ONEOK completes $4.425 billion Brazos Midstream acquisition

ONEOK has finalized its cash acquisition of Brazos Midstream’s natural gas gathering and processing assets in the Permian Midland Basin for approximately $4.425 billion. The deal significantly expands ONEOK’s footprint in the region, more than doubling its Midland Basin processing capacity to roughly 2.3 billion cubic feet per day, including facilities currently under construction.

The acquired system includes approximately 700 miles of gathering pipelines and is supported by roughly 600,000 dedicated acres. These assets are secured through long-term, fixed-fee contracts with a weighted-average remaining term of over 12 years. ONEOK CEO Pierce H. Norton II stated that the acquisition strengthens the company’s position and provides opportunities to connect increasing natural gas and natural gas liquids production across its integrated network.

The transaction follows a $9 billion minority equity investment from Apollo-managed funds. ONEOK indicated that the financing would support the purchase and approximately $5 billion in debt reduction. The company expects the acquisition to immediately increase earnings and free cash flow per share.