Lagoon Water Midstream on Tuesday said it has closed the acquisition of Midland, TX-based Double Drop Resources, a Permian Basin-focused water management company.

The acquisition “significantly expands Lagoon’s operations and establishes it as a multi-basin water management company with a presence in the heart of the Permian,” according to Lagoon, which is backed by Macquarie Infrastructure Partners.

Founded in 2017, Oklahoma City-based Lagoon had previously operated only in the Anadarko Basin.

The acquisition “is a key part of our continued growth strategy as we enter the Permian Basin,” said Lagoon CEO Kevin Lafferty. “The strategic decision to have a multi-basin presence strengthens the portfolio and builds upon our platform to sustainably offer full-cycle water management solutions.”

The company already has absorbed “all Double Drop employees, will maintain an office in downtown Midland, and has near-term plans to add additional disposal and water recycling facilities in the basin,” management said.

Lafferty said as Lagoon expands in the Permian, the firm “will continue to grow its core footprint in the Anadarko Basin, where the company’s market share has grown rapidly as rigs continue returning to the Midcontinent.”

Double Drop has commissioned three disposal wells over the last year with a fourth under construction. All of them are connected by a large diameter trunkline in the West Texas counties of Midland and Martin, according to Lagoon.

The Double Drop assets are able to source more than 300,000 barrels/day of water for completion operations. Lagoon plans to expand that capacity by installing recycling facilities. 

Double Drop CEO John Mahaffey said the firm has doubled its produced water volumes since January and expects volumes to double again over the next 12 months.

Lagoon COO Caitlyn Jackson added, “This acquisition is a significant and positive step for Lagoon by not only expanding our operational footprint but also increasing our role in the stewardship of water resources.”

Lagoon is not the only firm growing its produced water footprint in the Permian.

WaterBridge Holdings LLC recently acquired 10 water handling facilities and associated infrastructure with aggregate handling capacity of 100,000 barrels/day in a deal with Colgate Energy LLC. The transaction also included some 50 miles of produced water pipelines.Disposed water volumes in the U.S. onshore sector reached 11.5 billion barrels in 2018 and 12.4 billion barrels in 2019, before retreating to 11.3 billion barrels in 2020 amid a pandemic-induced slump in activity, according to Rystad Energy.