Report Volume XXIII, Number 10, January 15th, 2012

INDUSTRY NEWS (Houston, TX) – Hoover Energy Partners LP announced recently that it has acquired a 50-mile natural gas gathering system, water transportation system and water disposal well located in Reeves County, Texas from Eagle Oil & Gas. This system is underpinned by a long-term dedication of approximately 68,000 gross acres that Comstock Resources, Inc. recently acquired from Eagle Oil & Gas. Additionally, Hoover announced it has begun construction on Phase I of Pecos Crossing Pipeline, a 24-mile 12″ crude oil system that will serve Ward and Reeves counties, Texas and will have a capacity of up to 120,000 bpd. Both assets are located in the heart of the Bone Spring and Wolfcamp (”Wolfbone”) plays of the Delaware Basin.

“Hoover Energy Partners has shifted into high gear with the Eagle acquisition and construction of Pecos Crossing,” said Randy Hoover, President of Hoover Energy Partners. “We see 2012 as the year that Hoover will emerge as the premier midstream company serving producers targeting the Wolfbone play in Reeves and Pecos counties. Additional growth projects will be announced in the coming months.”

Pecos Crossing Pipeline is scheduled to be operational in April 2012 and will be the first crude oil pipeline operating south of the Pecos River. At its northern terminus, Pecos Crossing will deliver to Plains All American Pipeline’s newly constructed Barstow Station. At the southern terminus, Hoover will serve the Perry Ranch Station, a newly constructed truck loading and tank terminal. Multiple producer and Hoover owned laterals will continue to be constructed and connected as the Wolfbone is developed. Phase II of Pecos Crossing is being contemplated as the Wolfbone play extends south into Pecos County, Texas where Hoover’s legacy 550-mile natural gas gathering system and treating facilities are located.

INDUSTRY NEWS (Radnor, PA) – Penn Virginia Resource Partners, L.P. announced that it has acquired an option to purchase a pipeline easement in Susquehanna County along a 28.8 mile right-of-way corridor in the Pennsylvania Marcellus Shale. PVR is currently evaluating the construction of a new natural gas gathering pipeline, with an interconnection to the Tennessee system, to serve producers in the region. The optioned easement was acquired from the Rail-Trail Council of Northeastern Pennsylvania (”RTC”), and extends north from the Tennessee pipeline right-of-way in the town of Union Dale through the towns of Thompson and Lanesboro to the New York state line.

William H. Shea, Jr., Chief Executive Officer of PVR’s general partner, said, “We are pleased to have acquired this option as the first step in the development of a new outlet for the region’s natural gas production. The right-of-way was originally developed for railroad use and is ideally situated for pipeline construction. Use of the existing right-of-way will allow PVR to construct the line without creating another utility corridor in the region. The community will also benefit as the payments received by RTC will enable the Council to make significant improvements to the trail.

“We expect to continue discussions with potential shippers for construction of a 24-inch mainline trunk system capable of transporting approximately 360 million cubic feet per day of production to major northeastern US consumption markets,” said Mr. Shea.

INDUSTRY NEWS (Houston, TX) – Enterprise Products Partners L.P.announced recently that it has received sufficient transportation commitments to support development of its 1,230-mile Appalachia to Texas pipeline (”ATEX Express”) that will deliver growing ethane production from the Marcellus/ Utica Shale areas of Pennsylvania, West Virginia and Ohio to the U.S. Gulf Coast. Demand for price-advantaged ethane feedstock over crude oil-based derivatives within the Gulf Coast petrochemical market is approximately 955,000 barrels per day (”BPD”) and continues to increase. ATEX Express will have the capacity to transport up to 190,000 BPD from the Appalachian production areas to the partnership’s storage and distribution assets in Texas. The committed shipper transportation rate will range between 14.5 cents per gallon and 15.5 cents per gallon.

“The willingness of shippers to commit to a term of at least 15 years reflects the long-term potential of shale development in the Appalachian region and provides us with the assurance necessary to build the midstream infrastructure that will facilitate further development of this important domestic resource,” said Michael A. Creel, president and chief executive officer of Enterprise’s general partner. “In addition to providing valuable takeaway capacity that gives producers access to the most attractive markets, the ATEX Express pipeline will also serve as an economic driver for the country and the communities in which it will be located. This project is expected to directly create approximately 4,000 jobs during and after construction, which will increase the need for local goods and services and generate incremental state and local tax revenue. This is in addition to the jobs related to increased production in the Marcellus and Utica basins and those resulting from new and expanded ethylene plants in the United States.

Originating in Washington County, Pennsylvania, the first leg of the system would involve construction of approximately 595 miles of new pipeline extending to Cape Girardeau, Missouri, closely paralleling an existing Enterprise pipeline. At Cape Girardeau, Enterprise will reverse a 16-inch diameter pipeline and place it into ethane service. By utilizing an existing pipeline and following an existing right-of-way for the section to be constructed, ATEX Express offers a costeffective and timely solution that also minimizes the project’s environmental impact.

At the southern terminus of the ATEX Express pipeline, Enterprise will be constructing a 55-mile, 16-inch diameter pipeline to provide shippers with access to the partnership’s natural gas liquids storage complex at Mont Belvieu, Texas, giving them direct or indirect access to every ethylene plant in the United States.

Enterprise representatives are working with residents, landowners and community leaders along the proposed pipeline route, providing information about the project, conducting surveys and negotiating right-of-way agreements. ATEX Express is expected to begin commercial operations in the first quarter of 2014.