More Pipe for the Permian

More Pipe for the Permian

Hardly a week goes by that we don’t hear about shuffles and shovels making news in the midstream industry. Between all the mergers and acquisitions, new construction and expansions, midstreamers are working at a frenetic pace to meet unprecedented oil and gas production with the infrastructure to move supplies to market. RMR today is looking at just a few of the projects announced this month that are now servicing—or soon will service—the congested Permian and Eagle Ford.

To put the volumes produced each month in perspective, the Permian topped 4 MMBPD of crude oil in August; the Eagle Ford, nearly 1.4 MMBPD. Production there has quadrupled since 2011. But midstreamers have hit the ground running. In October, Enterprise announced construction of its fourth ECHO Permian pipeline from Midland to Houston and expansions of two of its pipelines to add 450,000 BPD of takeaway capacity. Construction of the company’s EPIC crude oil line servicing the Permian and Eagle Ford has begun with the EPIC expected to come online in January to transport 900,000 BPD. EPIC and Plains All American Cactus II pipeline added more than 1 million BPD of capacity. And the great news is, there’s more to come not only in the Permian and Eagle Ford but in the Andarko’s SCOOP and STACK, DJ, Bakken and every major producing basin in the U.S.

No doubt we’re experiencing a slow-down in production as independent E&Ps focus more on reducing debt and improving shareholder returns than production volumes. But with new energy technologies, drilling techniques and more efficient fracking processes still on the horizon, the next wave to unlock our vast oil and natural gas resources could be bigger than we can imagine today.

What do you think?

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All in the Family

All in the Family

When it comes to striking crude, Tyler, Texas-based Mewbourne Oil and Gas will never be a “me-too” player. While other independents are finding dry holes when it comes to securing more capital to drill and produce, Mewbourne maintains a steady-as-she-goes philosophy that has made the company an independent standout for more than 50 years.

Mewbourne Oil Company

Established in 1965, Mewbourne Oil Company has grown into one of the more prominent independent oil and natural gas producers in the Anadarko and Permian Basins of Texas, Oklahoma and New Mexico. The company’s success over the years can be attributed to a conservative approach to the business and a philosophy of managing all phases of operations from “prospect to pipeline.”

www.mewbourne.net

RMR today is studying Mewbourne and the reasons behind its exceptional success. Now age 84, founder Curtis Mewbourne built an E&P that continues to take a long-term view of the business, eschew debt, and work at its own pace to weather every cyclical storm. The strategy has served Mewbourne well. With presences in the Anadarko and Permian basins, Mewbourne has found its sweet spot in New Mexico where it holds 225,000 acres in the Delaware producing up to 100,000 Bbls of oil per day. And don’t think the mega neighbors haven’t taken note. But Mewbourne isn’t interested in selling—not now, not ever. This family-owned E&P plans to stay generational and that’s just how Mr. Mewbourne likes it. So do we.

What do you think?

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Akers and Acres in the DJ Basin

Akers and Acres in the DJ Basin

Austin Akers got a taste of the oil and gas business at age 15 when a family friend hired the high schooler to put together lease packets and interned him on title work. Now, only six years later, the 31-year-old is CEO of Bison Oil and Gas headquartered in Denver. And this isn’t his first time heading up a successful E&P either.

Bison Oil & Gas

Bison Oil & Gas, LLC (“Bison”) currently holds interests in and operates wells throughout the DJ Basin of Colorado and the San Juan Basin of New Mexico and is looking to expand its position via leasing, acquisition, joint venture, or farmout structures. Bison is focused on core drilling opportunities as well as producing property acquisitions.

www.bisonog.com

RMR today is studying the latest news from Bison, which just secured $155 million to develop more than 300 permitted drilling locations in the DJ Basin. That’s a lot of leases for a company its size. Bison adopted horizontal drilling early and currently operates 20 wells in the DJ across 50,000 net acres. A Cornell graduate, Akers is a prodigy of sorts who sees beyond any lackluster performance of wells previously drilled by other producers. He and his team build statistical databases and algorithms between good and not-so-good wells to evaluate the different variables in drilling and fracking. They then apply that intelligence to their own drilling and fracking techniques. Who says youth is wasted on the young?

Tell us your thoughts.

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A Perfect Permian Prize

A Perfect Permian Prize

Only in Texas could two midstream CEOs look out their office windows and literally gaze upon their joint venture reward. In this case, a gathering system comprised of more than 230 miles of pipelines and 200,000 Bbls of crude oil storage across four counties.

RMR today is following the latest news from Midland-based companies Rattler Midstream and Oryx Midstream, which recently announced the two will acquire Reliance Energy, also based in Midland, for $355 million in cash. The joint venture expands Rattler’s midstream footprint in the Permian and gives Oryx an entry there to offer its customers added options to move their production. Rattler’s parent, Diamondback Energy, is one of six long-term Reliance customers. You might recall Diamondback spun off Rattler back in May, which then went on to launch the biggest energy IPO of the year raising $665 million. For its part, Oryx is the largest privately-held oil gathering and transportation business in the Delaware Basin, currently expanding its system to 1,180 miles of crude oil pipelines and 1,170,000 Bbls of storage.

Wonder who’s buying lunch…

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Hot News for the Bakken and Powder River Basins

Hot News for the Bakken and Powder River Basins

With a low of 31 degrees and wind gusts up to 40 mph today, Casper, Wyo., is bracing for an even more brutal winter than usual. But inside the offices of Bridger Pipeline, things are heating up.

Bridger Pipeline

Belle Fourche, Bridger and Butte pipelines are a liquids pipeline operator that gathers and transports crude oil in the Williston Basin of western North Dakota and eastern Montana, and the Powder River Basin of Wyoming.

bridgerpipeline.com

RMR is following news from pipeline developer Bridger, which just announced two expansion projects across ND., Mont., and Wyo., with one slated to begin by year end. The 137-mile South Bend Pipeline will straddle ND., and Mont., where it will connect with other systems to transport 150,000 bbls of oil per day to several markets. The instrastate Equality Pipeline will move 200,000 bbls of oil per day from Wyo., and connect with other pipelines, including Bridger’s proposed Liberty line, which will terminate at the Cushing, Okla., hub.

This comes as oil and gas production in the Bakken alone continues to break records. In August, the North Dakota leg produced 1.48 million Bbls of oil and more than 3 BCF of natural gas. Those numbers are expected to climb though the rest of the year with producers feeling their own kind of heat to get oil and gas supplies to market. Bundle up, Bridger. What do you think?

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