Western Gas acquires Wyoming midstream assets from Anadarko for $254.4MM

Western Gas Partners, LP (WES ) today announced that it has acquired certain midstream assets located in southwest Wyoming from Anadarko Petroleum Corporation (APC) for total consideration of $254.4 million. 

“We are pleased to begin the new year with our third and largest acquisition since our initial public offering,” said Western Gas Partners’ President and Chief Executive Officer Don Sinclair. “We expect the acquisition to be immediately accretive to distributable cash flow, and believe these assets have significant potential for organic growth by serving the prolific Moxa, Pinedale, and Jonah fields.” 

Western Gas purchased Anadarko’s 100% ownership interest in two systems: (i) the Granger Gathering System – a 750-mile gathering system with related compression and other facilities, and (ii) the Granger Plants – two cryogenic trains with combined capacity of 200 million cubic feet per day (MMcf/d), two refrigeration trains with capacity of 145 MMcf/d, an NGL (natural gas liquids) fractionation facility with capacity of 9,500 barrels per day, and ancillary equipment. The average throughput on these systems for the fourth quarter of 2009 was approximately 240 MMcf/d, with Anadarko throughput representing nearly half of this amount. 

Contracts covering substantially all of the systems’ Anadarko-affiliated throughput were recently converted into 10-year, fee-based arrangements. To mitigate the remaining commodity price risk associated with this acquisition, the Partnership and Anadarko have entered into fixed-price commodity swap agreements through the end of 2014. 

“These swap agreements cover all non-fee-based system volumes and will enhance cash flow visibility on these assets, keeping our distributable cash flow largely insulated from changes in commodity prices,” said Sinclair.

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