Oil and gas company Penn Virginia will sell all of its Eagle Ford Shale natural gas midstream assets for $100 million to a newly-formed affiliate of energy-focused investment firm ArcLight Capital Partners, the Pennsylvania-based company said in a statement.
The assets on the block comprise a natural gas gathering and gas lift system, including around 119 miles of pipelines and associated facilities. They are located in Gonzales and Lavaca Counties, Texas.
The company did not provide further details on the ArcLight affiliate acquiring the assets and the investment firm did not respond to a request for comment.
The proceeds from the sale, which net of Penn Virginia’s partners’ interest are expected to amount to $95 million, will help fund the company’s 2014 capital expenditure plan.
“The divestiture of our natural gas midstream assets is the first step in a series of potential divestitures which will reduce our indebtedness, improve our liquidity and fund further investment in our oily Eagle Ford Shale play,” Penn Virginia’s president and chief executive H. Baird Whitehead said.
The transaction is expected to close in the first quarter of 2014.
Penn Virginia is primarily engaged in the exploration, development and production of oil, natural gas liquids, and natural gas with a focus on Texas. It is also active in the US’ Mid-Continent region, Mississippi and the Marcellus Shale in Appalachia.
Headquartered in Boston, ArcLight currently manages $10 billion in five funds.
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