KKR Natural Resources acquires assets from WPX Energy for $306 million

KKR Natural Resources spent $306 million to acquire assets in the Arkoma Basin and Barnett Shale from WPX Energy. The properties include 320 wells and 91 miles of pipeline in eastern Oklahoma and North Central Texas, and 525 wells and 115 miles of pipeline in the Arkoma. "We see attractive opportunities to invest behind the development of domestic energy resources and remain excited about the opportunity to grow our natural resources platform by continuing to acquire non-core oil and gas properties from high quality operators," KKR Natural Resources chief Jonathan Smidt said in a statement.

Barnett Shale still produces more than Haynesville, firm says

A Texas-based natural gas consulting firm is challenging the Energy Information Administration's estimate that the Haynesville Shale in Louisiana and Texas is producing more than the Barnett Shale in Texas.

"Our data clearly shows that the Barnett production is still greater than the Haynesville production," said George Lippman, president of Lippman Consulting.

The Barnett Shale averaged 5.52 billion cubic feet per day in February, Lippman Consulting's estimates say, compared with Haynesville daily output of 5.03 billion cubic feet, Lippman said. (Source: Fort Worth Star-Telegram, March 24, 2011)

Crosstex Energy adds new supply to North Texas gathering system

DALLAS, Texas - The Crosstex Energy companies, Crosstex Energy, L.P. (Nasdaq: XTEX) and Crosstex Energy, Inc. (Nasdaq: XTXI) announced on June 21 that the Partnership has entered into a 10-year firm transportation agreement with a major Barnett Shale producer for an additional 50 million cubic feet of natural gas per day on its North Texas gathering system. Crosstex is constructing a compressor station on an existing gathering line to accommodate the customer's transportation requirements.
The project is scheduled to be completed and operational in the first quarter of 2011.
Incremental investment required for the project is estimated to be less than $10 million and the annual cash flow from the agreement is expected to be approximately $8 million.
"This agreement is a prime example of how our strategic position in the Barnett Shale adds value. We are able to make relatively low-cost, incremental investments that generate high returns and enhance the utilization of our core assets," said Barry E. Davis, Crosstex president and CEO. "We will continue to look for opportunities in North Texas where our operations are located in the heart of the Barnett Shale, one of the most significant shale plays in the U.S."

Chesapeake Energy launches pipeline company limited partnership

FORT WORTH, Texas - Oklahoma City-based Chesapeake Energy, which has a large regional office in Fort Worth, said late on Sept. 24 that it will raise $588 million in cash by selling half its natural gas pipelines in the Barnett Shale of North Texas, as well as properties in other petroleum basins.
Chesapeake, a major Barnett gas producer, said it has entered into a definitive agreement to form a joint venture with Global Infrastructure Partners, a New York-based private equity fund. Chesapeake will contribute the Barnett Shale pipelines and processing facilities, called "midstream assets," to the new Chesapeake Midstream Partners Llc.
GIP will pay $588 million for its 50 percent interest in CMP, and Chesapeake will retain the other half.
Chesapeake said in May that it was in talks with four potential bidders for a $500 million stake in its Barnett Shale midstream properties.
Chesapeake will contribute substantially all of its midstream assets in the Barnett Shale as well as most of the company’s nonshale midstream assets in the Arkoma, Anadarko, Delaware and Permian basins. The transaction is expected to close this month.
The deal will provide additional money for Chesapeake’s operations.
Chesapeake has large lease holdings in major shale gas plays such as the Barnett, the Haynesville in Louisiana and the Marcellus in the Appalachian area in the eastern United States.

New lower-48 natural gas production make arctic pipelines less attractive

ANCHORAGE – A 40-year plan to deliver natural gas from Arctic regions of the U.S. and Canada to the Lower 48 states is under threat from large shale-gas discoveries elsewhere on the continent and slow-moving regulatory processes.
Over the past decade, partnerships involving ExxonMobil, Shell, BP and ConocoPhillips have spent hundreds of millions of dollars on plans to develop Alaska's North Slope and Canada's Mackenzie Delta.
Backers of the 4.5 billion cubic feet a day (cf/d), $30 billion Alaska project and the 1.8 billion cf/d, $13.7 billion Mackenzie Delta venture have tied their hopes to an unshakeable belief that gas prices will again rise well above $10 per 1,000 cf as conventional reserves disappear.
But hopes that these projects will come on stream in the 2010-20 period are fading, because regulators and governments have failed to keep pace with industry timetables for issuing approvals and permits. More importantly, shale-gas discoveries in Texas, Louisiana and Pennsylvania make piping gas from the Arctic look less profitable.
In Alaska, Gov. Sarah Palin’s administration bet $500 million on the Alaska Gasline Inducement Act (AGIA), providing an incentive for construction of a 4.5 billion cubic-foot-per-day natural gas pipeline from Alaska’s North Slope that may never be built.
New discoveries in the Barnett Shale of Texas coupled with new ways to extract gas a mile deep from the Marcellus Shale in Pennsylvania and the Haynesville Shale in Louisiana could supply the total needs of the U.S. for natural gas for the next 100 years, making a $30 billion line from Alaska increasingly unlikely to be profitable.

Enterprise, Duncan announce completion of Sherman Extension

Enterprise Products Partners L.P. and Duncan Energy Partners L.P. on March 23 announced that construction has been completed on the 174-mile Sherman Extension expansion of the Enterprise Texas Intrastate natural gas pipeline system which extends through the heart of the prolific Barnett Shale play of North Texas.
Current throughput on the Sherman Extension is approximately 360 million cubic feet per day (MMcf/d) and is expected to reach about 950 MMcf/d during April 2009, as the remainder of the system’s 48,000 horsepower of compression is brought on line.
The 36-inch diameter pipeline originates at a delivery point on the partnerships’ Texas Intrastate natural gas pipeline system near Morgan Mill, Texas, southwest of Fort Worth, and extends northward to an interconnect with Boardwalk Pipeline Partners L.P.’s Gulf Crossing pipeline near Sherman, Texas.
The completion of the Sherman Extension adds 1.1 billion cubic feet per day (Bcf/d) of incremental takeaway capacity from the region, while providing producers in the Barnett Shale and as far away as the Waha area of West Texas with greater flexibility to reach the most attractive markets, particularly those in the Northeast and Southeast areas of the country.
Current natural gas production from the Barnett Shale is approximately four Bcf/d and is projected to surpass six Bcf/d by 2011.