ONEOK agrees to purchase Brazos Midstream's Permian assets for roughly $4.43 billion

ONEOK OKE has entered into a definitive agreement to acquire Brazos Midstream's Permian Midland Basin natural gas gathering and processing assets for $4.425 billion in cash, roughly $4.43 billion, announced August 31, 2026. The seller, Brazos Midstream, is backed by Old Ironsides Energy and EnCap Flatrock Midstream.

The deal's central mechanic is financing: a separate $9 billion nonvoting minority equity investment in ONEOK from funds managed by Apollo Global Management, carrying an internal rate of return capped at 7.0% for the first nine years. ONEOK plans to use about $5 billion of those proceeds to pay down existing debt, funding the Brazos purchase with the remainder, without issuing new common shares.

The Brazos Midland system includes roughly 700 miles of gathering infrastructure and 1.2 billion cubic feet per day of processing capacity across seven core Permian Midland Basin counties, once the Cassidy II plant completes in the third quarter of 2027. The assets carry about 600,000 dedicated acres under fixed-fee contracts averaging more than 12 years, supported by 14 active drilling rigs from producers including ExxonMobil, Diamondback Energy and Double Eagle.

ONEOK values the purchase at roughly 7.5 times projected 2027 EBITDA, inclusive of about $80 million of expected synergies, falling to about 6.0 times projected 2028 EBITDA. The Brazos deal is expected to close in the fourth quarter of 2026 pending Hart-Scott-Rodino clearance, while the Apollo investment closes separately in the first half of September 2026. Investors will watch leverage and synergy realization against ONEOK's long-term EBITDA growth target.

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