HOUSTON, Feb. 9, 2011 /PRNewswire/ -- Copano Energy, L.L.C. (Nasdaq: CPNO) today announced several recent developments related to its Texas operating segment.
New Agreements with Pioneer, Petrohawk and other Eagle Ford Producers
Copano has entered into new, long-term agreements with several Eagle Ford Shale producers, including, among others, Abraxas Petroleum Corporation (Nasdaq: AXAS), Paloma Resources, Petrohawk Energy Corporation (NYSE: HK), Pioneer Natural Resources (NYSE: PXD), Reliance Eagleford Upstream Holding LP, Newpek, LLC and Riley Exploration. Copano has also expanded its recently announced contract with GeoSouthern Resources to include a larger acreage dedication. Under the terms of these agreements, which are primarily fee-based, Copano will provide gathering, compression, processing and fractionation services for these producers in portions of DeWitt, Karnes and Live Oak Counties, Texas. Copano has secured firm producer volume commitments for aggregate production of up to 120,000 MMBtu per day and additional commitments for production from approximately 135,000 gross acres in the Eagle Ford Shale as a result of the new agreements.
Extension of DK Pipeline
Copano also announced today that it will extend its recently completed 24-inch DK Pipeline in DeWitt and Karnes Counties, Texas by adding 58 miles of 24-inch pipeline through Lavaca County to directly connect the DK Pipeline system into its Houston Central Complex. The pipeline extension will increase the capacity of the DK Pipeline system from 225,000 MMBtu per day to 350,000 MMBtu per day and is expected to begin service in the fourth quarter of 2011. The DK Pipeline expansion project is expected to cost approximately $100 million.
"Our expansion in the Eagle Ford Shale continues to deliver results, and we are pleased to have reached additional agreements that will generate long-term, stable cash flows for Copano," said R. Bruce Northcutt, President and Chief Executive Officer of Copano Energy. "With our significant increase in capacity to serve production from the Eagle Ford - through the DK Pipeline extension and several other recently announced initiatives - we are strengthening our presence in the South Texas region. We are confident that we are taking the right steps to create additional value for all Copano unitholders by enhancing our existing infrastructure and offering competitive midstream solutions for Eagle Ford Shale producers."
Eagle Ford Shale Strategy Discussion and Fourth Quarter 2010 Earnings Call
In connection with Copano's progress in the Eagle Ford Shale, the Company will review its growth strategy on its upcoming fourth quarter 2010 earnings call, which is scheduled for Friday, February 25, 10:00 a.m. Eastern Time (9:00 a.m. Central Time). The call may be accessed live via telephone by dialing (480) 629-9722 and asking for the Copano Energy call at least 10 minutes prior to the start time, or via live webcast through the Investor Relations page of Copano's website (www.copanoenergy.com). In addition, Copano will post presentation materials for the growth strategy discussion on the Investor Relations page of its website.
Houston-based Copano Energy, L.L.C. (NASDAQ: CPNO) is a midstream natural gas company with operations in Oklahoma, Texas, Wyoming and Louisiana. Its assets include approximately 6,400 miles of active natural gas gathering and transmission pipelines, 250 miles of NGL pipelines and eight natural gas processing plants, with over one Bcf per day of combined processing capacity and 22,000 barrels per day of fractionation capacity. For more information please visit www.copanoenergy.com.
This press release includes "forward-looking statements," as defined by the Securities and Exchange Commission. Statements regarding activities or events that Copano believes will or may occur in the future are forward-looking statements. These statements include discussion of anticipated benefits from announced capital projects, future producer activity and Copano's total distributable cash flow and distribution coverage. These statements are based on management's experience and perception of historical trends, current conditions, expected future developments and other factors management believes are reasonable. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the following risks and uncertainties, many of which are beyond Copano's control: price volatility and market demand for natural gas and natural gas liquids; Copano's ability to continue to obtain new sources of natural gas supply and retain its key customers; the impact on volumes, and resulting cash flow, of technological, economic and other uncertainties inherent in estimating future production, producers' ability to drill and successfully complete and attach new natural gas supplies, the availability of downstream transportation systems and other facilities for natural gas and NGLs, and higher construction costs or project delays due to inflation, limited availability of required resources or the effects of environmental, legal or other uncertainties; general economic conditions; the effects of government regulations and policies; and other financial, operational and legal risks and uncertainties detailed from time to time in Copano's filings with the Securities and Exchange Commission.
Contacts: Carl Luna, SVP & CFO
Copano Energy, L.L.C.
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SOURCE Copano Energy, L.L.C.