OWL, Oryx show Permian infrastructure buildout pace remains high

By Luke Geiver | August 31, 2018

The infrastructure build-outs in the Delaware Basin continued this week. Oilfield Water Logistics has completed a high-capacity water gathering system and broke ground on a new project. In the northern Delaware Basin, OWL completed a pipeline project linking 200-miles of water gathering lines and disposal lines spread throughout Lea County, New Mexico.

In Loving County, Texas, OWL began working on its Red Hills Water Gathering System expansion project that will include an 11-mile extension. The system is designed to help producers either move disposal water or re-use produced water. In addition to the pipeline work, the OWL team has also contracted with a rig and spudded a new well to serve as an additional saltwater disposal well for the system.

OWL is backed by NGP Energy Capital Management (“NGP”), NGP Energy Technology Partners, Pearl Energy Investments and private investors, and has a $250 million credit facility with Texas Capital Bank with ample available borrowing capacity to fund future expansions and capacity additions, according to the company.

Oryx Midstream Services II LLC, a Midland-based company, has announced plans to extend a joint open season for a proposed crude oil gathering to serve E&P’s in Texas and New Mexico. After fist launching the call in early July of this year, the company decided shipper interest was great enough to keep the open season going until mid-September.

Oryx is supported by a consortium of capital providers including Quantum Energy Partners, Post Oak Energy Capital, Wells Fargo Energy Capital, local Midland investors and others who collectively have contributed significant capital to the venture, the company said.

Advantages for signing up early on the gathering line do exist, the company also noted. According to Oryx, Shippers that elect to make commitments to Oryx Delaware Oil Transport LLC during the Open Season for movements on the trunk line will receive firm transportation for their committed volumes. Shippers that receive firm service for gathering and/or transportation will be required to pay a premium rate compared to the rate offered to similarly-situated walk-up shippers.