Williams Partners LP (NYSE: WPZ) said April 6 it will acquire another piece of Utica East Ohio Midstream LLC (UEO), giving the company a 70% interest in the Utica Shale natural gas business.

Williams will pay about $575 million to buy all of EV Energy Partners LP’s (NASDAQ: EVEP) interest, about 21%, in UEO, both companies said.

The Ohio assets, which include gathering, processing, fractionation and storage assets, are anchored by long-term, fee-based contracted commitments. Williams, through its subsidiary Utica Gas Services, owns 49% equity interest in UEO.

UEO operates natural gas gathering and compression facilities in eastern Ohio, four processing plants with 800 million cubic feet per day (MMcf/d) of capacity, a 135,000 barrels per day (bbl/d) capacity fractionation facility and 600 Mbbl NGL storage capacity, said Mark Reichman, a director of research at Simmons & Co. International.

The assets earn fee-based revenues.

The partnership intends to fund the acquisition with equity and debt financings. To support the transaction, Williams’ general partner, Williams Co. (NYSE: WMB), has agreed to waive about $43 million of general partner incentive distributions from 2015 through 2017.

“Acquiring these cash-generating assets supports our strategy to grow our natural gas midstream position in key basins,” said Williams Partners CEO Alan Armstrong. “This fixed-fee business will be accretive to Williams Partners beginning in 2015, and the partnership has attractive growth opportunities as the Utica continues to develop.”

EV Energy’s net capital contribution to UEO has been about $294 million. The MLP said it intends to initially use net proceeds to repay outstanding credit and to hold the remainder available for future activities.

EV Energy’s stake fetched less than the $700 million anticipated by Kevin Smith, senior vice president, Raymond James. But the selling price will significantly improve the company’s balance sheet.

“The deal represents a significant step in EVEP’s ultimate plan of divesting its midstream business and reinvesting capital into its upstream operations,” he said.

Longer term, the company could make an accretive asset acquisition, providing a meaningful boost to production and cash flows.

The transaction, along with EV Energy’s sale of interest in Cardinal Gas Services, reflects the completion of the company’s divestiture of midstream investments in the Utica Shale, said Michael Mercer, president and CEO.

In October 2014, EV Energy sold 9% interest in Cardinal and Eagle Ford formation rights for $162 million. It used the money to pay bank debt.

“We are pleased with the returns we achieved and look forward to participating in what we expect to be an attractive upstream A&D market in the second half of the year," he said.

The agreement is subject to customary purchase price adjustments and closing conditions, including termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

The other member of UEO has the right to agree to acquire EV Energy’s interest in UEO for the same price. If the other member exercises and closes on this right, the aggregate purchase price received by EV Energy would remain the same, and Williams Partners would acquire about a 13% interest and the other member an 8% interest.

EV Energy expects the transaction to close by the middle of July 2015. Jefferies LLC acted as EVEP’s exclusive financial adviser in connection with the pending divestiture.

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