Short overview, then commentary discussing what to watch for from public companies in the Eagle Ford.
Aimee discusses Forest Oil's recent deal with Schlumberger, Atlas Pipeline's acquisition of Teak Midstream, and Conoco's drilling costs.
Atlas - Teak Eagle Ford Midstream Deal Worth $1 Billion
Teak Midstream Eagle Ford Map
Atlas Pipeline Partners has agreed to buy Eagle Ford Midstream assets through a $1 billion acquisition ofTeak Midstream, LLC. Atlas will gain Teak's operated assets and assets that are jointly owned with TexStar Midstream.
Assets acquired in the deal included:
- 200 MMcfd of cryogenic processing plant (Silver Oak)
- 200 MMcfd cryogenic processing facility under construction (Silver Oak II)
- 265 miles of 20" to 24" gathering and residue pipelines with 750 mmcfd of capacity
- 275 miles of low pressure gathering lines
Atlas will also acquire a 50-75% interest in several assets jointly owned with TexStar Midstream. Atlas is expected to operated the assets once the deal closes:
- 235 miles of pipeline, including rich gas gathering, header, and residue pipelines
- 3 miles of NGL pipeline
- A Co-Gen facility, which will produce power for the Silver Oak complex
“We are very excited about the acquisition of TEAK Midstream. We have been looking at the Eagle Ford shale for a number of years and are fortunate to have found what we believe is the ideal entry point. TEAK’s assets are the highest quality and best positioned for growth with minimal capital requirements. The assets are new, highly efficient, and are located in the heart of one of the most prolific plays in North America. ”
Atlas expects to further expand the assets going forward. Expansion projects include the potential for additional gathering lines and a third 200 mmcfd processing plant.
Teak Midstream's Eagle Ford Gathering & Processing Begin Operations
Teak Midstream Eagle Ford Map
Teak Midstream has started operations at its South Texas gathering system and its Silver Oak (200 mmcfd) cryogenic processing plant. Teak has long-term midstream agreements with Comstock Resources, Statoil, and Talisman. With significant commitments, the company already plans to expand its gathering system by 200 mmcfd by the first quarter of 2014.
At the center of the development is Teak's Silver Oak Processing Plant, which is located near the community of Pettus, between Beeville and Kenedy in Bee County. The plant is specifically designed to handle high concentrations of liquid-rich gas. From the plant, residue gas will be transported by a 20-inch, 57 mile pipeline to various interstate pipelines and NGLs will be transported by a 12-inch, three mile pipeline to DCP's Sand Hills Pipeline. The Sand Hills pipeline ultimately delivers NGLs in Mont Belvieu.
“Teak Midstream is well positioned to serve new and existing customers who are pursuing liquids-rich gas in the Eagle Ford and other formations in South Texas. The proximity of our extensive gas gathering systems to escalating drilling activity is ideal, and our processing plant has extremely high NGL recoveries, making it one of the most efficient facilities in the region, which can improve wellhead value for our customers,” said TEAK Co-Chief Executive A. Chris Aulds. “
Teak Midstream's new gathering system actually includes two separate systems:
- One system is 178 miles of 24-inch and 16-inch pipelines that moves wet gas from Dimmit through Webb, La Salle, McMullen, and Live Oak counties on to the Silver Oak Plant
- The second system is 22-miles of 20-inch pipe moving rich gas from the Karnes area to the Silver Oak Plant in Bee County