FORT WORTH, Texas—Outrigger Energy LLC is pushing ahead with two new gathering and processing projects in the Permian, one in the Midland Basin and another in the Delaware Basin, adding to its already extensive midstream operations in the Bakken, Powder River Basin, DJ Basin/Niobrara, Green River Basin and Uintah Basin.
In the Midland Basin, Outrigger Energy’s operations are focused on Howard, Borden and Martin counties, according to Dave Keanini, president of Outrigger Energy, who recently spoke at DUG Permian.
The company plans to open its Midland office in June, he added.
A crude gathering system with an initial capacity of 30,000 barrels per day (bbl/d) is scheduled to go into service in this year’s fourth quarter. The system would be “easily expandable” to up to 50,000 bbl/d, said Keanini. In addition, work is underway on a gas-gathering system and a cryo plant, with a capacity of 70 million cubic feet per day (MMcf/d) that is due to be in service in the third quarter. Residue gas from the Martin County plant will be connected to the ONEOK line, he said, while NGLs will flow into Enterprise’s Chaparral system.
Also under consideration are plans for an 80-mile crude transportation line from the Midland Basin gathering system to Colorado City, Texas. Outrigger Energy expects to announce an open season that will be held in June, Keanini said.
Outrigger Energy’s operations in the Delaware Basin are now focused on Winkler and Loving counties, with plans to expand into Reeves and Ward counties, and into Lea County, N.M., according to Keanini. Plans call for a crude gathering system with an initial design capacity of as much as 50,000 bbl/d. The system is scheduled to be in service in the third quarter.
Gas gathering and processing operations are also projected to begin in the third quarter. As in the Midland Basin, the cryo processing facility in Loving County will have an initial capacity of 70 MMcf/d, Keanini said. Residue gas will connect to the Transwestern line, while NGLs will be delivered to the Lonestar system.
Keanini cited several reasons for the choice of the Permian for the two projects, including the local appreciation of the oil and gas industry, the multiple target zones offered by the geology of the basin, and what has been only a relatively recent transition from vertical to horizontal drilling, offering future growth potential in the basin that was “quite staggering.”
Oil-in-place estimates for the Permian also reflect the multiplicity and greater thickness of target intervals in the basin. For the Permian, Keanini cited estimates of 80-200 million barrels per section vs. -30-90 million barrels per section for the Eagle Ford and 10-20 million barrels per section for the Bakken. While recovery factors in the Permian were uncertain, one large producer in the Permian estimated 50 billion barrels were recoverable from just the Wolfcamp and Spraberry zones, he noted.
With the completion of several major crude pipelines, takeaway out of the basin appeared to be adequate on the oil side for “the next few years,” another positive cited by Keanini. On the natural gas side, takeaway out of the Permian now totaled 3.9 billion cubic feet per day (bcf/d) to California and the Southwest, 1.3 bcf/d to the Midwest and 4.0 bcf/d to Eastern markets, as well as a proposed 3.4 bcf/d to Mexico—for a potential total of 12.6 bcf/d.
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