Oklahoma 2018

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OKLAHOMA: MIDSTREAM 32 | November 2018 | F or a state with a history of staking claims sooner, Oklahoma producers and the mid- stream operators supporting them are doing well having waited for the shale bonanza to make its way to the state. Refinements in com- pletion as well as a better understanding of production dynamics are enabling midstream and upstream companies to collaborate closely, avoiding some of the capacity mismatches that have marked the Bakken, Permian and other previous unconventional plays. That reconfirms that while the early bird gets the worm, the sec- ond mouse gets the cheese. In the case of Oklahoma, the cheese is wells coming on bigger and richer than anticipated. The South Central Oklahoma Oil Province (Scoop) and the Sooner Trend, Anadarko, Canadian and King- fisher (Stack) regions are showing themselves to be, paraphrasing Rodgers and Hammerstein, the plays that can't say no. "There is an advantage to operating in Okla- homa," said Jim Benson, managing partner at Energy Spectrum. "The Scoop, the Stack and the Merge are incredible reserves. In certain spots they are as good as the Permian. Beyond that, improve- ments in technology are driving costs down and enhancing development activity." Energy Spectrum is one of the few private- equity firms that specialize in the midstream, including pipelines, processing, terminals and storage. It is also one of the oldest, having been founded in 1995. Managers are investing out of the seventh fund, which was closed at $1.225 billion. Over the last couple of years, there is preference for greenfield projects, but buying existing assets is always an option. "We currently have 18 portfolio companies," Benson said, "one in Canada and the rest across all the major basins in the U.S. Half of our teams are re-ups, and one of them is on its fourth go-round with us." Energy Spectrum's presence in the Stack is through a firm called Great Salt Plains Pipeline (GSPP). In the Scoop it is through Velocity Mid- stream, which has a considerable crude develop- ment running north to south throughout the basin, and interconnecting with a regional refin- ery. Continental was the original anchor producer behind Velocity, but several third-party shippers have joined. "Having solid, well capitalized shippers is crit- ical to developing greenfield midstream oppor- tunities," Benson said. "We are actively seeking to expand the GSPP and Velocity systems with additional third parties." In May 2018 GSPP acquired Thunderbird Mid- stream, with assets in the Stack including a 20 MMcf/d processing plant and a 34-mile gathering system. The plant began operations in 2016 and has more than 40 acres to allow for expansion. The Thunderbird assets provide immediate processing capacity with additional firm market outlets for residue and NGL. Capital partners for the deal were MVP Hold- ings, and funds affiliated with Energy Spectrum Capital and Apollo Global Management. GSPP was Everything's up to date in gathering, processing and transportation. 'Many a New Day' for Oklahoma Infrastructure By Gregory DL Morris Contributing Editor

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