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Permalink Reply by searcherone on May 9, 2013 at 8:07am

Marcus, 

A little search says Gatherco, headquartered in Orrville, Ohio;

Also have lines in northwest section of Monroe Co. Ohio,  Lewisville and Graysville area as well as Summerfield which is right at Noble and Monroe line;   all in area of MarkWest facilities being built and lots of Antero acreage;

All very interesting for Monroe Co. as Gary Evans of Magnum Hunter stated yesterday that they were selling Eureka Hunter which is in southern Monroe;  I am guessing that Eureka will end up with MarkWest or Blue Racer--totally a layman's guess on this last one.

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Permalink Reply by Tony Yurina on May 9, 2013 at 2:25pm

Gatherco was formed in 1997 by virtue of the Columbia Gas Transmission gathering line spin offs.

Some 2,600 miles of gathering lines and ROW were sold to Gatherco at that time.  I would estimate they have gathering lines in some 20 or more Central to East & S.E. Ohio counties.

In 1996 Columbia was asking producers to pay something like 25 to 35 cents per MCF for the gathering function, and they balked.  Later they learned what the true cost of gathering was, the fee Columbia wanted was very reasonable.   Subsequently, the result was Columbia got out of the gathering business.  Gatherco was formed and still is a producer owned company to fill that void.

I would love to know the fee they charge for gathering today???  

I think a lot of folks are feeling the Utica cost of gathering & processing in royalty deductions, albeit some are out of line and excessive. 

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Permalink Reply by 0i7okn54zwbdo on May 9, 2013 at 3:44pm

"I would love to know the fee they charge for gathering today???"

Not sure, but I'll bet a box of donuts (which I accept as currency) that they've been getting killed the last few years with lagging NG prices.  Now they're in a nice position to cash in.  Good for them. 

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Permalink Reply by Markus on February 24, 2015 at 4:09am

So it took a while!

From CNBC:   http://www.cnbc.com/id/102390308

Chesapeake Utilities Corporation Announces Definitive Merger Agreement To Acquire Gatherco, Inc.

DOVER, Del., Feb. 2, 2015 /PRNewswire/ -- Chesapeake Utilities Corporation (NYSE: CPK) ("Chesapeake Utilities" or "Company") and Gatherco, Inc. ("Gatherco") today announced that they have entered into a merger agreement, dated as of January 30, 2015 under which Chesapeake Utilities will acquire Gatherco. Upon consummation of the transaction, Gatherco will merge into Aspire Energy of Ohio, LLC ("Aspire Energy"), a wholly-owned subsidiary of Chesapeake Utilities. The transaction was approved by the Gatherco Board of Directors and by Chesapeake Utilities' Merger and Acquisition Committee. The merger, which is expected to close in the second quarter of 2015, is subject to approval by the Gatherco shareholders. Chesapeake Utilities stockholder approval of the merger is not required. Management expects the transaction to be accretive in 2016 – the first full year of operation following the merger.

The transaction has an aggregate value of approximately $59.2 million, inclusive of the following:

• $49.8 million in exchange for all outstanding shares of Gatherco common stock, paid as follows:
  • 593,005 shares of Chesapeake Utilities common stock, valued at $29.9 million, and
  • $19.9 million in cash (before payment of certain transaction expenses and escrow deposits);
• $7.7 million in cash in consideration for cancellation of all outstanding Gatherco stock options; and
• Assumption of Gatherco's debt at closing, estimated to be $1.7 million.

Gatherco is a natural gas infrastructure company providing natural gas midstream services. Gatherco was established in 1997 in conjunction with the acquisition of Columbia Gas Transmission's natural gas gathering assets in Ohio. Gatherco's assets include 16 gathering systems and over 2,000 miles of pipelines in Central and Eastern Ohio. Gatherco provides natural gas gathering services and natural gas liquid processing services to over 300 producers, and supplies natural gas to over 6,000 customers in Ohio through the Consumers Gas Cooperative ("Cooperative"), an independent entity which Gatherco manages under an operating agreement.

At the close of the transaction, Gatherco, as merged into Aspire Energy, will continue to operate as a separate business unit, reporting to Elaine B. Bittner, Chesapeake Utilities' Senior Vice President of Strategic Development. "This transaction is a great strategic win for both companies, and meets key goals in Chesapeake Utilities' strategic plan. Both Chesapeake Utilities and Gatherco value their employees, are committed to excellent customer service, and are dedicated to achieving profitable long-term growth. Chesapeake Utilities will invest additional resources in Gatherco to increase its marketing channels, generate increased opportunities for the Cooperative it manages and attract additional producers to Gatherco's services. We look forward to building meaningful connections with the local communities in the Ohio region and serving them in the Chesapeake Utilities tradition," noted Ms. Bittner.

"We believe this transaction provides growth opportunities that will benefit the shareholders and customers of both companies, along with accretive earnings in the first full year of operation following the merger," said Michael P. McMasters, President and Chief Executive Officer of Chesapeake Utilities Corporation. "In addition, Gatherco has an established footprint in the Ohio natural gas production area. Over the long term, this may provide opportunities to construct new pipelines to gather and transport natural gas from the production area to the natural gas interstate pipelines that carry gas from the region."

Tony Kovacevich, President of Gatherco, added, "We have built a very successful company that is positioned for continued growth as the availability, clean burning nature, and economic competitiveness of natural gas continue to increase its use and create opportunities to serve producers in the shale production areas. With Chesapeake Utilities' resources, Gatherco will be even better positioned to pursue the many growth opportunities in those areas."

Expected Benefits of the Transaction

The transaction is expected to provide the following benefits:

1. Investment in new midstream unregulated energy opportunities with higher return potential. Chesapeake Utilities' current business includes both midstream and downstream natural gas operations. Eastern Shore Natural Gas Company, the Company's interstate pipeline subsidiary, and Peninsula Pipeline Company, the Company's Florida intrastate pipeline subsidiary, collectively represented approximately 30 percent and 28 percent of Chesapeake Utilities' total investment and net income as of the 12 months ended September 30, 2014, respectively. In addition, Chesapeake Utilities has owned and operated several unregulated energy businesses, going back as far as the early 1980s. These unregulated energy businesses have been complementary to the Company's utility operations and have generated returns higher than traditional regulated returns. The Gatherco transaction is a new unregulated midstream energy opportunity that has the potential to yield higher than traditional regulated returns.

2. Future Growth Potential. Gatherco, working in tandem with the Cooperative, will be identifying additional opportunities to provide natural gas service to new end use customers that can be served by the Cooperative and which are currently using propane and/or oil. Conversion of these users to natural gas represents an attractive source of potential future growth. Today, the Cooperative serves approximately 6,000 customers with another 150,000 potential customers for possible conversion.

3. Expansion of footprint into a new geographic territory. Gatherco distributes natural gas to customers in over 40 counties throughout Ohio. The Gatherco acquisition will expand Chesapeake Utilities' footprint beyond its Delmarva Peninsula and Florida service areas.

4. Long-term potential. The acquisition of Gatherco positions Chesapeake Utilities in the middle of the shale production area in Ohio. The portion of the shale basin in eastern Ohio is the newest, and therefore least developed, shale play in the U.S. Gatherco has an established footprint in this region. In the longer term, if economic, the footprint may provide Chesapeake Utilities a platform from which to capitalize on this potential opportunity.

Approvals and Timing

The closing of the merger is subject to a number of conditions, including approval by Gatherco shareholders. Chesapeake Utilities will file with the U.S. Securities and Exchange Commission, a registration statement on Form S-4 to register the common stock that Chesapeake Utilities will issue to Gatherco's shareholders in connection with the merger. The registration statement on Form S-4 will also include a proxy statement relating to the Gatherco shareholder vote. Gatherco anticipates seeking shareholder approval to facilitate closing of the transaction in the second quarter of 2015.

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Permalink Reply by James Vanderink on February 24, 2015 at 10:51am

Markus, how does this affect the Utica play? Just interested in your opinion.

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Permalink Reply by Markus on February 25, 2015 at 9:38am

Have never dealt with Chesapeake but I think that this will simply be a part of long term trend of consolidation.   I guess anything that brings more efficiency to gathering and transporting must be good for future drilling.  This is a very long game...imagine the ROWs they now own.  GatherCo goes way back if you include Columbia in the history and ROWs typically never expire....many miles.

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Permalink Reply by James Vanderink on February 25, 2015 at 11:20am

Unless I'm completely wrong Chesapeake Utilities has nothing to do with Chesapeake Energy.

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Permalink Reply by Markus on February 26, 2015 at 4:02am

James - I think you are indeed correct...not related.  I didn't dig much deeper than the headline and main points given time constraints.  Another life lesson reiterated!

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Permalink Reply by James Vanderink on February 26, 2015 at 12:25pm

Haha, I bought it at first also.

Permalink Reply by JL on February 24, 2015 at 1:59pm

It's in the 50-60 cent range. Once the gas goes through their pipeline and other pipelines, our last sales check ended up with 86 cents per MCF. That also has a line-loss deduction.

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Permalink Reply by James Vanderink on March 4, 2015 at 6:19am

I always wondered what was included in Gatherco. Slide 13

http://files.shareholder.com/downloads/CPK/4054619375x0x806988/C625...

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