Overview
- ONEOK announced Monday that it signed a definitive agreement to acquire Brazos Midstream's Midland Basin gathering and processing assets for $4.425 billion in cash.
- Funds managed by Apollo committed $9 billion of nonvoting minority equity to finance the transaction, with the stake structured as a Class B interest capped at a 7% IRR for nine years and about $5 billion earmarked to pay down ONEOK debt.
- The purchased system includes roughly 700 miles of gathering lines, about 1.2 billion cubic feet per day of processing capacity and roughly 600,000 dedicated acres under long‑term fixed‑fee contracts backed by active drilling activity.
- ONEOK expects Apollo's investment to close in September 2026 and the Brazos acquisition to close in the fourth quarter of 2026, with full operational gains dependent on completion of the Cassidy II plant in Q3 2027 that will lift Midland Basin processing to roughly 2.3 Bcf/d.
- Management says the deal will be immediately accretive to earnings and free cash flow per share, is valued at about 7.5 times projected 2027 EBITDA falling toward six times in 2028, and continues ONEOK's multiyear strategy to build an integrated Permian midstream and NGL network after prior deals such as Magellan, Medallion and EnLink.