University Lands selects 2 water providers for Delaware Basin oil

By Layne Water Midstream | January 23, 2019

H2O Midstream and Layne Water Midstream have signed a long-term contract with University Lands to jointly serve as the exclusive preferred water services provider on 167,000 acres located in WardWinkler and Loving counties in the Delaware Basin. H2O Midstream and Layne Water Midstream have formed a joint venture known as UL Water Midstream LLC that will develop and operate water infrastructure on the University Lands acreage. 

Under this agreement, ULWM will source groundwater and gather, store, transport, recycle, and dispose of produced water from oil and natural gas wells. H2O Midstream and Layne Water Midstream were selected over other potential water service providers based on their integrated midstream approach, their proven execution capabilities across the full water value chain, and track records of bringing reliable, sustainable, and economic solutions to Permian-focused oil and gas producers operating in both the Midland and Delaware basins.

The agreement with University Lands includes an incentive sharing structure that encourages the rapid development of full-cycle water midstream infrastructure with a long-term goal of reducing water logistics costs for operators, increasing revenue for the Texas Permanent University Fund, reducing the environmental impact of water handling, and enhancing the sustainability of University Lands acreage.  Producers that enter into long-term contracts with ULWM are expected to realize lower costs and improved flow assurance by leveraging ULWM's full-cycle water midstream platform, proven operating capability, and advantaged cost structure.

Mark Houser, the CEO of University Lands, stated, "Our goal is to drive the adoption of a more economic and holistic approach to oilfield water management.  The choice is the operator's, but we believe that there are economies of scale and benefits to connected systems, and that with time, these benefits will become more and more evident.  The key is to find reliable third-party service providers that operators can trust, like H2O Midstream and Layne Water Midstream.  The University Lands and UL Water Midstream agreement is a win-win-win benefitting University Lands, the oil and gas industry, and the environment."