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Howard Energy Partners Announces Acquisition Of Eagle Ford Assets

Stocks in this article: PWR XTEX XTXI

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.”

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