Azure Midstream Energy LLC, a midstream natural gas gathering and processing company based in Dallas, Texas, and the 100% owner of the general partner of Azure Midstream Partners LP (the Partnership) (NYSE: AZUR), has confirmed the contribution of the equity interests of Azure ETG LLC.
Consideration for the ETG contribution comprises $80 million in cash and an additional 255,319 common units in the Partnership. Approximately $80 million in cash proceeds from the contribution will be used to reduce indebtedness and creates financial flexibility to fund future development opportunities at Azure.
In January, Azure committed to reducing indebtedness by $195 million to $250 million. With the drop down of ETG, Azure will have met its 2015 debt reduction target and will gain access to additional liquidity to support its business development efforts across its platform.
The ETG system was part of Azure's Center system and includes approximately 250 miles of gathering pipelines, three owned treating plants, 10 MMcf/d of processing capacity and four interconnections with major interstate pipelines providing 1.75 bcf/d of access to downstream markets. A total of 336,000 gross acres in the Haynesville and Bossier shale formations are dedicated to ETG under 23 long-term producer contracts.