Tailwater-backed Tall Oak Midstream Grows STACK Position with Redcliff Deal

Tall Oak Midstream LLC acquired Redcliff Midstream for an undisclosed amount, expanding its footprint in the northern STACK extension of the Midcontinent region of Oklahoma.

“Redcliff Midstream’s complementary network of high-quality assets and its diverse customer base are a perfect fit for Tall Oak as we continue to grow our footprint and service offerings in the region,” TallOak CFO Max Myers said in a statement.

Based in Oklahoma City, Tall Oak is a midstream service provider in the Midcontinent region founded in early 2014. The company, which views itself as a consolidator in the midstream space, was recently acquired by Tailwater Capital LLC, a Dallas-based private equity firm.

On Jan. 27, Tailwater Capital announced it had agreed to acquire Tall Oak Midstream II and III from EnCap Flatrock Midstream for an undisclosed amount. The transaction closed in February, according to a company release on March 24.

“We are thrilled with how quickly our partnership with the Tailwater team has presented new opportunities, and we look forward to continuing to work together to grow our business while maintaining best-in-class service for our customers,” Myers continued in his statement.

Formed in 2017 as a wholly owned subsidiary of Canyon Midstream Partners II LLC, Redcliff Midstream provides gas gathering, treating and processing services throughout the northern region of the STACK play. The company’s infrastructure system comprises more than 200 miles of gathering pipeline and a network of five field compression stations across Woodward, Dewey, Blaine and Canadian counties plus a 240 MMcf/d cryogenic gas processing plant in Woodward County. 

In the release, Jason Downie, co-founder and managing partner at Tailwater Capital, said Redcliff will complement Tall Oak’s existing asset base and expand its infrastructure footprint in the Northern STACK Extension region.

“The Northern STACK Extension encompasses a robust inventory of economic undeveloped drilling locations and underutilized midstream infrastructure that Tall Oak is actively evaluating as it searches for accretive bolt-on opportunities to expand its regional footprint,” Downie said in a statement.

Through Tall Oak II, the company currently operates over 750 miles of low and high-pressure gathering lines across seven Oklahoma counties in the STACK extension.

Downie added that the Tall Oak management team, comprised of Myers as well as CEO Ryan D. Lewellyn, CCO Carlos P. Evans and COO Lindel R. Larison, are “uniquely suited to execute on this consolidation strategy given their deep knowledge of the basin and extensive relationships with nearby customers and competitors alike.”

For the transaction, Locke Lord provided legal counsel to Tall Oak. Simmons Energy, a division of Piper Sandler, was financial adviser and DLA Piper, Porter Hedges and Vinson & Elkins all served as legal counsel to the sellers.