Crestwood Marcellus Midstream LLC (CMM) is adding more bolt-on natural gas compression and dehydration assets in West Virginia’s Harrison and Doddridge counties that provide services to a unit of Antero Resources through a $95 million acquisition from Enerven Compression LLC.
The acquisition would include four compression and dehydration stations with 31 two- and three-stage reciprocating natural gas compressor units and 10 glycol dehydration units. Included is 43,100 hp of compression designed to provide aggregate capacity of 295 MMcf/d to Antero Resources Appalachian Corp.
Antero, which has a five-year agreement with Enerven, now sends its gas production to the stations via CMM’s gathering facilities for redelivery to downstream pipes and processing plants.
“The Enerven assets are already connected to our Marcellus gathering system and are under long term contract with Antero, our largest producer in the area,” noted Robert G. Phillips, who is CEO of Crestwood’s general partner. When combined with CMM’s existing assets in the Marcellus, “this acquisition creates significant operating synergies.”
All of the Enerven compressor stations now “are being fully utilized with ongoing projects to expand two of the four stations by approximately 25 MMcf/d. Antero’s gas is also being compressed by third-party compression not currently owned by Enerven or CMM.”
The acquisition, which should close by the end of the year, could contribute up to $12 million in gross earnings in 2013, according to CMM.
Crestwood Midstream Partners LP and Crestwood Holdings Partners LLC formed CMM to acquire an Antero gathering system in northern West Virginia earlier this year (see Shale Daily, Feb. 28). Crestwood and Antero at the time also agreed to a 20-year gas gathering and compression agreement for production within an area of dedication (AOD) that covered around 104,000 net acres in the southwestern core of the Marcellus.
Antero now is running six rigs on the AOD and up to 12 rigs in the area, including acreage adjacent and to the west of the eastern AOD, where CMM holds a seven-year right of first offer to acquire midstream assets owned by Antero, CMM noted.
Production volumes on the eastern AOD “have increased…from approximately 200 MMcf/d at the beginning of 2012 to an average of 257 MMcf/d in the second quarter 2012 and an average of 289 MMcf/d in the third quarter 2012, and a spot volume of approximately 376 MMcf/d on Nov. 1,” it said.
CMM now has two pipeline and two compressor station projects with a combined capacity of 100 MMcf/d underway to support Antero’s 2013 development program, which is expected to add more than 60 Marcellus Shale wells to the 100 producing wells currently connected to the gathering systems.
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