ONEOK will acquire Brazos Midstream's Permian Midland Basin natural gas assets for $4.425 billion as part of a broader $9 billion equity investment from Apollo designed to expand ONEOK's energy infrastructure and reduce its debt.
What is ONEOK acquiring?
ONEOK announced a definitive agreement to acquire Brazos Midstream's natural gas gathering and processing assets in the Permian Midland Basin for $4.425 billion in cash.
The acquisition includes approximately 600,000 dedicated acres under long-term, fixed-fee contracts, with a weighted average remaining term of more than 12 years. The system is currently supported by 14 active drilling rigs operated by major Permian producers, including ExxonMobil, Diamondback Energy, and Double Eagle.
ONEOK President and CEO Pierce H. Norton II: "These assets add a premier Permian Midland Basin platform supported by long-term contracts and attractive growth opportunities."
What will the acquisition add?
The acquisition will be funded through a $9 billion nonvoting minority equity investment from funds and affiliates managed by Apollo.
ONEOK plans to use approximately $5 billion of the proceeds to reduce existing debt. The company expects to move to lower project 2027 leverage to approximately 3.25 times debt-to-EBITDA.
Following the completion of the Cassidy II processing plant, expected in the third quarter of 2o27, the Brazos Midland system is expected to include approximately 700 miles of gathering infrastructure and 1.2 Bcf/d of processing capacity across seven Permian Midland Basin counties.
The acquisition will more than double ONEOK's Midland Basin processing capacity to approximately 2.3 Bcf/d, including plants under construction.
ONEOK President and CEO Pierce H. Norton II: "This transaction demonstrates ONEOK's strategy of intentionally expanding and extending our integrated energy infrastructure."
Why does it matter?
The transaction expands ONEOK's Permian footprint while strengthening connections across its natural gas, NGL, and crude oil infrastructure.
ONEOK expects the acquisition to be immediately accretive to earnings and free cash flow per share, while additional commercial and operational synergies could further reduce the effective acquisition cost over time.
