WPX Energy has announced that it has entered into a joint venture with Howard Energy to complete construction of facilities in the Stateline area of the Permian’s Delaware Basin.
The JV includes crude oil gathering assets already under construction and a planned natural gas processing complex. It does not include WPX’s natural gas and water gathering systems in the Stateline area, along with midstream rights to its remaining acreage position in the Delaware.
The JV with Howard will support WPX’s drilling operations in the Stateline area, representing 50,000 net acres, or 37 per cent of WPX’s roughly 135,000 net acre position in the Delaware.
“As a producer, this is a bold and innovative way to lay a well-defined path for our expected volumes and create an additional platform for generating shareholder value. Today’s agreement breaks new ground on both fronts. We believe the Howard team has the right skills, capabilities and focus to make this joint venture a success," said Rick Muncrief, WPX’s chairman, president and chief executive officer.
The deal is expected to close in the third quarter of this year.
WPX and Howard said that they will begin integrating their efforts to build out the crude oil gathering system and begin work on the cryogenic processing plant. The firm's expect to complete the first 200 MMcf/d train for the cryogenic natural gas processing complex in the first half of 2018.