Fort Worth-based Clearfork Midstream LLC announced on Tuesday that it had secured a capital commitment from EmCap Flatrock Midstream and had entered into a definitive agreement to purchase Azure Midstream Energy LLC.
The transaction is subject to standard regulatory approvals and is expected to close during the first quarter of 2022, according to a statement announcing the deal.
Clearfork is a growth-oriented midstream company that was formed in 2020 to provide comprehensive midstream solutions for oil and gas producers in basins across North America, with a specific emphasis on unconventional natural gas production in the Haynesville/Bossier Shale formation in North Louisiana and East Texas.
“Over the past few years, we have developed strong relationships with key members of the [EmCap Flatrock] team,” says Clearfork CEO Kipper Overstreet, in a statement. “The firm’s unparalleled reputation is well deserved. They have the financial strength we need and understand midstream better than anyone in the venture capital business. They aligned with us on the acquisition of Azure Midstream and Azure’s growth potential. We are very pleased to be part of the EFM family of companies.”
In addition to Overstreet, Clearkfork is led by a team of industry veterans including Chief Operating Officer George Grau Jr., Chief Commercial Officer Corey Lothamer, and Executive Vice President Kevin Venturini. Together, they have more than 75 years of collective experience in the energy industry, according to Clearfork. Before forming Clearfork, Overstreet served from 2013-20 in various roles at Azure Midstream, including most recently as vice president of corporate development and gas supply from 2017-20.
“The management team possesses certain characteristics including strong leadership; the ability to attract and retain talent; a strong reputation and track record, and a compelling business plan, all of which we highly prioritize when backing a team,” says EmCap Flatrock Managing Director Zach Kayem, a member of the Clearfork board of directors. “We have known members of management for better than half of a decade and are excited to pursue this significant midstream opportunity in East Texas and North Louisiana.”
Based in San Antonio with offices in Oklahoma City and Houston, EnCap Flatrock Midstream manages investment commitments of nearly $9 billion from a broad group of prestigious institutional investors. EnCap Flatrock Midstream is currently making commitments to management teams from EFM Fund IV, a $3.25 billion fund.
Azure Midstream’s natural gas gathering and treating platform spans the core areas of the Haynesville Shale formation and includes more than 500 miles of pipeline and 1.2 billion cubic feet per day of treating capacity across systems in North Louisiana and East Texas. Azure Midstream has nine downstream interconnects offering access to major market hubs, including Henry Hub, Houston Ship Channel/Katy, Carthage, Columbia Gulf Mainline, Perryville and Agua Dulce (via TETCO and NGPL). The Haynesville natural gas play is well positioned with proximity to large end-use markets and the growing U.S. Gulf Coast LNG export complex.
Clearfork’s management said it believes the Haynesville Shale will continue to represent a reliable and long-term source of natural gas supply to the world. Clearfork plans to invest additional capital after the acquisition to optimize the efficiency of Azure Midstream’s systems in support of existing customers and to pursue additional acreage dedications, throughput volumes, and regional infrastructure, according to the statement.