Kinetik Holdings closed its acquisition of Durango Permian LLC, a platform of gas gathering and processing assets in the northern Delaware Basin.

The transaction significantly enhances Kinetik’s presence in the New Mexico Delaware, the company said in a June 24 release.

Durango’s assets in Eddy, Lea and Chaves counties, New Mexico, include approximately 2,400 miles of natural gas gathering pipelines and 220 MMcf/d of processing capacity.

Kinetik Acquisition Map
The Durango system includes gas pipelines and processing capacity in Lea, Eddy and Chaves counties, New Mexico. (Source: Kinetik investor presentation)

When the deal was announced in early May, Kinetik agreed to pay an aggregate of $765 million in cash and equity for the Durango assets.

Kinetik agreed to pay $315 million in cash and 11.5 million shares of Class C common stock, some of it deferred until July 2025, to seller Morgan Stanley Energy Partners.

Kinetik financed the cash consideration of the deal with proceeds from a divestiture of its 16% interest in the Gulf Coast Express (GCX) pipeline, completed earlier this month.

ArcLight Capital Partners paid $540 million for the GCX interest. 

With the sale of its interest in GCX, Kinetik is now a purely Delaware Basin midstream provider.

The Durango acquisition and the GCX divestiture “are immediately deleveraging” with Kinetik’s leverage ratio at 3.4x after closing, Kinetik said.

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