rs said it will acquire BP America Production Co's two processing plants and associated gathering system in the Texas Panhandle for $227.5 million in cash to expand in the liquids-rich region.
The companies will also enter into a 20-year, fixed-fee gas gathering and processing agreement at deal closing under which Eagle Rock will gather and process BP's natural gas production from existing connected wells.
'The acquisition adds significant scale and reach to our existing position in additional liquids-rich natural gas plays,' Eagle Rock Chief Executive Joseph Mills said in a statement.
The Texas Panhandle includes the liquids-rich Granite Wash and Cleveland acreages.
The BP Panhandle System gathering volumes in the first half of 2012 averaged about 180 million cubic feet per day (mmcf/d), Eagle Rock said.
The system consists of two cryogenic processing plants - the Sunray and Hemphill - with processing capacity of about 220 mmcf/d and about 2,500 miles of gathering pipelines spread over 350,000 acres.
BP earlier this month agreed to sell its liquefied petroleum gas distribution business in Britain to DCC for $63 million. BP is involved in a $38 billion asset disposal programme, which is raising funds to help pay for the ongoing cost of cleaning up the 2010 Gulf of Mexico oil spill.
Eagle Rock, which has a market value of $1.22 billion, will also process BP and its joint venture partners all future natural gas production from new wells drilled within an initial two-year period from closing.
The transaction, which is expected to close on October 1, will add to earnings from 2014, Eagle Rock said in a statement.
Shares of Eagle Rock, which have lost about 24 percent of their value in the past seven months, closed at $8.96 on the Nasdaq on Friday.
(Reporting by Sunayan Bhattacharjee in Bangalore; Editing by Sriraj Kalluvila) Keywords: EAGLEROCKENERGYPARTNERS DEAL/
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