
(Source: WaterBridge Resources LLC)
[Editor’s note: This story was updated at 10 a.m. CT May 18.]
Centennial Resource Development Inc. terminated the sale of Permian Basin water infrastructure on May 15 citing failure of the buyer to close the multimillion-dollar transaction.
The transaction included saltwater disposal wells and associated produced water infrastructure located primarily in Reeves County, Texas, within the Delaware Basin where Centennial’s operations are focused. Houston-based WaterBridge Resources LLC agreed in late February to acquire the assets in a $225 million transaction, which was expected to close at the end of the first quarter.
“Pursuant to the terms of the purchase and sale agreement, Centennial provided written notice of termination relating to the divestiture after WaterBridge failed to close the transaction on or before 5 p.m. Mountain Time on May 15, 2020, which was the outside date for the divestiture set forth in the purchase and sale agreement,” Denver-based Centennial said in a company release.
Centennial also expects to receive the $10 million purchase price deposit, which is currently held in escrow.
In a February release, Centennial described WaterBridge as a long-standing partner, adding that the company historically disposed of nearly half of Centennial’s produced water volumes in Reeves County.

WaterBridge is backed by Five Point Energy LLC, which sold a 20% minority equity stake in the company to affiliates of Singapore’s sovereign wealth fund GIC in May 2019. The company recently announced a leadership succession plan that will see CEO and Founder Stephen M. Johnson transitioning into a new role, effective May 18.
Analysts with Tudor, Pickering, Holt & Co. (TPH) said they continue to see a “tough road ahead” for Centennial, absent a material rally in crude, given elevated leverage combined with high PDP declines and tightening liquidity constraints.
“While we see the official announcement as a negative event we had already removed proceeds from our model in anticipation of a low probability of closure given the plunge in crude prices and significant decline in [Centennial Resource Development] production,” the TPH analysts wrote in a May 18 research note.
TPH’s model for Centennial currently calls for roughly $255 million of spend this year driving exit-to-exit oil declines of 25%. Further, the firm’s analysts see a 2021 budget of $145 million continuing to roll production by an additional 17% exit-to-exit as Centennial “attempts to protect liquidity.”
Centennial is expected to give an update on a corporate debt exchange which was extended until May 19.
Recommended Reading
2025 Hamm Summit Goal: Make US NatGas ‘Hero’ for Powergen
2025-04-11 - Stepping up power for data centers “is a phenomenal opportunity here that our industry has to take advantage of. We have to get this right,” the Hamm Institute for American Energy’s executive director Ann Bluntzer Pullin said.
Trio Petroleum Deal Marks Entry into Canada’s Heavy Oil Region
2025-04-10 - California’s Trio Petroleum will acquire producing wells in the Lloydminster, Saskatchewan heavy oil region in a deal valued at roughly $1.38 million.
Prairie Operating Hedged D-J Production Ahead of Market Downturn
2025-04-10 - Approximately 85% of Prairie’s remaining 2025 daily production is locked in at $68.27/bbl WTI and $4.28/MMBtu Henry Hub as part of a strategic hedging program, the company said.
EIA: Tariff Chaos, OPEC Output Increases Spell $57/bbl WTI in 2026
2025-04-10 - Energy Information Administration price estimates for 2025 and 2026 are bad news for producers—if they come to pass—as breakeven prices for operators, even in the Permian Basin, require between $61/bbl and $62/bbl to remain profitable.
Oil Falls More Than 4% as Investors Reassess Trump's Tariff Flip
2025-04-10 - Oil prices fell by nearly $3/ bbl on April 10, wiping out the prior session's rally, as investors reassessed the details of a planned pause in sweeping U.S. tariffs and focus shifted to a deepening trade war between Washington and Beijing.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.