XRI Holdings LLC expanded its footprint through the acquisition on May 27 of Celtic Disposal LLC, the produced water infrastructure subsidiary of privately held Permian Basin operator Hibernia Energy III LLC.
Celtic was formed in 2019 to serve the saltwater disposal needs of both Hibernia, and other operators in the Midland Basin, where Hibernia, a portfolio company of NGP Natural Resources XII LP, is focused.
Hibernia’s produced water assets directly overlay XRI’s existing midstream infrastructure and recycling assets in the Midland Basin, “an area where XRI has significant operating expertise and deep customer relationships that will support further commercialization of the acquired produced water infrastructure assets,” said XRI CEO Matthew Gabriel in a statement.
Through its acquisition, XRI will become the long-term provider of all water-related services to Hibernia, including delivery of completions water and handling of produced water.
Hibernia has 35,000 gross (33,000 net) acres in Reagan and Upton counties, Texas. The company is uniquely positioned to quickly grow production with a supportive equity sponsor, low leverage, a veteran operations team, and a deep inventory of highly economic drilling locations, according to a release by the two Houston-based companies.
Embry Canterbury, CEO of Hibernia, commented in the release: “The direct tie-in to XRI’s existing Midland Basin midstream infrastructure and recycling assets is something that we’re very excited about.”
Canterbury added that the disposition of the Celtic infrastructure assets to XRI for undisclosed terms will also support the development of Hibernia’s acreage position in the Midland Basin.
“The combination of veteran operations teams and high-quality resources will support our operational plans to recycle more than 185 million barrels of water in the Permian Basin this year,” he continued in his statement.
XRI full-cycle water management and midstream company backed by Morgan Stanley Energy Partners. The company operates over 350 miles of permanent pipelines throughout the Permian Basin, with an aggregated system capacity to run approximately 1.25 million bbl/d.
The acquisition of Celtic Disposal from Hibernia will also enables XRI to capture significant third-party opportunities in the Midland Basin area with both new and existing customers.
Sidley Austin LLP provided legal counsel to XRI on the transaction. Baker Botts LLP was Hibernia’s legal counsel.
The JV consolidates three legacy upstream assets held by BP, Southland and Crowheart Energy into one contiguous footprint consisting of over 1.2 million net acres, which Denver-based Crowheart will operate, says Williams.
President & CEO, Luke Essman discusses how the company caters to midstream takeaway.
The Midland Basin, located within the eastern region of the Permian Basin, has seen a steady amount of new E&P activity since 2011.