Devon Energy (driller with midstream assets) and Crosstex Energy (midstream company) announced today they are merging their midstream operations into a new company. The new midstream company, which will have assets in both the Marcellus and Utica Shale (as well as other shale basins) will be majority owned by Devon. In fact, the biggest customer for the new joint venture will be…Devon itself. The announcement says Devon will dedicate drilling from 800,000 of its leased acres to the new (and as yet unnamed) midstream company.
The boards of directors for both Devon and Crosstex have already voted to OK the merger. Here’s the extensive announcement issued today, which contains details of the somewhat complicated corporate structure of the new company: