(Select Energy, 4.Oct.2021) — Select Energy Services, Inc. (NYSE: WTTR) announced that, effective 1 October 2021, it has successfully closed on the acquisition of substantially all of the assets of Agua Libre Midstream, LLC and certain water-related assets and operations of Basic Energy Services, L.P. and assumed liabilities in connection therewith, in each case pursuant to the terms of the stalking horse asset purchase agreement previously entered into with Basic and Agua Libre and following approval by the U.S. Bankruptcy Court for the Southern District of Texas on 23 September pursuant to Section 363 of the U.S. Bankruptcy Code. As consideration for the acquisition, Select has issued 902,593 shares of Class A common stock and paid $14.5mn in cash to Basic to close the transaction, subject to standard post-closing adjustments.
Based in Fort Worth, TX, Agua Libre is a leading provider of water midstream, logistics and production services to the oil and gas industry, including operations in Texas, New Mexico, Oklahoma and North Dakota.
John Schmitz, Chairman, President and CEO, stated, “We are very excited to execute on another accretive consolidation opportunity for Select. This acquisition significantly expands our produced water infrastructure footprint and further increases the Company’s revenue weighting towards production-related services and solutions. This acquisition is a continuation of our strategic effort to improve and bolster our base business, advance our technology and diversification efforts, and execute on strategic consolidation opportunities.
“With this transaction, we will be adding more than 550,000 barrels per day of permitted daily disposal capacity in in Texas, New Mexico, Oklahoma and North Dakota, with approximately 50% of this capacity in the Permian Basin. When combined with our existing assets, this brings our company-wide permitted daily disposal capacity to approximately 2 million barrels per day.
“The Agua Libre assets add to Select’s sizable existing water services and water infrastructure portfolio and expand the breadth of our water disposal service offerings into new geographic areas, including New Mexico and North Dakota. Supported by a number of of long-term contracts, approximately half of Agua Libre’s daily produced water volumes are sourced via fixed gathering pipelines. This sizable contracted infrastructure footprint provides us with access to a significant amount of long-lived produced water volumes in attractive areas for development. These volumes in turn open the door for numerous new infrastructure development opportunities, including recycling infrastructure to reuse and repurpose this waste stream for alternative beneficial uses.
“As we all know, water is vital to the health, economic, and social well-being of the communities we all live in and work in and our goal is to develop sustainable water solutions with a shared commitment to conservation. In fact, we believe that sustainable water and chemical solutions are critical to the ongoing energy transition and Select will play an important role in the advancement of solutions that are designed to meet the sustainability goals of, not only our customers, but all stakeholders. We believe the Agua Libre asset base provides a significant opportunity to continue to develop and advance these objectives,” concluded Schmitz.
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