Black Bear Midstream inks Cotton Valley gas gathering deal

Black Bear Midstream LLC, a portfolio company of funds managed by Oaktree Capital Management LP, has entered into a 7-year gas gathering and processing agreement with an unidentified Cotton Valley producer in Louisiana’s Desoto and Caddo parishes.

As part of the agreement, Black Bear will build about 20 miles of 16-in., rich-gas gathering pipe west of its DeSoto Parish 140-MMcfd cryogenic processing plant to support both this contract and other producers on both sides of the Louisiana-Texas border, Oaktree said.

“We continue to execute on our strategy to provide both lean and rich-gas gathering services in support of our customers drilling both Haynesville and Cotton Valley formations in North Louisiana. The relationship we’ve built with this and other producers keeps us excited about the area and confirms our belief that we can continue attracting production to Black Bear’s competitive, high-optionality services,” said Rich DiMichele, Black Bear’s president and chief executive officer.

While Black Bear disclosed no further details regarding the new agreement, Oaktree indicated more infrastructure expansion plans were on the horizon.

“Look for us to announce projects to extend our reach across the Texas border and throughout northern Louisiana. There has been increasing interest by regional pipelines targeting [US] Gulf Coast markets to source gas within our catchment area. While we don’t have a dog in this long-haul fight, we believe it’s in our customer’s best interest to have options across these announced pipelines and we’re working to provide that optionality,” said Travis Boeker, Black Bear’s executive vice-president of commercial business.

A gas-gathering and processing company focused on providing bespoke midstream solutions for producers in Louisiana and East Texas drilling the Cotton Valley and Haynesville formations, Black Bear has a high-pressure gathering system that provides dry and rich-gas gathering with several interstate natural gas connections, as well as a 40-mile NGL pipeline connecting its DeSoto Parish processing plant to NGL markets in Mont Belvieu, Tex.