Click here to close now.



Welcome!

Microsoft Cloud Authors: Pat Romanski, Elizabeth White, Liz McMillan, Mihai Corbuleac, David Bermingham

News Feed Item

Crestwood Midstream Partners LP Acquires Remaining Interest in Marcellus Shale Joint Venture for $258 Million

HOUSTON, TX -- (Marketwire) -- 01/08/13 -- Crestwood Midstream Partners LP (NYSE: CMLP) ("Crestwood") announced today that it has purchased the remaining 65% interest in Crestwood Marcellus Midstream LLC ("CMM") from Crestwood Holdings Partners LLC ("Crestwood Holdings") 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 approximately 6.2 million new Crestwood Class D units ("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.

Prior to the transaction, Crestwood Holdings, which is controlled by First Reserve Corporation, owned 100% of Crestwood's general partner ("Crestwood GP") and approximately 42% of Crestwood's outstanding limited partner units. After the transaction, Crestwood Holdings owns approximately 47% of Crestwood's outstanding limited partner units taking into account the new Class D Units. The Class D Units, substantially similar to Crestwood's existing Class C Units, allow for the payment of quarterly distributions in cash or through the issuance of additional Class D Units at the discretion of Crestwood. 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 reduce debt, which will provide Crestwood Holdings incremental flexibility to continue its support of future Crestwood growth through incremental capital investment.

The $258 million purchase price reflects an enterprise value of $525 million for 100% of CMM, including net CMM debt of approximately $130 million, and implies a transaction value of approximately 8.9 times estimated CMM 2013 earnings before interest, taxes, depreciation and amortization ("EBITDA"), which is consistent with comparable transactions in the midstream sector. The transaction was unanimously approved by the Crestwood GP Conflicts Committee, comprised entirely of independent directors, which retained Robert W. Baird & Co. Incorporated as its independent financial advisor to assist in evaluating the transaction and to render a fairness opinion. Additionally, the Conflicts Committee engaged the law firm of Akin Gump Strauss Hauer & Feld LLP to serve as its legal counsel.

"This acquisition is the first drop down transaction for Crestwood Holdings which shows the benefit of First Reserve's long term support and substantially increases Crestwood's exposure to the rich gas area of the Marcellus Shale region," stated Robert G. Phillips, President and Chief Executive Officer of Crestwood's general partner. "When we acquired the Antero Resources Appalachian Corporation ('Antero') Marcellus Shale midstream assets in March 2012 for $382 million, we structured the CMM joint venture to allow Crestwood to acquire an interest in an early stage, high-growth Marcellus Shale gathering business without significant stress on Crestwood's balance sheet. The Antero acquisition has exceeded our expectations with total gathering volumes increasing from approximately 200 million cubic feet per day ('MMcf/d') in early 2012 to almost 400 MMcf/d at the end of 2012, and we expect this significant volume growth to continue in 2013 based on the latest development plans from Antero. The recently completed $95 million Enerven compression acquisition added an additional component to our 2013 growth plans and supported the rationale to accelerate the drop down of Crestwood Holdings' interest in CMM into Crestwood. By retaining the Class D Units and materially increasing its ownership stake in the Partnership, Crestwood Holdings has shown its continued commitment to support and participate in the long term growth of Crestwood," concluded Phillips.

Crestwood's 2013 Marcellus Shale Outlook

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. The assets consist of approximately 40 miles of low pressure gathering pipeline and 43,000 horsepower of compression assets in Harrison and Doddridge Counties, West Virginia, supported by long term, 100% fixed-fee contracts with Antero covering approximately 136,000 net acres (the "Eastern Area of Dedication") with seven year minimum volume guarantees and the rights to acquire additional Antero midstream assets on adjacent acreage (the "Western Area"). Antero is currently running twelve rigs on its West Virginia acreage and continues its aggressive development of properties dedicated to Crestwood and in surrounding areas.

At year-end 2012, spot volumes on Crestwood's Marcellus Shale gathering systems were approximately 400 MMcf/d and are expected to exceed 500 MMcf/d by the end of 2013 with the connection of approximately 60 to 70 new wells. Based upon Antero'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. In addition to the four compressor stations acquired from Enerven, which are expected to add approximately $11 million to $12 million of EBITDA in 2013, Crestwood also expects to add at least two new compressor stations in the Eastern Area of Dedication by year end 2013. 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 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. The potential for continued infrastructure development in the Western Area illustrates the strength of Crestwood's relationship with Antero and the long term organic growth potential for Crestwood's Marcellus Shale position.

Additional Information and Conference Call

Crestwood will post additional materials related to the acquisition on the Investor Relations section of our website at www.crestwoodlp.com and will host a conference call for investors and analysts on Tuesday, January 8, 2013, beginning at 3:30 p.m. Central Time to review details of the acquisition. Interested parties may participate by joining the conference call at 800-946-0742 and entering passcode 7276047. The conference call will also be webcast live and can be accessed through the Investor Relations section of our website. A replay will be available for 30 days following the conference call by dialing 888-203-1112 and entering the replay passcode 7276047.

About Crestwood Midstream Partners LP

Houston, Texas based Crestwood is a growth-oriented, midstream master limited partnership which owns and operates predominately fee-based gathering, processing, treating and compression assets servicing natural gas producers in the Barnett Shale in north Texas, the Fayetteville Shale in northwest Arkansas, the Granite Wash in the Texas Panhandle, the Marcellus Shale in northern West Virginia, the emerging Avalon Shale trend in southeastern New Mexico, and the Haynesville/Bossier Shale in western Louisiana. For more information about Crestwood, visit www.crestwoodlp.com.

Forward-Looking Statements

The statements in this news release regarding future events, occurrences, circumstances, activities, performance, outcomes and results are forward-looking statements. Although these statements reflect the current views, assumptions and expectations of Crestwood's management, the matters addressed herein are subject to numerous risks and uncertainties which could cause actual activities, performance, outcomes and results to differ materially from those indicated. Such forward-looking statements include, but are not limited to, statements about the future financial and operating results, objectives, expectations and intentions and other statements that are not historical facts. Factors that could result in such differences or otherwise materially affect Crestwood's financial condition, results of operations and cash flows including, without limitation, changes in general economic conditions; fluctuations in oil, natural gas and NGL prices; the extent and success of drilling efforts, as well as the extent and quality of natural gas volumes produced within proximity of our assets; failure or delays by our customers in achieving expected production in their natural gas projects; competitive conditions in our industry and their impact on our ability to connect natural gas supplies to our gathering and processing assets or systems; actions or inactions taken or non-performance by third parties, including suppliers, contractors, operators, processors, transporters and customers; our ability to consummate acquisitions, successfully integrate the acquired businesses, realize any cost savings and other synergies from any acquisition; changes in the availability and cost of capital; operating hazards, natural disasters, weather-related delays, casualty losses and other matters beyond our control; timely receipt of necessary government approvals and permits, our ability to control the costs of construction, including costs of materials, labor and right-of-way and other factors that may impact our ability to complete projects within budget and on schedule; the effects of existing and future laws and governmental regulations, including environmental and climate change requirements; the effects of existing and future litigation; and risks related to our substantial indebtedness, as well as other factors disclosed in Crestwood's filings with the U.S. Securities and Exchange Commission. You should read our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2011, and our most recent Quarterly Reports and Current Reports for a more extensive list of factors that could affect results.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@ThingsExpo Stories
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 19th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo Silicon Valley Call for Papers is now open.
Machine Learning helps make complex systems more efficient. By applying advanced Machine Learning techniques such as Cognitive Fingerprinting, wind project operators can utilize these tools to learn from collected data, detect regular patterns, and optimize their own operations. In his session at 18th Cloud Expo, Stuart Gillen, Director of Business Development at SparkCognition, discussed how research has demonstrated the value of Machine Learning in delivering next generation analytics to imp...
SYS-CON Events announced today that ReadyTalk, a leading provider of online conferencing and webinar services, has been named Vendor Presentation Sponsor at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. ReadyTalk delivers audio and web conferencing services that inspire collaboration and enable the Future of Work for today’s increasingly digital and mobile workforce. By combining intuitive, innovative tec...
Amazon has gradually rolled out parts of its IoT offerings, but these are just the tip of the iceberg. In addition to optimizing their backend AWS offerings, Amazon is laying the ground work to be a major force in IoT - especially in the connected home and office. In his session at @ThingsExpo, Chris Kocher, founder and managing director of Grey Heron, explained how Amazon is extending its reach to become a major force in IoT by building on its dominant cloud IoT platform, its Dash Button strat...
Connected devices and the industrial internet are growing exponentially every year with Cisco expecting 50 billion devices to be in operation by 2020. In this period of growth, location-based insights are becoming invaluable to many businesses as they adopt new connected technologies. Knowing when and where these devices connect from is critical for a number of scenarios in supply chain management, disaster management, emergency response, M2M, location marketing and more. In his session at @Th...
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
It is one thing to build single industrial IoT applications, but what will it take to build the Smart Cities and truly society changing applications of the future? The technology won’t be the problem, it will be the number of parties that need to work together and be aligned in their motivation to succeed. In his Day 2 Keynote at @ThingsExpo, Henrik Kenani Dahlgren, Portfolio Marketing Manager at Ericsson, discussed how to plan to cooperate, partner, and form lasting all-star teams to change t...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life sett...
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Bradley Holt, Developer Advocate a...
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
There is little doubt that Big Data solutions will have an increasing role in the Enterprise IT mainstream over time. Big Data at Cloud Expo - to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA - has announced its Call for Papers is open. Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, wh...
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
industrial company for a multi-year contract initially valued at over $4.0 million. In addition to DataV software, Bsquare will also provide comprehensive systems integration, support and maintenance services. DataV leverages advanced data analytics, predictive reasoning, data-driven diagnostics, and automated orchestration of remediation actions in order to improve asset uptime while reducing service and warranty costs.
Vidyo, Inc., has joined the Alliance for Open Media. The Alliance for Open Media is a non-profit organization working to define and develop media technologies that address the need for an open standard for video compression and delivery over the web. As a member of the Alliance, Vidyo will collaborate with industry leaders in pursuit of an open and royalty-free AOMedia Video codec, AV1. Vidyo’s contributions to the organization will bring to bear its long history of expertise in codec technolo...