WaterBridge uses $800M loan to bolster Permian water assets

By Luke Geiver | January 02, 2019

The Permian Basin water disposal business is booming thanks to the continued evolution of well completion designs. Stephen Johnson, president of WaterBridge, a water handling and disposal company backed by Five Point Energy LLC, said his company will commit to a $800 million debt facility to fund water infrastructure acquisitions.

“As our Delaware Basin customers further evolve their well completion techniques, resulting in higher initial production rates and estimated ultimate recovery rates, we continue to expand our asset base to meet their growing capacity needs,” Johnson said.

David Capobianco, CEO of Five Point Energy, said WaterBridge and Johnson are working to develop large, integrated produced water handling networks that offer producers the capacity and redundancy necessary to scale their development programs.

Using portions of its loan, WaterBridge will acquire assets from Halcon Resources. The assets are located in the Texas counties of Pecos, Reeves, Ward and Winkler. The deal includes 60 miles of water gathering pipelines, 10 disposal wells and a 15-year produced water dedication for Halcon’s 75,000 gross acre position along with any additional acreage Halcon adds within a certain radius of the system. Halcon will also purchase freshwater from WaterBridge.

In addition to the southern Delaware assets of Halcon, WaterBridge will also acquire the water infrastructure assets of NGL Energy Partners LP. The deal is valued at $238 million, and includes nine saltwater disposal wells, 10-miles of pipeline in Reeves and Ward counties, and additional disposal facilities that, in total, can handle 275,000 barrels per day of water.