Outrigger Energy II LLC has completed the sale of its midstream system in Weld County, CO, to Summit Midstream Partners LP.
Summit Midstream previously said the deal was worth about $305 million total in cash.
Outrigger’s Denver-Julesburg (DJ) Basin system includes a 60 MMcf/d cryogenic natural gas processing plant with product deliveries to the Cheyenne Plains gas pipeline and DCP’s natural gas liquids (NGL) system. It also has 70 miles of low-pressure gas gathering pipelines, 90 miles of high-pressure gas gathering pipelines, and 30 miles of crude oil gathering pipelines with delivery to the Pony Express Pipeline.
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The transactions would triple Summit’s DJ gas processing capacity and add an estimated 505,000 dedicated leased acres in rural Weld County.
Outrigger’s DJ system is anchored by long-term contracts with basin operators. DJ producers have cited strong production through 2022 amid favorable pricing and a tightly supplied global oil market.
Outrigger CEO Dave Keanini said, “The robust midstream system we developed in the DJ Basin proved attractive to potential purchasers and this transaction with Summit delivers a positive outcome for our customers, employees, and investors.”
Outrigger will now be only focused on the continued development of its Williston Basin system in North Dakota’s Williams and Mountrail counties. Outrigger’s 250 MMcf/d Bill Sanderson cryogenic gas processing plant west of Williston, ND, began operating in June and is maintaining near 100% runtime, the company said.
The plant features ethane recovery and rejection capabilities with direct market access to the Northern Border Pipeline system for residue gas and the ONEOK NGL pipeline system for NGLs. Outrigger’s plant facilities are expandable with additional processing capacity of up to 200 MMcf/d for a total capacity of 450 MMcf/d, the company said.
In early 2022, Outrigger extended its 24- and 20-inch diameter gas pipeline from Williams County further east into Mountrail County to connect additional customers. The pipeline now extends more than 100 miles with capacity of about 450 MMcf/d.
“We are seeing our core customers increase gas deliveries to our system as we enter 2023 and expect volumes to steadily grow throughout the year,” Keanini said.
According to the latest figures from Baker Hughes Co. (BKR), the Williston had 42 rigs operating as of Friday (Dec. 2). This is up 56% from the same period last year.
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