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Significant Growth of MPLX; Pipeline Throughput Raised by 6%08/24/2022
According to U.S. midstream oil and natural gas company MPLX LP release on August 2, it has increased total pipeline throughputs by 6% in the second quarter of 2022 and terminal throughput by 4%, versus year-ago levels.
In an earnings statement of MPLX, the total pipeline throughputs were 5.9 million bbl/d, with terminal throughput of 3.1 million bbl/d for the second quarter.
Due to an increased utilization at refineries operated by its parent company Marathon Petroleum Co., MPLX’s upticks were mainly created.
Despite the market concerns about a potential global recession that would likely hurt consumption, MPLX is still bullish on energy demand.
The company reported a net income of $875 million and adjusted earnings of $1.457 million in the second quarter, both higher than in the same period of 2021. Also, it expects that there will still be room to run on the demand side, as demand itself is looking good and the inventories are low, so it is still a quite constructive environment for the company
Gathered volumes grew up by 11% from year-ago levels to an average of 5.6 Bcf/d. In the Marcellus region, gathered volumes fell 1% compared to year-ago levels to an average of 1.3 Bcf/d.
The company also announced Tuesday a program to repurchase an additional $1 billion in publicly traded units.
MPLX is expanding several projects, including in the Permian Basin where the Whistler pipeline is increasing from 2 Bcf/d to 2.5 Bcf/d, in addition to lateral pipelines into the Midland Basin and Corpus Christi domestic and export markets.
Furthermore, the company expects the significant growth of the Permian and considers that beyond even the announced expansions of the existing pipes such as Whistler, a couple of more pipes are going to be needed over the next 5-plus years.
Moreover, the construction is also maintained on the 200 MMcf/d Tornado ll processing plant, which MPLX anticipates coming online in the second half of 2022. Additionally, 68,000 bbl/d Smithburg de-ethanizer project in the Marcellus is expected to come online in the third quarter.
MPLX operates several natural gas gathering systems with the scope of services provided dependent on the composition of the raw or untreated gas. Its natural gas processing complexes remove the heavier and more valuable hydrocarbon components from natural gas.
Once natural gas has been processed, the heavier and more valuable hydrocarbon components, which have been extracted as a mixed NGL stream, can be further separated into their component parts for end-use sale through the process of fractionation. It sells basic NGL products, including ethane, propane, normal butane, isobutane, and natural gasoline.
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On August 31 Ring Energy Inc. purchased privately-held Stronghold Energy, adding operations that are mainly situated in Crane County, Texas, in the Permian Basin’s Central Basin Platform. According to a September 1 Ring Energy release, this transaction fully complements the conventional-focused Central Basin Platform and Northwest Shelf asset positions in the Permian Basin. The majority owned by Warburg Pincus LLC, Stronghold’s operations are concentrated on the development of about 37,000 net acres situated mainly in Crane County. In July Ring Energy entered into an agreement to buy Stronghold Energy II Operating LLC and Stronghold Energy II Royalties LP for $200 million in cash at closing and $230 million in Ring equity based on a 20-day volume weighted average price. Consideration also involved a $15 million deferred cash payment due six months after closing and $20 million of existing Stronghold hedge liability increasing the total transaction value to $465 million. Stronghold’s asset base is almost 99% operated, 99% working interest, and 99% HBP. In July, Ring announced the current net production of Stronghold’s asset base was approximately 9,100 boe/d (54% oil, 75% liquids).
On 3 August the pipeline operator Plains All American LP raised its 2022 profit forecast for the second time this year, as it expects a huge demand on its pipelines transporting U.S. shale oil to the Gulf Coast. The company increased full-year adjusted earnings guidance by $100 million to approximately $2.38 billion, since it anticipates higher crude and natural gas liquids volumes. European buyers have snapped up the U.S. light sweet crude, the largest part of which is delivered in the Permian Basin of West Texas and New Mexico, as they depend on replacing Russian barrels. Average daily crude oil volumes in the second quarter grew 30% on its Permian Basin pipelines with oilfield activity trending about 10% exceeding its initial expectations. Its shares increased 3.6% in after-hours trading on August 3 to $11.19.
On January 6, Phillips 66 announced that it plans to acquire more than 43% of DCP Midstream LP for $3.8 billion, expanding the business in the oil & gas business.
On January 5 Northern Oil & Gas (NOG) concluded a deal to acquire working interests in Midland-Petro D.C. Partners LLC (MPDC)'s Mascot Project in the Midland Basin, according to a January 9 press release. Firstly estimated at $330 million in cash, the deal was signed with an additional 3.25% working interest added to the 36.7% agreed upon when the transaction was announced on October 19. NOG paid $29 million more for the additional interests, which now totalled 39.958%. Finally, the deal closed for $320 million in cash and $43 million in debt at signing in October with the finance of Minnetonka, Minn.-based NOG with cash on hand, operating free cash flow, and assistance from its revolving credit facility.
Talos Energy Inc. is closing its $1.1 billion purchase of private operator EnVen Energy. A special meeting for Talos’ stockholders to vote on the deal and other matters is set on February 8, according to a prospectus filed on January 11 with the Securities and Exchange Commission. Shareholders are being asked to approve the EnVen merger, which as the company considered in September would raise its Gulf of Mexico production up to 40%. According to a January 11 press release, Talos asserted that it anticipates closing the transaction soon after the meeting. Talos Energy Inc. supposes that adding EnVen would double its operated deepwater facility footprint, extending key infrastructure in existing Talos operating areas. More than 80% of the combined assets will be deepwater, with the company operating more than 75% of the acreage it holds interests in. Talos is one of the largest independent operators in the U.S. Gulf of Mexico, with production operations, prospects, leases, and seismic databases spanning the basin in both Deep Water and Shallow Water. The company aims to actively grow through a balanced focus on asset optimization, development, and exploration while also seeking to add to its portfolio through acquisitions and business development.