Joint venture with Crowheart Energy transitions the upstream asset to a proven operator
The joint venture involves the consolidation of three legacy operating assets consisting of over 1.2 million net acres. (Credit: Gerd Altmann from Pixabay)
Williams (NYSE: WMB) announced today that it has finalized an upstream joint venture with Crowheart Energy (Crowheart) in the Wamsutter Field of the Greater Green River Basin of Wyoming. The joint venture involves the consolidation of three legacy operating assets consisting of over 1.2 million net acres, over 3,500 operating wells, and more than 3,000 potential development locations. The transaction consolidates the legacy BP, Southland and Crowheart upstream assets into one contiguous footprint, delivering operational cost savings and synergies, while unlocking significant long lateral development inventory. Williams’ strategic efforts to combine the Wamsutter Field reserves will enhance the value of its midstream and downstream natural gas and NGL infrastructure.
“We are excited to enter into this joint venture with a strong and well-capitalized operator with an ownership structure that will reduce costs, stimulate development activity, drive volumes and position our midstream and downstream assets for growth,” said Chad Zamarin, Williams Senior Vice President of Corporate Strategic Development. “Today’s announcement is the culmination of Williams’ consolidation efforts in the Wamsutter Field. With Crowheart as our operating partner, we position the upstream platform with a proven in-basin operator who is committed to optimizing and developing the consolidated assets.”
Under the joint venture, Crowheart will operate the parties’ consolidated upstream position and Williams will continue to operate and retain full ownership of its midstream assets. Williams will also retain real estate, surface and other rights designed to enable further expansion of midstream and renewable energy opportunities in Wyoming. The existing large scale and efficient infrastructure will allow this resource to be produced in an environmentally responsible manner.
Other key highlights of the joint venture include the following:
Initially Williams and Crowheart will own 75% and 25% respective interests, although Crowheart may increase its ownership through performance under a development program designed to enhance the value of Williams’ midstream assets.
Williams retains significant governance rights, including control of the selection and pace of operations pursued, and the ability to exit its upstream ownership position.
Upstream assets will be subject to a single, expanded fixed fee gathering and processing agreement, eliminating commodity price sensitive contracts while combining numerous existing agreements into a simplified structure.
9NGL volumes from each of the legacy upstream assets will be combined and dedicated to Williams, adding transportation volumes on Overland Pass Pipeline (OPPL) and Bluestem, and increasing downstream fractionation volumes at attractive rates.
Residue gas from the jointly held assets will be aggregated for downstream marketing and transportation, creating opportunities for enhanced margin as well as downstream fee-based revenue.
“The Wamsutter Field consolidation is a transformational milestone for the Greater Green River Basin. It provides the corporate scale, field operating efficiencies, water infrastructure backbone and new well development platform needed to make our basin an important and growing source of natural gas, natural gas liquids and oil,” said Crowheart Chairman Robb Turner. “Our team looks forward to working with Williams, our local communities, regulators and service providers to realize the full potential of this exciting transaction.”
Source: Company Press Release