Williams and Crestwood Equity Partners LP have announced that Williams has sold its 50% interest in Jackalope Gas Gathering Services LLC to an affiliate of Crestwood for US$484.6 million.
Prior to the transaction, Crestwood was Williams’ 50% joint venture partner in Jackalope where Williams acted as operator, responsible for managing construction and operations and Crestwood served as marketer, responsible for commercial services. Following the transaction, Crestwood has assumed operatorship of Jackalope.
“We continue to optimise our portfolio to improve our credit metrics while maintaining the growth embedded in our guidance,” said Alan Armstrong, President and CEO of Williams. “This win-win transaction frees up capital that we can re-deploy into high-return assets that are better linked to our strategy, while providing Crestwood with the entire ownership of an asset that is key to their Powder River Basin strategy. We’ve been pleased with our partnership with Crestwood and know that employees who move from Williams to Crestwood will continue operating these assets safely and reliably.”
Robert G. Phillips, Chairman, President and CEO of Crestwood, commented, “This transaction positions Crestwood to be the leading gathering and processing company in the highly prolific Powder River Basin which has emerged as a core growth asset for our partnership. We would like to thank Williams for a very strong partnership, welcome all of the highly-talented employees that will join Crestwood as part of the transaction, and reaffirm our commitment to providing best-in-class customer service for the producers the assets provide midstream services for in the basin. Crestwood is committed to generating accretive growth while maintaining financial discipline and this transaction is perfectly aligned with this strategy of generating long-term value to our unitholders.”
The Jackalope holdings are in Converse County, Wyoming, and provide gathering, compression and processing services and include the Jackalope Gas Gathering System and the Bucking Horse Processing Plant.
RBC Capital Markets acted as financial adviser to Williams and Davis Polk & Wardell served as legal counsel to Williams. Evercore acted as financial adviser to Crestwood and Vinson & Elkins served as legal counsel to Crestwood.
Williams plans to provide updated 2019 financial guidance with its 1Q19 earnings release.
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/12042019/williams-sells-its-50-interest-in-jackalope-gas-gathering-services/