RVRA turning focus to midstream operations in 2020?
With the 12/20 announcement of selling the Personville, East Texas upstream asset, Riviera's disposition of non-core assets is nearly complete.
They have now sold off all upstream properties except for the Anadarko Basin / NW Stack play in Oklahoma and the Ruston Field leasehold in northern Louisiana. The Anadarko play is situated in the same geographic location as Blue Mountain Midstream's operations, just a few miles northwest of their natural gas system in Canadian and Grady counties.
Riviera is in the process of completing an expansion of their crude oil gathering pipeline (the North/South Mainline) expected to be finished in H1 2020. They recently acquired Lumen Midstream, adding 50 miles of LNG pipeline and also started offering water gathering, transport and disposal services, further extending the reach of their midstream operations.
While Riviera appears to be turning much of its focus toward midstream operations, they have also continued to develop their core upstream assets, having drilled two new wells at Ruston Field and six new wells at Anadarko as of Nov. 2019. Given the push toward consolidating their operations in the Merge/Stack area of Oklahoma, don't be the least surprised if Riviera announces the sale of the N. Louisiana properties soon.
A bullet point on p.8 of the Q3 presentation about "misunderstood acreage" also hints at the possibility in 2020 of additional upstream M&A activity in the Anadarko Basin. The Merge/Stack play has disappointed lofty expectations that it would become another Permian Basin. With its inconsistent geology and multiple rock types muddling the hydrocarbons mix, many producers in the region are merging or selling their operations outright. Riviera seems to be making a stand in the area with its Anadarko basin upstream properties and given the company's strong cash position, will no doubt be looking to snap up struggling producers if the price is right.
AI
