H2O Midstream Acquires Sabalo's Produced Water Infrastructure, Creates Service Agreement

Updated 2 years ago

H2O Midstream announced the acquisition of produced water infrastructure from Sabalo Energy concurrent with the execution of a 15-yr 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 over 37 mi of pipeline, 9 salt water disposal wells, 4 Ellenburger salt water disposal well permits, and several third-party interconnects. Concurrent with the Sabalo acquisition, EIV Capital and multiple co-investors substantially increased their equity commitment for H2O Midstream to pursue additional growth opportunities throughout the Permian Basin.

The Sabalo system is already pipeline-connected to H2O Midstream's expansive produced water gathering network, bringing the combined system to 435,000 bpd of disposal capacity, 240,000 bpd of deep disposal permits, and 190 total mi of pipeline. In addition to ongoing expansion 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.