Oklahoma 2018

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OKLAHOMA: MIDSTREAM 38 | November 2018 | alleviate some of the pressure on natural gas dif- ferentials, but based upon current drilling activity continuing, we still need additional residue take- away infrastructure." Tall Oak III's initial Arkoma Stack project for 50 miles of 12-in. to 20-in. pipeline, two compression facilities, a 5,000 bbl/d stabilizer, an associated slug catcher and condensate storage facilities are already completed and in service. They are currently con- structing the Panther Creek plant, due in service in April 2019, and they have 75 miles of additional pipe under construction. Tall Oak III's producers in the Arkoma Stack are developing multiple stacked pay zones, includ- ing the Woodford, Caney and Mayes. The Tall Oak III system will span Hughes County and portions of Seminole, Pontotoc, Coal, Pittsburg, Atoka and McIntosh counties. "Tall Oak II is near fully built out with 700 miles of pipe and more than 30 customers," said Lewellyn. "That includes major producers such as Chesapeake and Continental, as well as smaller private-equity-backed producers such as Redbluff, Council Oak, Staghorn and Excalibur. It has a 60 MMcf/d cryogenic plant, the Carmen Plant, in operation, and is prepared to add an additional 200 MMcf/d cryogenic train to the existing site." The system also has a dry gas system in Custer and Blaine counties that is being built out to accommodate new drilling. "This is all driven by our producers," Lewellyn said. "They have been producing rich gas from the Osage, Woodford and Meramec formations, and now we are seeing strong results in the Chester and the Hunton again. On top of that, they are bringing on dry gas wells that are producing 15 MMcf/d to 20 MMcf/d. It is all very exciting." 'All or nothing' One important key to success for the midstream in a booming region such as Oklahoma is "stan- dardization rather than customization," Lewellyn said. "All of the plants and compressor stations we build are essentially the same. If you have been to one, you have been to all of them. We start our stations with one or two compressors but have the infrastructure and pads built to accommodate six compressors, and then we can drop in more rel- atively simply. Economy of scale is definitely the driver, and I would like to think we do it a little better each time." For processing, all of the Tall Oak operations use the recycle split vapor (RSV) cryogenic tech- nology. "RSV allows for a very deep cut of liquids," Lewellyn said. "The ethane rejection capability of a RSV plant is also very efficient." Efficiency has become paramount, Lewellyn noted, because "the Stack is already well along with pad drilling. That is a real blessing in terms of vol- umes—for them and for us—but it is a challenge because it all comes on at once. It is important to have the correct size pipe and amount of compres- sion from the start. That also allows us to give our producers the best service and price. The challenge for midstream is the spike in production. We have to be prudent. We're not a public power company that has to build capacity just for the few hottest days of the year." One of the unsung success stories of the Okla- homa bonanza is how upstream and midstream have worked together. "There have been so many mature operators in these plays," said Lewellyn. "They are finding very efficient ways to drill and complete their wells, and they have been good about communicating their needs and their timing. That has allowed a good balance between produc- tion and midstream." Producers have been making prudent invest- ments, he added. "Before they put on a super pad, they make sure that their midstream operator can handle it. Everyone knows you can't produce the oil if you can't produce the gas. We have weekly con- ference calls with our customers' operations teams. We never want to ask them to delay a producer bringing a well on, so strong communications and flexibility are required." Collaboration with customers has become essen- tial not only because wells are coming in larger than anticipated, but also faster. "Spud to spud times have gone from 45 days to 21 days," Lewellyn said. "That means that one rig is now doing the work of two. In some places in the Arkoma, spud to spud is down to 10 days or even less. That is three wells a month from one rig."

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