TEAK Midstream Opens Operation of Major Nat-Gas Processing Plant; Executes Deal with Comstock

TEAK Midstream, L.L.C. announced the company has begun operation of more than250 miles of natural gas gathering and residue delivery pipelines and theadjoining Silver Oak 200 million cubic feet per day (MMcf/d) cryogenic gasprocessing plant in South Texas to better serve gas producers operating in theEagle Ford Shale play and surrounding area. TEAK also announced it recentlyexecuted long-term gathering and processing agreements with ComstockResources, Inc. (NYSE: CRK) and another major Eagle Ford Shale producer thatsupport the facilities. TEAK had signed contracts with anchor shippersTalisman Energy USA Inc. and Statoil Natural Gas LLC earlier this year, aspreviously announced. TEAK plans to expand the gas processing capacity on itssystem by 200 MMcf/d by the first quarter of 2014 based on volume commitmentsto date and increasing demand to process liquids-rich gas from the Eagle Fordplay, as well as from the Buda, Pearsall, Olmos and Escondido formations.Early indicators of the Silver Oak plant's operational performance show thatthe facility is capable of generating some of the highest recoveries ofnatural gas liquids (NGL) from producers' gas streams in South Texas. SilverOak, located near the community of Pettus, is equipped with state-of-the-arttechnology and equipment designed specifically to handle higher concentrationsof liquids-rich gas.TEAK's new facilities include two inlet high-pressure gas gathering systems.One system consists of 178 miles of 24-inch and 16-inch diameter pipeline witha capacity of approximately 600 MMcf/d. This system originates in DimmitCounty on the western edge of the Eagle Ford play and moves rich gasproduction east through Webb, La Salle, McMullen and Live Oak counties toTEAK's Silver Oak plant in Bee County. TEAK jointly owns this gathering systemwith TexStar Midstream. The second system consists of 22 miles of 20-inchdiameter pipeline with a capacity of approximately 400 MMcf/d. This TEAK-ownedgathering system moves rich gas production from the prolific Karnes Countyarea to the Silver Oak plant.TEAK's new pipeline system also includes approximately 57 miles of 20-inchdiameter residue gas pipeline that will deliver dry gas from the Silver Oakplant to six major downstream intrastate and interstate pipelines – TennesseeGas Pipeline, Channel, Kinder-Tejas, Transco, Texas Eastern and NGPL.Additionally, TEAK has constructed approximately three miles of 12-inchdiameter NGL pipeline that transport liquids recovered at the Silver Oak plantto the DCP Sand Hills NGL pipeline. The Sand Hills pipeline ultimatelydelivers NGL to the Mont Belvieu fractionation complex and other fractionationfacilities along the Gulf Coast.