Oklahoma City-based Lagoon Water Solutions on Tuesday paid $85 million for part of Continental Resources Inc.'s oilfield water system serving Oklahoma’s busiest reservoirs, the STACK, aka the Sooner Trend of the Anadarko Basin, mostly in Canadian and Kingfisher counties, and the SCOOP, South Central Oklahoma Oil Province.

Lagoon picked off Continental's eastern STACK water recycling facility, gathering system and three related disposal wells in Blaine County, and as part of the transaction has inked a long-term arrangement to gather and  dispose of produced water and source recycled water for Continental.

The purchase is part of Lagoon's stated goal to become Oklahoma's "premier water midstream provider." The deal will give Lagoon 200 miles of pipelines in the state, expanding its growing network of gathering and disposal assets.

Continental CEO Harold Hamm said the system going to Lagoon represents "a small portion" of his company's water handling facilities, noting they currently are valued at approximately $1 billion. "These facilities contain significant added value for our shareholders," Hamm said.

From Lagoon's perspective the purchase is "significant," according to its CEO Kevin Lafferty. "This acquisition expands our network of reliable gathering and disposal assets in the core of the STACK play and further guarantees reliable takeaway water solutions for STACK operators," Lafferty said.

As part of the increased activity in the midstream water space, TPG Capital earlier this year acquired a majority stake in Goodnight Midstream, a produced water infrastructure company that works in the Permian Basin, Eagle Ford and Bakken shales, for $930 million. The private equity platform of global alternative asset firm TPG bought the stakes from Tailwater Capital and private investors in a deal expected to close this summer.

In addition to the water handling system sale, Continental announced the completion of three initiatives that collectively will add about $80 million to its capital expenditure (capex) budget for this year.

The trio include a $79.5 million leasehold acquisition from an undisclosed party in the SCOOP, adding up to 150 gross drilling locations in the Woodford and Sycamore; several acreage trades, netting Continental 3,000 more acres within the company's core operating areas; and an increase in its stake from $125 million to $150 million in 2019 mineral investments in conjunction  with Franco-Nevada Corp.