Sunday, October 18, 2009

GMX: Sells Part of Pipeline to Fund New Rig

Last week, GMX Resources announced that it had sold 40% of its gathering and compression business to Kinder Morgan Energy Partners, LP for $36 million. The proceeds will be used to fund a new rig (a FlexRig 3 from Helmerich & Payne) to drill in the Haynesville Shale and Cotton Valley Sands in east Texas.

The transaction involves gathering infrastructure from 130 wells, representing 120 miles of pipe and 22,500 hp of owned compression. GMX's subsidiary Endeavor Pipeline, Inc. will continue to operate the system. The transaction did not include salt water disposal assets or other poly pipelines.

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