Oryx Midstream Services today announced it has received an equity commitment totaling up to $300 million from Quantum Energy Partners, Post Oak Energy Capital, Wells Fargo Energy Capital, Oryx management and other private investors. Oryx will pursue midstream opportunities in the Permian Basin, focusing initially on the Delaware Basin in Texas and New Mexico. The company expects to leverage its deep energy industry experience and build on strong relationships with oil and gas producers in the region to provide a full suite of midstream services.
Oryx has signed long-term, fee-based contracts with three exploration and production companies — one large, publicly traded independent company and two private Midland-based companies — to support their active drilling programs in the northern Delaware Basin.
The three companies have dedicated to Oryx production from wells drilled within an area encompassing approximately 340,000 acres in Lea County, New Mexico. To accommodate production from the dedicated acreage, Oryx plans to initially construct up to 60 miles of rich gas gathering pipeline and up to 80 miles of crude oil gathering pipeline. Construction is expected to begin this month and will be conducted in phases based on customer needs. The pipeline systems will provide customers with an integrated gathering service and will serve production from multiple formations including the Second Bone Spring, Third Bone Spring, Avalon/Leonard and Wolfcamp shales. Oryx also plans to pursue third-party volumes inside the acreage dedication area and more broadly across the basin.
Oryx Chief Executive Officer Brett Wiggs commented that the new partnership coupled with this initial acreage dedication will allow Oryx to be “one of the first movers in an area where we expect to see substantial growth”, adding: “Our goal is to leverage this anchor position as we work with producers to develop custom midstream solutions and build much-needed infrastructure in the Delaware Basin.”
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