Crestwood’s shale assets will provide shareholder returns

By Luke Geiver | August 20, 2019

Crestwood Equity Partners is on the cusp of providing investors with returns on their commitment to the midstream energy asset owner and operator. Robert Phillips, president and CEO of the Houston-based firm that has major infrastructure assets in the Bakken, Powder River Basin, Marcellus Shale and Delaware Basin, told investors on the company’s second quarter update that the company will be generating free cash flow next year. Returns from several oil, gas and produced water gathering assets across the U.S. are now providing better than expected volumes and economic returns.

“We have a lot of investors that have hung with us for a long time,” he said. “We are excited to be at a point to return to investors.”

A large part of Crestwood’s success stems from the Bakken, where the company recently announced record production flows through its Arrow gathering system in August.

According to the company, In August 2019, daily gathering volumes exceeded 124 MBbls/d of crude oil, 96 MMcf/d of natural gas, and 84 MBbls/d of produced water. Crestwood now expects Arrow producers to connect 110 new wells in 2019. Further, Crestwood has successfully negotiated contract extensions with active producers on the Arrow system resulting in an average remaining term of 9.3 years.

The company also added that the Arrow gathering and processing system gathers crude oil, natural gas, and produced water on the Fort Berthold Indian Reservation in McKenzie and Dunn counties, North Dakota. The Arrow system consists of approximately 740 miles of pipe, 150 MMcf/d of processing capacity, and over 75,000 HP of compression, that is supported by a 150,000 acre dedication and long-term contracts with WPX Energy, XTO Energy, Bruin E&P Partners, Rimrock Oil & Gas, Enerplus Resources, PetroShale and QEP Resources.

Phillips said his team continues to stay focused on the needs of investors and will use free cash flow generated in the coming quarters for a mix of shareholder returns, dividends or buyback programs instead of investing in major new projects.