Genesis Energy Sells Pipeline Assets as Wyoming Emerges as Newest Big Shale Play

Houston's Genesis Energy is selling its Powder River Basin pipeline assets in Wyoming for $300 million.

With oil companies looking for the next big find, many have turned to the Powder River Basin of Wyoming that offers less congested and cheaper land than in the Permian Basin.  

Genesis is unloading its facilities in what is considered to be the next big emerging shale play in the country. Independent Houston producers such as EOG Resources and Anadarko Petroleum are all expanding in Wyoming.

Genesis is selling its pipeline, rail and oil gathering assets in the Powder River Basin to Dallas-based Silver Creek Midstream, which is looking to grow its Wyoming presence.

Genesis plans to use the cash proceeds to reduce its debt. While Genesis is primarily a pipeline business, it has spent over a billion dollars expanding into the alkali mining business in Wyoming.

Source:
Houston Chronicle

Backlash of Fracking in Oklahoma After Record Quake Could Slow Shale Play Development

Crop of Oklahoma Earthquake, September 3, 2016 ( USGS )

Crop of Oklahoma Earthquake, September 3, 2016 (USGS)

A record-tying earthquake that shook Oklahoma and was felt in six other states on Saturday may bring more backlash against hydraulic fracturing, which could possibly slow down development of some U.S. shale plays.

The 5.6-magnitude tremor was felt from Texas all the way to Illinois, tying with a record in 2011. Last year, 890 earthquakes were recorded as 3.0 or higher, a significant increase from a 2008 recording of only two earthquakes at 3.0 or higher, which occurred before the state’s fracking boom.

With an oil production increase in Oklahoma came an increase in wastewater disposal wells. As drilling companies use fracking methods to break up rock and extract oil, large quantities of wastewater are produced as a result. Drilling companies then inject the water into deep wastewater wells.

Many earthquakes in the state have been triggered by wastewater injection, and the Oklahoma Corporation Commission has been issuing restrictions over the last year to reduce the amount of wastewater injected into wells.

The weekend earthquake led the commission to suspend 37 wells in the state.

President of Strategic Energy and Economic Research in Winchester, Massachusetts Michael Lynch said: “[Oklahoma is] going to push the industry to come up with some permanent solutions. It’s hard to believe Oklahoma would ban fracking, but I can see where they would say to people that they have to do something else with the wastewater, which is believed to be the source of the increase in earthquakes,” according to Bloomberg.

Source:
Bloomberg