Tailwater Capital Announces Sale Of Tall Oak Midstream III To Summit Midstream Corporation

(MENAFN- PR Newswire) 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 .

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: [email protected]

John Schaufele
Managing Director, Investor Relations & Fundraising
Phone: 214-489-7043
Email: [email protected]

SOURCE Tailwater Capital

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