complex and is underpinned by a long-term, fee-based contract with an affiliate of Antero Resources Corp.

The acquisition was funded with (i) US $110 million of borrowings under Summit's revolving credit facility, (ii) US $98 million in proceeds from Summit's issuance of some 3.1 million common units to Summit Midstream Partners Holdings LLC, a wholly owned subsidiary of Summit Midstream Partners LLC, and (iii) US $2 million in proceeds from Summit's issuance of 63,422 general partner units to Summit Midstream GP LLC, its general partner. The value of the common and general partner units that were issued as partial consideration for the Mountaineer acquisition was based on the volume weighted daily average price of Summit's common units for the five trading days prior to entry into a certain unit purchase agreement by and among Summit, Summit Holdings and the general partner.

Summit Midstream Partners LP owns and operates midstream energy infrastructure assets that are located in unconventional resource basins. The company is headquartered in Dallas.