American Midstream Partners To Buy Assets Worth $100 Mln In Eagle Ford Shale

(RTTNews) - American Midstream Partners, LP (AMID) Wednesday announced agreement to purchase an approximate 120-mile natural gas gathering and redelivery system located in the oil window of the Eagle Ford shale for approximately $100 million.

In December 2013, an affiliate of American Midstream's general partner entered into a purchase and sale agreement with a subsidiary of Penn Virginia Corporation (PVA) to acquire the gathering and redelivery system.

"The gathering system is located in an area of the Eagle Ford that is a primary investment focus for Penn Virginia. As such, we believe there are opportunities for significant midstream infrastructure growth, which we expect will lower the acquisition multiple by several hundred basis points over the next several years, " said Steve Bergstrom, Executive Chairman, President and CEO.

American Midstream will effect the closing of the transaction by acquiring 100 percent of the equity of the affiliate of its general partner that previously entered into the purchase and sale agreement with Penn Virginia.

Upon closing the acquisition with Penn Virginia, American Midstream will also enter into a long-term, fee-based gathering agreement, whereby Penn Virginia will dedicate for 25 years all current and future natural gas production from the areas served by the system.

The transaction is expected to close in January 2014, subject to financing and other customary closing conditions.