The Sunray plant located in Moore County and the Hemphill plant situated in the Hemphill County together have about 220 million cubic feet of gas a day process capacity while the associated gas gathering systems include approximately 2,500 miles of pipelines.
Eagle Rock chairman and chief executive officer Joseph A Mills said the deal will strengthen the company’s midstream gathering and processing position in the liquids-rich Granite Wash and Cleveland plays in the Texas Panhandle.
"This acquisition brings to Eagle Rock a strong strategic partner in BP and enhanced financial stability with 55% of the existing volumes on the BP Panhandle System being dedicated under attractive long-term, fixed-fee contracts. In addition, the acquisition adds significant scale and reach to our existing position in additional liquids-rich natural gas plays," Mills added.
"The acquisition of BP’s Texas Panhandle midstream assets is consistent with our strategy of pursuing the most accretive long-term opportunities across our Midstream and Upstream Businesses, and we expect this transaction to be accretive to Eagle Rock’s distributable cash flow in 2014 and beyond."
The midstream assets are believed to serve BP’s natural gas production in the Texas Panhandle region and are expected to increase and expand Eagle Rock’s existing gathering and processing systems in the region.
The assets are expected to be more strategically useful to the company that specializes in midstream oil and gas operations.
Eagle Rock and BP will enter into a gas gathering and processing agreement for a period of 20-years and under the terms of the contract Eagle Rock will be gathering and processing the natural gas production from BP’s existing wells.
The two companies are expecting to close the deal in the final quarter of 2012 following the approval of all the regulatory and customary closing conditions.
