Enogex LLC, a subsidiary of OGE Energy Corp., will provide gas gathering, processing and transportation for Chesapeake Energy Corp. production in the Colony Granite Wash play in Custer and Washita counties in the Anadarko Basin of western Oklahoma, it said Wednesday.

To accommodate production growth in the Colony Granite Wash area, Enogex is preparing to invest more than $55 million in additional gathering and transportation pipeline infrastructure and a gas processing plant near Clinton, OK. The plant is expected to be in service in 2009 and will process up to 120 MMcfe/d. Enogex said it can grow to accommodate increasing Chesapeake production in the region.

Chesapeake is the largest producer of gas, the most active driller and the largest leasehold owner in the various Granite Wash plays of the Anadarko Basin and is currently using 12 operated rigs to further develop approximately 200,000 net acres of Granite Wash leasehold. Chesapeake believes it owns a backlog of more than 650 net wells to drill in its various Granite Wash plays, including approximately 250 Colony Granite Wash wells. From the Colony Granite Wash, Chesapeake is currently producing approximately 55 gross MMcfe/d from 18 gross (12 net) operated wells.

Nearby in the Mountain Front area of the Granite Wash, which is located in southwestern Oklahoma and the Texas Panhandle, Chesapeake has drilled three horizontal wells in the past three months, the company said in late March (see Daily GPI, March 26). Chesapeake now controls about 75,000 net acres in the Mountain Front leasehold, and it is expected to accommodate about 400 additional net horizontal wells over time.

“Enogex’s integrated midstream natural gas system will enable us to deliver this natural gas to consumers in Oklahoma as well as to markets in the southeastern and eastern United States,” said OGE and Enogex CEO Pete Delaney.

©Copyright 2008Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.