US-based Crestwood Midstream Partners’ subsidiary Crestwood Niobrara has signed an agreement to buy 50% interest in the Jackalope Gas Gathering Services from RKI Exploration & Production for nearly $108m.
The Jackalope Gas Gathering Services manages the Jackalope gathering and processing system located in Converse County, Wyoming, US.
The deal provides an early stage entry to Crestwood into the emerging Powder River Basin Niobrara Shale play and will provide Crestwood future infrastructure development opportunities across the rich gas and crude oil midstream value chain.
Crestwood general partner chairman, president and chief executive officer Robert G. Phillips said the company is focusing on its development efforts on rich gas plays such as the Powder River Basin Niobrara Shale.
"This transaction is an important next step in the development of that strategy and positions Crestwood in a growing play with an experienced midstream partner supported by a long-term contract and large acreage dedication being developed by very capable shale producers," Phillips added.
Access Midstream Partners owns the other 50% interest in Jackalope. The company has acquired the interest from Chesapeake Energy in December 2012.
Post Crestwood’s acquisition, Access will continue to provide field operations and construction management for Jackalope, while Crestwood will assume the commercial development role for the joint venture.
The Jackalope System is being developed to gather and process rich natural gas produced from a 311,000 acre area in Converse County.
The acquisition is expected to close in the third quarter of 2013.