ONEOK is acquiring Brazos Midstream's Permian Midland Basin assets for $4.425 billion, significantly expanding its natural gas gathering and processing capacity in the region. This strategic acquisition, financed by a $9 billion nonvoting minority equity investment from Apollo, is expected to immediately boost ONEOK's earnings and free cash flow per share while accelerating deleveraging.
ONEOK (OKE) announced a significant $4.425 billion acquisition of Brazos Midstream's Permian Midland Basin assets, a move that will more than double its processing capacity in the region to 2.3 Bcf/d. This deal is strategically important as it deepens ONEOK's footprint in a key U.S. production area, enhancing its Permian-to-Gulf Coast strategy and providing long-term fee-based contracts. The financing structure, involving a $9 billion equity investment from Apollo (APO) and a $5 billion debt reduction plan, is designed to accelerate deleveraging and improve financial metrics without issuing common equity. This is a major positive catalyst for ONEOK, promising immediate earnings accretion and increased flexibility for shareholder returns, while also benefiting producers like ExxonMobil (XOM) and Diamondback Energy (FANG) through expanded infrastructure.