/PRNewswire-FirstCall/ -- Magnum Hunter Resources Corporation (NYSE Amex: MHR and MHR-PC) (Magnum Hunter, or the Company) announced today that a wholly-owned subsidiary, Eureka Hunter Pipeline, LLC (Eureka Hunter Pipeline), and DCP Midstream Partners, LP (NYSE: DPM) and its sponsor, DCP Midstream, LLC (together, DCP), have entered into a Letter of Intent to create a natural gas gathering joint venture (the Gathering JV) between Eureka Hunter Pipeline and DCP for the gathering of natural gas in
Proposed JV Terms
The proposed Gathering JV will construct, own and operate certain natural gas gathering assets for natural gas produced in
Western West Virginia
. Magnum Hunter and DCP will each own 50 percent of the proposed Gathering JV. The estimated total construction cost to complete the initial gathering pipeline facilities is approximately
, with Magnum Hunter funding approximately
of that amount and DCP funding approximately
. Terms for the Gathering JV also include a
payment by DCP to Magnum Hunter at closing for certain rights of way that are being contributed by the Company and are in excess of the initial gathering pipeline project.
Once the initial facility is constructed, the two JV partners plan to fund the Gathering JV's future capital requirements for expansion facilities on a 50/50 cost basis. Closing of the proposed joint venture, which is expected to occur during the fourth quarter of 2010, is subject to the negotiation, execution and board approval of definitive documentation and receipt of customary third party consents and approvals.