Comprehensive Energy Data Intelligence
Information About Energy Companies, Their Assets, Market Deals, Industry Documents and More...
Plains All American, Oryx Midstream to Merge Permian Basin Assets08/10/2021
Plains All American Pipeline LP has decided to unite its Permian Basin assets with Oryx Midstream Holdings LLC, a privately held company. The Plains Oryx Permian Basin JV will comprise a crude pipeline with a capacity of 6.8 million bbl/d. This pipeline spans 5,500 miles, with an average remaining contract term of approximately seven years on the JV's 4.1 million committed acres.
Plains All American Pipeline LP owns the bulk of Permian Basin assets. Oryx Midstream, on the other hand, has significant holdings in the Permian Basin. Plains Oryx Permian Basin LLC will operate in the Permian Basin as a joint venture. Plains will hold 65% of the JV, and Oryx will control 35%, with the precise cash split set by a 10-year tiered modified distribution sharing agreement.
Moreover, without synergies, the JV is projected to produce $800 million in EBITDA and $625 million in free cash flow in 2021. The merger agreement's transactions are anticipated to complete in the fourth quarter of 2021.
JV's Journey In Merging Permian Basin Assets
Oryx Midstream and Plains working together is a natural evolution growth story. Plains' assets include about 5,500 pipeline kilometers and a multi-segment pipeline system capacity of 6.8 million barrels per day. Oryx has about 1,600 miles of pipeline and operational storage capacity in the Permian Basin, as well as 1.3 million acres of long-term acreage dedication and marketing agreements.
Midstream operators realize the advantages of scale and the ability to run their systems effectively. In addition, with the recent increase of takeaway capacity from the Permian Basin and a decrease in production levels as operators curtailed operations during the pandemic, the pipeline capacity is sufficient.
When the joint venture officially launches, the emphasis will be on integrating the two systems. With the JV's merged asset base, there will be more possibilities for optimization and operational leverage within the enlarged and integrated system. Plains Oryx Permian Basin JV is a beneficial deal for consumers, providing greater connection, better dependability, and increased efficiency.
This acquisition is a huge step forward in terms of enhancing the capabilities for the benefit of their customers and investors.
Plains Oryx Permian Basin will continue to develop and provide consumers with the best choices available. They are also enthusiastic about the deal and the joint venture's prospects, and what they can offer their consumers.
How has the Permian basin been performing recently? Does production keep growing? Who are the top market players? Find out with Rextag data experts.
Enterprise decided to go in on the Permian Basin. With the surprise purchase of Navitas Midstream for $3.25 billion in cash, the company gained a foothold in the Midland Basin, as it previously lacked #naturalgas or NGL infrastructure apart from downstream pipelines in the region. Enterprise estimates that distributable cash flow accretion will be in the range of $0.18 to $0.22 per unit in 2023, while simultaneously supporting additional capital returns to their limited partners through distribution growth and buybacks of common units.
Oil output in the Permian Basin in Texas and New Mexico is supposed to go up 88,000 bbl/d to a record 5.219 million bbl/d in June, as the U.S. Energy Information Administration (EIA) announced in its report on May 16. Additionally, gas productivity in the Permian Basin and the Haynesville in Texas, Louisiana and Arkansas will rise to record highs of 20 Bcf/d and 15.1 Bcf/d in June, respectively. Given that this growth has been expected, recent global market changes make forecasting the output even more challenging. Learning how production will change is easier with early activity tracking, a new service recently launched by Rextag – Pad Activity Monitor. With the help of PAM, you are able to monitor well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days. Additionally, it cuts down activity reporting lag times by at least 98%, from 120-180 days down to just 5-8 days. In order to access reports, charts, tables, and mapping visualizations via Rextag’s Energy DataLink use a web-based application allowing users to filter, download and identify activity on a map or data table. Moreover, customers will be able to set up daily, weekly, and monthly email report notifications.
The EIA forecasts that total output in the main U.S. shale oil basins will increase 142,000 bbl/d to 8.761 million bbl/d in June, the most since March 2020. Oil productivity in the Permian Basin in Texas and New Mexico is supposed to go up 88,000 bbl/d to a record 5.219 million bbl/d in June, as the U.S. Energy Information Administration (EIA) announced in its report on May 16. In the largest shale gas basin, the productivity in Appalachia in Pennsylvania, Ohio and West Virginia will grow up to 35.7 Bcf/d in June, its highest since beating a record 36 Bcf/d in December 2021. Gas output in the Permian Basin and the Haynesville in Texas, Louisiana and Arkansas will rise to record highs of 20 Bcf/d and 15.1 Bcf/d in June, respectively. Speaking of the Permian future output, putting hands on upcoming changes in production has recently been made easier with the new Rextag's service - Pad Activity Monitor. Thanks to satellite imagery and artificial intelligence, customers are able to monitor the oil and gas wells and are provided with near real-time activity reports related to drilling operations. However, it is noticed that productivity in the largest oil and gas basins has decreased every month since setting records of new oil well production per rig of 1,544 bbl/d in December 2020 in the Permian Basin, and new gas well production per rig of 33.3 MMcf/d in March 2021 in Appalachia.
No sooner had the crude prices soared above $100/bbl than the industry professionals believed in an incredible growth of drilling activity in North America’s largest shale patch. Analysts speculate that additional output of 500,000 barrels of oil daily would become a significant part (4%) of overall U.S. daily production. That is going to flatter oil and gasoline prices. Drilling permits in the Permian Basin are persistently growing, averaging approximately 210 at the beginning of April. Moreover, the permits trend is noticed as an all-time high as a total of 904 horizontal drilling permits were awarded last month. Nowadays, learning and analysing the current situation and predicting the future development become easier with early activity tracking, a new service recently launched by Rextag. Rextag's Pad Activity monitor (PAM) allows you to see well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days with the help of satellite imagery and artificial intelligence. While the increase in drilling will result in higher production, U.S. shale producers will have to overcome several hurdles including labor shortages and supply constraints.