Howard Midstream, WPX partner on Delaware oil, gas projects

By Luke Geiver | June 13, 2017

San Antonio-based Howard Midstream Energy Partners is now a major supporter of the Tulsa-based exploration and production firm WPX Energy. The entities have signed a joint venture to develop and operate multiple oil and gas midstream assets in New Mexico and Texas.

Through the JV, Howard Energy Partners (HEP) will finish constructing a 50-mile crude oil gathering system that has already been started by WPX, build a new cryogenic natural gas processing complex to a capacity of 400 million cubic feet per day and build associated natural gas and product pipelines.

“Historically, producer-backed midstream companies have performed well given the strong alignment of interests. We are excited about the strategic partnership with WPX, one of the strongest players in the Permian Basin, and the positive implications it has for our business,” said Mike Howard, chairman and CEO of the San Antonio company.

HEP utilized multiple funding sources to attain the $300 million needed to enter the JV. Along with a partnership with GIC Private Limited and Singapore’s sovereign wealth fund, HEP used Alinda Capital Partners and Alberta Investment Management Co.

Although the JV was formed to move WPX product, the entities will seek-out third-party volumes in an area of mutual interest in the Delaware Basin.

“As a producer, this is a bold move and innovative way to lay a well-defined path for our expected volumes and create an additional platform for generating shareholder value,” said Rick Muncrief, WPX chairman and CEO.

With work yet to be done on the crude oil gathering system, WPX has several wells awaiting completion before they can start delivery on the system.

In addition to its Texas assets, HEP owns and operates natural gas assets in Pennsylvania.