An affiliate of Denver-based Taproot Energy Partners LLC has secured agreements to expand a multi-product midstream system in Colorado’s Denver-Julesburg (DJ) Basin.
Taproot Rockies Midstream LLC’s additional acreage dedications would build out the Weld County system and support an initial dedication by joint venture partner Bison Oil & Gas II.
“We are excited to continue the expansion of our midstream infrastructure in Weld County to support the growing need for innovative and cost-effective midstream solutions for producers in the northeast DJ Basin,” CEO Kevin Sullivan said.
Anchored by Bison, the multi-product system is to include natural gas, crude oil and produced water gathering and transportation, natural gas processing, produced water disposal and fresh water sourcing. The produced water gathering system already is in service. The fresh water supply and delivery system should be available by late November. And the crude oil system is on schedule for completion by the end of the year.
Taproot also is pursuing other producers to add to the system.
Formed in May, Taproot was created to pursue greenfield and acquisition opportunities targeting crude oil, natural gas and natural gas liquids. It is the second partnership between management and Dallas-based Energy Spectrum Partners (ESP) VII LP.
“We look forward to growing alongside our dedicated producer clients as their drilling activity ramps up over the next six-to-12 months,” said Taproot COO Rod Donovan. “It’s an exciting time to align and contract with producers who have already seen exceptional results from their initial wells in the area.”
Sullivan said in August that additional midstream infrastructure was required in the DJ because of “improvements in completion techniques, increasing drilling activity and rapid growth of the Niobrara and Codell stacked plays…” He noted that the northeastern part of the Wattenberg field had seen “meaningful growth” in well productivity and drilling activity from several leading operators.
In its latest Drilling Productivity Report (DPR), the Energy Information Administration said natural gas production from the Niobrara formation in the DJ would increase to 5.18 Bcf/d in October from 5.13 Bcf/d in September. Oil output from the Niobrara is set to rise month/month to 620,000 b/d from 614,000 b/d.
According to the weekly rig count compiled by Baker Hughes, a GE company, the DJ-Niobrara added two drilling rigs week/week as of Sept. 14 to reach 27. For the comparable period a year ago, there were 28 rigs running in the basin.