SemGroup closes acquisition of Mississippi Lime midstream assets from Chesapeake

SemGroup

SemGroup Corp. (NYSE:SEMG) has closed its previously disclosed acquisition of the gas gathering and processing assets owned by Chesapeake Energy Corp. (NYSE:CHK), located in the Mississippi Lime play for $300 million in cash, the company said August 1. Approximately $125 million of additional capital expenditures will be required for the completion of the Rose Valley plants I and II, as well as additional capital related to future well connects.

Acquisition highlights

  • 200 miles of gathering pipeline;
  • Rose Valley I plant: 200 mmcfd cryogenic processing plant, expected to be operational first quarter 2014;
  • Rose Valley II plant: 200 mmcfd cryogenic processing plant, expected to be operational first quarter 2016;
  • Approximately 540,000 net acre dedication in the core of the Mississippi Lime play; and
  • 20-year, 100% fee-based, gas gathering and processing agreement.

"We are pleased to add all of these key assets to SemGroup's continued story of growth," said Norm Szydlowski, president and CEO of Tulsa, OK-based SemGroup. "This purchase positions us to expand our presence in a highly attractive area and provides future drop down inventory for Rose Rock Midstream."

LCT Capital, LLC and Citi acted as financial advisors to SemGroup.

SemGroup Corp. is a publicly traded midstream service company providing the energy industry the means to move products from the wellhead to the wholesale marketplace.

SemGroup provides diversified services for end-users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminalling and storing energy.

Rose Rock Midstream LP (NYSE:RRMS) is a growth-oriented Delaware limited partnership formed by SemGroup Corp. (NYSE:SEMG) to own, operate, develop and acquire a diversified portfolio of midstream energy assets. Rose Rock Midstream provides crude oil gathering, transportation, storage and marketing services. Headquartered in Tulsa, OK, Rose Rock Midstream has operations in six states with the majority of its assets strategically located in or connected to the Cushing, Oklahoma crude oil marketing hub.

 

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