Meritage Midstream unit buys south Powder River basin assets

Thunder Creek Gas Services LLC, a subsidiary of Meritage Midstream Services II LLC, has acquired midstream assets in the southern portion of Wyoming’s Powder River basin from Devon Energy Production Co. LP, a wholly owned subsidiary of Devon Energy Corp.

The assets include 115 miles of natural gas gathering pipeline and associated equipment that constitute almost all of Devon’s midstream assets across Wyoming’s Powder River basin. The deal includes a long-term dedication from Devon to Thunder Creek of 250,000 acres in the basin. Thunder Creek now has operations throughout the Powder River basin in and around the Turner, Teapot, Parkman, Sussex, Niobrara, Frontier, and Mowry resource plays.

Two producers have awarded gathering and processing contracts to Thunder Creek for the majority of those producers’ Powder River basin drilling programs for 2017. The operators control an estimated 400,000-600,000 net acres in the play.

The deals increase the number of acres dedicated to Thunder Creek to more than 1 million, which includes dedications from almost every active operator in the basin, Meritage says. Thunder Creek now plans to expand processing capacity at its 50 Buttes gas processing complex near Gillette to 180 MMcfd from 90 MMcfd with a targeted in-service date of late this year or early 2018.

It also expects to add more than 49,000 hp of compression, add 4-6 compressor stations, and build 425 miles of gathering and transportation pipeline over the next 5 years. Thunder Creek expects to expand processing capacity by more than 390 MMcfd of gas in the same time period.

Meritage’s Powder River basin assets include 1,000 miles of high- and low-pressure pipeline and the 108-mile Thunder Creek NGL pipeline, which connects 50 Buttes to the Phillips 66 Powder River pipeline for delivery of NGLs to Conway, Kan., and the Phillips 66 fractionation and refining complex near Borger, Tex.