H2O Midstream has acquired produced-water infrastructure from Sabalo Energy concurrent with the execution of a 15-year acreage dedication to provide produced-water gathering, disposal and recycling services to Sabalo. The acquired assets are adjacent to H2O Midstream’s existing operations in Howard County, Texas, and consist of more than 37 miles of pipeline, nine saltwater disposal wells, four Ellenburger saltwater disposal well permits and several third-party interconnects.
The Sabalo system is already pipeline-connected to H2O Midstream’s expansive produced-water gathering network, bringing the combined system to 435,000 barrels per day (bpd) of disposal capacity, 240,000 bpd of deep disposal permits and 190 total miles of pipeline. In addition to ongoing buildout to accommodate Sabalo’s development program, H2O Midstream is adding 40,000 bpd of recycling capacity with the option to expand to 80,000 bpd over time.
“The acquisition of Sabalo’s water infrastructure is an important step in realizing our vision of being the premier integrated water midstream provider in the Permian Basin,” said Jim Summers, chief executive officer of H2O Midstream. “The scale of our produced water ‘supersystem’ in the Midland Basin, coupled with our University Lands partnership in the Delaware Basin, allows us to provide our customers with an unmatched level of service, flexibility and reliability as they have put their trust in our hands.”
Barry Clark, the chief executive officer of Sabalo, said, “Due to the strong working relationship, location of complementary gathering infrastructure and proven reliability demonstrated by H2O Midstream, we determined they were the best team to purchase, operate and continue the buildout of our integrated water-gathering and recycling infrastructure.”