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OKE Plans to Expand Permian Presence With Brazos Midland Acquisition
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Key Takeaways
ONEOK agreed to buy Brazos Midland Basin gas assets for $4.425B, with closing expected in Q4 2026.
Apollo's $9B minority equity investment will fund the deal, with about $5B earmarked to reduce debt.
The deal would more than double ONEOK's Midland Basin processing capacity to nearly 2.3 Bcf/d.
ONEOK, Inc. (OKE - Free Report) announced an agreement to acquire Brazos Midstream’s Permian Midland Basin natural gas gathering and processing assets for $4.425 billion in cash. The deal is expected to close in the fourth quarter of 2026, subject to customary conditions, including regulatory clearance.
ONEOK’s Funding Strategy for the Acquisition
The company will fund the acquisition through a $9-billion minority equity investment from Apollo, with about $5 billion of the proceeds earmarked to reduce existing debt. This is expected to accelerate deleveraging toward 3.25 times debt-to-EBITDA without issuing common equity.
Strategic Synergies of the Acquisition
ONEOK’s acquisition of Brazos Midstream’s Midland Basin assets is expected to strengthen its position in the rapidly growing Permian Basin. The deal includes approximately 600,000 dedicated acres under long-term fixed-fee contracts with a weighted-average remaining term of more than 12 years. Following the expected completion of the Cassidy II plant in the third quarter of 2027, the system is expected to include 700 miles of gathering infrastructure and 1.2 billion cubic feet per day (Bcf/d) of processing capacity.
The transaction will more than double ONEOK’s Midland Basin processing capacity to nearly 2.3 Bcf/d, including plants under construction. It is expected to generate operational and commercial synergies, improve capital efficiency and support volume growth across ONEOK’s natural gas and NGL value chain.
OKE’s acquisition strategy is complemented by ongoing organic investments and the integration of its existing assets. Its $2.7-$3.2 billion 2026 capital spending plan includes projects across natural gas processing, refined products and NGL infrastructure.
Consolidation Boosts Oil & Gas Midstream Efficiency
Consolidation strengthens oil and gas midstream companies by expanding asset footprints, improving operational efficiency and lowering costs. It also enhances scale, cash flow stability and long-term growth opportunities. Apart from OKE, several other oil and gas midstream companies are expanding their operations through strategic acquisitions.
On Aug. 26, 2026, Enbridge (ENB - Free Report) agreed to acquire Salt Creek Midstream’s gathering business for $600 million, with the transaction expected to close in late 2026. The acquisition will expand ENB’s Delaware Basin infrastructure and export connectivity.
The Williams Companies (WMB - Free Report) agreed to acquire Momentum Midstream for up to $5.5 billion, with closing expected later in 2026, adding 4,000-plus pipeline miles, 1 million-plus Haynesville acres and 6 Bcf/d capacity.
Western Midstream Partners (WES - Free Report) completed its $1.6-billion Brazos Delaware acquisition on June 11, 2026, adding 470,000 acres, 900 pipeline miles and 460 MMcf/d processing capacity, expanding its Delaware Basin footprint.
Share Price Movement of OKE
In the past month, shares have rallied 8% compared with the industry’s 4.8% growth.
View the Zacks #1 Rank List
Image: Bigstock
OKE Plans to Expand Permian Presence With Brazos Midland Acquisition
Key Takeaways
ONEOK, Inc. (OKE - Free Report) announced an agreement to acquire Brazos Midstream’s Permian Midland Basin natural gas gathering and processing assets for $4.425 billion in cash. The deal is expected to close in the fourth quarter of 2026, subject to customary conditions, including regulatory clearance.
ONEOK’s Funding Strategy for the Acquisition
The company will fund the acquisition through a $9-billion minority equity investment from Apollo, with about $5 billion of the proceeds earmarked to reduce existing debt. This is expected to accelerate deleveraging toward 3.25 times debt-to-EBITDA without issuing common equity.
Strategic Synergies of the Acquisition
ONEOK’s acquisition of Brazos Midstream’s Midland Basin assets is expected to strengthen its position in the rapidly growing Permian Basin. The deal includes approximately 600,000 dedicated acres under long-term fixed-fee contracts with a weighted-average remaining term of more than 12 years. Following the expected completion of the Cassidy II plant in the third quarter of 2027, the system is expected to include 700 miles of gathering infrastructure and 1.2 billion cubic feet per day (Bcf/d) of processing capacity.
The transaction will more than double ONEOK’s Midland Basin processing capacity to nearly 2.3 Bcf/d, including plants under construction. It is expected to generate operational and commercial synergies, improve capital efficiency and support volume growth across ONEOK’s natural gas and NGL value chain.
OKE’s acquisition strategy is complemented by ongoing organic investments and the integration of its existing assets. Its $2.7-$3.2 billion 2026 capital spending plan includes projects across natural gas processing, refined products and NGL infrastructure.
Consolidation Boosts Oil & Gas Midstream Efficiency
Consolidation strengthens oil and gas midstream companies by expanding asset footprints, improving operational efficiency and lowering costs. It also enhances scale, cash flow stability and long-term growth opportunities. Apart from OKE, several other oil and gas midstream companies are expanding their operations through strategic acquisitions.
On Aug. 26, 2026, Enbridge (ENB - Free Report) agreed to acquire Salt Creek Midstream’s gathering business for $600 million, with the transaction expected to close in late 2026. The acquisition will expand ENB’s Delaware Basin infrastructure and export connectivity.
The Williams Companies (WMB - Free Report) agreed to acquire Momentum Midstream for up to $5.5 billion, with closing expected later in 2026, adding 4,000-plus pipeline miles, 1 million-plus Haynesville acres and 6 Bcf/d capacity.
Western Midstream Partners (WES - Free Report) completed its $1.6-billion Brazos Delaware acquisition on June 11, 2026, adding 470,000 acres, 900 pipeline miles and 460 MMcf/d processing capacity, expanding its Delaware Basin footprint.
Share Price Movement of OKE
In the past month, shares have rallied 8% compared with the industry’s 4.8% growth.
Image Source: Zacks Investment Research
OKE’s Zacks Rank
ONEOK currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.