The Delaware Basin is a growing focal point for new disposal capacity, and water midstream companies are gaining on market share.
This month’s chart comes from the Texas Railroad Commission and shows the number of saltwater disposal well (SWD) permits granted in each of the state’s Permian Basin counties in the 12 months preceding September 24, 2019.
Reeves (157), Loving (114), Martin (73), Pecos (67) and Midland (61) counties saw the highest concentration of permit approvals. Together these five counties accounted for more than 57% of the 818 permits authorized in all Texas Permian counties. More than half of all permits were for SWDs to be placed in the Delaware Basin, in line with expectations that oil & gas activity will continue to ramp up there in the future.
Across all counties, Solaris Water Midstream and NGL Water Solutions came away with the most permits at 25 each, though the latter now holds more of the permits issued during that period due to its 2019 acquisitions of Mesquite SWD (21) and Hillstone Environmental (24). In the top five counties, NGL also accounted for the most permits when considering its recent acquisitions, with a total of 63. Even if they hadn’t been acquired, Mesquite and Hillstone would have featured among the top five companies, both Permian-wide and within the five most active counties.
Only two operators – Diamondback Energy (23) and XTO Energy (21) cracked the top five companies across the entire Texan Permian, with the rest being water services providers. Diamondback was the only operator to reach top-five status in the most active counties. This indicates that water services providers are rapidly growing their share of the disposal market, a trend that will likely continue as the water midstream sector matures and producers increase their focus on core operations.
NB: Numbers in parentheses indicate the number of permits issued.
Permian Basin SWD permits granted by Texas county, October 2018-September 2019 Source: Texas Railroad Commission