Western Midstream Announces Acquisition of Brazos Delaware

Western Midstream Partners, LP (WES) has announced a definitive agreement to acquire all outstanding equity interests of Brazos Delaware II, LLC for approximately $1.6 billion. The transaction, which is structured as 50% cash and 50% equity, is expected to close late in the second quarter of 2026, pending customary closing conditions and regulatory approvals.

The acquisition significantly expands WES's natural gas and crude oil gathering and processing footprint in the Delaware Basin. With the addition of approximately 470,000 dedicated acres and 460 MMcf/d of natural gas processing capacity, WES's total dedicated acreage in the Delaware Basin will increase by nearly 49% to over 1.4 million acres. This move is anticipated to enhance WES's overall natural gas processing capacity by around 20%, bringing it to approximately 2.750 Bcf/d. The strategic rationale behind this acquisition lies in the diversification of WES's customer base through long-term, fixed-fee contracts with high-quality, investment-grade counterparties, which have a portfolio-wide weighted average remaining contract life of over nine years.

Brazos Delaware II, LLC is recognized as one of the largest privately held gathering and processing platforms in the Texas Delaware Basin. Its infrastructure includes around 900 miles of pipeline and a robust processing complex that has supported significant throughput, processing an average of 336 MMcf/d of natural gas and 25 MBbls/d of crude oil in 2025. The assets are strategically located within close proximity to low-pressure infrastructure, which minimizes future growth capital requirements and enhances free cash flow generation. This acquisition aligns with WES's M&A strategy of pursuing assets that are accretive and complementary to its existing operations.

The financial metrics of the deal indicate a purchase price representing an approximate 8.0x multiple on estimated 2027 EBITDA, which is expected to decline to around 7.5x as processing capacity is commercialized and synergies are realized. The transaction is projected to be immediately accretive to WES's estimated 2026 Distributable Cash Flow per unit, while maintaining a pro forma net leverage ratio of approximately 3.0x throughout 2026. This disciplined approach to capital deployment underscores WES's commitment to enhancing shareholder value while ensuring financial stability.

The broader market implications of this transaction may signal a continued trend of consolidation in the midstream sector, particularly as companies seek to enhance operational efficiencies and scale in response to evolving energy demands. As WES integrates Brazos's assets, the enhanced scale and operational synergies could position the combined entity for greater competitiveness in securing new business opportunities. The acquisition not only reflects WES's growth strategy but also highlights the ongoing investment interest in the Delaware Basin, which remains a key area for hydrocarbon production in the United States.