Acquisition adds natural gas gathering and processing assets in
the Eagle Ford, Utica and Niobrara shale plays and expands Access’
position in the Haynesville and Marcellus shale plays
Williams to concurrently acquire 50% GP interest and 23% LP
interest in Access Midstream Partners from Global Infrastructure Partners
Global Infrastructure Partners and Williams commit to contribute
$1.16 billion additional equity funding to Access
OKLAHOMA CITY--(BUSINESS WIRE)--Dec. 11, 2012--
Access Midstream Partners, L.P. (NYSE:ACMP) today announced it has
agreed to acquire Chesapeake Midstream Operating, L.L.C., a wholly owned
subsidiary of Chesapeake Midstream Development, L.L.C., from Chesapeake
Energy Corporation (NYSE:CHK) for $2.16 billion in cash. The acquisition
adds natural gas gathering and processing assets in the Eagle Ford,
Utica and Niobrara liquids-rich plays and expands Access’ existing
position in both the Haynesville and Marcellus dry gas plays.
Separately, Access and Chesapeake have agreed to extend Access’
exclusivity period with respect to Chesapeake’s remaining assets in the
Mid-Continent region until March 1, 2013.
The acquisition of the midstream assets is a transformational
opportunity for Access and will create the leading gathering and
processing MLP in the country. Upon completion of this transaction,
Access will have large scale, well established footprints in virtually
all of the major unconventional basins in the United States. The
acquisition provides immediate entry to gathering opportunities in key
liquids-rich regions and to the processing and fractionation segments of
the midstream value chain. Consistent with the Partnership’s current
portfolio of assets, the acquired assets are anchored by long-term,
market-based, cost of service agreements with Chesapeake and other
producer customers. This long-term, cost of service contract structure
provides protections for capital, inflation and re-contracting risks
resulting in highly visible and predictable cash flows. The acquisition
is expected to close by the end of 2012 and be immediately accretive to
distributable cash flow.
Concurrent with the closing of the acquisition, Williams (NYSE:WMB) will
acquire 50 percent of the general partner of Access and 34.5 million of
Access’ subordinated limited partner units from Global Infrastructure
Partners. Williams’ vast midstream experience will complement GIP’s
strong strategic and financial sponsorship as Access continues to
execute on its best in class business model.
GIP and Williams have entered into a subscription agreement to purchase
an aggregate of up to $1.16 billion of additional limited partner
interests, including $350 million of paid in kind equity, demonstrating
their substantial commitment to Access’ long-term success. Access has
concurrently obtained debt commitments to finance the balance of the
purchase price. Citigroup, Barclays and UBS Investment Bank have
provided commitments for a $1.0 billion acquisition bridge facility.
Barclays and Citi acted as exclusive financial advisors to Access with
respect to the acquisition and its related financings.
Terms of the CMO acquisition were unanimously approved by the Board of
Directors of Access’ general partner and by the Board’s Conflicts
Committee, which is comprised entirely of independent directors. The
Conflicts Committee engaged Tudor, Pickering, Holt & Co. Securities,
Inc. to act as its financial advisor and Richards, Layton & Finger, P.A.
to act as its legal advisor and also received advice from Jones Day
which acted as counsel to Access.
J. Mike Stice, Access Midstream Partners’ Chief Executive Officer,
commented, “The acquisition of these midstream assets is a
transformational opportunity for Access. Following this transaction,
Access will become the largest gathering and processing MLP as measured
by invested capital and throughput volume and will have a substantially
diversified portfolio with a critical midstream position in the most
prominent liquids-rich basins in the United States. The extension of our
services into gas processing, fractionation and NGL pipelines will
enhance our ability to grow and deliver additional value to our
unitholders going forward.
“I know the Williams team well and am very excited to add their
world-class sponsorship to Access. Our ability to leverage Williams’
deep midstream operational and development capabilities will
significantly benefit our expanded operations and lead to new growth
opportunities for years to come. With GIP’s continued position, we now
have two great sponsors with a substantial commitment to Access and a
strong belief in our assets and business model.”
Conference Call Information
A conference call to discuss the acquisition has been scheduled for
Tuesday, December 11, 2012 at 5:45 p.m. EST. The telephone number to
access the conference call is 785-424-1741 or toll-free 877-688-0767.
The passcode for the call is 303421. We encourage those who would
like to participate in the call to dial the access number between 5:35
and 5:45 p.m. EST. For those unable to participate in the conference
call, a replay will be available for audio playback from 8:00 a.m. EST
on December 12, 2012 through 8:00 a.m. EST on December 26, 2012. The
number to access the conference call replay is 719-884-8882 or
toll-free 888-348-4629. The passcode for the replay is 303421.
The conference call will also be webcast live on the Internet and can be
accessed by going to the Partnership’s website at www.accessmidstream.com
in the "Events" subsection of the "Investors" section of the website. An
archive of the conference call webcast will also be available on the
Access Midstream Partners, L.P. (NYSE:ACMP) is the industry’s
largest gathering and processing master limited partnership as measured
by throughput volume and owns, operates, develops and acquires natural
gas gathering systems and other midstream energy assets. Headquartered
in Oklahoma City, the Partnership's operations are focused on the
Barnett Shale, Haynesville Shale, Marcellus Shale and Mid-Continent
regions of the U.S. The Partnership’s common units are listed on the New
York Stock Exchange under the symbol ACMP. Further information is
available at www.accessmidstream.com
where the Partnership routinely posts announcements, updates, events,
investor information and presentations and all recent press releases.
This press release includes forward-looking statements.
Forward-looking statements give our current expectations or forecasts of
future events. They include but are not limited to our business strategy
and plans and objectives for future acquisitions, including the proposed
acquisition of Chesapeake Midstream Operating, L.L.C and the proposed
financing of that acquisition. We caution you not to place undue
reliance on our forward-looking statements, which speak only as of the
date of this release, and we undertake no obligations to update this
information. Although we believe the expectations and forecasts
reflected in these and other forward-looking statements are reasonable,
we can give no assurance they will prove to be correct. They can be
affected by inaccurate assumptions or by known or unknown risks and
uncertainties. Factors that could cause actual results to differ
materially from expected results are described under “Risk Factors” in
our 2011 Annual Report on Form 10-K and our other SEC filings.
Source: Access Midstream Partners, L.P.
Access Midstream Partners
Dave Shiels, CFO,
Debbie Nauser, 405-935-1739