Cardinal Midstream Acquires Midstream Assets from Antero Resources for $268 Million

October 7, 2010
Cardinal Midstream

DALLAS, Oct. 7, 2010/Business Wire/ -- Cardinal Midstream has entered into definitive agreements to acquire certain natural gas midstream assets from Antero Resources, LLC for $268 million. The assets gather, treat, dehydrate and process natural gas produced from the Arkoma Woodford shale in Eastern Oklahoma.

Cardinal will acquire Antero’s 60 percent interest in Centrahoma Processing, LLC, a joint venture with MarkWest Energy Partners, L.P. (NYSE: MWE). Centrahoma operates two cryogenic processing plants with 100 MMcfd of processing capacity and an NGL pipeline that connects the two plants located in Coal and Atoka counties in Oklahoma. As throughput at Centrahoma increases, Cardinal will more than double its processing capacity in the area with a new 120 MMcfd cryogenic processing plant to be installed in 2011. The transaction also includes Antero’s Northern Front Gathering System that delivers liquids-rich natural gas to the Centrahoma processing plants.

“Antero’s gathering and processing assets provide Cardinal with a strategic footprint in the heart of the Arkoma Woodford shale,” said Mack Lawrence, president of Cardinal Midstream. “In addition to leveraging this high-quality asset base, we are excited about the opportunity to work with MarkWest to expand and optimize these facilities.”

Cardinal will also acquire Antero’s East Rockpile Gathering System in Pittsburgh County, Oklahoma. The system gathers lean natural gas and delivers it to an amine treating and compression complex. Cardinal will expand its treating and compression capacity in East Rockpile as volumes on the gathering system increase. “We look forward to continuing to work with Antero as a key producer supplying these assets,” Mr. Lawrence added.

“This acquisition represents a strategic anchor asset that will enable Cardinal Midstream to expand and continue to grow its presence in the Arkoma Woodford shale,” said Doug Dormer, executive vice president of Cardinal. “The Arkoma Woodford continues to be a prolific and economic natural gas-producing basin. Our objective is to ensure that our customers have a dependable option to quickly, economically and safely bring their natural gas and NGLs to market.”

Cardinal Midstream is backed by private equity commitments from EnCap Flatrock Midstream and EnCap Investments L.P. “We are very excited about the opportunity that the Cardinal team has captured through all their diligence and hard work. This establishes a major midstream presence for our fund in the Woodford to complement significant other midstream investments in the Marcellus and Eagle Ford shale developments,” added Bill Waldrip, managing partner of EnCap Flatrock Midstream.

About Cardinal Midstream

Headquartered in Dallas, Texas, Cardinal Midstream provides oil and gas producers with a complete array of midstream services including natural gas gathering, transportation, processing, and treating. Cardinal’s growth strategy centers on building a full-service midstream business through acquisition and grass roots development projects. Cardinal Gas Treating, LLC, a wholly-owned subsidiary of Cardinal Midstream, currently owns a diverse fleet of amine treating and propane refrigeration plants with operations in the Haynesville, Eagle Ford and Woodford shale plays in Texas and Oklahoma as well as the Granite Wash, an emerging tight sands play in Northern Texas and Western Oklahoma. Cardinal Midstream is a privately held company founded in 2008 by Mack Lawrence, Jim Bryant, Doug Dormer and Marc Lyons. Cardinal is backed by private equity commitments from EnCap Flatrock Midstream and EnCap Investments L.P. Visit www.cardinalmidstream.com for more information.

About Antero Resources

Headquartered in Denver, Colorado, Antero Resources is an independent oil and natural gas company engaged in the acquisition, development and production of unconventional natural gas properties primarily located in the Appalachian Basin in West Virginia and Pennsylvania, the Arkoma Basin in Oklahoma and the Piceance Basin in Colorado.

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Casey Nikoloric
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