Devon Energy Corp. has agreed to sell natural gas gathering and processing assets in the Barnett Shale area near Fort Worth for $90 million, the company confirmed Tuesday.
The sale to Houston-based Crestwood Midstream Partners LP includes a 74-mile low-pressure natural gas gathering system, a 100 million cubic feet per day processing facility and 23,100 horsepower of compression equipment.
As part of the sale, the two companies also agreed to a 20-year deal where Crestwood will gather and process Devon's natural gas and natural gas liquids production from a 20,500-acre area that is producing about 95 million cubic feet per day.
Crestwood already operates a gathering system and two processing plants in the area.
“We had a natural ability to combine those systems and achieve some consolidation benefits and economies of scale,” said Joel Moxley, Crestwood's senior vice president and chief operating officer. “It expands our gathering system reach and gives us more gas in our existing facilities.”
Connecting Devon's wells to Crestwood's larger system will allow the Oklahoma City company to produce more natural gas liquids at a lower cost, Devon spokesman Tim Hartley said.
“While they optimize their newly expanded system, we can operate at lower pressures with higher liquids recovery and expanded marketing options for our gas and liquids production,” Hartley said.
Devon Energy sues federal EPA
Devon Energy Corp. has joined with the state of Texas to sue the U.S. Environmental Protection Agency over air quality regulations in Wise County, Texas.
The EPA earlier this month included the county north of Fort Worth as one of 46 areas nationwide that did not meet President George W. Bush-era ozone emission regulations of no more than 75 parts per billion. Devon and others oppose the way the EPA measured the emissions.
“If that methodology, that way of having regulation, is allowed to stand there, then that could set a precedent that could come to Canadian County and could come to a lot of places that might significantly increase the cost of producing energy, with what benefit?” Devon spokesman Tim Hartley told The Oklahoman on Tuesday.