WaterBridge Infrastructure LLC

What they do

WaterBridge gathers, transports, recycles and disposes of produced water for oil and natural gas E&P companies under long-term, fixed-fee contracts, and also operates two energy waste management facilities for non-hazardous E&P waste branded Desert Environmental. As of December 31, 2025 its network included approximately 2,500 miles of pipelines, 201 produced water handling facilities with approximately 4.7 million bpd of handling capacity, and approximately 2.4 million acres dedicated under long-term contracts. Operations are concentrated in the Delaware Basin, with additional presence in the Eagle Ford Basin and the Arkoma Basin.

Revenue drivers

• Produced water gathering, transportation and handling — The core business, billed under long-term, fixed-fee contracts with acreage dedications or minimum volume commitments; second quarter 2026 produced water handling volumes were 2.6 million barrels per day.
• Environmental waste management (Desert Environmental) — Two facilities disposing of non-hazardous waste from oil and gas E&P activity; the company is doubling facilities and capacity through the NDB Landfill acquisition and a new Stateline facility.
• Recycling — Recycling is included among the water management solutions offered under the long-term contracts referenced in the 10-K; separate revenue for it is not disclosed in the excerpts.
• Large-customer development projects — Dedicated infrastructure built for specific producers, such as the 2025 pipelines and handling facilities serving bpx energy's Reeves County, Texas development, underpinned by long-term transportation and disposal agreements with 10-year MVCs.

Recent performance

Second quarter 2026 revenue was $217.8 million, up 8% quarter-over-quarter, with produced water handling volumes of 2.6 million barrels per day, up 6% quarter-over-quarter. Net income was $14.6 million, a 7% net income margin, and Adjusted EBITDA was $115.8 million at a 53% Adjusted EBITDA Margin. Gross margin was $58.1 million and Adjusted Operating Margin was $124.1 million. Full year 2025 revenue was $525.6 million versus $316.3 million in 2024, while net income fell to $9 thousand in 2025 from $3.0 million in 2024. Operating cash flow rose to $159.7 million in 2025 from $73.9 million in 2024.

Strategy

The company is expanding its produced water network through both construction and acquisition in and around the Delaware Basin. It expects Speedway Pipeline Phase I, with 500,000 bpd of throughput capacity connecting Eddy and Lea Counties to LandBridge-owned out-of-basin pore space in the Central Basin Platform, to be in service in the third quarter of 2026. An open season supporting Phase II, which could add up to 500,000 bpd for a total of up to 1.0 million bpd, was announced on February 23, 2026 and scheduled to end in April 2026. On August 4, 2026 it agreed to acquire a Lea County, New Mexico environmental waste management facility for total consideration of approximately $189 million, and to sell approximately 560 acres of underlying fee surface to LandBridge for $20 million, for net consideration of approximately $169 million. It also closed the Ranger Water Midstream acquisition and is constructing a roughly 280-acre environmental waste management facility in the Stateline region.

Risks

• Dependence on E&P activity — Water volumes, and therefore revenue, depend on oil and gas exploration, development and production activity in the company's areas of operation, over which it has no control.
• Commodity price and capital spending exposure — Producers' willingness to develop depends on oil and gas prices, expected returns and access to capital, any of which can reduce the volumes delivered to WaterBridge.
• Construction and expansion execution — The 10-K states that construction and commissioning of any expansion project, including the Speedway Pipeline, is subject to numerous uncertainties and that there is no assurance projects will be executed on the terms or timetables estimated.
• Customer concentration and consolidation — The company relies on long-term contracts with a set of E&P customers, and industry consolidation may result in lower overall drilling and completion activity.

Outlook

Management increased full year 2026 guidance to produced water handling volumes of 2.55 to 2.75 million barrels per day, Adjusted EBITDA of $435 to $475 million, and capital expenditures of $530 to $590 million, citing the Ranger Water Midstream acquisition, the NDB Landfill acquisition, greenfield landfill construction and high-return commercial projects. First volumes came online for the Speedway Phase I Pipeline in July 2026, with volumes expected to keep ramping through the quarter. The special committee formed to evaluate converting from a Delaware limited liability company to a Texas corporation acknowledges the long-term benefits of conversion and expects to revisit the decision when full index eligibility requirements are met.