Net Midstream 105-mile Expansion to Agua Dulce Planned

Net Midstream's subsidiary, Eagle Ford Midstream, LP, has plans to expand its existing pipeline system by 105-miles from La Salle County to Nueces County. Anadarko is supporting the pipeline through a long-term transportation agreement.  The addition will add 105-miles of 24-30 inch pipe that will transport residue gas from Anadarko's Western Gas (Brasada) processing plant in La Salle County, TX to the Agua Dulce Hub in Nueces County, TX.

The Eagle Ford Midstream system, as of the announcement, consisted of 55 miles of 16-inch pipeline in La Salle and McMullen counties that delivers gas to Net's La Salle Pipeline and the Transco Pipeline near Tilden, TX. Net's La Salle pipeline delivers gas to a power plant in Pearsall, TX and the Transco Pipeline is a major interstate pipeline operated by Williams that delivers gas from South Texas to the Northeast.

Read more about Eagle Ford Midstream at netmidstream.com

Magnum Hunter's Eureka Hunter Subsidiary Deals For TransTex Gas Services - $58.5 million

Magnum Hunter Resources announced its subsidiary Eureka Hunter Holdings, LLC has entered an asset purchase agreement to acquire TransTex Gas Services. Eureka Hunter will pay $58.5 million, with both cash and equity, for TransTex Gas.  TransTex was started in 2006 and has quickly grow to the largest privately held contract gas treating company.  The company offers a broad range of midstream services and has over 50 amine plants that remove and treat CO2 and H2S from natural gas, as well as a fleet of dew point control plants.  TransTex's fabrication yard is conveniently located in Halletsville, TX, where the company can easily serve the Eagle Ford Shale. The company specializes in plants sized less than 60 GPM.

Magnum Hunter currently runs 4 rigs in the play and has plans to eventually spin off its midstream business into a MLP.

"The addition of the TransTex's group of assets and management team to Eureka Hunter is a another step in our overall business plan which makes for a very comprehensive and well rounded midstream services company. Eureka Hunter will now have immediate access and the ability to offer producers skid mounted wellhead treating and field processing plants ideally suited for specific customer needs. In addition, TransTex will broaden its footprint as Eureka Hunter continues to expand its gathering system in the Marcellus Shale of West Virginia and into the Utica Shale in eastern Ohio. We also believe the management team at TransTex will be able to identify additional business opportunities in the gathering and processing business for Eureka Hunter. With the acquisition of TransTex, we are significantly closer to the MLP objective we are ultimately seeking."

Enterprise Products Adding NGL Fractionators 7 & 8 at Mont Belvieu

Enterprise Product Partners is the latest of many Eagle Ford midstream companies that are adding infrastructure to handle growing NGL production. Enterprise is already constructing its sixth fractionator at Mont Belvieu and the latest announcement comes after Dow and Shell announced plans to go forward with new petrochemical plants in the U.S. The additions will add 150,000 b/d of incremental capacity in the fourth quarter of 2013 when total capacity will be more than 610,000 b/d at the facilities. That's more than double the capacity of Enterprise's plant just two years ago. The plans are supported by growing volumes of NGL production in the Eagle Ford Shale, Rocky Mountains, and West Texas.

Expanding Enterprise's Eagle Ford Midstream Business

The company is also extending its Eagle Ford NGL pipeline (450,000 b/d ultimate capacity) to Anadarko's Western Gas Brasada Processing Plant (200 mmcfd) in La Salle County, TX. The expansion adds over 173-miles of pipe, with capacity of 140,000 b/d, that will connect to Enterprises infrastructure near the company's processing plant in Yoakum, TX. The extension gives access to the Western Gas Plant and seven other South Texas processing facilities.

As of the announcement, Enterprise had completed 375 miles of natural gas pipelines in the South Texas Eagle Ford. The company's Eagle Ford Mainline system is close to completion and will be able to deliver 900 mmcfd of rich gas to the Yoakum plant. The Yoakum plant will begin processing rich gas in May and will reach full capability by the first quarter of 2013. At that time, the plant will be able to process 900 mmcfd of gas, with capacity of 110,000 b/d of NGLs.

Including Enterprise’s seven other integrated South Texas processing facilities, the partnership will be able to offer approximately 2.4 billion cubic feet per day of processing capacity for the region when Yoakum is fully operational.

What is a NGL Fractionation?

Once NGLs are processed out of the natural gas stream, wet-gas, the individual products must be separated to be marketed and consumed. Fractionators take the NGLs to their various boiling points and separate out the individual products - ethane, butane, iso-butane, propane, pentanes, and natural gasolines. Ethane is a common feedstock for petrochemical plants and butane and propane can be used for heating or in your lighters and grills.

GE - Howard Energy Deal Sets Up Acquisition of Meritage Midstream Services

GE Financial Services has acquired a 30.6% stake in South Texas midstream operator Howard Energy Partners. The amount paid was not disclosed, but we do know what the company is doing with the proceeds. Howard Energy will use the money to partially fund the acquisition of Meritage Midstream Services.  Howard Energy owns more than 280 miles of natural gas pipelines in South Texas.  Meritage Midstream owns 185 miles of pipe, including the Eagle Ford's Escondido Gathering System and the Cuervo Creek Gathering System that transports wet-gas.

When the transaction closes, the new Howard Energy Partners will own more than 450 miles of natural gas gathering pipelines in Dimmit, Frio, Maverick, Webb, and Zavala counties. The system currently gathers 175 mmcfd, but that amount will increase as more wells come online in the coming year.

The company plans to improve facilities to handle production from the Austin Chalk, Eagle Ford Shale, Escondido, Olmos, and San Miguel formations.

Anadarko Increases Eagle Ford Reserves - Resource Estimate to 600 mmboe

Anadarko increased its resource estimate for its Eagle Ford Shale properties to 600 million barrels of oil equivalent (mmboe) at its analyst day. The company also reported having before tax rates of return of more than 100% at as little as $2 natural gas prices, as long as oil is $100 per bbl. The average well across the company's acreage produces 65% liquids (40% oil & 25% NGLs).

Anadarko's 2012 Drilling Plans

Anadarko plans to drill 250 wells with 10 operated rigs in 2012 and will increase to 275+ wells in 2013.  The company has also doubled the expected number of wells with 4,000 planned locations. Over the past couple of years, the company has made significant operational improvements. Rig spud to rig release has fallen from 18 to 12 days, while drilling costs have remained below $2 million per well. Anadarko can also complete an individual stage in less than 8 hours and has driven completion costs below $5 million. The average well drilled in 2012 will have a lateral length of more than 6,600 ft. That's an increase of more than 2,000 ft per well over lateral lengths in 2009.

Anadarko's Eagle Ford Type Well

A typical well in the Eagle Ford for Anadarko displays the following characteristics:

• 450 mboe EUR
• Almost 600 boe/d IP, with a little less than 350 boe/d at the end of year one
• 40% Oil, 25% NGLs, 35% Natural Gas
• $5.8 million well costs

Additional Processing Capacity Coming Online

The company will also have the Brasada Processing Plant (200 mmcf/d) online in 2013. the Brasada Plant will add more than 5,000 b/d of NGLs production in 2013. Current expectations are for net sales volumes that almost reach 50,000 boe/d by year- end 2013.

Read more at anadarko.com