Kinetik Holdings Inc. (NYSE:KNTK) entered into an agreement to acquire Durango Permian LLC from Durango Midstream LLC for approximately $840 million on May 9, 2024. In a related transaction, ArcLight Capital Partners LLC signed an agreement to acquire 16% equity interest in GCX from Kinetik Holdings Inc. Kinetik will acquire Durango with the following forms of consideration and consideration terms: Upfront Consideration: $315 million cash consideration and approximately 3.8 million shares of Kinetik Class C common stock (and its subsidiary, Kinetik Holdings LP, will issue corresponding common units) to Durango Midstream, LLC, an affiliate of Morgan Stanley Energy Partners at transaction closing, expected in June 2024, the Kinetik stock issued at closing will be subject to a 364-day lock-up period. Deferred Consideration: Kinetik will issue an additional 7.7 million shares of Kinetik Class C common stock (and its subsidiary, Kinetik Holdings LP, will issue corresponding common units) to the Durango Seller on July 1, 2025.

Contingent Consideration: Up to $75 million contingent consideration tied to the actual capital cost of Kings Landing, subject to adjustment for any costs in excess of Durango management?s budget. Any contingent consideration would be paid in cash within three months after the Kings Landing in-service date. The transaction is expected to close in the second quarter of 2024 following satisfaction of customary closing conditions, including under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (?HSR?).

The cash consideration for the Durango Acquisition and the capital required under the New Eddy Count Agreement are funded with the proceeds from the GCX sale. Wells Fargo Corporate & Investment Banking acted as financial advisor for Durango.