Magnum Hunter Resources announced its subsidiary Eureka Hunter Holdings, LLC has entered an asset purchase agreement to acquire TransTex Gas Services. Eureka Hunter will pay $58.5 million, with both cash and equity, for TransTex Gas. TransTex was started in 2006 and has quickly grow to the largest privately held contract gas treating company. The company offers a broad range of midstream services and has over 50 amine plants that remove and treat CO2 and H2S from natural gas, as well as a fleet of dew point control plants. TransTex's fabrication yard is conveniently located in Halletsville, TX, where the company can easily serve the Eagle Ford Shale. The company specializes in plants sized less than 60 GPM.
Magnum Hunter currently runs 4 rigs in the play and has plans to eventually spin off its midstream business into a MLP.
"The addition of the TransTex's group of assets and management team to Eureka Hunter is a another step in our overall business plan which makes for a very comprehensive and well rounded midstream services company. Eureka Hunter will now have immediate access and the ability to offer producers skid mounted wellhead treating and field processing plants ideally suited for specific customer needs. In addition, TransTex will broaden its footprint as Eureka Hunter continues to expand its gathering system in the Marcellus Shale of West Virginia and into the Utica Shale in eastern Ohio. We also believe the management team at TransTex will be able to identify additional business opportunities in the gathering and processing business for Eureka Hunter. With the acquisition of TransTex, we are significantly closer to the MLP objective we are ultimately seeking."