Working Their Asphalt

Working Their Asphalt

The nation’s construction industry is practically giddy by the prospect of the Administration’s proposed American Jobs Plan and the $115 billion earmarked to repair pot-holed roads and highways while building shiny new ones. But it’s one heck of a hot-diggity for our friends who produce and store asphalt. For the uninitiated, asphalt is produced from a mix of aggregates and the bitumen-rich tar sands crude that’s pipelined from our Canadian neighbors to U.S. refineries for processing. You simply can’t produce asphalt without the heavy oil. Canada currently exports 3.8 MMBPD of the stuff to the U.S. Even with the death of the Keystone XL, pipeline expansions now underway will add another 950,000 BPD of capacity to keep those pavers rolling. On the storage side, Tulsa-based Blueknight Energy is poised for a giant bump should the Plan pass. The company, which last month transitioned to a pure-play operator of asphalt terminals, operates the largest independently owned network in the U.S., with 53 terminals across 26 states and more than 8.7 MMBbls of storage capacity.

What do you think? Learn more about Reese Energy Consulting at www.ReeseEnergyConsulting.com.

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STACK One Up for Tall Oak

STACK One Up for Tall Oak

Fresh off its acquisition in January by private equity firm Tailwater Capital, Okla. City-based Tall Oak Midstream has made its first purchase in a shale play the company knows like the back of its hand—the Anadarko Basin’s STACK. Reese Energy Consulting today is following the latest news from Tall Oak, which has acquired Redcliff Midstream from Canyon Midstream for an undisclosed sum. The bolt-on deal includes 200+ miles of newly built gathering pipelines, five compressor stations across four Okla., counties, and a 240 MMCFD cryogenic gas processing plant in the Northern STACK Extension. This liquids-rich area, according to Tailwater, offers a robust inventory of economic undeveloped drilling locations with underutilized midstream infrastructure that Tall Oak continues to evaluate in a search for additional bolt-on opportunities to grow its regional presence. Tall Oak’s existing STACK assets include more than 750 miles of low- and high-pressure gathering lines across seven Okla., counties.

 

Tall Oak Midstream

Tall Oak Midstream was founded in early 2014 by a team of experienced executives with diverse and complementary backgrounds across the midstream and upstream sectors. With a firm belief in a set of core values and a dedication to creating a customer-driven company that operates with excellence as its standard and innovation as a requirement, the Tall Oak team provides oil and gas producers a full suite of midstream services custom designed to meet our customers’ specific requirements and help achieve their business objectives.

www.talloakmidstream.com

What do you think? Learn more about Reese Energy Consulting and our natural gas and midstream expertise at www.ReeseEnergyConsulting.com.

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Buffet Scores on Natural Gas

Buffet Scores on Natural Gas

Reese Energy Consulting today is following a Seeking Alpha story that performs an insightful post-mortem on last year’s Berkshire Hathaway decision to bet huge on natural gas at a time when the nation’s fossil fuels industry wrestled on life support. While other energy investors already had sour whiffs of anything oil and gas, Warren Buffet sealed the largest deal of 2020 with his $9.7+ billion acquisition of Dominion Energy’s natural gas pipeline and storage business. The July purchase included 100% ownership of three pipelines sprawling 7,700 miles; 50% ownership of a fourth; 20.8 BCFPD of total transportation capacity; 900 BCF of storage; a 25% stake in Cove Point LNG; and control of 18% of all U.S. interstate gas flows. And there was more to come. Buffet in August scooped up stakes in five Japanese commodities trading firms for a cool $7 billion. Now, flash forward to this moment—to $2.55 per MCF gas prices vs last July’s $1.44, record-breaking LNG exports (predominantly to Asia)—and ask yourself: What was I thinking when Buffet was thinking this?

 

Berkshire Hathaway

Berkshire Hathaway is an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States.

www.berkshirehathaway.com

Learn more about REC and our natural gas and LNG services at www.ReeseEnergyConsulting.com.

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