WaterBridge agrees to acquire water infrastructure assets from Centennial Resource Development in $225m deal

The value includes $150m of upfront cash and an additional $75m payable to Centennial over a three-year period based on meeting certain incentive thresholds.

WaterBridge Holdings agreed to acquire water infrastructure assets from Centennial Resource Development in a deal valued at $225 million. The value includes $150 million of upfront cash and an additional $75 million payable to Centennial over a three-year period based on meeting certain incentive thresholds. WaterBridge and Centennial will enter a 15-year produced water management agreement.

Press Release

WaterBridge Holdings LLC (together with its subsidiaries, “WaterBridge”) announced today that it has signed a definitive agreement to acquire the Southern Delaware Basin produced water infrastructure assets of Centennial Resource Development, Inc. (NASDAQ: CDEV) (“Centennial”). Contemporaneous with closing, WaterBridge and Centennial will enter into a 15-year produced water management agreement at market rates for Centennial’s operated acreage within an extensive area of mutual interest. The transaction is valued at $225 million, consisting of $150 million in upfront cash and an additional $75 million payable to Centennial over a three-year period based on meeting certain incentive thresholds. The transaction is subject to certain regulatory approvals and other customary closing conditions and is expected to close in April 2020.

Upon closing of this transaction, WaterBridge has will have over 600,000 acres operated by over 23 blue-chip producers under long-term dedication in the Southern Delaware Basin. WaterBridge’s extensive integrated water infrastructure network provides nearly two million bpd of water handling capacity via 1,140 miles of large-diameter pipelines and 87 handling facilities.

David Capobianco, CEO of Five Point Energy and Chairman of WaterBridge, said “In 2016, Five Point Energy funded the formation of WaterBridge with a well-defined strategy of being a first mover in progressively addressing the produced water needs of the Permian Basin. With the addition of Centennial’s produced water handling assets to WaterBridge’s network, the company has expanded the capabilities of its system and firmly established itself as the largest pure play water midstream company in the industry.” Mr. Capobianco continued, “The capacity and redundancy offered by our systems will continue to be instrumental in supporting current and future customers’ development programs in the Southern Delaware Basin.”

Jason Long, Co-President and COO of WaterBridge stated, “Today’s announced transaction represents another key milestone for WaterBridge, further validating our unique value proposition and industry leading platform. Centennial has been an important partner to us from the very beginning and is widely regarded as one of the best operators in the Permian. We are very excited to grow our relationship to handle all of Centennial’s Southern Delaware produced water.”

Advisors

Winston & Strawn LLP served as legal advisor to WaterBridge in connection with the transaction.

About Five Point Energy LLC

Five Point Energy is a leading private equity firm focused on the midstream energy sector. The firm was founded by industry veterans who have had successful careers investing in, building and running midstream companies. Five Point’s strategy is to acquire and develop in-basin assets, provide value-added growth capital, and build world-class midstream companies with premier management teams and industry-leading E&P partners. The firm is focused on providing in-basin crude oil, natural gas, liquids and water management midstream solutions to E&P companies in the Permian Basin, Eagle Ford, Mid-Continent and Rockies. Based in Houston, Texas, Five Point Energy manages approximately $3.5 billion of capital across multiple investment funds. For further information, please visit www.fivepointenergy.com.

About WaterBridge

WaterBridge is the largest pure play produced water midstream company in the industry, and a portfolio company of Five Point Energy. Headquartered in Houston, TX with operations centrally located in the Southern Delaware Basin of the Permian Basin and the Arkoma Basin of southeast Oklahoma. WaterBridge develops, owns and operates permanent, integrated water infrastructure networks that handle full-cycle produced water requirements of its blue-chip customer base under long-term, fee-based contracts. WaterBridge benefits from a first-mover advantage in the emerging water midstream sector with the most experienced management team in the industry. For further information, please visit www.h2obridge.com.