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Western Midstream buys Aris Water for $1.5 Billion

Western Midstream Partners announced on Wednesday that it would acquire Aris Water Solutions for $1.5 billion in cash and stock. The company wants to diversify its operations in the Permian basin.

After the bell, shares of Aris Water Solutions rose by over 21%.

Western Midstream, a natural-gas focused pipeline operator, has sought to build a leading platform for water infrastructure in the U.S.'s top oilfield and diversify their customer base throughout West Texas and southeast New Mexico.

The company said that the acquisition would allow it to expand its footprint to the north, into Lea and Eddy Counties of New Mexico. It also provided access to additional throughput opportunities in its crude-oil, natural-gas and produced-water business.

Aris has a full-cycle infrastructure of water assets, including 790 miles produced-water pipelines, 1.8 million barrels of produced water per day (mmbd), 1.4 mmbd water recycling capacity and 625,000 acres of dedicated land from counterparties of investment grade.

Western Midstream CEO Oscar Brown stated that the acquisition would result in a "produced water gathering, disposal and recycling business which can meet flow assurance customers' needs."

Occidental Petroleum, a U.S. shale oil producer, holds a stake of 43.5% in the pipeline operator.

Aris shareholders receive 0.625 units of Western Midstream per Aris share or $25 in cash. The maximum cash consideration is $415,000,000.

The deal should close by the end of 2025. Reporting by Vallari Shrivastava, Bengaluru. Editing by Alan Barona

(source: Reuters)