The partnership will acquire Chesapeake‘s 100% ownership interest in the Springridge system which consists of 220 miles of gathering pipeline in Caddo and De Soto Parishes, Louisiana.
The average throughput on the system during the 2010 third quarter was approximately 400 million cubic feet per day, with significant future exposure to third-party volume.
At closing, the partnership will simultaneously enter into a 10-year, 100% fixed-fee gas gathering agreement with Chesapeake which includes a significant acreage dedication, annual fee redetermination and a minimum volume commitment.
The acquisition will be financed with a draw on the partnership’s revolving credit facility of approximately $250m plus $250m of cash on hand.
Following the transaction, the partnership will have approximately $500m of additional borrowing capacity on its credit facility.
The acquisition is expected to close before 31 December 2010.
