Wednesday, April 14, 2010

Petrohawk Energy (NYSE:HK), Kinder Morgan (NYSE:KMP) in Joint Venture

Petrohawk Energy (NYSE:HK) announced it'll be selling its 50 percent stake in its Haynesville Shale project to Kinder Morgan Energy Partners (NYSE:KMP). The Haynesville Shale project include the extracting and processing side of the business.

As a result of the $875 million deal, the two companies will form a partnership for the project.

Petrohawk has been selling off some of its assets this year, which so far has reached $1.4 billion in order to increase its liquidity, in order to focus on this very Haynesville property, along with the Eagle For shale project.

Capital raised from the deal will be used by Petrohawk to work on and expand its drilling programs, according to CEO and Chairman Floyd Wilson.

Wilson said this will probably be the last deal like this for 2010, possibly because it exceeded expectations by over $200 million.

Separate from this deal, Petrohawk has also been migrating capital toward the Eagle Ford project to increase oil production in order to diversify its assets because of the abundance of natural gas which is bringing prices down.

The new company, named KinderHawk Field Service, will be valued at close to $1.75 billion at the close of the deal. Until then, Petrohawk will continue to operate the business.

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