Tailwater commits $1.1 billion to expand Producers Midstream II network

In a move that strengthens the midstream sector’s future, Tailwater, a private investment firm, has invested $1.1 billion in Producers Midstream II, a leading provider of midstream solutions in New Mexico, Texas, and Oklahoma. The company noted that as energy demand is on the rise, more projects will need substantial investments to reach maximum capacity. Tailwater is an essential investment company in the energy sector and has the potential to positively affect several projects, thereby affecting thousands of people’s employment.

Tailwater Capital closes on a substantial investment in Producers Midstream, strengthening the midstream sector

The reports emerging from the region state that Tailwater has announced it has approximately $500 million of equity capital commitments in Midstream. Additionally, the company noted that an investment also includes a separate equity commitment from the newly formed Tailwater Fund V. Both the continuation vehicle and Fund V commitments include a substantial primary equity component to support the Company’s growth across its asset footprint.

In conjunction with the investment, the company is also expanding its senior secured credit facility from $400 million to $600 million. That expanded facility enables the company to provide increased flexibility to fund development across its entire asset footprint in the region.

“Tailwater is proud to continue supporting Producers Midstream as they execute on a proven strategy and pursue new opportunities for growth. This transaction reflects the strength of the platform, the confidence of our investors, and the leadership team’s strong executional capabilities.” – Stephen Lipscomb, Partner at Tailwater Capital

Producers Midstream has a vast portfolio of operations that stretches far and wide in the region

Producers Midstream has several operations in the region, and its diverse system of gathering and processing, and long-haul assets stretches as far as the eye can see, and beyond.

The company has over 3,300 miles of pipeline and approximately 860,000 dedicated acres in the region and plans to invest in infrastructure to further strengthen its footprint in the market. One such operation is the Lea County system, which is anchored by more than 85,000 acres of long-term dedications and is positioned as a key driver in the company’s plans to boost upstream activity.

The company can take solace in the fact that several operators will be looking to do business, as Producers Midstream has a significant inventory of attractive Tier 1 locations tied to its system in the Northern Delaware Basin.

Furthermore, it has now been revealed that the company received some significant financial advice from Kirkland & Ellis regarding the new single asset continuation vehicle that extends and grows its partnership with Producers Midstream II. Even the Europeans are investing in aging infrastructure in order to provide the midstream sector with a boost.

“The closing of this capital raise marks a significant milestone for Producers Midstream, strengthening both our capital position and our ability to serve customers with flexible and creative solutions. It is a testament to the hard work of our team and the continued trust of our partners.” – Matt Flory, Chief Executive Officer of Producers Midstream

Producers Midstream has plans to expand the total processing capacity of its portfolio in the region

The Northern Delaware Basin has several large operations that aim to strengthen the United States energy market. Tariffs from the current administration have had a disastrous effect on the energy sector’s bottom line. Couple that with the ongoing negotiations that Donald Trump has stewarded between Hamas and Israel in the Gaza war, and one can understand the volatile nature of the US economy at the moment. As spot thermal prices spike amid extreme weather and supply disruptions, Producers Midstream is perfectly positioned to become a regional leader in the energy sector.