MarkWest Energy Partners to acquire Keystone Midstream

May 7, 2012

MarkWest Energy Partners LP agreed to acquire 100% of Keystone Midstream Services LLC for $512 million in a transaction expected to close during this year’s second quarter.

Paula Dittrick

MarkWest Energy Partners LP agreed to acquire 100% of Keystone Midstream Services LLC for $512 million in a transaction expected to close during this year’s second quarter.

Keystone is owned by Stonehenge Energy Resources LP and affiliates of Rex Energy Corp. and Sumitomo Corp.

Rex Energy and Sumitomo are developing the Marcellus, Upper Devonian, and Utica shales in the Pennsylvania counties of Butler and Beaver.

Keystone's assets are in Butler County and include two cryogenic gas processing plants totaling 90 MMcfd of capacity, a gas gathering system, and associated field compression.

Rex Energy and Sumitomo have dedicated an 895 square mile area to MarkWest. To date they have jointly leased 68,400 highly prospective acres in Butler County, an acreage position that continues to grow.

MarkWest will gather and process the rich gas and fractionate the NGLs under long-term fee-based agreements.

Rex Energy plans to complete 22 wells in Butler County in 2012 and anticipates increasing its drilling activity following completion of the MarkWest NGL gathering pipeline. MarkWest anticipates gas volumes from Keystone to grow from MMcfd now to 170 MMcfd at yearend 2013, reaching 350 MMcfd by 2016.

About the Author

Paula Dittrick | Senior Staff Writer

Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.

Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.