Targa acquires New Mexico natural gas midstream assets through Riley Permian deal

Targa is adding to its Permian basin midstream portfolio by acquiring Dovetail Midstream LLC for $111 million. Dovetail's assets primarily consist of natural gas gathering infrastructure serving production in Eddy County, NM.

Dec. 5, 2025

2 min read

Targa Northern Delaware LLC, a part of Targa Resources Corp., Houston, has acquired certain New Mexico midstream assets from Riley Exploration Permian Inc., Oklahoma City, and its wholly-owned subsidiary, Riley Exploration – Permian LLC.

Riley sold subsidiary Dovetail Midstream LLC to Targa for an aggregate cash purchase price of $111 million.

Dovetail's assets primarily consist of natural gas gathering infrastructure serving production in Eddy County, NM.

Riley has the right to earn up to an additional $60 million in cash payments contingent on achieving certain volume-based performance thresholds over a 5-year period, the company said.

The agreement also provides for the sale by Permian to Targa of certain compressor station assets at a later closing date, which is expected to occur no later than first-quarter 2026 for an aggregate cash purchase price of about $10 million, subject to certain closing conditions. Riley Permian's US Securities and Exchange 8K filing Dec. 4 makes note of Birdie compressor station assets.

Bobby Riley, chairman and chief executive officer of Riley Permian, said the deal “fulfills the company's goal of achieving flow assurance for its natural gas production, allowing for wider development of our New Mexico assets.” Further, he said, “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."

Earlier this year, Riley completed a deal to acquire Silverback Exploration II LLC to add 5,000 boe/d (52% oil, 75% liquids) of total equivalent production and over 300 gross undeveloped locations directly adjacent and overlapping with Riley Permian’s existing New Mexico position in the Yeso Trend, for $142 million in cash.

For Targa, the deal comes on the heels of Targa Resources Corp.’s recent $1.25-billion agreement to acquire Stakeholder Midstream LLC for natural gas gathering, treating, and processing services and crude gathering and storage services in the Permian basin.