Tulsa’s Williams Companies, Inc. has sold a 50 percent interest in its Jackalope Gas Gathering Services LLC in Wyoming in a $485 million deal.
Crestwood Equity Partners LP based in Houston acquired the half ownership in the Powder River Basin operation under the name of Crestwood Niobrara LLC.
It was last summer when Williams Partners L.P. and Crestwood Equity Partners announced a major expansion of the gas gathering system. The Jackalope system is associated with the Bucking Horse gas processing operation in the Powder river Basin’s Niobrara Shale play.
Leadership at Crestwood described the new acquisistion as a continuation of their strategy to expand the company’s operational footprint in the core growth basins. They said the consolidation of the Jackalope assets positions the company for long-term growth by supporting Chesapeake Energy’s plans in the region.
Crestwood funded the acquisition through a combination of borrowing under its revolving credit facility and the issuance of an additional $235 million of preferred equity to Crestwood Niobrara’s existing preferred equity investors, led by Global Infrastructure Partners.
Here’s how company leaders look at the acquisition:
- Positions Crestwood to be leading G&P company in Powder River Basin: Crestwood immediately doubles its position in one of its core, high-growth assets, becoming one of the largest gas processing companies in the basin, with opportunity to expand commercial services to undedicated third-party operators
- Strong cash flow growth at attractive valuation: Crestwood expects the Jackalope assets to contribute annual cash flow of $100 million in
