Straight out of the IPO starting gate in 2015, Tallgrass Energy demonstrated amazing fleet of foot to grow, outperform, and go the distance even during the worst oil crash in a generation.
RMR is studying the remarkable success of Kansas-based Tallgrass and its network of oil, gas and water midstream systems in the Rockies, Upper Midwest and Appalachian regions. This mid-size midstream company not only survived the oil collapse but thrived with a crush of growth projects that won smiles from Wall Street along the way.
Now, with more than 8,300 miles of natural gas and 800 miles of crude oil pipelines, Tallgrass serves producers in the Bakken, Powder River and DJ basins. Its 300 miles of water pipelines support seven producing basins. Together, Tallgrass operates across 11 states—and there’s more to come. Up next is the 700-mile Seahorse Pipeline, which will transport crude from the Cushing oil hub to the Louisiana Gulf Coast. What do you think?
The consolidation dance among independent producers is starting to feel like a game of musical chairs with all eyes this week focused on Houston-based Callon Petroleum and its acquisition of Carrizo.
RMR this week is studying the all-stock $3.2 billion deal that will enlarge Callon’s footprint to 200,000 net acres overall, which includes 90,000 net acres in the Permian’s Midland sub-basin and 76,600 acres in the Eagle Ford. The companies are both around the same size, so there’s no minnow swallowing a whale here or vice-versa.
What’s interesting about this merger is that Callon’s original plan was to boost its pure-play Permian assets through acquisitions, then sell the company at a premium to a larger independent or perhaps even a major. Now, with the addition of prime sweet spots in the Eagle Ford for a near bargain-basement price, its149 MMBOE of proved reserves, 600+ undrilled locations and little to no pipeline bottlenecks, Callon loses it pure-play status but gains the assets needed to generate more cash flow and capture production at lower costs.
What do you think?
Within the last two months, Okla. City-based Great Salt Plains Midstream has completed construction on and expanded both a natural gas and crude oil system that stretch across five counties in the Anadarko Basin’s STACK play.
For producers there, looks like Christmas just came early. RMR today fixes the spotlight on Great Salt Plains, which last week announced the completion of its 137-mile gas gathering and transportation system. The system includes five compressor stations, the 70 MMCFD cryogenic Silver Lake gas plant and the 20 MMCFD Thunderbird gas plant offering 59 MMCFD of gathering compression capacity and 55 MMCFD of residue compression capacity.
This, barely a month after GSPM’s completion of a 317-mile crude gathering and transportation system that also serves the STACK with a direct line to the Cushing oil complex and an interconnect to the Phillips 66 refinery in Ponca City. While Christmas may still be months away, Great Salt Plains is already giving STACK producers one heck of a midstream gift.
Don’t look for any hazy, lazy, crazy days of summer this year for Denver-based Cureton Midstream. To the joy of producers everywhere in the DJ Basin, Cureton is days away from breaking ground on its second natural gas processing plant in Weld County, Colo.
RMR is studying the strategic moves by Cureton to address the dearth of infrastructure in one of the nation’s Big 8 oil and gas basins. Bottom line, the lack of midstream assets in one of the most economic plays in the U.S. affects drilling decisions big-time when increased production is caught in a stranglehold to get supplies to market. Not enough gathering lines, pipelines to transport, or processing plants. Lots of regulatory hurdles in the Mile-High City.
But in barely 18 months, Cureton built The Front Range Gas Plant and installed 115 miles of gas gathering pipelines in Weld County. In May, the company announced six new long-term agreements with gas producers and an expansion of its gas processing capacity by up to 400 MMCFPD. Now, the company turns its attention to the Hookside Gas Plant and Compressor Station also in Weld County estimated to go online in October. Cureton, rock on with your bad self. What do you think?
When Midland-based Rattler Midstream in May claimed the title of largest energy IPO of the year raising $665 million, this spinoff of Diamondback Energy showed it had serious bite in the Permian Basin. RMR is studying the next potential midstream monster of an IPO that would make the Rattler deal look like a common garter snake.
Now, Dallas-based Blue Racer Midstream is exploring an initial public offering that could be valued at as high as $2.5 billion. Blue Racer’s “supersystem” is concentrated in Ohio and West Virginia where it gathers, processes and transports natural gas and NGLs from the liquids-rich Utica and Marcellus in the Appalachian Basin. With three complexes straddling two states, the company’s expansive network includes 700 miles of pipeline, 1 billion CFD of nameplate processing capacity, 134,000 BPD of fractionation capacity, and 12,500 BPD of condensate stabilization capacity. According to the EIA, the Appalachia region will supply 40% of the U.S. gas market by 2030.
For Blue Racer, that’s winning a blue streak. What do you think?