DENVER, March 25, 2003 — MarkWest Energy Partners, L.P., announced that it has entered into a Purchase and Sale Agreement with Energy Spectrum Partners, L.P., for the acquisition of Pinnacle Natural Gas Company and certain affiliates for approximately $38 million.
The transaction is expected to close March 28. The assets, primarily located in the state of Texas, are comprised of three lateral natural gas pipelines transporting up to 1.1 Bcf/day under firm contracts to power plants and eighteen gathering systems gathering more than 44 MMscfd.
“Already being the largest gas processor in the Northeast, we are delighted to strategically diversify to the Southwest,” said John Fox, President and CEO. “This acquisition fits very well with our current asset base and core competencies. The assets are excellent for the partnership because of the fee-based nature of the cash flows from the pipeline laterals and the growth prospects for the gathering systems. Having a strong business presence in the Southwest should also provide future growth and development opportunities.”
Fox added, “We expect the Pinnacle acquisition to be significantly accretive to cash available for distribution to MWE unitholders, and we intend to increase the annual distribution per unit by at least $0.20 to $2.28 in the first full quarter after the transaction closes. We now will be ahead of our previously announced distribution target to increase the annual distribution per unit 10 percent annually. An increase to $2.28 would represent an increase of 14 percent within MWE’s first year of existence.”
The acquisition will be financed through existing credit lines plus a $15 million expansion of MWE’s existing credit facility. After the acquisition, the partnership will still have a conservative capital structure with overall debt to total capital of approximately 50 percent.
For more information, visit http://www.markwest.com .
MarkWest Energy Partners L.P. is a publicly traded master limited partnership with a solid core of midstream assets. It is the largest processor of natural gas in the Northeast, processing gas from the Appalachian basin and from Michigan. Its assets include natural gas processing facilities, liquids fractionation, transportation and storage facilities.