Enterprise Products to acquire Occidental’s gas gathering assets for $580 million

HOUSTON - Enterprise Products Partners L.P. (NYSE:EPD), a prominent player in the Oil, Gas & Consumable Fuels industry with a market capitalization of $67.8 billion, announced Wednesday it has executed agreements to acquire a natural gas gathering affiliate of Occidental in the Midland Basin for $580 million in cash. According to InvestingPro data, the company maintains strong financial health with an EBITDA of $9.5 billion over the last twelve months.

The debt-free transaction includes approximately 200 miles of natural gas gathering pipelines that support Occidental’s production activities in the Midland Basin, with access to more than 1,000 drillable locations. This strategic expansion aligns with Enterprise’s track record of delivering value to shareholders, including its impressive 7% dividend yield and 27 consecutive years of dividend increases, as highlighted in InvestingPro’s analysis.

As part of the agreement, Enterprise will also provide Occidental with natural gas gathering and processing services. The deal includes a long-term dedication of approximately 73,000 acres across four counties in the Midland Basin.

Enterprise also plans to build a new Athena natural gas processing plant with capacity to process 300 million cubic feet per day of natural gas and extract up to 40,000 barrels per day of natural gas liquids. The plant is expected to begin service during the fourth quarter of 2026.

Upon completion of the Athena plant, Enterprise’s Midland Basin assets will have the capability to process 2.2 billion cubic feet per day of natural gas and extract 310,000 barrels per day of natural gas liquids.

"These agreements with Occidental are consistent with Enterprise’s focus on expanding our Midland Basin franchise through organic investments in our midstream network and through targeted acquisitions that bolt-on to our existing infrastructure," said A.J. Jim Teague, co-chief executive officer of Enterprise’s general partner, in the press release.

The acquisition is subject to customary regulatory approvals and is expected to close in the third quarter of 2025.

The investments in the Athena plant and expansions of Enterprise’s Midland Basin gathering system are included in the company’s estimate of growth capital expenditures of $4.0 billion to $4.5 billion for 2025 and $2.2 billion to $2.5 billion for 2026. With revenue of $54.8 billion in the last twelve months and a conservative debt-to-equity ratio of 1.11, Enterprise demonstrates solid financial positioning for these capital investments. For detailed analysis and additional insights, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US equities.

In other recent news, Enterprise Products Partners reported its financial results for the second quarter of 2025, showing mixed outcomes. The company surpassed earnings per share expectations, posting $0.66 per share compared to the forecasted $0.65, representing a 1.54% positive surprise. However, the revenue figures were notably below expectations, reaching $11.36 billion, which is a 21.6% shortfall from the anticipated $14.49 billion. Following these results, Stifel adjusted its price target for Enterprise Products Partners, lowering it to $35.00 from the previous $36.00, though it maintained a Buy rating on the stock. Stifel noted that the company’s results were "lighter than our expectations," prompting the price target revision. These developments highlight the ongoing financial dynamics and analyst perspectives surrounding Enterprise Products Partners.

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