Red Fork enters East Oklahoma gas agreement

JETT RINK: Oklahoma-based ASX-listed Oil & Gas exploration and production company Red Fork Energy has agreed to purchase gas currently being produced by a neighbouring operator in the shallow Woodford shale gas project in Wagoner County.

The agreement was reached through Red Fork’s wholly owned mid-stream subsidiary EastOK Pipeline.

Under the terms of the agreement, EastOK will transport, process and sell approximately two million cubic feet of gas per day from this project.

In consideration of this, EastOK will recover its costs and generate a margin by retaining a percentage of the gas from this stream for sale.

This gas will be added to the stream currently being produced by Red Fork from its East Oklahoma South project.

It will be processed, compressed and transported to sales via EastOK’s existing Wagoner ‘A’ facilities.

EastOK has already built and commissioned the required gathering and transportation infrastructure and has already commenced receiving gas under the agreement.
 
“This agreement is an important step in the development of Red Fork’s mid-stream business,” Red Fork Energy managing director David Prentice said in the company’s announcement to the Australian Securities Exchange.

“We are very pleased that EastOK has been able to secure this agreement to transport, process and sell gas from one of its neighbouring operators in Eastern Oklahoma.
 
“In the current soft pricing environment for natural gas in the United States, this agreement will improve the margins being achieved at the company’s Wagoner ‘A’ facilities by lowering unit costs as volumes are increased.

“We expect EastOK will continue to grow its mid-stream presence in Oklahoma as it expands to support all of Red Fork’s exploration and production initiatives, including at the company’s Mississippian holdings in the northern part of the State.”