DALLAS, October 3, 2024 — Producers Midstream II, LLC (“Producers Midstream” or the “Company”), a portfolio company of Tailwater Capital, announced the Company is constructing a new gathering, treating, and processing system in Lea County, New Mexico. The System will be located in the core of the Delaware Basin, one of the most active oil and gas producing regions in the United States. The initial build-out will utilize existing plant, treating, and compression assets owned by the Company and is expected to be in-service by the second quarter of 2025. 

The first phase of the project includes relocating an existing 60 million standard cubic feet per day (“MMscfd”) cryogenic processing plant owned and operated by Producers Midstream, constructing an acid gas injection well (“AGI”) and installing more than 40,000 horsepower of compression equipment, all currently owned in inventory by Producers Midstream. Producers Midstream can quickly increase the capacity of the Plant to 90 MMscfd in order to support additional customers. The Company also has an additional 150 MMscfd cryogenic processing plant in inventory in the Texas Panhandle that is available for relocation to this area. 

“The construction of this system is a key part of our long-term strategy to provide scalable and efficient midstream solutions in the Delaware Basin,” said Matt Flory, President and CEO of Producers Midstream. “By strategically positioning assets and expanding capacity, we’re equipping operators with the infrastructure they need to support ongoing and future development in this rapidly growing area.”

Producers Midstream has already entered into definitive agreements with multiple parties, securing both acreage dedications and volume commitments to support the development. The Company is actively negotiating with additional operators and has the ability to expand capacity to keep pace with the aggressive drilling plans in the county.

“This phased development approach allows us to strategically repurpose existing, idle assets to an area in the Delaware basin that has significant, immediate gas infrastructure needs,” said Stephen Lipscomb, Partner at Tailwater Capital. “The Producers Midstream team is in a unique position to quickly provide their customers with solutions, but also has the capability to scale with these customers over time.”