Eagle Rock to gather, process Apache's Texas Panhandle gas

Eagle Rock Energy Partners LP entered into a new fee-based gas gathering, processing, and purchase agreement with Apache Corp. to support the Houston independent’s active drilling program in the Texas Panhandle portion of the Anadarko basin. Apache has dedicated all existing and future wells drilled within a more than 106,000-gross acre area in Hemphill, Lipscomb, Ochiltree, Roberts, Hansford, and Sherman counties, Tex., to Eagle Rock under market-based terms. The dedicated acreage covers the Granite Wash, Hogshooter, Tonkawa, Marmaton, and Cleveland plays in the Anadarko basin.

Eagle Rock will gather Apache production and process it at one or more of its cryogenic processing plants in the Texas Panhandle. Eagle Rock’s Texas Panhandle assets include roughly 6,500 miles of gathering pipeline and more than 480 MMcfd of high-efficiency processing capacity, with an additional 60 MMcfd expected online in this year’s second quarter following the completion of its previously announced Wheeler plant.

The agreement supersedes and expands on various existing agreements between Eagle Rock and Apache, providing fee-based compensation to Eagle Rock and applying to all existing and future wells completed by Apache on any of the acreage in the dedicated area.

Eagle Rock last year bought BP America Production Co.’s processing plants and associated gathering serving the Texas Panhandle (OGJ Online, Aug. 13, 2012). The two companies entered into a 20-year agreement under which Eagle Rock will gather and process BP’s production from existing connected wells.

Contact Christopher E. Smith at chriss@ogjonline.com.

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