Aris Water Solutions (ARIS) 7 Mar 232022 Q4 Earnings call transcript

Greetings, and welcome to the Aris Water Solutions fourth quarter 2022 earnings call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, David Tuerff, Senior Vice President, Finance and Investor Relations for Aris Water Solutions. Thank you.

You may begin.

to call. Water welcome XXXX fourth and conference earnings morning, the Solutions Aris quarter Good joined by Zartler; am Founder Stephan I today and Brock; CEO, Tompsett. Executive our Amanda Chairman, Bill and CFO, our our President and

we that expectations in call uncertainties that guarantees could which will forward-looking number a are actual of and and remind current our future and we this statements to presentation, not other begin, regarding materially I’d subject related and factors forward-looking beliefs, statements. differ Before to make events you like are the plans of and to performance and contemplated cause such unknown results known results risks from by and

and measures, undue on GAAP. Exchange directly financial are release in measures These useful considered in in be to not as believe which today’s the to are the with included isolation in to are conference call Please time other our measures investor of performance. not filings You contain or that should made factors measures accordance of US in substitute presentation. in appendix for would in supplemental prepared a comparable time evaluating financial earnings GAAP companying I forward-looking point and Reconciliations cautionary most reliance Securities cautioned out our we with the our discussion included from non-GAAP statements refer place like statements. our also to Commission. risk to will the presentation today’s

over Chairman, Zartler. Bill the turn Executive call now our to and Founder I’ll

EBITDA the XXXX. the volume year XX% than for marked company. year of for by joining progress David, us for everyone, more adjusted this another Thank both you, We and grew XXXX and tremendous thanks, over morning.

Basin. our continue with by of footprint Permian the premier operators We contracts in the core expand long-term to backed

reuse collaborative year, with solutions, XXXX water water and excited and well company continue our in I'm our course further and ExxonMobil, leader evidenced the last alongside of as Chevron, comprehensive ConocoPhillips, beyond. management efforts as Chevron. itself infrastructure agreement beneficial a to Over established momentum by the in this strategic

for from at than communicated growth steady market months publicly, largest the though, Looking several ’XX, customers, see have slower ago. growth forecasted as we six our

expands with see current capital more we and been also our no other our has us ground, system customers, core discipline inflationary both operating opportunities and returns and and one remain contracting operators. additional covers pressure on and Capital and As priority for immune to our the budgets. shareholder

to acreage, means growth extended who are we us, connected steady reflected in runway our for CapEx which volume customers alongside and have tier top inventory For is dedicated that in XXXX.

believe also of We believe oil further this and on are our the sector. to in we uses. services continue for that produced water. industrial began gas water-intensive Amanda and will We we recycling produced operations, position beneficial water the for by forefront our can into reuse expand own of efforts other and the at industry's solutions elaborate

verticals operator-owned outside a infrastructure also we adjacent to opportunities other oil water industry. complex industry We gas are be treating natural and field of the of believe water and fragmented, private consolidator for oil the and positioned

complementary and public discipline. XXXX, In than equity through our strategic We scaled but see acquisition of none we met opportunities fit, accretion sheet, evaluated proven transactions, and be can future Delaware on a other cash capabilities, currency, targets. record, that remain have Energy's efficiently balance We platform focused financial earnings and a our consolidation, M&A. key track assets, several and flow for flexible

Aris’s team, I'm year, and excited primarily this and we opportunities growth in ample remain efficiencies. customers, blue on XXXX chip further our about realizing growth focused our beyond. asset excited operational for With we're While footprint, unparalleled

over Amanda. it turn to I'll that, With

Thank you, Bill.

the anticipated XX% year-over-year. fourth continued in inflation, XX% quarter potential we skim and realized more and previously announced, short impacted earnings in oil than We Our the of cost our full fell adjusted as volumes year with as as full growth infrastructure. revenue. severe high up our significant of customer not at weather, lower XXXX, EBITDA activity, we were business we expectations, by delivered have well yet But and changes

Some one barrel address of inflation impact in these is third factors to to our but adjusted in sequential our margin within were the we our quarter. controllable are progress steps control. versus making mitigate taking beyond the expenses quarter, penny the continue began a control, operating fourth to of of what We've on

did on as costs as wanted. not progress we make However, quickly we had

in we stabilize the saw operating fourth downhole For controllable disposal we business, costs. our as on produced quarter, costs focused core water

However, revenue in the we price and oil due fourth also recoveries oil margins operating lower saw the skim on lower impact to quarter. of skim lower

we permanent We have increases areas and skim in we we elevated are seen using be oil do our how and improvements and generators have challenged diesel where have made recovered. in pumps. oil In equipment pumping power power, sorting water costs to rental, not and particularly in by capture continue now renting and recycling costs, business,

We have reduce expenses. projects underway these to

produced XXXX, more network. the context, by active facilities, of number move and significantly our a nearly it and and we way complex operate and two water water to some for taken the half increased recycled provide grew To adjust has we volumes a time times versus

fundamental three our impacting margins. have challenges We sourcing

components supply for for key industry facilities. newer challenges and to related is lead reuse times first The our extended

in interim, equipment leading We renting to higher operating are the expenses.

components by course $X.X We million equipment rental of and replaced operating to such an by approximately permanent on costs as over annualized be expect these the capital pumps reducing basis. XXXX, tankage

diesel line We anticipate made over we've reuse connections, to Second, for complete. power. an basis on power incur waiting rental once be had of temporary costs generators. by reducing course $X.X we Prior fuel million annualized these connections making XXXX, are to connect newer costs and public should to to approximately the on operating utilities our line these facilities

specifications chemical costs under in our to water resulted seen we've contracts. particularly quality County, our in levels some achieve operating increased Finally, related of areas, inlet lower which of to needed Lee in required higher has newer treatment

are how quality water chemical our improvements systems, more our sending of customers cost dosing effectively. on to manage quality working with to the We us, water they're implementing and

addition to are more we In to capital implementing also on efficient. our become projects controlled expenses, focusing

As million expansion approximately recently for save we look disposal and have well on cost configurations per $X.X disposal wells, expect and we incremental to our redesigned program savings. at our operating facility average, see

the capacity connect provide we we to As years. trunk lines new in customer are increasing also to locations, of size additional our future

fourth weeks. to XXXX, volume the in water but Turning see activity to lower quarter our volumes on already in are ramp our acreage this produced early for growth beginning outlook completion slowed our year, past several we

flat the XXXX. slightly down water first the volumes larger completion of recycled, are with ways. forecast growing expected While fourth in to XXXX, impact schedules quarter recent water water of their volumes while XXXX anticipate versus which our quarter water will turn for of contrast, XX% produced we the produced in to In in level volumes some produced growing, are overall consistent of our anticipate to completion XX% from This the activity which we is incrementally seeing we lower is produced customers, provisions production three Permian. lower of us to reduce amount in

reduced low total margins sourcing customer and we in to see First, activity. due water will our

volumes incurring dispose Second, of because operating we we more expenses. not additional much, will recycling downhole, are as

is our volumes not Third, to able volumes. we for because higher with capacity has disposal interruptible capacity available disposal take reduced opened margin as our required recycling, less up, are contracted much and

to in while turning related schedule upgrade disposal supply half acquired Now, issues now anticipated. well connected tubing. the delays chain to the to are Delaware first are we with the our to approximately where of behind we the performance system, the have volumes XX% had year, below of These we due Energy, our impacting assets primary to currently procurement

with quarter, should volume full by as up. see an $XX the the million to and EBITDA be original second our of $XX will per expectation work We second still upgrade believe our of this and year half the sustained increased to expect in million We be for annualized wraps year. completed integration and line

of core excited maximize reuse. treat on produced to leading by beneficial are recycling we announce implement efforts are with technologies and collaborative and has efforts produced announced substantial pilot strategic water that our progress handling agreement encouraged to we reuse making, returns water underway for in ExxonMobil to previously water. and beneficial We're Chevron our joined business, ConocoPhillips, industry the are produced very While to

associated We in outside now are this program the at to pilots and opportunities by beneficial have oil of with execution in completed interim, QX verticals the XXXX. In primary to the the produced gas. reuse phase, actively water and expect looking of treated commercialize are we

desalination Additionally, last month pilot focused produced announced, water for Alliance project Department a Water the technologies the known Innovation, and receive National of only of on using the grant. treatment Aris’s funding US to federal selected the as Energy, we

ryegrass. which A&M, Texas of with study produced agricultural six-month for and used a completed water cotton irrigation recently also We successfully treated

project and their for We significant also cotton, quantified are confirmed associated carbon this excited to roots. the and share ryegrass, sequestration that in potential

are how other We beginning projects to area. we now to can partner evaluate develop full-scale this in stakeholders with

recognize and have compounds feasibility exploring may In are bromine other ammonia the commercial lithium various that as of inorganic various technologies. we concentrations and extractive such raw water as and of produced minerals addition, and that contains such value, assessing

sustainability that of target pleased sustainability to we exceeded our also the front, announce notes. are the performance XXXX we sustainability On linked successfully

our exceeded water produced of recycled versus target volume sold of sustainability water total XX%. Our XX%

costs. business where work we remain to in the optimization while recognize produced our growth conclusion, reuse and additional remains our pursuing In do more returns. efficiency, attractive at we The Aris costs, selectively capital invest we team feel our can water operating managing capital fundamentals on focused of of strong, have we opportunities

financial Steve for With to to discuss turn results over outlook our that, I’ll and it financial XXXX.

We and from quarter third and million, was XXXX. the down $XX.X Amanda. compared X% sequential sequentially realized we decline lower approximately the of to fourth also recorded The XXXX. operating adjusted the by by due X% cost $X.X as skim impacted you, but from million of of communicated. the were third volumes for of fourth Thank pricing largely quarter the quarter pressures XXXX, skim quarter EBITDA negatively to volumetric We previously miss lower up

we the and in million approximately $XXX invested during For with year, expectations capital, line guidance.

begun produced X.XX as should have million expected, for down, XXX,XXX the to day average XXXX, million to quarter, forward first we for barrels X.XX XXX,XXX year-over-year day. to Looking slightly to volumes, and volumes per year per average expect the barrels and water,

higher relative Our XXXX. volumes of forecast volumes, margin overall or percentage to assumes lower a our spot

will geography could to that we which that number higher. volumes contracted look recycled lower capture drive result, and allows, this opportunities short-term customer a activity As

it's sequentially first quarter XXXX by of which in $XXX,XXX. As approximately year, the quarter quarter to two mind of last fourth days first versus that relative we us evaluate the our impacts results fewer the worth are bearing in in the fourth, there

which contracts, expected skim excluding the mix increase year. into to average, over per on half water CPI to produced escalators in of revenue, XXXX our approximately contract rates impact barrel due the For go are $X.XX of to $X.XX pricing effect first the and

expect the year-over-year adjusted excluding margin well of recycling for additional year. rate margins take of offset throughout see relatively approximately is levels flat be will place upside cost to to able our relative if some or initiatives. which to as we are for We these our accelerate million maintenance operating We planned of expense, increases water, improve potential produced above skim, to savings forecast $X.X increase to these revenue our

have For and we compared water skim forecast fourth in year, X.XX% produced the the experienced to recoveries of made some address approximately the as in the of operational volumes quarter, shortfall for adjustments to quarter. oil, X.XX% fourth we

assume noting change a to to be to to barrel recoveries, and equates forecasted oil year-over-year, approximately $X approximately skim $X annual X.XX% $XX average worth down, impacts in XXXX. are realized barrel million $XXX,XXX. approximately per EBITDA, an barrel relative While increase EBITDA price in as per to increase expected volumes compared of skim outlook revenue is that annual pricing skim It overall we of in is as skim per our $XX of by from

per will offset grow our business, volumes some revenue first day XXX,XXX per activity XXX,XXX increase of year. We which our slightly expectations in to to believe barrels from day completion should in the water of second and water half $X.XX XXXX, lower We groundwater barrel XXXX. solutions for quarter, $X.XX the continue XXX,XXX XXXX. customers on water for of reuse in the average of resulting operating are the in expenses, per of barrels for and the XXX,XXX to for For from water

XX% reuse drive initiatives adjusted assumes be year-over-year. outlook several to have improvements, to will approximately We Amanda but operating down total our margin as mentioned, X% and sourcing underway

Our approximately water of outlook barrels. XX% recycle inlet also assumes we produced all

of margin, $X So, OpEx increase million to recycle rate, extent we EBITDA, the change see approximately to X% in we that rate can equates as downhole additional savings. including our a

$XX core to for million continue adjusted water million offset This recycling. growth, $XX lower EBITDA million the forecasting skim in our quarter, adjusted we're $XXX lower year. the full million by EBITDA and $XXX strength first pricing, consistent together, to volumes, of inflation, handling and of taken impacts So, which outlook reflects for rates of the exhibit produced to the

Turning $XXX weighted is existing to $XXX million capital million of the disposal year. to capital, half the and lines, trunk connections and of related towards of to new expansions required for includes new first to in sections we key capital, forecast which XXXX, wells. primarily growth well is pads, This six contracts,

implementation, plan million mentioned, and million system high the as as new compliance, well one-time for optimization improvements for to drive also $X $XX operating space. non-recurring We to investments $XX associated capital accounting return office to software previously spend million million with SOX $X approximately margin to

million and capital $XX maintenance to availability. million for asset $XX have system ensure also integrity to We

capital million for excluding in and the capital. $XXX full of including the together, $XX are impacts million be expenditures to year, to $XXX forecasted million first working the $XX Taken between million quarter,

Our growth capital six-to-nine-month spending generally between lag and investment has revenue. a

we additional investments wells capital reductions. in program growing the to volumes second connected, early operating and optimization water good as So, produced and XXXX realizing cost of are of visibility and our benefit XXXX, the our half system deliver anticipated have

and and Looking of debt profile, capital $XXX year target ended our until available have million with growth of have a no to facility as fourth of our working under balance the a adjusted XXXX. sheet fund maturities ratio In credit debt EBITDA credit approximately utilized to at midpoint CapEx, quarter, of today. and and range, the X.X we portion our the our at we revolver

per paid on announced of share, XXth. of recently $X.XX we will to Finally, which our XXth be shareholders record consecutive March of sixth March dividend as

turn I'll Amanda over it wrap to that, up. With to

Steve. Thanks,

across quarter fell we're XXXX. our of fourth the the proud performance While of expectations, short team's

efforts grow. service reuse. We led through beneficial goals. our to provided We pressures. managed premier collaborative safe, to We continued have operators. We reliable industry We sustainability our to exceeded inflationary unprecedented further

work operating focused We reduction on to continue margins, towards are pricing highly improving and increases. and initiatives cost operational improvements both through our

of full half significantly EBITDA acquisition, our the in CPI-linked the We increase escalation our expect the in we benefit our XXXX realize Delaware the rates. adjusted of optimization and of as to impact Energy cost back efforts, revenue

and business through XXXX into development beyond with We also see and existing continued growth customers efforts. additional

as towards since been becoming we has Aris While inception, company new positive. evaluate a growth growth flow free work opportunities selective will cash and remain we

that, With we questions. will take

John question Goldman Instructions] [Operator Our with Mackay first question. comes your proceed from the line with of Please Sachs.

good quarters margin think looking Thanks the some you're I these OpEx at a specific savings that been now all Hey, through. of on appreciate we've your I'm time. trying new from about working the detail of couple perspective the of just to talking headwinds kind for morning. of it, for some now.

to for maybe time overall Just on talking milestones little here you for are if for more these could - just a watching if guys hit to some of waiting we're spend of could margin from kind that be start should comfortable guide Thanks. actually the and improvements you comment you right kind we the now. how wondering you of to

you, Appreciate Steve take through the question. your Thank have John. We'll you list.

been details have to progress. are so able We to committed track more you our sharing

good morning, right. Amanda, and Thank John. All you,

in to of that's regards the in think addressed rental I to of year. Amanda and year, going half the electrical, equipment we heard the to across you think speak first this look if be what you some all

going improvement sum, all So, a In penny the about really think operating volumes. half in to and per year, that of that a barrel it’s second see across half in you're we the margin.

half should across relative with Energy, improvement first. second the Likewise, the year done we all So, see we that of work to have quarter. the by Delaware second should the

units So, we'll as in up Energy a step Delaware resulting see and well. volumes

think this, I revenue we of other have contracts and January, from on different in July. piece April, CPI, coming the standpoint a

all of the we'll have July, so, by CPI And escalators. benefit the

where So, going first and between half. second half we're a see that's differentiation really to

getting other be to over point, are working moving Exxon, first obviously bit When water our our to John, well booster schedule. IPOed, water, are as to to we going get to successful. little were slightly, connected half produced field, related may both are power. able out the tracking for all were on of disposal, to we're and that reuse. thing to we work the control, as XX the a but we we got Working power At on we line pumps with in our schedule power. able That but out this now SWDs, throughout we see, is the and of we've slip

So, we million. as $X.X that that connected. we've what line will be getting of approximately And explained, is just actually back impact connected report able to we've power

So, it we is meaningful, pushing hard them as can. we as and are

that. Appreciate Okay.

year. it kind - you that ‘XX curious as completions year, through a of of kind down Is lower a How on the slowing Looking impact moderation kind completions one activity isn't of is of more as just much could it follow-up, to a if kind potentially? others? ‘XX? that unfold forward as actually and walking of So, seeing it as Maybe kind last, be. seeing what this little volumes could of customer of this well. leaning of on is more higher the that time maybe does just more then And that in than outlook, high spend one interruptible for mean year-over-year just

outlook be because when impact bring right, recycle, guided do our volumes. capacity open have up and that volumes lower, you're we we to interruptible we completion So, turn to interruptible expect we doesn't that

forecasts, customers, customer their in has But very and understanding I is impacted think by we this again, that customers, large in a on forecast business. their particular we are short outlook. our cycle leaning large reduced and and terms it's one really of have

So, point as see right It we but progresses, the now. this is we geography. may where of forecast the sharing is at our what year is changes of estimation best function are a

a some is control. to of customers continuing just function of of is it are top of that, stay are but crews, their frac we So, where out our and moving on this

All time for Thank right, it. today. Appreciate you understood. the

you. Thank

line question with Dounis your Please from with Spiro Citi. the next question. Our of comes proceed

past. also a remarks Curious it the be Morning, little stronger operator. sort and if lot cash And selective remarks on mentioned levels. and more in flow your should to occur going sort different free about but a a sounds I come after guys Amanda, rates current to around shift pointed you far, sort you’d maybe of does than bit, ‘XX. you some that's flow Thanks, those a off sounds ‘XX getting more these in bit a ways of when a cash meaningful of And release and in closing being if later like of the like being items being in projects just around one-off exit free growth about much been it we this see point, drop everybody. little forward. to maybe than just talked so path towards expand positive outlook a you have the positive. the that call on could of CapEx Also think slight in growth discerning

bit or So, inflection than cash that? little to is a of point still is think could it further sort out flow, ‘XX on be that crazy it that

Great question.

Something lot. about talk we an awful

end at exit QX, XX% the increase rate you're volume. We produced we QX in of do this I right. mean, So, year. the water see see to

strong. fixed sort in EBITDA. of be volume core CPI a and continues our in is as the over So, see again some you've in sort forecast million midstream and this and with our got $XXX a very of caps. exiting business company CPI, escalated mean, I our to our accordance Selective We growth, where function just of have you some you story, know case, our really rates where current of

but degradation. discerning. margin have now seen have on to become anticipated more going Nobody the inflation we are impact inflation, We can

system. return So, and achieve additive the threshold at going be a be certain we to projects are really really looking want have to our to to

So, are you as going selective, little said. a more to we be

In margin about we of see million. year always the terms understand of We came We by next We be of see year that that terms CapEx at we the improvements infection delay. in on again, to free ‘XX. Growth do impact down that year. that efficiencies CapEx XXXX cash doing point. are down $XX cash point the projects this do of some expect achieve, we this current There's EBITDA that flow, coming will at that early this CapEx be looking And current importance basis forecast, do operating outlook, see this. in down. free flow, of believe we our should and the

Wow, great.

for Thanks color. great That's Okay. that, Amanda.

just some Second well. those of touch as to remarks. question, in prepared up wanted M&A on Came in

the been mentioned today. rate. thinking of several now. Has how that You Just but last get more how alignment bit that targets on you're you all quite about market a can that curious none year, Curious you've hit hurdle M&A characterize maybe sort softened evaluating where you'd it price?

to So, a that that what the done deal again, would've going disciplined. year, I'm in wasn't have It for have sort it product it the not opportunity. for of pipeline. is wanted. and of talked last because the this we year last liked address price Bill but strong very We But We year. terms lack a did achieve was about to of

currency between I opportunities led markets has what and I likely is market the the think which realization businesses happening is what worth mean, allows I extent may stocks integration to upstream and the think themselves, years, midstream that sellers more the things valuations the to several recognition And be where of apparent. space. public we says over there's opportunities in the and continue ought think market are some these of achieve get that public and the the a these and reveal to of or valuations where assets to I but time, as and private to be having expected now worth, than see today, consolidation rebound last to more over beginning the have upside it's in across, public consolidation hopefully efforts the Well, terms services, the everyone industry midstream they're in whether where

it. Got you, color. great everyone. That’s Thank

you. Thank

Our proceed please question. of comes Hoh Samantha from with next question ISI. the with your line Evercore

about on my guys. M&A Or wondering, Hey, Thanks question. little taking still I like midstream, Are topics we focus a the bit. Permian of midstream can stay you or geography just you targets. might of sort for I'm Any maybe you're thinking for transaction? not how maybe fund you terms like information of was just going you're in can on how targets? to how sorry, targeting by opportunities guys share customer and mix in terms M&A that potential

Sure, from to hear good Samantha, you. and

in again, been, are pretty where continue is the and at to a look want looked to will great have this the we've you be. type to basins that we We consistent Permian other and fundamentals space, place may So, see. support certainly if growth of returns

analysis, sort not looking the at important - very is only we're but is our in space. it of So, midstream geography

before, and explained core where look As of more sort bring geography-specific, targets, the that relates water of not it which of things that our to will we but as we look in sort at sort adjacencies systems. and be the business, for the we with treatment, sense the our are may some of in effectively volumes potentially we can opportunity reuse can we capacity underutilized utilize potentially use across makes strategically system of accretive, more where

wondering to back a out you you the into that of to that you Is field going go talk on scale and was the engineering try guys really over reuse then the Okay. scale initiative. next up quarter first a like sort the pilot field in terms I just to small pilot, then and about to beneficial rolling pilot? of that it of if are the the of size segue and in be maybe time? can year, have room And planning that trial,

It Great question, series is actually of Samantha. pilots. a

lineup just talent sharing set have working costs those Conoco, Chevron, of aside (Spanos) with amazing an SWD. with with and is of at We and with our capabilities them. Exxon, And all it

different We technologies will a of piloting be scale. series at

up have either technologies or tested efficient, for bench to these taking technologies to et make entire the looking energy coming this at of of we're out early promising cetera. more but year that the consideration off all some and geography year the they the be lower testing, scale some before, into robust with sure it's in will field and throughout different we next So, ability ones, then costs, been are in

So, series do is recycling we determine pilots, to different we water we technologies of use remember, trying are and will cost treatment, pilots, to after treating because wish for these applications. post-treatment, pre-treatment, which polishing for for what then of and lower produced for

for So, it is, to got hydrogen, with program get proven you've do What have water. for if you're we've doing agricultural to you to clean hydrogen. don't clean this very have as as have you'd

you feedstock can by applications. to feedstock what because forever, ag, talk this to talk can once very it it, because happy same to commercialize we've industries used the industry, this, multiple huge about find treat I it to seeing, and are this working by more about we time ways in know and So, detail different for know how very, encouraged we of year with complex, with effectively water this that cost be got at

Just to some initiative? component this is piggyback that on being of out now, into or is that, right going growth CapEx G&A of expense there

that's What good a line our we've it's we've broken a separate R&D. in is, question. statements Yes, item. so, this into out financial done

it. into that visibility have you So,

you'll these low. the we've company is burden established, it CapEx, see and through through So, fairly the on capital partnerships flow doesn't

now it, strong not funded significant budget portion we'll to going partners we'll achieved funding have and who DOE, And Sam, sort commercially they're diesel, we've are And of grants. that we a I achieve extractive - we've independent achieved brine these be on is the or by But would and grant by grant, focusing we work looking to on be now, we've receive but challenge others only that funding and grant's cost-sharing at continue on we see also just anybody year. where this the the not we’ll technologies got to that to benefit of also Exxon whether viable. really of focus what

That's great. luck to guys. of Best you,

[Operator Thank you. instructions].

Fargo. line with Our question Satish Wells comes with of proceed next Please Praneeth from the your question.

Good just for to Thanks. volumes. to produced morning. I guidance back the water go wanted

that at how kind projecting tied trying growth you're Is plans gaining any market much midpoint. and out? customers to determine new of potentially this I drilling to share. existing the to growth and there break adding think is I'm way versus guess I of customers their XX%

existing Yes. I is would customers contracts. say and existing the of overall for this majority

pretty have confidence based good we from we the forecast our in information on today. So, the producers have

not business it's opportunities. new upon predicated development So,

great. Okay,

share Praneeth, and in you markets, terms development additional market effort. have share, gaining very that a robust we business know of

expanding, So, tuck-in. we working with are customers, constantly with

will volumes this talk that is really expect numbers. not that I - in earnings we growth And XX% under is of So, that water presentation, these well, in were long-term year. think XX we the to ‘XX, in fact about really what but contracts, reflected handling trend continue, and see our produced the that these fee-based

an then I you it. if wondering capital us maybe was could update on your just got Okay, And give philosophy. return

if with step I'm kind an that's was in to flow cash still there the case. originally just think of dividend I the grow growth, wondering and intent

Yes.

on the ramp forward, achieve from put look inflation in to impacted returns recommend by we we'll as but volume attractive us operating to positive flow free earlier, a been position Certainly, level. continue the standpoint, well, project next costs, increases the able that year dividend to the board we going the we and a to and achieve free return project is we once - think I capital think that status. cashflow be Amanda to alluded has

like radar, to to. that's something deliver our certainly something on that's we'd then shareholders, think we I intend and So,

Got it. Thank you.

Thank you.

Selman question line Please with of Our your comes proceed next with Akyol Stifel. question. from

morning. Good you. Thank

Just a couple quick ones.

in Just guidance interruptible, just the everything you pretty Energy or then in there assumed you - a guess, for could hooking back maybe that. so just volumes, in additional guess, question a profitability in elaborate to between of confidently of And going up? maybe Is needed well that the helpful. could now? terms integration, function confident why Delaware interruptible Services, then second to guess order Any got just bit, you talked what's and difference the it quarter. it as Maybe in about you you're embedded be I on that second us, achieving what's exactly that? Have for color I do as little is remind would me I you for

Sure. I'll and Delaware, then take start with on interruptible. have I'll the Steve

that So, relates confident of issues. be will this chain half on the Delaware year. to a really we Energy, It supply are second

upgrades getting the in SWDs to those most and we the likely go tubing information on have you the the than we most function that get it Once is are but more on on hand, in to connect back in of connected have and to. we tubing, This line we can need, tubing timing. and going the We coatings of a site of have completed. ordering

a expected. basis, So, and second half annualized that deliver million an that $XX EBITDA to we the anticipate we have on schedule will we in we $XX million of year

Yes.

more relative barrel a to we're grow we interruptible, the with profitable it. able we're what have about $X.XX those. incremental, It's of forecast, purely to terms in In

this Slide year, last we think have we spot in presentation, of the of terms XX about were of on volumes I and XX% year. last

Our that down year. has X% current about this forecast

that, to the extent additional that to the able would margin. grow us we're give So,

Yes.

a So, on I think is effect that. doubling it

can So, we're we and and we to we're point there it is excess paid that use being which recycling but for recycling, up replace twice. also use in when a water fill fill that the at capacity capacity,

deliver So, interruptible does outsized margins.

very All right. much. you Thank

turn concludes that session. gentlemen, our any to floor for and question-and-answer Ms. I'll Brock the Ladies comments. you. Thank final back

everybody for Thank you. the thank call today. joining to Want

want employees for work us. thank that ahead is our still work hard ‘XX, of the hard all in sort of their also to We

focused very are delivering results. on We

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