WPX Energy Makes Delaware Basin Dedication to New System
MIDLAND, Texas–(BUSINESS WIRE)–Oryx Midstream Services II, LLC (Oryx II) announced today that it will build a new regional crude oil transportation pipeline serving the Delaware Basin with initial capacity of up to 400,000 barrels per day. Oryx II recently closed on a long-term regional oil transportation agreement with WPX Energy (NYSE: WPX) and other producers bringing total acres committed to Oryx II to approximately 300,000 dedicated acres. When combined with Oryx Midstream Services, LLC (Oryx I), the total Oryx Delaware basin dedication footprint and system capacity will be in excess of 850,000 acres and 600,000 barrels per day, respectively.
Construction will begin immediately on the new 220-mile regional transport line that will provide receipt points from the Carlsbad, Stateline, Pecos and Pyote areas, and deliver crude to Crane and Midland, Texas. The system, comprised of 16-, 20- and 24-inch lines, will have an initial capacity of up to 400,000 barrels per day with the ability to expand based on shipper needs. It will serve production from every active county in the Delaware Basin including Lea and Eddy counties in New Mexico and Loving, Reeves, Ward, Pecos, Winkler and Culberson counties in Texas. The new crude oil pipeline will be constructed in phases and is expected to be in full service by the end of 2018.
“As ongoing improvements are made in drilling technologies and rig counts in the Delaware Basin increase, production growth from Oryx’s customer base, including WPX, continues to be strong. With this strong production growth comes transportation bottlenecks, an issue that this new pipeline will address, providing much-needed takeaway capacity in the area,” said Oryx Chief Executive Officer Brett Wiggs. “The Oryx team remains focused on improving and expanding our asset base, to not only meet producers’ current needs but also anticipate the future needs of our customers.”
Karl Pfluger, Oryx President, said, “The combined footprint of our crude gathering and transportation system is unparalleled. Based on our current and future customers’ needs, we are considering strategic opportunities to leverage the unique scale of our combined footprint to better serve producers in the Delaware basin. One of these strategic opportunities includes a potential long-haul transport system to the Gulf Coast.”
Oryx I was launched in 2014 by an initial equity commitment totaling up to $300 million from Quantum Energy Partners, Post Oak Energy Capital, Wells Fargo Energy Capital, Oryx management and other private investors. In March 2017, Oryx II closed on an equity commitment of $340 million from the same sponsor group, bringing the total commitment to Oryx to $640 million.
About Oryx Midstream Services
Midland-based Oryx Midstream Services is focused on developing midstream infrastructure in the Delaware Basin in New Mexico and Texas. Led by an experienced team with more than 145 years of experience in the oil and gas industry, Oryx is dedicated to providing producers with solutions and flexibility through a full suite of midstream services. For more information visit www.oryxmidstream.com.
About Quantum Energy Partners
Quantum Energy Partners is a leading provider of private equity capital to the global energy industry, having managed together with its affiliates more than $13 billion in equity commitments since inception. For more information on Quantum, please visit www.quantumep.com. For investor relations, please contact Michael Dalton at (713) 452-2000.
About Post Oak Energy Capital
Post Oak, which was established in 2006, is an energy-focused private equity firm based in Houston. Its management team has executive management experience and a broad network in the energy business as well as significant expertise in private equity investments, operations, development, finance, acquisitions and divestitures. The firm pursues private equity investments primarily in the upstream sector of the oil and gas industry in North America and, to a lesser extent, in oil field services and related infrastructure. Post Oak works in close partnership with operating management teams to build businesses, accelerate growth and enhance shareholder value. Post Oak’s website is www.postoakenergy.com.