Tailwater Capital LLC

We’re excited to share that Douglas Prieto, CEO of Tailwater E&P, and Paul L., Operating Partner, will be speaking at the UBS?Dallas?Energy?Forum?on April 1-2. Doug will dive into Tailwater’s upstream business, discussing how we continue to execute strategic growth in the sector, while Paul will share insights on private equity and infrastructure, highlighting key opportunities in today’s evolving?energy?investment landscape. If you’re attending and want to connect with Doug or Paul, feel free to reach out to them directly.

Every year, Nat Bullard publishes a comprehensive slide deck on decarbonization trends, packed with insights into macro energy dynamics. The data reveals broader investment and infrastructure shifts that have significant implications for capital deployment. Here’s what stood out to the Tailwater team:? ?? Private low-carbon companies are growing faster than their public counterparts, highlighting the importance of capital flexibility in scaling energy transition solutions. ?? The interconnection queue is backlogged, with approval timelines for projects stretching from two years in 2005 to five years today. This underscores the need for faster permitting and grid modernization. ?? U.S. utilities remain long on natural gas, reinforcing its continued role in the energy mix even as low-carbon investment expands. ?? AI data centers will drive significant power demand, requiring tens of gigawatts of additional generation capacity—either from the grid or behind-the-meter solutions. ?? AI adoption is outpacing the internet and personal computers, with nearly 40% of the public having used AI within two years of mass-market launch. ?? Despite the high energy demand, energy costs represent only about 4% of average AI model expenses. ? For investors, these trends highlight key opportunities in energy infrastructure, grid modernization, and industrial resilience. As AI and energy converge, capital will flow toward solutions that enable reliability, scalability, and efficiency. #TailwaterInsights ? Read the full report:?https://bit.ly/4kjaSWW?

Tailwater Managing Director and Head of Investor Relations & Fundraising, John Schaufele, will speak on the “Trends in Decarb Investing Under a New Administration” panel at the W&L Energy Forum this Friday, March 28, in Houston. ? The event, hosted by Washington and Lee University, John’s alma mater, will convene industry leaders to discuss the trajectory of U.S. energy policy under a new administration, including the future of the fossil fuel industry, deregulation, and energy independence. ? We look forward to John’s participation in what promises to be a timely and thoughtful conversation on the future of energy investing.

Tailwater portfolio company Ash Creek Renewables has secured exclusive licensing rights for a new high-performance Camelina seed variety, strengthening its "Forks and Fuels" initiative. This milestone supports the growing demand for sustainable aviation fuel (SAF) and renewable diesel while providing farmers with additional revenue opportunities. With this expansion, Ash Creek is scaling its operations in Montana and launching international planting efforts in Argentina. The company is also developing biodegradable materials from Camelina meal, creating sustainable alternatives to single-use plastics. Read the full announcement here: https://bit.ly/4kIrckv

The Federal Reserve Bank of Dallas recently published an insightful report on Texas power markets, highlighting the growing challenges?ERCOT?faces in balancing supply and demand. The data is striking—ERCOT?has dramatically increased its 2030 summer peak demand forecast from 100,000 MW to 148,000 MW, driven by rising industrial loads from data centers, crypto mining, hydrogen electrolyzers, and other energy-intensive sectors. As power demand accelerates, Texas must address key challenges to maintain grid reliability: ?? Solar and batteries are critical to help meet summer peak demand. But, in winter, they are less effective because peak demand is often highest in the mornings. ?? Winter reliability risks remain for all energy sources with?ERCOT, including a 50% chance of rolling outages in a storm like December 2022—80% in a Winter Storm Uri scenario. ?? Texas’ energy-only market lacks incentives for new dispatchable power. Lower summer prices, while great for consumers, hide the investment needed in thermal generation needed for reliability. ERCOT’s rapid demand growth will require a more dynamic market design that incentivizes both renewable and dispatchable power investments. Without structural changes, Texas could face reliability risks in both summer and winter as demand accelerates. As Texas continues to evolve as a global energy hub, the need for smart capital deployment in energy infrastructure will be critical. #TailwaterInsights Find the full report here:?https://bit.ly/3QRpa3C?

We’re looking forward to joining industry leaders, investors, and executives at the Piper Sandler 25th Annual Energy Conference on March 17-19 in Las Vegas. This premier event will cover key themes shaping the energy sector—including the strong operating environment for conventional energy, renewable developments, supply and demand trends, and the evolving energy landscape. Tailwater’s Joel Fry, Partner, and Paul L., Operating Partner, will be in attendance to discuss investment opportunities and market perspectives. If you're attending and would like to connect, feel free to reach out to Joel or Paul directly. See you in Vegas!

We’re excited to share the February edition of the Tailwater Monthly Recap, featuring key insights and market perspectives from across our portfolio. This month, we’re highlighting: - Tailwater in Bloomberg: Exploring how family offices are stepping in to fill the capital gap in energy investment and the role of Tailwater E&P in this evolving landscape. - AI, Energy Markets & Long-Term Realities: Despite market reactions to AI efficiency gains, data center growth continues to fuel demand for reliable, dispatchable energy sources like natural gas and CCUS. - The Evolving Energy Landscape & Rising Power Demand: Oil and gas companies are adapting through LNG, CCUS, and hydrogen, while surging electricity demand is reshaping infrastructure needs. We break down the trends driving energy investment decisions. - Disciplined Investment & Shareholder Value: As executive compensation shifts from production growth to capital efficiency, we explore why disciplined capital allocation remains the key to long-term returns. Stay connected with Tailwater—read the full recap and subscribe today!

Tailwater portfolio company Blue Tide Environmental has upsized its revolving credit facility, reinforcing its financial position as the company scales operations?in?Baytown, Texas. This expansion will provide additional flexibility for growth and operational efficiency as?Blue?Tide?continues to build a leading platform for re-refined Group II+ base oils. The Tailwater team is proud to support?Blue?Tide’s continued momentum and its efforts to drive long-term growth?in?the re-refined base oil market. We also appreciate Texas Capital and Origin Bank for their partnership?in?reaching this important milestone. Read the full release here: https://bit.ly/4i1ElU7

Exciting news from our portfolio partner, Frontier Carbon Solutions! Frontier today announced a strategic partnership with Baker Hughes to accelerate large-scale carbon capture and storage (CCS) and power solutions across the U.S. This collaboration brings together Frontier’s innovative infrastructure development with Baker Hughes’ expertise in CCS technologies, well design, and power generation. The partnership strengthens Frontier’s ability to meet rising energy demands while advancing scalable, lower-carbon solutions for industrial and data center customers. Read the full announcement here: https://bit.ly/3QLRB2Q

Members of the Tailwater team look forward to attending the With Intelligence Women’s Private Equity Summit in Phoenix, Arizona next week! Jill McMillan, Managing Director, Head of Communications & Public Affairs, Caroline Keith, Associate, and Isabelle Wyant, Associate, will be there alongside women from across the private equity industry for three days of networking, collaboration, and deal-making. If you’re attending, feel free to reach out to Jill, Caroline, or Isabelle—they’d love to connect!