The deal will help Summit Midstream Partners transition its portfolio to nearly 55% crude oil-oriented basins and marks the conclusion of a strategic review process carried out by its board, which was publicly disclosed last October
MPLX to acquire Summit Midstream Utica from Summit Midstream Partners in an all-cash deal. (Credit: Arul from Pixabay)
US-based Summit Midstream Partners (SMLP) has agreed to sell Summit Midstream Utica to a subsidiary of MPLX, a master limited partnership formed by Marathon Petroleum, for $625m in an all-cash deal.
The deal also includes Summit Midstream Utica’s stake of nearly 36% in Ohio Gathering (OGC), an interest of around 38% in Ohio Condensate (OCC). Summit Midstream Partners’ 100% owned assets in the Utica Shale are also part of the sale.
Summit Midstream Utica owns the Summit Utica natural gas gathering system that spans across Belmont and Monroe counties in southeastern Ohio. The midstream system caters to producers focused on the dry-gas reserves of the Utica and Point Pleasant shale formations.
The Summit Utica system is involved in the gathering and delivery of natural gas. This is mainly under long-term, gathering agreements based on fees, including acreage dedications.
OGC and OCC (collectively Ohio Gathering) include a natural gas gathering system and condensate stabilisation plant in the Utica Shale in southeastern Ohio.
The gathering system is spread over the condensate, liquids-rich and dry-gas windows of the Utica Shale for various producers engaged in production from the Utica and Point Pleasant shale formations in southeastern Ohio’s Belmont, Guernsey, Monroe, Noble, and Harrison counties.
All gathering services on the Ohio Gathering system are substantially offer as per long-term, fee-based gathering agreements.
Sale of the assets marks the conclusion of a strategic review process carried out by Summit Midstream Partners’ board, which was publicly disclosed last October.
The deal will also help Summit Midstream Partners transition its portfolio to nearly 55% crude oil-oriented basins.
Summit Midstream Partners president, CEO, and chairman Heath Deneke said: “We are pleased to announce this compelling transaction with MPLX, which is the result of a thorough strategic review, and generates substantial value creation opportunities for our unitholders.
“MPLX has been a great joint venture partner and operator of the OGC and OCC assets since Summit entered the Utica Shale in 2014 and we thank both MPLX and our valued Summit employees for their hard work and dedication to the partnership and producer customers in the region.”
Summit Midstream Partners utilised the financial advisory services of RBC Capital Markets for the deal, while Locke Lord was its legal adviser.