Regarding the acquisition, Robert Panico, President and Chief Executive Officer of Gateway, stated "This acquisition nearly doubles our offshore pipeline network and expands our footprint from Galveston, Texas to New Orleans, Louisiana, making us a major gatherer in the Gulf of Mexico. These pipeline systems are located in prolific areas of the Gulf with proven production operated by major producers. There have been numerous leases acquired around these assets which we anticipate will lead to continued drilling activity. We are also very pleased to add Gulfshore Midstream, a sophisticated player in the energy industry, as one of our largest stockholders."
Speaking of the strategic implications of this acquisition, Mr. Panico stated, "This acquisition demonstrates the company's successful implementation of its business plan by redeploying assets to the company's core business segments in the midstream energy industry. Our ability to acquire Gulfshore's offshore pipeline systems was made possible by the completion of the following steps of our business plan:
The funds provided by these transactions position us to pursue opportunities in the midstream sector and improve our ability to raise capital from third parties on favorable terms."
Paul VanderLinden, President of Gulfshore Midstream, stated, "We considered many alternatives in connection with the ultimate sale of our pipeline systems, and we determined that a transaction with Gateway, in which we would receive a significant equity position, was in our best interest and would provide us with the ability to capitalize on Gateway's strong management team and the implementation of its business plan."
Speaking of the financial aspects of the acquisition, Chris Rasmussen, Gateway's Chief Financial Officer, stated, "The Gulfshore assets are expected to be immediately accretive to Gateway's earnings per share and EBITDA. In the year ended December 31, 2006 and the six months ended June 30, 2007, these assets generated revenues of approximately $1.4 million and $750,000, respectively. These pipeline systems have very low operating expenses, and will further benefit from the synergies that our existing offshore pipeline business will provide
Gateway Energy Corporation owns and operates natural gas gathering, transportation and distribution systems and related facilities in Texas, Texas state waters and in federal waters of the Gulf of Mexico off the Texas and Louisiana coasts
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