WPX Energy has signed an agreement to divest Van Hook gathering system located in North Dakota, US, to a private equity fund managed by Ares Management subsidiary Ares EIF Group for approximately $185m.
The North Dakota asset considered for the sale features an oil, natural gas and water gathering system.
Under the terms of the deal, WPX will continue to operate the system, which supports the Van Hook peninsula area development.
The system gathers approximately 11,000 barrels per day of oil, approximately 6,500 million cubic feet per day (Mcf/d) of natural gas and approximately 5,000 barrels per day of water. The system also has provision for potential expansion.
Subject to customary conditions, the transaction is planned to be completed during the fourth quarter of this year.
The sale is a part of WPX’s strategy to divest assets worth $400-$500m by the end of 2015 and a further $400-$500m worth of asset in 2016.
The transaction proceeds will be used by WPX to reduce its debt from its acquisition of RKI Exploration & Production.
Ares EIF Group partner and co-head Terence Darby said: "We are excited to make this acquisition since it fits the type of investment that the Ares EIF Group targets – a strong performing asset with stable and capable management and the potential for future expansion."