Delek Logistics strengthened its position in the Permian Basin with a pending acquisition of Gravity Water Midstream in a cash-and-stock deal valued at $285 million. It’s the second water infrastructure purchase made by Delek since September.
Delek and Gravity announced the deal on Dec. 12, with the companies expecting the deal to close in first-quarter 2025. The transaction consists of $200 million in cash for Gravity Oilfield Services, of which Gravity Water Midstream is a division. The balance will be paid in $85 million worth of Delek shares.
Gravity’s midstream facilities are in the Midland Basin in Texas and the Williston Basin in North Dakota. Gravity’s water infrastructure consists of more than 200 miles of permanent pipeline and 46 saltwater disposal facilities, according to a press release.
In September, Tennessee-based Delek purchased H2O Midstream, a water midstream company with a large presence in the Permian Basin for $230 million in cash and stock.
“We are committed to executing our strategy of being the preferred oil, gas and water midstream services provider in the Permian Basin,” said Avigal Soreq, Delek Logistics president, in the Dec. 12 announcement.
Delek’s announcement included new details on the company’s plans for acid-gas injection (AGI) capabilities at its Libby 2 gas processing plant, which is under construction in the northern Delaware Basin. AGI is needed as part of a sour gas processing system.
In the Midland Basin, Delek also announced securing an additional 34,000 of acreage dedication. The company said it now has about 400,000 of dedicated acreage in the Midland for operations, with the land supported by DKL’s Permian Gathering System.
“The announcements today are a testament to the high-quality growth opportunities we are seeing in and around our existing assets,” Soreq said.
Vinson & Elkins advised Gravity Oilfield Services in the sale of its Gravity Water Midstream division.