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Summit Midstream Partners to sell Utica assets to MPLX for $625 mln
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Summit Midstream Partners to sell Utica assets to MPLX for $625 mln
Mar 22, 2024 6:53 AM

March 22 (Reuters) - Pipeline operator Summit Midstream

Partners ( SMLP ) said on Friday it would sell its Utica assets

to a unit of midstream energy company MPLX LP ( MPLX ) for about

$625 million in cash.

The Marcellus and Utica shale, spread across Pennsylvania,

West Virginia and Ohio, are among the regions where U.S.

drillers have been cutting the number of gas rigs operating over

the last year, according to data from energy service firm Baker

Hughes.

The U.S. oil and gas rig count dropped because of a decline

in oil and gas prices, higher drilling costs and as companies

focused more on paying down debt and boosting shareholder

returns rather than increasing output.

Summit Midstream ( SMLP ), shares of which jumped about 16% before

the bell, said the assets comprise the Summit Utica natural gas

gathering system in southeastern Ohio and its equity interests

in Ohio Gathering and Ohio Condensate.

"We believe there are several value optimizing strategies to

pursue to further build scale, particularly in our Permian and

Rockies segments," the company said.

MPLX ( MPLX ) is a limited partnership formed by Marathon Petroleum ( MPC )

to focus on midstream and logistic infrastructure in key

U.S. natgas basins. It also operates Ohio Gathering and Ohio

Condensate, which it co-owns with Summit Midstream ( SMLP ).

Summit had said last year it had engaged external advisers

to evaluate strategic alternatives after receiving interest from

third parties for potential deals‎, including sale of specific

assets.

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