Williams Partners Agrees to Acquire Additional Interest in Utica East Ohio Midstream Partnership
April 06 2015 - 8:00AM
Business Wire
Williams Partners L.P. (NYSE:WPZ), which, through its
subsidiary Utica Gas Services, currently owns 49 percent equity
interest in Utica East Ohio Midstream LLC (UEO), today announced it
has agreed to acquire an additional 21 percent equity interest in
UEO from a subsidiary of EV Energy Partners, L.P. (NASDAQ:EVEP) for
approximately $575 million.
Once complete, Williams Partners will own a 70 percent equity
interest in UEO, a substantial natural gas midstream business in
the Utica Shale in eastern Ohio. The gathering, processing,
fractionation and storage assets are anchored by long-term,
fee-based contracted commitments.
“Acquiring these cash-generating assets supports our strategy to
grow our natural gas midstream position in key basins,” said Alan
Armstrong, chief executive officer of the general partner of
Williams Partners. “This fixed-fee business will be accretive to
Williams Partners beginning in 2015 and the partnership has
attractive growth opportunities as the Utica continues to
develop.”
The other member of UEO has the right to acquire a portion of EV
Energy Partners’ interests in UEO for the same price. If the other
member exercises this right, Williams Partners would acquire an
approximate 13 percent interest and the other member would acquire
an approximate 8 percent interest.
In connection with the acquisition of the additional 21 percent
interest, Williams (NYSE:WMB) has agreed to waive approximately $43
million of general partner incentive distribution rights for the
three-year period 2015 through 2017. Williams Partners expects to
finance the acquisition with a combination of equity and debt
including revolver borrowings.
The agreement is subject to customary purchase price adjustments
and closing conditions, including termination of the waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act. The
transaction is expected to close by the middle of July 2015.
About Utica East Ohio Midstream LLC
UEO is a joint project to develop infrastructure for the
gathering, processing and fractionation of natural gas and natural
gas liquids (NGL) in the Utica Shale play in eastern Ohio. Williams
Partners, along with other equity owners, operates the
infrastructure complex which consists of natural gas gathering and
compression facilities, four processing plants with a total
capacity of 800 MMcf per day, a 135,000 barrel per day NGL
fractionation facility, approximately 600,000 barrels of NGL
storage capacity and other ancillary assets, including loading and
terminal facilities that are operated by our partner. These assets
earn a fixed fee that escalates annually within a specified
range.
About Williams Partners
Williams Partners (NYSE:WPZ) is an industry-leading, large-cap
natural gas infrastructure master limited partnership with a strong
growth outlook and major positions in key U.S. supply basins and
also in Canada. Williams Partners has operations across the natural
gas value chain from gathering, processing and interstate
transportation of natural gas and natural gas liquids to petchem
production of ethylene, propylene and other olefins. Williams
Partners owns and operates more than 33,000 miles of pipelines
system wide – including the nation’s largest volume and fastest
growing pipeline – providing natural gas for clean-power
generation, home heating and industrial use. Williams Partners’
operations touch approximately 30 percent of U.S. natural gas.
Tulsa, Okla.-based Williams (NYSE:WMB), a premier provider of
large-scale North American natural gas infrastructure, owns 60
percent of Williams Partners, including the general-partner
interest. www.williams.com
Portions of this document may constitute “forward-looking
statements” as defined by federal law. Although the partnership
believes any such statements are based on reasonable assumptions,
there is no assurance that actual outcomes will not be materially
different. Any such statements are made in reliance on the “safe
harbor” protections provided under the Private Securities Reform
Act of 1995. Additional information about issues that could lead to
material changes in performance is contained in the partnership’s
annual reports filed with the Securities and Exchange
Commission.
Williams Partners L.P.Media Contact:Tom Droege,
918-573-4034orInvestor Contacts:John Porter,
918-573-0797orBrett Krieg, 918-573-4614
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