A long-term, fee-based agreement has also been signed by Brazos with Callon for gas gathering and processing services for acreage currently under development in Ward and Pecos counties in Southern Delaware Basin.

Brazos chief commercial officer Stephen Luskey said: “The acquisition of these strategic assets builds upon our existing franchise position and provides a platform for growth in an area we know well.

“Callon is one of the leading pure-play Permian operators and we are pleased to be able to manage their gas infrastructure needs.”

Brazos said that the acquisition of the midstream assets strengthens its position in the core of the Delaware Basin.

Callon Petroleum CEO and president Joe Gatto said: “We are pleased to be entering into a long-term operating partnership with the team at Brazos Midstream, one of the premier gathering and processing firms in the Delaware Basin.

“We believe this transaction supports our current plans for robust growth across our Delaware Basin footprint.”

The natural gas gathering system will connect to Comanche II natural gas processing plant as well as to Brazos’ existing system.

Upon completion of the transaction, which is scheduled in January 2018, Brazos will have 260 MMcf/d of total operated processing capacity.

Separately, Brazos is planning to build a third natural gas processing plant, Comanche III. Construction on the plant is scheduled to start in early 2018.