Houston-based Western Gas Partners LP (NYSE: WES) bought Houston's Nuevo Midstream LLC for $1.5 billion last year, but now the Nuevo name is making a comeback.
San Antonio-based EnCap Flatrock Midstream private equity firm is investing $400 million in the formation of the new Nuevo Midstream Dos LLC energy company in Houston.
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Former Nuevo CEO Jay Lendrum will serve as the chairman of the new company, while former Nuevo COO Randy Ziebarth is the president and CEO of the new Nuevo Dos. The new company will even maintain the old Nuevo Midstream website.
Ziebarth said the team looks forward to building another successful company with EnCap Flatrock. The first iteration of Nuevo was formed in 2011 with an initial $65 million equity commitment from EnCap Flatrock.
At the time of the sale, Lendrum said the goal was ultimately to monetize and sell the company's assets at some point.
While the first Nuevo focused on midstream business in the Delaware Basin portion of Texas' Permian Basin, the new Nuevo Dos will pursue organic growth and acquisitions across North America.
Nuevo Dos was advised by Locke Lord LLP on the deal, while EnCap Flatrock worked with Thompson & Knight LLP.
The investment comes from EnCap Flatrock's $3 billion EFM Fund III.
EnCap Flatrock was formed in 2008 by a partnership between Houston-based EnCap Investments LP and Flatrock Energy Advisors. And EnCap Investments is keeping very busy, as well.
David Miller, one of EnCap Investments’ founders, said the closing of the energy fund represents EnCap Investments' 19th institutional fund and that investments will soon begin going toward management teams and new deals in the upstream sector.
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