![Summit Midstream](/sites/default/files/styles/hart_news_article_image_640/public/image/2024/03/summit-midstream-sells-utica-interests.jpg?itok=dOLfTWuS)
Summit Midstream used the deal to drop some of its natural gas-centric assets out of its portfolio at a time of low prices. (Source: Shutterstock)
Summit Midstream (SMLP) will sell its assets in the Utica Shale to an MPLX subsidiary for $625 million in cash.
The deal, announced March 22, includes Summit's 36% interest in the Ohio Gathering Co. and 38% interest in the Ohio Condensate Co., along with other Utica assets. Ohio Gathering owns and operates midstream infrastructure that includes dry and wet natural gas gathering systems and condensate transportation and storage in Southeastern Ohio.
Summit used the deal to drop some of its natural gas-centric assets out of its portfolio at a time of low prices to focus instead on plays that are producing far more profitable crude.
The transaction is the culmination of a strategic review process undertaken by the Summit board of directors, announced on Oct. 3, 2023, Summit said in a press release. The board considered options to increase value for shareholders, including an outright sale of the company.
"We believe there are several value optimizing strategies to pursue to further build scale, particularly in our Permian and Rockies segments," said Heath Deneke, Summit CEO. Crude-rich basins will account for 55% of the company's portfolio after the sale.
According to the company, the sell increases liquidity with a $400 million credit facility and more than $325 million of unrestricted cash, allowing it to reduce debt.
Marathon Petroleum formed MPLX in 2012 as a limited partnership to focus on midstream and logistic infrastructure in key U.S. natural gas basins.
Recommended Reading
Canada’s Train Strike Goes Off—Then Back On—the Rails
2024-08-23 - After the Canadian government stepped in to end the work stoppage, the Teamsters Union indicated that the strike would go forward.
Enbridge Cuts Toll to Transport Crude from Canada to Gulf
2024-08-23 - The change comes three months after Canada tripled capacity to 890,000 bbl/d on the Trans Mountain Pipeline.
Analysts: Long Canadian Rail Strike Could Exponentially Affect US NGLs, Crude
2024-08-21 - With the effects of Canada’s rail strike up in the air, the newly opened Trans Mountain Pipeline offers an alternative route for crude headed south.
Brazos Completes Permian G&P Plant, Announces Another
2024-08-15 - Privately held Brazos Midstream completed a 200 MMcf/d cryogenic gas processing plant in the Midland Basin and plans to build a larger gas processing plant in the second half of 2025.
Analysts: Midstream MLPs Outperforming S&P in 2024
2024-08-14 - The midstream sector has been able to take advantage as capex spending slows and cash flows increase.