Summit Midstream Partners Unit To Buy Red Rock Gathering For $305 Mln

(RTTNews) - Grand River Gathering, LLC, the wholly-owned subsidiary of Summit Midstream Partners, LP (SMLP) Monday announced agreement to acquire Red Rock Gathering Co., LLC, a natural gas gathering and processing system located in the Piceance Basin in western Colorado, for a total cash consideration of $305.0 million.

The Red Rock drop down will be partially financed with a draw of approximately $110.0 million under SMLP's revolving credit facility. The balance of the acquisition is expected to be financed with the proceeds from a primary equity offering of SMLP common units.

The acquisition strengthens SMLP's presence in western Colorado's Piceance Basin, which includes the liquids-rich Mesaverde formation as well as the Mancos and Niobrara shale formations.

"With the recent commissioning of Red Rock's new cryogenic processing plant for Black Hills Corporation and the ongoing development of natural gas gathering infrastructure for WPX Energy, we believe that Red Rock will be a source of growth for SMLP for many years, " said Steve Newby, President and CEO.