Summit Midstream acquires Arkoma Basin operator

Summit Midstream has entered into definitive agreements to acquire Tall Oak Midstream Operating and its subsidiaries for a mix of cash and equity consideration. This strategic acquisition marks a significant milestone in Summit’s growth strategy, increasing scale in a credit and value accretive manner.

The acquisition represents a significant step forward in SMC’s plan to consolidate assets and expands Summit’s operations to the Arkoma Basin, adding 440 million cubic feet per day (MMcf/d) of processing capacity, over 400 miles of pipelines and over 300,000 of dedicated acres with significant undeveloped locations.

A Tall Oak Midstream facility. The company was acquired by Summit Midsteam. (Image: Tall Oaks Midstream)

“We are thrilled to announce the acquisition of Tall Oak Midstream, which represents a significant step forward in our strategic growth plan,” said Heath Deneke, president, chief executive officer and chairman. “Tall Oak Midstream’s high-quality assets and talented team will complement our existing operations and provide us with an expanded customer base. We look forward to welcoming Tall Oak’s employees and integrating their operations to unlock further value for our stakeholders.”

The Tall Oak Midstream assets, located in central Oklahoma, are comprised of two 220 MMcf/d natural gas processing plants, approximately 244 miles of low-pressure natural gas gathering lines, approximately 167 miles of high-pressure natural gas gathering lines and approximately 65,000 horsepower of field and plant compression. The gathering agreements for the Tall Oak system include long-term, fee-based contracts with a weighted average term of approximately 13 years. Volume throughput on the Tall Oak system is underpinned by acreage dedications, with an estimated 315,000 leased acres from its key customers. The dedicated acreage spans highly productive, rich gas areas within the Arkoma Basin, with producers primarily targeting the Woodford formation.

“This transaction represents a unique opportunity to partner with the Summit organization to support the long-term growth and value creation initiatives already underway at the Company,” said Jason Downie, Co-Founder and Managing Partner at Tailwater Capital. “The Tall Oak assets are complementary to Summit’s existing gas portfolio, and we believe the Company is well positioned to drive even more value for shareholders over the coming years.”