MIDLAND, Texas—Solid production growth from the Permian Basin is something most in the oil industry believe is a foregone conclusion in the foreseeable future, however, there are some obstacles both infrastructure and regulatory based that may pump the brakes on the region’s expected output. While some of that is on the oil production side, a fair share of uncertainty also falls on the basin’s midstream water assets, its capacity and path to expansion.

Speaking at the water forum ahead of Hart Energy’s Executive Oil Conference, analysts covering the sector point to saltwater disposal capacity risks and need for cash-hungry oil producers to raise capital by divesting non-E&P assets as key drivers in looming consolidation for water players in the Permian Basin region.

Since June 1, over one-third of the approved saltwater disposal well permits in the Permian’s Delaware Basin have had capacity reductions imposed by regulators.

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