https://ir.ariswater.com/news-events/press-releases/detail/66/aris-water-solutions-inc-announces-long-term-full-cycle

HOUSTON–(BUSINESS WIRE)– Aris Water Solutions, Inc. (NYSE: ARIS) (“Aris,” “Aris Water,” or the “Company”) announced today a long-term full cycle water management agreement with Chevron U.S.A. Inc. (“Chevron”) in the Permian Basin. Under the arrangement, Aris will provide produced water handling and recycling services in a portion of Chevron’s core position in the Delaware Basin, including acreage in Eddy and Lea Counties, New Mexico and Culberson and Reeves Counties, Texas. The agreement will facilitate Chevron’s increased use of recycled water in their operations and reduce their use of groundwater, improving their water sustainability footprint.

Aris 1Q earnings

In March of 2022, Aris announced an expansion of its alliance with Texas Pacific Land Corporation (“TPL”). As part of the expanded relationship, Aris has access across TPL’s Northern Delaware surface acreage to provide a full suite of produced water services, including incremental water recycling for two leading large-cap customers operating on TPL royalty and surface acreage. In addition, Aris received key additional shallow interval water handling locations with the ability to permit more as needed.

From Aris earnings call:

Additionally, earlier in the first quarter, we announced our expanded alliance with Texas Pacific Land Corporation. Importantly, Aris now has expanded access across Texas Pacific’s Northern Delaware surface acreage in Texas to provide a full suite of produced water services, including incremental water recycling for two large leading customers. We also received key additional shallow interval water handling locations, as well as the option to permit additional locations that will allow us to expand our system efficiently and as needed over time alongside the growth of our customers.

The Aris business and offering remains in growth mode and continue to provide both significant operating cash flow and opportunities to reinvest this cash for attractive returns under existing and new long-term contracts.

Our agreement with Chevron is a great indication of that strategy. We secured a long-term full cycle agreement with a premier operator that underwrites an attractive return on incremental capital that expands our network. We will continue to invest and grow alongside existing and new customers at compelling returns while working closely with regulators, customers and other key stakeholders to encourage reuse and pioneer beneficial reuse solutions. We will evaluate technologies and capabilities that can accelerate our efforts around water treatment and we’ll make targeted efficient investments that can help move the industry forward.

We are optimistic as we continue to hit record volumes help the industry achieve its sustainability goals and prudently invest for additional long-term growth alongside our premier contracted operators. We are tremendously proud of our strategic alignment with Texas Pacific Land Corporation and Chevron, both of which are significant milestones and endorsements of our capabilities. This momentum reflects our demonstrated track record built for purpose infrastructure and dedicated team.

Praneeth Satish, Analyst:

Hi, good morning. I guess to start, can you maybe just give us a sense broadly in terms of drilling activity and appetite from producers across your footprint? I guess mainly, I’m just asking, is there any more appetite from public E&Ps to ratchet up drilling? Or is it mostly the private majors that are driving the growth?

Bill Zartler, Founder and Executive Chairman:

Well, you have to ask them, but for the most part, I mean I think incrementally, we are seeing, if the tendency was to finish earlier to wrap up, you’re going to keep that rig working a little while longer right now, so I think that is I think Chevron has indicated a slow ramp-up. The rig count currently today doesn’t really reflect that. So, I think that we’re rolling into a set of economics that are pretty compelling for operators. I don’t think that the dam is going to break loose, and you’re going to see people go up 4 or 5 times, but I do see incremental increases in activity levels among some of the larger contracts, larger players on top of clearly these smaller players, more rapid increases.