Summit Midstream (SMLP) will sell its assets in the Utica Shale to an MPLX subsidiary for $625 million in cash.
The deal, announced March 22, includes Summit's 36% interest in the Ohio Gathering Co. and 38% interest in the Ohio Condensate Co., along with other Utica assets. Ohio Gathering owns and operates midstream infrastructure that includes dry and wet natural gas gathering systems and condensate transportation and storage in Southeastern Ohio.
Summit used the deal to drop some of its natural gas-centric assets out of its portfolio at a time of low prices to focus instead on plays that are producing far more profitable crude.
The transaction is the culmination of a strategic review process undertaken by the Summit board of directors, announced on Oct. 3, 2023, Summit said in a press release. The board considered options to increase value for shareholders, including an outright sale of the company.
"We believe there are several value optimizing strategies to pursue to further build scale, particularly in our Permian and Rockies segments," said Heath Deneke, Summit CEO. Crude-rich basins will account for 55% of the company's portfolio after the sale.
According to the company, the sell increases liquidity with a $400 million credit facility and more than $325 million of unrestricted cash, allowing it to reduce debt.
Marathon Petroleum formed MPLX in 2012 as a limited partnership to focus on midstream and logistic infrastructure in key U.S. natural gas basins.
Recommended Reading
For Sale, Again: Oily Northern Midland’s HighPeak Energy
2024-03-08 - The E&P is looking to hitch a ride on heated, renewed Permian Basin M&A.
E&P Highlights: Feb. 26, 2024
2024-02-26 - Here’s a roundup of the latest E&P headlines, including interest in some projects changing hands and new contract awards.
Gibson, SOGDC to Develop Oil, Gas Facilities at Industrial Park in Malaysia
2024-02-14 - Sabah Oil & Gas Development Corp. says its collaboration with Gibson Shipbrokers will unlock energy availability for domestic and international markets.
E&P Highlights: Feb. 16, 2024
2024-02-19 - From the mobile offshore production unit arriving at the Nong Yao Field offshore Thailand to approval for the Castorone vessel to resume operations, below is a compilation of the latest headlines in the E&P space.
TotalEnergies Acquires Eagle Ford Interest, Ups Texas NatGas Production
2024-04-08 - TotalEnergies’ 20% interest in the Eagle Ford’s Dorado Field will increase its natural gas production in Texas by 50 MMcf/d in 2024.