Kinetik Holdings Inc.

2. 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.

Barilla Draw Acquisition

In the first quarter of 2025, the Company completed a bolt-on acquisition with Permian Resources Corporation to acquire all issued and outstanding membership interests of its wholly owned subsidiaries, 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. The acquired net assets were included in the Midstream Logistics segment. This transaction was accounted for as a business combination in accordance with ASC 805 Business Combinations.