Calgary –Steel Reef Infrastructure Corp. and Crescent Point Energy Corp. announced on Jan. 20 the closure of their previously announced transaction where Steel Reef purchased certain associated natural gas gathering, processing and sales infrastructure assets in Saskatchewan from Crescent Point for total cash consideration of $500 million.
Crescent Point noted the assets sold as part of this transaction include nine natural gas gathering and processing facilities and two gas sales pipelines with total throughput capacity of more than 90 MMcf/d.
“Acquiring key natural gas infrastructure assets in leading resource plays provides Steel Reef with the opportunity to enhance and integrate its full-service gas processing offerings,” said Scott Southward, Steel Reef president and CEO in a press release. “This acquisition demonstrates our resolve to provide infrastructure solutions for our customers, while providing value for our shareholders. We thank our customers and investors for their continued support as Steel Reef executes its growth strategy.”
The deal essentially doubles the size of Steel Reef, which started in 2012, initially by building its own facilities in southeast Saskatchewan and then buying or building other facilities in the region, as well as a few outliers in west central Saskatchewan and Alberta.
With this acquisition, Steel Reef adds to its portfolio nine natural gas processing facilities, the associated gathering systems and sales gas pipelines. These processing facilities are comprised of four Viewfield gas plants located near Stoughton; the Flat Lake gas plant south of Oungre; Glen Ewen gas plant, and in southwest Saskatchewan near Shaunavon, the Rapdan gas plant, Leitchville gas plant and Dollard gas plant.
Steel Reef raised equity proceeds of $175 million from InstarAGF, an existing shareholder, and expanded its credit facilities through National Bank of Canada, Bank of Nova Scotia and ATB Financial to fund the transaction and its future growth. National Bank Financial acted as Steel Reef’s debt advisor on the transaction.
