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MarkWest Presents Operational Update

Zacks Equity Research

On Jan 30, natural gas processor and distributor, MarkWest Energy Partners LP (MWE) released an operational update, highlighting its developments in the unconventional Marcellus and Utica shale gas plays.

The market reacted positively to the news, with MarkWest shares reaching $70.57 per share in intraday trade on Jan 31, before settling at $70.19, up from the previous close of $69.66.

In compliance with its previous announcement of increasing its presence in the Northeast, MarkWest has brought online 2 fractionation projects with a total capacity of 98,000 barrels per day (Bbl/d) of C2+ and 5 cryogenic processing facilities with a total capacity of 1 billion cubic feet per day (Bcf/d). With an objective to penetrate further into the Northeast, the partnership has 17 projects underway. Upon completion, these processing and fractionation projects are expected to increase MarkWest’s total production to more than 4.7 Bcf/d and fractionation capacity to more than 400,000 Bbl/d.

Marcellus Shale Update

During the last quarter of 2013, MarkWest brought online three new processing plants at the Majorsville, Mobley, and Sherwood complexes. With these additions, the partnership now has a capacity of more than 2.2 Bcf/d in the shale.

MarkWest’s total capacity increased to 670 million cubic feet per day (MMcf/d) at the Majorsville complex, where the partnership had brought online the 200 MMcf/d Majorsville V facility, which supports production from Chesapeake Energy Corp. (CHK) and Statoil ASA (STO). The partnership’s total capacity increased to 520 MMcf/d at the Mobley complex, with the addition of the 200 MMcf/d Mobley III plant that supports production from EQT Corp. (EQT) and Magnum Hunter Resources Corp. With the addition of the 200 MMcf/d Sherwood III plant at the Sherwood complex, that supports Antero Resources Corporation’s Marcellus program, total capacity has increased to 600 MMcf/d.

With the commencement of its second de-ethanization facility, MarkWest’s purity ethane fractionation capacity doubled to 76,000 Bbl/d in December. The partnership’s Liberty Ethane Pipeline has also started operation.

Utica Shale Update

A joint venture (:JV) between MarkWest and The Energy and Minerals group, MarkWest Utica EMG started operations at the Seneca complex. The complex, in Noble County, Ohio, comprises two 400 MMcfe/d processing plants that support production from Antero, PDC Energy, Rex Energy Corp. and others.

Last month, MarkWest and its JV brought online the Hopedale fractionation and marketing complex. The partnership also brought online a pipeline that links its Marcellus and Utica NGL facilities.

Zacks Rank

Denver, Colorado-based MarkWest Energy currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in-line with the broader U.S. equity market over the next one to three months.

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