Howard Energy Partners (HEP) has completed most of its planned oil and natural gas midstream infrastructure in the Permian Basin’s Delaware sub-basin, enabling more opportunities to move supply south.
The Delaware assets are part of a strategic joint venture that HEP operates with WPX Energy Inc., supported by a 600-mile-plus area of mutual interest in New Mexico’s Lea and Eddy counties and the West Texas counties of Reeves and Loving.
WPX and HEP created a 50-50 joint venture two years ago to support development in the Stateline area, which at the time represented 50,000 net acres (37%) of WPX’s 135,000 net-acre position in the Delaware.
The midstream infrastructure buildout is the initial phase of a broader strategic plan by HEP, which includes moving more oil and gas volumes to the Gulf Coast for export and into Mexico via the Nueva Era gas system.
“The completion of our previously announced projects in the Delaware Basin and our continued presence in the region is part of our broader company strategy to diversify both service offerings and geographic area,” said HEP CEO Mike Howard.
“We are in the core of the core of the Delaware Basin with multiple productive zones, and it will continue to be a growth focus for HEP. Through our strategic relationships and great customer service we continue to attract third-party business and expect volume growth to remain strong on our strategically located processing and pipeline assets.”
HEP recently commissioned the second 200 MMcf/d plant as part of a two-plant, 400 MMcf/d County Line Facility, a cryogenic processing complex in Reeves County. The first plant came online last September, and the complex also includes 4,000 b/d of condensate stabilization capacity.
In addition, HEP has completed more than 50 miles of oil gathering pipelines with 100,000 b/d of capacity, and an associated 50,000 bbl terminal in Reeves County.
A new contractual commitment to support an undisclosed Delaware producer is expected to further expand oil gathering to accommodate dedicating more than 10,000 additional gross acres, HEP noted.
On the gas infrastructure side, HEP recently completed a 23-mile, 24-inch diameter trunkline connecting additional supplies in the Delaware. Construction is ongoing for 21 miles of 16-inch high pressure, rich gas gathering pipelines, which should be completed this summer. Once completed, the gas gathering system would have 800 MMcf/d of throughput capacity with the ability to expand, HEP said.
Tulsa-based WPX, in an effort to keep capital expenditures in line this year and expand the Stateline operations, agreed in February to sell the Nine Mile Draw assets in Reeves County, which include roughly 5,600 net acres and 1,500 boe/d of production.
WPX also sold a 20% equity interest in WhiteWater’s Agua Blanca gas pipeline in the Permian to First Infrastructure Capital Advisors LLC, which is buying the WhiteWater system. WhiteWater is developing the 2 Bcf/d Whistler Pipeline Project to move Permian gas to the Texas coast and beyond.