Welcome to the Business Journal Archives
Search for articles below, or continue to the all new BusinessJournalDaily.com now.
Search
Devon, Crosstex Energy to Combine Midstream Assets
YOUNGSTOWN, Ohio -- Devon Energy Corp. and Crosstex Energy Inc., based in Dallas, announced Monday theyhave signed definitive agreements to combine substantially all of Devon’s U.S. midstream assets with Crosstex’s assets to form a new midstream partnership. The new business will consist of two publicly traded entities: the master limited partnership and a general partner entity.
Devon, based in Oklahoma City, will hold a controlling stake in both entities. The new company will be based in Dallas.
The combination of Devon’s and Crosstex’s midstream systems, including gathering and transportation pipelines, and processing, fractionation and logistics assets, provides the new company with diversification and scale, along with an enhanced liquids-oriented growth profile, according to the companies. These assets are located in the Barnett Shale, Permian Basin, Cana and Arkoma Woodford, Eagle Ford, Haynesville, Gulf Coast, Utica and Marcellus shale plays.
In May, Crosstex announced it would invest $25 million to build its third natural gas compression and condensate stabilization facility in the Ohio Valley. Its plants operate in Noble and Monroe counties.
The new company will have approximately 7,300 miles of gathering and transportation pipelines, 13 processing plants with 3.3 billion cubic feet per day of net processing capacity, 6 fractionators with 165 million barrels per day of net fractionation capacity, as well as barge and rail terminals, product storage facilities, brine disposal wells and an extensive crude oil trucking fleet.
Under the terms of the definitive agreements, in exchange for a controlling interest in both the new general partner entity and the master limited partnership, Devon will contribute its equity interest in the newly formed Devon Holdings and $100 million in cash. Devon’s contributed assets are valued at $4.8 billion in the transaction, the company said.
Shareholders of Crosstex Energy will receive one unit in the general partnership plus $2 in cash for each share of Crosstex.
Copyright 2013 The Business Journal, Youngstown, Ohio.
CLICK HERE to subscribe to our twice-monthly print edition and to our free daily email headlines.