Southern Delaware Basin Water Infrastructure Transaction Terminated
Centennial said in its 10-Q report for Q1 that the economic downturn increased the likelihood that the transaction would fail to close by its original timeline.
Centennial Resource Development said a $225 million agreement with WaterBridge Resources was terminated on 15 May. In the deal, WaterBridge would have acquired the Southern Delaware Basin produced water infrastructure of Centennial Resource Production.
The two companies agreed to a deal in February for Centennial’s saltwater disposal wells and associated produced water infrastructure in Reeves County, consisting of $150 million in cash at closing and an additional $75 million payable to Centennial on a deferred basis.
Centennial said it provided written notice of termination after WaterBridge failed to close the transaction on 15 May, which was the outside date for the divestiture in the purchase and sale agreement.
Centennial also said it believes it has a right to receive the $10 million purchase price deposit, which is currently held in escrow.
But, in a 10-Q filing for its Q1 report, Centennial said that uncertainty in the oil and gas industry, commodity prices, and drilling and completion activity in the Delaware Basin increased the likelihood that the transaction would fail to close by its original timeline.