NorthWestern Energy Triples Gas Assets With $70 Million Devon Acquisition

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
70MM
Description

Purchased operating and non-operating interests in about 900 wells with production of 5.6 Bcf in 2013.

NorthWestern Corp. (NYSE: NWE) completed a $70.2 million purchase Dec. 2 of Devon Energy Production Co. LP’s interests in northern Montana's Bear Paw Basin that triples NorthWestern’s gas production in the region.

NorthWestern, doing business as NorthWestern Energy, purchased Devon's operating and non-operating interests in about 900 wells that will produce 5.6 billion cubic feet (Bcf) in 2013. The facilities have 63 Bcf of net gas reserve and exist in the Bear Paw fields near NorthWestern's other natural gas production assets.

The purchase includes Devon's 82% interest in the Havre Pipeline Co. LLC. Devon's pipeline interest consists of 82 miles of transmission lines, 576 miles of gas gathering lines and 21 compressors in Blaine, Chouteau and Hill counties. Twenty-nine former Devon employees accepted positions with NorthWestern Energy bringing the company's total Havre-area workforce to about 70 employees.

“We're pleased to have secured another gas production asset in Montana that will help provide long-term supply price stability and reliability for our customers," Bob Rowe, NorthWestern CEO, said in the release. "We're also pleased to welcome the newest members of the team to the NorthWestern Energy family. We look forward to getting to know them as co-workers in the Havre area."

Estimating 20 Bcf annual natural gas usage by NorthWestern's core customers, the 5.6 Bcf of 2013 production from the Devon transaction represents about 28% of the supply portfolio.

Adding Devon’s output to NorthWestern’s Battle Creek and existing Bear Paw assets, the transaction would nearly triple NorthWestern’s capacity, allowing it to meet 37% of customer needs.

NorthWestern provides electricity and natural gas in Montana, South Dakota and Nebraska. The company owns gas production interests in the Battle Creek Field and the Bear Paw Basin which extends from the Missouri River North to the Canadian Border. The company is based in Sioux Falls, S.D.