Utica Gas Services LLC is buying EV Energy Partners LP's (Nasdaq: EVEP) interest in Utica East Ohio Midstream LLC for $575 million.
The buyer will pick up 21 percent of the business, which provides customers with gas gathering, processing, storage, rail loading and other oil-related services. Utica East is a joint venture between M3 Midstream, Access Midstream partners and EV Energy.
Utica Gas is a subsidiary of Tulsa-based energy infrastructure business Williams Partners LP (NYSE: WPZ).
EV Energy, a Houston-based, upstream-focused oil company, has been selling its midstream assets. The company previously sold its interest in Cardinal Gas Services, and says the Utica East divestiture rids it of midstream investments in the Utica Shale formation.
We expect to see an increase in M&A activity among midstream energy companies, which focus more on oil transportation, storage and marketing than searching underground for oil. For more, keep an eye out for our May cover story.
Jefferies LLC acted as EV Energy's financial adviser for the deal.
There have been several deals in the oil and gas sector recently, including Dominion Midstream Partners LP's (NYSE: DM) acquisition of Dominion Carolina Gas Transmission LLC earlier in April, and Warburg Pincus' investment of up to $500 million in energy startup Independence Resources Management, also announced in April.
Many dealmakers are looking to make acquisitions in the oil sector as the low price of crude oil sparks distress in the industry, bringing down purchase prices for transactions. For more, see Investors Flow Into Oil & Gas.