Page 11 - NorthAmOil Week 44 2020

NorthAmOil PIPELINES & TRANSPORT NorthAmOil

MPLX starts up main segment

of Wink-to-Webster pipeline

TEXAS MPLX said this week that it had brought the incentivise customers to keep using their infra-
main segment of its Wink-to-Webster oil pipe- structure for shipping oil to the Gulf Coast.
line in Texas into service. The announcement Indeed, MPLX said volumes across its pipe-
came as part of the company’s 2020 third-quar- line and terminal businesses were lower year
ter earnings release, in which it also reported net on year in the third quarter, primarily owing to
income of $665mn, compared with $629mn for lower refinery utilisation at Marathon’s refiner-
the third quarter of 2019. ies. However, the company said the Wink-to-
The company, which is a master limited part- Webster pipeline system already has 100% of its
nership (MLP) formed in 2012 by Marathon contractable capacity secured under long-term
Petroleum to operate midstream assets, said the commitments from shippers.
main segment of Wink-to-Webster had started MPLX owns a 15% equity stake in the Wink-
transporting crude in October. Service for ship- to-Webster pipeline, with affiliates of ExxonMo-
pers on the more than 1mn barrel per day (bpd) bil, Plains All American Pipeline, Delek Group,
pipeline is anticipated to be available sometime Lotus Midstream and Rattler Midstream also
in the fourth quarter of this year. owning interests in the project.
Wink-to-Webster was designed to carry In March, it was reported that Marathon
oil from the Permian Basin to the Texas Gulf was exploring a sale of MPLX in an effort to
Coast, where it can be refined or exported. The mitigate against the impact of the oil price col-
pipeline was initially aimed at helping to ease a lapse that started that month. Such a sale was
takeaway capacity bottleneck in the Permian, estimated at the time to be worth up to $15bn.
but the industry downturn this year has upended However, Marathon subsequently announced
things. Instead, pipeline operators in Texas were a sale of its Speedway gasoline station chain for
recently reported to be slashing prices in order to $21bn instead.™

INVESTMENT

Tourmaline makes two acquisitions

ALBERTA CANADA’S Tourmaline Oil announced two production model. Tourmaline projects that
acquisitions this week. The company said it production from the combined Modern and
had agreed to acquire Jupiter Resources in an Jupiter assets will increase from 76,000 boepd
all-stock deal valued at around CAD626mn currently to 85,000 boepd over the next two
($480mn) and had already acquired Mod- years.
ern Resources in a cash and stock deal worth Tourmaline said for each common share,
CAD144mn ($110mn). The two companies Jupiter shareholders would receive about
being acquired own adjacent acreage in Alber- 0.2365 of a Tourmaline common share. That
ta’s Deep Basin. deal is anticipated to close in mid-December.
Tourmaline anticipates that the acquisitions For the Modern deal, the company offered
will raise its average annual output to about CAD73.75mn ($56.53mn) cash and 1.5mn
400,000 barrels of oil equivalent per day (boepd) worth of common shares.
in 2021, up 25% from previous guidance. The In addition, Tourmaline announced the sale
acquisitions include over 900 net sections of of a gross overriding royalty (GORR) on the
prospective land and over 445mn boe of proven Modern and Jupiter acreage to Topaz Energy for
and probably (2P) reserves in what Tourmaline cash proceeds of CAD130mn ($100mn). Topaz
described as the “most prolific and economic” is a subsidiary that Tourmaline recently took
area of the Deep Basin, along with related facili- public with a CAD217.5mn ($166.7mn) initial
ties and infrastructure. public offering (IPO).
The company said it would initially pursue According to their websites, Modern is
“very modest” growth of 3-5% from the Mod- owned by ARC Financial and EnCap Invest-
ern and Jupiter assets in 2021-22 in an effort ments, while Jupiter is an independent com-
to optimise efficiency and costs. After this, it pany in which Apollo Global Management is
is planning to shift to a maintenance capital/ an investor.™

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