HOUSTON, TX (October 24, 2017) – Eureka Midstream Holdings, LLC (Eureka Midstream or the Company) announced today a new ownership structure and provided an operations update.
New Ownership Structure and Improved Financial Flexibility
Eureka Midstream announced a new ownership structure of the Company. Blue Ridge Mountain Resources, Inc. (BRMR), formerly known as Magnum Hunter Resources, entered into a definitive agreement to divest 100% of its equity investment in Eureka Midstream. BRMR formerly had an equity partnership in the Company with Morgan Stanley Infrastructure, Inc. (MSI). MSI has entered into a new partnership in the Company with SK Holdings Co., Ltd. (SK), a top three conglomerate in South Korea, with assets of $150 billion and deep expertise in the energy sector globally. SK now has a direct ownership interest in the company and will work with MSI and the Eureka team to continue to drive the system’s impressive growth.
Eureka Midstream, as further noted in a press release issued September 6, 2017, closed on a $400 million senior credit facility with an additional $100 million accordion provision, subject to certain terms and conditions. Intended use of the credit facility will be to fund capital expenditures, finance acquisitions, and organic growth projects. The new Eureka Midstream credit facility, among other things, provides the Company with improved financial flexibility with an increase in aggregate commitments from $225 million to $400 million.
“Third quarter 2017 was a busy and productive period at Eureka Midstream. Our new credit facility provides us with improved financial flexibility and liquidity to explore and pursue new expansion opportunities for both our valued customers and shareholders in the nation’s largest natural gas basin,” says Chris Akers, President of Eureka Midstream.
“At the same time,” Akers continued, “we believe that our continued operational and commercial execution to serve the needs of existing as well as new customers, combined with our new ownership structure, will create additional opportunities for growth and development at Eureka. Already, we have seen a significant increase in drilling activity throughout the basin as companies continue to recognize that the Marcellus and Utica are the country’s lowest cost and most prolific natural gas and natural gas liquids resource. This increase in drilling activity has further facilitated an increase in midstream activity. We believe these developments, as well as the exceptional experience and success that both Morgan Stanley and SK bring to the table, will drive increased throughput volumes within our network and create future growth opportunities at Eureka Midstream.”
Eureka Midstream’s twelve interconnects, designed to provide higher netbacks and optionality for our clients, combined with the strategic location of our 200+ mile pipeline network, has driven increased demand for our services. Initial demand estimates indicate roughly 30 – 40 percent increase in throughput volumes between first quarter 2017 and year-end 2017, to more than 1 Bcf/d.
About Eureka Midstream
Eureka Midstream Holdings, LLC is a Houston, Texas based midstream company focused in the Appalachian Basin. The Company is currently active in two of the most prolific unconventional shale resource plays in North America, the Marcellus Shale and Utica Shale located in Northwest West Virginia and Southeast Ohio.