Greg Harper, President and CEO of Blue Mountain, said, “Blue Mountain is excited about the opportunity to expand its service offerings and relationship with Roan. We are pleased to have developed this project together which will provide Roan with a significant reduction in their operating expenses. Blue Mountain is committed to helping E&P companies achieve their water re-use goals with a sustainable solution to decrease fresh water consumption and waste. Our team is excited to see this project positively impact the community and the environment, including significantly reducing high volume trucking associated with Oklahoma’s oil and gas business.”
Blue Mountain plans to construct the facilities in and around its existing asset footprint in the core of the Merge and SCOOP plays. The initial water system is anticipated to consist of approximately 100 miles of produced and recycled water pipelines and is interconnected to a water treatment facility with up to 30,000 barrels per day of recycling capability. Blue Mountain is constructing and operating the system and expects to begin servicing Roan’s drilling operations in the second quarter of 2019.
Total capital expenditures for this initial water gathering system and facilities are estimated at approximately $59 million and will largely be incurred in 2019. This initial system is expected to generate material EBITDA starting in Q2 2019 for Blue Mountain and is projected to contribute an annual run-rate EBITDA of approximately $18 to $20 million by 2020 when fully commissioned. “By providing a full-service water management solution, we expect significant synergies with our design, rights-of-way, construction and operations efforts derived from our well established and expanding natural gas infrastructure,” said Mr. Harper.
With the addition of water management, Blue Mountain is enhancing its suite of midstream services to better serve its anchor customer Roan and looks to meet the operational needs of other nearby producers. Mr. Harper added, “Product and customer diversification is another step in Blue Mountain’s plan for establishing a premier midstream company focused in the Merge/SCOOP/STACK.”
ABOUT BLUE MOUNTAIN MIDSTREAM LLC
Headquartered in Houston, Texas, Blue Mountain is a full-service midstream company offering gathering, compression, processing, treating, transportation and marketing services to oil and gas producers in the Merge/SCOOP/STACK plays. Operations are primarily focused on production from the Woodford and Mississippian formations and the core Merge Shale trend in central Oklahoma. Blue Mountain is a wholly owned subsidiary of Riviera Resources, Inc.
ABOUT RIVIERA RESOURCES
Riviera Resources, Inc. is an independent oil and natural gas company with a strategic focus on efficiently operating its mature low-decline assets, developing its growth-oriented assets, and returning capital to its stockholders. Riviera’s properties are located in the Hugoton Basin, East Texas, North Louisiana, Michigan/Illinois, the Uinta Basin and Mid-Continent regions. Riviera also owns Blue Mountain Midstream LLC.
Statements made in this press release that are not historical facts are “forward-looking statements.” These statements are based on certain assumptions and expectations made by the Company which reflect management’s experience, estimates and perception of historical trends, current conditions, and anticipated future developments. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or anticipated in the forward-looking statements. These include risks relating to our ability to consummate the tender offer, financial and operational performance and results, low or declining commodity prices and demand for oil, natural gas and natural gas liquids, ability to hedge future production, ability to replace reserves and efficiently develop current reserves, the capacity and utilization of midstream facilities and the regulatory environment. These and other important factors could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. Please read “Risk Factors” in the Company’s Registration Statement on Form S-1, Quarterly Reports on Form 10-Q and other public filings. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information or future events.
Riviera Resources, Inc.