MarkWest Utica EMG - a joint venture between pipeline operator
MarkWest Energy Partners LP
) and energy infrastructure private equity fund The Energy and
Minerals Group - has entered into a deal with
PDC Energy Inc.
) - an independent energy firm.
Per the agreement, MarkWest will purvey gathering, processing,
fractionation and marketing services in Utica Shale region for
PDC Energy. Utica Shale is basically a rock unit and has a huge
potential of becoming a natural gas resource. Utica Shale
underlies parts of Kentucky, Maryland, New York, Ohio,
Pennsylvania, Tennessee, West Virginia and Virginia in the U.S.
By the end of the second quarter of 2013, MarkWest is expected to
start gathering and processing of PDC Energy's liquids-rich gas
that will be produced from Guernsey County, Ohio. The initial
production from PDC Energy's operation in the Utica Shale is
planned to be processed at Cadiz complex of MarkWest, situated in
Harrison County, Ohio.
PDC Energy's gas will then be carried to the Seneca complex for
further processing, by the second half of 2013. The Seneca
complex is based in the Noble County, Ohio.
Along with developing high-grade processing and gathering
infrastructure for PDC Energy, MarkWest also plans to finish the
installation of fractionation facility in Harrison County, Ohio,
by the first quarter of 2014. The facility is expected to have a
fractionation capacity of 100,000 barrels of liquid per day.
Denver, Colorado-based MarkWest Energy is a master limited
partnership (MLP). The firm is engaged in the gathering,
processing and transmission of natural gas, transportation,
fractionation and storage of natural gas liquids (NGLs), and the
gathering and transportation of crude oil. MarkWest Energy
Partners conducts its operations in four segments: Southwest,
Northeast, Liberty and Utica.
Acquisitions have historically played a major role in the
partnership's growth profile and are expected to remain
significant. MarkWest Energy may find it difficult to complete
accretive transactions in the future, which could negatively
impact its growth rate.
MarkWest Energy currently carries a Zacks Rank #5 (Strong Sell),
implying that it is expected to significantly underperform the
broader U.S. equity market over the next one to three
In the energy sector,
Helmerich & Payne Inc
Range Resources Corporation
) display better fundamentals and currently carry a Zacks Rank #1
HELMERICH&PAYNE (HP): Free Stock Analysis
MARKWEST EGY PT (MWE): Free Stock Analysis
PDC ENERGY INC (PDCE): Free Stock Analysis
RANGE RESOURCES (RRC): Free Stock Analysis
To read this article on Zacks.com click here.