HOUSTON — Eagle Rock Energy is buying BP’s Sunray and Hemphill processing plants and associated 2,500-mile gathering system serving the liquids-rich Texas Panhandle for $227.5 million.
Eagle Rock and BP will enter into at closing a 20-year, fixed-fee Gas Gathering and Processing Agreement under which Eagle Rock will gather and process BP''s natural gas production from the existing connected wells.
The closing of the acquisition is expected to occur on Oct. 1, 2012.
"We are excited about this transaction as it meaningfully grows and strengthens our midstream gathering and processing position in the liquids-rich Granite Wash and Cleveland plays in the Texas Panhandle,” said Joseph A. Mills, Eagle Rock''s chairman and CEO. “This acquisition brings to Eagle Rock a strong strategic partner in BP and enhanced financial stability with 55% of the existing volumes on the BP Panhandle System being dedicated under attractive long-term, fixed-fee contracts. In addition, the acquisition adds significant scale and reach to our existing position in additional liquids-rich natural gas plays.”