Houston-based Western Gas Partners LP Monday closed its $210 million purchase of all or parts of various Powder River Basin processing and gathering infrastructure from Anadarko Petroleum Corp., which previously formed Western and eventually spun it off. Some of the purchase involves percentage interests in the Anadarko assets.
The sale, which was announced earlier this year, includes 100% interest in the Hilight processing plant, a 50% interest in the Newcastle processing facility and gathering system, and a 14.81% interest in the Fort Union gas gathering and treatment system. The midstream assets are all located in the Powder River Basin in Wyoming.
A combination of debt and equity was used by Western to make the purchase. It received a five-year $175 million note from Anadarko and issued some 2.55 million common shares to Anadarko at a price of approximately $13.69/partnership unit. With the completion of this deal, Western said Anadarko now owns 63% of the common and subordinated units and 2% of the partner interest in the company.
Western was originally created by Anadarko to own, operate, acquire and develop midstream energy assets. The company now holds assets in East and West Texas, the Rocky Mountains and the Midcontinent, providing gathering, compressing, treating, processing and transporting services for natural gas held by Anadarko, other producers and shippers.
Noting that this was its first asset sale since going public as a stand-alone company, Western CEO Robert Gwin called the new assets “excellent additions” to the company’s Rocky Mountain operations, supplementing its existing portfolio with “substantial third-party business and organic growth opportunities.” In addition, Gwin said the acquisition is “immediately accretive to distributable cash flow per unit [of the partnership].”
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