TPG Capital to pay $930m for majority stake in Goodnight Midstream

Private equity firm TPG Capital will acquire a majority stake in Goodnight Midstream for approximately $930 million from Tailwater Capital and private investors...
Private equity firm TPG Capital will acquire a majority stake in Goodnight Midstream for approximately $930 million from Tailwater Capital and private investors. The agreement includes additional equity capital which, when combined with committed debt financing, totals $300 million to fund continued expansion. The deal should be closed by the end of the second quarter 2019. Tailwater Capital will retain a significant minority investment.
Goodnight Midstream announced back in February that it put two trans-basin pipelines totaling 600,000 barrels of produced water per day of throughput capacity into commercial service. The Llano gathering system serves Lea County, New Mexico and the Rattlesnake pipeline serves Goodnight’s customers in Ward County, Texas. They run 45 miles to 3 disposal facilities and 25 miles to an undisclosed number of facilities, respectively. Both systems have planned expansions on the books for 2019.
A press release from Tailwater Capital stated that the recapitalization of Goodnight Midstream will help provide the means for achieving ambitious growth objectives. Goodnight Midstream CEO Patrick Walker declined to comment on the transaction or future strategies until its financial close at that time.
Gabe Collins, Baker Botts Fellow in Energy & Environmental Regulatory Affairs at Rice University’s Baker Institute, told Water in Oil this was likely the second of many rounds of private equity moving into the space and investments changing hands. Collins said, “It shows that despite many private equity firms’ growing concern about the near-term profit potential of unconventional oil and gas assets, the hunger for exposure to oilfield water remains strong.”
Goodnight Midstream’s produced water gathering and transportation pipelines now total over 420 miles and include more than 50 disposal wells. The company moves 350,000 barrels of produced water per day and have 1.4 million barrels per day of permitted disposal capacity.
TPG is a global asset firm managing $103 billion of assets in 9 countries. Tailwater Capital is an energy focused private equity firm managing $2.7 billion in invested capital and has executed over 100 transactions in the upstream and midstream sectors for a total of $19 billion.



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