MarkWest Utica EMG Announces Definitive Agreements with PDC Energy and Provides Update to Utica Development Plans
DENVER--(BUSINESS WIRE)-- MarkWest Utica EMG, L.L.C. (MarkWest Utica EMG), a joint venture between MarkWest Energy Partners, L.P. (NYS: MWE) (MarkWest) and The Energy and Minerals Group (EMG), today announced definitive agreements with PDC Energy, Inc. (NAS: PDCE) (PDC) to provide gathering, processing, fractionation, and marketing services in the Utica Shale.
MarkWest Utica EMG expects to begin gathering and processing PDC's liquids-rich gas production from Guernsey County, Ohio by the end of the second quarter of 2013. Initial production from PDC's Utica operations will be processed at the Cadiz complex located in Harrison County, Ohio. In the second half of 2013, PDC's gas will be transported via MarkWest Utica EMG's high-pressure rich-gas header system to the Seneca complex located in Noble County, Ohio for processing. In addition to developing high-quality gathering and processing infrastructure on behalf of PDC, during the first quarter of 2014 MarkWest Utica EMG and MarkWest are expected to complete the installation of 100,000 barrels per day of C2+ fractionation capacity in Harrison County, Ohio that will include extensive marketing access by truck, rail, and pipeline. When completed, MarkWest Utica EMG and MarkWest will have the largest processing and fractionation capacity in the Utica Shale. The fractionation facility will also be connected by an NGL pipeline to MarkWest's extensive NGL infrastructure in the Marcellus Shale and to its Houston, Pennsylvania complex, the largest fractionation and marketing facility in the Northeast. The large-scale and fully-integrated midstream system will provide significant flexibility and redundancy for PDC and other producer customers operating in the core liquids-rich area of the Utica Shale.
In just over nine months, MarkWest Utica EMG has announced long-term, fee-based agreements with four major producers operating in the core of the hydrocarbon-rich area located in the southern portion of the Utica Shale play including Gulfport Energy Corporation (Gulfport), Antero Resources (Antero), Rex Energy Corporation (Rex), and PDC. These producers will have access to MarkWest Utica EMG's fully-integrated midstream system extending throughout a multi-county area in eastern Ohio. MarkWest Utica EMG currently has 60 MMcf/d of refrigeration processing capacity available at the Cadiz complex and, during the second quarter of 2013, will begin operation of its 125 MMcf/d Cadiz I cryogenic processing facility. The 185 MMcf/d of combined processing capacity at the Cadiz complex is expected to provide the needed capacity to support the 2013 drilling plans of anchor tenants Gulfport and Antero, in addition to Rex, PDC and other producer customers. MarkWest Utica EMG expects to complete the first 200 MMcf/d Seneca facility by October of this year and will have sufficient capacity to meet all its producers' priority requirements, as well as provide significant interruptible processing capacity as needed. To further meet the growing demand of its producer customers, MarkWest Utica EMG will complete the second 200 MMcf/d Seneca facility by the end of this year, bringing its total processing capacity in the Utica Shale to 585 MMcf/d. The Seneca and Cadiz complexes will be connected by a large high-pressure gas pipeline that can be operated as a single large processing complex to provide its producer customers with significant reliability and residue gas market flexibility.
"We are excited to support PDC in the development of their rich-gas acreage in the southern Utica Shale and continue to rapidly develop significant midstream infrastructure in eastern Ohio," stated Frank Semple, Chairman, President, and Chief Executive Officer of MarkWest. "With our partner EMG, we are committed to providing our producer customers with superior customer service throughout this emerging resource play."
MarkWest Energy Partners, L.P. is a master limited partnership engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of natural gas liquids; and the gathering and transportation of crude oil. MarkWest has a leading presence in many unconventional gas plays including the Marcellus Shale, Utica Shale, Huron/Berea Shale, Haynesville Shale, Woodford Shale and Granite Wash formation.
This press release includes "forward-looking statements." All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. Although MarkWest believes that the expectations reflected in the forward-looking statements are reasonable, MarkWest can give no assurance that such expectations will prove to be correct. The forward-looking statements involve risks and uncertainties that affect operations, financial performance, and other factors as discussed in filings with the Securities and Exchange Commission (SEC). Among the factors that could cause results to differ materially are those risks discussed in the periodic reports filed with the SEC, including MarkWest's Annual Report on Form 10-K for the year ended December 31, 2012. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading "Risk Factors." MarkWest does not undertake any duty to update any forward-looking statement except as required by law.
MarkWest Energy Partners, L.P.
Frank Semple, 866-858-0482
Chairman, President & CEO
Nancy Buese, 866-858-0482
Senior VP & CFO
Josh Hallenbeck, 866-858-0482
VP of Finance & Treasurer
KEYWORDS: United States North America Colorado Ohio
The article MarkWest Utica EMG Announces Definitive Agreements with PDC Energy and Provides Update to Utica Development Plans originally appeared on Fool.com.
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