ONEOK has secured a $9 billion minority equity investment from Apollo Global Management to fund its $4.425 billion acquisition of Brazos Midstream's Permian assets in the Midland Basin, the company said in an announcement Friday.
The investment takes the form of nonvoting preferred equity, meaning Apollo will hold a stake without board representation or control rights. ONEOK, a midstream energy company with operations across natural gas and crude oil transportation, will use the capital to complete the purchase of Brazos's assets and manage its debt obligations.
The announcement shows ONEOK is also executing a $5 billion debt repayment plan alongside the deal. The Brazos assets include natural gas processing facilities, gathering systems, and treating plants across the Permian, one of the largest hydrocarbon-producing regions in the United States.
Appollo Global Management manages roughly $680 billion in assets and has been active in energy infrastructure and credit over the past three years. Apollo's $9 billion commitment enters a market where long-term contracted cash flows in midstream infrastructure attract large allocators.
ONEOK's Permian exposure expands with the Brazos deal as the company already operates significant gathering and processing capacity in the region. The nonvoting structure allows Apollo to capture returns without operational involvement, a common arrangement in midstream capital partnerships where technical execution and regulatory compliance rest with the operator.
The $4.425 billion acquisition price values Brazos's Midland Basin footprint at a moment when energy infrastructure buyers are targeting assets with decades of production runways and minimal execution risk. Permian midstream assets have commanded sustained valuations despite recent energy price volatility, given the region's cost advantage and production resilience relative to other domestic basins.
Appollo's nine-billion-dollar check represents roughly 1.3 percent of the firm's total assets under management. The number that decides whether this capital deployment succeeds is ONEOK's ability to achieve debt-service coverage ratios above 1.4 times within 18 months of closing the Brazos deal.
