A subsidiary of Devon Energy Corp. (NYSE: DVN) agreed to sell substantially all of its natural gas gathering equipment and pipeline to Meritage Midstream Services II LLC, Meritage said May 4.
Meritage, based in Denver, and subsidiary Thunder Creek Gas Services LLC purchased various assets, including 115 miles of pipeline located in the southern part of Wyoming’s Powder River Basin. Financial terms of the transaction were not disclosed.
The transaction includes Devon’s long-term dedication of 250,000 acres in the basin.
Thunder Creek’s operations now span various resource plays in the Powder River Basin, including the Turner, Teapot, Parkman, Sussex, Niobrara, Frontier and Mowry.
Meritage CEO Steve Huckaby said the company has worked with Devon since entering the Powder River in 2013 and has developed strong relations with the company as well as other producers.
“We all share a common vision and mutual enthusiasm for the future of the Powder River Basin,” Huckaby said. “Economics in the basin are strong and we are seeing activity ramp up as producers recognize the long-term value of the basin’s formations.”
Meritage Midstream affiliates are backed by equity commitments of up to $800 million by Riverstone Holdings LLC.
Vinson & Elkins LLP provided legal counsel to Meritage on the Devon transaction.