Tailwater Capital to Acquire NorTex Midstream Partners

DALLAS, Feb. 17, 2021 /PRNewswire/ -- Tailwater Capital LLC ("Tailwater" or the "Firm"), a private equity firm based in Dallas, today announced that it has signed a definitive agreement to acquire NorTex Midstream Partners, LLC ("NorTex" or the "Company"), an independently owned Houston-based natural gas storage and transportation company. Financial terms of the transaction were not disclosed.

Founded in 2007, NorTex provides revenue optimization and asset reliability solutions for utilities and power generation facilities in North Texas through strategically located natural gas storage and transmission. The Company operates the largest portfolio of non-utility gas storage facilities in North Texas. NorTex's asset base includes 36 Bcf of depleted reservoir working gas capacity, 83 total miles of natural gas transportation pipelines, as well as the Tolar Hub – the largest natural gas hub in North Texas. NorTex's storage facilities have operated consistently for nearly 60 years, serving as critical infrastructure for the greater Dallas-Fort Worth market.

Following the close of the transaction, which is subject to customary regulatory and closing conditions, NorTex will retain its headquarters in Houston, its three field operation sites and will continue to be led by the current management team, including Chief Executive Officer John Holcomb, Chief Financial Officer Reed Hatch and Chief Operating Officer Kurt Haaland.

The acquisition of NorTex provides Tailwater with highly strategic storage infrastructure located adjacent to both the Dallas-Fort Worth metropolitan region and key inbound gas supply pipelines. As the population of the DFW metroplex continues to grow, so too will the need to deliver reliable power throughout the day. With more intermittent renewable sources being added to the grid, thermal generation will be critical to deliver power at a moment's notice during periods of renewable intermittency. NorTex is well-positioned to facilitate that call on thermal power generation in North Texas and service the critical infrastructure necessary to provide reliable electricity to the North Texas market.

"As demand for high-deliverability natural gas storage continues to grow in the North Texas region, we are thrilled to partner with such a sophisticated team of infrastructure experts and operators in Tailwater, who intimately understand our business and the natural gas needs in North Texas," said Mr. Holcomb. "The Tailwater team shares our long-term vision and ambition for NorTex. As we leverage our unmatched track record with customers and continue enhancing our capabilities to better serve our customers, we are confident that we will build on our reputation in the market as the preeminent natural gas storage and transportation provider in the Dallas-Fort Worth region."

"NorTex and its facilities have served as an irreplaceable component of the North Texas power grid for nearly 60 years, with a long track record of consistently meeting the power generation supply needs of its customers and the residents of the Dallas-Fort Worth region," said Edward Herring Co-Founder and Managing Partner of Tailwater Capital. "As demand accelerates and renewables continue to play a growing role in the evolution of the North Texas power grid, intermittency will continue to present an ongoing challenge. We are excited to work with John and the management team to step up and play a key role in the energy transition process through NorTex's unrivaled storage capabilities, and we look forward to working together to strategically grow the business and position it for continued and sustainable success."

Kirkland & Ellis served as legal counsel to Tailwater Capital in connection with the transaction. Jefferies LLC acted as exclusive financial advisor representing NorTex and NorTex's parent company, Castleton Commodities International LLC ("CCI"). Eversheds Sutherland served as legal counsel to NorTex and CCI in connection with the transaction.

About Tailwater Capital, LLC

Dallas-based Tailwater Capital is a growth-oriented energy private equity firm with a well-established track record of working constructively with proven management teams to deliver value-added solutions. Tailwater currently manages more than $3.7 billion in committed capital and the team has executed more than 100 energy transactions in the upstream and midstream sectors representing over $20 billion in transaction value. For more information, please visit www.tailwatercapital.com.

About NorTex Midstream Partners, LLC

Houston-based NorTex Midstream Partners is one of the largest independently owned developers and operators of high-deliverability, multi-cycle natural gas storage capacity in the United States. NorTex owns and operates over 36 Bcf of gas storage capacity. NorTex assets have multiple interconnections with several major pipeline systems serving the North Texas energy markets with gas supplies sourced from the Permian Basin, the Barnett Shale and the emerging SCOOP/STACK play in Oklahoma. Visit NorTex at www.nortexmidstream.com to see how we deliver midstream value.

Contacts

Jonathan Keehner / Julie Hamilton
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449

SOURCE Tailwater Capital LLC