The acquisition represents all of the interest in the Madisonville pipeline not previously owned by Gateway, for $539,166.67 in cash and 100,000 shares of Gateway common stock. The cash portion of the transaction will be funded out of Gateway’s line of credit.
As a result of this acquisition, Gateway now owns 100% of the Madisonville pipeline connecting the Madisonville gas treatment plant to two major pipelines. The Madisonville gas plant operator is obligated to transport all gas treated at the plant through Gateway’s pipeline under a fully dedicated transportation agreement.
Robert Panico, president and CEO of Gateway, said: I am very pleased with this acquisition as it gives us complete control over the pipeline. Due to continuing delays, we are unable at this time to project when the recently expanded plant capacity will come on-line. However, Gateway remains very optimistic about the potential for the expanded plant and this pipeline to have a significant impact on Gateway’s revenues.
