Select Energy Services To Rebrand, Focus on Water Business
Select Water Solutions will focus on water management and added assets in the Permian Basin.
Select Energy Services intends to rebrand itself Select Water Solutions, further aligning with the company’s vision to be a recognized leader and trusted partner in sustainable water management. In addition, the company successful completed multiple water infrastructure acquisitions in the Permian Basin.
During 2022, Select recycled 174 million bbl of produced water for reuse, or more than 7 billion gallons, with approximately two-thirds coming from fixed facilities and one-third coming from mobile operations.
“In recent years, we have closed on a dozen strategic acquisitions, while simultaneously divesting noncore businesses and assets that were not strategic to our vision,” said John Schmitz, chairman of the board, president, and chief executive officer at Select Energy Services. “During 2022, we grew our revenues by more than 300% relative to our pandemic lows and generated all-time-high levels of net income.”
The company expects the rebranding to take place during the first half of 2023, likely becoming effective shortly after its annual meeting of shareholders.
In December 2022 and January 2023, Select completed a series of transactions in the Midland Basin area of the Permian Basin for total consideration of around $44 million, including $36 million of cash consideration and about 900,000 shares of Select Class A common stock. In December 2022, Select closed on the acquisition of two joint venture interests in certain produced water recycling facilities in Howard County, Texas, for cash and stock consideration. These acquisitions complete the buyout of all minority partner interests in certain recycling facilities that Select owned and operated following the acquisition of Breakwater, which previously closed in November 2022.
Additionally, Select acquired 35 miles of gathering and distribution pipelines, 3.5 million bbl of water storage, approximately 120 brackish source water wells, and 25,000 B/D of permitted disposal capacity. In conjunction with the acquisitions, Select initiated the construction of additional pipeline connections to connect the acquired assets to existing Select facilities, providing significant optionality long-term and expanding the scope and reach of its operations across a broader acreage footprint in the core of the Midland Basin.
Select also recently entered into a 10-year agreement with an unnamed public independent operator in the Northern Delaware Basin that will result in the construction of a produced water recycling facility capable of recycling 100,000 B/D of produced water with 1.5 million bbl of treated produced water storage capacity. Select plans to construct 5 miles of large-diameter pipeline to distribute treated produced water to pad sites throughout the operator’s acreage footprint.
The project is supported by a 10-year acreage dedication, under which the operator has agreed to purchase from Select's recycling facility all recycled completions water required for its operations within the dedicated area. The dedication covers 18,000 acres in the Northern Delaware Basin with an additional right-of-first-offer to construct produced water recycling and processing infrastructure on an additional approximately 10,000 acres in Lea County, New Mexico.