Goodnight Midstream, a leading produced water midstream infrastructure company, on Oct. 8 confirmed the closing of a significant capital investment and an incremental commitment from Tailwater Capital LLC, an energy-focused private equity firm based in Dallas, which has been an investor in the company since 2016.
Tailwater had previously agreed to sell Goodnight Midstream to TPG Capital LLC in March 2019 for about $930 million. However, Bloomberg reported the transaction had been terminated in late September.
As part of the capital investment on Oct. 8, Tailwater committed over $500 million of growth capital to support Goodnight’s strategic objectives and to allow the company to continue to expand its best-in-class service offering for its blue-chip customer base, according to a company press release.
“We are thrilled to continue our partnership with the team at Tailwater, who has added tremendous value to Goodnight over the past three years,” said Patrick Walker, CEO and co-founder of Goodnight Midstream. “This investment will provide a significant amount of equity growth capital from a trusted partner who understands that long-term growth in this sector requires a strong balance sheet. With this capital flexibility, we will continue to meet the increasing demand from our customers for scalable produced water infrastructure solutions and remain focused on providing safe, reliable and environmentally sustainable produced water logistics services to our customers.”
Goodnight is a pioneer in the produced water midstream sector, which is expected to require multi-billion dollar investments to accommodate projected volume growth in Goodnight’s basins of operation. Since receiving its initial investment from Tailwater in 2016, Goodnight has expanded its Bakken operations and entered the Delaware Basin, Midland Basin and Eagle Ford shale. Today, Goodnight’s facilities and trans-basin pipeline systems in the Delaware Basin include more than 700,000 barrels per day (bbl/d) of throughput capacity providing producers in the region with a safe and reliable solution for flow assurance.
The total Goodnight platform now consists of 500 miles of produced water pipelines with 1.6 million bbl/d of throughput capacity. The company recently signed five new long-term customer contracts in the Delaware Basin and Bakken that will assure Goodnight’s eighth consecutive year of double-digit volume growth on Goodnight-built, greenfield systems.
“As a long-standing investor in Goodnight, our focus is on helping to position the company for ongoing success,” said Jason Downie, Co-Founder and Managing Partner of Tailwater Capital. “We are excited to expand our partnership with the Goodnight team and to provide them with the capital to grow their footprint throughout North America. With a best-in-class management team, an industry-leading platform and a robust portfolio of long-term contracts, we are confident that the future is bright for Goodnight.”
The deal would create the largest pure-play northern Midland Basin E&P with a 73,000-net-acre position and 12,000 boe/d of production that is expected to more than double through 2020.
Pin Oak Energy closed a transaction with a Shell affiliate to acquire roughly 43,000 acres prospective for Utica Shale development in northwestern Pennsylvania.
Repsol will still hold a 51% stake in the block after the deal.