Midstream natural gas company Williams Partners has agreed to acquire certain membership interests in Wamsutter from Williams, an Oklahoma-based oil and gas firm, for $750 million.
Wamsutter owns the Wamsutter system, which includes an approximately 1,700 mile natural gas gathering system in the Washakie basin in south-central Wyoming and the Echo Springs cryogenic processing plant near Wamsutter, Wyoming.
Under the terms of the agreement, Williams Partners will acquire 100% of the class A membership interest in Wamsutter and 50% of the initial class C units, while Williams will retain 100% of the class B membership interest in Wamsutter and 50% of the initial class C units.
The transaction structure is intended to allow Williams Partners to receive cash flows from the existing Wamsutter business and at least 5% of the increase in cash flows resulting from growth of the existing business with Williams.
Williams has agreed to contribute funds to Williams Partners from 2008 until 2012 to limit general and administrative expense to defined levels. For the nine month period ended September 30, 2007, Williams Partners would have received an additional $4.5 million from these contributions.