HOUSTON, June 14, 2018 /PRNewswire/ — WaterBridge Resources LLC (“WaterBridge” or the “Company”) announced that its subsidiary WaterBridge Operating LLC has entered into a $200 million revolving credit facility (the “Credit Facility”) led by SunTrust Bank with a syndicate of nine financial institutions. The Credit Facility will be used for general corporate purposes and to support WaterBridge’s investments in water infrastructure in the Permian Basin in west Texas and the Arkoma Basin in southeast Oklahoma. Upon closing, WaterBridge and its affiliates have more than $700 million in committed capital, including $500 million from Five Point Energy LLC, to fund ongoing growth and expansion efforts in multiple domestic basins.
Houston, Texas, June 6th, 2018 – EVX Midstream Partners, LLC (“EVX”) today announced that it has signed a definitive agreement with one of the nation’s largest independent oil and gas producers whereby EVX will construct, own and operate a new produced water gathering and disposal system over approximately 40,000 dedicated acres in McMullen County, TX. Additionally, EVX announced the commissioning of its newly constructed Hacksaw crude gathering system. Also located in McMullen County, the Hacksaw system will provide its customers with wellhead gathering, treating and storage, as well as access to markets in the Houston Ship Channel and Corpus Christi.
May 9, 2018 San Mateo Black River Oil Pipeline, LLC (“San Mateo”) is conducting a binding open season to gauge shipper interest in committed crude oil interstate transportation service on the Rustler Breaks Pipeline Project (the “Project”), a proposed approximately 17-mile, 10-inch diameter crude petroleum gathering and transportation system to be constructed and operated by San Mateo from certain points of origin in Eddy County, New Mexico to an interconnect with Plains Pipeline, L.P. in Eddy County, New Mexico. Upon closing of the open season, San Mateo will incur significant expenses in constructing the Project. Commencement of commercial operations is targeted for the third quarter of 2018.
May 8, 2018 Dallas, Texas, May 8, 2018 – San Mateo Black River Oil Pipeline, LLC (“San Mateo”), a wholly-owned subsidiary of San Mateo Midstream, LLC, today announced its binding open season to gauge shipper interest in committed crude oil interstate transportation service on the Rustler Breaks Pipeline Project (the “Project”), a proposed approximately 17-mile, 10-inch diameter crude petroleum gathering and transportation system to be constructed and operated by San Mateo from certain points of origin in Eddy County, New Mexico to an interconnect with Plains Pipeline, L.P. in Eddy County, New Mexico.
DALLAS, Texas, April 19, 2018 – San Mateo Midstream, LLC (“San Mateo” or the “Company”) today announced the completion and successful start-up of the expansion of the Black River cryogenic natural gas processing plant (the “Black River Processing Plant”) in Eddy County, New Mexico. The expansion of the Black River Processing Plant adds an incremental designed inlet capacity of 200 million cubic feet of natural gas per day to the previously existing designed inlet capacity of 60 million cubic feet of natural gas per day for a total designed inlet capacity of 260 million cubic feet of natural gas per day. The expanded Black River Processing Plant will support San Mateo’s anchor tenant, Matador Resources Company (NYSE: MTDR), and offer processing opportunities for other producers’ development efforts in the Delaware Basin. San Mateo has also completed a natural gas liquids (“NGL”) pipeline connection at the Black River Processing Plant to the NGL pipeline owned by EPIC Y Grade Pipeline LP. This NGL connection provides several significant benefits to San Mateo’s customers as compared to trucking the NGLs out of the area. San Mateo’s customers receive (i) firm NGL takeaway out of the Delaware Basin, (ii) increased NGL recoveries, (iii) improved pricing realizations through lower transportation and fractionation (T&F) costs and (iv) increased optionality through the ability to operate the Black River Processing Plant in ethane recovery mode, if desired. In addition, San Mateo expects the NGL connection to lower operating costs at the Black River Processing Plant and provide operational advantages as transportation by pipeline rather than by truck reduces operational risks, such as weather-related interruptions or insufficient trucking capacity.
Five Point to Continue Building World-Class Midstream Businesses in Partnership with E&Ps and Exceptional Management Teams
HOUSTON, March 29, 2018 /PRNewswire/ — Five Point Energy (“Five Point”), formerly Five Point Capital Partners LLC, a private equity firm focused exclusively on investments within the midstream and energy infrastructure sector, today announced the final closing of Five Point Energy Fund II L.P. (the “Fund”). The Fund was oversubscribed and closed at its hard cap of $750 million, exceeding its original target of $650 million.
DALLAS, Texas, January 22, 2018 – San Mateo Midstream, LLC (“San Mateo” or the “Company”) today announced a strategic relationship with a subsidiary of Plains All American Pipeline, L.P. (NYSE: PAA) (“Plains”) to gather and transport crude oil for upstream producers in Eddy County, New Mexico. Subsidiaries of San Mateo and Plains have agreed to work together through a Joint Tariff arrangement and related transactions to offer producers located within a joint development area of approximately 400,000 acres in Eddy County, New Mexico (the “Joint Development Area”) crude oil transportation services from the wellhead to Midland, Texas with access to other end markets.
Houston, Texas, January 5th, 2018 – EVX Midstream Partners, LLC (“EVX”) today announced that it has signed a definitive agreement to construct, own and operate a new crude oil gathering system in McMullen County, TX with one of the nation’s largest independent oil and gas producers. The system, which is expected to be in service during the second quarter of 2018, will consist of large-diameter gathering over approximately 20,000 dedicated acres and a storage terminal with connectivity to Eagle Ford JV Pipeline.
WaterBridge Resources LLC today announced that, through its affiliate WaterBridge Resources II LLC (WaterBridge II and collectively, “WaterBridge”), it has closed on the acquisition of Arkoma Water Resources, LLC, (the “Acquisition”), from USG Surface Facilities I, LLC, (“USG”). WaterBridge II was formed in conjunction with the Acquisition and is supported by $300 million in equity commitments from Five Point Capital Partners LLC and its affiliates (“Five Point”), increasing Five Point’s aggregate equity commitments to WaterBridge to $500 million.
Getting rid of wastewater from onshore wells has become an increasingly costly problem for oil producers as U.S. crude output surged in recent years, especially in the new shale fields from Texas to North Dakota. Drillers typically get about seven barrels of water for every one of oil, and some struggle to deal with the overflow that is mostly sent by truck to disposal sites miles away. David Capobianco, a former managing director for Allen’s Vulcan Capital, is trying to change that by building pipelines to get wastewater out. His newly formed WaterBridge Resources LLC aims to be a water-management company for oilfields. The firm is considering a public share listing within a year to 18 months, taking advantage of a U.S. shale boom that the government expects will boost crude production close to 10 million barrels a day next year.
“Next to profitability and safety, water may well be the next most important topic for an oil company,” said Laura Capper, chief executive officer at EnergyMakers Advisory Group, an industry consultancy in Houston. “It has risen to the forefront over the last five years unlike anything I’ve ever seen.”
To get a sense of just how much water is involved, consider the forecasts for rising oil output in the Permian Basin, the busiest field in Texas and a big beneficiary of increased investment in shale reserves. It currently pumps 2.4 million barrels of oil a day, but production could grow to a peak of as much as 10 million in future years. At the current rate of disposal in the area, that would mean 30 million to 50 million barrels of dirty water every day, enough to fill the Empire State Building eight times a day.
Disposal Cost
Disposal can be expensive, especially with oil prices around $50 a barrel, half the price in 2014. West Texas Intermediate, the U.S. benchmark, was trading down 15 cents at $49.74 a barrel as of 1:19 p.m. Singapore time on Friday.
Most drillers hire oilfield-service companies to get rid of the wastewater. Trucks dump the water into holes dug deep underground that lead to porous formations, thousands of feet below the drinking-water table. In Texas, the service costs about $1.50 to $2.50 a barrel. Capobianco, in an interview, said he can reduce that to roughly $1, once his pipelines are in place.
“We are at a tipping point,” where water is set to join oil and natural gas as a key commodity for the industry’s pipeline companies, said Capobianco, who is also a former board member for the general partner of Plains All American Pipeline LP. “Water is at a very nascent stage. The market hasn’t caught up with the ultimate reality that water will trade the same as any other hydrocarbon.”
If Capobianco takes WaterBridge public, the company would be the first devoted entirely to oilfield-water pipelines to be traded on any major U.S. exchange, according to EnergyMakers.
Explorers are starting to face the fact that their water production is becoming too big to truck away.
But only recently have integrated water-solution systems become economically viable for the industry, as activity picked up this year in the Permian’s Delaware formation in West Texas, according to Colton Bean, associate of midstream research at Tudor Pickering Holt & Co. in Houston.
One big reason: Roads in the rural basin already are jam-packed with trucks shipping in fresh water, sand and equipment to well heads, and taking oil and dirty water away. “There is not a well-developed road network, so ideally as many trucks you can get off the road the better,” Bean said.
Capobianco is chief executive officer for the Houston-based private equity firm Five Point Capital Partners, which funded WaterBridge Resources with $200 million at the start of 2016. Last month, WaterBridge acquired EnWater Solutions LLC for an undisclosed amount, its first acquisition of a water-pipeline company in the Permian Basin. It will be announcing another deal in the next two to four weeks, Capobianco said.
Capper said she’s counted roughly 25 companies similar to Capobianco’s that are in various stages of development for water pipelines. “It’s a market that is developing for very good reason,” she said. “It’ll be here for the long run.”
Wastewater isn’t the only goal. After Capobianco builds out a bigger network of disposal pipelines, the next major step will be an integrated system of management that cleans and recycles it for use in future production, he said. In fracking — a technique that helped fuel the U.S. oil boom — water, sand and chemicals are forced into the ground to loosen oil trapped in layers of shale rock.
The industry’s water use isn’t without controversy. In Oklahoma, where as many as 20 barrels of water are produced for every barrel of oil, heavy injections of wastewater underground have been blamed for all the earthquakes in the state. Using pipelines might help address that problem, by providing access to areas better suited for disposal.
“We’re a whole lot better about producing oil and gas than we used to be,” Capper said. “And when you produce more oil and gas, you get more water with it.”
