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Energy Transfer is making another major push into one of America's busiest oil and gas regions, agreeing to acquire Vaquero Midstream LLC for about $2.63 billion in a cash-and-stock transaction designed to expand its reach across the Delaware Basin.

The deal, announced Tuesday, will bring a substantial network of pipelines and natural gas processing assets under Energy Transfer's control. Sidley Austin LLP is advising Energy Transfer, while Willkie Farr & Gallagher LLP represents Vaquero.

The transaction calls for Energy Transfer to pay $1.95 billion in cash and issue approximately 33.3 million newly issued common units.

For Energy Transfer, the acquisition is more than a simple expansion on a map. It creates a connection between Vaquero's gathering and processing infrastructure and Energy Transfer's existing network for natural gas and natural gas liquids, potentially opening additional revenue streams from transportation, processing, terminal and export services.

Vaquero Adds 300 Miles of Delaware Basin Pipelines

Vaquero operates approximately 300 miles of pipelines serving oil and gas producers across Loving, Reeves, Ward and Winkler counties in the Delaware Basin.

The region is one of the most active oil and gas-producing areas in the United States, making infrastructure capable of moving and processing production particularly valuable.

The acquisition gives Energy Transfer a larger presence in the basin while adding infrastructure that can feed into its broader midstream network.

Caymus Complex Adds Major Processing Capacity

Vaquero's assets also include the Caymus Processing Complex, which houses three natural gas processing plants with combined capacity of approximately 675 million cubic feet per day.

But the ceiling could be considerably higher.

Vaquero has sufficient acreage to support construction of two additional processing plants, potentially lifting total processing capacity to roughly 1.2 billion cubic feet per day, according to the companies.

That expansion potential gives Energy Transfer another lever for growth as production and processing needs evolve across the Delaware Basin.

Long-Term Contracts Strengthen Vaquero Assets

The infrastructure being acquired is supported by long-term contracts and acreage commitments covering approximately 100,000 acres.

The companies said those agreements have an average remaining term of about 10 years, providing Energy Transfer with a significant contracted base as it integrates the assets.

The combination of pipeline transportation and processing capacity could also strengthen Energy Transfer's ability to capture value at multiple stages of the energy supply chain.

Energy Transfer Expects Immediate Cash Flow Boost

Energy Transfer said the Energy Transfer $2.6B Vaquero deal is expected to immediately increase distributable cash flow per common unit.

The transaction is scheduled to close during the fourth quarter, assuming regulatory approval and the satisfaction of other customary closing conditions.

For Energy Transfer, the acquisition brings together existing infrastructure, future expansion potential and long-term commercial commitments in a region where energy production continues to demand extensive midstream capacity.

Sidley and Willkie Lead Deal Counsel

Sidley Austin's legal team advising Energy Transfer is led by partners George Vlahakos and Atman Shukla.

Willkie Farr & Gallagher's team representing Vaquero is led by partners Jesse Betts, Jessica Hammons and Nathan Meredith.

If completed as planned, the $2.63 billion transaction will give Energy Transfer another sizable foothold in the Delaware Basin while adding hundreds of miles of pipelines and significant natural gas processing capacity to its already extensive midstream network.