V&E and Weil Lead TEAK and TexStar Midstream Pipeline Joint Venture

By Brooks Powell, Staff Writer
brooks.powell@texaslawbook.net

February 22, 2012 – Dallas-based TEAK Midstream LLC and TexStar Midstream of San Antonio announced a joint venture Wednesday to build a 75-mile pipeline from the Eagle Ford Shale play as part of an extensive infrastructure project to serve new petroleum and natural gas extraction sites in southwest Texas.

TEAK is represented by Vinson & Elkins, while TexStar is represented by Weil Gotshal & Manges.

The pipeline, known as the Bee Express, will complete a 125-mile system originating in La Salle County to connect operations in the Eagle Ford Shale to TEAK’s Silver Oak processing plant now under construction near the town of Pettus. The 75-mile joint venture portion is part of an additional 200-mile system of natural gas gathering and residue delivery lines. The entire system should be operational early in the third quarter of 2012 and will cost roughly $280 million to TEAK’s interest.

M&A partner Robin Fredrickson led the Vinson & Elkins team, along with Cliff Vrielink, a partner in V&E’s energy practice. Fredrickson said the TEAK/TexStar deal is one of many recent midstream pipeline developments that will service the new exploration sites that came online in 2011. But as many new sites came under contract in 2011, large energy deals in 2012 will become fewer and further between.

“I think there will be a lot of smaller [joint venture] deals, and you’ll see the occasional big JV deal, but my feeling is that’s probably going to start tapering off a bit,” said Fredrickson.

Rodney Moore, a private equity and energy law partner at Weil in Dallas, led the representation team for TexStar. Joining Moore in Dallas were commercial litigation partner Ray Guy, tax partner Jared Rusman, corporate counsel Chris Gleason, real estate associate Leslie Smith, corporate associates Monty Ward, Brett Thorstad and Clinton Hutchings, and tax/compensation associate Lane Morgan.

Fredrickson and Vrielink of Houston were joined by partner Myles Reynolds of V&E’s Dallas energy practice and tax partner Tom Crichton of Dallas, Houston counsel Scot Dixon in real estate, and associates Chris Richardson of Hong Kong, and Talia Jarvis and David Yellow Robe of Houston.

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