logo
  Join        Login             Stock Quote

Crestwood Midstream (CMLP) Buys Balance Interest In Marcellus Shale JV

 January 08, 2013 03:17 PM


(By Balaseshan) Crestwood Midstream Partners LP (NYSE: CMLP) said it has bought the balance 65% interest in Crestwood Marcellus Midstream LLC (CMM) from Crestwood Holdings Partners LLC for $258 million.

The transaction is expected to be 7%-8% accretive to Crestwood's 2013 distributable cash flow on a fully diluted basis and was funded with $129 million of cash drawn on Crestwood's existing revolving credit facility and about 6.2 million new Crestwood Class D units issued to Crestwood Holdings.

As a part of the consideration received for the transaction, Crestwood Holdings is maintaining its 2% general partner interest in Crestwood. Crestwood does not expect any additional capital markets activity related to this transaction.

[Related -Stocks Close Mixed; Apple (AAPL) Rises Over 2 Pct]

The Class D Units will begin receiving distributions with the first quarter 2013 distribution, payable in the second quarter 2013, and will maintain the pay-in-kind feature until they convert to common units on a one-for-one basis on March 1, 2014.

Crestwood Holdings plans to use the cash portion of the purchase price to lower debt, which will provide Crestwood Holdings incremental flexibility to continue its support of future Crestwood growth through incremental capital investment.

With the completion of this transaction, Crestwood now owns 100% of CMM's natural gas gathering, compression and dehydration business located largely in the rich gas window of the southwestern core of the Marcellus Shale play.

[Related -Crestwood (CMLP) Announces Merger With Inergy]

At year-end 2012, spot volumes on Crestwood's Marcellus Shale gathering systems were about 400 MMcf/d and are expected to exceed 500 MMcf/d by the end of 2013 with the connection of about 60 to 70 new wells.

Based upon Antero Resources Appalachian Corp.'s current 2013 drilling and development plan in the Eastern Area of Dedication, Crestwood expects to expand its low pressure gathering systems with an additional 18 miles of pipeline.

Crestwood currently expects the capital expenditures for this development to be in the range of $70 million to $80 million, and Crestwood intends to primarily utilize CMM's $200 million revolving credit facility, which will remain in effect post-transaction and is non-recourse to Crestwood, to finance these organic growth capital expenditures.

Additionally, Crestwood said it is in early discussions with Antero regarding the accelerated development of midstream infrastructure in the Western Area including the addition of incremental compressor stations that would materially increase total Marcellus Shale gathering capacity by year-end 2013.

CMLP is trading up 0.56% at $23.21 on Tuesday. The stock has been trading between $19.90 and $32.45 for the past 52 weeks.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageMBIA Inc. (MBI) : BTI's $12 a Tough Task

MBIA Inc. (NYSE:MBI) is doing well on a day stocks are struggling The guarantee insurance company is the read on...

article imageUrban Outfitters, Inc. (URBN) Q2 Earnings Preview: A Snug Fit

Urban Outfitters, Inc. (NASDAQ:URBN) will hold a webcast to discuss its second quarter of fiscal-year 2015 read on...

article imageEstee Lauder Companies Inc. (EL) Q4 Earnings Preview: Options Player Betting On EL’s EPS Looking Pretty

Estee Lauder Companies Inc. (NYSE:EL) will release fiscal 2014 fourth quarter and full year financial read on...

article imageHerbalife Ltd. (HLF): 3 Reasons To Pay Attention to Recent Insider Buying

Well, well, well… it looks as if boardroom buyers viewed the recent selloff as an opportunity to buy. read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.