Company: WBI
Filing Date: 2025-04-18
Form Type: DRS
Source: 0000950123-25-003575
Chunk: 151

Company: WaterBridge Infrastructure LLC
Filing Date: 2025-04-18
Form: DRS
Chunk 151
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 produced water handling facilities and shallow production wells per section, and there are assumed to be no new shallow production wells drilled; (4) Assumes zero new deep production wells will be drilled.

Produced water handling facilities and their access to specific geologic zones are regulated at the state level and are required to meet guidelines imposed by the relevant state agencies. Because the Delaware Basin straddles the Texas-New Mexico state border, the planning, permitting and building of water infrastructure is dependent upon the laws and regulations of either Texas or New Mexico, with Texas historically presenting a more supportive regulatory and permitting environment.

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Further supporting the long-term increase in produced water in the basin, producing wells generally yield increasing WORs over their lifespan. At the beginning of a well’s producing life, the proportion of hydrocarbons is typically at its highest. As the well matures, the hydrocarbon production declines at a faster rate than the production of water, leading to an increasing WOR over time. This phenomenon has been observed across the majority of basins in the United States, including the Delaware Basin. The below chart shows WORs by producing formation within the Delaware Basin on a 12- and 36-month basis. In all cases, the WOR increases as the well matures.

It is also generally true that wells targeting deeper formations within a given basin produce higher WORs due to a combination of increased pressure and initial water in place. The below chart shows WORs for the average well drilled by formation in the Delaware Basin. The bars are ordered from the deepest bench (Woodford) to the shallowest bench (Avalon).

Source: Enverus, data and analytics derived from Enverus PRISM® March 2025.

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Producer activity in the Delaware Basin over time has been focused on the core formations such as the 2nd and 3rd Bone Spring and the Wolfcamp A/XY which tend to be shallower and have lower WORs. This focus has led to a decline in core inventory remaining in these prolific formations and has forced upstream producers to test deeper formations like the Wolfcamp B/C/D and the Woodford to replenish their drilling inventory. We believe that producers’ development programs will increasingly target these deeper formations which will increase the WORs of new wells drilled in the basin and ultimately support the broader trend of continued growth in produced water.

Source: Enverus, data and analytics derived from Enverus PRISM®