WESTMINSTER, Colorado – (COMMERCIAL THREAD) – Pine Run Gathering LLC (“Pine Run Gathering”) today announced that it has entered into a transaction to acquire Pine Run Midstream, LLC (“Pine Run Midstream”) from a subsidiary of PennEnergy Resources, LLC (“PennEnergy”) and minority partners for $ 205 million. Pine Run Gathering is a joint venture owned by a subsidiary of Stonehenge Energy Resources III, LLC (“Stonehenge III”), a holding company of Energy Spectrum Partners VIII LP, and by a subsidiary of UGI Energy Services, LLC (“UGIES” ), which is a subsidiary of UGI Corporation (NYSE: UGI).
PennEnergy, an independent Pittsburgh-based oil and gas company, is a major Appalachian-based producer and anchor customer on the Pine Run System. Stonehenge III is the third partnership between Energy Spectrum Capital and the management of Stonehenge Energy Resources (“Stonehenge”). The transaction will be financed by the equity of Stonehenge III (51%) and UGIES (49%) as well as by a senior secured credit facility.
Pine Run Midstream operates 43 miles of dry gas gathering pipeline and compression assets located in Butler and Armstrong counties in western Pennsylvania. The Pine Run Midstream system has been in service since 2014 and will be operated by Stonehenge. Stonehenge and UGI expect the investment to immediately pay off.
Pine Run Gathering is Stonehenge’s fourth venture in the Appalachian Basin. “Stonehenge is excited to add the Pine Run Midstream System to our operations in Western Pennsylvania and views the strategic partnership with UGIES as a beneficial step in providing producers in the region with cost-effective, customer-focused services,” said Patrick Redalen, CEO of Stonehenge. . “The Pine Run Midstream System is a high quality asset that has been well managed and operated by the PennEnergy team. We are very happy to have the chance to extend our relationship with Rich, Greg and the entire PennEnergy team.
This is the second recent investment in natural gas gathering systems in the Appalachian Basin by UGIES, as it continues to invest in well-positioned assets in the highly productive areas of the Marcellus Shale. UGIES will add its stake in Pine Run Gathering to UGI Appalachia, LLC, which operates collection assets in Pennsylvania, Ohio and West Virginia. “We are very pleased to announce this investment, which complements our existing portfolio of intermediate assets,” said Robert F. Beard, Executive Vice President – Natural Gas, UGI. “The addition of our Pine Run Gathering stake to UGI Appalachia enhances and expands our presence in Western Pennsylvania and is in line with the strategy set out when we announced our acquisition of Columbia Midstream Group in 2019. Pine Run Midstream a direct connectivity to UGI’s Big Pine pipeline, which is one of the assets acquired under the Columbia Midstream deal, and is well positioned to capture additional production nearby. Above all, the expansion of our natural gas portfolio allows us to provide low cost and environmentally friendly energy to more consumers.
Joseph L. Hartz, President of UGIES, said: “Pine Run Gathering is a great addition to our portfolio. It is well managed and has a strong operations team that fits perfectly with our intermediary business. Hartz added, “This asset will accelerate the growth of our existing natural gas gathering business in western Pennsylvania and is an excellent strategic choice for UGIES. ”
In connection with the transaction, Baker Botts LLP acted as legal counsel for Pine Run Gathering and Winston & Strawn LLP as legal counsel for PennEnergy.
Tudor, Pickering, Holt & Co. acted as financial advisor to PennEnergy.
Based in Westminster, CO and backed by Energy Spectrum Capital, Stonehenge Energy Resources is a private energy company focused on building, owning and operating intermediate facilities in the Appalachian Basin to assist its producer-partners in the optimal development of their resources. Formed in 2007, Stonehenge has supported the development of unconventional Appalachian shale gas by collecting and processing NGL-rich gas in Butler County, Pennsylvania. Stonehenge currently operates two natural gas gathering systems in Butler, Clarion and Armstrong counties, Pennsylvania. For more information on Stonehenge, visit www.stonehengeenergy.com.
About UGI Corporation
UGI Corporation is a distributor and distributor of energy products and services. Through subsidiaries, UGI operates natural gas and electricity utilities in Pennsylvania, distributes LPG both nationally (via AmeriGas) and internationally (via UGI International), manages intermediate energy assets in Pennsylvania, in Ohio and West Virginia and power generation assets in Pennsylvania, and engages in energy marketing, including renewable natural gas, in twelve states and the District of Columbia and internationally in France, Belgium, the Netherlands and the United Kingdom.
Complete information about UGI Corporation is available on the Internet at https://www.ugicorp.com.
About Energy Spectrum Capital
Founded in 1995, Energy Spectrum Capital is a Dallas, Texas-based venture capital firm that invests directly in well-managed lower-middle market companies that acquire, develop and operate energy infrastructure assets in North America. Since its inception, Energy Spectrum has raised more than $ 4.5 billion in equity through eight funds. For more information, please visit www.energyspectrum.com.