WaterBridge Resources’ subsidiary announces $800m debt facilities

WaterBridge Resources’ subsidiary WaterBridge Operating has announced $800m debt facilities, which will help it to repay outstanding indebtedness as well fund the purchase of water infrastructure assets from Halcón Resources.

The debt facilities were led by SunTrust Robinson Humphrey, with a group of fifteen financial organisations.

The debt facilities comprise a term loan A of $600m, of which $400m will be taken at closing and a $200m as a delayed draw tranche. This is in addition to an existing $200m revolving credit facility.

On 20 December, WaterBridge purchased all of Halcón’s existing water infrastructure assets in Pecos, Reeves, Ward and Winkler counties of Texas.

The $200m cash taken at closing is subject to customary closing adjustments, with up to an additional $25m every year in each of the next five years as per the achievement of some development milestones by Halcón.

The Halcon deal includes acquisition of around 60 miles of water gathering pipelines, ten disposal wells with total permitted capacity of 120,000 bpd, freshwater wells and water recycling facilities.

The deal also covers 15-year water supply agreement following which WaterBridge will be Halcón’s only supplier of fresh and recycled water for drilling and completion operations within the area of mutual interest.

Furthermore, this week, WaterBridge signed a definitive agreement to purchase South Delaware water infrastructure assets from affiliates of NGL Energy Partners.

As per this deal, $238.8m will be paid in cash at closing. The deal will see acquisition of nine saltwater disposal facilities and around 10 miles of pipeline in southern Reeves and Ward counties of Texas.

The combined permitted capacity of the acquired facilities is 275,000 barrels per day.

Following acquisition, WaterBridge will assume all existing commercial agreements.

The deal also includes additional disposal permits with 90,000 barrels each day of permitted capacity.

As per the deal, WaterBridge will pay additional consideration following transfer of some assets within 18 months of closing of the transaction.

The NGL deal is subject to certain regulatory and other customary closing conditions. This deal is expected to close within 45 days.