ONEOK closes $4.43bn acquisition of Brazos’ Permian assets

ONEOK (OKE) completed the $4.425B cash acquisition of Brazos Midstream's natural gas assets in the Permian Midland Basin. The deal strengthens ONEOK's position, doubling its processing capacity to 2.3B cubic feet per day. Shares traded at $89.23 post-announcement.

Brazos Midstream, a private company, completed the sale of its Midland Basin assets to ONEOK (OKE) for $4.425B. The deal includes 700 miles of pipelines and 1.1B cubic feet of processing capacity. Brazos previously sold Delaware Basin assets to Western Midstream Partners this year.

ONEOK (NYSE: OKE) completed its $4.425B acquisition of Brazos Midstream's Permian Midland Basin assets, doubling its processing capacity to 2.3B cubic feet per day. The deal adds 600,000 dedicated acres under long-term contracts, enhancing ONEOK's midstream operations and growth prospects.

ONEOK (OKE) completed a $2b debt buyback, focusing on long-dated bonds. This move may reshape its interest cost profile and financial flexibility. Analysts note the company's core midstream thesis remains intact, but leverage and interest coverage are key risks. ONEOK's earnings are expected to grow to $4.4b by 2029, with revenue projected at $40.4b. Some analysts see a 14% potential upside, while others highlight long-term energy transition risks.

ONEOK (OKE) raised its quarterly dividend by 4% to $1.07 per share, supported by 90% fee-based cash flows. The company also raised its 2026 earnings guidance and reported $5.42 in 2025 EPS. Interest expenses surged to $1.78 billion in 2025, but deferred tax benefits extend financial flexibility through 2031.

Fitch upgraded ONEOK's long-term issuer default rating to BBB+ from BBB, citing a $9B Apollo investment, Brazos acquisition, and debt repayment. Fitch expects leverage to decline to 3.5x and remain below that level. The upgrade reflects ONEOK's strengthened position in the Permian Basin and improved financial flexibility.