In a strategic move to enhance its presence in the midstream services sector, Delek Logistics Partners, LP (NYSE: DKL) has announced the acquisition of Gravity Water Intermediate Holdings LLC for $285 million. This deal further cements Delek Logistics’ position as a leading provider of integrated crude oil, natural gas, and water midstream solutions in key U.S. basins.
Expanding Operations in the Permian Basin
The acquisition of Gravity Water Midstream adds significant capabilities to Delek Logistics’ portfolio, particularly in the Permian Basin, one of the world’s most prolific oil and gas regions. Gravity’s operations, primarily concentrated in Howard County within the Midland Basin, align seamlessly with Delek’s existing assets, including those from its earlier acquisition of H2O Midstream.
Details of the Deal
The $285 million transaction includes:
- $200 million in cash.
- 2.175 million common units of Delek Logistics.
This acquisition is expected to boost Delek Logistics’ third-party EBITDA to over 70%, reinforcing its growth trajectory and expanding its service offerings.
About Gravity Water Midstream
Gravity Water Midstream is a prominent player in water management for the oil and gas industry. Its assets include:
- Over 200 miles of permanent pipeline.
- 46 saltwater disposal facilities.
- 14 freshwater facilities with a combined storage capacity of over six million barrels.
These facilities provide gathering, transportation, recycling, storage, and disposal services for produced water, ensuring an efficient and environmentally responsible approach to water management.
Strategic Benefits
With the integration of Gravity’s infrastructure, Delek Logistics aims to:
- Enhance Operational Efficiency: Leverage Gravity’s assets to optimize costs and streamline operations.
- Expand Service Offerings: Provide comprehensive solutions for water and crude management to customers.
- Drive Growth: Strengthen its foothold in the Midland and Williston Basins, ensuring long-term value creation.
Future Outlook
Uzi Yemin, Chairman and CEO of Delek Logistics, expressed optimism about the acquisition:
“The addition of Gravity Water Midstream is a significant milestone in our journey to becoming a fully integrated midstream services provider. This deal not only strengthens our capabilities but also positions us for sustained growth in the Permian Basin and beyond.”
By combining resources, Delek Logistics anticipates unlocking synergies and creating new opportunities for its customers and stakeholders.
Stay tuned to The Logistic News for the latest updates on strategic acquisitions and developments in the logistics and energy sectors.
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