Energy Transfer (ET) Is Paying $2.625 Billion For A Delaware Basin Expansion

• Energy Transfer (NYSE:ET) agreed to acquire Vaquero Midstream in a cash and stock transaction valued at US$2.625b.
• The deal expands Energy Transfer’s natural gas gathering and processing footprint in the Delaware Basin by adding Vaquero’s existing infrastructure.
• Vaquero’s system is backed by long term contracts with what Energy Transfer describes as premium customers in the basin.
• The planned acquisition of Vaquero Midstream and the Delaware Basin build out deserves to be weighed against our wider thesis on Energy Transfer. We have also flagged 2 warning signs (1 major) for Energy Transfer.

For a broader view on where capital is moving across energy infrastructure and grid build out, compare this move with 44 power grid technology and infrastructure stocks.

Energy Transfer provides energy-related services across the US, and this deal fits into its role as a large midstream operator that moves and processes hydrocarbons between producers and end markets. With a market cap of about US$70.5b, the business has the scale to absorb and integrate sizeable midstream networks.

3 things going right for Energy Transfer that this headline doesn't cover.

Why is Energy Transfer buying Vaquero Midstream now?

Energy Transfer is adding three natural gas processing plants and associated gathering lines in the Delaware Basin through this US$2.625b mix of cash and equity. Management is leaning into long term contracts with what it calls premium customers, which can increase contracted volumes that feed into its wider pipeline and export system.

Does this Vaquero deal change the Energy Transfer Narrative?

The Vaquero acquisition lines up with the existing Narrative that leans on long dated gas demand and contracted capacity, including more than 6 Bcf/d tied to utilities and data centers. Folding Vaquero’s long term agreements into that footprint increases the weight on execution, capital discipline and keeping leverage within the 4 to 4.5x EBITDA target range.

See how these catalysts shape Energy Transfer's path to a $24.58 fair value.

What should investors watch next on this Energy Transfer deal?

The key markers sit around closing and integration. The transaction is guided to complete in the fourth quarter of 2026 subject to approvals, so investors can watch for regulatory clearances, updated 2026 capital spending guidance that reflects the US$1.95b cash outlay, and any revised leverage or volume targets once Vaquero is folded in.

Add Energy Transfer to your Watchlist and get alerts as these catalysts play out.

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