Eureka Hunter Launches Bid For TransTex

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Estimated Price
59MM
Description

To purchase company primarily engaged in treating natural gas, including leasing of equipment to third parties, gaining 50 amine plants & interest in fleet of hydrocarbon dew point control plants.

Eureka Hunter Holdings LLC, a subsidiary of Magnum Hunter Resources Corp., Houston, (NYSE: MHR) has entered an asset purchase agreement with privately-held, Houston-based TransTex Gas Services LP for $58.5 million in cash and equity.

Eureka will pay $46.8 million in cash and issue $11.7 million units.

TransTex is primarily engaged in treating natural gas, including the leasing of equipment to third parties in need of natural gas treating. TransTex is the largest privately-held contract gas treating company in the U.S. with treating plants currently deployed in seven states serving approximately 30 different customers. TransTex’s services are offered to a broad range of producers and midstream operators which includes gas treating, processing, dehydration, pressurized NGL storage tanks, H2S scavengers, power generation and well head separation facilities. The TransTex fleet is comprised of 50 amine plants to treat and remove CO2 and H2S from natural gas and an interest in a fleet of hydrocarbon dew point control plants.

TransTex’s holdings includes a complete engineering and fabrication team that designs and fabricates treating plants in a fabrication yard at Hallettsville, Texas, in close proximity to the Eagle Ford shale drilling activity where Magnum Hunter is presently active with four drilling rigs operating today.

The acquisition of TransTex will be immediately accretive to Magnum Hunter and its subsidiaries. The post transaction enterprise value of Eureka Hunter has now been established at a value of $458.5 million. Magnum Hunter will retain an approximate 72% equity ownership in Eureka Hunter following the closing of TransTex, valuing its remaining interest in Eureka Hunter at approximately $299 million.

Funding for the cash portion of the acquisition will be provided by an investment commitment from an affiliate of ArcLight Capital Partners.

The acquisition is expected to close by April 2.