A handful of investors including General Electric Co. (GE) and
Quanta Services Inc. (PWR) will invest in natural gas pipeline
operator Howard Energy Partners, owner and operator of 280 miles of
natural gas pipelines in the Eagle Ford Shale of South Texas.
Under the deal, GE, Quanta and Crosstex Energy LP (XTEX) will
each own a 30.6% stake in the pipeline operator. Clear Springs
Energy Co. LLC is also making an investment.
As part of their investment, Crosstex and Quanta will each
contribute $87.25 million. GE did not disclose what it would pay
for its stake.
Howard Energy said it will use the funds to acquire the
natural-gas-gathering assets of Meritage Midstream Services LLC in
South Texas. Following the deal's closing, Howard Energy will own
and operate roughly 450 miles of natural-gas-gathering pipelines in
the state.
"This fits perfectly with our strategy of working with expert
management teams to meet rapidly growing producer demand for
infrastructure," said John Shepherd, a managing director at GE
Energy Financial Services.
Recent years have seen a massive drilling boom across North
America as companies race to participate in shale resource plays
like the Eagle Ford Shale.
Shares of General Electric were recently up 0.5% to $19.88 in
premarket trade. Shares of Quanta and Crosstex Energy were
unchanged from Wednesday closes at $21.65 and $16.97,
respectively.
-By Mia Lamar, Dow Jones Newswires; 212-416-3207;
mia.lamar@dowjones.com