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Midstream: Corporate Finance: Valuation Services

In 2008, Flatrock Energy Advisors LLC and EnCap Investments L.P. joined together to create EnCap Flatrock Midstream (“EnCap Flatrock”), a private equity firm dedicated to invest in the midstream sector of the North American energy industry. Today EnCap Flatrock has more than $3 billion in total assets under management. The firm’s impressive portfolio of companies includes Nuevo Midstream LLC (“Nuevo”), which was formed in April 2011 by EnCap Flatrock and the senior management team at Torch Energy Advisors Inc. Nuevo owns and operates midstream infrastructure assets in the Delaware Basin in West Texas and in southeastern New Mexico, with specific emphasis on the Bone Springs and Wolfcamp formations and the Avalon Shale trend. Opportune was engaged to perform an independent valuation of Nuevo’s assets.

Opportune performed a diligence review of all contracts in order to verify the key assumptions underlying Nuevo’s internal projections. Opportune developed commodity price forecasts using market data independently obtained from industry publications, NYMEX futures and historical basis differentials. Additionally, Opportune conducted independent research related to the appropriate levels of working capital, control premiums paid in recent midstream transactions, and other standard analysis customary to an independent valuation.

Opportune understands the increasing complexities of energy-industry valuations, and performs advanced analyses of derivatives, securities, equity instruments, debt instruments and corporate deal structures for numerous organizations in the energy market. For additional information, click here.

Josh Sherman

PartnerOpportune LLP