Tall Oak Midstream LLC’s founders have formed Tall Oak Midstream II LLC with an initial equity commitment of up to $300 million from private equity firm EnCap Flatrock Midstream and Tall Oak management.
Tall Oak will continue to focus on operating and expanding its midstream assets in the US Mid-Continent, while Tall Oak II will pursue midstream opportunities in other resource plays across North America.
Both Tall Oak companies are led by their four founders: President and CEO Ryan Lewellyn; Chief Commercial Officer Carlos P. Evans; CFO Max J. Myers; and COO Lindel R. Larison. The $300 million equity commitment is the second that EnCap Flatrock has made to the Tall Oak management team and brings total financing for Tall Oak and Tall Oak II to $850 million. Tall Oak was formed in early 2014 with an initial $400 million equity commitment from EnCap Flatrock and Tall Oak’s founders. In October 2014, Tall Oak’s subsidiary, TOMPC LLC, closed on a $100 million credit facility, which is expandable to $150 million.
Tall Oak now operates two natural gas gathering and processing systems in the Mid-Continent. The Tall Oak CNOW System and the Tall Oak STACK System serve multiple oil and gas producers targeting the region’s liquids-rich, stacked pay zones. In the third quarter of 2015, Tall Oak’s total cryogenic processing capacity in the Mid-Continent is expected to reach 175 MMcf/d across both systems with more than 400 miles of gathering pipeline planned.
The Tall Oak CNOW System serves producers targeting pay zones in the Central Northern Oklahoma Woodford (CNOW) region, including the Mississippi Lime, Woodford, and Cleveland formations. Located in Payne County, Oklahoma, the Battle Ridge Complex is the central processing and nitrogen rejection facility serving Tall Oak’s CNOW Gas Gathering system, which spans Creek, Logan, Lincoln, Noble, Payne and Pawnee counties. The Battle Ridge Natural Gas Processing Plant came into service in mid-February with an initial processing capacity of 75 MMcf/d. The Tall Oak CNOW System provides direct access to downstream markets including Southern Star Central Gas Pipeline and Enable Gas Transmission for residue gas, and 175 miles of gathering pipelines and three compressor stations are in service. Tall Oak plans to install an additional 75 miles of pipe and five more compressor stations.
The STACK play sits northwest of Oklahoma City, Oklahoma, and targets the Woodford and Mississippian shale plays. Tall Oak is currently operating 60 miles of natural gas gathering pipelines and one compressor station, with plans to complete an additional 150 miles of pipe and two more compressor stations in 2015. Tall Oak’s STACK gathering system will be served by the Chisholm Plant, a new cryogenic plant with 100 MMcf/d of processing capacity. Tall Oak expects to commission the Chisholm Plant in September.