DCP Midstream Partners LP completed the acquisition of certain natural gas gathering and compression assets in Oklahoma from Anadarko Petroleum Corp. for $180.3 million in cash, subject to customary adjustments (see Daily GPI, March 8).
The midstream assets have historically gathered approximately 25 MMcf/d of production in Grady, Garvin and McClain counties in Oklahoma and delivered the gas to a third party for processing. The gathering system consists of approximately 225 miles of pipeline and 9,500 hp of compression. The assets will be operated by the owner of the partnership's general partner, DCP Midstream LLC (formerly Duke Energy Field Services LLC).
"In closing this transaction, we continue to successfully execute upon two of our primary growth objectives, delivering value to our unitholders and increasing the combined midstream footprint of the partnership and DCP Midstream," said CEO Mark Borer. "These assets are located near existing assets owned by our parent and therefore provide future opportunities to participate in growth projects together."
The partnership will finance the transaction with a combination of debt and equity.
The contracts related to these assets are percentage of proceeds arrangements, where the partnership's revenues correlate directly with the price of the natural gas and natural gas liquids sold after processing. The partnership intends to execute fixed-price swaps for the period from June 2007 through Dec. 31, 2013 to hedge a significant portion of the commodity exposure relative to these assets.
©Copyright 2007 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.