THE WOODLANDS, Texas,
May 18, 2015 /PRNewswire/
-- Summit Midstream Partners, LP (NYSE: SMLP) announced today
that its wholly owned subsidiary, Bison Midstream, LLC ("Bison
Midstream"), has closed its previously announced acquisition of
100% of the equity interests of certain subsidiaries of Summit
Midstream Partners, LLC ("Summit Investments") for total cash
consideration of $255.0 million,
subject to customary purchase price adjustments (the
"Acquisition"). The Acquisition includes certain crude oil
and produced water gathering systems and transmission pipelines
located in the Williston Basin
(the "Polar & Divide system").
Based on the achievement of certain development milestones since
announcing the Acquisition on May 6,
2015, SMLP also announced today that it has exercised an
option to acquire a crude oil transmission project currently under
development in the Williston Basin
(the "Stampede Lateral") from a subsidiary of Summit Investments
for an additional $35.0
million.
The $290.0 million total
acquisition was financed with (i) the net proceeds from a primary
equity offering of 6.5 million common units that closed on
May 13, 2015 and (ii) a draw of under
SMLP's $700.0 million revolving
credit facility. The transaction closed on May 18, 2015.
The terms of the Acquisition and exercise of the Stampede
Lateral option were approved by the board of directors of SMLP's
general partner and by the board of directors' conflicts committee,
which consists entirely of independent directors. The
conflicts committee engaged Evercore Partners to act as its
independent financial advisor and to render a fairness opinion, and
Akin Gump Strauss Hauer & Feld, LLP to act as its legal
advisor.
Because of the common control aspects in a drop down
transaction, the Acquisition has been deemed a transaction between
entities under common control and, as such, will be accounted for
on an "as if pooled" basis for all periods in which common control
existed. As such, SMLP's financial results will
retrospectively include the financial results attributable to the
Polar & Divide system for all periods beginning after
February 15, 2013.
Overview of the Polar & Divide System
The Polar
& Divide system includes more than 295 miles of crude oil and
produced water pipelines, spanning throughout the central and
western parts of Williams and
Divide counties in North Dakota, from the Missouri River to the
Canadian border. The Polar & Divide system is underpinned
by long-term, fee-based gathering agreements with multiple
producers, including anchor customers, Whiting Petroleum Corp. and
SM Energy Company. Several of these gathering agreements
include rate redetermination mechanisms which effectively serve to
protect future cash flows by resetting the gathering rate upward in
the future in the event that the customer does not attain certain
minimum production thresholds.
The Polar & Divide system began operating in May 2013 and currently has a maximum aggregate
throughput capacity of 80,000 barrels per day ("bbls/d") of crude
oil and produced water. In the first quarter of 2015, the
Polar & Divide system gathered over 48,000 bbls/d of crude oil
and produced water from pad sites, central receipt points, and
truck unloading stations, an increase from approximately 33,500
bbls/d for the year ended December
31, 2014. Crude oil is currently delivered to the COLT
Hub in Epping, North Dakota and
produced water is delivered to producer-owned and third-party
injection wells located throughout the Williston Basin. Two
development projects are currently underway to provide customers of
the Polar & Divide system with additional delivery points for
crude oil, including (i) an interconnect with Enbridge's North
Dakota Pipeline System, and (ii) the Stampede Lateral, which will
interconnect with Global Partners LP's ("Global") Basin Columbus
rail terminal near Columbus, North
Dakota.
The Stampede Lateral is a greenfield development project which
includes the construction of a 46-mile, 10-inch diameter crude oil
transmission pipeline with throughput capacity of 50,000 bbls/d to
Global's Basin Columbus rail terminal. The Stampede Lateral
is underpinned by a long-term contract with Global, including
minimum volume commitments, and is expected to be placed into
service in the fourth quarter of 2015.
Based on 2016 projected EBITDA from Polar & Divide and the
Stampede Lateral, the $290.0 million
total acquisition, coupled with approximately $75 million of growth capital expenditures
through the fourth quarter of 2016, is being acquired at a 7.8x
acquisition multiple.
About Summit Midstream Partners, LP
SMLP is a
growth-oriented limited partnership focused on developing, owning
and operating midstream energy infrastructure assets that are
strategically located in the core producing areas of unconventional
resource basins, primarily shale formations, in North America. SMLP currently provides natural
gas gathering, treating and processing services pursuant to
primarily long-term and fee-based natural gas gathering and
processing agreements with customers and counterparties in four
unconventional resource basins: (i) the Appalachian Basin, which
includes the Marcellus Shale formation in northern West Virginia; (ii) the Williston Basin, which includes the Bakken and
Three Forks shale formations in northwestern North Dakota; (iii) the Fort Worth Basin, which includes the Barnett
Shale formation in north-central Texas; and (iv) the Piceance Basin, which
includes the Mesaverde formation as well as the Mancos and Niobrara shale formations in
western Colorado and eastern
Utah. SMLP owns and operates more
than 2,600 miles of pipeline and over 250,000 horsepower of
compression. SMLP is headquartered in The
Woodlands, Texas with regional corporate offices in
Denver, Colorado and Atlanta, Georgia.
About Summit Midstream Partners, LLC
Summit Midstream
Partners, LLC ("Summit Investments") indirectly owns a 44.5%
limited partner interest in SMLP and indirectly owns and controls
the general partner of SMLP, Summit Midstream GP, LLC, which has
sole responsibility for conducting the business and managing the
operations of SMLP. Summit Investments owns, operates and is
developing various crude oil, natural gas, and water-related
midstream energy infrastructure assets in the Bakken Shale in
North Dakota, the DJ Niobrara
Shale in Colorado, and the Utica
Shale in Ohio. Summit Investments
also owns a 40% interest in a joint venture that is developing
natural gas gathering and condensate stabilization infrastructure
in the Utica Shale in southeastern Ohio. Summit Investments is a privately held
company controlled by Energy Capital Partners II, LLC, and certain
of its affiliates.
Forward-Looking Statements
This press release
includes certain statements concerning expectations for the future
that are forward-looking within the meaning of the federal
securities laws. Forward-looking statements contain known and
unknown risks and uncertainties (many of which are difficult to
predict and beyond management's control) that may cause SMLP's
actual results in future periods to differ materially from
anticipated or projected results. An extensive list of
specific material risks and uncertainties affecting SMLP is
contained in its 2014 Annual Report on Form 10-K filed with the
Securities and Exchange Commission on March
2, 2015 and as amended and updated from time to time. Any
forward-looking statements in this press release are made as of the
date of this press release and SMLP undertakes no obligation to
update or revise any forward-looking statements to reflect new
information or events.
Logo -
http://photos.prnewswire.com/prnh/20120927/MM82470LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/summit-midstream-partners-lp-announces-simultaneous-closing-of-2550-million-polar--divide-drop-down-and-350-million-stampede-lateral-option-300085180.html
SOURCE Summit Midstream Partners, LP