NGL Energy Partners LP said it wants to focus on an area of the Permian Basin that straddles the New Mexico-Texas border, and will sell saltwater disposal wells, associated infrastructure and permits in Texas to a subsidiary of WaterBridge Resources LLC for more than $238 million.

The Tulsa-based partnership said its South Pecos assets include nine saltwater disposal wells near Pecos, TX, in southern Reeves and Ward counties, in the Permian's Delaware sub-basin. The sale also includes pipelines connected to the disposal wells, plus all of the agreements, disposal permits, and commercial, surface and other contracts associated with the facilities.

The partnership said it plans to use proceeds from the sale to reduce its debt, improve compliance leverage by the end of the fiscal year, and enhance liquidity. The transaction, currently listed at $238.8 million in cash, is subject to regulatory and other customary closing conditions, upon which additional consideration would be made for meeting certain criteria. The sale is expected to close within 45 days.

"The focus of our Delaware Basin water solutions strategy has been centered around our consolidated and growing position in central Reeves County, north to the Texas-New Mexico state line and up into Lea and Eddy County," said CEO Mike Krimbill. "We will continue to have over 1 million b/d of permitted disposal capacity in the Delaware Basin following this transaction, with substantial land positions and multiple pipeline projects.

"This transaction allows NGL to focus more fully on this core area of growth and high return opportunities while helping to also achieve our goals of a 'self-funding' model and reducing overall leverage."

NGL Energy acquired two ranches in New Mexico totaling about 122,000 acres for $93 million over the summer. The Beckham and McCloy ranches, located in Eddy and Lea counties, include locations for more than 20 saltwater disposal wells and 11.6 million barrels of freshwater rights in New Mexico. At the time, the partnership said the acquisitions would boost its available freshwater volumes in the Delaware to more than 30 million barrels annually.