Summit Midstream (SMLP) will sell its assets in the Utica Shale to an MPLX subsidiary for $625 million in cash.
The deal, announced March 22, includes Summit's 36% interest in the Ohio Gathering Co. and 38% interest in the Ohio Condensate Co., along with other Utica assets. Ohio Gathering owns and operates midstream infrastructure that includes dry and wet natural gas gathering systems and condensate transportation and storage in Southeastern Ohio.
Summit used the deal to drop some of its natural gas-centric assets out of its portfolio at a time of low prices to focus instead on plays that are producing far more profitable crude.
The transaction is the culmination of a strategic review process undertaken by the Summit board of directors, announced on Oct. 3, 2023, Summit said in a press release. The board considered options to increase value for shareholders, including an outright sale of the company.
"We believe there are several value optimizing strategies to pursue to further build scale, particularly in our Permian and Rockies segments," said Heath Deneke, Summit CEO. Crude-rich basins will account for 55% of the company's portfolio after the sale.
According to the company, the sell increases liquidity with a $400 million credit facility and more than $325 million of unrestricted cash, allowing it to reduce debt.
Marathon Petroleum formed MPLX in 2012 as a limited partnership to focus on midstream and logistic infrastructure in key U.S. natural gas basins.
Recommended Reading
Magnolia Oil & Gas Hikes Quarterly Cash Dividend by 13%
2024-02-05 - Magnolia’s dividend will rise 13% to $0.13 per share, the company said.
HighPeak Energy Authorizes First Share Buyback Since Founding
2024-02-06 - Along with a $75 million share repurchase program, Midland Basin operator HighPeak Energy’s board also increased its quarterly dividend.
Northern Oil and Gas Ups Dividend 18%, Updates Hedging
2024-02-09 - Northern Oil and Gas, which recently closed acquisitions in the Utica Shale and Delaware Basin, announced a $0.40 per share dividend.
Equinor Releases Overview of Share Buyback Program
2024-04-17 - Equinor said the maximum shares to be repurchased is 16.8 million, of which up to 7.4 million shares can be acquired until May 15 and up to 9.4 million shares until Jan. 15, 2025 — the program’s end date.
ProPetro Ups Share Repurchases by $100MM
2024-04-25 - ProPetro Holding Corp. is increasing its share repurchase program to a total of $200 million of common shares.