Midstream energy player Williams Partners LP recently declared that it has concluded separate deals with Western Gas Partners, LP (WES - Free Report) , Anadarko Petroleum Corporation (APC - Free Report) , and Energy Transfer Partners, L.P. , and some of their respective subsidiaries. The partnership was paid an aggregate cash consideration of $200 million in relation to these deals. We note that the agreements increase Williams Partners’ ownership in two Marcellus Shale gathering systems in exchange for its ownership stakes in Delaware Basin joint venture and Ranch Westex assets.
Western Gas and its subsidiaries received 50% of Williams Partners ownership stake in Delaware Basin JV Gathering LLC, which is already operated by the former. In turn, Williams Partners acquired Western Gas’ 33.75% ownership stake in both the Rome and Liberty natural gas gathering systems in northern Pennsylvania, and a cash payment of $155 million. The acquisition increased Williams Partners’ ownership interest to 67.5% in both the Rome and Liberty gathering systems. These facilities are already operated by Williams Partners and are included in its Bradford Supply Hub in the Northeast G&P segment. Current throughput at the Rome and Liberty gathering systems is approximately 1.6 billion cubic feet per day.
Following the deals, Williams Partners sold its 33.33% interest in Ranch Westex JV LLC to Anadarko Petroleum and Energy Transfer Partners, in equal proportions, for a total of $45 million in cash ($22.5 million each). Ranch Westex is the owner of the Bone Springs gas processing plant in the Delaware Basin.
Williams Partners intends to use aggregate cash of $200 million for general partnership purposes, including the funding of growth capital.
About the Partnership
Williams Partners is engaged in gathering, processing, transporting and storing natural gas and natural gas liquids. The partnership is headquartered in Oklahoma City. Williams Partners currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last one year, Williams Partners’ units have outperformed Zacks categorized Energy And Pipeline - Master Limited Partnership (MLP) industry. William Partners’ units gained 102.22% compared with the industry’s increase of 93.89%.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>