Mitchell Energy & Development Corp. announced it enteredinto a letter of intent to purchase Conoco’s 50% interest in theJameson processing plant and an associated 2,600-mile West Texasgas gathering system for an undisclosed sum. The Permian Basinplant and facilities currently are owned evenly by Conoco andMitchell.

The Jameson plant, located in Coke County, has a processingcapacity of 65 MMcf/d of natural gas and 10,000 barrels of NGLs.Currently, the plant is processing 43 MMcf/d of natural gas andmaking 7,500 b/d of NGLs. The partnership had jointly owned theplant since 1992.

Allen J. Tarbutton, Jr., president of Mitchell’s gas servicesdivision, said, “This acquisition adds quality assets at a timewhen NGL demand is increasing dramatically. The additional 3,700b/d of NGLs that we gain will boost our overall daily production toaround 50,000 barrels.”

The move was announced just days after Mitchell said it wouldincrease its capital budget by over 20% due to increased earningsin the second quarter of this year (see NGI, Sept. 6). The companyhas a history of buying assets in West Texas, including a 1998purchase of Texas Gas’ North Texas gathering and processingfacilities and Western Gas Resources’ Perkins/Noel gathering systemin West Central Texas for $31 million.

Guy Cantwell, a spokesman for Conoco, said the sale of theJameson Plant interest is right in line with Conoco’s strategy ofputting dollars in assets that have the highest value for thecompany. “The basic reason we sold the plant is that it is not nearany other processing facilities we own. We couldn’t justify linkingthat facility with any of our other assets.” Cantwell added thatthe Jameson Plant was only responsible for about 4% of thecompany’s overall NGL production.

John Norris

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