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Producers targeting the liquids-rich stacked pay zones in the emerging Central Northern Oklahoma Woodford (CNOW) play have a new gathering and processing system coming their way.
Tall Oak Midstream LLC said Wednesday it plans to build a system to serve producers targeting the Mississippian Lime, Woodford Shale and Cleveland formations.
The Tall Oak CNOW system is to be anchored by a long-term acreage dedication from American Energy-Woodford LLC (AEW), an affiliate of American Energy Partners LP (AEPLP). The dedication spans an area of about one million acres that covers all previously undedicated acreage in Payne County and portions of Creek, Logan, Lincoln, Noble and Pawnee counties in Oklahoma. AEW contributed its existing 60 miles of gathering lines in exchange for a minority interest in the new system. The producer has an option to increase its nonoperating interest to up to 50% in the system.
AEPLP, which was formed by former Chesapeake Energy Corp. CEO Aubrey McClendon, is credited with naming the CNOW play (see Shale Daily, April 11). It is seen by producers there -- such as Devon Energy Corp., Newfield Exploration Co., Continental Resources Inc., SandRidge Energy Inc. and Gastar Inc. -- as holding much promise. The CNOW formation also is known as the “STACK,” the name coined by Newfield Exploration Co., and Continental’s “SCOOP,” the South Central Oklahoma Oil Province (see Shale Daily, Feb. 25).
"It's a very exciting time to be working in the Midcontinent," said Tall Oak CEO Ryan Lewellyn. "Drilling and production schedules continue to climb, and the long-term outlook for the CNOW play is very positive. We are excited about this opportunity and focused on providing AEW and other producers in the area a near-term solution with reliable access to multiple markets."
The initial CNOW system is to include a 250-mile, low-pressure gathering system with multiple compression sites and a cryogenic processing plant in Payne County. The plant, known as Battle Ridge, is expected to be in service in December with an initial capacity of 75 MMcf/d. It would include nitrogen rejection capabilities.
"The Battle Ridge facility is large enough to accommodate planned expansions, which are expected to bring processing capacity to 300 MMcf/d as customer demand increases," said Tall Oak’s Carlos Evans, chief commercial officer.
The CNOW system would provide direct access to downstream markets such as Southern Star Central Gas Pipeline and Enable Gas Transmission for residue gas.