Atlas Pipeline Partners LP (APL) has completed a 60 MMcf/d expansion of its Velma system in the Woodford Shale of Oklahoma, increasing capacity to 160 MMcf/d.

The expansion is part of an agreement with ExxonMobil Corp. subsidiary XTO Energy Inc., which would use the facility under a long-term fee-based agreement (see Shale Daily, Dec. 6, 2011).

The Woodford Shale is one of ExxonMobil’s most prominent North American onshore plays. Last year the super major more than tripled its position in the play to about 172,000 net acres, and today it has more than 230,000 acres there. According to ExxonMobil’s 2011 annual report, the Woodford in southern Oklahoma’s Ardmore Basin was its “most active” emerging liquids-rich shale play. The producer indicated it had the potential to produce 70,000 boe/d.

In April ExxonMobil expanded its position in the Texoma Woodford with a $590 million cash purchase from Chesapeake Energy Corp. (see Shale Daily, April 10). The leasehold included included acreage in Oklahoma’s Bryan, Carter, Johnston and Marshall counties, and at the time the acreage was producing 25 MMcfe/d net.

During ExxonMobil’s 1Q2012 earnings call, Investor Relations Vice President David Rosenthal said the producer had bought another 58,000 acres in the Woodford Shale to increase its total position in the play to more than 230,000 acres.

“This will further expand our position in a play…with an estimated potential to recover 600 million boe at an attractive unit development cost of approximately $10/boe, Rosenthal said. “We continue to focus drilling activity to maximize the development of this liquids-rich play with 10 operated rigs. Current drilling is focused on delineating the acreage, as well as determining optimal well spacing and drilling and completion practices.”

“Due to increased activity in the rich gas areas where the Velma system is located, the expansion is operating at 50% of capacity, well ahead of previously announced expectations,” APL said. Additional compression work is expected before the end of the month and the plant “could be expected to reach 75% of capacity shortly thereafter. The partnership will continue to evaluate additional opportunities in Velma’s areas of operation and work with its producer customers to continue to develop the area.”

APL also expects a 200 MMcf/d expansion of its WestOK system to be online in July. WestOK extends into the Midcontinent of northern Oklahoma and southern Kansas, figuring prominently in Mississippian Lime growth.

“The drilling activity in the Mississippian Lime has continued to increase behind the system, and volumes continue to grow in excess of current processing capacity. Once this expansion is completed, the WestOK system will have total processing capacity of 458 MMcf/d,” APL said.

The partnership finalized buying gathering systems in Barber and Harper counties in Kansas, including 60 miles of pipelines and associated rights-of-way. The systems already were connected to the WestOK system and allow APL to further expand into the state. The WestOK system includes 5,100 miles of active gathering pipe and is moving 340 MMcf/d.

In addition, APL bought the Mansfield gathering system in Tarrant County TX, which serves Barnett Shale producers, for an undisclosed amount. The system, which currently moves 26 MMcf/d, consists of 19 miles of gathering pipeline and is contracted under a fee-based arrangement with affiliate Atlas Resources Partners LP.