Kinetik acquires gas, crude oil gathering systems in Texas Delaware basin

Kinetik Holdings Inc. has agreed to acquire natural gas and crude oil gathering systems primarily located in Reeves County, Tex., from Permian Resources Corp. for $180 million. 

With the deal, Kinetik expands its Delaware basin gas and crude systems, said Jamie Welch, Kinetik’s president and chief executive officer. 

The assets lie "adjacent to our existing Delaware South system and will be integrated shortly following closing," he said. 

With the deal, Kinetic acquires about 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. The deal also includes over 250 MMcfd of primarily owned electric compression with corresponding ownership of a private electric distribution system, over 150 MMcfd of gas gathered volumes, and 25,000 b/d of crude gathered volumes in 2025, the company said. 

In a note Dec. 10, TD Cowen analysts said the gathering systems being sold are primarily from Permian Resources' recently acquired Barilla Draw asset. "Importantly, the transaction excludes surface acres and water assets as both remain critical to future development in and around Barilla Draw," they continued.  

Permian Resources acquired Barilla Draw acreage from Occidental Petroleum in July (OGJ Online, July 29, 2024). 

Kinetic said additional upside exists with control of residue gas and natural gas liquids from the dedicated rich gas via system optimization and integration with existing assets. Permian Resources said the deal allows it 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.

The transaction is expected to close during the first quarter of 2025, subject to regulatory approval.
The deal is expected to close in first-quarter 2025 following satisfaction of customary closing conditions.