WaterBridge Announces Long-Term Commercial Agreements with BPX Energy to Support Delaware Basin Development

Rhea-AI Summary

WaterBridge has announced long-term commercial agreements with BPX Energy to support development in the Delaware Basin. WaterBridge will construct and operate 400MBbls/d of new produced water handling capacity over the next three years, with potential expansion to 600MBbls/d. This agreement includes a 10-year minimum volume commitment by BPX Energy.

WaterBridge’s affiliate relationship with LandBridge Company enables sustainable development, leveraging over 273,000 surface acres in the Delaware Basin. The agreements include constructing a large-diameter gathering and transportation system to efficiently transport water from BPX Energy’s development sites in Reeves County, Texas.

WaterBridge’s CEO, Jason Long, emphasized the strategic expansion of their relationship with BPX Energy, highlighting their resources and scalable infrastructure. BPX Energy’s CEO, Kyle Koontz, praised WaterBridge’s operational expertise and sustainable water solutions. Michael Reitz, COO of WaterBridge, noted the importance of surface access and their ability to disperse water volumes across a broad area.

Positive

• WaterBridge will develop up to 600MBbls/d of new water handling capacity, enhancing infrastructure.
• The agreement includes a 10-year minimum volume commitment from BPX Energy, providing long-term stability.
• WaterBridge’s strategic relationship with LandBridge leverages over 273,000 surface acres for sustainable development.

Negative

• None.

Insights

Financial Analyst

This commercial agreement marks a strategic expansion in LandBridge's (LB) water management capabilities through its affiliate WaterBridge. The 10-year minimum volume commitment from BPX Energy represents a significant long-term revenue stream and validates LB's business model in the Delaware Basin.

The infrastructure development, capable of handling up to 600MBbls/d of produced water, leverages LB's extensive 273,000+ surface acres in the region. This asset-light model allows LB to generate recurring revenue without substantial capital expenditure, as WaterBridge handles the infrastructure investment.

For investors, this deal enhances LB's competitive moat in the Permian Basin. The long-term nature of the contract provides steady cash flow visibility and demonstrates the company's ability to monetize its surface rights through strategic partnerships. The scalability of the project, from 400MBbls/d to 600MBbls/d, also provides embedded growth potential.

Energy Infrastructure Specialist

The scale of this water handling agreement is particularly notable in the context of Delaware Basin operations. A capacity of 400-600MBbls/d represents a substantial portion of regional water management infrastructure, positioning WaterBridge and LandBridge as critical service providers in the area.

The greenfield construction of a large-diameter gathering system in Reeves County addresses a important operational challenge in the region - the sustainable management of produced water. This infrastructure development reduces operational risks for both parties and provides environmental benefits through proper water handling and potential reuse opportunities.

The strategic value of LandBridge's surface acreage becomes evident in this deal, as it enables the company to offer comprehensive solutions that competitors cannot easily replicate. This competitive advantage should translate into sustained pricing power and higher margins for water handling services.

Up to 600MBbls/d of new produced water handling capacity to be developed, including up to 400MBbls/d on LandBridge surface

Agreement includes a 10-year minimum volume commitment by BPX Energy

HOUSTON--(BUSINESS WIRE)-- NDB Midstream LLC and WaterBridge Operating LLC (collectively, “WaterBridge”) today announced they have executed long-term commercial agreements with BPX Production Company (“bpx energy”) to support their long-term development plans in the Stateline region of the Delaware Basin. WaterBridge will initially construct and operate 400MBbls/d of new produced water handling capacity over the next three years, with the ability to increase capacity to 600MBbls/d.

WaterBridge’s abundant access to pore space through its affiliate relationship with LandBridge Company LLC (NYSE: LB), a leading land management platform that owns 273,000+ surface acres in the Delaware Basin, enables bpx energy to sustainably develop its production footprint. The commercial agreements contemplate the greenfield construction of a large-diameter gathering and transportation system to safely and efficiently transport water away from bpx energy’s development locations in Reeves County, Texas.

“We’re excited to expand our commercial relationship with bpx energy. Our new agreement provides enhanced and sustainable produced water handling solutions as bpx advances its development plans in the Stateline region,” said Jason Long, Chief Executive Officer of WaterBridge. “As pioneers of midstream water management, and through our affiliate relationship with LandBridge, we have unparalleled resources to develop and support purpose-built scalable infrastructure for blue chip operators, including produced water handling and reuse networks across vast and contiguous surface acreage.”

“It’s important to develop long-term sustainable water solutions in the Permian Basin. The WaterBridge executive team has the scale and operational expertise to match our focus on operational excellence, and long-haul solutions represent a valuable and responsible way to manage water through our multiple decades of Permian resource,” said Kyle Koontz, Chief Executive Officer of bpx energy.

“The scale of this multi-year agreement is a testament to the importance of strategically located surface access and the symbiotic relationship we have with LandBridge,” said Michael Reitz, Chief Operating Officer of WaterBridge. “Our unmatched surface and pore space capacity and our ability to disperse produced water volumes across a broad geographic footprint were critical elements in designing a tailored water-handling solution that is perfectly suited to bpx energy’s needs.”

Vinson & Elkins LLP served as legal counsel to WaterBridge and Locke Lord LLP served as legal counsel to bpx energy.

About NDB Midstream and WaterBridge Operating LLC

NDB Midstream LLC is a strategic partnership between Five Point Energy and Devon Energy Corp. (NYSE: DVN) that operates full-cycle produced water transportation, handling, recycling and reuse assets in the northern Delaware Basin in West Texas and New Mexico and the Eagle Ford Basin in South Texas. NDB Midstream LLC handles approximately 1.2 million bpd of produced water and owns 2.0 million bpd of produced water handling capacity.

WaterBridge Operating LLC is a portfolio company of Five Point Energy and GIC that operates full-cycle produced water transportation, handling, recycling and reuse assets in southern Delaware Basin in West Texas and the Arkoma Basin in Oklahoma. WaterBridge Operating LLC handles approximately 1.2 million bpd of produced water and owns 2.2 million bpd of produced water handling capacity.

WaterBridge collectively comprises the largest pure play produced water midstream business in the industry. Headquartered in Houston, Texas, WaterBridge benefits from a first-mover advantage in the emerging water midstream sector with a management team with extensive experience in the water midstream industry. For further information, please visit www.h2obridge.com.

About BPX Energy

bpx energy, bp's US onshore business, operates in the Permian, Eagle Ford, and Haynesville basins. Headquartered in Denver, bpx focuses on safely producing high-margin barrels while lowering emissions.

About LandBridge

Since its founding in 2021, LandBridge has served as a leading land management business within the Delaware Basin. The company currently owns approximately 273,000 surface acres across Texas and New Mexico, located primarily in the heart of the Delaware sub-basin in the Permian Basin, the most active region for oil and natural gas exploration and development in the United States. LandBridge actively manages its land and resources to support oil and natural gas production and broader industrial development, including digital infrastructure. LandBridge was formed by Five Point Energy LLC, a private equity firm with a track record of investing in and developing energy, environmental water management and sustainable infrastructure companies within the Permian Basin. For more information, please visit: www.landbridgeco.com

About Five Point

Five Point Energy is a private equity firm focused on building businesses within the environmental water management, surface management and sustainable infrastructure sectors. The firm was founded by industry veterans who have had successful careers investing in, building, and running midstream infrastructure companies. Five Point’s strategy is to buy and build assets, create companies, and grow them into sustainable enterprises with premier management teams and industry-leading E&P partners. Based in Houston, Five Point targets equity investments up to $1 billion and has approximately $7 billion of assets under management across multiple investment funds. For more information about Five Point Energy, please visit: www.fivepointenergy.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250121837767/en/

Scott McNeely

Chief Financial Officer

NDB Midstream LLC

WaterBridge Operating LLC

Contact@h2obridge.com



Media

Daniel Yunger / Nathaniel Shahan

Kekst CNC

daniel.yunger@kekstcnc.com / nathaniel.shahan@kekstcnc.com

Source: NDB Midstream and WaterBridge Operating LLC

FAQ

What does the WaterBridge and BPX Energy agreement involve?

The agreement involves developing up to 600MBbls/d of new produced water handling capacity and a 10-year minimum volume commitment by BPX Energy.

How much new water handling capacity will WaterBridge construct?

WaterBridge will initially construct and operate 400MBbls/d, with the potential to expand to 600MBbls/d.

What is the duration of the BPX Energy volume commitment?

The volume commitment by BPX Energy is for a minimum of 10 years.

How does WaterBridge’s relationship with LandBridge benefit the agreement?

The relationship provides access to over 273,000 surface acres, enabling sustainable development and efficient water handling.

Where will the new water handling infrastructure be located?

The infrastructure will be located in the Stateline region of the Delaware Basin, including Reeves County, Texas.

What are the benefits of the WaterBridge and BPX Energy agreement for shareholders?

The agreement provides long-term stability with a 10-year commitment and the potential for significant infrastructure development, enhancing operational capacity and sustainability.