WPX Energy Inc. (NYSE: WPX) has struck a midstream partnership in the Permian Basin that will give the Tulsa, Okla.-based company a “competitive advantage” amid worries that production could overtake takeaway capacity in the next six to eight months.
On June 13, WPX agreed to form a 50/50 joint venture (JV) with Howard Energy Partners to jointly develop oil gathering and natural gas processing infrastructure in the Permian’s Delaware Basin. Initially the partnership has committed $563 million of new capital on the JV, San Antonio-based Howard Energy said in announcing its entry in the Delaware.
WPX said the deal puts the value of its Stateline oil gathering and gas processing projects at $863 million. The JV includes no minimum or drilling commitments and is supported by a 600 square mile area of mutual interest in Lea and Eddy counties, N.M., and Reeves and Loving counties, Texas.