News

SUGAR LAND, Texas—Rangeland Energy (“Rangeland”) today announced that the largest frac sand unit train shipped to date in North America has arrived at the company’s RIO Hub located near Loving, New Mexico.

The RIO Hub is part of Rangeland’s RIO System, which serves oil and gas producers in the Delaware Basin. The record 150-car unit train carried 16,500 tons (33 million pounds) of frac sand and was powered by five diesel locomotive engines. The unit train originated in Ottawa, Illinois, and was operated by BNSF Railway Company (“BNSF”), which transferred service of the train in Clovis, New Mexico, to its short-line railway partner, Southwestern Railroad Inc. (“SWRR”), for direct delivery to the RIO Hub.

The unit train arrived on October 2 and was unloaded within 22 hours. The sand was stored at the RIO Hub and will supply an operator with a large quantity of sand for high-volume hydraulic fracture jobs in the Delaware Basin. Demand for sand in the Delaware Basin remains high, and unit train service provides a more cost-effective and reliable means of shipping large volumes of sand than manifest service.

“Despite the current pricing environment, the Delaware Basin remains an economic play, and producers operating in the region continue to require increasingly large volumes of frac sand to drill and complete their wells,” said Rangeland Executive Vice President and Chief Operating Officer Steve Broker. “Our goal is to serve the needs of our customers, and we are pleased to have the capacity and flexibility to receive this record-breaking unit train at RIO. Rangeland was able to accommodate the unit train’s arrival and unload it in a timely manner because we designed the RIO Hub to have the size and scale to meet the sand or oil market’s requirements in a way that increases efficiencies and reduces costs. We expect sand volumes to continue to increase as operators drill longer wells and complete larger fracs. We are well positioned to meet those needs at the RIO Hub.”

About the RIO System
The RIO System is a multipart system designed to support the production of crude oil and condensate in the Delaware Basin. The RIO Hub is a 300-acre rail facility located near Loving, New Mexico, in the center of the basin’s drilling and production activity. The terminal provides services for outbound crude oil and condensate and inbound frac sand. The hub, which was fully commissioned in July 2015, provides frac sand suppliers with unit train unloading, silo storage and truck loading facilities for moving large quantities into the Delaware Basin. Initial rail-to-truck transload service began in November 2014. To date the RIO Hub has received 31 unit trains and additional manifest railcars. Approximately 522,784 tons (1.05 billion pounds) of frac sand have been distributed to the region. Rangeland commissioned 26,000 tons of silo storage capacity in early August. Demand continues to be strong in the Delaware Basin, and Rangeland expects volumes to increase significantly in the months ahead. As a result, Rangeland plans to expand the RIO Hub to accommodate more than 1 million tons of frac sand per year. Rangeland also is working with crude oil and condensate customers regarding the installation of truck unloading facilities, tankage and storage services and rail and pipeline connectivity.

Now under construction, the RIO Pipeline originates at the RIO State Line Terminal located at the Texas-New Mexico border near Mentone, Texas. The terminal will serve as a crude oil gathering hub by providing storage tanks and truck unloading facilities. The RIO Pipeline will terminate at the RIO Midland Terminal, which will provide tankage and connections to various terminals and interstate pipelines serving Cushing and Gulf Coast markets. Rangeland has executed contracts with numerous shippers and expects the pipeline and the two terminals to come into service in May 2016. The RIO Pipeline will have an ultimate capacity of more than 120,000 barrels per day.

About Rangeland Energy
Headquartered in Sugar Land, Texas, Rangeland Energy was formed in 2009 to focus on developing, acquiring, owning and operating midstream infrastructure for crude oil, natural gas, natural gas liquids and other petroleum products. The company is primarily focused on emerging shale plays across North America with an emphasis on West Texas, the Gulf Coast, California and Canada. Rangeland successfully developed the COLT system in North Dakota’s Bakken Shale and sold the system in 2012. The Rangeland team represents more than 150 years of combined midstream experience and is backed by an equity commitment from EnCap Flatrock Midstream. 

About EnCap Flatrock Midstream
EnCap Flatrock Midstream provides value-added private equity capital to proven management teams focused on midstream infrastructure opportunities across North America. The firm was formed in 2008 by a partnership between EnCap Investments L.P. and Flatrock Energy Advisors. Based in San Antonio with offices in Oklahoma City and Houston, EnCap Flatrock is led by Managing Partners William D. Waldrip, Dennis F. Jaggi and William R. Lemmons Jr. The firm manages investment commitments of nearly $6 billion from a broad group of institutional investors. EnCap Flatrock is currently making commitments to new management teams from EFM Fund III, a $3 billion fund. www.efmidstream.com.