Energy Transfer to buy Vaquero Midstream for $2.63 billion in cash-and-stock deal

Key Points:

• Energy Transfer has agreed to acquire Vaquero Midstream in a deal valued at approximately $2.6 billion, consisting of $1.95 billion in cash and about 33.3 million newly issued shares.
• The acquisition expands Energy Transfer's midstream operations, adding assets linked to its natural gas and natural gas liquids infrastructure, which will enhance volumes for its transportation, fractionation, terminalling, and export businesses.
• Vaquero Midstream operates around 300 miles of pipeline in Texas's Southern Delaware Basin and has a processing capacity of about 675 million cubic feet per day, with fee-based contracts supported by roughly 100,000 dedicated acres and an average remaining contract term of about 10 years.
• Analysts view the deal as part of ongoing midstream sector consolidation, positioning companies for long-term growth and potential valuation increases through a combination of inorganic and organic expansion projects.
• The acquisition is expected to close in the fourth quarter of 2024, while Energy Transfer plans to invest $5 billion to $5.5 billion in capital in 2026, focusing primarily on natural gas network projects.