SemGroup Widens Midstream Footprint In Mississippi Lime

June 2013, Vol. 240, No. 6

SemGroup Corp. has a definitive agreement to acquire the equity interests of Mid-America Midstream Gas Services LLC, a wholly owned subsidiary of Chesapeake Energy Corp., the owner of gas gathering and processing assets in the Mississippi Lime play, for $300 million.

Acquisition highlights are as follows: 200 miles of gathering pipeline; Rose Valley I plant: 200 MMcf/d cryogenic processing plant, expected to be operational in early 2014; Rose Valley II plant: 200 MMcf/d cryogenic processing plant, expected to be operational first quarter 2016; 540,000-net acre dedication in the core of the Mississippi Lime play, supported by a joint venture between Chesapeake and Sinopec International Petroleum Exploration & Production Corp.; and Chesapeake has committed to a 20-year, 100% fee-based, gas gathering and processing agreement.

Rose Valley I and II plants require $125 million of additional capital expenditures for completion as well as additional capital related to future well connects. Combined with its existing facilities, SemGroup will have a total processing capacity of 600 MMcfd in northern Oklahoma. With 655,000-net acre dedications within the core of the Mississippi Lime play, the company will also have the opportunity for further growth as production increases.

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