Kinetik Holdings Inc. (NYSE: KNTK) has recently announced the sale of its 27.5% equity interest in Epic Crude Holdings, LP to a subsidiary of Plains All American Pipeline, L.P. and Plains GP Holdings for a net upfront cash consideration of approximately $500 million. Additionally, there is a contingent cash payment of $96 million due if a capacity expansion of Epic Crude is formally sanctioned.
The terms of the transaction imply an upfront valuation of $2.85 billion for 100% of Epic Crude, with an additional $350 million for the contingent consideration. Kinetik's President and CEO, Jamie Welch, stated that this transaction aligns with the company's commitment to maximizing long-term shareholder value by reallocating proceeds from non-core asset sales to attractive growth projects and potentially accelerating shareholder returns.
The cash proceeds from this transaction will be utilized for general corporate purposes. The deal is anticipated to close by early 2026, subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Vinson & Elkins LLP served as legal counsel to Kinetik in this transaction. Kinetik Holdings Inc. is a fully integrated, pure-play, Permian-to-Gulf Coast midstream C-corporation operating in the Delaware Basin, with headquarters in Houston and Midland, Texas. The company provides comprehensive gathering, transportation, compression, processing, and treating services for natural gas, natural gas liquids, crude oil, and water.
This sale marks a significant move for Kinetik Holdings Inc., providing substantial upfront cash and the potential for additional contingent consideration, which will impact the company's financial position and future investment opportunities. As a result of these announcements, the company's shares have moved -1.73% on the market, and are now trading at a price of $41.95. Check out the company's full 8-K submission here.
