Crestwood Equity Partners has announced the divestiture of its Marcellus natural gas gathering and compression assets to Antero Midstream Corporation, for $205 million in cash, representing a multiple of over 7 times 2023E Adjusted EBITDA, subject to customary adjustments. These assets located in Doddridge County and Harrison County, West Virginia, comprise a legacy gas system that was acquired in 2012 and was impacted in recent years by Crestwood’s anchor producer focusing development activity on the rich gas window of the Southwest Marcellus Shale. As a result, Crestwood’s assets have been on natural field decline since 2017 and are non-core to Crestwood’s long-term growth strategy of becoming a leading midstream operator in the Williston, Delaware, and Power River basins. Crestwood intends to use the proceeds from the sale of these assets to enhance financial flexibility through a combination of debt reduction and opportunistic common unit repurchases.
“Over the past ten years, our employees in the Marcellus Shale have done an incredible job to build and operate a premier natural gas gathering and compression system, safely and sustainably. Many of Crestwood’s peer-group leading operational practices were developed in the Marcellus and form the basis of the best-in-class operations program across our midstream G&P portfolio. I would like to personally thank these employees for their dedication and loyalty,” commented Robert G. Phillips, Founder, Chairman, and Chief Executive Officer.
Mr. Phillips continued, “This timely and market-based divestiture is another strategic transaction that highlights Crestwood’s long-term commitment to maximizing unitholder value through portfolio optimization and redeployment of proceeds from legacy non-core assets to further strengthen our balance sheet and improve financial flexibility for unit repurchases and higher returning investment opportunities in our core areas. Over the past 18 months, Crestwood has strategically enhanced its asset portfolio to build competitive scale in its core basins, and as we focus on optimizing and integrating the Oasis Midstream, Sendero Midstream, and CPJV acquisitions, today’s announcement highlights our confidence in the portfolio achieving our long-term leverage ratio target of sub 3.5x in 2023 and demonstrates our commitment to generating accretive unitholder returns and solidifying our financial flexibility for the future.”
