Daily News: March 24, 2014

Evercore Advises Summit Midstream on Red Rock Gathering Buy

Summit Midstream Partners announced that its wholly owned subsidiary, Grand River Gathering, closed the previously announced acquisition of Red Rock Gathering Company from a subsidiary of Summit Midstream Partners for total cash consideration of $305 million, subject to customary working capital adjustments.

The board of director’s conflicts committee engaged Evercore Partners to act as independent financial advisor and render a fairness opinion, and Akin Gump Strauss Hauer & Feld acted as its legal advisor.

Red Rock’s largest customers include subsidiaries of WPX Energy, Encana, Noble Energy, Black Hills, Piceance Energy and Ursa Resources Group II. For the year ended December 31, 2013, volume throughput on the Red Rock system averaged 148 MMcf/d, and more than 80.0% of its revenue was generated from fee-based services.

Pro forma for the Red Rock drop down, SMLP will continue to generate more than 90.0% of its revenue under long-term, fee-based contracts and will have over 4.2 Tcf of minimum volume commitments through 2026.

The terms of the Red Rock drop down transaction were approved by the board of directors of SMLP’s general partner and by the conflicts committee, which consists entirely of independent directors.

Dallas-headquartered Summit Midstream Partners is a growth-oriented limited partnership focused on developing, owning and operating midstream energy infrastructure assets located in the core producing areas of unconventional resource basins, primarily shale formations, in North America.

Red Rock is a natural gas gathering and processing system located in the Piceance Basin in western Colorado and eastern Utah.