Capital Markets | Midstream - Gas Gathering | Private Equity Activity

New Processing Facility Begins Operations in the STACK

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ARM Energy (ARM) and HPS Investment Partners, LLC reported that Kingfisher Midstream, LLC officially begun full operation of the Kingfisher Midstream Lincoln plant in Oklahoma earlier this month. 

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ARM Midstream, a subsidiary of ARM Energy began construction of the facility in September 2015 in partnership with capital provided by HPS.

Zach Lee, ARM's chief executive officer, said: "Bringing the Kingfisher Midstream Lincoln plant online and on schedule is an exciting milestone for our partnership and for producers in the STACK. The facility will greatly alleviate some of the production bottlenecks in the STACK area by providing 60,000 MCFD of needed processing capacity. Producers in the area may now benefit from an unconstrained gas gathering option as well as a centralized crude oil truck load out facility."

Don Dimitrievich, a Managing Director at HPS, added: "HPS greatly values its partnership with ARM and is excited to help launch this best-in-class midstream system for producers in the STACK. Development of the Kingfisher Midstream Lincoln plant reflects the increasing focus of HPS on investing in midstream assets in production areas, such as the STACK, where some of the best economics in the industry currently exist."

The project is anchored by a long-term commitment of more than 100,000 net acres dedicated to Kingfisher Midstream, LLC. Phase one features a state-of-the-art, 60,000 MCFD cryogenic processing plant, over 100 miles of high and low pressure gas gathering pipeline, over 100 miles of crude gathering, a 50,000 bbl crude storage facility, condensate stabilization, and six crude oil truck loading stations. It includes 15,000 horsepower of compression, giving it the ability to accept low and high pressure gas from field production. Phase two will feature an additional 200,000 MCFD of processing capacity, incremental gas and crude gathering, and added market connectivity.

Taylor Tipton, President of ARM Midstream and ARM Energy Management, said: "Producers in the STACK continue to have impressive results from multiple horizons adding to the economic viability of the play. As the STACK develops, and as Kingfisher Midstream's processing capabilities expand, the added processing capacity, firm residue take away, and crude pipeline connectivity to Cushing will ensure those economics are protected."