Tulsa’s Williams Co. announced it has wrapped up the $1.125 billion cash sale of its assets and equity in the previous Four Corners Area business in New Mexico and Colorado to Harvest Midstream Company.
Houston-based Harvest Midstream Company, an affiliate of Hilcorp Energy Company has taken over operation of the assets which include 3,700 miles of pipeline, two gas processing plants and one CO2 treatment facility in the San Juan and Rio Arriba Counties of New Mexico and La Plata County, Colorado.
“At Harvest, we recognize the vast potential that remains in the San Juan Basin and are excited to be growing in the Four Corners Region,” said Jason Rebrook, CEO Harvest Midstream Company. “Harvest is an industry leader in providing midstream services and with this acquisition we can expand the reach of those services for our customers.”
The acquisition of the Four Corners Area assets from Williams includes more than 3,700 miles of pipeline, two gas processing plants, and one CO2 treatment facility in the San Juan and Rio Arriba Counties, New Mexico and La Plata County, Colorado.
Williams indicated the cash will be used to fund its portfolio of growth capital and investment including its recent joint-venture acquisition with KKR of Discovery DJ Services from TPG Growth. The acquisition was completed in August and under terms of the venture, Williams holds a 40 percent ownership stake after an initial economic contribution of nearly $469 million to the total purchase price.
Williams is also the operator of these assets in the Denver-Julesburg (“DJ”) Basin and holds a majority of governance voting rights in the joint venture. Williams and KKR have renamed the DJ Basin business, “Rocky Mountain Midstream LLC.”
“Completing both the FCA transaction and the Discovery DJ Services acquisition follows our strategy to connect the best supplies to the best markets,” said Alan Armstrong, president and chief executive officer of Williams. “We have divested a business from a maturing basin at an attractive multiple and redeployed a portion of that capital to a higher-growth basin where our newly named ‘Rocky Mountain Midstream’ business presents strong future-growth opportunities, including sites with permitting underway for greater than 1 billion cubic feet per day of gas processing.”
The FCA assets divested by Williams are located in the San Juan and Rio Arriba Counties in New Mexico and in La Plata County in Colorado and include 3,700 miles of pipeline, two gas processing plants, and one CO2 treating facility.
“The Four Corners Area has been an important part of Williams since 1983, and I appreciate the hard work and dedication of the FCA team through the years,” Armstrong said. “Harvest is an outstanding midstream services provider and is ideally positioned in that basin to operate these assets in a manner that optimizes throughput and lowers cost.”