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Nuevo Midstream Announces Major Expansion in Delaware Basin

December 14, 2011
Nuevo Midstream

Company Will Significantly Increase Natural Gas Processing, Treating and Gathering Capacity in West Texas and Southeast New Mexico

HOUSTON – December 14, 2011 – Nuevo Midstream, LLC announced today that the company will significantly increase processing and treating capacity at its Ramsey plant site located in the Delaware Basin near Orla, Texas. Nuevo has purchased a cryogenic processing plant with capacity of 100 million cubic feet per day (MMcf/d) and a second amine treating plant with a capacity of 475 gallons per minute (gpm). Both will be installed at the Ramsey site and are expected to be operational in the second quarter of 2012. Nuevo will also extend its Ramsey Gathering System with additional large diameter, natural gas gathering lines and an interconnect to the El Paso natural gas pipeline. The Ramsey Gathering System crosses through Eddy County in southeast New Mexico and Culberson, Loving and Reeves counties in West Texas and currently serves 38 natural gas producers pursuing the liquids-rich Bone Springs, Wolfcamp and Avalon Shale plays.

This is Nuevo Midstream’s second major expansion in the Delaware Basin since the company launched in April. The Phase II expansion is supported by additional customer dedications of acreage and production volume in the Avalon Shale trend.  When the expansion is complete, Nuevo Midstream will have 110 MMcf/d of processing capacity and 625 gpm of treating capacity at the Ramsey plant along with more than 180 miles of high and low pressure pipeline and residue connections to interstate and intrastate markets. Drilling projections from numerous existing and prospective customers are expected to support further system extensions and capacity upgrades.

Nuevo recently completed its Phase I expansion which included the recommissioning of a 10 MMcf/d refrigerated JT processing plant and fractionator and the installation of a 150 gpm amine treating facility at the Ramsey plant site, as well as the addition of 13 miles of eight-inch pipeline to the Ramsey Gathering System with an interconnect to the Enterprise Products pipeline nine miles south of the Ramsey plant. 

“We are pleased to announce completion of the Phase I expansion of our Ramsey Gas Gathering system and a very sizable Phase II expansion of our processing and treating capacity,” said Jay Lendrum, Nuevo Midstream’s president and CEO.  “With the location of our processing assets and gathering lines, we are well positioned to serve producers operating in the liquids-rich Bone Springs, Wolfcamp and Avalon Shale plays.   Producer activity in the area is accelerating, and we will continue to expand our capacity and pipeline footprint to provide producers with strategic gathering, processing and treating services to enable them to move gas to multiple high value markets. We are in advanced discussions with a number of producers regarding additional acreage and production dedications. Based on the level of current and planned drilling activity in the area, it is very conceivable that by the time our Phase II expansion is operational, we will be in the advanced planning stages of a Phase III expansion. Our goal is to offer as much as 250 MMcf/d of total processing capacity through the Ramsey system.”

About Nuevo Midstream, LLC
Nuevo Midstream, LLC is a start-up midstream company headquartered in Houston.  The company was formed in April 2011 with a $65 million commitment from EnCap Flatrock Midstream, a private equity firm based in San Antonio, Torch Energy Advisors Incorporated (Torch Energy) and Petroleum Fuels Company, Inc., (Petroleum Fuels). The commitment included contributions of assets and management services by Torch Energy and Petroleum Fuels.  Nuevo Midstream’s operations are focused in the Delaware Basin with emphasis on the Bone Springs and Wolfcamp formations and the Avalon Shale trend in southeast New Mexico and West Texas.  The company’s management team is led by President and CEO Jay Lendrum, who also serves as chairman of Torch Energy’s board of directors. The senior leadership group at Nuevo Midstream has more than 150 years of energy industry experience and also includes Randy Ziebarth, vice president and general manager; Chris Work, chief financial officer; Ron Brown, vice president of liquids marketing; Paul Kelly, vice president; and Dwight Serrett, vice president of engineering and construction.

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