The acquired assets are adjacent to H2O Midstream's existing operations in Howard County, Texas


Image: H2O Midstream announces acquisition of Sabalo Energy produced water assets and close of 15-year agreement. Photo: courtesy of PublicDomainPictures from Pixabay.

H2O Midstream LLC (“H2O Midstream”) announced today the acquisition of produced water infrastructure from Sabalo Energy, LLC (“Sabalo”) concurrent with the execution of a 15-year acreage dedication to provide produced water gathering, disposal and recycling services to Sabalo. The acquired assets are adjacent to H2O Midstream’s existing operations in Howard County, Texas and consist of over 37 miles of pipeline, nine salt water disposal wells, four Ellenburger salt water disposal well permits, and several third-party interconnects. The Sabalo system is already pipeline-connected to H2O Midstream’s expansive produced water gathering network, bringing the combined system to 435,000 bpd of disposal capacity, 240,000 bpd of deep disposal permits, and 190 total miles of pipeline. In addition to ongoing buildout to accommodate Sabalo’s development program, H2O Midstream is adding 40,000 bpd of recycling capacity with the option to expand to 80,000 bpd over time.

“The acquisition of Sabalo’s water infrastructure is an important step in realizing our vision of being the premier integrated water midstream provider in the Permian Basin,” said Jim Summers, Chief Executive Officer of H2O Midstream. “The scale of our produced water ‘supersystem’ in the MidlandBasin, coupled with our University Lands partnership in the Delaware Basin, allows us to provide our customers with an unmatched level of service, flexibility, and reliability as they have put their trust in our hands. We are excited to partner with Sabalo in meeting their produced water disposal and recycling needs for years to come.”

Barry Clark, the Chief Executive Officer of Sabalo, stated, “Due to the strong working relationship, location of complementary gathering infrastructure, and proven reliability demonstrated by H2O Midstream, we determined they were the best team to purchase, operate, and continue the buildout of our integrated water gathering and recycling infrastructure. As a result of this transaction, Sabalo has secured a long-term partnership to gather all of its produced water via pipe and the optionality to scale up produced water recycling operations to meet the needs of an aggressive completion schedule in the future.”

Concurrent with the Sabalo acquisition, EIV Capital and multiple co-investors substantially increased their equity commitment for H2O Midstream to pursue additional growth opportunities throughout the Permian Basin.

Source: Company Press Release