Penn Virginia Corp. (PVA) sold the right to build and operate a crude oil gathering and intermediate transportation system covering a portion of its Eagle Ford Shale acreage to Republic Midstream LLC for $150 million, the company said in a statement. Republic is a joint venture funded by ArcLight Capital Partners LLC and managed by American Midstream Partners LP and JP Energy Partners LP. American Midstream and JP Energy are both affiliates of ArcLight. Part of the net proceeds from the sale will be used to repay the outstanding balance on PVA’s revolving credit facility, and the remainder will be used to help fund its Eagle Ford capital program.
The oil gathering system and an associated central delivery and blending station will be built in Gonzales and Lavaca counties, Texas, and are expected to enter service by mid-2015. PVA will have a minimum committed volume of 15,000 barrels of oil per day for 10 years from the dedicated portion of its acreage.
Acquest Advisors LLC served as PVA's financial advisor in connection with the transaction.
H. Baird Whitehead, president and CEO, said, “This transaction, along with the pending sale of our Mississippi assets and the gas gathering sale to American Midstream Partners in January, brings the total proceeds from 2014 asset sales to $319 million, exceeding our original goal of up to $300 million.”
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