Bakken is US divestiture hot spot

Author Manash Goswami

North Dakota’s Bakken region has become a hotspot for US independents looking to sell midstream assets such as pipelines to shore up their balance sheets to fund core drilling programs.

North Dakota’s Bakken region has become a hotspot for US independents looking to sell midstream assets such as pipelines to shore up their balance sheets to fund core drilling programs.

Bakken producers are under more pressure from shareholders to sign midstream divestments. That’s in part because regional infrastructure constraints and a longer distance from major refining and storage hubs have kept Bakken crudes at a steep discount to benchmark US WTI.

Hess sold a 50pc stake in its Bakken midstream assets to Global Infrastructure Partners for $2.675bn. 

The price Hess fetched was above expectations, which may prompt fellow Bakken producer Whiting Petroleum to proceed with a proposed divestiture of its gas processing plants there. Whiting paid $3.8bn to acquire Kodiak last year to become the biggest Bakken producer.

Oasis Petroleum said it is looking at options to monetize its Bakken water disposal unit, Oasis Midstream Services.

Kinder Morgan kicked off a string of US mega-midstream deals in January when it bought Bakken pipeline company Hiland Partners from founder and Continental Resources chief executive Harold Hamm for $3bn.

Other producers are also shedding midstream assets. Pioneer and India's Reliance Industries sold their Eagle Ford shale condensate and natural gas gathering joint venture to Enterprise Products Partners for $2.15bn.

For more information, please contact OilBlog@argusmedia.com

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