Oilfield Water Logistics (OWL) said Monday it has acquired a portfolio of operating produced water infrastructure assets in New Mexico from an unnamed, “major Permian Basin oil producer.”
The assets include 23 saltwater disposal wells and 300 miles of water gathering pipelines, according to OWL, which said it has also entered into a long-term contract with the seller for water infrastructure solutions.
The acquisition doubles OWL’s footprint in the Permian’s northern Delaware sub-basin, said CEO Chris Cooper.
Exploration and production “companies increasingly face operational and logistical challenges related to the transportation, re-use and disposal of produced water,” Cooper said.
The OWL deal is the latest in a flurry of water-related transactions in the Permian, where the produced water market could reach $12 billion by 2025, according to a recent analysis by Raymond James & Associates Inc.
A December report by Bluefield Research estimated that annual spending by U.S. oil and gas operators on water management for hydraulic fracturing will average $17 billion from 2019-2028.
Financial terms of the OWL transaction were not disclosed.