Penn Virginia Resource Partners, L.P. has signed a definitive agreement to acquire Chief Gathering LLC for $1.0 billion. Chief Gathering, which is owned by Chief E&D Holdings LP (Chief), is a midstream pipeline company with operating assets serving Marcellus Shale natural gas producers primarily in northeastern Pennsylvania. This transaction, when closed, will result in a major expansion of PVR's pipeline systems in the gas-rich Marcellus Shale. PVR expects to finance the purchase through a combination of committed equity and debt. The transaction is expected to close in the second quarter of 2012, subject to regulatory clearances and other customary closing conditions.

Chief Gathering's assets include six natural gas gathering systems serving over 300,000 dedicated acres in Bradford, Lycoming, Sullivan, Susquehanna, Wyoming and Greene Counties, Pennsylvania and Preston County, West Virginia. Additionally, Chief Gathering is currently constructing a new 750 MMcfd trunkline, anticipated to be in service in the third quarter of 2012, extending from northern Wyoming County to Luzerne County with a connection to Transco's interstate pipeline. PVR currently owns two gathering systems in Lycoming and Wyoming Counties, with a third system in early stage development in Susquehanna County.

Tags: L.P., Penn Virginia Resource Partners