v3.25.3
BUSINESS COMBINATIONS
 9 Months Ended
Sep. 30, 2025
Business Combination [Abstract]  
BUSINESS COMBINATIONS BUSINESS COMBINATIONS
For acquired businesses, we recognize the identifiable assets acquired and the liabilities assumed at their estimated fair values on the date of acquisition with any excess purchase price over the fair value of net assets acquired recorded to goodwill. Determining the fair value of these items requires management’s judgment and the utilization of an independent valuation specialist, if applicable, and involves the use of significant estimates and assumptions.
As of September 30, 2025, our allocations of purchase price for acquisitions made during 2025 and 2024 are detailed below:
Acquisition DateAcquisitionConsideration TransferredCurrent AssetsProperty Plant & EquipmentIntangible AssetsOther Long Term AssetsLiabilitiesContingent Consideration
(In thousands)
(1)Q1 2025Barilla Draw $175,481 $— $164,981 $10,500 $15,652 $15,652 $— 
(2)Q2 2024Durango Permian, LLC$781,167 $61,171 $627,452 $183,000 $3,621 $89,577 $4,500 
Barilla Draw Acquisition
On January 14, 2025, the Company completed the previously announced bolt-on acquisition with Permian Resources Corporation, who directly owned all of the issued and outstanding membership interests of (a) RC Permian Gathering, LLC, a Delaware limited liability company (“Permian Gathering”) and (b) Barilla Draw Gathering, LLC, a Delaware limited liability company (“Barilla Draw”), to acquire all issued and outstanding membership interests of Permian Gathering and Barilla Draw (the “Barilla Draw Acquisition”) for $175.5 million of cash consideration. Assets acquired consisted of natural gas and crude gathering pipelines and compression equipment of $165.0 million, intangible right-of-way assets of $10.5 million and operating lease right of use assets of $15.7 million. Acquired gathering pipelines and compression were valued based on replacement cost along with economic obsolescence adjustments. These assets are depreciated over an estimated useful life of 20 years. Intangible right-of-way assets were valued based on the across the fence method and are amortized over an estimated useful life of seven years. Acquired net assets from this business combination were included in the Midstream Logistics segment. This transaction was accounted for as a business combination in accordance with ASC 805 Business Combination (“ASC 805”). Certain data necessary to complete the purchase price allocation is not yet available, including, but not limited to, the completion of the valuation of the underlying assets and liabilities assumed. The Company is continuing its review of these matters during the measurement period. During 2025, the Company recorded measurement period adjustments totaling $2.9 million related to working capital settlements for the effective period. Acquisition-related costs were immaterial for this transaction. For the three and nine months ended September 30, 2025, excluding intercompany revenue and cost of sales, Barilla Draw recorded revenues of $7.6 million and $22.3 million, respectively, and net income of $1.9 million and $5.1 million, respectively.
Durango Acquisition
On June 24, 2024 (the “Durango Closing Date”), the Company consummated the Membership Interest Purchase Agreement (the “Durango MIPA”), dated May 9, 2024, by and between the Company, the Partnership, and Durango Midstream LLC, an affiliate of Morgan Stanley Equity Partners (the “Durango Seller”), pursuant to which the Partnership purchased all of the membership interests of Durango Permian, LLC and its wholly owned subsidiaries (“Durango”) from Durango Seller for an adjusted purchase price of approximately $785.7 million (the “Durango Acquisition”). Durango Seller is entitled to an earn out up to $75.0 million in cash (the “Kings Landing Earn Out”), contingent upon the Kings Landing gas processing complex in Eddy County, New Mexico (the “Kings Landing Project”), which was placed into service in September 2025. The Kings Landing Earn Out is subject to reductions based on actual capital costs associated with the Kings Landing Project. The Company recorded a contingent liability related to the Kings Landing Earnout based on project completion probability, see additional information in Note 16—Commitments and Contingencies in the Notes to our Condensed Consolidated Financial Statements set forth in this Form 10-Q. The Durango Acquisition allows the Company to further expand its footprint into New Mexico and across the Northern Delaware Basin.
The Durango Acquisition was accounted for as a business combination in accordance with ASC 805. Starting on the Durango Closing Date, our Consolidated Financial Statements reflected Durango as a consolidated subsidiary. The accompanying Condensed Consolidated Financial Statements herein include (i) the combined net assets of the Company carried at historical costs and net assets of Durango carried at fair value as of the Durango Closing Date and (ii) the combined results of operations of the Company with Durango’s results presented within the Condensed Consolidated Financial Statements from the Durango Closing Date going forward. Acquired net assets from this business combination were included in the Midstream Logistic segment. For the three and nine months ended September 30, 2025, excluding intercompany revenue and cost of sales, Durango recorded revenues of $49.0 million and $141.6 million, respectively, and net loss of $5.1 million and $0.1 million, respectively. For the three and nine months ended September 30, 2024, Durango recorded revenues of $35.8 million and $38.9 million, and net income of $1.4 million and $1.6 million, respectively, excluding intercompany revenue and cost of sales. Decrease in net income was primarily driven by decreases in NGL and condensate prices and a fair value adjustment to the Kings Landing Earn Out contingent liability of $5.7 million recognized during the third quarter of 2025.