Tall Oak Midstream Secures Large Acreage Dedication In Oklahoma’s STACK Play and Announces Plans To Expand Processing Capacity

Tall Oak Midstream

  • The new dedication brings Mid-Continent acreage dedications to Tall Oak to a total of more than 400,000 net acres.
  • Tall Oak announces plans to add 200 million cubic feet per day (MMcf/d) of processing capacity in the STACK.
  • This expansion will bring Tall Oak’s natural gas processing capacity in the Mid-Continent to more than 300 MMcf/d by Q3 2016.

OKLAHOMA CITY – August 10, 2015 – Tall Oak Midstream, LLC (“Tall Oak”) today announced that it has secured a long-term, fee-based natural gas gathering and processing agreement with one of the largest acreage holders and natural gas producers in the Mid-Continent’s STACK play (“the Company”). The Company has dedicated production from all existing and future wells drilled on 40,000 net acres located in Oklahoma’s Kingfisher and Blaine counties. The associated production will be gathered and processed at Tall Oak’s Chisholm Processing Complex, a cryogenic processing facility located in Kingfisher County.

Construction of the Chisholm plant is proceeding on schedule, and the first cryogenic processing train is expected to come into service in September 2015 with an initial capacity of 100 MMcf/d. To support the new dedication and increased demand from other customers, Tall Oak has ordered a second cryogenic train for the Chisholm complex that will add 200 MMcf/d in processing capacity, bringing the facility’s total processing capacity to 300 MMcf/d. Current plans call for the second train to come online in the third quarter of 2016. Future expansions at the Chisholm complex will allow for a total of 700 MMcf/d in processing capacity as customer demand increases. Tall Oak is currently operating more than 100 miles of gathering pipelines in the STACK with plans to complete an additional 100 miles of pipe and two more compressor stations in 2015.

“Notwithstanding the current commodity price environment, the STACK play is one of the most economic plays in the country and continues to provide strong returns for our customers,” said Tall Oak Chief Commercial Officer Carlos Evans. “This important agreement strengthens our position in the Mid-Continent, where we remain very focused on deploying the necessary capital and developing the infrastructure needed to stay ahead of our customers’ immediate and long-term needs.”

STACK Crude System Update
Tall Oak is also proceeding on the design and right of way acquisition for a crude oil gathering, storage and transportation system designed to serve producers in Oklahoma’s STACK play. Anchored by a long-term agreement with Felix Energy, LLC, the crude oil system will connect to multiple downstream pipelines that provide direct access to the market center at Cushing, Oklahoma. Tall Oak expects to bring the system into service by the fourth quarter of 2015. Tall Oak’s initial crude oil system will consist of a storage and truck-unloading facility east of Okarche, Oklahoma, in the center of the STACK play, and a 20-mile pipeline that will provide connections to multiple downstream markets. The Okarche facility will have the capacity to store 40,000 barrels of crude oil. Ultimately, Tall Oak expects to construct more than 200 miles of crude oil gathering pipelines and 150,000 barrels of storage.

About Tall Oak Midstream, LLC
Based in Oklahoma City, Tall Oak Midstream, LLC (“Tall Oak”) and Tall Oak Midstream II (“Tall Oak II) are innovative midstream companies led by their four founders: Ryan D. Lewellyn, CEO; Max J. Myers, CFO; Carlos P. Evans, CCO; and Lindel R. Larison, COO. The Tall Oak companies are dedicated to bringing a fresh perspective to serving oil and gas producers with a full suite of midstream services. Core capabilities include natural gas gathering, compression, treating and processing; crude oil gathering and transportation; condensate and water handling; and product marketing solutions. Tall Oak is currently focused on building out midstream infrastructure in the Mid-Continent. A map of current operations may be found here. Tall Oak II is pursuing midstream opportunities in other resource plays. Tall Oak Midstream and Tall Oak Midstream II are supported by equity commitments from EnCap Flatrock Midstream.

About EnCap Flatrock Midstream
EnCap Flatrock Midstream provides value-added private equity capital to proven management teams focused on midstream infrastructure opportunities across North America. The firm was formed in 2008 by a partnership between EnCap Investments L.P. and Flatrock Energy Advisors. Based in San Antonio with offices in Oklahoma City and Houston, EnCap Flatrock is led by Managing Partners William D. Waldrip, Dennis F. Jaggi and William R. Lemmons Jr. The firm manages investment commitments of nearly $6 billion from a broad group of institutional investors. EnCap Flatrock is currently making commitments to new management teams from EFM Fund III, a $3 billion fund.