Company: WBI
Filing Date: 2025-04-18
Form Type: DRS
Source: 0000950123-25-003575
Chunk: 17

Company: WaterBridge Infrastructure LLC
Filing Date: 2025-04-18
Form: DRS
Chunk 17
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                         0.49 |    |     | $ |                         0.48 |    |     | $             |                         0.39 |   |     | $ |                         0.36 |   |

(1) Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Operating Margin and Adjusted Operating Margin per Barrel are Non-GAAP financial measures. See “—Summary Historical and Pro Forma Financial Data—Non-GAAP Financial Measures” below for more information regarding these non-GAAP measures and reconciliations to the most comparable GAAP measures. Industry Summary The underlying industry of our customer base is the upstream oil and natural gas sector in the United States, which includes major producing regions across the country. Our operations are centered in the Delaware Basin, a sub-basin of the prolific Permian Basin. The Permian Basin is the most active oil and natural gas producing region in the United States. The Delaware Basin in particular has experienced significant growth over the past decade, with oil production increasing more than eight-fold since 2014 and water production following a similar trajectory. This growth is driven primarily by drilling activity from large, well-capitalized upstream producers, many of whom are our significant customers. We believe that our integrated water infrastructure network and comprehensive water handling solutions position us as an ideal partner to support these producers’ operations. The Permian Basin, and specifically the Delaware Basin, has consistently attracted substantial drilling activity, even amidst varying commodity prices and macroeconomic conditions. As of March 31, 2025, there were 265 drilling rigs in the Permian Basin, representing 54% of all rigs running in the United States, with 163 rigs running in the Delaware Basin alone, according to Enverus. The region has seen significant advancements in drilling efficiency, largely due to pad development and technological innovations, which have increased the number of wells turned-in-line (“TIL”) per rig. This efficiency is crucial as it allows for the maximization of production and well economics, further driving the demand for effective water management solutions. Water management is a critical component of upstream oil and natural gas operations, particularly in unconventional basins like the Permian. The process involves the supply of water for hydraulic fracturing, the separation and disposal of produced water, and increasingly, the recycling of produced water for reuse. Water management costs represent a significant portion of upstream producers’ lease operating expenses (“LOE”), particularly in the Delaware Basin, where they can account for 30 to 40% of total LOE.