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Private Equity Invests $100M to Create New Midstream Company

Dallas-based private equity firm Tailwater Capital LLC said it will invest $100 million to create a new midstream company, Producers Midstream LP, which will focus initially on greenfield and strategic acquisition opportunities in New Mexico, Oklahoma and Texas.

Tailwater said Producers Midstream will have "a broad geographic scope," but will initially focus on various basins in the three aforementioned states. Jim Bryant, whose career in the oil and gas industry has spanned more than 50 years, will serve as CEO.

"We are thrilled to partner with the Tailwater team on this endeavor," Bryant said. "Many of the management team members, including myself, have known the partners at Tailwater for a long time. Tailwater brings a thoughtful and creative approach to oil and gas private equity that will serve Producers Midstream well."

According to Tailwater, Bryant has an extensive background in the midstream sector, specializing in the engineering, development and management of midstream facilities. He co-founded several midstream companies, including Endevco Inc., Regency Gas Services LLC and Cardinal Midstream LLC (see Daily GPIDec. 2, 2004June 16, 2003).

Tailwater said Hudson White will serve as CFO for the new company, which will also be based in Dallas. Matt Flory and Chad Choate will serve as vice presidents (VP) in charge of commercial business development, while James Hegar will serve as VP in charge of engineering and operations.

Producers Midstream management will have more than 75 years of experience in the midstream sector, which includes roles at Energy Transfer Partners, Regency Energy Partners, PVR Partners, Valerus Field Solutions and others.

Tailwater was advised by Locke Lord LLP on the transaction, while Producers Midstream was advised by Mack Matheson & Marchesoni PLLC and Stephens Inc.

Last August, in an effort to expand its presence in the Bakken Shale, Tailwater announced an $80 million investment in Goodnight Midstream (see Shale DailyAug. 25). Dallas-based Goodnight, formerly 1804 Operating, was considering expanding its water handling and salt water disposal services beyond the Bakken by entering the Texas market.

Founded in 2013 by Edward Herring and Jason Downie, Tailwater currently manages $1.6 billion in equity capital and has more than $700 million available for new investments. Tailwater has executed more than 35 energy transactions, representing more than $11 billion in transaction value. Its focus is on acquiring and growing midstream assets, and participating in non-operated upstream opportunities in select basins.

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