ONEOK (OKE) M&A announcement summary

Deal rationale and strategic fit

• Acquisition of Brazos Midland Basin assets for $4.425B, funded by a $9B Apollo minority equity investment, expands scale and integration in the Permian, creating one of the largest platforms in the region.

• Adds 600,000 dedicated acres, 4,000 well locations, 14 active rigs, and long-term fixed-fee contracts averaging over 12 years, supporting growth visibility.

• More than doubles Midland Basin processing capacity to 2.3 Bcf/d, elevating position to third largest in the region.

• Strengthens wellhead-to-water NGL value chain, increasing processing, transportation, and export capabilities.

• Enhances ability to optimize capacity, connect volumes to downstream infrastructure, and deploy capital efficiently.

Financial terms and conditions

• Acquisition price is $4.425B, funded by a $9B nonvoting minority equity investment from Apollo, with no common equity issuance.

• $5B of proceeds used to extinguish existing debt, reducing leverage to 3.25x debt-to-EBITDA.

• Apollo receives a non-voting Class B interest, capped at a 7% IRR for nine years, with quarterly distributions equal to 15% of cash flow from operations and a buyout option after eight years or at $200M balance.

• Class B interest is structurally subordinate to all existing debt and has no board representation or liquidation preference.

• $130M in CapEx expected in 2027 to complete Cassidy II plant, not included in the quoted acquisition multiple.

Synergies and expected cost savings

• $80M in full-year synergies included in the 2027 EBITDA multiple, with recurring synergies expected to reduce the effective acquisition multiple over time.

• Significant capital and operational synergies expected due to overlapping infrastructure, enabling cost avoidance and efficient volume movement.

• Ability to move more volume with less capital due to combined assets and capital efficiencies anticipated as capacity is optimized.

• Optimizes commercial and capital savings opportunities, aligning with historical organic build multiples.