Crestwood Announces Commercial Operations at Bucking Horse II Processing Plant, New G&P Agreement with Occidental Petroleum, and Provides Powder River Basin Update
Crestwood Equity Partners LP (NYSE: CEQP) (“Crestwood”) today announced that is has begun commercial operations at the Bucking Horse II processing plant in Converse County, Wyoming in the Powder River Basin. The Bucking Horse II plant is a 200 MMcf/d processing plant that brings Crestwood’s total processing capacity in the basin to 345 MMcf/d and allows Crestwood to offer producer customers the best natural gas and gas liquid recoveries in the basin.
Additionally, Crestwood has entered into a new gathering and processing agreement to provide wellhead services for Occidental Petroleum’s (“Occidental”)(NYSE: OXY) 2020 delineation program in the Powder River Basin. The dedication is on the eastern portion of the existing Jackalope Gas Gathering Services (“Jackalope”) system and based on the close proximity of these wells to the existing system, Crestwood expects minimal incremental capital requirements to connect the new wells. Occidental is one of the largest operators in the basin with approximately 400,000 net undeveloped acres.
Robert G. Phillips, Chairman, President and Chief Executive Officer commented, “Today marks a key milestone for Crestwood as we bring the Bucking Horse II plant fully online and complete our three-year investment program to align our assets with our producers’ plans in our core growth basins. I want to congratulate all of the Crestwood employees that did a tremendous job to bring the plant into service safely and under-budget, and we are excited to welcome Occidental, a premier investment-grade operator, to our customer base in the basin. The multiple stacked plays in the basin provide enormous potential for our producers, and as a result, capital continues to be allocated to growing oil production in the basin. Crestwood is pleased to be the largest full-service gathering and processing company in the Powder River Basin and will continue to work with our customers and off-set producers to support their drilling and development plans in the coming years.”
There are currently 19 rigs running in the Powder River Basin, three of which are running on acreage dedicated to the Jackalope system. In full-year 2019, the Jackalope system averaged gathering volumes of 145 MMcf/d and processing volumes of 125 MMcf/d, increases of 41% and 46%, respectively, over full-year 2018. Crestwood expects to connect 45 – 50 wells to Jackalope in 2020 based on current development plans from Chesapeake Energy (NYSE:CHK), Occidental, and Panther Energy, and estimates volume growth of 10% for gathering volumes and 15% for processing volumes over full-year 2019. With the Bucking Horse II plant complete, Crestwood’s capital requirements in the basin will decrease substantially, with future capital invested towards various expansion and optimization projects across the system including line looping and compression.
About Crestwood Equity Partners LP
Houston, Texas, based Crestwood Equity Partners LP (NYSE: CEQP) is a master limited partnership that owns and operates midstream businesses in multiple shale resource plays across the United States. Crestwood Equity is engaged in the gathering, processing, treating, compression, storage and transportation of natural gas; storage, transportation, terminalling, and marketing of NGLs; gathering, storage, terminalling and marketing of crude oil; and gathering and disposal of produced water.
This news release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities and Exchange Act of 1934. The words “expects,” “believes,” anticipates,” “plans,” “will,” “shall,” “estimates,” and similar expressions identify forward-looking statements, which are generally not historical in nature. Forward-looking statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management, based on information currently available to them. Although Crestwood believes that these forward-looking statements are based on reasonable assumptions, it can give no assurance that any such forward-looking statements will materialize. Important factors that could cause actual results to differ materially from those expressed in or implied from these forward-looking statements include the risks and uncertainties described in Crestwood’s reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K and its subsequent reports, which are available through the SEC’s EDGAR system at www.sec.gov and on our website. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management’s view only as of the date made, and Crestwood assumes no obligation to update these forward-looking statements.
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