Western Midstream Closes Meritage Acquisition, Adds 1,500 Miles of Gas Pipelines

(P&GJ) — Western Midstream Partners LP has announced the closing of the previously announced acquisition of Meritage Midstream Services II LLC. The consideration was funded with cash on hand and WES’s recent $600 million investment grade senior notes issuance.

The deal, announced in early September for $885 million, was paid for with cash on hand and a $600 million issuance of senior grade notes, according to a statement from Western.

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.

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, 38,000 bbl/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.

“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.

The Meritage acquisition transforms WES’s existing asset footprint in the Powder River Basin with expanded gathering and processing facilities, a diversified customer base, and long-term contracts supported by minimum volume commitments and acreage dedications.

As previously announced, for the third quarter 2023, management intends to recommend a Base Distribution increase of $0.0125, or $0.05 annualized, resulting in a total annualized distribution of $2.30 per common unit.

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