TULSA, Okla.--(BUSINESS WIRE)-- Williams Partners L.P. (NYSE:WPZ) has completed its previously announced acquisition of Caiman Energys wholly owned subsidiary, Caiman Eastern Midstream, LLC. The acquisition provides Williams Partners (WPZ) with a significant footprint and growth potential in the natural gas liquids-rich portion of the Marcellus Shale.
Williams (NYSE:WMB) owns approximately 68 percent of Williams Partners, including the general-partner interest.
With the completion of this major acquisition, were well on our way to become the leading provider of gathering, processing and transportation solutions for producers in the Marcellus Shale, said Alan Armstrong , chief executive officer of Williams Partners general partner.
The acquisition establishes Williams Partners new Ohio Valley Midstream business. The operation area is northern West Virginia, southwestern Pennsylvania and eastern Ohio. Work is under way to expand the existing physical assets, which include a gathering system and a processing facility. In addition, construction is underway on fractionation and additional processing facilities and there are plans to construct natural gas liquid (NGL) pipelines.
The new business is anchored by long-term contracts, including gathering dedications totaling 236,000 acres from 10 producers. In addition, there are processing commitments in place for 100 million cubic feet per day.
Williams Partners plans to operate its Ohio Valley Midstream business from West Virginia. The partnership has put an experienced management team in place, along with approximately 50 former Caiman Eastern employees, to facilitate continued operations and expansions. It plans to continue to add staff locally.
Williams Partners and the owners of Caiman Energy are continuing work to create a joint venture to develop midstream infrastructure in the NGL- and oil-rich areas of the Utica Shale, primarily in Ohio and northwest Pennsylvania. Caiman Energys private-equity backers include EnCap Flatrock Midstream, EnCap Investments L.P. and Highstar Capital.
Williams Partners funded the approximate $2.4 billion purchase price of the Caiman Eastern acquisition with a combination of approximately $1.72 billion in cash, net of purchase price adjustments, and the issuance to Caiman of approximately 11.8 million Williams Partners common units.
Williams Partners in the Marcellus
The Caiman Eastern acquisition builds on Williams Partners strategy to develop large-scale infrastructure that connects Marcellus Shale producers natural gas and NGLs to the best markets.
Across the Marcellus Shale, the partnership has gathering dedications on 1.2 million acres. It expects gathering volumes there to reach 5 Bcf/d by 2015.
In Northeastern Pennsylvania, Williams Partners is building the Susquehanna Supply Hub, with plans for 3 Bcf/d of takeaway capacity by 2015 to deliver Marcellus Shale production into four major interstate gas pipeline systems.
In western Pennsylvania, Williams Partners owns a 51-percent interest and operates the Laurel Mountain Midstream joint venture. Laurel Mountain includes a gathering system of nearly 1,400 miles of pipeline with a capacity of approximately 230 MMcf/d. The Laurel Mountain system is expected to reach approximately 1 Bcf/d of gathering by 2015.
Williams Partners Transco interstate gas pipeline system runs through eastern Pennsylvania and has several expansion projects that are outlets for Marcellus Shale production. As well, the partnership has an ongoing open season to gauge customer interest in its proposed Atlantic Access project. As proposed, Atlantic Access would significantly expand direct access for Marcellus and Utica Shale natural gas to both Northeast and Southern U.S. markets by late 2015.
About Williams Partners L.P.
Williams Partners L.P. is a leading diversified master limited partnership focused on natural gas transportation; gathering, treating, and processing; storage; natural gas liquid (NGL) fractionation; and oil transportation. The partnership owns interests in three major interstate natural gas pipelines that, combined, deliver 14 percent of the natural gas consumed in the United States. The partnerships gathering and processing assets include large-scale operations in the U.S. Rocky Mountains and both onshore and offshore along the Gulf of Mexico. Williams owns approximately 68 percent of Williams Partners, including the general-partner interest. More information is available at www.williamslp.com.
Williams Partners L.P. is a limited partnership formed by The Williams Companies, Inc. (Williams). Our reports, filings, and other public announcements may contain or incorporate by reference statements that do not directly or exclusively relate to historical facts. Such statements are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You typically can identify forward-looking statements by various forms of words such as "anticipates," "believes," "seeks," "could," "may," "should," "continues," "estimates," "expects," "forecasts," "intends," "might," "goals," "objectives," "targets," "planned," "potential," "projects," "scheduled," "will," or other similar expressions. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to management and include, among others, statements regarding:
- Amounts and nature of future capital expenditures;
- Expansion and growth of our business and operations;
- Financial condition and liquidity;
- Business strategy;
- Cash flow from operations or results of operations;
- The levels of cash distributions to unitholders;
- Seasonality of certain business components; and
- Natural gas, natural gas liquids, and crude oil prices and demand.
Forward-looking statements are based on numerous assumptions, uncertainties and risks that could cause future events or results to be materially different from those stated or implied in this announcement. Many of the factors that will determine these results are beyond our ability to control or predict. Specific factors that could cause actual results to differ from results contemplated by the forward-looking statements include, among others, the following:
- Whether we have sufficient cash from operations to enable us to pay current and expected levels of cash distributions following establishment of cash reserves and payment of fees and expenses, including payments to our general partner;
- Availability of supplies, market demand, volatility of prices, and the availability and cost of capital;
- Inflation, interest rates and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on our customers and suppliers);
- The strength and financial resources of our competitors;
- Ability to acquire new businesses and assets and integrate those operations and assets into our existing businesses, as well as expand our facilities;
- Development of alternative energy sources;
- The impact of operational and development hazards;
- Costs of, changes in, or the results of laws, government regulations (including safety and climate change regulation and changes in natural gas production from exploration and production areas that we serve), environmental liabilities, litigation and rate proceedings;
- Our allocated costs for defined benefit pension plans and other postretirement benefit plans sponsored by our affiliates;
- Changes in maintenance and construction costs;
- Changes in the current geopolitical situation;
- Our exposure to the credit risk of our customers and counterparties;
- Risks related to strategy and financing, including restrictions stemming from our debt agreements, future changes in our credit ratings and the availability and cost of credit;
- Risks associated with future weather conditions;
- Acts of terrorism, including cybersecurity threats and related disruptions; and
- Additional risks described in our filings with the Securities and Exchange Commission (SEC).
Given the uncertainties and risk factors that could cause our actual results to differ materially from those contained in any forward-looking statement, we caution investors not to unduly rely on our forward-looking statements. We disclaim any obligations to and do not intend to update the above list or to announce publicly the result of any revisions to any of the forward-looking statements to reflect future events or developments.
In addition to causing our actual results to differ, the factors listed above may cause our intentions to change from those statements of intention set forth in this announcement. Such changes in our intentions may also cause our results to differ. We may change our intentions, at any time and without notice, based upon changes in such factors, our assumptions, or otherwise.
Limited partner interests are inherently different from the capital stock of a corporation, although many of the business risks to which we are subject are similar to those that would be faced by a corporation engaged in a similar business. Investors are urged to closely consider the disclosures and risk factors in our annual report on Form 10-K filed with the SEC on February 28, 2012, and our quarterly reports on Form 10-Q available from our offices or from our website at www.williamslp.com.
Williams Partners L.P.
Jeff Pounds, 918-573-3332
John Porter, 918-573-0797
Sharna Reingold, 918-573-2078
Source: Williams Partners L.P.Copyright Business Wire 2012