SAN FRANCISCO & THE WOODLANDS, TexasGolden Gate Capital, a leading private equity investment firm, on April 15 announced the formation of Stonehill Environmental Partners, led by CEO Jay Parkinson, a long-time energy industry veteran and former Golden Gate Capital Operating Executive.

Golden Gate Capital also announced the acquisition of the assets of Waterfield Midstream, a provider of midstream infrastructure solutions in the Permian Basin. Waterfield Midstream currently services Martin County in the Midland Basin behind long-term acreage dedication contracts with permitted disposal capacity of approximately 250,000 barrels per day (bbl/d). The addition of the Waterfield Midstream assets, which will be rebranded as Stonehill and integrated into the company, marks the first acquisition in the Stonehill platform.

Stonehill provides energy infrastructure solutions to the upstream energy industry by designing, building, owning and operating fixed water pipeline, recycling and disposal assets that maximize efficiency and reduce the environmental footprint for oil and gas industry customers’ operations. The company will pursue both organic and inorganic growth strategies to facilitate scale expansion. M&A opportunities will include standalone assets, as well as monetizing existing E&P-owned water infrastructure assets, providing E&P companies the opportunity to re-deploy capital to core drilling and completion activities.

“We are excited for the opportunity to once again partner with Dave Thomas and the rest of the terrific Golden Gate Capital team as we look to aggressively build out a larger water midstream pipeline and disposal system,” said Parkinson. “We are confident that Golden Gate Capital’s industry expertise and commitment to continued investment in both inorganic and organic growth opportunities will help establish Stonehill as a leader in providing environmentally friendly, efficient water solutions.”

“We have an outstanding relationship with Jay and the highly-respected Stonehill team, and are delighted to work with them again,” said Dave Thomas, a managing director at Golden Gate Capital. “Jay and his team have a tremendous track record of building water infrastructure solutions for the oil and gas industry, and with Waterfield Midstream as Stonehill’s flagship investment, we look forward to helping develop this environmentally-minded platform to meet E&P companies’ evolving needs.”

Parkinson and Golden Gate Capital have a strong history of success with a prior venture, Hillstone Environmental Partners. Established in 2015, Hillstone designed, built, owned and operated an interconnected water gathering, recycling and disposal system in the heart of the Permian Delaware Basin in Loving and Lea counties with total pipeline capacity of 680,000 bbl/d and permitted capacity of 1,265,000 bbl/d. In just four years, Hillstone established itself as an industry-leading provider of comprehensive water infrastructure solutions, with impressive organic growth and a high-quality asset base that included long-term contracts with investment-grade E&P companies. Hillstone was sold to NGL Energy Partners LP for $600 million in October 2019.

Tudor, Pickering, Holt & Co. acted as financial adviser to Golden Gate Capital and Stonehill and Weil, Gotshal & Manges LLP served as legal counsel.

With over $19 billion in cumulative committed capital, Golden Gate Capital is differentiated by its unique perpetual fund structure, enabling the firm to make long-term investments without liquidity constraints. Golden Gate will be Stonehill’s anchor investor as it grows its infrastructure platform.