Howard Energy Partners (HEP) today announced the company has
commenced operations with the acquisitions of Texas Pipeline LLC
and Bottom Line Services, LLC for a total consideration of $76
million. Crosstex Energy, L.P. (NASDAQ: XTEX) and Quanta Services,
Inc. (NYSE: PWR) each provided an initial capital contribution of
$35 million in exchange for an individual ownership interest of
approximately 35 percent in HEP. Additional funds were provided
from management of HEP, management of Bottom Line Services and
private investors.
San Antonio-based HEP, a total-solutions energy company,
provides midstream services through its newly acquired
subsidiaries, Texas Pipeline, a San Antonio-based midstream owner
and operator, and Bottom Line Services, a company specializing in
pipeline and plant construction based in George West, Texas. 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 natural gas leases. Texas Pipeline recently negotiated new long
term commitments from oil and gas producers 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 successfully 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 has been in business since 2003 and is
presently involved in more than 30 construction projects for
numerous producers in the Eagle Ford Shale. Bottom Line Services
has experienced significant growth as a result of the growing
infrastructure demands of the Eagle Ford play.
“We are pleased that this unique partnership has come together,”
said Mike Howard, Chairman and Chief Executive Officer of Howard
Energy Partners. “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. We have a
strong balance sheet with over $10 million of cash in the bank and
an undrawn credit facility of $20 million. In addition, Crosstex,
Quanta and many others have expressed interest in investing
significant new equity to back our large inventory of project
developments. We feel privileged to have the opportunity to have
created such a meaningful endeavor in San Antonio and look forward
to a bright future.”
“Crosstex is excited to partner with Howard Energy Partners,
which provides us a new growth platform in the rapidly developing
Eagle Ford Shale play. 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 HEP will
yield additional investment opportunities for us directly through
HEP and through other ventures in the Eagle Ford and other shale
developments,” said Barry E. Davis, Crosstex President and Chief
Executive Officer. “We believe HEP and Quanta will be great
partners as we supplement our growth strategies and we look forward
to a long-term working relationship with them.”
“The midstream infrastructure demands of the Eagle Ford Shale
play are significant and call for a unique build-own-operate
solution,” said Jim O’Neil, president and CEO of Quanta Services.
“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. The investment in HEP also permits
Quanta to participate in the opportunity for the infrastructure
growth and recurring income associated with this significant
market.”
Mike Howard, Chairman and Chief Executive Officer of HEP, most
recently served as President of Midstream for Energy Transfer
Partners (NYSE: ETP) from 2005 to 2010. Mr. Howard was responsible
for the largest divisions of the company which operated 17,500
miles of intrastate and interstate natural gas pipelines, plants
and storage facilities. During his tenure, he actively participated
in the growth of the company through more than $7.5 billion of low
risk–high return projects that were supported by long-term customer
contracts. Previously, Mr. Howard was Vice President of Engineering
and Operations for Crosstex Energy.
Brad Bynum will serve as President and Chief Financial Officer
of HEP. Since 2005, Mr. Bynum has served as Chief Financial Officer
of Hall-Houston Exploration Partners, LLC, an offshore Gulf of
Mexico exploration and production company. Prior to Hall-Houston,
he was an investment banker at Merrill Lynch & Co. where he
focused on the energy sector. Mr. Bynum will continue to serve
Hall-Houston as a general partner. He also serves on the board of
directors of Magnum Hunter Resources Corporation, a position he has
held since 2006.
About Howard Energy Partners
San Antonio-based Howard Midstream Energy Partners, LLC dba
Howard Energy Partners is an independent, total-solutions energy
services company, owning and operating approximately 250 miles of
oil and natural gas pipelines in the Eagle Ford Shale producing
region in south Texas. The company’s unique structure provides
value to customers by offering in-house engineering, project
management, leasing, manufacturing, and construction
capabilities.
For more information on Howard Energy Partners, visit
www.howardenergypartners.com.
About the Crosstex Energy Companies
Crosstex Energy, L.P., a midstream natural gas company
headquartered in Dallas, operates approximately 3,300 miles of
pipeline, nine processing plants and three fractionators. The
Partnership currently provides services for 3.2 billion cubic feet
of natural gas per day, or approximately six percent of marketed
U.S. daily production.
Crosstex Energy, Inc. (NASDAQ: XTXI) (the Corporation) owns the
two percent general partner interest, a 25 percent limited partner
interest and the incentive distribution rights of Crosstex Energy,
L.P.
Additional information about the Crosstex companies can be found
at www.crosstexenergy.com.
About Quanta Services
Quanta Services, Inc. (NYSE: PWR), is a leading specialized
contracting services company, delivering infrastructure solutions
for the electric power, natural gas and pipeline and
telecommunication industries. The company’s comprehensive services
include designing, installing, repairing and maintaining network
infrastructure nationwide. Additionally, Quanta licenses
point-to-point fiber optic telecommunications infrastructure in
select markets and offers related design, procurement, construction
and maintenance services. With operations throughout North America,
Quanta has the manpower, resources and expertise to complete
projects that are local, regional, national or international in
scope.
Additional information about Quanta Services can be found at
www.quantaservices.com.
This press release (and oral statements regarding the subject
matter of this release) contains forward-looking statements within
the meaning of the federal securities laws. These statements are
based on certain assumptions made by the Company and its members
based upon management’s experience and perception of historical
trends, current conditions, expected future developments and other
factors the Company and its members believe are appropriate in the
circumstances. These statements include, but are not limited to,
statements with respect to the Company’s prospects, growth and
investment opportunities, potential recurring revenues, and the
affect of the Company’s results and operations on its members, as
well as any other statements that do not relate strictly to
historical or current facts. Such statements are subject to a
number of assumptions, risks and uncertainties, many of which are
beyond the control of the Company and its members, which may cause
the Company’s or its members’ actual results to differ materially
from those implied or expressed by the forward-looking statements.
These risks and uncertainties include, but are not limited to, the
inability to fully realize the anticipated benefits from the
proposed transactions; the volume of natural gas transported on the
Company’s pipelines and gathering systems; the fees charged and the
margins realized for the Company’s services; energy prices
generally; the ability to effectively integrate the operations of
the newly acquired subsidiaries and to realize potential synergies;
risks associated with the construction of new pipelines and
treating and processing facilities or additions to the Company’s
existing pipelines and facilities, including difficulties in
obtaining permits and rights-of-way or other regulatory approvals
and the performance by third-party contractors; the ability to
timely expand the Company’s facilities to meet demand for its
services; the general level of petroleum product demand and the
availability and price of petroleum product supplies; the continued
ability to find and contract for new sources of natural gas supply;
the environmental risks associated with the operation of pipelines,
the impact of weather on product demand and on construction of new
facilities; and other risks impacting the midstream industry
generally. The Company and its members have no obligation to
publicly update or revise any forward-looking statement, whether as
a result of new information, future events or otherwise.
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