Oklahoma 2018

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OKLAHOMA: MIDSTREAM 34 | November 2018 | tive basins with comprehensive solutions for gas, oil and water. In addition, they are focused on sys- tems with a strong base of shippers. We are seeing some bifurcation in the buyer market: The smaller systems can be bolt-on acquisitions for the MLPs, if they have the cash, and also larger private-equity buyers. The very large strategic midstream compa- nies and assets are also being looked at by infra- structure funds, multibillion private-equity funds and the large strategic players." The possible exception to that is water, which is still new to many. "It is so different," Benson noted. "And some companies are concerned with the envi- ronmental and political issues associated with it." Benson is not just being hopeful with those exit strategies. "Most of our sales have been to strate- gic companies. We have made a few initial public offerings, but that is not a preferred approach for us. There would have to be something compelling. Our typical timeline from the time we form a port- folio company to an exit is about four to seven years, but we have sold sooner and we have held a few of our companies beyond that. But, like all private-equity firms, we are focused on giving our investors back their money at some point with a respectable return." As of midyear 2018 the Thunderbird plant and associated pipelines were fully integrated into the GSPM system said Rusty Rains, CEO of GSPM. "We started talking to Thunderbird almost two years ago. At the time we were MVP Holdings, one of the partners in Great Salt Plains Midstream. That deal did not go through, but over time we stayed in touch and continued to talk. For mid- stream it's all about the acreage commitments, and securing Chisholm Oil & Gas as a producer commitment was a watershed moment for GSPM. So when GSPM was formed in December 2017 we checked back with them and were able to come to an agreement. It is a good fit, literally a bolt-on: We were able to connect the two systems with just a few hundred feet of pipe. "Our Silver Lake processing facility is less than 4 miles away from the Thunderbird facility and will add capacity of 70 million cubic feet per day. That facility has recently been commissioned," Rains said. "Given the opportunity to have Thunderbird online so quickly, we took the opportunity to add additional liquids handling on the front end of our Silver Lake processing plant." 'The land we belong to is grand' "When we selected the location for Silver Lake, we looked at several possible outlets for residue gas," Rains said. "We secured firm capacity. Now our shippers have the confidence to produce as much as they can without having to worry about residue. On the liquids and residue takeaway Thunderbird adds additional market options with secure trans- portation rights." The anchor shipper for GSPM is also a strong partner—Chisholm. "We work closely to stay ahead of their drillbit," said Aaron Wright, chief com- mercial officer for GSPM. "Even though those schedules are sometimes moving targets [as they accelerate their development]. We have weekly schedule meetings." Wright noted that while the gas gathering gets most of the attention these days, the crude gather- ing system is the bigger footprint: 200 miles versus planned 140 miles for gas. "We also have 140 miles of mainline that delivers volumes to the Cushing markets," he added. In a state where trucking is still common it is starting to come under pressure. With high vol- ume crude being delivered from multiwell pads the crude system is an advantage. Wright elaborated on a crude strategy that responds to increasing volume with gradual expan- sion of pipe and terminals with an emphasis on transloading from trucks. "Our facility at Coving- ton, Okla., under construction, will be one of our central tank facilities," Wright said. "We will be aggregating barrels there. It is due to be in service in December 2018. We also have existing truck receipt and storage facilities at Cherokee, Hennessey, Perry, with plans to add facilities at Ames and Crescent. Cherokee has 170,000 barrels of storage with options to get to Cushing." Having both gas and crude systems is at odds with the pure-play vogue, but Rains asserts it makes most sense for producers and for investors. "We create value in this play. All producers have both gas and oil, but most midstream operators focus on

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