Targa Buys Riley Permian’s New Mexico Gas Gathering Assets for $111 Million
Riley Permian has sold its New Mexico midstream subsidiary, Dovetail Midstream, to Targa Northern Delaware for $111 million, expanding Targa’s Delaware Basin footprint and freeing Riley to focus on upstream development in Eddy County.
(P&GJ) — Riley Exploration Permian, Inc. has sold its New Mexico-based midstream subsidiary, Dovetail Midstream LLC, to Targa Northern Delaware LLC in a $111 million cash deal, the company announced on Dec. 4.
The agreement, which closed simultaneously with signing, transfers all membership interests in Dovetail Midstream to Targa. The assets include natural gas gathering infrastructure supporting Riley Permian’s production in Eddy County, New Mexico.
Riley Permian said proceeds from the sale will be used to reduce debt, pay income taxes, and cover transaction costs. The company could receive up to an additional $60 million in contingent payments over five years if certain volume-based performance targets are met.
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The agreement also includes a planned follow-up transaction — the sale of compressor station assets for about $10 million — expected to close by the first quarter of 2026, pending customary conditions.
“We're excited to further our partnership with a best-in-class operator in Targa,” said Bobby Riley, Chairman and CEO of Riley Permian. “This transaction fulfills the Company’s goal of achieving flow assurance for its natural gas production, allowing for wider development of our New Mexico assets. By removing future capital spending obligations associated with expanding the midstream system, this transaction allows us to focus our expertise and capital on the development of our upstream assets including our recent acquisition of Silverback Exploration II, LLC and its subsidiaries.”
The deal strengthens Targa’s presence in the Delaware Basin and supports Riley Permian’s strategic shift toward upstream growth.