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Tall Oak to build gathering system in Payne County area

Tall Oak Midstream LLC plans to build 250 of natural gas gathering pipeline and a cryogenic processing plant to serve American Energy-Woodford and other producers in north central Oklahoma.
By Jay F. Marks Business Writer Modified: June 25, 2014 at 5:59 am •  Published: June 25, 2014

Fledgling pipeline company Tall Oak Midstream LLC has scored a coup with a long-term acreage dedication from Aubrey McClendon’s new company focused on Oklahoma’s Woodford Shale.

Tall Oak, which is about five months old, will build a natural gas gathering and processing system in north central Oklahoma to serve multiple producers in the liquids-rich play, which features stacked pay zones.

The system will be anchored by American Energy-Woodford LLC, an affiliate of former Chesapeake Energy Corp. CEO McClendon’s American Energy Partners LLC.

“We’re excited to have a project so close to home,” Tall Oak CEO Ryan Lewellyn said.

Lewellyn said the new Edmond company’s existing relationships helped it secure American Energy-Woodford’s business after a request for proposals went out to about a dozen midstream firms. Carlos Evans, Tall Oak’s chief commercial officer, had been manager of gas sales at Chesapeake.

American Energy-Woodford’s dedication spans an area of about 1 million acres that includes all previously undedicated acreage in Payne County and parts of five surrounding counties.

The Oklahoma City-based company contributed its existing gathering lines to Tall Oak in exchange for a minority stake in the midstream firm’s new system, dubbed the Central Northern Oklahoma Woodford system. It has an option to increase its non-operating interest in the system to as much as 50 percent.

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