The EnLink Midstream companies will receive $275 million from combined noncore asset sales and invest $100 million in 2017 to construct a new gas processing plant in the Sooner Trend Anadarko basin Canadian and Kingfisher counties (STACK) play of Oklahoma.
EnLink has agreed to divest its 31% common ownership interest in Howard Midstream Energy Partners LLC (HEP) for $190 million. Alberta Investment Management Corp. (AIMCo) and management will acquire a common ownership stake in HEP as a result of EnLink's divestiture, which follows AIMCo's preferred investment in HEP in August.
Proceeds from the sales and planned 2017 estimated at-the-market equity issuances are expected to fund a majority of the equity portion of EnLink's 2017 capital expenditure requirements, including the upcoming $250-million installment payment related to the acquisition of certain Tall Oak Midstream LLC subsidiaries (OGJ Online, Dec. 7, 2016).
In response to producer activity and well results in the STACK, EnLink is proceeding with the development of Chisholm III, a 200-MMcfd processing expansion of its existing Central Oklahoma system that is expected to be operational by yearend 2017.
Upon completion of the Chisholm III expansion, EnLink's Central Oklahoma processing capacity will total 1 bcfd, which represents nearly a three-fold increase from the 350 MMcfd of capacity operated in 2015. EnLink's Central Oklahoma platform is underwritten by long-term, fee-based contracts from major producers.
EnLink says its incremental processing capacity will also generate meaningful increases in NGLs produced from the Central Oklahoma platform, which will in turn be transported on the company's Cajun-Sibon pipeline. The NGL output increases are expected to benefit the entirety of the company's Louisiana NGL footprint and current estimates project that throughput on Cajun-Sibon will reach capacity in second-quarter 2017.