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TPG Dips Into E&P Produced Water Growth, Takes $930M Stake in Goodnight Midstream

TPG Capital said Monday it is acquiring a majority stake in Goodnight Midstream, a produced water infrastructure company that works in the Permian Basin, Eagle Ford and Bakken shales, for $930 million.

The private equity platform of global alternative asset firm TPG is buying the stakes from Tailwater Capital and private investors. The existing shareholders agreed to commit additional equity to support the continued growth of the business. With additional growth equity and proceeds from committed debt financing, the company would have access to more than $300 million.

The transaction is expected to be completed by mid-year.

“Our business is focused on building long-term innovative and cost-effective produced water solutions,” said Goodnight CEO Patrick Walker. “Our piped systems save our customers money while reducing the environmental impact of oil and gas production.”

Goodnight, which provides oilfield water management infrastructure, has more than 420 miles of dedicated produced water gathering and transportation pipelines and 50-plus saltwater disposal wells. It gathers, transports and disposes more than 350,000 barrels/day of produced water. It has more than 800,000 dedicated gross acres and 1.4 million barrels/day of permitted water disposal capacity.

“The team at Goodnight Midstream has created a differentiated approach to providing produced water services through a dynamic midstream model,” said TPG Capital partner Christopher Ortega. “As the midstream water sector continues to develop and mature, we believe the company is well positioned to emerge as a leading provider of scale. We’re excited to support the company through its next chapter of growth.”

Long an energy sector investor, Tarrant Capital IP LLC, aka TPG, two years ago formed blank check explorer TPG Pace Energy Holdings, which is run by former long-time Occidental Petroleum Corp. CEO Steven Chazen. TPG has also partnered with other U.S.-based energy teams, including Discovery Midstream Holdings LLC, EnLink Midstream, Jonah Energy LLC, MI Energy and Northern Tier Energy. TPG has also acquired assets from public corporations that include Encana Corp. and Marathon Oil Corp.

BMO Capital Markets served as financial adviser and Kirkland & Ellis LLP served as legal counsel to TPG. For Goodnight, Jefferies LLC acted as lead financial adviser and Credit Suisse Securities (USA) LLC served as joint financial adviser. Vinson & Elkins LLP served as legal counsel to Goodnight.

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