Penn Virginia Resource Partners has acquired pipeline assets in the Anadarko Basin of Oklahoma and Texas from a private seller for $29.7 million in cash.
Funding for the acquisition was provided by borrowings under Penn Virginia Resource Partners’s (PVR) revolving credit facility. The acquired assets consist of 100 miles of 10-inch and 12-inch diameter pipelines and approximately 5,000HP of compression and are located in the Anadarko Basin in Roger Mills County, Oklahoma, and in Hemphill, Ochiltree and Roberts counties of Texas.
The acquired pipelines expand PVR Midstream’s gathering footprint and provide access to additional sources of natural gas production. Prior to the acquisition, PVR Midstream had gas volumes on its gathering systems that it could not process due to capacity constraints at its Beaver plant.
This acquisition will allow certain previously non-contiguous pipeline and gathering systems to be connected, giving PVR Midstream the option of moving volumes directly to either its 100 million cubic feet per day (mmcfd) Beaver gas processing plant or its 60mmcfd Spearman gas processing plant, which was placed into service in February 2008.
James Dearlove, CEO of PVR, said: We are pleased with this acquisition, which enhances PVR Midstream’s organic growth opportunities and creates operating synergies with existing midstream assets. With the combination of strong processing margins currently in our Beaver-Spearman system area and new third party gathering and processing volumes, we expect the acquisition to be immediately accretive to PVR’s distributable cash flow.