Western Gas Partners LP (NYSE: WES) acquired a 50% interest in the Delaware Basin joint venture (DBJV) gathering system from Anadarko Petroleum Corp. (NYSE: APC).

Western Gas paid no consideration at closing, but agreed to make a future payment on March 31, 2020, equal to eight times the average of the system’s 2018 and 2019 EBITDA, less capital expenditures incurred from closing through Feb. 29, 2020. Based on the current forecast of the gathering system’s performance and capital needs, Western Gas expects to pay $283 million on the agreed upon date.

In conjunction with the acquisition, Anadarko amended its existing gathering agreement with DBJV to extend the term to Dec. 31, 2024. Gathering rates are determined using a cost-of-service methodology under which DBJV earns a targeted rate of return of 18% over the life of the agreement. Western Gas estimates that the net present value of the purchase price payment is $176 million and that the asset will generate $15-25 million of EBITDA in 2015.

Terms of the acquisition were approved by the board of directors of Western Gas’ general partner and by the board’s special committee, which is entirely composed of independent directors. The special committee engaged Evercore Partners to act as its financial adviser and Bracewell & Giuliani LLP to act as its legal adviser.