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MarkWest Purchases Gas Gathering Systems in Oklahoma

Denver-based MarkWest Energy Partners LP has purchased 100% of the ownership interest in Santa Fe Gathering LLC and the Grimes Gathering System in Roger Mills and Beckham counties, OK, for an undisclosed amount. Current system throughput on the Grimes system, which was constructed in May 2005, is 16 MMcf/d.

As a part of the acquisition, the master limited partnership signed a 10-year gas gathering agreement with the largest producer on the system, Oklahoma City-based JMA Energy Company LLC, under which undeveloped acreage will be dedicated to the Grimes system. The Grimes system was initially constructed to gather growing Cherokee and Des Moines production in the region.

MarkWest also said it is exploring the possibility of integrating the Grimes system with its Foss Lake Gathering System, which it acquired in late 2003 (see Daily GPI, Nov. 25, 2003).

"We are pleased with this acquisition and the Grimes system's potential for further development," said CEO Frank Semple. "The foundation for the purchase agreement and associated gathering agreement was MarkWest's reputation for providing outstanding service in our nearby Foss Lake Gathering System and the company's strategy to continue to expand its gathering business in the prolific Anadarko Basin. We look forward to working with JMA and other producers to fully develop this rapidly growing field."

MarkWest Energy Partners, which is majority owned by MarkWest Hydrocarbon Inc. in Denver, is one of the largest processors of gas in the Appalachia region. Since 2003, MarkWest has expanded its Southwest unit in Texas and Oklahoma to include 19 gas gathering systems, two processing plants (including the East Texas plant, which began operating in January 2006) and four lateral gas pipeline systems. MarkWest's Northeast unit generates cash flow stream from gathering and processing natural gas from long-lived gas reserves in the Appalachian Basin and from gathering, processing and transporting natural gas and crude oil via its facilities in Michigan.

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