* To sell 50 pct stake in KinderHawk for $855 mln

* Kinder Morgan to assume Petrohawk's $65 mln of debt

* Says to form new JV in liquids-rich Eagle Ford shale

* Raises FY2011 oil and liquids output target

* Petrohawk shares up 4 percent (Adds graphic, factbox; updates share movement)

By Arup Roychoudhury

BANGALORE, May 5 - Petrohawk Energy's year-long efforts to reduce exposure to natural gas continued as it agreed to sell its 50 percent stake in Haynesville shale midstream joint venture to partner Kinder Morgan Energy Partners LP for $855 million.

Kinder Morgan will assume $65 million of Petrohawk's debt as part of the deal on the JV, KinderHawk Field Services, which the companies say is the largest gas gathering and midstream business in the Haynesville shale, northwest Louisiana.

"I think it's an outstanding deal... It should be an accretive event," MKM Partners analyst Curtis Trimble said.

Last year, Petrohawk sold half its stake in midstream assets in the gas-rich Haynesville, located in parts of Texas and Louisiana, to Kinder Morgan for $875 million, citing low prices for the commodity. [ID:nSGE63C0E7]

First-quarter natural gas prices were down 19 percent from last year, while U.S. crude oil prices soared by about a fifth during the same period.

This has led Petrohawk and peers like W&T Offshore and Bill Barrett to increase investment in oil and liquids-rich regions like Bakken shale, Eagle Ford, Permian Basin and Niobrara shale. [ID:nL3E7FQ0E7] [ID:nL3E7F81LR]

Petrohawk sold a number of its gas-rich properties last year, including its Fayetteville acreage to Exxon Mobil for $650 million. [ID:nSGE6BM08Z]

The company has been reallocating most of its capital spending on lucrative assets like Eagle Ford and Permian. Out of its 2011 capital plan of $2 billion, about $950 million will be on Eagle Ford and another $75 million in the Texas Permian.

However, its Haynesville properties remain its largest in terms of area, and Petrohawk will spend $950 million there too.

Petrohawk also raised its full-year total and liquids production forecast.

The company now expects average production of 940-960 million cubic feet equivalent per day, an increase of about 41 percent. It expects to exit 2011 with 16 percent liquid content, almost quadruple of last year.

EAGLE FORD MIDSTREAM

Petrohawk and Kinder Morgan also said they will now form a joint venture in the Eagle Ford shale, which will own about two midstream gathering systems with Petrohawk holding 75 percent.

Petrohawk, valued at about $7 billion, said it has so far acquired 325,000 acres in the liquids-rich Permian basin, at $1,400 per acre. It will invest $75 million in the region from its full-year spending plan of $2 billion.

"Although it varies from region to region, I think the $1,400 average figure is really cheap," analyst Trimble said.

Separately, Kinder Morgan said it would invest about $220 million in a new pipeline for Petrohawk. [ID:nN05260871].

For January-March, Petrohawk posted its first estimate-beating results in four quarters. [ID:nASA022M0]

On Thursday, when oil fell more than $7, Petrohawk shares rose about 6 percent to $25.46 in morning trade on the New York Stock Exchange, before paring gains to trade flat at $23.93 in the afternoon session. Shares of Houston-based Kinder Morgan fell 1.5 percent to $72.87. (Reporting by Arup Roychoudhury in Bangalore; Editing by Don Sebastian and Gopakumar Warrier)

http://uk.reuters.com/article/2011/05/05/petrohawk-idUKL3E7G51XT201...