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Magellan Reported Volume Changes on Its LongHorn and BridgeTex Pipelines08/15/2022
According to a July 28 report, Magellan Midstream Partners LP marked that the volumes in the last quarter on the Longhorn and BridgeTex pipelines that carry crude from the Permian Basin to Houston dropped dramatically since shippers likely exported barrels, meanwhile, refined product volumes grew on pandemic demand recovery.
Following Russia’s invasion of Ukraine, Europe's request for barrels increased and shippers on the long-haul crude oil lines took volumes elsewhere, likely to be exported from the main port for oil exports – Corpus Christi, Texas, which is the largest U.S. crude export port.
Being an example of potential decisions that U.S. shippers could be making the moves are expected to be temporary. Shippers that did not fulfill their obligations would still have income which is known as deficiency payments, which are actually penalties for not transporting oil.
Volumes on the 450-mile (724-km) Magellan’s wholly-owned Longhorn crude oil pipeline from West Texas to Houston averaged approximately 200,000 bbl/d in the three months ended June 30 in contrast with 260,000 bbl/d in the same period the year before.
A joint venture, the BridgeTex crude pipeline from the Permian to Magellan’s East Houston terminal dropped to 215,000 bbl/d from virtually 315,000 bbl/d in the year-ago period.
The Tulsa, Okla.-based company expects relatively flat volumes for a few years on the Longhorn and the Bridgetex crude pipelines.
Meanwhile, on the Saddlehorn pipeline in Colorado, another joint venture, volumes were almost the same, and levels on the company’s South Texas systems rose.
However, volumes on the most prominent common carrier refined products pipeline system in the U.S. increased 3% partly because of pandemic demand recovery.
Income from oil storage plunged as a steeply risen-in-price market made holding barrels less attractive and following contract expirations while operating expenses grew $28 million.
Magellan is an important owner of tanks at the Cushing, Okla., storage hub, where levels have held almost above the operational lows of 20 million barrels in recent weeks. Magellan has a 9,800-mile refined products pipeline system with 54 connected terminals and two marine storage terminals (one of which is owned through a joint venture). Moreover, it owns about 2,200 miles of crude oil pipelines, a condensate splitter and storage facilities with an aggregate storage capacity of about 39 million barrels, of which 29 million are used for contract storage. Approximately 1,000 miles of these pipelines, the condensate splitter and 31 million barrels of this storage capacity (including 25 million barrels used for contract storage) are wholly-owned, and the remainder is owned through joint ventures.
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Matador Expands In Delaware; Purchases Acreage from Advance Energy at $1.6 Billion
On January 24, Matador spread the word that it will add oil- and gas-producing assets in Lea County, N.M., and Ward County, Texas, and some midstream infrastructure. Most of the acreage is strategically situated in Matador’s Ranger asset area in Lea County. The bolt-on includes about 18,500 net acres, 99% held by production, in the core of northern Delaware. The deal would also extend Matador’s inventory by 406 gross (203 net) drillable horizontal locations with prospective targets in the Wolfcamp, Bone Spring, and Avalon formations.
Potential Deal for $5 Billion: Tug Hill and Quantum Energy Seek Sale
Undisclosed industry sources said that THQ Appalachia I LLC (Tug Hill and Quantum Energy) is seeking a sale of the U.S. natural gas producer for more than $5 billion, including debt. Mainly operating in the Marshall and Wetzel counties in West Virginia, THQ Appalachia has net production of around 760 MMcf/d. Despite volatility in commodity markets which has made the valuation of energy producers tougher, THQ Appalachia is anticipating more than $5 billion due to the worth of its existing production and the possible value of its undeveloped acreage, the sources said on June 17. Additionally to purchasing THQ Appalachia, possible bidders in the sale process also have the opportunity to buy XcL Midstream, the pipeline firm that moves the company’s gas to market and has the same CEO as in Tug Hill. If the same buyer chooses to purchase XcL, the deal consideration will increase further. However, the anonymous sources admitted that the sale depends on the market conditions and is not guaranteed since Tug Hill and Quantum could ultimately decide to retain some or all of THQ Appalachia and XcL’s assets. Tug Hill and Quantum refused to comment on these statements and XcL did not respond to a comment request.
ONEOK Inc. and Magellan Midstream Partners LP have announced a merger agreement that will result in the formation of a formidable midstream company headquartered in Tulsa, Oklahoma. The deal will bring together their respective assets and expertise, resulting in a powerful entity boasting an extensive network of approximately 25,000 miles of pipelines primarily focused on transporting liquids.
Callon Acquires $1.1 Billion Delaware Assets and Bows Out of Eagle Ford - Here's What You Need to Know
Callon is set to purchase Percussion Petroleum's Delaware assets for $475 million while selling its Eagle Ford assets to Ridgemar for $655 million. In a strategic step to optimize its operations, Callon Petroleum recently made headlines by sealing two deals on May 3, totaling a staggering $1.13 billion. The company is taking confident steps to bolster its presence in the Delaware Basin while bidding farewell to its stake in the Eagle Ford Shale.
Permian Resources bolsters dominance in the Delaware Basin with strategic land acquisitions, expanding its portfolio by over 5,000 net leasehold acres and 3,000 royalty acres. In a stunning display of growth and strategic maneuvering, Permian Resources Corp., based in Midland, Texas, has made waves in the first quarter by securing a series of deals worth over $200 million in the highly sought-after Delaware Basin. This move solidifies their position as a player in the region.