Black Bear Midstream, a portfolio company of funds managed by Oaktree
Capital Management, L.P. (“Oaktree”), announced that it entered into a
contract to provide “dry” gas gathering service beginning in late 2018.
The six-year agreement includes a significant volume commitment and
extends Black Bear’s business beyond its core of natural gas processing.
Black Bear owns and operates a 140 million cubic feet per day
(“mmscf/d”) cryogenic gas processing plant in Caddo Parish, LA, high
pressure gas gathering network and a 40-mile natural gas liquids (“NGL”)
pipeline that extends into DeSoto Parish, LA.
“We are excited to expand our business to include dry gas gathering,”
said Rich DiMichele, President and CEO of Palmilla Energy, LLC, which
operates Black Bear on behalf of Oaktree. “There has been significant
growth in dry gas drilling within our catchment area and producers are
seeking reliable, scalable gas gathering service. Many of the older
gathering systems simply were not designed for the type of growth
experienced from Haynesville drilling.” DiMichele added: “We also have
residue gas at the tailgate of the Black Bear processing plant that is
‘sweet’ and ‘dry.’ We are using this gas to blend with higher CO2 gas we
typically see coming out of Haynesville wells. For many producers, we
are a much cheaper option than treating alternatives.”
Black Bear also recently received approval to expand its gas processing
plant by 200 mmscf/d. According to Travis Boeker, Palmilla EVP –
Commercial there are a number of producers in East Texas and along the
Louisiana state line that are drilling rich gas wells in response to
increasing demand for NGLs, particularly ethane. “With ethane recoveries
over 90% at our processing plant, Black Bear has a clear competitive
advantage that creates significant value for its customers,” according
to Boeker.
Boeker noted that new steam cracker capacity capable of consuming nearly
900,000 barrels per day of ethane is slated to come on line over the
next several years. “Nearly all of the new cracker capacity is on the
Gulf Coast, so we have a location advantage for delivering NGLs to these
new world-class facilities.” Boeker also stated that producers are
interested in gas residue markets that won’t be as severely affected by
the glut of natural gas from the Permian and Marcellus. “We provide our
customers with access to multiple gas residue markets today, and we
expect to develop new options for Haynesville and Cotton Valley gas for
LNG export.”
About Black Bear Midstream
Black Bear Midstream is a gas gathering and processing company focused
on providing midstream bespoke solutions for producers in Louisiana and
east Texas drilling the Cotton Valley and Haynesville formations. The
company has a high pressure gathering system providing dry and rich gas
gathering with several interstate natural gas connections along with a
40-mile NGL pipeline connecting its 140 mmscf/d cryogenic gas processing
plant to NGL markets in Mt. Belvieu, LA.
About Oaktree
Oaktree is a leader among global investment managers specializing in
alternative investments, with $122 billion in assets under management as
of June 30, 2018. The firm emphasizes an opportunistic, value-oriented
and risk-controlled approach to investments in credit, private equity,
real assets and listed equities. The firm has over 900 employees and
offices in 18 cities worldwide. For additional information, please visit
Oaktree’s website at http://www.oaktreecapital.com/.
About Palmilla
Palmilla Energy, LLC is an owner, operator and developer of midstream
oil and gas assets based in Houston, TX. The core team has been together
for over 10 years originally with Petrohawk Energy and Halcón Resources.
The team has built over 1,000 miles of pipeline, gas processing plants,
crude handling facilities and rail terminals in the Haynesville, Eagle
Ford, Permian, Utica, Fayetteville and Bakken with a perfect safety
record of zero recordable incidents.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180910005255/en/
Copyright Business Wire 2018
Source: Business Wire
(September 10, 2018 - 8:00 AM EDT)
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