DALLAS, Oct. 1, 2024
/PRNewswire/ -- Tailwater Capital LLC ("Tailwater"), an energy and
environmental infrastructure private equity firm, today announced
that it has entered into definitive agreements with Summit
Midstream Corporation (NYSE: SMC) ("Summit", "SMC" or the
"Company") and its wholly owned subsidiary Summit Midstream
Partners, LP (the "Partnership"), whereby Summit will acquire Tall
Oak Midstream Operating, LLC and its subsidiaries (collectively,
"Tall Oak" or "Tall Oak Midstream III") for a total consideration
of approximately $450 million.
Consideration is comprised of $155
million in cash, approximately 7.5 million shares of a
combination of SMC Class B common stock and common units of the
Partnership (in an Up-C structure), representing approximately 40%
ownership in the pro forma company, and up to $25 million contingent consideration in cash over
certain measurement periods through March
31, 2026.
The transaction is expected to close in the fourth quarter of
2024, subject to customary closing conditions, shareholder approval
and regulatory approvals. Upon closing, four directors appointed by
Tailwater Capital will serve on the pro forma Summit Board.
Tall Oak is a leading, large-scale gas gathering and processing
system in the Arkoma Basin
comprised of two 220 million cubic feet per day ("MMcf/d") natural
gas processing plants and approximately 244 miles of low-pressure
natural gas gathering lines, 167 miles of high-pressure natural gas
gathering lines and 65,000 horsepower of field and plant
compression.
"This transaction represents a unique opportunity to partner
with the Summit organization to support the long-term growth and
value creation initiatives already underway at the Company," said
Jason Downie, Co-Founder and
Managing Partner at Tailwater. "The Tall Oak assets are
complementary to Summit's existing gas portfolio, and we believe
the Company is well positioned to drive even more value for
shareholders over the coming years."
"Our entire Tall Oak team has done an exceptional job delivering
high-quality service while prioritizing reliability and safety, and
I am confident that the Summit team will continue to execute and
capitalize on new and exciting opportunities in the Arkoma Basin," said Ryan Lewellyn, President and Chief Executive
Officer at Tall Oak Midstream. "Tailwater has been an invaluable
partner for our business, and we are excited to continue to work
with Tailwater, not only on the transition of Tall Oak to Summit
but also on future potential projects under the Tall Oak name."
Advisors
TPH&Co., the energy business of Perella
Weinberg Partners, served as exclusive financial advisor to
Tailwater Capital. Kirkland & Ellis LLP served as legal advisor
to Tall Oak Midstream and Tailwater Capital. Guggenheim Securities,
LLC served as financial advisor and Locke Lord LLP served as legal
advisor to Summit.
About Tailwater Capital
Dallas-based Tailwater Capital is an energy
and growth infrastructure private equity firm with a
well-established track record of working constructively with proven
management teams to deliver value-added solutions. Tailwater has
raised more than $4.7 billion in
committed capital since inception and the team has executed more
than 180 transactions representing over $26
billion in value. For more information, please visit
www.tailwatercapital.com.
About Tall Oak Midstream III
The Tall Oak Midstream
assets, located in central Oklahoma, are comprised of two 220 MMcf/d
natural gas processing plants, approximately 244 miles of
low-pressure natural gas gathering lines, approximately 167 miles
of high-pressure natural gas gathering lines and approximately
65,000 horsepower of field and plant compression.
The gathering agreements for the Tall Oak system include
long-term, fee-based contracts with a weighted average term of
approximately 13 years. Volume throughput on the Tall Oak system is
underpinned by acreage dedications, with an estimated 315,000
leased acres from its key customers. The dedicated acreage spans
highly productive, rich gas areas within the Arkoma Basin, with producers primarily
targeting the Woodford formation.
About Summit Midstream Corporation
SMC is a
value-driven corporation focused on developing, owning and
operating midstream energy infrastructure assets that are
strategically located in the core producing areas of unconventional
resource basins, primarily shale formations, in the continental
United States. SMC provides
natural gas, crude oil and produced water gathering, processing and
transportation services pursuant to primarily long-term, fee-based
agreements with customers and counterparties in four unconventional
resource basins: (i) the Williston
Basin, which includes the Bakken and Three Forks shale formations
in North Dakota; (ii) the
Denver-Julesburg Basin, which includes the Niobrara and Codell shale formations in
Colorado and Wyoming; (iii) the Fort Worth Basin, which includes the Barnett
Shale formation in Texas; and (iv)
the Piceance Basin, which includes the Mesaverde formation as well
as the Mancos and Niobrara shale formations in Colorado. SMC has an equity method investment
in Double E Pipeline, LLC, which provides interstate natural gas
transportation service from multiple receipt points in the
Delaware Basin to various delivery
points in and around the Waha Hub in Texas. SMC is headquartered in Houston, Texas.
Contacts
Jill McMillan
Managing Director, Communications & Public Affairs
Phone: 214-489-7047
Email: jmcmillan@tailwatercapital.com
John Schaufele
Managing Director, Investor Relations & Fundraising
Phone: 214-489-7043
Email: jschaufele@tailwatercapital.com
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SOURCE Tailwater Capital
