2011-06-30-2011-06-22-2011-06-22
Acquired 2 TX Eagle Ford-focused service companies, gaining 250 miles of gathering pipelines in Dimmit, Frio, Maverick and Zavala counties & a pipeline construction service.
San Antonio-based, privately held Howard Midstream Energy Partners LLC (dba Howard Energy Partners) has commenced operations with the purchase of San Antonio-based Texas Pipeline LLC and George West, Texas-based Bottom Line Services LLC for a total $76 million.
Crosstex Energy LP, Dallas, (Nasdaq: XTEX) and Quanta Services, Inc., Houston, (NYSE: PWR) each provided an initial capital contribution of $35 million in exchange for an individual ownership interest of approximately 35% in Howard Energy. Additional funds were provided from management of HEP, management of Bottom Line Services and private investors.
Howard Energy has been formed to focus on the Texas midstream sector.
Texas Pipeline and Bottom Line are now subsidiaries of Howard Energy. Texas Pipeline is a midstream owner and operator and Bottom Line Services specializes in pipeline and plant construction. Both subsidiaries currently operate primarily in the Eagle Ford Shale in South Texas.
Texas Pipeline operates 250 miles of large-diameter gathering pipelines in Dimmit, Frio, Maverick and Zavala counties in the Eagle Ford and Pearsall shales. The pipeline system is in the vicinity of more than one million acres of owned and operated oil and gas leases. Texas Pipeline recently negotiated long-term commitments from E&Ps for transportation and gathering services in Dimmit County that will extend the existing system another 30 miles by the third quarter of this year.
Bottom Line Services has constructed more than 500 miles of pipeline and installed more than 70 midstream facilities including amine plants, cryogenic processing plants and compressor stations. The company is involved in more than 30 construction projects for numerous producers in the Eagle Ford shale.
Howard Energy chairman and chief executive Mike Howard says, "The well-positioned assets and skilled services of Texas Pipeline and Bottom Line Services, coupled with strong financial backing and management experience, puts Howard Energy Partners in an excellent position for growth. The financial and strategic support that our capital partners can provide us as we pursue new growth platforms in the Eagle Ford, as well as other shale developments in the United States, is unrivaled."
Prior to Howard Energy, Howard was vice president, engineering and operations, for Crosstex Energy.
Brad Bynum has been named as president and chief financial officer. He is CFO of Houston-based offshore Gulf of Mexico-focused E&P Hall-HoustonExploration Partners LLC. Prior to Hall-Houston, he was an investment banker at Merrill Lynch & Co. where he focused on the energy sector. Bynum will remain a general partner of Hall-Houston.
Crosstex president and CEO Barry E. Davis says, "This is a new geographic area for us, and our investment is consistent with our strategy to expand outside our existing core areas. We expect our association with Howard Energy will yield additional investment opportunities for us directly through Howard Energy and through other ventures in the Eagle Ford and other shale developments."
Quanta Services president and CEO Jim O'Neil says, "The midstream infrastructure demands of the Eagle Ford Shale play are significant and call for a unique build-own-operate solution. The partnership of Howard Energy Partners, Crosstex and Quanta combines proven midstream development experience, project capital and deep construction and program management capabilities to deliver a total solution to the increasing infrastructure demands of the Eagle Ford Shale play."