Kinetik Holdings Inc experienced a 3.6% gain in premarket trading after reports that the company is contemplating a potential sale following takeover interest from Western Midstream Partners. The media outlet that first reported the approach said Kinetik has begun evaluating options to determine market interest.
Company details cited in the reports describe Kinetik as a roughly $7.2 billion midstream operator that manages about 4,600 miles of pipeline within the Delaware portion of the Permian Basin in western Texas and New Mexico. That network and the location of its assets are noted as factors that make Kinetik a strategic piece of natural gas infrastructure in a fast-changing market.
According to the same reporting, the initiative to explore a sale followed an initial outreach by Western Midstream Partners. Western Midstream is identified as being backed by Occidental Petroleum. Sources say the contacts are at an early stage and that Western Midstream has not submitted a formal bid.
Executives and advisors are reportedly considering a sale process that would measure interest from both strategic industry players and infrastructure investors. The goal of such a process, as described, would be to solicit indications of interest from potential buyers and gauge the market for a possible transaction.
Observers cited in the reporting link the approach and the broader interest in midstream assets to heightened merger and acquisition activity across the natural gas sector. That uptick in dealmaking is attributed in the reports to strong U.S. natural gas production and rising demand from liquefied natural gas exports and data center consumption, factors the reports say are encouraging companies to scale up pipeline capacity and secure supply.
Kinetik's placement within the Delaware Basin - a region characterized in the reporting as one of the more productive areas of the Permian - is presented as a reason the company could draw attention from buyers seeking to expand infrastructure holdings. Still, the accounts underline that any transaction remains uncertain while discussions are early and no firm proposals have been lodged.
Market context: The reported approach to Kinetik comes amid broader consolidation activity in the midstream sector, where operators and investors have been actively pursuing opportunities to increase scale and pipeline reach in response to elevated production and shifting demand patterns.