ONEOK, Inc. (NYSE:OKE) has agreed to acquire Brazos Midstream's Permian Midland Basin natural-gas gathering and processing ***** ets for $4.425 billion in cash. The deal is being paired with a $9 billion nonvoting minority equity investment from Apollo, of which ONEOK plans to use about $5 billion to reduce existing debt. ONEOK expects the acquisition to be immediately accretive to earnings and free cash flow per share.
The transaction would more than double ONEOK, Inc. (NYSE:OKE)'s Midland Basin processing capacity to approximately 2.3 Bcf/d, including plants already under construction. The acquired platform includes roughly 700 miles of gathering infrastructure, 1.2 Bcf/d of processing capacity after the Cassidy II plant is completed, and approximately 600,000 dedicated acres backed by fixed-fee contracts with more than 12 years of weighted-average remaining term.
The biggest attraction is the quality and location of the ***** ets. The Permian remains one of the most economically important oil and gas-producing regions in the U.S., and the Brazos system gives ONEOK, Inc. (NYSE:OKE) additional exposure to ***** ociated natural-gas volumes generated by oil production. The acquired ***** ets are supported by 14 active drilling rigs operated by producers including ExxonMobil, Diamondback Energy, and Double Eagle. The long-term contracts provide ONEOK with considerable visibility into future volumes and cash flows. That makes this more than a simple capacity expansion. ONEOK is effectively adding infrastructure that can grow alongside production on the dedicated acreage.
The ***** ets fit closely with ONEOK's existing gathering, processing, NGL transportation and crude infrastructure. That creates an opportunity to extract more value from the same barrels and molecules as they move through ONEOK's network.
The company expects to connect the Brazos system with downstream ***** ets such as its West Texas NGL Pipeline and the Medford NGL fractionation facility. This broader integration could produce commercial and operational efficiencies that an independent owner of the ***** ets might not be able to capture. ONEOK estimates about $80 million of full-year synergies in its 2027 EBITDA calculation and expects additional commercial and capital efficiencies as the systems are integrated.
#cash #expects
The transaction would more than double ONEOK, Inc. (NYSE:OKE)'s Midland Basin processing capacity to approximately 2.3 Bcf/d, including plants already under construction. The acquired platform includes roughly 700 miles of gathering infrastructure, 1.2 Bcf/d of processing capacity after the Cassidy II plant is completed, and approximately 600,000 dedicated acres backed by fixed-fee contracts with more than 12 years of weighted-average remaining term.
The biggest attraction is the quality and location of the ***** ets. The Permian remains one of the most economically important oil and gas-producing regions in the U.S., and the Brazos system gives ONEOK, Inc. (NYSE:OKE) additional exposure to ***** ociated natural-gas volumes generated by oil production. The acquired ***** ets are supported by 14 active drilling rigs operated by producers including ExxonMobil, Diamondback Energy, and Double Eagle. The long-term contracts provide ONEOK with considerable visibility into future volumes and cash flows. That makes this more than a simple capacity expansion. ONEOK is effectively adding infrastructure that can grow alongside production on the dedicated acreage.
The ***** ets fit closely with ONEOK's existing gathering, processing, NGL transportation and crude infrastructure. That creates an opportunity to extract more value from the same barrels and molecules as they move through ONEOK's network.
The company expects to connect the Brazos system with downstream ***** ets such as its West Texas NGL Pipeline and the Medford NGL fractionation facility. This broader integration could produce commercial and operational efficiencies that an independent owner of the ***** ets might not be able to capture. ONEOK estimates about $80 million of full-year synergies in its 2027 EBITDA calculation and expects additional commercial and capital efficiencies as the systems are integrated.
#cash #expects
11 days ago
