GE Financial Services has acquired a 30.6% stake in South Texas midstream operator Howard Energy Partners. The amount paid was not disclosed, but we do know what the company is doing with the proceeds. Howard Energy will use the money to partially fund the acquisition of Meritage Midstream Services. Howard Energy owns more than 280 miles of natural gas pipelines in South Texas. Meritage Midstream owns 185 miles of pipe, including the Eagle Ford's Escondido Gathering System and the Cuervo Creek Gathering System that transports wet-gas.
When the transaction closes, the new Howard Energy Partners will own more than 450 miles of natural gas gathering pipelines in Dimmit, Frio, Maverick, Webb, and Zavala counties. The system currently gathers 175 mmcfd, but that amount will increase as more wells come online in the coming year.
The company plans to improve facilities to handle production from the Austin Chalk, Eagle Ford Shale, Escondido, Olmos, and San Miguel formations.