Crestwood Announces Divestment of Marcellus Assets
HOUSTON–(BUSINESS WIRE)–Crestwood Equity Partners LP (NYSE: CEQP) (“Crestwood”) today announced the sale of its Marcellus natural gas gathering and compression assets to Antero Midstream Corporation (NYSE: AM), for $205 million. dollars in cash, a multiple of more than 7x 2023E Adjusted EBITDA, subject to customary adjustments. These assets located in Doddridge County and Harrison County, West Virginia, include a legacy gas system that was acquired in 2012 and has been impacted in recent years by senior producer Crestwood focusing its development activities on the gas-rich southwest window of the Marcellus Shale. As a result, Crestwood’s assets have been in natural decline since 2017 and are not essential to Crestwood’s long-term growth strategy to become a leading midstream operator in the Williston, Delaware and Power River Basins. Crestwood intends to use the proceeds from the sale of these assets to improve financial flexibility through a combination of debt reduction and opportunistic common unit buyouts.
“Over the past ten years, our employees at Marcellus Shale have done an incredible job building and operating a world-class natural gas gathering and compression system in a safe and sustainable manner. Many of Crestwood’s peer group operational best practices have been developed in the Marcellus and form the basis of the best-in-class operating program across our midstream G&P portfolio. I would like to personally thank these employees for their dedication and loyalty,” commented Robert G. Phillips, Founder, President and Chief Executive Officer.
Mr. Phillips continued, “This timely, market-based divestment is another strategic transaction that demonstrates Crestwood’s long-term commitment to maximizing unitholder value through portfolio optimization and redeployment of proceeds from legacy non-core assets to further strengthen our balance sheet and improve our financial position. flexibility for unit redemptions and higher yielding investment opportunities in our key areas. Over the past 18 months, Crestwood has strategically enhanced its asset portfolio to create competitive scale in its core basins, and as we focus on optimizing and integrating the acquisitions of Oasis Midstream, Sendero Midstream and CPJV, today’s announcement underscores our confidence in the portfolio achieving our long-term leverage ratio target below 3.5x in 2023 and demonstrates our commitment to generating accretive returns for unitholders and to consolidate our financial flexibility for the future.
The transaction is expected to close in the fourth quarter, subject to customary regulatory approvals, including those of Hart-Scott-Rodino.
Locke Lord LLP served as legal counsel to Crestwood. Vinson & Elkins LLP served as legal counsel to Antero Midstream Corporation.
This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities and Exchange Act of 1934. The words “expects”, “believes”, “anticipates ‘, ‘anticipates’, ‘will’, ‘shall’, ‘estimates’, ‘intends’ and similar expressions identify forward-looking statements, which are generally not historical in nature. Forward-looking statements are subject to risks and uncertainties and are based on management’s beliefs and assumptions based on information currently available to it. Although Crestwood believes that these forward-looking statements are based on reasonable assumptions, it cannot guarantee that these forward-looking statements will materialize. Important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include the risks and uncertainties described in Crestwood’s reports filed with the Securities and Exchange Commission, including its report annual report on Form 10-K and its subsequent reports, which are available through the SEC’s EDGAR system at www.sec.gov and on our website. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management’s views only as of the date made, and Crestwood undertakes no obligation to update such forward-looking statements.
About Crestwood Equity Partners LP
Based in Houston, Texas, Crestwood Equity Partners LP (NYSE: CEQP) is a master limited partnership that owns and operates midstream businesses in several shale resource plays across the United States. Crestwood is engaged in the gathering, processing, treatment, compression, storage and transportation of natural gas; storage, transport, terminalling and marketing of NGLs; collection, storage, terminalling and marketing of crude oil; and collection and disposal of produced water. To learn more about Crestwood Equity Partners LP, visit www.crestwoodlp.com; and to learn more about Crestwood’s sustainability efforts, please visit https://esg.crestwoodlp.com.