After a year of already monumental growth, WaterBridge Resources LLC is now poised for further expansion, the water midstream company’s private-equity backer, Houston-based Five Point Energy LLC, said May 17.

Five Point Energy sold a 20% minority equity stake in WaterBridge, also based in Houston, to affiliates of GIC, Singapore’s sovereign wealth fund. Though the terms of the transaction weren’t disclosed, the firm said the transaction’s purchase price implies a WaterBridge enterprise value of roughly $2.8 billion. 

After its launch in December 2015, WaterBridge has emerged as one of the top water companies serving the Delaware Basin within the Permian, where operators have been facing growing water woes.

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Following close of its pending acquisition with PDC Energy Inc., WaterBridge will own and operate 550 miles of pipeline connecting 56 water handling facilities with about 1.4 million barrels per day of produced water disposal capacity throughout the southern Delaware Basin. The company’s Delaware platform has long-term contracts from 13 producers in the Delaware basin covering about 420,000 dedicated acres and 2.4 million acres under an area of mutual interest (AMI) contract. 

WaterBridge also has a water infrastructure position in the Arkoma Basin, which consists of 10 saltwater disposal with 170,000 bbl/d of produced water disposal capacity. The Arkoma facilities are connected via 175 miles of pipeline services under long-term contracts from five producers covering about 378,000 dedicated acres with 1.7 million acres under AMI.

Under the terms of the transaction, GIC and Five Point Energy have committed to a framework to provide incremental equity capital to facilitate WaterBridge’s current pipeline of accretive acquisition and organic growth opportunities.

At the time of its formation, WaterBridge received an initial equity commitment from Five Point Energy of up to $200 million. By late 2017, however, the firm had increased its commitment in WaterBridge to $500 million.

WaterBridge’s new investor, GIC, is a leading global investment firm established in 1981 to secure the financial future of Singapore. The firm currently has well over $100 billion in assets under management, according to the company press release.

Stephen Johnson, CEO and founder of WaterBridge, said in a statement on May 17: “We are very pleased to partner with such a reputable financial institution that shares our vision in building the premier water midstream company. Through our combined resources, WaterBridge has unparalleled access to the capital needed to continue executing the company’s growth strategy.”

Five Point Energy said the equity transaction with GIC has closed and is not subject to any additional conditions. The minority equity position was acquired from funds affiliated with Five Point and WaterBridge management.

Barclays was financial adviser to Five Point Energy and WaterBridge in connection with the transaction. Law firm Latham & Watkins LLP also represented the companies. Kirkland & Ellis LLP served as GIC’s legal adviser.

Emily Patsy can be reached at epatsy@hartenergy.com.

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