Williams Partners Agrees to Acquire Additional Interest in Utica East Ohio Midstream Partnership
Williams Partners L.P. (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. (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 (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 (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 (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.