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UPDATE 1-WPX forms JV to develop midstream assets in Permian basin
June 13, 2017 / 10:40 AM / 6 months ago

UPDATE 1-WPX forms JV to develop midstream assets in Permian basin

(Adds details, background)

June 13 (Reuters) - U.S. oil and gas producer WPX Energy Inc said it had agreed to form a joint venture with privately held Howard Energy Partners to develop oil gathering and natural gas processing infrastructure in the Permian basin.

The joint venture will complete the construction of a pipeline, already started by WPX, and develop a new natural gas processing plant, the company said.

The pipeline is designed to move about 125,000 barrels of oil per day (bpd), while the natural gas plant will have an initial capacity of 400 million cubic feet per day (MMcf/d).

WPX said it would receive $300 million upfront in cash from Howard Energy.

The Permian basin, which straddles Texas and New Mexico, has been a hot spot of deal activity due to its low production costs that make it economical to drill there even when crude prices are depressed. (Reporting by Ahmed Farhatha in Bengaluru; Editing by Sai Sachin Ravikumar and Anil D‘Silva)

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