Denver-based MarkWest Hydrocarbon Inc. has acquired an Alberta gathering system for C$3.1 million (US$2.0 million). The purchase includes six miles of pipelines and compression facilities that currently gather 5,500 Mcf/d. MarkWest plans to expand the system to 10,000 Mcf/d by early 2002. The new addition in southeastern Alberta is located in the Bantry field, where MarkWest already has wells and drilling locations.

The system, bought from an undisclosed seller, together with a second connecting gathering system currently under construction by MarkWest, will serve seven townships and allow connection of new gas wells to the sales line as the company continues its aggressive exploitation program in what it called a “very productive and rapidly growing field.”

The new system, said MarkWest, is part of a larger strategy of building a gathering system that is anticipated to grow to a capacity of 35 MMcf/d by year-end 2002, “allowing our exploration and production segment and third-party volumes to grow smoothly in tandem, as we execute our game plan for rapid ramp-up of natural gas production.” The midstream gathering system and related facilities will require 2001-2002 capital expenditures of about US$7 million, including this acquisition.

“This acquisition is another example of MarkWest’s strategy of pursuing exploration opportunities where there are also midstream requirements that we can fulfill at very good returns,” said CEO John Fox. He added that the Canadian acquisition is “well on its way to achieving the high expectations we envisioned at the time of purchase in August 2001.”

MarkWest operates through two business segments: gathering, processing and marketing, and exploration and production. The exploration and production segment produces natural gas in Colorado, New Mexico, Michigan and Alberta.

Last August, MarkWest more than doubled its natural gas reserves, paying $50 million for the shares of Leland Energy Canada Ltd. and Watford Energy Ltd. — two privately owned exploration and production companies based in Calgary (see Daily GPI, Aug. 14). The acquisition included 26 Bcfe of proved reserves (95% natural gas), 106,000 net acres, and an inventory of 300 drillable locations.

©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.