| Key Points: – Western Midstream to acquire Aris Water Solutions for ~$2B in cash and equity. – Deal creates a fully integrated produced-water system in the Delaware Basin. – Acquisition expands WES’s New Mexico footprint and diversifies its customer base. |
Western Midstream Partners announced Tuesday that it will acquire Aris Water Solutions in a cash-and-equity deal valued at approximately $2 billion. The transaction aims to strengthen Western Midstream’s position as a leading full-cycle water infrastructure provider in the Permian Basin, particularly in the Delaware sub-basin.
Under the agreement, Aris shareholders will receive either 0.625 Western Midstream common units or $25 per share in cash, subject to proration and totaling no more than $415 million in cash consideration. The deal represents a 23% premium to Aris’s closing share price and a 10% premium to its 30-day volume-weighted average price. Once completed, Aris shareholders are expected to own about 7% of the combined company.
The acquisition is expected to significantly enhance Western Midstream’s ability to serve oil and gas producers with water gathering, recycling, disposal, and transport services. Aris brings a portfolio of assets that includes approximately 790 miles of water pipelines, 1,800 MBbls/d of disposal capacity, and 1,400 MBbls/d of recycling capacity. The company also operates on over 625,000 dedicated acres under long-term contracts with a number of investment-grade exploration and production customers.
In addition to operational expansion, the transaction provides access to the McNeill Ranch in New Mexico. The asset includes surface rights and pore space that can be used to expand disposal capacity in a region that has seen accelerated drilling activity and increased water-handling demand.
Executives from both companies say the integration will create long-term value through infrastructure synergies, increased flow assurance for producers, and more efficient capital allocation. The combination also positions the new entity as a differentiated provider of water infrastructure services at a time when producers are looking for environmentally sustainable and cost-effective water management solutions.
Western Midstream expects the deal to be accretive to its free cash flow per unit in 2026. The company is targeting $40 million in annual cost synergies and plans to maintain a pro forma net leverage ratio of approximately 3.0x. Additionally, the ongoing development of long-haul infrastructure like the Pathfinder pipeline is expected to provide added operational flexibility and growth potential.
The acquisition underscores a growing trend in the energy sector, where midstream companies are investing more heavily in water infrastructure as a strategic asset. With environmental regulations tightening and production efficiency under the spotlight, control over water recycling and disposal has become a core competitive advantage for Permian operators.
