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Denver-based Evolution Midstream LLC is buying the Rowdy natural gas gathering system in Wyoming's Powder River Basin (PRB) from Dallas-based Lucid Energy Group. The price was not disclosed. Closing is expected July 1.
The Rowdy system in the PRB serves producers in Campbell, Converse and Johnson counties and comprises about 1,000 miles of gathering pipelines and 43,700 hp of compression.
Evolution executives emphasized growth potential in the PRB, while Lucid has been selling some of its gas infrastructure assets in favor of expanding its footprint in the Delaware sub-basin in the Permian.
A spokesperson called the PRB assets "an extensive footprint" of assets in the heart of the Wyoming basin that is expected to provide a foundation for growth opportunities. Evolution plans to invest additional capital to increase Rowdy system capacity and to offer gathering and processing to producers of all sizes. This will include crude gathering services, too.
PRB producers are seeking "entry into an exciting, stacked play," said Evolution CEO Raj Basi. "The acquisition of the Rowdy system is the first step in developing our comprehensive vision for gas gathering, treating and processing in the area."
With a focus on the Rockies' midstream services sector, Evolution will reach out to producers currently served by Rowdy, according to Preetam Dandapani, senior vice president for business development. "We will continue expanding our footprint and capabilities to meet the needs of others in the area," Dandapani said.
Earlier this year, Lucid sold Lovington gas gathering assets to San Antonio-based Stakeholder Midstream LLC.
Last year Lucid acquired Agave Energy Co., which owned and operated natural gas gathering and processing assets in the Permian’s Delaware sub-basin in southeastern New Mexico and the PRB of eastern Wyoming.
Lucid secured an equity commitment in April for up to $250 million from Magnetar Capital to support its strategy for developing a proposed natural gas gathering and processing system in the Delaware a sub-basin.