Tailwater Capital Invests $1.1 Billion to Boost Producers Midstream Expansion Across Texas, New Mexico, Oklahoma

Tailwater Capital secured $1.1 billion in new financing to recapitalize and expand Producers Midstream, bolstering its pipeline, gathering, and processing network across Texas, New Mexico, and Oklahoma.

(P&GJ) — Tailwater Capital LLC has secured $1.1 billion in new debt and equity to recapitalize and expand Producers Midstream II LLC, enhancing the company’s footprint across Texas, New Mexico, and Oklahoma.

The deal includes about $500 million in equity commitments anchored by Secondaries at Goldman Sachs Alternatives, alongside additional backing from new and existing Tailwater investors. Tailwater’s newly formed Fund V also contributed fresh capital to support future growth initiatives.

In connection with the investment, Producers Midstream increased its senior secured credit facility from $400 million to $600 million, led by Texas Capital Bank. The expansion provides greater flexibility to fund development across its 3,300-mile system and 860,000 dedicated acres.

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

Producers Midstream CEO Matt Flory said the capital infusion strengthens the company’s balance sheet and ability to deliver “flexible and creative solutions” to customers.

The company recently commissioned The Dude processing plant in Lea County, New Mexico, where it is processing natural gas under new long-term contracts. Producers plans to expand capacity at the plant to 240 MMcf/d by Q3 2026.

In addition to gathering and processing assets, Producers Midstream operates the 300-mile Palo Duro Pipeline, a long-haul natural gas line running from Abilene, Texas, to Oklahoma. The company said new capital will help expand and commercialize the system to better serve power generation and data center customers in the growing “Data Center Corridor.”