Sidley Advised Energy Transfer on US$2.625 Billion Acquisition of Vaquero Midstream

Sidley advised Energy Transfer LP on its definitive agreement to acquire Vaquero Midstream LLC in a transaction valued at approximately US$2.625 billion. The acquisition adds a natural gas gathering and processing business in the Delaware Basin to Energy Transfer's Permian footprint.

Consideration will consist of US$1.95 billion in cash and approximately 33.3 million newly issued Energy Transfer common units. The transaction is expected to close in the fourth quarter of 2026, subject to regulatory approval and customary closing conditions.

Vaquero operates an approximately 300-mile gathering and intrabasin transportation pipeline network across Loving, Reeves, Ward, and Winkler counties in Texas. Its Caymus Processing Complex includes three processing trains with a total capacity of approximately 675 MMcf/d, and Vaquero owns sufficient acreage to support two additional trains that could raise capacity to approximately 1.2 Bcf/d. The system is supported by long-term, fee-based contracts and approximately 100,000 dedicated acres, with an average remaining contract life of approximately 10 years.

Energy Transfer expects the transaction to add to distributable cash flow per common unit from the outset, and Vaquero's assets already connect to the partnership's downstream natural gas and NGL infrastructure. Energy Transfer operates approximately 140,000 miles of pipeline and related energy infrastructure across 44 states.

Sidley's team was led by partners George Vlahakos and Atman Shukla (Energy and Infrastructure), and senior managing associates Courtney Luster and Karla Utset (M&A). Additional team members included Stephen Boone Jr., Kenneth Irvin, and Eva Romero-Sutherland (Energy and Infrastructure); Angela Richards and Eric Ma (Tax); Heather Palmer and Austin Pierce (Environmental); Elizabeth McCloy and Brandon Bryer (Real Estate); Eric Winwood, Marian Fielding, and Matthew Green (Employee Benefits and Executive Compensation); Sam Burdyl (Commercial Litigation and Disputes); Vadim Brusser, Jason Semmes, and Miriam Carroll Silvestri (Antitrust and Competition); Stephen McInerney (Privacy and Cybersecurity); and Lauren Grau and Andy Dykstra (Technology Transactions).