Luncheon – October 1, 2004

Title: A Producer’s Guide to Gathering and Processing Deals
Speaker: Chuck Sawyer, Western Gas Resources, Inc.
Publication: The Outcrop, October 2004, p. 4

A producer’s scientific success in the discovery of a new field can often turn into an economic failure if the midstream (gathering, compression & processing) and downstream (interstate pipelines) aspects of gas transportation are ignored. Midstream costs must be considered in any exploratory project. These costs will result in a decrease (sometimes significant) of the dollar netback to the wellhead. The structure of gathering & processing contracts is important to maximize the wellhead netback value. Specific examples of midstream costs and values associated with various processing contracts will be presented.