Natural gas company thriving
Hiland Partners energy producer plans cooperation with state companies

By Jack Money

Published: October 3, 2008

ENID — Hiland Partners is growing.

The company estimates it will spend about $55 million to $60 million this year to begin expanding its Kinta system of gas gathering pipelines, other systems in the Woodford Shale natural gas field in southeast Oklahoma and in the Bakken Shale oil field in North Dakota.

Various agreements with producers of natural gas in the areas are spurring the systems’ expansions, officials said.

Also, the company will use some of that money to connect recently completed wells into existing gathering systems.

Joe Griffin, the partnership’s chief executive officer and president, talked about the expansions and the company’s growth plans during a recent conference call discussing second-quarter earnings.

"Our inlet natural gas volume on a thousand cubic feet per day basis increased about 16 percent (from a year ago),” Griffin said.

"We have updated our growth capital expenditure program since our last earnings call by approximately $20 million, and that gets us to the $55 to $60 million we are estimating for this year.

"Within that, we have approximately $44 million committed to system expansions and well connects,” he said. "The other $16 million is to kick off new projects, such as the North Dakota Bakken.”

Griffin added that drilling activity along the company’s existing systems remains strong.

He also said Hiland will work hard to expand its existing business relationship with Enid-based Continental Resources.

Hiland Partners provides gas gathering services to Continental Resources in many areas where Continental has active wells.

Jake Dollarhide, chief executive officer of Longbow Asset Management, said Hiland Partners is pursing an aggressive posture, working with other producers, and said that strategy is smart.

"It is important to keep moving forward and investing, even in times when prices are falling, because it is easy to sit back and rest on your heels and just wait for good times to try to expand,” Dollarhide said.

"When they can enter into agreements with oil and natural gas producers to get the product from wells directly to market in times like this, their costs of capital are not as high, and that gives them an advantage.”

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