Permian Resources Corp. will sell its oil and gas gathering systems, largely in Reeves County, Texas, to Kinetik Holdings for $180 million, the E&P said Dec. 10.

The Delaware Basin natural gas and oil pipeline systems include a combination of both recently purchased and legacy company-owned midstream infrastructure and exclude any water infrastructure or surface acreage, Permian Resources said.

The transaction provides a multi-stream opportunity for natural gas gathering, compression and processing, as well as crude gathering services for Kinetik, the midstream company said in a separate press release.

The deal includes approximately 60,000 gross operated acres dedicated by Permian Resources under long-term, fixed-fee agreements for natural gas gathering, compression and processing and crude oil gathering services.

Kinetik also picks up more than:

  • 250 MMcf/d of primarily owned electric compression with corresponding ownership of a private electric distribution system;
  • 150 Mmcf/d of gas gathered volumes; and
  • 25,000 bbl/d of crude gathered volumes in 2025.

The transaction is competitive with Kinetik's organic backlog and meets the company’s strict investment criteria, the company said.

“We are excited to announce another divestiture of non-core assets at a price that is accretive over both the short and long-term, further streamlining our business and driving value for investors,” said James Walter, co-CEO of Permian Resources. “The sale of these non-core infrastructure assets will allow us to continue our relentless focus on being the Delaware Basin’s lowest cost operator.”

“Kinetik has a strong track-record of operating midstream assets across the Delaware Basin, and we are pleased to partner with them on this transaction. Their extensive infrastructure and logistics expertise will continue to support the development of our high-return drilling inventory,” said Will Hickey, co-CEO of Permian Resources.

The transaction will also allow Permian Resources to increase the amount of residue natural gas sold at Gulf Coast pricing over time, further reducing the company’s exposure to in-basin Waha pricing. Additionally, the company expects the transaction to have essentially no impact to its cash operating costs. The transaction is expected to close during first-quarter of 2025, subject to regulatory approval.

"This investment opportunity reinforces our strategic partnership with Permian Resources, which is one of the most active and lowest cost operators in the Delaware Basin," said Jamie Welch, Kinetik's president and CEO. "We are excited to further expand our Delaware gas and crude systems with this natural fit, bolt-on acquisition. The Assets are located adjacent to our existing Delaware South system and will be integrated shortly following closing. The dedicated acreage includes highly economic inventory and shallow PDP declines, and with Permian Resources' long-term development support, we expect attractive volume growth and long-term value creation for our stakeholders."

Jefferies LLC acted as financial adviser and Kirkland & Ellis LLP acted as legal adviser to the Permian Resources in connection with the transaction.

Comments