The University Lands – ULWM Preferred Provider Agreement provides incentives for H2O Midstream and Layne Water Midstream to rapidly build source, gathering, reuse, storage and disposal infrastructure to reduce water logistics costs, enhance mineral development and increase sustainability on UL acreage.
Why the Partnership?
The ULWM Joint Venture and UL/ULWM preferred provider agreement allow for a holistic and efficient approach to full-cycle water management by combining the experience and unique core competencies of H2O Midstream and Layne Water Midstream with University Lands’ acreage position in the Permian Basin.
- H2O Midstream: Produced water handling, transportation, storage, disposal and reuse
- Layne Water Midstream: Freshwater sourcing, transportation and delivery
- Undisclosed Investor: Investment across entire platform aligns interests and provides access to significant capital
- University Lands: Access to resource and surface easements across contiguous acreage
How Do We Create Value for University Lands?
The partnership benefits UL directly and indirectly in a number of ways:
- Long Term Royalties: Under the preferred partner agreement, UL receives a direct share of the gross revenue ULWM earns across each segment of the oilfield water value chain (sourcing, gathering, disposal, skim, and recycling).
- Enhanced Minerals Revenue: Implementation of a full-cycle water midstream model which utilizes interconnected storage, pipeline, treatment and disposal infrastructure will bring significant economies of scale and capital efficiency to operators across University Lands. These efficiencies and the potential for producers to limit capital expenditures and reduce LOE provides a powerful incentive to drill on University Lands, unlocking additional mineral royalties over the term of the contract and beyond.
- Environmental Sustainability:
- Elimination of materially all trucking for water operations by using interconnected pipeline networks (our Howard County system has a 99.97% run-time rate)
- Acceleration of produced water recycling by leveraging common infrastructure across contiguous acreage to fundamentally change the economics for smaller producers
- Stewardship of best practices by a world class water midstream team
|Layne Water Midstream||H2O Midstream|
ULWM combines leading expertise in source and produced water logistics with a highly experienced management team and strong capital backing
Best-in-class Full-Cycle Water Management
UL’s mission is to maximize the revenue from The PUF Lands by applying intensive management, accounting, conservation and environmental programs, which improve and sustain the productivity of The PUF Lands, protect the interests of The University of Texas System and promote awareness and sensitivity for the environment.
University Lands’ Water Midstream Request for Proposal (RFP)
UL Water Midstream Provider Selection Process
- Approximately 25 interested parties
- Received 8 Regional Full-Cycle Water Management Proposals
Selected ULWM LLC as the exclusive provider for the Delaware Basin
What does this mean for Producers in the Delaware Basin? An Opportunity to Outsource Water Management?
- Redirect Capital to Drilling
- Reduce Disposal Demand
- Utilize Scale of PUF Lands
- Reduce Costs
- Increase Sustainable Recycling
ULWM Current Activities
- Develop an integrated water midstream business encompassing brackish source water as well as gathering, reuse, storage and disposal infrastructure.
- Analyze hydrogeology to identify ideal locations for brackish water development
- Survey locations for injectivity, seismicity and volume fundamentals to permit new shallow and deep disposal wells
- Design system with multiple, strategically located storage hubs and pipeline networks to facilitate reuse and recycling
For more information on UL Water Midstream, go to www.ULwatermidstream.com