Fresh off joining the EnCap Flatrock Midstream portfolio of companies, San Antonio-based Ironwood Midstream Energy Partners LLC has set its sights on growing its South Texas operations.

Concurrent with a new $400 million equity commitment, Ironwood on Nov. 12 formed a new affiliate and also stuck a deal to acquire South Texas midstream assets currently owned and operated by a subsidiary of Twin Eagle Resource Management LLC.

Ironwood initially formed in April 2015 to develop a crude oil gathering system in West Texas, according to the company website. The system, which serves large Permian Basin operators, went into service September 2015.

In 2017, the company expanded into the Eagle Ford Shale through the acquisition of natural gas gathering assets located in Karnes and Gonzales counties, Texas, from 1776 Energy Operators LLC.

On Nov. 12, the company formed Ironwood Midstream Energy Partners II LLC supported by EnCap Flatrock, a private-equity firm formed through a partnership between EnCap Investments LP and Flatrock Energy Advisors LLC.

Ironwood II will focus on greenfield projects and acquisition opportunities in Texas. Not even a day old, the company has already entered into a binding agreement to purchase the Twin Eagle South Texas assets for an undisclosed amount.

The acquisition comprises of Twin Eagle’s Gardendale and Asherton gathering systems, which span Dimmit and La Salle counties, Texas. The systems have connections to multiple long-haul pipelines, allowing access to the U.S. Gulf Coast, Three Rivers and Houston markets, the company release said.

Together the systems include 137 miles of active crude oil gathering pipeline. Long-term dedications total more than 124,000 acres and interconnects include Plains All American Pipeline, Harvest Pipeline Co., NuStar Logistics LP and the upcoming EPIC Crude Oil Pipeline.

Gardendale Pipeline Asset Map (Source: Twin Eagle Resource Management LLC)
Gardendale Pipeline Asset Map (Source: Twin Eagle Resource Management LLC)

At closing of the transaction, expected in December, Twin Eagle COO Danny Rea will also join Ironwood II’s executive team as chief commercial officer. Ironwood II’s current executive team consists of Mike Williams, Justin Johnson and Josh Doramus.

Before joining Twin Eagle in 2015, Rea previously served as vice president of midstream for Anadarko Petroleum Corp. and as senior vice president and COO for Anadarko’s Western Gas Partners affiliate, now owned by Occidental Petroleum Corp.

Gibson, Dunn & Crutcher LLP served as legal adviser to Ironwood II for both the Twin Eagle acquisition and EnCap Flatrock transaction. Shearman & Sterling LLP served as counsel to EnCap Flatrock Midstream and Sidley Austin LLP represented Twin Eagle.

Onshore