Tall Oak?s assets are focused on gathering and processing in the Arkoma basin and include 400 pipeline miles and 440 million cubic feet per day (MMcf/d) of capacity. The transaction would increase SMC's operating scale and natural gas capacity, expanding the portfolio to a balanced mix of natural gas and crude oil. The acquisition will provide an entry into the Arkoma basin, which we believe will somewhat diversify the company?s business; however, we do not view Arkoma as a top-tier basin, due to its higher break-even costs. That said, with an expectation of stronger natural gas prices in the outer years of our forecast and a customer base that is predominantly focused in the Arkoma, we believe the transaction will
