Energy Transfer Expands Permian Presence With $3.25 Billion Acquisition: Details – Energy Transfer (NYSE:ET)

Diamondback Energy, Inc. (NASDAQ:FANG) stock prices are rising after signing an agreement with this company LP energy transfer (NYSE: ET) will sell WTG Midstream Holdings LLC.

Energy Transfer LP is acquiring WTG Midstream from subsidiaries Stonepeak, Davis Estate and Diamondback Energy in a transaction valued at approximately $3.25 billion.

The transaction value includes $2.45 billion in cash and approximately 50.8 million newly issued Energy Transfer common units.

The buyout is expected to strengthen Energy Transfer’s natural gas pipeline and processing network in the Permian Basin.

The acquisition includes eight gas processing plants (~1.3 Bcf/d), two additional facilities under construction (~0.4 Bcf/d) and a 20% interest in BANGL Pipeline.

Energy Transfer is expected to benefit from well-positioned assets in the Permian, which is the most active region in the US

The transaction is expected to close in the third quarter of 2024, subject to regulatory approval and customary closing conditions.

Synergy: The transaction is expected to generate additional revenues from downstream NGL transportation fees and fractionation. Energy Transfer expects WTG assets to add approximately $0.04 to the DCF distribution per common unit in 2025, which is expected to increase to approximately $0.07 per common unit in 2027.

Diamondback Energy expects total net pre-tax consideration of approximately $375 million, subject to customary closing conditions and adjustments. Proceeds from the transaction will be used to reduce debt related to the pending Endeavor Energy Resources, LP merger.

As of the end of March, Energy Transfer’s corrected Distributable cash flow attributable to partners was $2.36 billion.

Investors can gain exposure to FANG stocks through Texas Capital Trust Texas Capital Texas Oil Index ETF (NYSE:OILT) i Invesco ETF focused on energy exploration and production (NYSE:PXE).

Reduction: FANG shares were up 1.89% at $197.11 at last check on Tuesday.

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