WaterBridge NDB LLC, a portfolio company of Five Point Energy LLC, has entered an agreement with Devon Energy to form a produced water infrastructure system, NDB Midstream LLC.

In connection with the transaction, Devon and NDB Midstream entered into a long-term agreement in which Devon committed all of its produced water within a large area of mutual interest, including an initial dedication of about 52,000 acres and contribution of 18 saltwater disposal sites with about 375,000 bbl/d of permitted capacity. The system consisted of approximately 210 miles of produced water pipelines for gathering, transportation, disposal and reuse.

As part of the transaction, Devon received a 30% equity interest in NDB Midstream as well as a commitment by Five Point to fund a portion of the initial build of the system expansion.

The partnership between two technical leaders will yield the largest private water infrastructure system in the prolific Stateline region of the Delaware Basin in Loving County, Texas, and Lea and Eddy counties, New Mexico, WaterBridge said.

The partnership will provide Devon with a significant increase in permitted water handling capacity, “delivering both reliable flow assurance and access to abundant resources and infrastructure to support Devon's future drilling plans and the company's produced water reuse and recycling operations," said Greg Horne, Devon vice president of marketing and midstream who serves as a board member of NDB Midstream.

As part of the transaction, NDB Midstream is developing a large-scale water transportation, handling and recycling system in the area, primarily located on land owned by Five Point's land management platform, DBR Land LLC.

David Capobianco, CEO of Five Point Energy and chairman of WaterBridge NDB, said the joint venture with Devon is one of the largest in the water sector to date and is transformative for WaterBridge.

“It significantly expands our industry-leading platform's scale, commercial reach and strategic value,” Capobianco said. "Since WaterBridge's founding in 2016, we have been pioneers of midstream water management, progressively addressing the produced water needs of our blue-chip clients and reducing reliance on freshwater sources for drilling and completion activities. The future of WaterBridge could not be brighter as we work to bring incredibly innovative solutions to market in the near future, including desalination hubs."

Latham & Watkins LLP and Winston & Strawn LLP served as legal counsel to WaterBridge NDB and White & Case LLP served as legal counsel to Devon.

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