Stakeholder Midstream Announces Expansions in the Permian Basin’s San Andres Play

SAN ANTONIO–(BUSINESS WIRE)–#midstream—Stakeholder
Midstream, LLC announced today it will build a new natural gas
gathering system in the Permian Basin to serve producers working in the
Horizontal San Andres. This comprehensive gas gathering solution
includes low-pressure gathering, liquids handling, sour gas treating,
cryogenic processing and nitrogen rejection capabilities. In conjunction
with its new natural gas system, Stakeholder also will significantly
expand its existing San Andres Crude Gathering System. These new assets
are supported by long-term contracts and dedications of more than
100,000 acres from Horizontal San Andres
producers.

Comprehensive Natural Gas Solution

Stakeholder’s comprehensive gas gathering, treating and processing
system will include low-pressure sour gas gathering lines across Yoakum
County, Texas, and into Lea County, New Mexico. To support its expanded
gathering footprint, Stakeholder will construct a state-of-the-art
treating and processing facility in Yoakum County. The new facility will
include front-end liquids handling, an amine treater and acid gas
injection well, a cryogenic processing plant with the capacity to
process 60 million cubic feet per day, and a nitrogen rejection unit.

Stakeholder’s gas system will be fully operational in the third quarter
of 2018. Stakeholder currently is working with producers regarding
expansions into Roosevelt, Chaves and Eddy counties in New Mexico and
Cochran and Gaines counties in Texas and plans to announce significant
expansions to the system backed by new acreage commitments by year-end.

Crude Gathering Expansion

Stakeholder also will make substantial expansions to its San Andres
Crude Gathering System in Yoakum County. The crude system was fully
commissioned on May 1, 2017, and currently consists of approximately 90
miles of gathering pipelines, a crude oil storage terminal and multiple
downstream pipeline connections. The expansion will include additional
gathering lines, pump stations and additions to storage capacity at
Stakeholder’s crude terminal. The acquisition of rights of way is
underway, and the new gathering lines are expected to come into service
in the first quarter of 2018. Stakeholder also is working with several
producers to expand the gathering system into surrounding counties.

Customer Perspective

“Stakeholder recognized the potential of the Horizontal San Andres early
and has worked with Steward Energy and the rest of the producer
community to advance the play by hosting technical producer conferences
and developing thoughtful midstream solutions based on long-term
producer needs,” said Lance Taylor, chief executive officer of Steward
Energy II, LLC. “With industry-leading returns, this play is rapidly
advancing, and we believe that Stakeholder has thoughtfully developed a
complete and well-designed solution that will meet the needs and address
the challenges faced by producers targeting the Horizontal San Andres.
I’m grateful for the relationship Stakeholder and Steward have forged
and look forward to expanding that partnership with this newest venture.”

“Stakeholder has been a great partner in the Horizontal San Andres who
has met all of its commitments and performed as promised. Stakeholder’s
crude system started up on time, has operated efficiently and has
provided increased netback to producers,” said Kevin Riley, president of
Riley Exploration Permian, LLC. “On any project, you want to work with
people you can trust and depend on. We believe this is even more
critical in the Horizontal San Andres, and Stakeholder clearly meets
these criteria.”

CEO Perspective

“The San Andres has a long history as one of the most prolific
formations in the country for oil and gas producers pursuing vertical
development,” said Stakeholder Co-CEO Rob Liddell. “Today we are seeing
very favorable economics coupled with strong production results as
producers apply horizontal drilling techniques across the play. With
more than 130 horizontal wells drilled over the past 12 months, we’ve
moved rapidly to work with our customer base to design and build
infrastructure that effectively manages the complex set of challenges
presented by the San Andres sour gas stream. We’ve had a great response
to our ability and commitment to meeting these challenges and are
excited to announce a purpose-built system that includes
state-of-the-art treaters, acid gas injection wells, a nitrogen
rejection unit and a best-in-class cryogenic processing plant.”

“It’s exciting to work alongside an innovative and capable group of
producers, who are rapidly developing the Horizontal San Andres,” said
Stakeholder Co-CEO Gaylon Gray. “Operators are accelerating their
drilling schedules, and we share their confidence in the future of the
play. We also believe there is line of sight to the development of other
formations in the Northwest Shelf and Central Basin Platform. Although
gas qualities differ across formations, many of these other formations
will likely exhibit some of the same challenges the San Andres gas has
presented, and we are pleased to have a facility that can meet the needs
of producers regardless of the target zone.”

About Stakeholder Midstream, LLC

Based in San Antonio and founded in 2015, Stakeholder Midstream is an
independent midstream company serving oil and gas producers operating in
unconventional shale plays throughout North America. Stakeholder’s
long-term vision of success is built on fostering strong, long-term
relationships with all constituents. Stakeholder cultivates these
relationships based on trust, accountability and fairness to ensure that
all stakeholders are heard, valued and served. Capabilities include
in-field natural gas gathering, compression, treating and processing
services; innovative NGL solutions; and crude oil gathering,
transportation and storage. Stakeholder is backed by venture capital
commitments from EnCap
Flatrock Midstream. Please visit www.stakeholdermidstream.com
for more information.

About EnCap Flatrock Midstream

EnCap Flatrock Midstream provides value-added growth capital to proven
management teams focused on midstream infrastructure opportunities
across North America. The firm was formed in 2008 by a partnership
between EnCap
Investments L.P. and Flatrock Energy Advisors. EnCap Flatrock is
based in San Antonio with offices in Oklahoma City and Houston. The firm
manages investment commitments of nearly $6 billion from a broad group
of institutional investors. EnCap Flatrock currently is making
commitments to new management teams from EFM Fund III, a $3 billion
fund. Please visit www.efmidstream.com
for more information.

Contacts

TEN|10
Group, LLC
Casey Nikoloric
303.433.4397 x101 o
303.507.0510
m
[email protected]