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Crestwood was founded in 2004 as a private company to provide natural gas gathering services for Barnett Shale producers in the Fort Worth basin, one of the industry’s earliest shale development plays. In August 2007, the company went public as Quicksilver Gas Services LP, a master limited partnership, which led to the expansion of gathering and processing facilities in the liquids-rich gas Cowtown/Corvette area located in the southwestern portion of the Barnett Shale in 2008 and 2009 and construction of a new lean gas gathering system in the Lake Arlington area. In early 2010, the partnership expanded its Barnett Shale assets by acquiring the dry gas Alliance gathering and treating system which led to a significant expansion of the Alliance system in 2010 and 2011.
In May 2010, Crestwood Holdings was formed as a partnership between the Crestwood Midstream Partners’ management team, led by Robert G. Phillips, and affiliates of First Reserve Corporation. In October 2010, Crestwood Holdings acquired 100% of the general partner and 62% of the common units of the partnership for $701 million, changed the name and New York Stock Exchange ticker symbol to Crestwood Midstream Partners LP and CMLP, respectively, and assumed operations of the Barnett Shale assets and administrative offices in Fort Worth, Texas.
Commencing a North American diversification strategy, in February 2011, Crestwood acquired the Las Animas System, in the liquids-rich Avalon Shale/Bone Spring area of Southeastern New Mexico for $5 million from a group of independent producers. In April 2011, Crestwood completed the $338 million acquisition of midstream assets in the Fayetteville Shale and the Granite Wash from Frontier Gas Services LLC, a private equity-backed midstream development firm. The Fayetteville Shale is a dry gas formation in the Arkoma basin located in Northwest Arkansas. The Granite Wash is a liquids-rich oil and gas formation in the Anadarko basin located in the Texas Panhandle. In November 2011, Crestwood completed the $73 million Tri-State Sabine system acquisition from Tristate/Energy Spectrum, a private equity-backed midstream development firm. The Sabine System is located in the Haynesville/Bossier Shale area in western Louisiana. These acquisitions greatly expanded Crestwood's scale and business mix while diversifying its geographic portfolio, producer/customer group relationships and provided opportunities for organic growth projects.
Due to the significant decline in natural gas prices in late 2011 and early 2012, Crestwood shifted its growth and diversification strategy to focus on liquids-rich areas where producers were increasing development activities. In March 2012, Crestwood and Crestwood Holdings formed a joint venture, Crestwood Marcellus Midstream, to acquire gas gathering assets in the Marcellus Shale from Antero Resources in Harrison and Doddridge Counties, West Virginia for $382 million. The Marcellus Shale is considered by many in the industry to be North America’s premier natural gas shale play and the acquisition provided an excellent entry point into this fast growing region. The Antero assets are located in the rich-gas southwestern core of the play and are connected to some of the most prolific Marcellus Shale wells completed to date. The acquisition included a twenty-year gathering and compression contract with Antero covering approximately 136,000 dedicated acres with seven-year minimum production volume guarantees and a right of first offer on additional Antero rich-gas acreage located nearby until 2019.
Continuing its focus on rich-gas assets, in August 2012, Crestwood completed an $87 million bolt-on acquisition of gathering and processing assets in the liquids-rich Barnett Shale from Devon Energy. The acquisition included a 74 mile rich-gas gathering system, 100 million cubic feet per day cryogenic processing plant and 23,100 horsepower of compression equipment. As part of the transaction, Crestwood and Devon entered into a twenty-year gathering, processing and compression agreement covering a 20,500 acre dedication. The Devon West Johnson County system has been fully integrated into Crestwood’s Cowtown gathering/processing system and the Devon plant is now available to be relocated to a new Crestwood infrastructure project.
In December 2012, Crestwood Marcellus Midstream (CMM) completed another bolt-on acquisition, purchasing an existing compression business from Enerven Compression LLC, a private equity-backed natural gas compression service provider. This $95 million transaction included four compressor stations totaling 43,000 horsepower of compression equipment which are connected to CMM’s low pressure gathering systems in Harrison and Doddridge Counties, West Virginia under a five-year minimum term compression services agreement with Antero. The acquisition increased CMM’s fee-based business with Antero and expands the value chain of services that Crestwood provides customers in the Marcellus Shale. Following its initial term, the Enerven assets will continue to operate under CMM’s existing 20-year gathering and compression agreement with Antero Resources.
Due to the significant growth of Marcellus Shale natural gas volumes on the CMM systems during 2012, expected increases in 2013 and the recent addition of the Enerven compression business, Crestwood decided to accelerate the its drop down acquisition of Crestwood Holdings’ interest in CMM earlier than previously planned. On January 8, 2013, with the approval of Crestwood’s Conflicts Committee, comprised of all independent directors, Crestwood acquired the remaining 65% interest in CMM from Crestwood Holdings for $258 million implying a total enterprise value for the CMM joint venture of $525 million. With 100% ownership of these fast growing Marcellus shale assets, Crestwood has improved its geographic diversification adding visible long term growth from rich-gas areas to its portfolio.
Crestwood’s executive offices are located in Houston, Texas, with administrative offices in Fort Worth, Texas, and operations offices in Glen Rose, Texas, Pampa, Texas, Greenbriar, Arkansas and Charleston, West Virginia.
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