Page 8 - NorthAmOil Week 45

NorthAmOil PIPELINES & TRANSPORT NorthAmOil
Eagle Ford infrastructure beefed up as Equinor exits
TEXAS
HARVEST Midstream, an affiliate of Hilcorp Energy, has started construction on the Ingle- side pipeline and the Harvest Midway ter- minal. The infrastructure is aimed at serving customers in the Eagle Ford shale play in South Texas, and connecting them with the port cities of Corpus Christi and Ingleside on the state’s Gulf Coast.
The 24-mile (39-km), 24-inch (610-mm) Ingleside pipeline will originate from the Harvest Midway terminal and connect to multiple crude export terminals in the Ingleside area, Harvest said in a statement. These will include the Flint Hills Resources Ingleside terminal and the South Texas Gateway terminal that is being developed by Buckeye Partners.
The Ingleside pipeline will also connect to multiple terminals in the Midway and Taft area. The pipeline will have an eventual capacity of
600,000 barrels per day, with up to 380,000 bpd supplied by Harvest’s existing Eagle Ford pipe- line systems. Harvest talked up Ingleside as the “fastest-growing export centre along the Gulf Coast” and said its new pipeline would provide
its customers with direct access to the area.
The Harvest Midway terminal will have the capacity to store over 10mn barrels. The initial buildout will include 200,000 barrels of crude oil storage, as well as measurement and pumping infrastructure with a capacity of 25,000 barrels
per hour, Harvest said.
The Ingleside Pipeline is due to enter service
in the first quarter of 2020, with the Harvest Mid- way terminal set to start up in the fourth quarter of the same year.
The development comes as one major pro- ducer exits the Eagle Ford. Days after Harvest’s announcement, Norway’s Equinor said it would sell its position in the play to Spain’s Repsol for $325mn. The deal covers Equinor’s 63% stake in its joint Eagle Ford venture with Repsol, which spans 69,000 acres (279 square km) and pro- duces 43,000 barrels of oil equivalent per day (boepd). The Spanish company will become the 100% owner of the asset.
The Norwegian firm said the transaction was in line with its efforts to optimise its onshore US portfolio.™
INVESTMENT
Occidental lining up asset sales
DJ BASIN
OCCIDENTAL Petroleum is reportedly solic- iting bids for oil and gas assets in Wyoming and Colorado that it acquired through its takeover of Anadarko Petroleum. Citing sources famil- iar with the matter, Reuters reported that Occi- dental hopes to receive up to $700mn for the assets.
According to marketing documents, Occi- dental has offered about 200,000 acres (809 square km) in the Denver-Julesburg (DJ) Basin, which spans Wyoming and Colorado. The assets produce around $66mn per year in cash flow, mostly in mineral royalties. Bids on the proper- ties are due in December.
The drilling acreage on offer is mostly located in the Wyoming portion of the DJ Basin and includes minerals, properties Occidental oper- ates and some land leased to other producers. Reuters’ sources reportedly valued the properties at $500-700mn.
Separately, Occidental is offering its cam- pus in Midland, Texas, up for sale. County tax records show that the facility was valued at $45.7mn in 2018. Reuters cited an Occidental spokeswoman, Melissa Schoeb, as saying her company was planning to move its Midland staff
into offices that Anadarko was building prior to the acquisition.
The DJ Basin acreage and the Midland cam- pus are among a number of smaller asset sales that Occidental is pursuing as it seeks to reduce its debt load. The company took on about $40bn of debt when it acquired Anadarko. Since the acquisition, it has already raised about $10bn from asset sales – including closing a deal to sell Anadarko’s Mozambique LNG stake to France’s Total for $3.9bn. Total is still in the process of closing its acquisition of Anadarko’s other African assets, which are due to fetch a further $4.9bn for Occidental.
Meanwhile, activist investor Carl Icahn has cut his holdings in Occidental by nearly one- third, selling 10mn shares in the company. He still holds 23mn shares, valued at around $900mn, and is intending to continue his proxy fight with Occidental’s board.
Icahn has been a vocal critic of the Anadarko acquisition, and is currently seeking the release of documents relating to the deal in court. He claimed, in a November 8 letter to shareholders, that Occidental had lost $21bn in market cap- italisation since the deal was first rumoured.™
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w w w . N E W S B A S E . c o m Week 45 13•November•2019