WaterBridge Holdings LLC has secured $345 million of equity capital to fund the acquisition of produced water infrastructure from three oil and gas producers in the Permian Basin’s Delaware sub-basin, the firm announced Wednesday.
The producers are Primexx Energy Partners, Tall City Exploration III LLC and Jetta Permian LP.
The assets acquired from Primexx are located in Reeves County, and comprise roughly 70 miles of pipeline and six disposal wells with 150,000 barrels/day of permitted capacity, WaterBridge said.
Concurrently, “WaterBridge and Primexx entered into a 20-year produced water management agreement at market rates for Primexx’s operated acreage within an extensive area of mutual interest.”
The assets recently acquired from Tall City and Jetta also are located in Reeves County, and entail 29 miles of pipeline, and two disposal wells with 40,000 barrels/day of permitted capacity.
Tall City and Jetta each entered into 15-year produced water management agreements with WaterBridge.
Following the transactions, WaterBridge “has more than 600,000 acres under long-term dedication in the Delaware, will provide 1.7 million b/d of produced water handling capacity over 800 miles of large-diameter pipelines, and will provide 70 handling and disposal facilities,” the company said.
Added Chairman David Capobianco, “The capacity and redundancy offered by our system will continue to be instrumental in supporting current and future customers’ growing development programs in the Southern Delaware Basin.”
Analysts at Raymond James & Associates Inc. said in June that the produced water market in the United States could reach 54 million barrels/day* by 2025, translating to a $12 billion market in the Permian Basin alone.
Meanwhile, Bluefield Research said this week that it expects U.S. oil and gas companies to spend $174 billion on water management for hydraulic fracturing from 2019-2028, and that, “a host of midstream water companies backed by private equity and sovereign wealth funds are positioned to seize the opportunity going forward.”
*Correction -- The original article incorrectly stated the volume of oil and gas wastewater expected to be produced in the U.S. Analysts at Raymond James & Associates Inc. said in a July 29 research note that they expect the produced water market to reach 54 million barrels/day by 2025. NGI regrets the error.