Comprehensive Energy Data Intelligence
Information About Energy Companies, Their Assets, Market Deals, Industry Documents and More...
Williams Buys MountainWest Pipeline System for $1.5 Billion
12/27/2022
On December 15, Pipeline giant Williams made a deal to purchase MountainWest Pipelines Holding Co. from Southwest Gas Holdings Inc. for almost $1.5 billion including debt.
Williams is paying $1.07 billion in cash and assuming $0.43 billion of debt to buy MountainWest, which comprises approximately 2,000 miles of interstate natural gas pipeline systems mainly situated across Utah, Wyoming, and Colorado.
The sale comes almost a year after Southwest Gas acquired Dominion Energy’s Quester Pipeline LLC and related entities, which was renamed as MountainWest. Southwest Gas paid almost $2 billion for Questar, plus the assumption of $430 million in debt, and closed the transaction on December 31, 2021.
According to a press release announcing the transaction, the Rocky Mountain system’s total transmission capacity is approximately 8 Bcf/d. MountainWest holds 56 Bcf of total storage capacity, including the Clay Basin underground storage reservoir, maintaining valuable service to western markets. The acquisition price represents an about 8x estimated 2023 EBITDA multiple.
The addition of MountainWest is extending services to major Rockies demand markets by providing natural gas transfer into Salt Lake City and other areas not currently served by Williams. The bolt-on would be incrementally accretive, meaningfully expanding EBITDA without materially affecting the company’s leverage.
The company sees this acquisition as an opportunity to bring value to both Williams and MountainWest customers as they integrate business processes and systems, allowing it to potentially offer new flow paths for next-generation natural gas that could create additional market optionality for its shippers.
The transaction is expected to close in 2023, following the satisfaction of customary closing conditions, including regulatory approvals and the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Williams owns and operates more than 30,000 miles of pipelines system wide – including Transco, the nation’s largest volume and fastest growing pipeline – and handles approximately 30% of the U.S. natural gas supply used for power generation, heating, and industrial use.
MountainWest Pipeline (Dominion Energy Questar Pipeline, LLC) is a subsidiary of Dominion Energy Midstream Partners, LP an interstate natural gas pipeline company that provides transportation and underground storage services in Utah, Wyoming, and Colorado. DEQP owns and operates slightly more than 2,500 miles (4,000 km) of pipeline with a total daily capacity of 2,530 million decatherms. The company's system is in the Rocky Mountains, near large reserves of natural gas in six major producing areas, including the Greater Green River, Uinta, and Piceance basins.
TD Securities and J.P. Morgan served as co-financial advisers to Williams. Moelis & Company and Lazard Freres & Co. LLC served as co-financial advisers to Southwest Gas Holdings. Williams was represented by Davis Polk & Wardwell LLP. Southwest Gas Holdings was represented by Morrison & Foerster LLP.
If you are looking for more information about energy companies, their assets, and energy deals, please, contact our sales office mapping@hartenergy.com, Tel. 619-349-4970 or SCHEDULE A DEMO to learn how Rextag can help you leverage energy data for your business.
Rockies Overview by Rextag: Green River, Powder River, Niobrara-Denver Julesburg, Piceance, Uinta, San Juan, Paradox Basin, Wyoming, Colorado, Utah, New Mexico
New Mexico leads the Rockies region in gas production and ranks as the sixth-largest in terms of active gas wells in the U.S. Last year, the state's gas well count slightly increased by 0.2% to 30,699, with new additions in both the northwestern San Juan Basin and the southeastern Permian Basin. Meanwhile, just to the north in Colorado, gas producers grew by a modest 0.1% to 30,322, primarily due to increased drilling activity in the DJ and Piceance basins. Wyoming saw a decline in its active gas wells by 3.7%, down to 17,006, with production mainly in Sublette, Sweetwater, and Converse counties reflecting stable or slightly reduced drilling activity. Utah also experienced a slight decrease of 0.2% in its number of gas wells, totaling 6,463. In Q1 2024, oil and gas industry activity in Oklahoma, Colorado, and northern New Mexico experienced a decline. This marks the fifth consecutive quarter of contraction in drilling and business activities within these regions. According to a survey that included responses from 33 firms operating in the Rockies, this downtrend is expected to continue over the next six months.
Ensign’s Assets Are Acquired by Marathon for $3 Billion
Marathon Oil Corp. closes the acquisition of Ensign Natural Resources’ Eagle Ford assets for $3 billion cash, according to the company’s release on December 27. The purchase includes 130,000 net acres (99% operated, 97% working interest) in acreage adjacent to Marathon Oil’s existing Eagle Ford position. Ensign’s estimated fourth-quarter production will average 67,000 net boe/d, including 22,000 net bbl/d of oil.
Kinetik Holdings recently announced a series of transactions in the energy sector. They struck a deal to buy Durango Permian infrastructure for $765 million. At the same time, they're selling their 16% share in the Gulf Coast Express Pipeline to ArcLight Capital Partners for $540 million. The total purchase cost includes $510 million in cash paid immediately and an additional $30 million that will be paid later, depending on whether they decide to expand further.
Recently, the Permian has seen significant acquisitions: Exxon Mobil purchased Pioneer Natural Resources for about $60 billion. Diamondback Energy's $26 billion deal to acquire Endeavor Energy Resources is currently on hold due to requests from the U.S. Federal Trade Commission. Occidental’s acquisition of CrownRock for $12 billion in the Midland.
EOG Resources is pushing boundaries in Ohio's Utica oil play and now drilling on the Sable pad, also located in Noble County. This site features the 3.7-mile lateral currently under construction. The company's first multi-well pads in the area Timberwolf and Xavier have each produced over 200,000 barrels of oil since their inception—Timberwolf in August and Xavier in October. A third site, the four-well White Rhino pad in Noble County, is also showing promising early results, according to Keith Trasko, EOG’s Senior Vice President of Exploration and Production, who noted the wells are performing as expected in their initial weeks.