Price for New Mexican water: $93 million

NGL Energy Partners LP (ticker: NGL) has purchased another Permian Basin ranch, adding 9.6 million barrels of annual fresh water rights to its Permian Basin water portfolio.

NGL said it bought the 36,000-acre Beckham Ranch, which sits atop the Carlsbad, Capitan, and Jal Water Basins located in southeastern Lea County. In July NGL bought the McCloy Ranch, located in Eddy and Lea Counties, New Mexico, which is 87,000 acres of land and an associated 2 million barrels of annual water rights.

NGL Energy Partners Adds Water Sources in the Permian - Oil & Gas 360

NGL Energy Partners Adds Water Sources in the Permian Basin. Permian Basin Map: USGS

NGL’s available freshwater volumes in the Delaware Basin now exceed 30 million barrels annually. The partnership said the deal adds locations for 20 saltwater disposal wells and 11.6 million barrels of annual fresh water rights in New Mexico, potentially making it one of the largest midstream water infrastructure companies for oil and gas producers in the basin, the company said.

Total cost of the acquisitions was approximately $93 million with an estimated full year run-rate Adjusted EBITDA contribution of $18 million, NGL said in a statement.

NGL said it is developing multiple water pipelines, including the Lea County Express Pipeline that will originate in the area of the acquired ranches and transport produced water to certain NGL water disposal facilities in Texas and New Mexico.

NGL currently operates 27 active saltwater disposal facilities with over 1 million barrels per day of disposal capacity and more than a dozen approved permits in the Delaware Basin.  Earlier this year, the partnership announced the acquisition of 55 miles of pipeline rights-of-way from Pecos, Texas to the New Mexico State Line which it has earmarked for the Western Express Pipeline System in Reeves County, Texas, which includes wastewater transportation pipelines ranging from 16 to 24 inches in diameter, connecting 20 of NGL’s Delaware Basin SWD facilities.

This portion of the Western Express system consists of approximately 750,000 barrels per day of wastewater injection and disposal capacity.  The Western Express Pipeline System is being expanded into New Mexico via two 24-inch pipelines from NGL’s SWDs near Loving, New Mexico to the Texas State Line.

The Western Express Pipeline System is expected to ultimately consist of more than 200 miles of gathering and transportation pipelines connecting over one million barrels per day of wastewater injection capacity spanning from Loving, New Mexico to Pecos, Texas.


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