Magnum Hunter Resources Corp. (NYSE: MHR) announced Sept. 16 it will sell a stake in its midstream subsidiary to Morgan Stanley Infrastructure Inc.
Houston's Magnum Hunter entered into an agreement with an affiliate of Morgan Stanley to sell roughly 6.5% equity interests in Eureka Hunter Holdings LLC for $65 million. The transaction implies Eureka's value is $1 billion.
Eureka Hunter conducts midstream services within the Marcellus and Utica shales in West Virginia and Ohio.
Through the transaction, the company has eliminated its need to fund future capital costs for Eureka Hunter for rolling six month periods, said Gary C. Evans, Magnum Hunter chairman and CEO, in a statement.
"We have found a new equity partner that has a similar vision and business philosophy as our management team and board, which will allow this tremendous asset to grow and prosper in preparation for an anticipated MLP offering sometime next year," he said.
Morgan Stanley will also acquire ArcLight Capital Partners LLC's 41% stake in Eureka for an undisclosed amount.
The transaction with ArcLight is expected to close in early October. Magnum Hunter's sale is anticipated to close in mid-January.
Upon closing, Magnum Hunter and Morgan Stanley will hold roughly 98% interest in Eureka Hunter.
Recommended Reading
Exclusive: Why Family Offices Favor ‘Lower-Risk’ Oil, Gas Investments
2024-11-22 - Evan Smith, Stephens’ senior vice president for investment banking, describes growth in the company’s network of family offices, specifically those investing in the energy sector, in this Hart Energy Exclusive interview.
Energy Sector Sees Dramatic Increase in Private Equity Funding
2024-11-21 - In a 10-day period, private equity firms announced almost $20 billion in energy funding. Is an end in sight for the fossil fuel capital drought?
Expand Energy Announces $500MM Tender Offer for 2026 Notes
2024-11-20 - Expand also issued a conditional notice of redemption for all of its outstanding 8.375% Senior Notes due 2028.
Vistra to Offer Senior Notes for Equity Interest Repayment
2024-11-19 - Vistra Corp. said the proceeds from the offer will be used toward an early payout for the installment purchase of Avenue Capital Management II’s interest in Vistra Vision.
US Energy Secretary Nominee Chris Wright Champions Energy at DUG GAS
2024-11-19 - President-elect Donald Trump's energy secretary nominee Chris Wright championed energy's role in bettering human lives earlier this year on stage at Hart Energy’s DUG GAS Conference and Expo.