Antero Midstream to acquire Crestwood’s Marcellus gathering assets

Antero Midstream Corp. has agreed to acquire Marcellus shale natural gas gathering and compression assets from Crestwood Equity Partners LP. The acquisition adds roughly 425 undeveloped drilling locations and 120,000 gross dedicated acres in Doddridge and Harrison Counties, W. Va., and increases Antero Midstream's compression capacity by 20% and gathering pipeline mileage by 15%.

The assets include 72 miles of dry gas gathering pipelines and nine compressor stations with approximately 700 MMcfd of capacity. Current throughput on the system is about 200 MMcfd, leaving space for growth without significant capital investment.

Throughput will be gathered and compressed under the agreement established by Crestwood, which is substantially like Antero Midstream's existing gathering and compression agreement with Antero Resources, but not considered in the low-pressure gathering rebate volumes with Antero Resources.

Crestwood’s assets have been on natural field decline since 2017, its anchor producer having focused development activity on the rich-gas window of the Southwest Marcellus shale. The system’s initial anchor producer was Mountaineer Keystone LLC (OGJ Online, Dec. 20, 2011).

Crestwood described the assets as non-core to its long-term growth strategy of becoming a leading midstream operator in Williston, Delaware, and Power River basins and said it intends to use proceeds from the sale to enhance financial flexibility as it continues integrating its Oasis Midstream (OGJ Online, Oct. 26, 2021), Sendero Midstream, and CPJV acquisitions (OGJ Online, May 25, 2022).

The companies expect the $205-million transaction to close fourth-quarter 2022, subject to regulatory approvals. The transaction will be financed with borrowings under Antero Midstream's revolving credit facility.