As the Permian becomes more gassy, associated gas moves from being a problem to being a profit center.  With more transport capacity to the Gulf Coast end users coming on line, the price at the WAHA Hub will increase and more oil companies will be looking to take advantage.

Excerpt:  https://rbnenergy.com/rhinestone-cowboy-vaquero-midstream-breaks-in...

Vaquero Midstream — a portfolio company of Yorktown Partners, a private equity firm that also backs Momentum Midstream — on April 29 announced plans for two major expansions to its Delaware network:

• A 70-mile, 24-inch-diameter, high-pressure pipeline (dashed light-green line in Figure 1 above) that will run from a connection to Vaquero’s existing high-pressure line in Loving County to its Caymus processing complex. The new pipeline, scheduled to enter service by the end of this year, will increase the capacity of the company’s gathering system to about 800 MMcf/d from the current 400 MMcf/d. The new pipeline will alleviate hydraulic constraints on the northern end of Vaquero’s gathering system as customers continue to grow production in northern Reeves and Loving counties, TX, over the next few years.
• Caymus III, a new 200-MMcf/d gas processing plant that will increase Vaquero’s total processing capacity by half, to 600 MMcf/d. The new plant is slated to come online in March 2026.

• The new high-pressure pipeline will debottleneck Vaquero Midstream’s gathering system, leaving it well-positioned to transport increasing volumes of gas from the northern end of the Texas portion of the Delaware Basin to the Waha area. In turn, Caymus III will enable Vaquero to process those incremental volumes. The company noted that both projects will be supported by a portion of a $400 million credit facility the company secured earlier last month.
• The expansion projects were, as you’d expect, spurred by ever-rising crude oil and associated gas production in the Delaware, a basin whose gas-to-oil ratio (GOR) is higher than the Midland and therefore requires a lot of gas processing capacity. As shown by the stacked layers in Figure 2 below, gross gas withdrawals (natural gas, other gases and NGLs) in the three-county area served by Vaquero’s gathering system — Loving, Reeves and Ward counties — increased by more than 2.5X over the past seven years, from less than 2.2 Bcf/d in 2018 to 5.7 Bcf/d at the end of 2024.