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Strategies & Market Trends : Value Investing

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To: E_K_S who wrote (38950)	9/30/2010 11:06:42 AM
From: E_K_S	Read Replies (1) of 78627

Re: Magnum Hunter Resources Corpora (AMEX: MHR) DCP Midstream Partners LP (DPM) From MHR 8K released 9/27/2010: On September 16, 2010, Magnum Hunter Resources Corporation (the “Company”) issued a Press Release announcing that it had entered into a letter of intent with DCP Midstream Partners, LP, and its sponsor DCP Midstream, LLC, to create a natural gas gathering joint venture for the gathering of natural gas in West Virginia and Ohio. Planned Appalachian Gathering Joint Venture Between Eureka Hunter Pipeline and DCP Midstream in West Virginia and Ohio finance.yahoo.com From the article:"...Once the initial facility is constructed, the two JV partners plan to fund the Gathering JV's future capital requirements for expansion facilities on a 50/50 cost basis. Closing of the proposed joint venture, which is expected to occur during the fourth quarter of 2010..." ---------------------------------------------------- I like the reoccurring revenues generated from the NG gathering business. One way to own an interest is to buy either the beaten down E&P companies that have already built out their gathering lines and/or buy the E&P developer(s) that have a mainstream JV partner that will help build and operate the gathering system. FWIW - Hedged a portion of my recently purchased MHR stock selling the May $5.00 calls once this news was disclosed. Will lock in a 37% return in 8 months if called away and allow me to lower my overall cost basis if not. EKS

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