* Sells 40 pct stake in gas gathering and compression business
* Deal valued at $36 million * Says to use funds for drilling program expansion
Oct 16 (Reuters) - GMX Resources Inc said it agreed to sell a 40 percent stake in its gas gathering and compression business to Kinder Morgan Energy Partners LP for $36 million to help expand its drilling program in Texas and Louisiana.
The salt water disposal assets and other poly pipelines will not be part of the deal and will continue to be wholly owned by GMX's unit, Endeavor Pipeline Inc, the company said
Endeavor will also continue to act as the operator of the gas gathering system and the deal is expected to close in early November, GMX said in a statement.
'The Kinder Morgan transaction provides the financial capacity for GMXR to add a second rig to the Haynesville/Bossier horizontal drilling program,' GMX's Chief Executive Ken Kenworthy said in a statement.
The Bossier and Haynesville shales contain large quantities of gas and are both located in east Texas and northern Louisiana.
GMX said that partnering with Kinder Morgan in the midstream business will also give it access to additional capital for midstream growth.
Shares of GMX Resources were up about 1 percent at $18.60 in trading after the bell. They had closed at $18.44 in regular trade on the Nasdaq.
(Reporting by Thyagaraju Adinarayan; Editing by Anil D'Silva) Keywords: GMXRESOURCES/ (thyagaraju.adinarayan@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: thyagaraju.adinarayan.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
* Deal valued at $36 million * Says to use funds for drilling program expansion
Oct 16 (Reuters) - GMX Resources Inc said it agreed to sell a 40 percent stake in its gas gathering and compression business to Kinder Morgan Energy Partners LP for $36 million to help expand its drilling program in Texas and Louisiana.
The salt water disposal assets and other poly pipelines will not be part of the deal and will continue to be wholly owned by GMX's unit, Endeavor Pipeline Inc, the company said
Endeavor will also continue to act as the operator of the gas gathering system and the deal is expected to close in early November, GMX said in a statement.
'The Kinder Morgan transaction provides the financial capacity for GMXR to add a second rig to the Haynesville/Bossier horizontal drilling program,' GMX's Chief Executive Ken Kenworthy said in a statement.
The Bossier and Haynesville shales contain large quantities of gas and are both located in east Texas and northern Louisiana.
GMX said that partnering with Kinder Morgan in the midstream business will also give it access to additional capital for midstream growth.
Shares of GMX Resources were up about 1 percent at $18.60 in trading after the bell. They had closed at $18.44 in regular trade on the Nasdaq.
(Reporting by Thyagaraju Adinarayan; Editing by Anil D'Silva) Keywords: GMXRESOURCES/ (thyagaraju.adinarayan@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: thyagaraju.adinarayan.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
© 2009 AFX News
