ONEOK Says Its Brazos Plants Are Full And Volumes Are Running Ahead Of Plan
Executives see about 14 rigs on the Brazos acreage in 2027, with room for more, and Cassidy 1 due at year end.
ONEOK's newly acquired Brazos Midland plants are full, and volumes are running above the company's expectations for this point in the year, Chief Commercial Officer Sheridan Swords said on the company's third-quarter earnings call. ONEOK, which runs pipelines and facilities that gather, process, move and store natural gas, natural gas liquids, refined products and crude, closed the Brazos deal earlier this month.
Plants full, rigs possibly rising
Swords said the current Brazos plants are full and the continued ramp should be enough to fill Cassidy 1, which comes online at year end. Based on current producer plans, ONEOK expects an average of about 14 rigs on the Brazos Midland dedicated acres during 2027.
Asked by a Wells Fargo analyst whether that count could climb, Swords said he sees an opportunity for it to "move up." Producers are encouraged by early Barnett results, he said, and are likely to shift more activity there as they get comfortable.
The Wells Fargo analyst noted that the fourth-quarter contribution annualizes to about $315 million of EBITDA, against the $590 million 2027 target given when the deal was struck. Chief Financial Officer Walt Hulse said the $550 million a day of processing capacity is full and ONEOK is doing offloads, so volumes will take a stair step up once Cassidy 1 arrives. Swords said Cassidy 1 adds about 330 million cubic feet a day, an increase of over 50%. Cassidy 2 is due in 2027.
Capital savings from oversized pipes
Swords said Brazos built oversized pipelines, which let ONEOK skip expanding a main line on its legacy gathering and processing system. He called the capital synergies immediate.
President and Chief Executive Pierce Norton, whose background is in construction, said he could "walk around that plant and tell that they've addressed a lot of the things that I've seen as problems in the past."
ONEOK is tying the Brazos and legacy Midland systems together.
Guidance and the Brazos contribution
Hulse said ONEOK raised its 2026 adjusted EBITDA midpoint by $200 million from last quarter's guidance. About $75 million reflects the expected 2026 Brazos contribution, offset by $25 million of transaction costs. Another $50 million is transaction-related benefits, and $100 million is stronger base-business performance.
ONEOK is not giving 2027 guidance now, Norton said, but expects to do so after fourth-quarter results in February. Third-quarter adjusted EBITDA was $2.24 billion, up 6% from a year earlier.
Cassidy 1 is due online at year end and Cassidy 2 in 2027, the next tests of whether Brazos reaches its $590 million target.
Sources
- Oneok Boosts Outlook on Higher Permian Basin Volumes — MarketWatch
- ONEOK GAAP EPS of $2.13 beats by $0.63 (OKE:NYSE) | Seeking Alpha — seekingalpha.com
- ONEOK Q3 2026 earnings preview: Revenue estimates see upward revisions (NYSE:OKE) | Seeking Alpha — seekingalpha.com
- Mergers & Acquisitions : Law360 : Legal News & Analysis — law360.com
- ONEOK Announces Higher Third-Quarter 2026 Earnings and — globenewswire.com
