JV Partners Crestwood Equity & Williams Partners Announce Agreement to Restructure Gathering & Processing Agreement with Ches...
October 19 2016 - 4:15PM
Business Wire
- Expect win-win for the joint venture
and Chesapeake with new long-term, fixed-fee structure designed to
ramp up development and production opportunities in the Powder
River and achieve the full potential of the acreage
- Demonstrates parties’ commitment to
align their interests for mutual growth while sustaining financial
support of investments
Williams Partners L.P. (NYSE: WPZ) and Crestwood Equity Partners
L.P. (NYSE: CEQP), as 50/50 joint venture partners in the Bucking
Horse natural gas processing plant and Jackalope Gas Gathering
System, today announced they have signed an agreement with
Chesapeake Energy Corporation (NYSE: CHK) to restructure natural
gas gathering and processing services in Wyoming’s Powder River
Basin.
The restructured services are expected to replace the current
cost-of-service arrangement and improve economics to support a
ramp-up in near-term development and production activity and
incentivize long-term development across an expanded area of
dedication in the region.
“The restructuring will create a win-win for the joint venture
and for Chesapeake that aligns interests for mutual growth,” said
Walter Bennett, senior vice president, Williams’ West operating
area.
“This new simplified fee structure will promote production
growth and improve the economics on both the drilling and midstream
operations,” adds Heath Deneke, Crestwood’s chief operating officer
and pipeline group president.
The restructured terms of service are expected to include
minimum annual revenue guarantees that support the transition to a
new fixed-fee structure over the next five to seven years.
“I’m pleased to be aligned with our midstream partners and look
forward to developing the resources in the Powder River,” said Doug
Lawler, Chesapeake’s president and chief executive officer. “This
new agreement is a result of the positive relationships we have
built with Williams Partners and Crestwood and our shared desire to
improve the economics of this play. The new attractive fixed-fee
structure will allow Chesapeake to accelerate our development
plans, improve margins and achieve the full potential of our Powder
River acreage.”
The Bucking Horse plant has the capacity to process 120 million
cubic feet (MMcf) of natural gas per day and the Jackalope
gathering system includes approximately 184 miles of low pressure
gathering pipelines.
Subject to board approvals of the definitive agreement, the
restructured services are to become effective Jan. 1, 2017 for a
20-year term.
Chesapeake will discuss the agreement and its development plans
in the Niobrara during its Analyst Day on Thursday, Oct. 20 at 9
a.m. CDT.
About Williams Partners
Williams Partners (NYSE: 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.
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, heating and industrial use.
Williams Partners’ operations touch approximately 30 percent of
U.S. natural gas. Tulsa, Okla.-based Williams (NYSE: WMB), a
premier provider of large-scale U.S. natural gas infrastructure,
owns 60 percent of Williams Partners, including all of the 2
percent general-partner interest. www.williams.com
About Crestwood Equity Partners LP
Houston, Texas, based Crestwood Equity Partners LP (NYSE: CEQP)
is a master limited partnership that owns and operates midstream
businesses in multiple unconventional shale resource plays across
the United States. Crestwood Equity is engaged in the gathering,
processing, treating, compression, storage and transportation of
natural gas; storage, transportation, terminalling, and marketing
of NGLs; and gathering, storage, terminalling and marketing of
crude oil.
About Chesapeake Energy Corporation
Headquartered in Oklahoma City, Chesapeake Energy Corporation's
(NYSE: CHK) operations are focused on discovering and developing
its large and geographically diverse resource base of
unconventional oil and natural gas assets onshore in the United
States. The company also owns oil and natural gas marketing and
natural gas gathering and compression businesses.
Portions of this press release may constitute “forward-looking
statements” as defined by federal law. Although the parties believe
any such statements are based on reasonable assumptions, there is
no assurance that actual outcomes will not be materially different.
Additional information about issues that could lead to material
changes in performance is contained in the parties’ annual and
quarterly reports filed with the Securities and Exchange
Commission.
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version on businesswire.com: http://www.businesswire.com/news/home/20161019006396/en/
Investor Relations ContactsCrestwood Equity Partners
L.P.Josh Wannarka,
713-380-3081josh.wannarka@crestwoodlp.comorWilliams Partners
L.P.John Porter, 918-573-0797john.porter@williams.comorChesapeake
Energy CorporationBrad Sylvester,
405-935-8870brad.sylvester@chk.comorMedia ContactsCrestwood
Equity Partners L.P.Elizabeth Suman,
832-519-2276elizabeth.suman@crestwoodlp.comorWilliams Partners
L.P.Sara Delgado, 918-573-2713sara.delgado@williams.comorChesapeake
Energy CorporationGordon Pennoyer,
405-935-8878gordon.pennoyer@chk.com
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