Gateway Energy buys Barnett Shale Gathering System
Gateway Energy Corporation announces acqusition of the Hickory Creek Gathering System from Hickory Creek Gathering L.P. and Range Texas Production, LLC for $3.9 million
Gateway Energy Corporation (OTC Bulletin Board: GNRG) (the “Company”) today announced that it has acquired the Hickory Creek Gathering System from Hickory Creek Gathering L.P. and Range Texas Production, LLC for a cash purchase price of $3.9 million, adjusted to reflect a transaction effective date of November 1, 2009.
The Hickory Creek Gathering System is located in Denton County, Texas, in the core area of the Barnett Shale and currently services two significant producers. Â There are currently 15 producing wells connected to the system with throughput of approximately 11,000 MMBtu per day at a fixed gathering fee for each MMBtu transported. Â The producers have also identified up to 18 additional drilling locations within the dedicated leases for future development. Â The purchase price has been paid by the Company utilizing a combination of available cash and the Company’s existing line of credit.
Based on projected 2010 production, the Company expects the Hickory Creek Gathering System to increase the Company’s revenue in 2010 by approximately $772,000, assuming no additional wells are placed on the system during 2010. Â This system has very low operating expenses, and will benefit from the synergies that the Company’s existing pipeline business will provide.
Mr. Robert Panico, President and CEO of the Company said: “This is an exciting opportunity for Gateway. Â This acquisition expands our geographical area of operations and it gives us a foothold in a very important producing basin, the Barnett Shale. Â We plan to use the Hickory Creek Gathering System as the base from which we can pursue organic growth opportunities with our current and neighboring producers, as well as to pursue additional acquisition opportunities in the Barnett Shale.”
For additional information about the Company please visit our website at www.gatewayenergy.com
About Gateway Energy
Gateway Energy Corporation owns and operates natural gas gathering, transportation and distribution systems in Texas, Texas state waters and in federal waters of the Gulf of Mexico off the Texas and Louisiana coasts. Â Gateway gathers offshore wellhead natural gas production and liquid hydrocarbons from producers, and then aggregates this production for processing and transportation to other pipelines. Â Gateway also transports gas through its onshore systems for non-affiliated shippers and through its affiliated distribution system and makes sales of natural gas to end users.