Centennial Resource Development Inc. agreed to divest produced water infrastructure in the Permian Basin in a $225 million sale to WaterBridge Resources LLC.

The divested water infrastructure assets, located in the southern Delaware Basin, currently dispose of approximately half of the company’s gross produced water in Texas. Centennial has roughly 80,100 net acres in the Delaware Basin located in Reeves County, Texas, and New Mexico’s Lea County.

“This transaction represents a significant premium to Centennial’s current trading valuation and will essentially offset any outspend this year, assuming current prices,” said Centennial CEO Mark Papa in a statement on Feb. 24. “It also significantly reduces the amount of infrastructure capex needed to maintain and grow these assets in the future.”

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