Caiman Energy Brings Marcellus Shale Natural Gas Plant Online
Dallas, Texas — Caiman Energy, LLC today announced completion of the Ft. Beeler Processing Plant I, a cryogenic processing facility located in the Marcellus Shale formation near Cameron, West Virginia.
In connection with bringing online the plantfs 120 million cubic feet per day (mmcf/d) capacity, Caiman also announced execution of a definitive long--]term agreement with Chesapeake Energy Corporation (NYSE: CHK) to process rich gas Chesapeake produces in Marshall and Wetzel counties, West Virginia. Chesapeake is the second-largest producer of natural gas in the U.S.
"We are very pleased to be partnering with Caiman Energy to accelerate the development of this clean, abundant domestic resource," said Jim Johnson, Chesapeake's Senior Vice President of Energy Marketing. "The continued development of the Marcellus Shale is a significant step toward reduction of our country's oil imports, the creation of thousands of high-paying jobs in the U.S., and the payment of significant local, state and federal taxes."
Recent midstream service agreements with long-term acreage dedications include contracts with Gastar Exploration Ltd. (AMEX: GST); Stone Energy (NYSE: SGY); Grenadier Energy Partners, LLC; and Drilling Appalachian Corp. Caiman has agreements in place with AB Resources LLC and Chief Oil & Gas, LLC, Caiman's initial anchor tenants in the Marcellus. Existing customers also include Trans Energy, Inc., and Republic Energy, LLC. The new agreements bring Caiman's total dedicated acreage in the rich gas Marcellus processing area of West Virginia's Marshall and Wetzel counties to more than 160,000 acres. Including dedications in the lean gas areas of Pennsylvania and West Virginia, Caiman now has close to 500,000 acres of Marcellus acreage dedicated to its midstream operations.
Drilling projections from numerous existing and potential customers have prompted Caiman to launch construction of a second cryogenic processing facility. The 200 mmcf/d Ft. Beeler Processing Plant II is expected to be complete by the end of 2011 and will bring the company's natural gas processing capacity at Ft. Beeler to 320 mmcf/d. Caiman will also explore construction of a third cryogenic processing facility with a capacity of 200 mmcf/d as early as the second quarter of 2011. Caiman has more than 60 miles of high-pressure, large-diameter pipeline in service in the Marcellus Shale and an additional 60 miles of gas gathering lines under construction.
"We are very pleased with the significant scope and pace of our expansion in the Marcellus," said Caiman Energy President and CEO Jack Lafield. "We are committed to meeting the needs of our dedicated producer base. There are 10 rigs currently running on dedicated acreage in our rich gas areas. To meet our customers' expanding requirements for infrastructure, we expect to have total processing capacity of 520 mmcf/d online by the second half of 2012."
Lafield said that by the end of 2011, "we expect to have invested more than $400 million for new infrastructure in the Marcellus Shale. Marshall and Wetzel counties in West Virginia are home to some of the best rich gas resources in the entire play. We will continue to develop and grow our assets as drilling activity expands, driving increased requirements for gathering, processing, and access to high value markets."
About Caiman Energy:
Caiman Energy is a midstream energy company focused on the design, construction, operation and acquisition of midstream assets. The company, currently pursuing midstream projects in emerging resource plays throughout the U.S., serves producers by providing natural gas gathering, compression, transportation, measurement, treatment, and processing. Caiman was founded in 2009 by partners Jack Lafield, Danny Thompson and Rick Moncrief, who bring more than 90 years of experience in the midstream industry. Caiman is a portfolio company of EnCap Flatrock Midstream which is headquartered in San Antonio, Texas. For more information, visit CaimanEnergy.com.
Stephen L. Arata
Senior Vice President & CFO