Wyoming Preps for a Drilling Bonanza

Wyoming Preps for a Drilling Bonanza

Little more than six years ago, five independent E&Ps signed on to propose a drilling project in the Powder River Basin. But these were no ordinary producers and what they collectively proposed was no ordinary project. With the approaching dawn of a new Administration, E&Ps are scarfing up $10,000-apiece drilling permits on federal lands, especially in N.M., and Wyo., where the oil crash has seriously bruised the states’ economies. Then there’s The Magnificent Five whose Converse County Oil and Gas Project has received a final nod from the BLM to drill 5,000 wells over 10 years. EOG Resources, Occidental, Chesapeake, Northwoods Energy, and Devon each have a seat at the board of what will be one of the largest oil and gas projects in Wyo., history. Extending across 1.5 million acres, the venture will include 1,500 miles of gathering pipe, hundreds of miles of water pipeline, numerous roads, and power lines. More than 8,000 jobs are expected to be created along with $18-$28 billion in tax revenues.

What do you think? Learn more about Reese Energy Consulting and our range of upstream, midstream, and downstream services at www.ReeseEnergyConsulting.com.

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Just Add Water

Just Add Water

Marvin Nash, a Wyo., cowboy with a storied history as wide as his full-brim hat, has developed an oilfield wastewater repurpose system that essentially rewrites the script for produced water management in arid climes. Reese Energy Consulting today visited with Nash and his company, Encore Green Environmental, which launched its pilot project in September after a call from a Wyo., wildcatter who told Nash, “I’ve got 50,000 Bbls of water in a pond and it’s gonna cost me $4-5 bucks per barrel to haul it off.” Nash said, “I can do it for half.” And he did. But that’s not the full story. EGE’s Conservation by Design system not only eliminates the need for disposal injection but irrigates land with treated produced water via mobile storage tanks and sprinklers—all in proximity to the wellsite. The process sequesters carbon, promotes photosynthesis through new vegetation, and reduces the impact of climate change. “Smart E&Ps understand the next midstream partner is the landowner himself,” Nash says. With 40% of the nation considered arid and thirsty, he’s now out to introduce his system in Texas and N.M.

 

Encore Green Environmental

Encore Green Environmental’s patent-pending methodology, Conservation By-Design™, brings the perfect storm together for unprecedented environmental and industrial results.

www.encoregreenenvironmental.com

What do you think? Learn more about REC and our midstream services at www.ReeseEnergyConsulting.com.

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National Fuel Doubles Its Game in Appalachia

National Fuel Doubles Its Game in Appalachia

For all the general malaise settling over the oil and gas industry, utility companies are still moving forward with E&P and midstream projects to accommodate growing demand for natural gas.

National Fuel

National Fuel Gas Company is a diversified energy company with $6.2 billion in assets distributed among the following five operating segments: Exploration and Production, Pipeline and Storage, Gathering, Utility, and Energy Marketing.

www.natfuel.com

Such is the case of Pa.-based National Fuel, which transports gas to more than 740,000 customers through local distribution systems in western N.Y., and northwestern Pa., via its 245-mile Empire Pipeline originating from the Canadian border. The utility has recently announced a $541 million deal to acquire “a one-of-a-kind opportunity” from Royal Dutch Shell in the form of 200,000 net acres of natural gas fields in the Marcellus and Utica, 142 miles of gathering pipelines, and 100 miles of water pipelines that support Shell’s Tioga County production operations. Net proved developed natural gas reserves are estimated at 710 BCF. Gathering connections include numerous interstate pipelines as well as National Fuel’s Empire system. The transaction essentially doubles National Fuel’s drillable acreage.

National Fuel provides interstate natural gas transmission and storage by way of its integrated pipeline system that extends more than 2,300 miles from the Canadian border through N.Y., and Pa. The utility’s subsidiary, Seneca Resources, explores, develops, and produces natural gas and oil in Calif., and the Marcellus and Utica basins.

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The Money Backers:  Energy Spectrum Capital

The Money Backers: Energy Spectrum Capital

In RMR’s continuing series The Money Backers, we give readers a glimpse of who’s who and who owns what in energy’s private equity world.  From the largest to the smallest to the newest, we look especially at those firms making hay in the midstream industry to provide the capital infusion required to give growth projects liftoff.

Private equity may have shut the door on investment capital for certain segments of the oil and gas industry, but Dallas-based Energy Spectrum Capital is leaving their door wide open for new midstream opportunities. This investor—the longest-operating midstream PE group in the nation—finds its niche with lower, middle-market companies that acquire, develop, and operate North American midstream assets. ESC has just announced the final close of its eighth midstream private-equity fund amounting to $996 million, and by all accounts looks to shop for more assets with an eye on gathering and transportation systems, processing and treating plants and storage facilities. Since its inception in 1995, the firm has raised more than $4.5 billion in capital for 63 portfolio companies. The previous Energy Spectrum Partners VII fund closed in 2014 at $1.225 billion.

Energy Spectrum Capital

Energy Spectrum Capital is a private equity infrastructure firm that focuses on the energy industry. The firm also manages private equity funds that make direct investments in the companies that acquire, develop and operate midstream energy assets.

energyspectrum.com

 For now, ESC’s investments are spread across 15 midstream operators. But with nearly one $1 billion in pocket—and a ripe-for-the-picking environment—expect that number to increase in short order. Here are a few of the growth vehicles currently supported by Energy Spectrum.

  • Houston-based Azure Midstream operates 479 miles of natural gas pipeline, providing gas gathering, compression, treating and processing in north La., and East Texas. The company’s Holly System serves the “core of the core” of the Haynesville and consists of 361 miles of high- and low-pressure pipeline, two amine treating plants and four compressors. The Shelby System, which also services the Haynesville and Bossier formations, includes 126 miles of pipe, one amine treating plant, and access to four major pipeline interconnects.
  • From its home base in Plano, Texas, BlueJack Energy Solutions develops and operates wastewater solutions for Permian producers. Customers include Laredo Petroleum, Occidental, Sable Permian Resources, Arch Oil & Gas, and Discovery Natural Resources.
  • With 61 bulk liquids tanks and barge, rail and truck capabilities, Houston-based Bluewing Midstream is expanding its storage facilities to add 1.9 MMBbls of new storage capacity, as well as adding shipping connections at the Port of Brownsville.
  • Caliche also focuses on storage but on the subsurface side. Headquartered in Houston, this company owns and operates a 5 MMBbl salt cavern on the Texas Gulf Coast that can accommodate 600 lbs of ethylene at maximum capacity. Growth projects ahead include a large expansion to provide 32 MMBls of salt dome storage capacity.
  • In a joint venture with Concho Resources, Tulsa-based Frontier Energy Services built and sold the 500-mile Alpha Crude Connector in the Northern Delaware in 2017 to Plains All American for $1.215 billion. Frontier’s latest project, the Beta Crude Connector, will consist of 100 miles of crude oil pipe and approximately 250,000 Bbls of operational storage in the Midland.
  • City-based Great Salt Plains Midstream operates crude oil and natural gas infrastructure serving producers in the state’s STACK play. The company’s assets include 317 miles of crude pipe, 137 miles of natural gas pipe, two cryogenic plants, and the 115-mile Great Salt Plains Pipeline which extends from Cherokee to the Cushing Hub.

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