ONEOK to Acquire Brazos Midstream Assets for $4.425 Billion

The acquisition significantly bolsters ONEOK’s footprint in the Permian Basin, adding approximately 600,000 dedicated acres and 1.2 billion cubic feet per day of processing capacity by 2027. By integrating these assets with its existing infrastructure, ONEOK expects to double its Midland Basin processing capacity to 2.3 Bcf/d. The deal is structured to be immediately accretive to earnings and free cash flow per share, supported by long-term, fixed-fee contracts with major producers including ExxonMobil and Diamondback Energy.

Strategic Financial Restructuring

Beyond the acquisition, the $9 billion equity injection from Apollo serves as a cornerstone for a broader deleveraging effort. ONEOK intends to use $5 billion of these proceeds to extinguish existing debt, a move designed to accelerate the company’s debt-to-EBITDA ratio to 3.25x. The minority equity interest is structured as a nonvoting Class B stake in a newly formed holding company, with a return capped at a 7.0% internal rate of return for the first nine years. This arrangement allows ONEOK to avoid issuing common equity while maintaining flexibility for future capital allocation, including potential dividend increases and share buybacks. The transaction, unanimously approved by the company's board, is expected to close in the fourth quarter of 2026.