Western Midstream Partners Expands with Brazos Delaware Acquisition, Strengthens Delaware Basin Position

Western Midstream Partners Enhances Asset Base with Brazos Delaware Acquisition

In a significant development, Western Midstream Partners, LP (NYSE: WES) has declared its intention to acquire Brazos Delaware II, LLC, elevating its operational capabilities within the Delaware Basin. The value of the transaction is approximately $1.6 billion, a strategic move aimed at amplifying WES's natural gas and crude oil processing capacities.

Strategic Overview of the Acquisition

The impending acquisition includes an impressive 470,000 acres dedicated to natural gas and crude oil assets, alongside an increase of approximately 460 million cubic feet per day (MMcf/d) for natural gas processing. This enhancement is projected to raise WES's total area committed in the Delaware Basin to over 1.4 million acres, reflecting a 49% increment. Additionally, the natural-gas processing capacity of WES will increase by about 20%, bringing the total to approximately 2.750 billion cubic feet per day (Bcf/d).

The deal, which will be financed through a 50-50 split between cash and common equity, is anticipated to quickly contribute positively to WES's distributable cash flow per unit for the year 2026. The acquisition is poised to diversify WES's customer base through long-term, fixed-fee contracts anchored with high-quality, investment-grade counterparties. These contracts currently boast a weighted average life exceeding nine years, enabling stability and future growth potential.

President and CEO Oscar K. Brown articulated his enthusiasm regarding the acquisition, stating, "The Brazos acquisition aligns with our mission to make strategic acquisitions that add value to WES’s asset base, providing quality customers and promoting free cash flow generation."

Specific Benefits of Brazos Assets

Brazos stands as one of the largest privately held gathering and processing operations within the Texas Delaware Basin. Its extensive portfolio comprises 900 miles of pipeline, processing approximately 336 MMcf/d of natural gas and 25 MBbls/d of crude oil as of 2025. Notably, nearly all drilling sites related to Brazos's dedicated acreage are in proximity to low-pressure infrastructures, significantly reducing future capital requirements and enhancing the cash flow generation landscape for WES.

The acquisition integrates well with WES's existing Delaware Basin network, amplifying their competitive edge and capacity for operational efficiencies. With approximately 3,500 drilling locations identified with profits projected at $65 per barrel, WES enjoys a secured outlook for throughput growth for decades.

Financial Framework and Contractor Insights

Concerning the financial structuring of the acquisition, the purchase price of $1.6 billion reflects an approximate 8.0x multiple on anticipated EBITDA for 2027, with progressive reductions expected as processing capabilities become commercialized. The dual financing method maintains a balanced leverage ratio of around 3.0x throughout 2026, fostering a sound financial posture.

Greenhill and Troutman Pepper Locke LLP acted as advisors for WES during this transaction, whereas Jefferies LLC and Vinson & Elkins LLP served as advisors for Brazos. The completion of this acquisition is subject to customary conditions and regulatory approvals, with expectations for closure by late Q2 of 2026.

Future Perspectives

WES's management reflects on the prospects of expanding its operational framework with the Brazos acquisition. With organic growth projects underway, including the Pathfinder Pipeline and North Loving II, which are set to become operational in early 2027, the acquisition positions WES to enhance its footprint and tap into the growing resource potential of the Delaware Basin. This acquisition marks a pivotal step as WES endeavours to solidify its stance as a leading entity in the midstream space, all while focusing on delivering value to its stakeholders.

In summary, Western Midstream Partners is embarking on a transformative journey through the acquisition of Brazos Delaware II, reinforcing its dominance in the energy sector and setting the stage for sustained growth in the lucrative Delaware Basin landscape.

For further information, stakeholders can visit Western Midstream's official site.