UTICA Briefs

Former Chesapeake CEO invests in Utica

Oklahoma City, Okla.-based American Energy Partners LP, headed by former Chesapeake Energy CEO Aubrey McClendon, recently announced it has raised $1.7 billion in private equity commitments to finance operations in eastern Ohio.

The company said the investments will be provided through an affiliate, American Energy-Utica LLC. Its initial plan is to acquire 110,000 net acres of leasehold in the southern portion of the Utica shale. The company will begin drilling operations in the fourth quarter 2013 with one rig. It has plans to increase its activity to 12 rigs within the next 2-3 years.

Investors for the new company include Energy & Minerals Group, GSO Capital Partners, and Blackstone Group. Additional debt will be provided by Magnetar Capital and BlackRock Inc.

Wastewater facility slated for Carroll County

Youngstown, Ohio-based Iron Eagle Enterprises recently announced plans to open a new wastewater recycling facility in Sherrodsville, Ohio, in Carroll County.

The plant was designed by Rettew Flowback in North Canton, Ohio, and will have the capacity to recycle 14,000 b/d of water. Plans for the facility were strictly designed for companies working to develop Utica oil and gas resources. In addition to flowback water, the plant also will recycle precipitation run off from drilling sites and brine from older producing wells.

The facility will employ 50 people once brought online. Water will be trucked to and from the facility and will be treated and filtered within a 24-hour period. In addition, the facility will be outfitted with special equipment to wash out tankers on site to prevent cross-contamination with treated water.

This is the first third-party treatment facility to be permitted in Ohio. In a prepared statement, Mike McKenzie, Director of Operations at Iron Eagle, said the facility already complies in advance with pending Ohio legislation pertaining to the proper disposal of oilfield wastewater.

The company also said more facilities are in the planning phase pending demand of the service.

Open season begins for Utica pipeline

Kinder Morgan Energy Partners LP and MarkWest Utica EMG LLC, and the Energy and Minerals Group announced a binding open season for a proposed Y-grade pipeline project for transportation of natural gas liquids from the Utica and Marcellus shales to Mont Belvieu, Tex.

The project plan is to convert more than 1,000 miles—from Mercer, Penn., to Natchitoches, La.—of Kinder Morgan's Tennessee Gas Pipeline system, which is currently in service for natural gas. The company will then build out an additional 200 miles of pipeline from Natchitoches to a proposed fractionation facility in Mont Belvieu.

The pipeline is slated to come onstream in mid-2016. It will have an initial capacity of 15,000 b/d with capacity to expand to 400,000 b/d, with additional pump stations.

The open season is scheduled for late December 2013.

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