Magnum Hunter announces partnership with Morgan Stanley

Magnum Hunter Resources Corporation has announced that it has entered into a Transaction Agreement with an affiliate of Morgan Stanley Infrastructure Inc. relating to a separate purchase agreement between MSI and Ridgeline Midstream Holdings, LLC, an affiliate of ArcLight Capital Partners, LLC, providing for the purchase by MSI of all convertible preferred and common equity interests in Eureka Hunter Holdings, LLC owned by ArcLight.

Eureka Hunter is Magnum Hunter's majority owned subsidiary, through which various midstream services in West Virginia and Ohio are conducted, including the Company's Eureka Hunter Pipeline.

The Transaction Agreement includes a new limited liability company agreement at Eureka Hunter to be entered into by Magnum Hunter, MSI and the minority interest members of Eureka Hunter contemporaneously with the closing of MSI's purchase of ArcLight's equity interests in Eureka Hunter.

Mr. Gary C. Evans, Chairman of the Board and Chief Executive Officer of Magnum Hunter and Eureka Hunter, commented, "With the agreement signed yesterday, we accomplished the following events. First, there will no longer be a cash preferred dividend payment to any equity holder, which is a savings of approximately US$ 16 million per year to Eureka Hunter. Second, we have eliminated Magnum Hunter's need to fund future capital costs at the Eureka Hunter level for rolling six month periods. Third, we have agreed to sell to our new business partner an equity interest that values the entire enterprise at US$ 1 billion. Lastly, we have found a new equity partner that has a similar vision and business philosophy as our management team and board which will allow this tremendous asset to grow and prosper in preparation for an anticipated MLP offering sometime next year."

Edited from source by Elizabeth Corner

Read the article online at: https://www.worldpipelines.com/business-news/18092014/magnum-hunter-announces-partnership-with-morgan-stanley/