Friday, May 6, 2011

Petrohawk's Pipeline Sale to Bring in $855 Million

A couple of weeks ago, Petrohawk announced that it would be selling its share of the 50/50 joint venture Haynesville Shale pipeline it owns with Kinder Morgan (it sold the first half to Kinder Morgan last year), hoping to raise $1 billion for capital expenditures.  It turns out that Kinder Morgan bought the rest of the Haynesville pipeline and 25% of Petrohawk's Eagle Ford Shale pipeline infrastructure for $920 million ($855 million net to Petrohawk plus $65 million of assumed debt).

One investment analyst thinks that's a cheap price given the strong cash flow of the operation.  It's probably kind of telling that the press release only appeared on Kinder Morgan's web site and not on Petrohawk's.  Unfortunately, when you have only one likely buyer for an asset you are not likely to get top dollar.

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