TPG terminates $930 million purchase of shale water handler Goodnight Midstream

CHICAGO (Bloomberg) - Private equity firm TPG Capital has canceled its agreement to buy oilfield water management company Goodnight Midstream for $930 million, according to TPG.

The parties terminated TPG’s deal to buy a majority stake in Goodnight from Tailwater Capital on July 5 because Goodnight was unable to satisfy certain closing conditions, a representative for TPG said in an emailed statement. TPG announced the deal in March.

Existing shareholders, including management, will remain invested in the company, the representative for TPG said. Tailwater is continuing to invest in the business, one of the people said.

A representative for Goodnight referred comments to Tailwater, which declined to comment.

The deal hinged in part on Dallas-based Goodnight securing a contract with an unidentified major oil company that had not yet materialized, people familiar with the matter said in May.

Negotiations for that contract are ongoing, people familiar with the matter said this week. Since July, Goodnight has secured five new commercial contracts in the Bakken shale in North Dakota and Delaware Basin in West Texas and New Mexico, the people said.

The deal is the latest oil and gas deal to collapse amid volatile commodity prices and other pressures. Penn Virginia Corp. and Denbury Resources Inc. scrapped their merger in March. The hedge fund Paulson & Co. has come out against Callon Petroleum’s $1.2 billion acquisition of Carrizo Oil & Gas, saying this month that Callon should abandon the transaction and put itself up for sale.

Goodnight helps oil and gas companies gather, transport and dispose of water used in drilling shale wells. It has a network of 450-miles of gathering pipelines connected to more than 50 saltwater disposal wells, according to its website.