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Bakken Still Attracting New Midstream Investment

Even with the continuing relatively low crude oil prices, new investment has continued to flow to the Bakken Shale, with announcements earlier this month from some new midstream players in the North Dakota shale play.

Private equity firm Quantum Energy Partners formed a new entity, Intensity Midstream LLC, with a $300 million stake to pursue "acquisition, development and operation of high quality midstream assets" in the Bakken and other select North American basins. At the same time, oil/natural gas pipeline component manufacturer RW Lyall & Co. opened a new service and sales center in Dickinson, ND.

Quantum formed Intensity as a joint venture with two former officials of Hiland Partners LP, a leading oil/gas midstream services provider in the Bakken. Earlier this year, Hiland was sold to Kinder Morgan Inc. for $3 billion by billionaire Harold Hamm, the founder of Continental Resources Inc., the Bakken's leading producer (see Shale Daily, Jan. 21).

Joseph Griffin and Derek Gipson, the former CEO and CFO, respectively, at Hiland, will help guide Intensity Midstream in the Bakken and elsewhere. Griffin called the new company a "producer-focused" midstream operation that can provide "responsiveness, quick decision making and solid execution."

Griffin and Gipson indicated they have a lot in common with Quantum, which has more than $10.5 billion in equity commitments, particularly a "similar investing philosophy."

Quantum Managing Director Bill Montgomery said the new joint venture intends to build "a substantial midstream platform." The new company will be based in Tulsa, OK.

Privately held RW Lyall’s new North Dakota presence will provide maintenance and service for well pad equipment located throughout the Bakken/Three Forks shale plays. Initially, it will operate the 4,000-square-foot facility with two service technicians and service trucks, and a regional sales office headed by Clifton Batty.

Lyall will offer fabrication, parts and on-site services from its crews, Batty told local news media. The facility is servicing 15 clients and could expand to meet customer growth in the future, he said.

The company has operations in California and Wisconsin and has been around since 1970, providing pipe equipment and services to midstream clients.

COO Bruce Lange said the new Bakken facility “helps Lyall further enhance our commitment and dedication to, and presence in, the oil and gas wellhead and midstream market in this area of the country.”

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