HOUSTON, TX — (Marketwire) — 10/18/11 — Crestwood Midstream Partners LP (NYSE: CMLP) (“Crestwood”) announced today the signing of a definitive agreement to acquire Tristate Sabine, LLC (“Tristate”) from affiliates of Energy Spectrum Capital, Zwolle Pipeline, LLC and the Tristate management for $65 million of cash to be paid at closing and a deferred payment of approximately $8 million one year following the closing date, subject to customary post-closing adjustments.
Separately, Crestwood–s general partner has declared its regular quarterly distribution of $0.48 per unit for the quarter ended September 30, 2011. This distribution will be payable on November 10, 2011, to unitholders of record on November 1, 2011. The distribution represents a 14.3 percent increase over the $0.42 per unit distribution paid with respect to the third quarter of 2010. The Class C units issued in April 2011 will not receive a cash distribution, but will instead be issued additional Class C units.
Crestwood will acquire entities that own and operate approximately 52 miles of high-pressure natural gas gathering pipelines located in Sabine Parish, Louisiana (the “Tristate System”). The Tristate System provides gathering and treating services for Haynesville and Bossier Shale production from the Toledo Bend South field area for redelivery to Gulf South Pipeline and Tennessee Gas Pipeline. Contracts on the Tristate System dedicate approximately 20,000 acres under long-term, fixed-fee arrangements. System capacity is currently being expanded to 100 million cubic feet per day (“MMcf/d”) for gathering and 80 MMcf/d for treating. The majority of the system has been constructed since 2009.
“We are pleased to announce another acquisition which diversifies Crestwood–s shale play midstream portfolio,” stated Robert G. Phillips, President and Chief Executive Officer of Crestwood–s general partner. “The Tristate acquisition fits with our strategy of owning assets in core shale play acreage that are backed by long-term, fixed-fee contracts with experienced producers. This transaction comes at a compelling value and will be easily integrated into Crestwood.”
“The acquisition will be immediately accretive to cash flow, adding approximately $9.0 million annually on the basis of estimated fourth quarter 2011 results. This forecast includes the completion of current pipeline projects and the connection of recently contracted wells. Over the long term, we believe there is substantial in-fill drilling development potential on the dedicated acreage and numerous expansion opportunities in the area,” continued Phillips.
The acquisition is expected to close on November 1, 2011, and will be financed with borrowings under Crestwood–s existing revolving credit facility. Evercore Partners acted as exclusive sell side advisor in this transaction.
Crestwood expects to announce its financial results for the third quarter of 2011 on Tuesday, November 8, 2011, before the New York Stock Exchange opens for trading. Following the announcement, Crestwood will host a conference call for investors and analysts at 9:00 a.m. Central Time that day to discuss the operating and financial results. Interested parties may participate in the call by joining the conference call at 888-438-5448 and entering passcode 4556564. The conference call will also be webcast live and can be accessed through the Investor Relations section of our website. A replay will be available for 30 days following the conference call by dialing 888-203-1112 and entering the replay passcode 4556564 or through the Investor Relations section on our website.
Houston, Texas-based Crestwood is a growth-oriented, midstream master limited partnership which owns and operates predominately fee-based gathering, processing, treating and compression assets servicing natural gas producers in the Barnett Shale in North Texas, the Fayetteville Shale in Northwest Arkansas, the Granite Wash area in the Texas Panhandle and the Avalon Shale area of Southeastern New Mexico. For more information about Crestwood LP, visit .
The statements in this news release regarding future events, occurrences, circumstances, activities, performance, outcomes and results are forward-looking statements. Although these statements reflect the current views, assumptions and expectations of Crestwood–s management, the matters addressed herein are subject to numerous risks and uncertainties which could cause actual activities, performance, outcomes and results to differ materially from those indicated. Such forward-looking statements include, but are not limited to, statements about the future financial and operating results, objectives, expectations and intentions and other statements that are not historical facts. Factors that could result in such differences or otherwise materially affect Crestwood–s financial condition, results of operations and cash flows including, without limitation, changes in general economic conditions; fluctuations in natural gas prices; failure or delays by our customers in achieving expected production in their natural gas projects; competitive conditions in our industry; actions or inactions taken or non-performance by third parties, including suppliers, contractors, operators, processors, transporters and customers; our ability to consummate acquisitions, successfully integrate acquired businesses and realize any cost savings and other synergies from any acquisition; fluctuations in the value of certain of our assets and liabilities; changes in the availability and cost of capital; operating hazards, natural disasters, weather-related delays, casualty losses and other matters beyond our control; construction costs or capital expenditures exceeding estimated or budgeted amounts; the effects of existing and future laws and governmental regulations, including environmental and climate change requirements; the effects of existing and future litigation; and risks related to our substantial indebtedness; as well as other factors disclosed in Crestwood–s filings with the Securities and Exchange Commission. You should read our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2010, our subsequently filed Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K, for a more extensive list of factors that could affect results. The forward-looking statements included in this news release are made only as of the date hereof and we undertake no obligation to publicly update or revise any of these forward-looking statements to reflect new information, future events or circumstances except to the extent required by law.
Mark Stockard
832-519-2207