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MarkWest Seals Deal with Antero - Analyst Blog

By: Zacks.com
Posted: 11/7/2012 4:20:00 PM
Referenced Stocks: GPOR;MWE;NGL

Denver, Colorado-based MarkWest Energy Partners L.P. ( MWE ) has agreed to render processing, fractionation, and marketing services to Antero Resources for its liquid acreage in Utica Shale play.

MarkWest will execute the transaction through the joint venture -- MarkWest Utica EMG, L.L.C. aka MarkWest Utica -- formed with private-equity group The Energy & Minerals Group ("EMG"). The operations of the joint venture include the development of natural gas gathering, transportation and processing and natural gas liquid (NGL) transportation, fractionation, as well as marketing infrastructure in the Utica shale in eastern Ohio.

Per the agreement, MarkWest Utica will set up a natural gas processing unit in Noble County, Ohio with an interim capacity of 45 million cubic feet per day (MMcf/d). The facility is expected to be fully completed in the second quarter of 2013.

The joint venture will complement this unit with a cryogenic gas processing facility of 200 MMcf/d capacity that will likely come on-line by the third quarter of 2013. A third 200 MMcf/d cryogenic processing plant will also be developed toward the end of 2013.

MarkWest Utica also intends to build a NGL gathering system as well as a fractionation and marketing complex in Harrison County, Ohio.

All the facilities together will be Utica Shale's largest fractionation and marketing complex that is slated to be entirely operational in the first quarter of 2014. The total unit will be capable of providing about 100,000 barrels per day (Bbl/d) of C2+ fractionation.

This new complex is designed to be well connected with the Marcellus Shale where MarkWest enjoys strong exposure and position.  This Harrison facility along with the complex of Houston will form the biggest fractionation complexes in the northeast that will offer high-class operating flexibility and consistency, as well as market access.

MarkWest management remains committed toward developing the resource rich holdings in the Utica Shale. The company, in early March, signed a Letter of Intent (LOI) with Gulfport Energy Corporation ( GPOR ), to construct extensive natural gas gathering infrastructure across the Harrison, Guernsey, and Belmont counties.

MarkWest shares currently retain a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock.



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