DALLAS, September 8, 2022 — Tailwater Capital, LLC (“Tailwater”), a private equity firm that takes a full immersion approach to investing in energy and growth infrastructure solutions, today announced that it has entered into a definitive agreement to sell NorTex Midstream, LLC (“NorTex” or the “Company”) to Williams Field Services Group, LLC (“Williams”), a subsidiary of The Williams Companies, Inc. (NYSE: WMB) for a $423 million purchase price.
Tailwater acquired NorTex in February 2021, shortly after Winter Storm Uri hit Texas. As one of the only operational natural gas storage facilities supplying the North Texas region during the storm, the Company played a pivotal role supporting natural gas power generators and utilities. NorTex delivered more than 5 Bcf of natural gas to its customers and provided enough natural gas to heat and power approximately 380,000 homes, saving customers more than $800 million or the equivalent of over $2,100 per household.
Today, the Company operates the largest portfolio of non-utility gas storage facilities in North Texas and has considerably expanded its natural gas deliverability capabilities over the last 18 months. Since partnering with Tailwater, the Company has also improved the reliability of the North Texas power grid by executing agreements to directly connect and supply natural gas to some of the area’s largest power plants. 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.
“We are pleased to have partnered with NorTex and to have played a role in enhancing the Company’s ongoing efforts to provide the highest quality energy storage needs for customers across North Texas,” said Edward Herring, Co-Founder and Managing Partner of Tailwater Capital. “The partnership exemplifies Tailwater’s approach to working alongside best-in-class management teams and leveraging our operational expertise to accelerate growth, unlock value and support the transition to a low-carbon economy.”
“When we partnered with NorTex in February 2021, we did so with the conviction that the energy transition would require thermal generation to deliver power at a moment’s notice during periods of renewable intermittency,” said Stephen Lipscomb, Partner at Tailwater Capital. “That conviction was tested immediately with Winter Storm Uri, and NorTex delivered on its reputation of reliability, flexibility and high-quality solutions for customers. We believe the Company is better positioned than ever to provide critical, dependable natural gas to power the North Texas market as the Company enters its next phase of strategic growth.”
“Tailwater shared our vision and deeply understood the essential role our infrastructure plays in today’s evolving market,” said John Holcomb, President and CEO of NorTex. “That alignment allowed us to work together to have an immediate and substantive impact, and position our business for long-term, sustainable success as the partner of choice and premier provider of dependable natural gas storage services in the greater Dallas-Fort Worth region. I would like to thank the entire Tailwater team for their support, and I look forward to our next chapter with the Williams team.”
Kirkland & Ellis LLP served as legal counsel to Tailwater and NorTex in connection with the transaction. Davis Polk & Wardwell LLP served as legal counsel for Williams. Wells Fargo Securities, LLC acted as exclusive financial advisor to Tailwater and NorTex. BofA Securities served as financial advisor to Williams.
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 $3.8 billion in committed capital and the team has executed more than 100 energy transactions in the upstream and midstream sectors representing over $22 billion in transaction value. For more information, please visit www.tailwatercapital.com
About NorTex Midstream
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.