WaterBridge Holdings LLC is continuing to build on its extensive portfolio of produced water infrastructure in the Permian Basin.

Backed by private equity firm Five Point Energy, the midstream company recently completed a transaction to acquire Colgate Energy LLC assets in the Delaware sub-basin that it snagged in June from Occidental Petroleum Corp. (Oxy). Financial details were not disclosed.

“Colgate’s decision to expand their relationship with WaterBridge further validates our position as the water solutions provider of choice in the Delaware Basin,” said WaterBridge Co-CEO Jason Long. “This transaction further enhances our ability to manage and distribute over 2 million barrels/day of produced and recycled water across our Permian platform.”

Like other acquisitions in recent years, WaterBridge consolidated existing produced water management contracts with Colgate into a new 15-year services agreement. 

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Colgate, a Midland, TX-based independent, agreed to dedicate all of the operated acreage acquired from Oxy, as well as legacy acreage previously dedicated to WaterBridge. Colgate has more than 86,100 gross operated acres dedicated to WaterBridge in the West Texas counties of Reeves and Ward.

The assets acquired by WaterBridge include 10 water handling facilities and associated water midstream infrastructure with aggregate handling capacity of around 100,000 barrels/day. About 50 miles of produced water pipelines are also part of the deal.

WaterBridge is to manage the infrastructure and integrate the assets into its broader southern Delaware sub-basin platform.

The company last year acquired assets from Centennial Resource Development Inc. In 2019, it secured $345 million of equity capital to buy produced water infrastructure from three other oil and gas producers in the Permian Delaware. It also bought similar assets from PDC Energy Inc. With the latest transaction, WaterBridge said it has about 600,000 acres operated by more than 20 producers under long-term dedication in the southern Delaware sub-basin. It also has 2.1 million barrels/day of water handling, reuse and redelivery capacity via 959 miles of large-diameter pipelines and 97 water handling facilities.

Winston & Strawn LLP served as legal adviser to WaterBridge in the transaction.