HOUSTON, July 9, 2012 /PRNewswire/ -- NiSource Gas Transmission and Storage's (NGT&S) Midstream & Minerals Group, LLC (MMG) and its various subsidiaries today announced they have entered into definitive agreements with affiliates of Hilcorp Energy Company ("Hilcorp"), a privately owned oil and gas exploration and development company based in Houston, Texas, to develop the hydrocarbon potential on a significant acreage block in the Utica/Point Pleasant Shale formation in northeast Ohio and western Pennsylvania, and to construct new gathering pipeline infrastructure and natural gas liquids (NGL) processing facilities to support natural gas production in the same region.

As part of the upstream joint venture, NiSource will combine its leasehold acreage in northeast Ohio with Hilcorp's current leasehold to form a significant acreage block in the Utica/Point Pleasant Shale formation in northeast Ohio and western Pennsylvania. Hilcorp will serve as the operator and manage the development of the combined acreage. NiSource will be a non-operating working interest owner in the project.

The newly formed midstream joint venture, Pennant Midstream, LLC, will construct an initial 50 miles of wet gas gathering pipeline facilities in northeast Ohio and western Pennsylvania with a capacity of 400 million cubic feet (mcf) per day. In addition, Pennant will build a natural gas processing complex with an initial 200 mcf per day of cryogenic gas processing capacity along with an associated residue line in Ohio to process gas for the upstream joint venture and other interested parties. The initial processing plant is set to be delivered in July of this year. The gathering system and processing complex, which will be operated by NiSource Midstream Services, are expected to be in-service by the third quarter of 2013. Pennant is reviewing several options with various parties for fractionation, including development of its own facility.

"This partnership demonstrates that NiSource is well-positioned and committed to providing the midstream services required by producers across the liquids-rich eastern Ohio and western Pennsylvania Utica Shale play," said Jimmy D. Staton, executive vice president and NiSource Gas Transmission & Storage group CEO. "NiSource has a longstanding commitment to economic growth and job creation in the region and has been serving the citizens of Ohio and Pennsylvania for more than a century. We look forward to expanding our legacy through this partnership."

Hilcorp's Chairman and CEO, Jeff Hildebrand, said, "We are pleased to partner with NiSource to develop gathering and processing options for producers early in the Utica Shale wet gas horizon, which they will build and operate. We are equally excited about the opportunity to develop their acreage position, along with our own extensive Utica Shale acreage."

Joseph A. Blount, Jr., NiSource Midstream & Minerals Group's president & COO, commented, "These two joint ventures with Hilcorp allow us to maximize the value of our acreage by leveraging Hilcorp's widely recognized expertise in hydrocarbon exploration and development, while also providing a great foundation from which to provide midstream services and solutions, including gathering, compression, processing and liquids handling for other Utica producers in eastern Ohio and western Pennsylvania."

Engineering and construction plans are already in progress, and community outreach will begin immediately. Hilcorp and NiSource will work closely with individual surface rights owners and community officials regarding the production process and timing, as well as lease specifics. Questions can be directed to the toll-free project phone number: 1-888-499-3450.

About the NiSource Gas Transmission & Storage Companies, including NiSource Midstream Services: As units of NiSource Inc. (NYSE: [ NI ]), the NiSource Gas Transmission & Storage (NGT&S) companies include Columbia Gas Transmission, Columbia Gulf Transmission, Hardy Storage, Millennium Pipeline, Crossroads Pipeline and NiSource Midstream Services (NMS). NMS is focused on providing a variety of producer services including gathering, treating, conditioning, processing, compression and liquids handling in the Marcellus and Utica shale plays. Combined, the NGT&S companies operate approximately 15,000 miles of interstate natural gas pipeline and 37 storage fields, delivering more than one trillion cubic feet of natural gas per year. For more information, please visit [ www.ngts.com ].

About NiSource

NiSource Inc. (NYSE: [ NI ]), based in Merrillville, Ind., is a Fortune 500 company engaged in natural gas transmission, storage and distribution, as well as electric generation, transmission and distribution. NiSource operating companies deliver energy to more than 3.8 million customers located within the high-demand energy corridor stretching from the Gulf Coast through the Midwest to New England. Information about NiSource and its subsidiaries is available via the Internet at [ www.nisource.com ].

About Hilcorp

Hilcorp Energy Company is currently one of the largest privately-owned independent oil and natural gas companies in the United States. Headquartered in Houston, Texas, Hilcorp has over 1000 employees and engages in oil and gas exploration, development, and production in eleven operating areas, including the Cook Inlet region of Alaska, the Texas/Louisiana Gulf Coast, the Utica shale, the Gulf of Mexico, and the Rockies. Hilcorp's pipeline affiliates operate natural gas and oil pipelines in many of the geographic areas where Hilcorp has production.

Forward-Looking Statements

This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Those statements include statements regarding the intent, belief or current expectations of NGT&S and its management. Although NGT&S believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Readers are cautioned that the forward-looking statements in this presentation are not guarantees of future performance and involve a number of risks and uncertainties, and that actual results could differ materially from those indicated by such forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, but are not limited to, the following: weather; fluctuations in supply and demand for energy commodities; growth opportunities for NGT&S' businesses; the success of regulatory and commercial initiatives; dealings with third parties over whom NGT&S has no control; actual operating experience of NGT&S' assets; the regulatory process; regulatory and legislative changes; the impact of potential new environmental laws or regulations; the results of material litigation; changes in general economic, capital and commodity market conditions; and counterparty credit risk and the matters set forth in the "Risk Factors" Section in NiSource Inc.'s 2011 Form 10-K and 2012 Forms 10-Q, many of which are risks beyond the control of NGT&S. NGT&S expressly disclaims a duty to update any of the forward-looking statements contained in this release.

SOURCE NiSource Midstream Services

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