Fueled by Another Acquisition, Energy Transfer Continues to Deliver Record-Setting Results

Energy Transfer LP (NYSE: ET) has been on an acquisition spree, and its latest deal has fueled another quarter of record-setting results. In July 2024, Energy Transfer completed the acquisition of WTG Midstream Holdings LLC, adding approximately 6,000 miles of complementary gas gathering pipelines and nine gas processing plants with a total capacity of 1.5 Bcf/d. This strategic move has expanded Energy Transfer's Midland Basin network and increased its natural gas processing capacity, driving record volumes and earnings.

WTG Midstream's assets have significantly contributed to Energy Transfer's impressive third-quarter 2024 results. The acquisition added ~6,000 miles of gas gathering pipelines, nine processing plants (~1.5 Bcf/d), and an additional 200 MMcf/d plant under construction. These assets have extended Energy Transfer's Midland Basin network and increased its processing capacity, enabling it to increase midstream gathered volumes and produced volumes by 6% and 26%, respectively, setting new Partnership records.

The acquisition of WTG Midstream is expected to add approximately $0.04 of Distributable Cash Flow (DCF) per common unit in 2025, increasing to $0.07 per unit in 2027. This growth is supported by a high-quality customer base with an average contract life of more than eight years, providing a stable revenue stream. The transaction was structured to maintain Energy Transfer's leverage target, with a mix of cash and equity consideration, ensuring the company's financial strength and flexibility.

Energy Transfer's acquisition strategy has not only driven record-setting results but has also positioned the company for future growth. The acquisition of WTG Midstream, along with other strategic investments, has expanded Energy Transfer's natural gas pipeline and processing network in the Permian Basin. This expansion enhances Energy Transfer's ability to provide natural gas to power plants and data centers across its footprint, capitalizing on the increasing demand for natural gas-fueled power.

In addition to its acquisition strategy, Energy Transfer has also invested in organic growth projects, further driving its record-setting results. The company recently completed a 50 MMcf/d expansion to the Orla East processing plant in the Permian Basin and constructed a 30-mile crude oil pipeline, allowing it to transport approximately 100,000 Bbls/d of crude oil from its terminals in Midland, Texas to Cushing, Oklahoma.

Energy Transfer's financial performance reflects the success of its acquisition strategy and organic growth projects. In the third quarter of 2024, Energy Transfer reported Adjusted EBITDA of $3.96 billion, up 12% year-over-year (YoY), driven by increased volumes across crude oil, natural gas, and NGL segments. Distributable Cash Flow (DCF) attributable to partners grew to $1.99 billion, with a $4 million increase YoY.

As Energy Transfer continues to execute its strategic acquisition plans and invest in organic growth projects, it is well-positioned to maintain its record-setting results and drive growth in the midstream energy sector. The company's ability to integrate acquired assets and operations, coupled with its strong balance sheet and financial flexibility, ensures a promising future for Energy Transfer and its investors.