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Private Equity Investment Flows Into Bakken Water Handling, Disposal Operations

Texas-based private equity firm Tailwater Capital LLC has expanded its energy-focused investments into the Bakken Shale in North Dakota with an $80 million investment in the fluids management portion of the play such as water handling and saltwater disposal.

Founded in 2013 by Edward Herring and Jason Downie, Tailwater Capital manages $1.6 billion in equity capital, more than $700 million of which is available for new investments, such as the Bakken. It has had a Texas focus in its first years of operation but is now looking at all shale plays, according to Joel Fry, a principal with the Dallas-based firm.

Its $80 million in the Bakken goes to Goodnight Midstream (formerly 1804 Operating) to expand its footprint in North Dakota, according to CEO Patrick Walker. "Goodnight plans to pursue larger development projects and acquisitions," Walker said.

Fry said the firm is "interested in controlling midstream investments across all major North American shale plays. We have the most familiarity with Texas basins given our investment track record but have recently entered the Bakken based upon investment strategies particular to that basin," Fry told NGI's Shale Daily on Tuesday. He emphasized that water handling is an attractive area in the Bakken.

"In the upstream; we are currently investing through two nonoperated working investment funds of capital.”

Like Tailwater, headquartered in Dallas, Goodnight Midstream is thinking about expanding its water handling and salt water disposal services beyond the Bakken by entering the market in Texas. Goodnight has 150 miles of saltwater gathering pipelines and 16 disposal facilities in North Dakota.

Goodnight Midstream's previous name was tied to the Bakken; the 1804 reference was to a highway in western North Dakota that is synonymous with the state's principal oil/gas region.

The fluids services company "provides trusted water handling and salt water disposal solutions to oil/gas clients in high-growth areas of North America," said a Tailwater spokesperson.

"The committed capital will be used to further develop water gathering and disposal facilities in North Dakota, and to fund Goodnight's expansion into Texas and other regions of interest."

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