Banfor

WASHINGTON – The U.S. Energy Information Administration reported crude oil inventories in Cushing, Oklahoma, totaled 32.9 million barrels (excluding pipeline fill and stocks in transit by water and rail) in the week ending September 10, which is a 42% decrease since the beginning of the year. Crude oil inventories at Cushing are now 26% lower than normal, based on the previous five-year (2016–2020) average for that time of year. The Cushing storage hub is the crude oil delivery point for the NYMEX West Texas Intermediate (WTI) crude oil futures contract and is home to 14% of U.S. commercial tank and underground crude oil working storage capacity.

The storage withdrawals in Cushing are consistent with high crude oil inventory withdrawals elsewhere in the United States and globally in recent months. According to the EIA’s latest Petroleum Supply Monthly, the decline of 35 million barrels (the equivalent of 1.2 million barrels per day) in June 2021 was the largest decline in U.S. crude oil inventory (including crude oil held in the Strategic Petroleum Reserve) since the agency began collecting this data in 1981. In general, inventories tend to decline when consumption exceeds production.

The 32.9 million barrels of crude oil in inventory on September 10 means Cushing had a storage capacity utilization of 43%. Before this year's decline in inventories, the most recent time that Cushing storage utilization had fallen that low was in late 2018, following disruptions on the Keystone Pipeline system (which extends from Canada through Cushing to export terminals on the Texas Gulf Coast) and after the Diamond Pipeline system (which runs from Cushing to Memphis, Tennessee) entered service.

OKLAHOMA CITY and MIDLAND, TX - Lagoon Water Midstream has closed on the acquisition of Double Drop Resources, a water management company located in the Permian basin. With ongoing support from Macquarie Infrastructure Partners, this acquisition significantly expands Lagoon's operations and establishes it as a multi-basin water management company with a presence in the heart of the Permian. Lagoon has absorbed all Double Drop employees, will maintain an office in downtown Midland, and has near-term plans to add additional disposal and water recycling facilities in the basin.

"Lagoon's acquisition of Double Drop Resources is a key part of our continued growth strategy as we enter the Permian Basin. The strategic decision to have a multi-basin presence strengthens the portfolio and builds upon our platform to sustainably offer full-cycle water management solutions," said Kevin Lafferty, President and CEO of Lagoon Water Midstream. As the company expands into a new basin, it will continue to operate and grow its core footprint in the Anadarko Basin, where the company's market share has grown rapidly as rigs continue returning to the Mid-continent.

In the past year, Double Drop Resources has commissioned three new disposal wells with a fourth under construction, all connected by a large diameter trunkline in Midland and Martin Counties. Additionally, the Double Drop assets are capable of sourcing over 300,000 barrels per day of water for completion operations, and Lagoon plans to invest in continued growth of its sourcing capability by installing recycling facilities. John Mahaffey, CEO of Double Drop Resources stated, "I am proud of our dedicated team which has doubled our produced water volumes since January, and we anticipate volumes will double again over the next 12 months. As we enter the next phase of growth, we are excited to join Lagoon and leverage the team's technical and management experience in sustainable water management."

"Lagoon has established itself as a leading water management company in Oklahoma. We are excited to bring to the Permian basin our track record of customer support, industry-leading safety culture and performance, and operational excellence," said Caitlyn Jackson, Chief Commercial Officer. "This acquisition is a significant and positive step for Lagoon by not only expanding our operational footprint but also increasing our role in the stewardship of water resources."

Lagoon Water Midstream enters Permian with Double Drop Resources acquisition