Williams Completes Sale of Four Corners Area Business to Harvest Midstream Company for $1.125 Billion
Williams Uses Portion of Proceeds to Fund the Recent Joint-Venture
Acquisition of DJ Basin Assets
Williams (NYSE: WMB) announced today that it has completed the sale of
assets and equity comprising its previous Four Corners Area business
(“FCA”) in New Mexico and Colorado to Harvest Midstream Company
(“Harvest”) for $1.125 billion in cash.
The cash proceeds will contribute to funding Williams’ extensive
portfolio of attractive growth capital and investment expenditures,
including the company’s recent joint-venture acquisition with KKR of
Discovery DJ Services from TPG Growth that was completed Aug. 3, 2018.
Under terms of the joint venture, Williams holds a 40 percent ownership
stake after an initial economic contribution of approximately $469
million to the total purchase price. Williams is also the operator of
these assets in the Denver-Julesburg (“DJ”) Basin and holds a majority
of governance voting rights in the joint venture. Williams and KKR have
renamed the DJ Basin business, “Rocky Mountain Midstream LLC.”
“Completing both the FCA transaction and the Discovery DJ Services
acquisition follows our strategy to connect the best supplies to the
best markets,” said Alan Armstrong, president and chief executive
officer of Williams. “We have divested a business from a maturing basin
at an attractive multiple and redeployed a portion of that capital to a
higher-growth basin where our newly named ‘Rocky Mountain Midstream’
business presents strong future-growth opportunities, including sites
with permitting underway for greater than 1 billion cubic feet per day
of gas processing.”
The FCA assets divested by Williams are located in the San Juan and Rio
Arriba Counties in New Mexico and in La Plata County in Colorado and
include 3,700 miles of pipeline, two gas processing plants, and one CO2 treating
facility.
“The Four Corners Area has been an important part of Williams since
1983, and I appreciate the hard work and dedication of the FCA team
through the years,” Armstrong said. “Harvest is an outstanding midstream
services provider and is ideally positioned in that basin to operate
these assets in a manner that optimizes throughput and lowers cost.”
For the transaction to divest its assets in the Four Corners Area,
Williams’ lead financial adviser was Morgan Stanley; Davis Polk acted as
legal counsel. For the Discovery acquisition, Simmons acted as the lead
financial adviser to both Williams and KKR; Gibson Dunn served as legal
counsel to Williams, and Simpson Thatcher served as legal adviser to KKR.
About Williams
Williams (NYSE: WMB) is a premier provider of large-scale infrastructure
connecting U.S. natural gas and natural gas products to growing demand
for cleaner fuel and feedstocks. Headquartered in Tulsa, Okla., Williams
is an industry-leading, investment grade C-Corp with operations across
the natural gas value chain including gathering, processing, interstate
transportation and storage of natural gas and natural gas liquids. With
major positions in top U.S. supply basins, Williams 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, heating and industrial use. Williams’ operations
touch approximately 30 percent of U.S. natural gas. www.williams.com
About Harvest Midstream Company
Harvest Midstream Company, formerly Harvest Pipeline Company, is a
privately held midstream services provider based in Houston, Texas, that
operates crude oil and natural gas gathering, storage, transportation,
treatment and terminalling assets across the Lower 48 and Alaska. To
learn more visit www.harvestmidstream.com.
Portions of this document may constitute “forward-looking statements”
as defined by federal law. Although the company 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 company’s annual and quarterly reports
filed with the Securities and Exchange Commission.
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