TopSail will be primarily focused on purchasing and developing refined products logistics and processing
Tailwater Capital has announced the formation of TopSail Energy LP, with an initial commitment of $100 million. The newly formed portfolio company will focus on purchasing and developing various refined products logistics and processing assets in North America, according to a company press release.
Jim Lelio, who spent the last 15 years in senior roles at Kinder Morgan (ticker: KMI, KinderMorgan.com), will act as TopSail’s chief executive. Lelio has over 21 years of experience, and has spent his career focused on refined products and biofuels transportation, storage, and terminaling operations.
The TopSail management team also includes Derrick Bockius, COO, and Jason Aguirre, Director of Business Development.
- Over the past ten years, Bockius has overseen construction and operations of several large midstream projects, including Kinder Morgan’s transmix facility in St. Louis, Missouri, KMI’s condensate splitter facility in Galena Park, Texas, and Magellan Midstream’s (ticker: MMP, com) condensate splitter facility in Corpus Christi, Texas.
- Aguirre most recently served as a business development manager at KMI and has more than eight years of oil and gas finance and accounting experience.
Tailwater beginning to use its dry powder
Dallas-based private equity firm Tailwater recently spoke with Oil & Gas 360® about the oil and gas market, saying that capital could be coming to market in the near future.
“There’s a lot of capital on the sidelines,” Tailwater Co-Founder and Managing Partner Jason Downie said. “From a timing perspective, I would imagine there’s a major effort to deploy capital this year.”
Tailwater has two types of funds: a midstream vehicle Downie described as a “control equity” style fund, and an upstream vehicle focused on non-operated working interest. Tailwater tries to avoid the “one-size-fits-all” model, and instead takes a more nuanced approach.
“Where many energy private equity firms are focused on the more traditional model of backing a management team with a commitment of equity capital and many different management teams per fund, Tailwater’s approach is much more specific around growth capital and a partner-oriented approach with the management team on a specific concept,” said Downie.
The company’s $650 million midstream fund, which closed in December 2014, was about 20% invested prior to the formation of TopSail. Tailwater also closed its $217 million Tailwater E&P Opportunity Fund II LP in November of last year, which Downie said would focus on “core onshore United States, liquids-weighted basins,” like the Bakken, Niobrara, Permian, Eagle Ford and SCOOP/STACK.
Finding opportunities you normally wouldn’t see
“People are starved for capital, so now is the time where you can find opportunities that you normally wouldn’t see,” said Downie. “That doesn’t always mean buying something for cheap – that can mean providing someone an opportunity through a partnership. Normally, operators might build their own gathering system and today, quite frankly, they could use a capital partner. So we’re trying to look at all of the above.”
