Kinder Morgan - Copano Reach $5 Billion Deal

Copano Energy Assets Map

Kinder Morgan and Copano Energy have reached a $5 billion agreement whereby KMP will acquire Copano. The transaction prices Copano at a 23.5% premium to its closing prices on January 29, 2013. The combined company has over 80,000 miles of pipelines and more than 180 terminals. The deal is expected to close by the third quarter of 2012

Richard Kinder, CEO stated, "The footprint we now control has never been paralleled........I'm absolutely convinced US natural gas is the future of energy......everything points to infrastructure being the biggest hurdle to continued growth.....We're seeing increased use of US hydrocarbons in every portion of the economy."

Copano's assets are centered around the South Texas Eagle Ford, Fort Worth Basin Barnett Shale, Oklahoma's Woodford Shale & Mississippi Lime plays, and the Powder River Basin in Wyoming. The company has more than $1 billion in identified growth projects and Rich Kinder expects that number will grow once the assets are under KMP control. Copano operates:

• 6,900 miles of pipelines with 2.7 Bcf/d of throughput capacity
• 9 processing plants with 1 Bcf/d of capacity
• 315 mmcfd of treating capacity

Kinder Morgan Asset Map

Kinder Morgan will now own 100% of the two companies' Eagle Ford Gathering JV. Eagle Ford Gathering comprises approximately 400 miles of pipelines (including its capacity rights in certain KMP pipelines) with capacity to gather and process over 700,000 mmbtu/d.

Kinder plans to retain the "vast majority" of Copano's 415 employees and the company's Tulsa office.

KMP's Analyst day call will be streaming at kindermorgan.com until 2 pm CST.

Swift Energy Inks Gathering Deal - Reports Austin Chalk Results in LA

Swift Energy Eagle Ford Shale Acreage Map

Swift Energy signed a gathering agreement with Eagle Ford Gathering, LLC. Swift will have 40 mmcfd of firm capacity on the system in LaSalle County by the fourth quarter of 2012.

Eagle Ford Gathering, LLC is a 50/50 midstream partnership between Kinder Morgan (KMP) and Copano Energy (CPNO).

On a side note - the company reported a successful Austin Chalk well in Vernon Parish, LA. The well produced 744 b/d of oil and 7.2 mmcfd of natural gas.

Copano Energy Eagle Ford Assets Add to Earnings

Copano Energy's Eagle Ford pipeline and midstream assets boosted the company's bottom line in the fourth quarter of 2011. The Texas segment of the company reported growth of 27% in gross margins from Q4 2010 to Q4 2011. The primary boost was from increased pipeline throughput in the Eagle Ford Shale and Barnett Combo plays.  Throughput volumes in the South Texas shale play were up 657%. How's that for volume growth.....

Eagle Ford Gathering, LLC also completed its 117-mile pipeline in December 2011. The separate entity, which is partnership between Copano and Kinder Morgan, provided gathering services for an average of 145,551 mmbtu/d in the quarter.

The quarter results also followed an announcement that the company will begin a DK Pipeline expansion that will extend the pipeline 65-miles into McMullen County.

SM Energy - Talisman and Statoil Reach Eagle Ford Acreage Deal

SM Energy sells 15,400 acres in LaSalle and Dimmit counties for $225 million ($14,600 per acre) to a partnership of Talisman and Statoil. SM Energy has been courting offers over the past several months and it looks like it wasn't able to get a satisfactory JV agreement across all of its acreage. Expect another announcement across a larger portion of the company's acreage in the coming weeks.

"The position is a detached block of acreage that is comprised of the entirety of the Company's operated acreage in LaSalle County, Texas, as well as an immaterial portion of adjacent operated acreage in Dimmit County, Texas. In total, approximately 15,400 net acres are being sold for cash proceeds of approximately $225 million. Due to limited infrastructure, there is currently no production associated with three wells that have been drilled on the acreage. As of year-end 2010, there was an immaterial amount of proved reserves booked for this acreage. The buyers will be entitled to approximately 12% of the takeaway capacity associated with SM Energy's agreement with Eagle Ford Gathering LLC, a joint venture between Kinder Morgan Energy Partners, L.P. and Copano Energy, L.L.C."

Read the full press release at sm-energy.com