Williams Uses Portion of Proceeds to Fund the Recent Joint-Venture Acquisition of DJ Basin Assets
TULSA, Okla.–(BUSINESS WIRE)–Williams (NYSE: WMB) announced today that it has completed the sale of assets and equity comprising its previous Four Corners Area business (“FCA”) in New Mexico and Colorado to Harvest Midstream Company (“Harvest”) for $1.125 billion in cash.
The cash proceeds will contribute to funding Williams’ extensive portfolio of attractive growth capital and investment expenditures, including the company’s recent joint-venture acquisition with KKR of Discovery DJ Services from TPG Growth that was completed Aug. 3, 2018. Under terms of the joint venture, Williams holds a 40 percent ownership stake after an initial economic contribution of approximately $469 million to the total purchase price. Williams is also the operator of these assets in the Denver-Julesburg (“DJ”) Basin and holds a majority of governance voting rights in the joint venture. Williams and KKR have renamed the DJ Basin business, “Rocky Mountain Midstream LLC.”
“Completing both the FCA transaction and the Discovery DJ Services acquisition follows our strategy to connect the best supplies to the best markets,” said Alan Armstrong, president and chief executive officer of Williams. “We have divested a business from a maturing basin at an attractive multiple and redeployed a portion of that capital to a higher-growth basin where our newly named ‘Rocky Mountain Midstream’ business presents strong future-growth opportunities, including sites with permitting underway for greater than 1 billion cubic feet per day of gas processing.”
The FCA assets divested by Williams are located in the San Juan and Rio Arriba Counties in New Mexico and in La Plata County in Colorado and include 3,700 miles of pipeline, two gas processing plants, and one CO2 treating facility.
“The Four Corners Area has been an important part of Williams since 1983, and I appreciate the hard work and dedication of the FCA team through the years,” Armstrong said. “Harvest is an outstanding midstream services provider and is ideally positioned in that basin to operate these assets in a manner that optimizes throughput and lowers cost.”
For the transaction to divest its assets in the Four Corners Area, Williams’ lead financial adviser was Morgan Stanley; Davis Polk acted as legal counsel. For the Discovery acquisition, Simmons acted as the lead financial adviser to both Williams and KKR; Gibson Dunn served as legal counsel to Williams, and Simpson Thatcher served as legal adviser to KKR.
Williams (NYSE: WMB) is a premier provider of large-scale infrastructure connecting U.S. natural gas and natural gas products to growing demand for cleaner fuel and feedstocks. Headquartered in Tulsa, Okla., Williams is an industry-leading, investment grade C-Corp with operations across the natural gas value chain including gathering, processing, interstate transportation and storage of natural gas and natural gas liquids. With major positions in top U.S. supply basins, Williams owns and operates more than 33,000 miles of pipelines system wide – including the nation’s largest volume and fastest growing pipeline – providing natural gas for clean-power generation, heating and industrial use. Williams’ operations touch approximately 30 percent of U.S. natural gas. www.williams.com
About Harvest Midstream Company
Harvest Midstream Company, formerly Harvest Pipeline Company, is a privately held midstream services provider based in Houston, Texas, that operates crude oil and natural gas gathering, storage, transportation, treatment and terminalling assets across the Lower 48 and Alaska. To learn more visit www.harvestmidstream.com.