Summit Midstream Partners (SMLP) Announces the Sale of its Bison Gas Gathering System in North Dakota
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Summit Midstream Partners, LP (NYSE: SMLP) (“Summit”, “SMLP” or the “Partnership”) today announced that its wholly-owned subsidiary, Summit Midstream Holdings, LLC (“SMP Holdings”), has signed and completed the sale of Bison Midstream, LLC (“Bison Midstream”), its gas gathering system in Burke and Mountrail counties, North Dakota to Steel Reef Infrastructure Corp. (“Steel Reef” or the “Company” through its wholly owned subsidiary Steel Reef US Corp.), an integrated owner and operator of associated gas capture, gathering and processing assets in North Dakota North and Saskatchewan, for a cash consideration of $40 million, subject to customary transaction adjustments.
Heath Deneke, President, CEO and Chairman of the Board, said, “We are pleased to announce this strategic transaction with Steel Reef. Combined with the previously announced divestiture of the Lane Gathering and Processing System earlier this summer, the sale of Bison Midstream represents a continuation of our strategy to rationalize our asset portfolio through balance sheet enhancing transactions while creating additional financial flexibility to reinvest in more strategic scale development opportunities across our footprint. With the sale of Bison Midstream, Summit will focus in the Williston Basin on growing its crude oil gathering systems and produced water primarily located in Williams and Divide counties, North Dakota. We remain pleased with the level of customer development activity in Central Williams County and pro forma for the transaction, we continue to expect over 50 new wells behind our liquids system in 2023. Pro forma for the transaction, SMLP has approximately $90 million drawn on its $400 million ABL credit facility, which translates to more than $300 million of available liquidity. We continue to expect a trend up our 2022 Adjusted EBITDA guidance range of $205 million to $220 million. »
Presentation of the bison
The Bison Midstream system is located in Mountrail and Burke counties in northwestern North Dakota. Bison Midstream collects, compresses and processes the associated natural gas that exists in the crude oil stream produced from the Bakken and Three Forks shale formations. Gathering agreements for the Bison Midstream system include long-term, fee-based or percentage-of-revenue contracts. Volume throughput on the Bison Midstream system is supported by area concessions from its major customers. A major independent US crude oil and natural gas company and Chord Energy Corporation are major customers of Bison Midstream. Natural gas collected on the Bison Midstream system is delivered to the Aux Sable Midstream LLC (“Aux Sable”) Palermo packing plant in Palermo, ND, and then delivered to downstream pipelines serving the plant Aux Sable’s 2.1 Bcf/d natural gas processing plant in Channahon, Illinois. .
Locke Lord LLP served as counsel to Summit and Bracewell LLP served as counsel to Steel Reef.