EQT Midstream, EQT GP Holdings, and Rice Midstream Partners Enter Streamlining Transaction
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EQT Midstream Partners (EQM), EQT GP Holdings (EQGP), and Rice Midstream Partners (RMP) entered into a midstream streamlining transaction that includes:
• EQM’s acquisition of EQT Corporation’s retained midstream assets and Gulfport Energy’s 25 percent ownership in the Strike Force Gathering System for $1.69 billion. EQT will receive $1.15 billion in cash and 5.9 million EQM common units and Gulfport Energy will receive $175 million in cash.
• The merger of EQM and RMP in a unit-for-unit transaction at an exchange ratio of 0.3319x, which implies a transaction value of $2.4 billion, including the assumption of RMP debt. The RMP debt balance as of March 31, 2018 was $325 million.
• EQGP’s purchase of RMP’s Incentive Distribution Rights (RMP IDRs) from EQT for 36.3 million EQGP common units.
TRANSACTION DETAILS
EQM has entered into a definitive agreement with EQT to acquire its Olympus Gathering System and its 75 percent interest in the Strike Force Gathering System. EQM has also entered into a definitive agreement with Gulfport Energy to acquire its 25 percent interest in the Strike Force Gathering System. EQT will receive $1.15 billion in cash and 5.9 million EQM common units and Gulfport Energy will receive $175 million in cash. Additional details regarding the Olympus Gathering System and the Strike Force Gathering System (Ohio Gathering Assets). The acquisition is expected to close in the second quarter of 2018.
EQM and RMP have entered into a definitive merger agreement under which EQM will acquire RMP in a unit-for-unit transaction. Each holder of a common unit of RMP will receive 0.3319 units of EQM, representing a 10 percent premium to RMP and an equity value of $2.1 billion based on the closing RMP and EQM unit prices on April 25, 2018. EQM will also assume RMP debt, which totaled $325 million as of March 31, 2018. The transaction is expected to close in the third quarter of 2018.
The merger of EQM and RMP creates significant operational efficiencies through the optimized buildout of gathering and header pipeline systems to service the combined EQT and legacy Rice Energy acreage footprint. The efficiency gains are expected to result in approximately $500 million of capital avoidance, while achieving the same level of gathered volume growth during the next five years. In addition to the capital synergies, EQM expects to realize savings of approximately $15 million per year in operating and maintenance expense and selling, general and administrative expense.
EQGP has entered into a definitive agreement with EQT to acquire its ownership of the RMP IDRs for 36.3 million EQGP common units, which represents $937 million based on the April 25, 2018 EQGP closing unit price. The transaction is expected to close in the second quarter of 2018.
OHIO GATHERING ASSETS
The Ohio Gathering Assets consist of two dry natural gas gathering systems, known as Olympus and Strike Force. The Ohio Gathering Assets were designed and constructed to gather natural gas in the Utica shale in eastern Ohio, primarily in Belmont and Monroe Counties.
About EQT Midstream Partners
EQT Midstream Partners, LP is a growth-oriented limited partnership formed by EQT Corporation to own, operate, acquire, and develop midstream assets in the Appalachian Basin. The partnership provides midstream services to EQT Corporation and third-party companies through its strategically located transmission, storage, and gathering systems that service the Marcellus and Utica regions. The partnership owns approximately 950 miles of FERC-regulated interstate pipelines; and also owns approximately 1,800 miles of high- and low-pressure gathering lines.
To stop by EQT Midstream Partners’ website, CLICK HERE
About EQT GP Holdings
EQT GP Holdings, LP is a limited partnership that owns the general partner interest, all of the incentive distribution rights, and a portion of the limited partner interests in EQT Midstream Partners, LP. EQT Corporation owns the general partner interest and a 90 percent limited partner interest in EQT GP Holdings, L.P.
About Rice Midstream Partners
Rice Midstream Partners LP is a fee-based, growth-oriented limited partnership formed to own, operate, develop and acquire midstream assets in the Appalachian basin. RMP provides midstream services to EQT Corporation and third-party companies through its natural gas gathering, compression and water assets in the rapidly developing dry gas cores of the Marcellus and Utica Shales.
To stop by Rice Midstream Partners’ website, CLICK HERE
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