Kinetik Holdings Inc. (NYSE: KNTK) (“Kinetik” or the “Company”) has announced a strategic acquisition of natural gas and crude oil gathering systems from Permian Resources Corporation (NYSE: PR) (“Permian Resources”) for $180 million in cash. The assets, located primarily in Reeves County, Texas, provide Kinetik with expanded capabilities in natural gas gathering, compression, and processing, as well as crude oil gathering services. This acquisition aligns with Kinetik’s growth strategy in the Delaware Basin, leveraging its existing infrastructure and deepening its partnership with one of the region’s most efficient operators. Scheduled to close in Q1 2025, the transaction is expected to enhance operational synergies, unlock additional value through system integration, and generate long-term benefits for stakeholders.

This announcement highlights Kinetik Holdings Inc.’s strategic acquisition of natural gas and crude oil gathering systems from Permian Resources Corporation. Here are some key takeaways and insights:

Strategic Fit

1. Location Advantage: The acquired assets are adjacent to Kinetik’s existing Delaware South system, allowing for seamless integration and operational efficiency.
2. Expansion in the Delaware Basin: Reinforces Kinetik’s presence in one of the most prolific U.S. oil and gas regions.
3. Partnership Strengthening: Solidifies Kinetik’s strategic relationship with Permian Resources, a significant and efficient operator in the Delaware Basin.

Operational and Financial Highlights

1. Dedicated Acreage: 60,000 gross operated acres are secured under long-term agreements, ensuring predictable cash flow.
2. High-Volume Infrastructure: The assets include significant electric compression capacity and a private electric distribution system, contributing to cost efficiency and reliability.
3. Volume Growth: Projected volumes for 2025 include 150 Mmcf/d of gas and 25 Mb/d of crude, with room for additional optimization and integration benefits.
4. Investment Criteria: Aligns with Kinetik’s focus on high-quality, accretive investments.

Long-Term Value Creation

1. Upside Potential: Opportunities for enhanced control over residue gas and natural gas liquids through system optimization.
2. Support for Development: Permian Resources’ active and efficient development practices are expected to drive steady volume increases and mitigate production decline risks.

Closing Timeline

• The transaction is set to conclude in Q1 2025, subject to customary regulatory approvals, including the Hart-Scott-Rodino Antitrust Act compliance.

This move positions Kinetik to strengthen its asset portfolio and capitalize on the growing demand for midstream services in the Delaware Basin, potentially driving shareholder value over the long term.

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