Friday, April 16, 2010

Petrohawk, Kinder Morgan in Haynesville Shale joint venture

HOUSTON - Kinder Morgan Energy Partners on April 13 said it has agreed to pay $875 million in cash to Petrohawk Energy to form a natural gas gathering and processing joint venture centered on the Haynesville Shale play in northwest Louisiana.
With the creation of KinderHawk Field Services, the small Houston-based exploration and production company will have raised $1.4 billion in cash from asset sales in 2010 alone.
That's on top of another $1.2 billion in asset sales, $2.7 billion in equity fund raising and $1.1 billion in debt issued since December 2007.
“Yes, we've raised a lot of capital, but we've had a great use for those funds,” Petrohawk Chairman and CEO Floyd Wilson said.
In that time the company took its acreage in the Haynesville and expanded it to become a top producer of natural gas from the tight, cement-like shales that until recent years were considered too expensive to drill. Almost single-handedly, Petrohawk created awareness of the Eagle Ford Shale in South Texas, becoming the dominant player there.
All told, Petrohawk has gone from being a company with four trillion cubic feet equivalent of gas reserves and a $3 billion market capitalization in December 2007 to 34 trillion cubic feet in reserves and a $7 billion market cap. With the scale also has come greater efficiency: Petrohawk went from 25,000 wells to 5,000 in that same time.

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