Energy Transfer to Acquire Vaquero Midstream in a $2.625 Billion Delaware Basin Deal

Energy Transfer LP (TXSE: ET), one of the largest and most diversified energy infrastructure operators in the United States, announced on October 6, 2026 that it has agreed to acquire Vaquero Midstream LLC in a transaction valued at approximately $2.625 billion. The consideration consists of $1.95 billion in cash and approximately 33.3 million newly issued Energy Transfer common units. The partnership expects to close the deal in the fourth quarter of 2026, subject to regulatory approval and customary closing conditions.

What Energy Transfer Is Buying

Vaquero is a natural gas gathering and processing company in the core of the Southern Delaware Basin of Texas. Its pipeline network runs approximately 300 miles and serves operators across Loving, Reeves, Ward and Winkler counties. In addition, Vaquero operates the Caymus Processing Complex, which has three processing trains with a total capacity of approximately 675 MMcf/d.

Vaquero also owns enough acreage to build two additional trains. According to the company, those trains could raise total processing capacity to up to approximately 1.2 Bcf/d. Meanwhile, the system is supported by long-term, fee-based firm contracts and about 100,000 dedicated acres, with an average remaining contract life of approximately 10 years.

How the Assets Fit the Network

Energy Transfer described the deal as a bolt-on acquisition. Notably, Vaquero’s assets are already interconnected with Energy Transfer’s downstream natural gas and NGL infrastructure. As a result, the partnership expects the deal to create incremental revenue opportunities through pipeline transportation, fractionation, terminalling and export services.

Energy Transfer also expects the Vaquero assets to be immediately accretive to distributable cash flow per common unit. The company added that the acquisition should strengthen its position in one of the most active and lowest-cost producing regions in North America.

Where the Business Stood Heading In

For the second quarter, Energy Transfer reported Adjusted EBITDA of $5.07 billion, up 31% from $3.87 billion a year earlier. Distributable cash flow attributable to partners, as adjusted, rose 32% to $2.59 billion. Following those results, the partnership raised its full-year 2026 Adjusted EBITDA guidance to between $18.8 billion and $19.1 billion, up from a prior range of $18.2 billion to $18.6 billion.

Several volume measures also set partnership records in the quarter. NGL exports rose 25%, NGL transportation volumes rose 13%, and midstream gathered volumes rose 4%. In June, Energy Transfer placed its 275 MMcf/d Mustang Draw I processing plant into service in the Midland Basin. Separately, it raised its quarterly cash distribution to $0.3400 per common unit, its nineteenth consecutive increase.

The Vaquero announcement also arrives one day after Energy Transfer’s common units began trading on the Texas Stock Exchange under the same ticker. Next, the partnership plans to report third-quarter results on November 3, 2026, before the market opens.

Strategic Investment Summary

• Definitive Agreement: Energy Transfer LP (TXSE: ET) agreed to acquire Vaquero Midstream in a transaction valued at approximately $2.625 billion.
• Deal Consideration: The price consists of $1.95 billion in cash and approximately 33.3 million newly issued common units, with closing expected in the fourth quarter of 2026.
• Processing Capacity: Vaquero’s Caymus Processing Complex has about 675 MMcf/d of capacity, with room for two more trains that could lift it to up to about 1.2 Bcf/d.
• Contract Support: The system is backed by fee-based firm contracts, about 100,000 dedicated acres and an average remaining contract life of roughly 10 years.
• Second-Quarter Results: Adjusted EBITDA rose 31% to $5.07 billion, and full-year guidance was raised to $18.8 billion to $19.1 billion.
• Next Update: Energy Transfer plans to report third-quarter results on November 3, 2026.

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