Company: WBI
Filing Date: 2025-06-02
Form Type: DRS/A
Source: 0000950123-25-005943
Chunk: 161

Company: WaterBridge Infrastructure LLC
Filing Date: 2025-06-02
Form: DRS/A
Chunk 161
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 the statewide WOR has been relatively stable with an upward trajectory.

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Note: As of March 31, 2025. Source: Enverus, data and analytics derived from Enverus PRISM® March 2025.

In the absence of any new development of produced water handling facilities, the Delaware Basin is projected to have constrained water handling capacity by 2029. Under this scenario, beginning in 2025, incremental produced water volumes will need to be recycled, as the availability of produced water facilities will not be sufficient to keep up with demand for produced water handling capacity. In the absence of adequate recycling demand and produced water handling capacity, operators may have to shut-in production or delay completion of new wells, as they will not have sufficient available capacity for the handling of their produced water volumes.

Note: As of March 31, 2025. Source: Pickering Energy Partners and B3 Insights; (1) Assumes a 20% decrease in basin wide operational produced water handling capacity to account for logistical inefficiencies within the Permian Basin; (2) Based on the 2023-2024 average number of new produced water handling facilities per year; (3) Sub-plays are limited to two total 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

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laws and regulations of either Texas or New Mexico, with Texas historically presenting a more supportive regulatory and permitting environment.

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