Oklahoma 2018

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OKLAHOMA: MIDSTREAM | November 2018 | 39 One of the advantages to working in Oklahoma, Lewellyn noted, is how savvy the people are about the industry, whether elected officials, regulators or landowners. "That familiarity at all levels, along with having so many service companies in the state, allows us to move a lot faster. That is a key to rapid development. Everyone is here in one place, sitting under the basket at every [Oklahoma City] Thunder home game." Which is not to say that industry takes land- owners or government officials for granted. "We are sensitive to their needs," said Lewellyn. "For surface owners, we are respectful of crops and live- stock. That allows us to get access and connect wells faster. Through Tall Oak I, II and III, we have committed $850 million in Oklahoma and spent $700 million of that in just a few years. It is a great place to do business." 'Territory folks should stick together' The new kid on the block, Valiant Midstream, is fast off the mark: It was formed in July 2017 and aspires to have its first 200 MMcf/d processing plant in service by November 2018, if not sooner. The train will serve Corterra Energy and Canyon Creek Energy, along with other producers and third-party gathering systems in the Arkoma Basin. Earlier in 2018 Valiant Midstream presi- dent and CEO Brandon Webster told Hart Ener- gy's Midstream Business, "With a little luck and Mother Nature cooperating, there's a chance we'll beat that schedule. In the interim, we will be tak- ing the gas to legacy processing plants in the area." Valiant has signed a contract for Targa to take the NGL to Mt. Belvieu, Texas. "Given the aggressive growth of producers in the region we immediately began looking at NGL and residue-gas outlets," said Cody Blosch, senior vice president of business development for Valiant. "Their Grand Prix project to Mont Belvieu is a good fit for our NGL." That camaraderie extends across the plays. "We feel like we have a lot in common with all the Mid- continent players," Blosch said. "What is good for our producers is good for the Arkoma Stack and good for the state." The feeling seems to be mutual: He added that Targa mentioned Valiant Midstream "several times" in its earnings statements regarding the parties' NGL relationship. "The pie is large enough for all of us," Blosch said, "but we are still being proactive. We are Oklahoma people, mostly midstream guys but some of us have upstream management experi- ence too. That helps us better understand the producer perspective." The Arkoma is a "much underestimated basin," Blosch stressed. "It did not have longer laterals and enhanced completions until very recently. There is a great deal of upside to the rock with multiple benches. We saw what was happening in the Scoop and the Stack and knew that technology would soon be hitting the Arkoma Stack." The core of Valiant Midstream's system is in Hughes, Coal and Atoka counties, where there tends to be a lack of modern processing infra- structure along with some aging and undersized pipelines. "Oklahoma is blessed with a lot of infra- structure," said Blosch. "That helps producers at the start, but it is just not enough for the volumes that are coming online. So yes, we have been drill- ing in Oklahoma for a hundred years, but today producers need the latest cryogenic technology, capacity and reliability." Specifically to residue gas, Blosch noted that "Cheniere's Midship and Enable's Wildcat projects will help, but there will be a need for a new line" before too long. He explained "it's not only that wells are coming on bigger and richer than antici- pated. It is also that there are dry gas areas with big volumes as well. They are prolific and are filling the existing residue capacity." Further, the exact delineations of the Scoop and the Stack, and more so the Arkoma, have yet to be made final. "There clearly are fairways," said Blosch, "but people are still trying to sort exactly where those start and end." To that end, Valiant Midstream has already started discussions with producers about the next 200-million-a-day plant. "We are committed to the success of our producers," he said, "and that will mean another train. We are just trying to deter- mine when. We are also looking at potential proj- ects for other like-minded producers elsewhere in the Midcontinent." Q

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