Crestwood Midstream Partners Monday said it has completed the acquisition of gathering and processing assets from subsidiaries of Devon Energy Corp. for $87.1 million, which is $2.9 million less than the originally reported acquisition price (see Shale Daily, July 25).
The assets are in the liquids-rich southwestern area of the Barnett Shale in northern Texas and include a 74-mile low-pressure rich natural gas gathering system, a cryogenic processing facility with capacity of 100 MMcf/d and 23,100 hp of compression. As part of the transaction, Houston-based Crestwood and Devon also entered into a 20-year fixed-fee gathering, processing and compression agreement covering existing and future production from approximately 20,500 acres.
The acquisition “expands Crestwood’s rich gas operations and strengthens our relationship with another great producer customer [Devon],” said Crestwood CEO Robert G. Phillips.
Devon’s pipeline system and processing plant, built in 2006, are adjacent to Crestwood’s Cowtown gathering system, which includes the Cowtown and Corvette gas processing plants with a combined capacity of 325 MMcf/d. The Cowtown system and Devon’s Johnson County system now are interconnected, and Crestwood has processed gas volumes for Devon in the past. Crestwood plans to consolidate the systems and process all of Devon’s gas in its plants.
Crestwood is a midstream master limited partnership that owns and operates predominately fee-based gathering, processing, treating and compression assets servicing gas producers in the Barnett Shale, the Fayetteville Shale in northwestern Arkansas, the Granite Wash in the Texas Panhandle, the Marcellus Shale in northern West Virginia, the emerging Avalon Shale trend in southeastern New Mexico, and the Haynesville/Bossier Shale formation in western Louisiana.
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