Just heard about this ... Can someone explain what's going on?
DTE Midstream, a non-utility business of DTE Energy (NYSE: DTE), today announced it entered into an agreement to acquire a gathering system and gathering pipeline in the Haynesville shale formation of Louisiana for a purchase price of $2.25 billion in cash, plus a $400 millionmilestone payment upon completion of the gathering pipeline in the second half of 2020. Under the terms of the agreement, DTE will acquire 100 percent of the assets from Momentum Midstream and Indigo Natural Resources, the primary gas producer supplying the system. Assets that are part of the acquisition include an existing gathering system and a 150-mile gathering pipeline under construction, which will be in service in the second half of 2020. The primary assets gather natural gas produced in the Haynesville shale basin and access multiple major downstream pipelines, including those serving the Gulf Coast.
DTE acquired a gathering system (pipeline) from Momentum Midstream and Indigo Natural Resources. Operators often build gathering systems and treating facilities to connect wells to market and then sell them to midstream companies. As the name implies midstream companies focus on operating those systems. Operators prefer to drill wells. Sales like this have happened many times over the life of the Haynesville Shale Play.
Thanks ... Indigo has 7 wells on our property. I assume we will still get royalties from them and not DTE.
You assume correctly. Indigo owns the wells and has a contractual agreement with DTE to gather, treat and transport the gas.
It was Exco... and then Indigo... was once operating in East Texas... and now they're Brookstone. I didn't know Indigo owned a midstream operation... maybe that's just Louisiana?