Mitchell Grows West Texas Presence
Mitchell Energy & Development Corp. announced it entered
into a letter of intent to purchase Conoco's 50% interest in the
Jameson processing plant and an associated 2,600-mile West Texas
gas gathering system for an undisclosed sum. The Permian Basin
plant and facilities currently are owned evenly by Conoco and
The Jameson plant, located in Coke County, has a processing
capacity of 65 MMcf/d of natural gas and 10,000 barrels of NGLs.
Currently, the plant is processing 43 MMcf/d of natural gas and
making 7,500 b/d of NGLs. The partnership had jointly owned the
plant since 1992.
Allen J. Tarbutton, Jr., president of Mitchell's gas services
division, said, "This acquisition adds quality assets at a time
when NGL demand is increasing dramatically. The additional 3,700
b/d of NGLs that we gain will boost our overall daily production to
around 50,000 barrels."
The move was announced just days after Mitchell said it would
increase its capital budget by over 20% due to increased earnings
in the second quarter of this year (see NGI, Sept. 6). The company
has a history of buying assets in West Texas, including a 1998
purchase of Texas Gas' North Texas gathering and processing
facilities and Western Gas Resources' Perkins/Noel gathering system
in West Central Texas for $31 million.
Guy Cantwell, a spokesman for Conoco, said the sale of the
Jameson Plant interest is right in line with Conoco's strategy of
putting dollars in assets that have the highest value for the
company. "The basic reason we sold the plant is that it is not near
any other processing facilities we own. We couldn't justify linking
that facility with any of our other assets." Cantwell added that
the Jameson Plant was only responsible for about 4% of the
company's overall NGL production.
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