Steel Reef acquires Summit Midstream's Bison Gas gathering system in North Dakota for $40 million in cash as part of Houston-based Summit's plans to streamline its portfolio.
According to a release on September 19, with the sale of Bison Midstream, Summit's focus in the Williston Basin will be on increasing its crude oil and produced water gathering systems mainly situated in Williams and Divide Counties, North Dakota.
The Bison agreement follows the sale of Summit's Lane gathering and processing system in the Permian Basin to Matador Resources Co. in June for $75 million. The merger of the divestitures creates additional financial flexibility to reinvest in more strategic scale-building opportunities across Summit's footprint.
Summit Midstream Partners LP concentrates on developing, possessing, and managing midstream energy infrastructure assets that are strategically situated in the core producing areas of unconventional resource basins, mainly shale formations, in the continental U.S. The company's portfolio is broken down into four sections: the Barnett, Northeast, Permian, and Rockies.
After the sale of the company's Bison gas gathering system, Summit will still possess the Polar and Divide system in the Williston Basin, which has more than 295 miles of crude oil and produced water pipelines, spanning throughout the central and western parts of Williams and Divide counties in North Dakota, from the Missouri River to the Canadian border.
Summit Midstream is interested in the status of customer development activity in central Williams County and pro forma for the transaction and anticipates over 50 new wells behind our liquids system in 2023.
The Bison gas gathering system, established in Mountrail and Burke counties in northwestern North Dakota, was purchased by Steel Reef Infrastructure Corp., an integrated owner, and operator of associated gas capture, gathering, and processing assets in North Dakota and Saskatchewan.
Bison gathers, compresses, and treats associated natural gas in the crude oil stream produced from the Bakken and Three Forks shale formations. According to the Summit release, a large U.S. independent crude oil and natural gas company and Chord Energy Corp. are Bison Midstream's key customers.
Natural gas gathered on the Bison system is conveyed to Aux Sable Midstream LLC's Palermo Conditioning Plant in Palermo, North Dakota. Then the gas is transferred to downstream pipelines serving Aux Sable's 2.1 Bcf/d natural gas processing plant in Channahon, Illinois.
Pro forma for the Bison transaction, Summit will have about $90 million drawn on its $400 million ABL credit facility, resulting in over $300 million of available liquidity, according to Deneke. The company continues to anticipate to trend toward the high end of our 2022 Adjusted EBITDA guidance range of $205 million to $220 million.
Locke Lord LLP served as the legal adviser to Summit and Bracewell LLP was the legal adviser to Steel Reef for the Bison transaction.
