Company: WBI
Filing Date: 2025-09-15
Form Type: S-1/A
Source: 0001193125-25-202719
Chunk: 23

Company: WaterBridge Infrastructure LLC
Filing Date: 2025-09-15
Form: S-1/A
Chunk 23
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 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. As producers continue to extend lateral lengths and increase production, the demand for efficient water management solutions is expected to grow, underscoring the importance of our operations in supporting the industry’s evolving needs.

As discussed above, flow assurance is of paramount importance to E&P companies because any prolonged interruption in produced water handling can lead to lower oil and natural gas production. As a result, E&P companies recognize the critical nature of having robust water management infrastructure in place to support their operations. According to the Federal Reserve Bank of Dallas, as of the first quarter of 2025, approximately 74% of executives from 104 surveyed E&P companies anticipate drilling and completion constraints in the Permian Basin within the next five years due to insufficient produced water infrastructure. Industry leaders continue to pay close attention to the availability and limitations of water infrastructure systems serving active basins and are eager to partner with water infrastructure operators that can provide reliable produced water handling solutions.

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The Railroad Commission of Texas (the “TRRC”), the primary regulatory body for oil and gas exploration, production and transportation in Texas, including well regulation, recently issued updated permitting guidelines for produced water handling facilities in the Permian Basin that went into effect on June 1, 2025. The guidelines apply to new and amended produced water handling facility permit applications for all industry operators in the basin and introduce and expand restrictions on the location and operations of new and amended water handling facilities with the intent to mitigate and avoid issues that can arise in areas with high pore pressure in the underlying geologic formations. In general, these guidelines should encourage less geographic concentration of produced water handling facilities in the Permian Basin.

We believe these guidelines enhance the value of our large-scale, integrated water infrastructure platform because we are well-positioned to move produced water volumes away from areas with high pore pressure to areas with underutilized pore space and correspondingly lower pore pressure. Furthermore, because of our preferential access to LandBridge’s surface acreage, which benefits from having underutilized pore space, and our existing water handling facility permits in low pore pressure areas, we expect to be able to continue to dispose of produced water volumes in compliance with