Sanchez Production Partners has announced their intention to purchase Eagle Ford midstream assets.
Sanchez Production Partners (SPP) has initiated a transaction with Sanchez Energy to acquire 50% interest in Carnero Gathering, LLC. The company expects that the $44 million deal will increase their midstream revenue and adjusted EBITDA to approximately $7 million.
The Carnero Gathering System will ultimately connect45 miles of high pressure natural gas gathering pipelines from the Western Catarina Midstream system to a new plant in La Salle County.
Other details include:
- An initial payment of approximately $37 million in cash
- Sanchez Energy will assume remaining capital commitments of approximately $7.4 million
- SPP has amended its $500 million credit facility to stipulate conditions for investments in joint ventures
- The processing plant is expected to be operational in early 2017