H2O Midstream LLC said June 14 it acquired produced water assets in the Permian Basin from Encana Corp. (NYSE: ECA) for an undisclosed amount.
H2O Midstream's acquisition is concurrent with the execution of an acreage dedication based midstream water services agreement with Encana's U.S. subsidiary to gather, dispose and deliver for reuse produced water for a substantial portion of Encana’s acreage position in Howard County, Texas.
The acquisition includes ownership and operation of Encana’s existing produced water gathering system in the Permian consisting of more than 100 miles of interconnected pipeline and five saltwater disposal wells totaling 80,000 barrels per day (bbl/d) of permitted disposal capacity.
RELATED: H2O Midstream CEO Talks Water’s Impact On Shale
H2O Midstream said it plans to expand the existing system significantly through the addition of new produced water pipelines, additional disposal wells and the construction of a state-of-the-art water storage and reuse hub.
"This acquisition fits perfectly with our strategy of building an expansive gathering, disposal and storage network to provide producers a full suite of midstream water services in the Permian Basin," Jim Summers, CEO of H2O Midstream, said in a statement. "Our goal is to create long-term value for our partners by significantly lowering their lease operating costs, reducing their total capital requirements and delivering best in class service in the areas of reliability, safety and sustainability."
By 2018, H2O Midstream expects to have more than 200 miles of pipeline for gathering, 140,000 bbl/d of disposal capacity and more than 2 million bbl of storage to serve Encana as well as other nearby producers.
Based in Houston, H2O Midstream is a private equity funded energy midstream company focused exclusively on water throughout U.S. shale plays.
H2O Midstream is funded by EIV Capital and co-investments from several of EIV’s institutional partners collectively representing more than $50 billion in assets under management, according to a company press release.
Recommended Reading
Wayangankar: Golden Era for US Natural Gas Storage – Version 2.0
2024-04-19 - While the current resurgence in gas storage is reminiscent of the 2000s —an era that saw ~400 Bcf of storage capacity additions — the market drivers providing the tailwinds today are drastically different from that cycle.
Biden Administration Criticized for Limits to Arctic Oil, Gas Drilling
2024-04-19 - The Bureau of Land Management is limiting new oil and gas leasing in the Arctic and also shut down a road proposal for industrial mining purposes.
SLB’s ChampionX Acquisition Key to Production Recovery Market
2024-04-19 - During a quarterly earnings call, SLB CEO Olivier Le Peuch highlighted the production recovery market as a key part of the company’s growth strategy.
PHX Minerals’ Borrowing Base Reaffirmed
2024-04-19 - PHX Minerals said the company’s credit facility was extended through Sept. 1, 2028.
Exclusive: The Politics, Realities and Benefits of Natural Gas
2024-04-19 - Replacing just 5% of coal-fired power plants with U.S. LNG — even at average methane and greenhouse-gas emissions intensity — could reduce energy sector emissions by 30% globally, says Chris Treanor, PAGE Coalition executive director.