Select Water Solutions (NYSE: WTTR) has formalized a seven-year water agreement with a large publicly traded operator in the Northern Delaware Basin, adding a 128 million-barrel minimum-volume commitment and 14 saltwater disposal wells to its infrastructure network. The deal, disclosed during the company's second-quarter earnings call, extends Select's footprint in Eddy and Lea counties, New Mexico, and is expected to require $25 million to $30 million of capital to connect the transferred wells to its existing pipeline and recycling system within roughly 12 months.
The agreement arrives as Select's Water Infrastructure segment posted record quarterly revenue of $102 million, up 5% sequentially and 26% year over year, with gross margins before depreciation and amortization reaching 58%. Produced-water volumes handled rose to 1.5 million barrels per day in the quarter, supported by higher skim-oil capture and pricing. Consolidated revenue climbed 8% from the first quarter to $396 million, while net income more than doubled to $23 million and adjusted EBITDA increased 19% to $93 million, exceeding the prior guidance range of $77 million to $80 million.
Management said the performance through the first half positions the Water Infrastructure segment to reach the high end of its 25% to 30% full-year growth target, with third-quarter revenue expected to grow another 5% to 10% and gross margins before D&A between 56% and 58%. During the quarter, Select also added several minimum-volume commitments, acreage dedications, and interruptible tie-in agreements alongside the Northern Delaware deal.