Western Midstream to Acquire Meritage, Adding 1,500 Miles of Gas Pipelines in Powder River Basin

(P&GJ) — Western Midstream Partners LP has announced that one of its operating subsidiaries has signed an agreement to acquire Meritage Midstream Services II LLC in an all-cash transaction for a purchase price of $885 million, subject to customary adjustments.

Meritage Midstream subsidiary Thunder Creek Gas Services, LLC continues to add to the company's gas gathering system.

Meritage, a privately held midstream company headquartered in Denver, Colorado, owns and operates a large-scale natural gas gathering and processing business in the Powder River Basin of Wyoming. Completion of the transaction is expected in the fourth quarter of 2023, subject to customary closing conditions and regulatory approvals.

Meritage’s assets, located in Converse, Campbell, and Johnson counties, Wyoming, include approximately 1,500 miles of high- and low-pressure natural gas gathering pipelines, approximately 380 MMcf/d natural gas processing capacity, and the Thunder Creek NGL pipeline; a 120 mile, 38 MBbl/d FERC-regulated NGL pipeline that connects to Meritage’s processing facilities.

The Meritage assets are supported by more than 1.4 million dedicated acres from a diverse set of majority investment grade counterparties, with an average remaining contract life of approximately eight years. Following the integration of the Meritage assets, WES will be well positioned to compete for additional acreage dedications and business development opportunities from offset producers in the basin. WES expects the transaction to close during the fourth quarter of 2023. Given the uncertain timing of closing within the fourth quarter, WES is not updating its 2023 Adjusted EBITDA guidance range at this time.

“The addition of the Meritage assets meaningfully expands the financial and operational scale of our existing Powder River Basin footprint by adding significant producer inventory and further diversifying our growing G&P customer portfolio,” Michael Ure, president and CEO of WES, said.

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