American Oil and Gas Reporter - January 2021 - 14

IndustryDigest
Court Rules Against
Railroad Commission's
Emergency Orders
AUSTIN, TX.-A state judge has
ruled that the Texas Railroad
Commission must not enforce
emergency orders it implemented last
spring to help oil and gas companies
survive last spring's commodity price
swoon.
According to published reports,
District Court Judge Jan Soifer decided
the commission failed to provide
adequate public notice of the orders
under consideration, for which
advocacy group Public Citizen sued the
RRC. The commission appealed the
ruling and is no longer considering it
in effect.
Those emergency measures, which
the RRC adopted at its May 5 meeting,
include:
· Extending well-plugging
deadlines from one to two years;
· Allowing crude oil storage in
formations other than salt;
· Waiving fees and surcharges on a
variety of filings; and
· Extending deadlines for various
administrative approvals.
These items are among the
recommendations the commission
received and approved from the " blue
ribbon task force for oil economic
recovery " it formed at its April 21, 2020
hearing (AOGR, May 2020, pg. 26).
Press accounts indicate Public
Citizen has expressed plans to seek a
court order that will force the RRC to
comply with the ruling before RRC's
appeal is resolved. ❒

Diamondback Energy,
QEP Resources
Reach Merger Agreement
MIDLAND-Diamondback Energy
Inc. and QEP Resources have entered a
definitive agreement under which
Diamondback will acquire QEP in an
all-stock transaction valued at $2.2
billion.
According to the companies, the
transaction:
· Expands Diamondback's material
Tier-1 Midland Basin inventory;
· Is accretive to all relevant 2021
per share metrics, including cash flow
per share, free cash flow per share and
14 THE AMERICAN OIL & GAS REPORTER

leverage, before accounting for
synergies;
· Lowers the company's 2021
reinvestment ratio and enhances its
ability to generate free cash flow, delever and return capital to stockholders;
· Creates significant, tangible
annual synergies of at least $60 million$80 million;
· Appears likely to maintain
Diamondback's investment grade status;
and
· Will prompt Diamondback to
allocate a significant majority of its
capital to the Northern Midland basin.
" The acquisition of QEP checks
every box of Diamondback's corporate
development strategy, " affirms
Diamondback Chief Executive Officer
Travis Stice. " Diamondback does not
need to participate in industry
consolidation to simply get bigger. We
participate in corporate development
opportunities we firmly believe will
increase the long-term value of our
stockholders' investment. "
The companies say the consideration
consists of 0.05 shares of Diamondback
common stock for each share of QEP
common stock, representing an implied
value to each QEP shareholder of $2.29
a share based on the closing price of
Diamondback common stock on Dec.
18, 2020. ❒

Summit Midstream Partners
Says FERC OKs Double E
HOUSTON-Summit Midstream
Partners LP reports that Double E
Pipeline LLC, a joint venture in which
SMLP owns a 70% equity interest and
serves as operator, has received Federal
Energy Regulatory Commission approval of its application to construct
and operate the Double E Pipeline project, pursuant to Section 7(c) of the Natural Gas Act.
Upon completion, the new Double
E interstate natural gas pipeline will
provide up to 1.35 million dekatherms
of firm transportation service from the
Delaware Basin in Southeast New
Mexico and West Texas to delivery
points near Waha in Reeves and Pecos
Counties, Tx. Upon fulfilling certain
remaining requirements, including finalizing a right-of-way grant from the
U.S. Bureau of Land Management and
filing an implementation plan with
FERC, Double E says it expects to re-

ceive FERC's notice to proceed with
construction.
Summit President, Chief Executive
Officer and Chairman Heath Deneke describes the FERC approval as an important milestone in the Double E
Pipeline's development. " SMLP continues to focus on developing this worldclass project on schedule and under
budget in a safe and efficient manner, "
he relates. " Due to the efforts of the
hard-working men and women developing this project to lock in costs and capture value, the total cost to complete
Double E is now tracking approximately 15% below original budget established at FID in June 2019. We are in
the process of finalizing third-party financing for substantially all of SMLP's
remaining Double E capital obligations
and we expect to secure financing concurrently with receipt of FERC's notice
to proceed with construction. "
❒

EDC Invests $16 Million
In Poker Lake Project
ARLINGTON, TX.-U.S. Energy
Development Corp. (EDC) says it has
invested $16 million in the nine-well
Poker Lake horizontal development
project in Eddy County, N.M. The
development, which EDC says targets
the Wolfcamp Shale, is operated by XTO
Energy. Initial production from the $97
million project is expected in early 2021.
" The Poker Lake project is located in
an Opportunity Zone, which is attractive
because of the additional tax incentives
offered in those areas, " points out EDC
Chairman and Chief Executive Officer
Jordan Jayson. " Our team is focused on
providing our investors and institutional
partners with excellent investment
opportunities. We are looking forward to
working on this project and expanding
our footprint in the Permian Basin. "
EDC says it has deployed more than
$93 million in the Permian Basin in the
last 12 months and continues to
evaluate further expansion in the area.❒

Industry Coalition
Launches Program
To Reduce Flaring
WASHINGTON-Oil and gas
industry air quality coalition The
Environmental Partnership has launched

American Oil and Gas Reporter - January 2021

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