Copano looking to achieve investment-grade status, increase competitive position on acquisition front

By Jennifer Lanning Drey

Portland, Ore., Sept. 5 - Copano Energy, LLC has a goal of becoming an investment-grade company in order to lower its cost of debt and appear more competitive when pursing acquisitions, Matthew J. Assiff, chief financial officer of Copano, said during a Friday presentation at the Morgan Keegan 2008 Equity Conference in Memphis.

Pursuing complimentary acquisitions to build cash flow is a key component of Copano's business strategy.

"We're posed to continue to pursue further growth," Assiff said.

The company has historically used a combination of equity and debt to finance acquisitions.

However, absent any acquisitions, the company believes it can avoid going to the capital markets for debt or equity for the next three years, Assiff said.

Copano reported liquidity of $565 million at June 30. The company targets maintaining a leverage ratio lower than 4x, and the company's total debt to adjusted EBITDA was 2.9x at June 30.

In seeking acquisitions, Copano looks for opportunities to acquire high-quality assets in established producing regions that offer visibility to the growth available in the area.

Copano also looks to mitigate downside risks associated with commodity prices by looking for acquisitions that offer a complimentary contract mix, Assiff said.

"We don't grow for growth's sake. We grow to make sure that there's true value in the assets and that it's accretive to unit holders and accretive to credit quality," he said.

Copano's business strategy also includes growing through organic projects, and the company has $160 million of new projects planned in 2008, all of which meet Copano's criteria of having a 15% or higher rate of return, Assiff said.

Copano is a Houston-based midstream natural gas company.

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