Thursday, May 9, 2019

Regarding The "Halo" Effect -- May 9, 2019

A reader sent this note earlier today. It's a great note, better articulated than anything I've written.

It's a great jumping off point for future thoughts about the "halo" effect. See this post for the Whiting slides. Also this post for a couple more slides on Gen 5 fracking. And finally, this narrative on the "parent-well-uplift" phenomenon from the CEO.

From the reader:
I heard some other glimmer recently that was pro halo effect. Not sure if it was DrillingInfo, Rystad, CLR, Shaleprofile, or what source.

Essentially the insight was that child wells are not just typically lower production themselves but also impact the parent negatively (after all their is well to well competition). This is basically the case in other basins. But the one exception was the Bakken. That in the B, the child wells were not only better than parent but also some uplift of the parent. This is because old completions were so poor. E.g. might not be seen if you did a child of a current completion.

I wouldn't take any of this as total validation. Just some inklings starting to back you up.

I still prefer to see some statistical study (DrillingInfo is great about these kinds of analyses) that filters pairs of wells and looks at the impact. Nor just random data points that may not represent average effect (issue with your aenecotes and WLL chart...need to show whole dataset not a few points that happen to show an impact...maybe others don't).

Other issues with the WLL chart: need to see a control versus just resting the well (there is a down time while you frack the child). And using producing days versus calendar days...obscures the financial impact of the down time and also that resting is going on.

Another issue is that the post-child frack time is very short. They say they have 2500 producing days, but you have way less than that post frack (50?) Need to see long term behavior. I think megafracks started in late 2017 or at latest early 2018, so there should be more wells where we can see over a year of decline.
My comments:

Disclaimer: I am inappropriately exuberant about the Bakken. I often see the Bakken from the point of view of a small (mom-and-pop) mineral owner. That definitely "influences" my thoughts about the Bakken.

Disclaimer: in a long note like this there will be typographical and factual errors. I have no training in the oil sector. I often see things that don't exist but I don't intentionally mislead readers. I have never been a good writer, and I do not articulate things as well as I wish I could. But if one reads enough of my stuff, one should get a feeling for what I'm trying to say; that's one of the reasons, I suppose, that I blog so much.

Anyway, my comments:

1. I'm not convinced the "halo" effect will be enough to "move the needle" with regard to earnings for operators in the Bakken. It is exciting to see the "halo" effect when it occurs because I imagine it excites the mineral owner to see a jump in royalties, especially when led to believe that once a well starts to decline in production, it will continue to decline. In a more general sense, I get the feeling that no one expected this to happen -- to see a significant jump in production in old wells even when nothing specific is going on at the well.

2. I found it interesting that operators had not discussed this phenomenon in their earnings call. That suggested to me it was not enough to "move the needle."

3. On the other hand, I was just as surprised to see Whiting (or any operator) address the phenomenon. And surprisingly, there were three slides as well as a fairly lengthy Q&A (one question) on the subject. That seems like a long time to spend on one subject that so many discount.

4. The reader above would like to see a statistical study; I agree. My hunch is that Whiting (and others are doing that). I don't have the skills or the time (or perhaps even enough data) to do a statistical study, so we will have to wait. Now that Whiting has broached the subject, we might see more discussion on the subject going forward.

5. Even more interesting than a statistical study would be more research on the phenomenon.

6.  Anecdotally, this is what I've seen:
  • some fields/areas in the Bakken seem to be exhibit the phenomenon more than other fields/areas
  • some operators seem to experience the phenomenon more often, and some may actually be trying to maximize "parent-well-uplift" results. MRO comes to mind. Perhaps (probably) CLR
  • the phenomenon is short-lived -- but not necessarily all that much shorter duration than seen after the original frack some years earlier
  • the more daughter wells (horizontals) fracked around one parent well, the better the results, all else being equal (which seems obvious but may not be)
  • new production in some '"parent-well-uplift" events are incredible; others much more subtle
  • the results of a successful "parent-well-uplift" have two results:
    • immediate jump in production;
    • affects the overall decline rate -- resulting in an increased EUR
7. The reader noted that he/she seems to remember reading something about the "halo" effect not being seen in other shale basins (Eagle Ford, Permian) suggesting that these sources think this may be "unique" to the Bakken

8. At first glance, it would not make sense that one basin would be unique with regard to "parent-well-uplift" but if the "halo" effect is a function of the natural micro-fractures in a basin, there could be a difference between basins.

Anyway, time to move on for now.

But I wanted to make sure that others read that note from the reader regarding the "halo" effect.

I was surprised that Whiting would bring it up; at the same time I was surprised that the phenomenon wasn't brought up earlier. But now that I've read earnings reports/transcripts for the past decade I understand why it has not been brought up previously. I can't imagine we will see much in earnings reports unless there is solid evidence that the phenomenon moves the needle (with regard to production) and operators actively try to maximize the phenomenon.

Again, so much could be written. We've barely scratched the surface. More to follow.

You know, one way to measure this, I suppose, is if down the road, let's say ten years from now, the discussions among operators is whether the "halo" effect is a better phenomenon to study rather than EOR such as CO2 injection.

The "halo" effect may turn out to be anecdotally interesting and exciting for individual small mineral owners, but nothing else. On the other hand ....

On The Other Hand, Randy Travis

Active Rigs In North Dakota Up To 66 -- Haven't Seen That In Awhile -- May 9, 2019

Note: some of my replies to recent comments and some of my blogs today have been a bit snarkier than usual. Some days I just get into one of those moods. I would say more but I don't want to belabor the point. 

Brent: pretty much flat today; down 0.17%; closed at $70.25.

Libya: link here. Libyan government suspends operations of oil major Total as well as many as 40 other foreign companies -- wouldn't that be, like, everyone? Oh, no big deal -- it's just a paperwork snafu -- the licenses of those 40 foreign firms expired. They all expired the same day? How did almost four dozen companies forget to send in their paperwork and payments? Wouldn't Libya grant them a grace period? Or maybe simply impose a late fee of, like, $10? The article doesn't say how much exported oil we're talking about but it seems if four dozen firms have been shut down, that would be, like, most of the country's export capacity. One would think. The chairman of the Libyan state-owned oil company, says, and, this seems to be an understatement: "[this is] a direct threat to Libyan oil sector development and procurement."

Relevancy? How important is Libyan oil to the world economy? Some folks think Libya is very, very important -- especially the peak oil folks who suggest the price of oil is determined by the last barrel available. Brent was pretty much flat today; down 0.17%. After hours it traded up 0.03% (2 cents/bbl) perhaps in response to the Libyan news.

See first comment: maybe it really is no big deal, operating in/out of Libya with expired licenses. 

Active rigs:

$61.705/9/201905/09/201805/09/201705/09/201605/09/2015
Active Rigs6661492884

Seven new permits:
  • Operator: Crescent Point Energy
  • Field: Burg (Williams County)
  • Comments: Crescent Point Energy has permits for a 7-well Claire Rose pad in section 19-159-99, a mix of Three Forks and middle Bakken wells
Five permits renewed:
  • Hess: five AN-Norby permits in McKenzie County
Four permits canceled:
  • QEP: four MHA permits in Dunn County, all in section 26-148-92; there's not a lot of activity in this area; this site is probably less than a mile north of the McKenzie Bay Marina (north side of the river) which may have been a factor

WBI Energy -- MDU -- New Pipeline Proposed -- May 9, 2019

Link here. Huge "thank you" to a reader for spotting the story. Data points:
  • WBI Energy, a division of MDU Resources
  • the North Bakken Expansion Project
  • from: WBI's Tioga Compressor Station (Tioga, ND, east of Williston, same county)
  • to: North Border Pipeline south of Watford City (McKenzie County; south of the river)
  • 60 miles; 20-inch diameter
  • capacity: 200,000 mcfpd (about 35,000 boepd)
  • will file with FERC this month (May, 2019)
  • construction could begin in 2Q21
  • service date: November, 2021
  • $220 million
At one time, early in the Bakken boom, the rule of thumb seemed to be $1 million/mile of pipeline construction. This project would be $11 million/mile of pipeline construction. The fact that this will be "under the river" may increase the cost significantly, and I don't know if there are additional pump stations required or other infrastructure expansion that might be required.

For readers who are concerned this is "simply" another regional pipeline and won't help with the bigger issue of "takeaway" from the Bakken, this proposed 60-mile connector will connect with the Northern Border Pipeline, an international pipeline that links the midwestern US (Indiana and Illinois) with western Canada.

See this link
In addition to transporting Canadian sourced supply, Northern Border Pipeline receives and transports natural gas produced in the Williston and Powder River Basins in the United States and synthetic natural gas produced at the Dakota Gasification plant in North Dakota.

Owners/operator:
  • Northern Border Pipeline Company is a general partnership owned by TC PipeLines, LP, and ONEOK Partners, L.P.
  • Northern Border Pipeline is operated by: TransCanada Northern Border Inc.
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Enbridge

Looking for long-term commitments.

Story here.

NOG

NOG is tracked here.

September 30, 2022: another bolt-on acquisition in the Permian for NOG.

2Q22: 72,689 boepd (57% oil); link here.

June 7, 2022:

3Q21:


NOG

  • February 3, 2021: announces first acquisition in the Appalachian Basin; $2,700 / acre for 64,000 acres; $175 million cash deal; seller: Reliance Marcellus, LLC.
  • September 10, 2020: announces first acquisition in the Delaware Basin; $30,000 / acre for 66 acres; total production about 25,000 - 30,000 boepd;
  • 2Q20: link here --  wells in process remain near record levels at 26.7 net wells; 23,804 boepd; 26K bbls of remaining 2020 oil hedged at over $58/bbl; 22K bopd of 2021 oil hedged at over $54.50/bbl;
  • 1Q20: link here -- 44Kboepd; net income of $0.74 driven in part by a $345 million mark-to-market gain in derivatives; 1Q20 adjusted income was $0.04 per share down from $0.07 a year earlier;
  • 4Q19 and full year 2019: link here
  • 2Q19 earnings: link here; production increased 66% year-over-year; 34,965 boepd; 3.2 million boe in 2Q19; net income, 12 cents, beating forecast of 11 cents;
  • 1Q19 earnings: press release; 34,598 boepd; adjusted, a gain of 7 cents/share or $27.8 million; a huge loss due to non-cash mark-to-market loss on hedges; forecast: 12 cents/share;
  • April 22, 2019: acquires 18K net acres; $300 million; $17K/acre; if it produces 6,600 boepd as anticipated, that's quite a jump in production
  • January, 2019, corporate presentation; 151,978 net acres; 4Q18 mid-point guidance, 35,500 boepd; 3Q18: 26,708 boepd; total proved reserves have increased 79% year-over-year; most of that due to acquisitions; now at 135.5 million boe;
  • 4Q18 press release prior to earnings announcement later this month -- January 22, 2019; 151,978 net acres; 97% HBP in ND; 3Q18: 27K boepd; 4Q18 guidance, 36K boepd; CWC: $8 million; 2018 wells tracking 1 million boe EUR; major partners: Slawson (15%); CLR (14%); Whiting (12%); Hess (8%): COP (7%); Oasis (5%); XTO (5%); EOG (5%); operating expenses, $9/boe;
  • 2Q18 earnings: adjusted earnings, 9 cents; beats by one cent; raises full year production guidance by 60% over 2017; 2Q18 production exceedes expectations, increased 53% y/y and 17% sequentially; now averaging 21,046 boepd; exited the quarter with 16.4 net wells in production; added 8.1 organic net wells; three acquisitions this year: Salt Creek; Pivotal; and W Energy; Salt Creek closed June 4, 2018;
  • July 31, 2018: NOG to aquire 10,600 acres for  $300 million; $28,000 / acre; W Energy deal
  • July 18, 2018: NOG to acquire "large package of producing wells" from Pivotal Petroleum Partners; appears no acreage involved?
  • April 26, 2018: NOG acquires 1,300 incredibly good Bakken acres for an incredible $49 million ($40 million in cash; 6 million shares in NOG)
  • March, 2018: $120 million public offering; NOG to raise $120 million in new public offering? Mostly for acquisition and drilling program. If acquisition alone, in North Dakota, back-of-the-envelope: $120 million / $2,000-acre = 60,000 acres. My last update shows NOG with 145,000 net acres (2017); has had as much as 180,000 net acres (2012)
  • 3Q17: 145,749 net acres; link here16,285 bopd in 2015; 165,000 net acres in 2015;
  • 1Q17: 13,299 boepd; EURs tracking 1 million boe; 30-day IPs now (2016) average 1,485 boepd; net income for 1Q17 was $16.9 million; adjusted net income was a loss of $0.1 million; adjusted EBITDA for the quarter was $29.6 million
  • 1Q14: 13,287 boepd (20% increase q/q); 185,000 net acres (company's press release);
  • 2013 average: 12,261 boepd; 187,000 acres.
  • 3Q13 press release: 13,000 boepd;
  • March, 2013 update: 12th largest leaseholder in the Bakken; 180,000 net acres; 106 net wells; currently drilling 157 gross (12 net) wells); proved reserves, 68 million boe; still says has potential to acquire 3,000 to 5,000+ acres/quarter; I don't see much change since last presentation.
  • 4Q12 update: 10,000 boepd; 106 net wells; 
  • November, 2012, corporate presentation: 184,000 net acres;
  • 2Q12: 180,000 net acres; average cost: $2,184/acre for most recent 7,060 net acres in key prospect area; 16 net wells in 2Q12;
  • June corporate presentation: 177K acres; average cost: $1,832; $15 - $20 million/quarter in 2012 for acreage acquisition
  • 1Q12 results: 173,000 net acres; average cost: $1,672/acre; acquired 10,278 net acres in 1Q12;
  • Dec 15, 2011, corp update -- 4Q11: acquired 7,600 acres; $19 million ($2,500/acre); exit 2011 w/ 160,000 net WB acres
  • Exit 2011 with 37 net wells; spud 40 wells in 2011; avg 7,000 boepd
  • Exit 2011: 10,000 boepd (compare with OAS and KOG)
  • CAPEX for 2012: $325 million; spud 44 wells; avg cost of Bakken well -- $7.4 million
  • BEXP presentation (link now broken) says NOG has 148,904 net acres; early 2011
  • 147,407 net acres in North Dakota Bakken and Three Forks (according to 2010 annual, released Mar 2, 2011)
  • Analyst's figure: 130,000 net acres (December 31, 2010)
  • Avg daily production (bbls): 140 (2008); 800 (2009); 2,500 (2010); 5,000 (2011);
  • NOG CONFERENCE NOTES, 2012:
As a non-operator NOG takes advantage of the discount in prices for small parcels of non-op acreage compared to operated acreage.  Moreover, without the drilling infrastructure NOG maintains more flexibility should oil prices fall out of bed.
Acreage is acquired in the path of development, giving great time value metrics.
NOG will issue an updated reserve report with Q2 results.  With 40% of net wells having come online in 2012, expect NPV-10 to balloon.
NOG participates in ~25% of North Dakota Bakken wells, with average interests of almost 10%.
Hedged:  75% for balance of 2012 with a floors near $91;  hedged 50% for 2013 with floors near $90.
Drilled more net wells in Q1 2012 than OAS or KOG.
When the oil price is down, acreage acquisition dynamics moves into their favor.

NOG -- 1Q19 -- Earnings -- Guidance

Press release.

Highlights:
  • Production increased 92% over the prior year, averaging 34,598 barrels of oil equivalent (“Boe”) per day; strong well performance driving an increase in 2019 production guidance with no change to capital spending guidance.
  • Drilling and development capital expenditures totaled $74.0 million, a 5% reduction versus the prior quarter.
  • Cash flow from operations, excluding an $11.4 million net increase from changes in working capital, was $87.5 million.
  • Northern spent $15.1 million on share repurchases in the quarter and $8.4 million on ground game acquisitions. 
Narrative:
First quarter 2019 production totaled 3.1 million Boe and averaged 34,598 Boe per day, a 92% increase from the prior year. Oil and gas sales in the first quarter increased 53% from the prior year to $132.7 million. Net income in the first quarter was a loss of $107.2 million or $0.29 per diluted share, primarily driven by a $152.2 million non-cash mark-to-market loss on hedges. Adjusted Net Income in the first quarter was $27.8 million or $0.07 per diluted share. Adjusted EBITDA totaled $104.8 million in the first quarter, an 87% increase from the prior year. Adjusted EBITDA was down sequentially primarily due to a decline in realized gas prices. (See “Non-GAAP Financial Measures” below.) 

Breaking News -- PEMEX Pipeline In Southern Mexico Explodes -- May 9, 2019

More to follow, I'm sure, on the pipeline explosion in Mexico. [Later, May 9, 2018: fire under control.] A google search suggests Pemex pipeline explosions/fires are not particularly out of the ordinary.

Impeachment: tell me again what happens when the US House impeaches one of the most respected attorney generals ever. Compare him to Eric Holder, Edwin Meese, Janet Reno, John Ashcroft, John Mitchell, and particularly Edward Bates.

China - US trade talks. Increased tariffs were to go into effect tomorrow morning, Friday, May 10, 2019. The Chinese market has slumped significantly. Premier Xi probably getting an earful.






I haven't watched the market this past week, except for minor exceptions. I'll check in next week if/when the trade talk is "resolved." I checked my brokerage account to see if dividends had improved my overall cash position -- huge buying opportunity this week. See disclaimer below.

Sixteen reasons ("Wall Street" looks for the Fed to cut rates this year):

M
Sixteen Reasons, Connie Stevens

Sixteen reason. Link here.

Top story last week, the US economy:
Add: the southern surge to provide sub-$15/hour laborers.

**********************************
Other News

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or think you may have read here.

MPC in $9 billion deal to merge midstream units. Link here.
Marathon Petroleum Corp. (MPC) has agreed to merge its two midstream businesses, MPLX LP and Andeavor Logistics LP (ANDX), in a deal worth $9 billion, the company announced Wednesday.

The definitive merger of Marathon’s two master limited partnerships involves MPLX acquiring ANDX in a unit-for-unit transaction at a blended exchange ratio of 1.07x. It would give ANDX public unitholders 1.135x MPLX common units for each ADNX common unit held and MPC would receive 1.0328x MPLX common units for each ANDX common unit held.

This announcement comes after Ohio-based oil refiner MPC agreed it would acquire rival oil refiner Andeavor for $23.3 billion in April 2018.
Mis-match: we were the first to talk about this years ago. Now we have another great article on the same subject (archived) -- the mismatch between light oil and global refineries.
I don't have an opinion on whether the writer's anxieties will prove to be correct but his argument is sound. In fact, it may be the only reason that WTI has not plummeted to $40/bbl. Again, however, here is another writer that fails to even mention in passing the huge impact on current events when President Obama killed the Keystone XL. I'm an eternal optimist and feel comfortable that free market capitalism will work this all out. Speaking of which, the average price of gasoline has decreased in Los Angeles this past week. Down an average of 2 cents/gallon.

"We'll Never See Snow Again" -- Algore, Patrick Kennedy, Et Al -- May 9, 2019

From The National Weather Service:


No mention of global warming, but after the first hurricane this summer, we'll hear all about global warming.

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Valiant Ambition

I'm reading Nathaniel Phlbrick's book by the same title, c. 2016. I had skimmed through this book some months ago.

The other day I was looking for a book that would provide a "travelogue" of sorts or a geographic description of the "water" geography of the New York area, from Long Island west to New Jersey. Then I remembered this book.

Unless you live there or study it closely, it is very difficult to understand the "water" geography of the New York area -- at least it is for me. It is absolutely fascinating. 

Turned out to be a perfect book.

December, 1776: it appeared the war had been lost. Truly amazing what a few men were able to do.

Later, pages 62 - 63. Philbrick quickly and brilliantly provide vignettes of the men we all "learned" in elementary / middle school during those hellish days of 1776:
  • George Washington: general of the Continental Army
  • his adjutant general, Joseph Reed, who betrayed Washington,
  • Major General Charles Lee: Washington's second-in-command
  • Major General Nathaniel Greene: who lost Fort Washington; provided General Washington really, really bad advice on this one; MG Greene should have been dismissed after the Fort Washington disaster, but Geo Washington kept him; the former, a Quaker, was instrumental in persuading the Continental Congress for funds to re-build the army
  • James Monroe, future president of the US, was a lieutenant during the retreat across New Jersey
  • Thomas Paine, Common Sense, a year earlier; The Crisis, notes while retreating across New Jersey ("these are times that try men's souls")
  • Alexander Hamilton: crossing New Jersey; 21 years old; an artillery captain from New York; he had been an undergraduate at what is now Columbia University, Hamilton was about to become one of Washington's most trusted subordinates

One Of These Is Fake News -- May 9, 2019

One of these is fake news:

#1:


#2:



#3:

Random Look At A Petro Harvester Madison Well In Portal Oil Field -- May 9, 2019

Again, for newbies: this is not a Bakken well. This is a Madison well in the center of the Williston Oil Basin; the well is north of Williston. The well is located 1.75 miles south of the Canadian border. There is a fair amount of activity in this area.


The well:
  • 33938, drl, Petro Harvester Operating Company, LLC, PTL2 4-28 164-92 C, target: Madison, Portal oil field, some production reported;
Production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
MADISON3-201920131563511980378627861000
MADISON2-20190000000


From the well file:
  • permit says the spacing unit is 560 acres (slightly less than the standard section of 640 acres)
  • target: Midale/Nesson Porosity; 30' thick seam; 
  • this grassroots well was spud on November 9 and reached TD of 15,175' MD on November 28, 2108
  • approx 2.5 miles southwest of Portal, ND, in the central portion of the Williston Basin
  • lateral #1 produced 7,924' of 6" openhole volume after intermediate casing point of 6,619' MD in the 30' foot thick Midale/Nesson Target (92% in Target)
  • vertical hole drilled to 1,373 MD'
  • KOP in the Triassic Spearfish formation
  • the Mississippian lower Midale target top was drilled at 6,490' MD / 5,923' TVD
  • TD on November 3, 2018
  • TD was projected to be 8,880.04' 
  • [0.04' = 0.48 inch]
  • average background gas, 450 units
  • connection gases as high as 3,800 units
  • "prepared for an anticipated hydraulic frac job to enhance, then produce, the moderately tight porosity / permeability observed in the Midale/Nesson target

Six Wells Coming Off Confidential List Today -- May 9, 2019

Game changer: Delta testing in-flight free wi-fi. This is obviously going to happen: free in-flight wi-fi.

TransMountain: Canada will announce its decision "next month." If as expected, Canada greenlights the pipeline, another year will be lost; they cannot lay the pipeline during the winter; this also gives the opposition six to nine months to prepare for organized protests; don't hold your breath on this one.

Anadarko: Chevron cedes the deal to OXY. Probably how it should have worked all the while. OXY and Anadarka had been in talks off and on for three years. Finally Chevron says "enough already." Makes a big with a consolation prize of $1 billion. OXY finally came to terms with Anadarko and Warren Buffett. 

Jobless claims, link here:
  • prior: 230K
  • consensus: 215K
  • actual: 228K 
  • change from previous week: down 2,000
Wells coming off the confidential list today -- Thursday, May 9, 2019: 33 wells for the month; 128 wells for the quarter
  • 34811, 685, Oasis, Aagvik 5298 41-35 15T, 50 stages; 3.96 million lbs, Banks, t11/18; cum 97K 3/19;
  • 34751, 403, Lime Rock Resources III-A, LP, Schneider 11-33-28H-143-96, 50 stages; 5.9 million lbs; Fayette, t11/18; cum 41K 3/19;
  • 34637, SI/NC, Slawson, Wolverine Federal 14-31-30TF2H, Elm Tree, no production data,
  • 33938, drl, Petro Harvester Operating Company, LLC, PTL2 4-28 164-92 C, target: Madison, Portal oil field, some production reported;
  • 33124, 1,344, Bruin E&P Operating, LLC, Fort Berthold 147-94-1B-12-13H, 55 stages, 14.4 million lbs; McGregory Buttes, t11/18; cum 107K 3/19;
  • 32508, 380, BR, CCU Mainstreet 4-1-25MBH, 32 stages; 8.58 million lbs; Corral Creek, t3/19; cum --
Completion strategies tracked here.

Active rigs:

$61.825/9/201905/09/201805/09/201705/09/201605/09/2015
Active Rigs6561492884

RBN Energy: Medallion's Midland crude oil header system and Delaware Express Shuttle.
Crude oil gathering systems are, by their very nature, growing and evolving things, especially in super-hot shale plays like the Permian. These systems typically sprout when economics and the expectation of growing production support the development of small-diameter pipeline networks to transport crude from the lease to takeaway pipes — reducing the need for truck deliveries in the process. They then are organically extended as drilling-and-completion activity expands into nearby areas. Over time, some crude gathering systems grow so large — and are so well interconnected with takeaway pipelines — that they become intra-basin header systems that allow shippers to move crude to many interconnection points, thereby providing the highest level of destination optionality. Today, we look at one such highly evolved gathering system — Medallion Midstream’s gathering/header network in the Midland Basin — and at other Medallion pipes that gather Delaware Basin crude oil.