US-based Altus Midstream has agreed to combine with pipeline asset holding company BCP Raptor in an all-stock transaction.

The deal, which comes amid surging commodity prices, is expected to create pure-play Permian integrated midstream company in the Delaware Basin, Texas with $9bn enterprise value, including debt.

BCP Raptor owns EagleClaw Midstream, Caprock Midstream, and Pinnacle Midstream businesses. It also holds a stake of 26.7% in the Permian Highway Pipeline.

Altus, which was formed through the combination of Kayne Anderson Acquisition and energy company Apache, will issue 50 million Class C common shares to BCP’s unitholders.

The transaction will allow BCP’s backers, including private equity firm Blackstone and I Squared Capital to take over the control of Altus, which owns interests in four Permian-to-Gulf Coast pipelines.

Upon completion of the deal, BCP will own a 75% stake in the combined company, which will operate in two segments: midstream logistics and pipeline transportation.

Apache Midstream’s stake will be reduced from 79% to 20% and the remaining 5% stake in the combined company will be held by existing Altus public shareholders.

The deal is expected to allow BCP Raptor to become a public company.

Subject to completion of customary closing conditions, including Altus shareholder approval and regulatory reviews, the transaction is planned to be completed in the first quarter of 2022.

The transaction is expected to make Altus probably the largest natural gas processor in the Delaware Basin and the third-largest in the Permian Basin in terms of processing capacity.

The combined entity will have nearly two billion cubic feet (bcf) per day natural gas processing capacity strategically located near the Waha Hub in West Texas.

In a separate announcement, Daybreak Oil and Gas agreed to buy Reabold California, which operates ten producing wells in the Sacramento Basin in Northern California, in an all-stock transaction.

Upon completion of the deal, Daybreak is expected to have 1.085 million barrels of proved oil equivalent.