March 19, 2012 6:53 PM

Gibson Dunn, VE Land Roles on Williams Partners’ $2.5 Billion Shale Deal

Posted by Tom Huddleston Jr.

Williams Partners said Monday that it will pay $2.5 billion to acquire Caiman Eastern Midstream, a subsidiary of Dallas-based Caiman Energy that processes natural gas in the Marcellus Shale formation.

In buying Caiman Eastern, Williams—a publicly traded affiliate of Tulsa-based energy company the Williams Companies—is snapping up natual gas assets in northern West Virginia, southwestern Pennsylvania, and eastern Ohio. Caiman Eastern’s assets include two processing facilities and a fractionator, which is used in the controversial extraction process known as hydraulic fracturing, or “fracking.”

Williams, which will pay $1.78 billion in cash and roughly $720 million in stock for Caiman Eastern, expects the unit to produce 2 billion cubic feet of natural gas per day and roughly 300,000 barrels of liquified natural gas per day by 2020. The deal, which is subject to regulatory approvals, is expected to close in the second quarter of this year.

Williams is being advised by a Gibson, Dunn Crutcher team that is led by Denver-based corporate partner Richard Russo and includes corporate partners Steven Talley and Robyn Zolman. New York corporate partner Janet Vance is also working on the deal, as is Orange County corporate of counsel Theodore Kim.

Last summer, Gibson Dunn worked on the Williams Companies’ bidding war with rival Energy Transfer Equity for control of Southern Union, as The Am Law Daily reported at the time. Energy Transfer eventually won that battle, reaching an agreement last fall to acquire Southern Union for $5.3 billion. Since then, Energy Transfer has held talks with the Williams Companies about possibly selling it some of Southern Union’s natural gas pipeline assets.

Caiman Eastern has hired Vinson Elkins to act as lead outside counsel on the transaction. MA partner Christopher Collins and capital markets partner Douglas McWilliams are leading the firm’s team, which also includes environmental partner Larry Nettles and tax partners David Peck and David D’Alessandro.

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