Devon Energy Corp. subsidiary WPX Energy Permian LLC has formed a partnership with WaterBridge NDB LLC, a portfolio company of private equity firm Five Point Energy LLC.
The new partnership—NDB Midstream LLC—is developing a large-scale water transportation, handling, and recycling system in the Stateline region, in Loving County, Texas, and Lea and Eddy counties in New Mexico, primarily on land owned by Five Point's land management platform, DBR Land LLC, WaterBridge NDB said in a release Aug. 7.
In connection with the transaction, Devon has committed to NDB Midstream all of its produced water within an area of mutual interest, including an initial dedication of 52,000 acres, and contributed to NDB Midstream 18 SWDs with 375,000 b/d of permitted capacity and 210 miles of produced water pipelines for gathering, transportation, disposal, and reuse.
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 “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’s vice-president, marketing and midstream, and board member of NDB Midstream.
Devon Energy Delaware basin asset
Devon holds 400,000 net acres in the Delaware basin, in what it calls its ‘franchise’ asset. In the second quarter, the company reached an all-time oil production record of 323,000 b/d. Of that, about 65% is attributed to Delaware basin acreage where an additional 34 wells were placed online in the quarter to reach a total of 76 wells online.
Also in the quarter, the successful Mule appraisal, an 11-well project in the Delaware basin, derisks about 100 locations in the Cotton Draw area, the company said.
The company expects to spend about 60% of its estimated 2023 total capital budget of $3.6-3.8 billion on Delaware basin assets.