Crestwood Midstream Partners says it agreed to buy gathering and processing assets in the liquids-rich southwestern area of the Barnett Shale from Devon Energy for $90 million. Houston-based Crestwood and Devon, the largest producer in the Barnett, inked a "20-year, fixed-fee gathering, processing and compression agreement under which Crestwood will gather and process Devon's natural gas production" from 20,500 acres that currently produce 95 million cubic feet a day. The deal should close in the third quarter.
Assets include a 74-mile low-pressure gathering system, a 100-million cubic-feet-a-day cryogenic processing facility and 23,100 horsepower of compression equipment in western Johnson County built since 2006. It's all adjacent to Crestwood's Cowtown gathering system purchased in 2010 from Quicksilver Resources, which includes two natural gas processing plants totaling 325 million cubic feet a day of capacity. "Upon closing, Crestwood is expected to consolidate the systems by increasing the system interconnect capacity with the ultimate goal to process all of Devon's West Johnson County natural gas production in Crestwood's Cowtown and Corvette processing plants," Crestwood said.
-- Jim Fuquay
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