Morgan Stanley Has Stake in Pipeline Asset

Magnum Hunter Resources Corp said it will sell a stake in its natural gas gathering subsidiary in the Marcellus and Utica shale fields, to a unit of Morgan Stanley (MS), giving the two co-ownership in the business valued at $1 billion.

Morgan Stanley Infrastructure said it would pay Magnum Hunter $65 million for a 6.5 percent stake and that it would buy ArcLight Capital Partners LLC's 41 percent stake in the business for an unspecified amount.

After the two transactions, Magnum Hunter and Morgan Stanley Infrastructure would together hold an equity interest of about 98 percent in Eureka Hunter.

"We have found a new equity partner ... which will allow this tremendous asset to grow and prosper in preparation for an anticipated MLP offering sometime next year," said Gary Evans, Magnum Hunter's chief executive officer.

Reporting By Kanika Sikka