H2O Midstream expands its Permian water client network

By Luke Geiver | October 23, 2018

H2O Midstream has secured a major client in the Midland Basin. Through an agreement with Legacy Reserves Inc., H2O will now gather, dispose and redeliver for reuse produced water from several horizontal wells operated by Legacy in Howard County, Texas. Legacy is now the seventh major client of H2O Midstream.

“We made the decision to enter into a long-term relationship with H2O Midstream to outsource a portion of our produced water needs due to the reliability and efficiency of their water hub infrastructure and interconnected water gathering system. We expect this agreement to improve our full-cycle water costs, reduce our environmental footprint and promote safety," said Dan Westcott, president and CFO. 

In May, H20 completed the first third-party, truckless produced water hub in Texas. The facility is serviced entirely by pipelines and can hold 1 million barrels of water. The hub includes two 500,000-barrel ponds connected to a network of 10 disposal wells totaling 220,000 barrels per day of capacity via a pipeline network that spans more than 130 miles.

With Legacy, H20 Chief Commercial Officer Darrell Bull said the company will be able to help Legacy with redelivery of their own produced waters or transport excess produced water via pipeline into third-party disposal wells.

H2O was formed in 2016 with an intial investment of $100 million from EIV Capital.