Summit Midstream (SMLP) will sell its assets in the Utica Shale to an MPLX subsidiary for $625 million in cash.
The deal, announced March 22, includes Summit's 36% interest in the Ohio Gathering Co. and 38% interest in the Ohio Condensate Co., along with other Utica assets. Ohio Gathering owns and operates midstream infrastructure that includes dry and wet natural gas gathering systems and condensate transportation and storage in Southeastern Ohio.
Summit used the deal to drop some of its natural gas-centric assets out of its portfolio at a time of low prices to focus instead on plays that are producing far more profitable crude.
The transaction is the culmination of a strategic review process undertaken by the Summit board of directors, announced on Oct. 3, 2023, Summit said in a press release. The board considered options to increase value for shareholders, including an outright sale of the company.
"We believe there are several value optimizing strategies to pursue to further build scale, particularly in our Permian and Rockies segments," said Heath Deneke, Summit CEO. Crude-rich basins will account for 55% of the company's portfolio after the sale.
According to the company, the sell increases liquidity with a $400 million credit facility and more than $325 million of unrestricted cash, allowing it to reduce debt.
Marathon Petroleum formed MPLX in 2012 as a limited partnership to focus on midstream and logistic infrastructure in key U.S. natural gas basins.
Recommended Reading
Deepwater Roundup 2024: Offshore Australasia, Surrounding Areas
2024-04-09 - Projects in Australia and Asia are progressing in part two of Hart Energy's 2024 Deepwater Roundup. Deepwater projects in Vietnam and Australia look to yield high reserves, while a project offshore Malaysia looks to will be developed by an solar panel powered FPSO.
The OGInterview: How do Woodside's Growth Projects Fit into its Portfolio?
2024-04-01 - Woodside Energy CEO Meg O'Neill discusses the company's current growth projects across the globe and the impact they will have on the company's future with Hart Energy's Pietro Pitts.
Third Suriname Find for Petronas, Exxon Could Support 100,000 bbl/d FPSO
2024-05-17 - A recent find offshore Suriname in Block 52 by Petronas and Exxon Mobil could support a 100,000 bbl/d FPSO development, according to Wood Mackenzie.
Deepwater Roundup 2024: Offshore Europe, Middle East
2024-04-16 - Part three of Hart Energy’s 2024 Deepwater Roundup takes a look at Europe and the Middle East. Aphrodite, Cyprus’ first offshore project looks to come online in 2027 and Phase 2 of TPAO-operated Sakarya Field looks to come onstream the following year.
E&P Highlights: Feb. 26, 2024
2024-02-26 - Here’s a roundup of the latest E&P headlines, including interest in some projects changing hands and new contract awards.