GMXR Signs Agreement With PVR East Texas Gas Processing

Independent exploration and production firm GMX Resources has announced that it has signed a gas gathering and processing agreement with midstream energy firm PVR East Texas Gas Processing as part of a broader program aimed at consolidating GMX Resources’s overall position.

PVR East Texas Gas Processing is a wholly owned subsidiary of Penn Virginia Resource Partners. The agreement with GMX Resources (GMXR) details the terms to process all of its natural gas produced from wells jointly developed with Penn Virginia Oil & Gas located in the Harrison and Panola counties of Texas.

GMXR estimates that processing revenues on the associated natural gas production will increase the current average sales price by approximately $1.20 per million British thermal units. The company expects a potential $4.5 million revenue increase for 2008 at the current commodity prices.

Processing is expected to commence no later than March 1, 2008. In addition, GMXR will gain access for its residue gas to additional pipelines serving the Perryville, Louisiana, market hub.

GMXR has also finalized the definitive agreement for the previously announced proposed acquisition of approximately 3,000 net acres of undeveloped leases in Harrison County, Texas, increasing its overall net acreage by 18% and operated acreage to 65%.