Select Water Solutions at 17th Annual Southwest IDEAS Conference: Strategic Shift to Infrastructure

On Thursday, 20 November 2025, Select Water Solutions (NYSE:WTTR) presented at the 17th Annual Southwest IDEAS Conference, outlining its strategic pivot towards water infrastructure, particularly in the Permian Basin. The company emphasized its leadership in water recycling and infrastructure development while acknowledging challenges in transitioning from a service-based model to infrastructure-focused operations.

Key Takeaways

• Select Water Solutions is shifting towards water infrastructure, focusing on long-term contracts and stable cash flows.
• The company is targeting a significant increase in water recycling capacity from 50% to 85-90%.
• Investments in Lea County, New Mexico, are pivotal, with a $400 million commitment to infrastructure.
• Financial strategy centers on debt aversion, shareholder returns, and a 4x return on investment for projects.
• The company is expanding into municipal, agricultural, and industrial water markets for diversification.

Financial Results

• Consolidated EBITDA is expected to remain flat from 2023 to 2025, despite growth in water infrastructure.
• Gross margins are projected to rise by 5-10 points with the shift to infrastructure, which offers 2 to 2.5 times higher margins than services.
• Water recycling costs are approximately $0.50 per barrel, more economical than disposal options.
• The company plans $250 million-$275 million in CapEx for the current year, with 80% allocated to New Mexico, and $225 million-$250 million for the next year.

Operational Updates

• A major focus is on building out water infrastructure in Lea County, New Mexico, with a pipeline network designed for bi-directional water flow.
• Almost 1 million acres have been secured with long-term contracts averaging 11 years.
• The infrastructure build-out in Lea County is expected to be completed by mid-2026.
• The company is enhancing water recycling and disposal capabilities, aiming for a significant increase in recycling rates.

Future Outlook

• Select Water Solutions anticipates continued growth into 2027, driven by current capital investments.
• The company is diversifying into municipal, agricultural, and industrial water markets, securing water rights in Colorado and exploring opportunities in Texas.
• Regulatory scrutiny is expected to increase, positioning recycling as a more sustainable and less regulated solution.

Q&A Highlights

• Infrastructure build-out is the primary challenge in increasing recycling rates.
• Competitors include traditional disposal companies, but Select Water Solutions differentiates itself by prioritizing recycling.
• The company is securing municipal water rights and exploring industrial opportunities, including data center cooling.

For more detailed insights, please refer to the full conference call transcript below.

Full transcript - 17th Annual Southwest IDEAS Conference:

Sandy Martin, Host, Ideas Conference: Welcome to the Ideas Conference. I’m Sandy Martin, and next up we have Select Water Solutions, traded on the NYSE, ticker WTTR. Presenting today is Michael Skarke, the EVP and Chief Operating Officer, and I’ll hand it off to Michael.

Michael Skarke, EVP and Chief Operating Officer, Select Water Solutions: Thank you and good morning. Thank you all for being here. I look forward to talking to you today about Select Water Solutions. Starting off, we just have our regular disclaimer. You can’t take anything I say seriously or something along those lines, but we will not be reading this in detail. Let’s get to the more interesting part. Starting off, water in oil and gas is absolutely essential. It is a growing problem. It’s been growing for a number of years, and we think it will continue to become a bigger and bigger issue, specifically in the Permian Basin. Really, that’s how we’ve structured our entire company. We are a water solutions company. We have operations in every basin, but over half of our activity comes out of the Permian Basin. We’re organized across three segments. The first and our largest segment is water infrastructure.

We’re putting in infrastructure solutions around recycling pipelines and disposal for gathering and distribution of water. The second one is our water services. This is our temporary solutions around water solutions. Largely, this is the transportation of water through diesel pumps and lay flat hose. Then our third and smallest segment is our chemical technologies. We sell primarily friction reducer and surfactants. Some of this is used internal to support our water recycling efforts, and then some of it goes directly to operators or to horsepower companies. We are the leading provider in water solutions. We’re a full water lifecycle company. This is cradle to grave, source to disposal. We’re providing all of those solutions really across the United States, but again, primarily in the Permian Basin. Looking back at our history, we started as a service company, an oilfield service company, and we were founded in 2007.

Shortly after being founded, we started focusing on water. We realized that’s really where our niche was. We were better at moving and managing water than other people, and we realized that we had more growth and higher margins focusing on what we were best at. We really made a push to expand water services. You can see in 2018, 80% of our income was from water services. After that, we really started to focus on infrastructure to get away from the day rate model and move to a per barrel solution and move on to fixed price, fixed pipes with long-term contracts. We have been aggressively pursuing an organic and some inorganic activity as well to support the shift from services to infrastructure. Today, a majority of our income comes from water infrastructure. Some of the service is attrition. Some of it is just growing infrastructure.

We think this path will continue to grow. As you can see, the future state, we expect to be 60% infrastructure with 40% combination of services and infrastructure. We like to think of ourselves today as a water infrastructure company with a service arm to help execute flexible, scalable solutions. Looking at the water services, just showing the growth rate to support the transition that I showed you on the prior page, you can see on the left side we have water recycling. On the right side of the page, we have produced water disposal. That makes up 85% of what we consider water infrastructure. The compound annual growth rates, really starting in 2020, are up 75-80%. Even if you look at it over the last three years, you still have significant growth.

The KER is not quite as high, but still very meaningful growth in the revenue, gross profit and volumes for our water infrastructure platform. I think this slide is really interesting, and it’s a bit busy. I apologize for that, but I’ll try to walk you through it. We’re looking at the Northern Delaware produced water volumes and takeaway. By Northern Delaware, we really mean New Mexico. This is Lea County, New Mexico. If you look at the green line here on the chart, you’ll see the produced water from Northern Delaware, New Mexico, Lea County from 2021 projected out through 2035. The two shaded areas, the dark shaded area is the volume that’s being disposed of inside of New Mexico, and the light shaded is the volume that’s being recycled in New Mexico.

We would be doing most of that recycling and some of the disposal as well. What you’ll notice is there’s a very large gap between the water that’s being produced in New Mexico and the water that’s actually being consumed or disposed of in New Mexico. All of that water today is matriculating to Texas to the Texas border, and that is competing with pore space with the Texas Delaware production. It is going into kind of the hotbed of where you would find increased pore space issues, limitations, surface breaches, and seismicity. We see that as today a large problem for the industry and for the state of New Mexico, and it’s a large problem that continues to grow and expand. Finding a solution to the current problem that is continuing to expand is really what we’re focused on.

We’re the leading recycling provider in New Mexico today. New Mexico is recycling about half of its completion water. We see meaningful upside to get that something closer to 85% or 90%. You’ll never get all the way there, but we can move it up materially. We’re a top 10 provider for local disposal in New Mexico. New Mexico is not permitting meaningful disposal capacity, so you’re going to have to find a new solution which would get you to a distant disposal solution. That’s where you’re taking the volumes out of New Mexico and frankly beyond the hot zone on the 285 corridor and the state line. Lastly, there is really the developing solution around beneficial reuse. We’re firm believers in beneficial reuse. We have completed three successful pilots, two in the Permian, one in Colorado. We’re working on three different technologies.

We’ll go into that a little bit later. What I would say to kind of preface it is beneficial reuse is not permitted today in the state of Texas. There’s going to be a number of issues that are going to prevent it from being a meaningful contributor probably in the next 24 months. If you look out longer term and how you solve the wedge as you think about 2030 and beyond, we see that as a very meaningful contributor and one that we’re going to be active participant in. Looking back at recycling, this local disposal, distant disposal, and beneficial reuse, again, we think all four of these solutions will be needed in the Northern Delaware. We think frankly all four of these solutions will be needed across the Permian Basin, and we’re going to be participants in them.

We are really focused on being a recycling-first provider, and this slide really shows you why. Recycling has an economic advantage to any other form of disposal. Recycling is a synthetic disposal, in that we are taking those barrels, we are recycling and repurposing them for oil and gas use, and we are able to do that at, call it $0.50 a barrel. You compare that to local disposal at $1 a barrel and distant disposal or beneficial reuse in the kind of $1.25 range. This is the rare scenario where the right social environmental solution is also the right economic solution for our customer, and it is the right economic solution for us as well. We have total alignment with our customer. Again, it is why we are focusing on recycling as many barrels as we possibly can.

To the extent that our existing network can’t consume those barrels, we will look to disposal or other solutions. Kind of looking more on the recycling, it’s one thing to show the comparison to disposal prices, but this is a slide that I use in every one of my customer meetings when I’m talking to them about the benefits of recycling. It really looks at what the market alternative is to manage the water, which is to get rid of a barrel of produced water, which is going to hit the customer’s LOE, and a source of barrel of frack water, which is going to hit the customer’s AFE. What we find is we’re generally 25%-50% cheaper than the traditional method of sourcing a barrel of fresh or brackish water for completions and disposing of barrels for production.

When you can save money on the AFE and the LOE, and it’s to the magnitude of, call it 35%, you get a lot of tension in those meetings. This is one of the big reasons why we’ve been so successful in growing water infrastructure. I showed you the growth rates from the prior page around disposal and why we’ve been able to announce contracts on a quarterly basis for long-term dedications. It’s really taking advantage of the cost savings that we can present to the operator. We talked a little bit about beneficial reuse. I would preface it by saying that there is no one in the industry today that has an approved permit to put distilled produced water on the ground or in a waterway.

As such, there’s no one who’s making meaningful revenue off of this other than a free pilot or something of that nature. There are a couple of companies that are firm believers. This is where the industry will go and needs to go, and we would be among that small group. We’re working diligently. We had a successful pilot co-located with one of our recycling facilities in Martin County. We’re working closely with one of the leading operators in the Permian Basin, one of the leading educational universities in West Texas or in the state of Texas. We’re currently ongoing a trial to use distilled produced water for crop irrigation. It is a controlled study. We’re analyzing the water. We’re analyzing the soil. We’re analyzing the crops. Again, in partnership with the Texas Produce Water Consortium and Texas Tech University, something we’re very excited about.

We view this as a way to educate the regulators to make sure that we get the right laws in place to support beneficial reuse, but in a responsible way. Going back to the contracts I mentioned, if you look at the dedicated acres and the right of first refusal acres that we’ve secured specifically in New Mexico over the last 12 months, really on a quarterly basis, we continue to increase. We’re up to almost 1 million acres between dedicated and right of first refusal acres that we’ve secured in a 12-month time period. The average contract duration is 11 years. These are very much long-term contracts around the water to provide a solution for recycling, for disposal, for reuse. I think this is really a testament to the model that we’ve employed.

We wouldn’t be this successful if we didn’t have a strong value proposition in an environment where customers are looking for the lowest cost solution. When you can provide the lowest cost solution that also happens to be the highest margin product for us, you’re going to be in a good position. You’ll be able to announce wins on a quarterly basis. One other point on the contracts, part of the shift to infrastructure, it is a higher margin product. It’s a good financial returns metric, but it provides increased stability. When you’re not having to bid every job, when you have long-term contracts to take away that produced water to resupply completion water, it increases the stability. It increases the certainty of cash flow. It provides us more flexibility, and it’s something that we’ve been very focused on and successful at.

Showing that graphically, on the far left, you can see in July of 2024 what our infrastructure looked like in Lea County, New Mexico. I would note that the long blue line down the center of the county line was a freshwater pipeline that has since been converted to a produced water pipeline. You look at kind of where we are today and then what’s currently under contract and being built out, you’re going to have a pipeline network that spans the majority of Lea County, most of which is two pipelines in the same ditch. You’re able to flow bidirectionally water at the same time. They’re all large diameter pipelines. We did this to create maximum optionality and efficiencies from an execution standpoint.

We can consolidate or gather produced water from multiple operators to our centralized recycling facilities while simultaneously redistributing frack water for new well completions. As we continue to build out the system, the expansions get smaller and smaller because the bulk of it will be built out, which are going to be the highest return projects that we’ll have. It’s that marginal two-mile expansion that connects you to a 15-well development that no one else is going to be positioned to capture because they don’t have the supporting infrastructure. We get really excited about the incremental returns as we continue to build this out. I’d note that the 2026 under contract, we expect to have all of this built out by the middle of the third quarter.

I would tell you that the demand is absolutely there, and it’s something that we’re working on to get in ground as soon as we can because the need to balance the water between Lea County from east to west and north to south is absolutely there. I go back to the reason that we’re being pushed by our customers in providing the solution is because it is the most economic solution for them, and they’re trying to watch their LOE and their AFEs. Just looking at the integrated asset base, we highlight the Northern Delaware. This is where we’re spending all of our capital. I mean, we’re going to have $400 million invested in Lea County. We think it is the best, most economic rock in the United States, the two best counties you can be in. It has the most inventory.

It has the highest water cuts of economic inventory, which as a water guy is good news for us. We think it will be the most, and it’s got the most inventory. We think it’s going to be the most resilient and have the longest runway of anything in the lower 48 and certainly within our portfolio. That is why we’ve been kind of aggressively pursuing it. You’ll see the stats there. I would highlight that we’re certainly more than just a New Mexico player. We have really sizable positions across kind of all the basins. You’ll see the Delaware disposal recycling, where they’re going to be the largest recycling provider in the Delaware. The pipeline network we’re building out is second to none, and we do have disposal backup to support recycling.

The Haynesville, we’re going to be the largest disposal provider in the Haynesville with a similar pipeline gathering network that couldn’t be replicated from a regulatory standpoint. In the Midland, we’re going to be the largest disposal, excuse me, the recycling provider there, again, with disposal backup. The Northeast, we’re the largest disposal provider in the Northeast. We have a reasonable position from a disposal standpoint in the Bakken with a leading solids management position. We’re the largest solids management provider in the Bakken. Lastly, we have the first commercial recycling facility in the DJ.

I don’t want to lose sight of the importance that we have in New Mexico and Lea County and where we’re spending our money and the earnings profile of that, but did want to hit on the fact that we are across the United States in oil basins and in gas basins and do have the optionality to continue to support them from an infrastructure standpoint. As we think about where we were and you think back to the pie graphs, I repeated them here, we kind of have historically where we’ve been, which was largely service-based. It’s 80% of our earnings were from services. That’s a call-out business. That’s highly cyclical. It’s highly correlated to the frack crews or drilling rigs. We made a conscious shift to try to transition that to more infrastructure, which is going to moderate the cyclicality, as I mentioned.

You’re going to have long-term contracts of 10-plus years. Your gross margins are going to, from a consolidated basis, will increase by about 5-10 points. On a product basis, it’s going to be twice or two and a half times what you’re going to see on the service side. You’ll see in infrastructure. That is kind of where we are today. There is going to be kind of another evolution that we’ll get to in a minute. At our heart, we’re really a water company. We’ve been sourcing water. We’ve been moving water. We’ve been permitting water. We’ve been storing water for 15 years. We just do it mostly for oil and gas. As we look kind of in a future state, we do see an expansion of that into municipal, agricultural, industrial markets.

That will extend the contract duration even beyond the 10 years to contracts that are 30, 40, potentially 50 years and provide just a totally different level of stability, cash flow, and underwriting. I do think there’s another phase of our evolution that’s coming. We’re planting the seeds in that now as we start to see the requirements from the investment standpoint in the Northern Delaware diminish. This slide kind of shows you really, I think the key point on this slide is if you look at 2023, 2024, and 2025, the corporate consolidated EBITDA is flat. What that masks is the light blue bar where you see infrastructure, and infrastructure is increasing materially, and you’re being offset by the change in services.

While consolidated EBITDA is flat, you have a real growth story inside of water infrastructure, and it’s part of the transition that we talked about. I think this is something that’s often misunderstood by many of the investors that we talk to because it’s unclear when you flash up Bloomberg or pull a 10K as to what’s really going on with the business. We talked a little bit about the municipal. We did an investment earlier this year where we procured 1,600 acre feet in Colorado, south of Denver, near Colorado Springs. We’re aggregating a number of water rights and then looking to build out storage and provide that to municipalities, but also general industry under the long-term contract. This is the start. This is the seeds that I mentioned earlier about us planting in terms of developing a true water story beyond oil and gas.

It is something that we are very excited about. This is not currently generating income. We still have to secure the offtakes with the municipalities and the industrial. I think we have targeted kind of 2027, 2028 to get that done, and we are still on target to our original estimate. Again, as you think about the evolution of Select as a water company, this is where we see it going and something that we are very excited about. We talked a little bit today about the consolidation on the operator side. We certainly see it. I think the consolidation for operators will continue. That will probably end up with some consolidation for service and midstream companies as well. The good news for Select as a sizable public company is we believe scale seeks scale.

We think as we see more consolidation with the operators or just through the existing consolidation on the operators, they’re going to want to work with companies that are large enough to support their investments, to support their simul fracs, trimal fracs, quad frac developments. It is going to have the right safety plan in place. There are not a ton of those, but we’re certainly among the few. We get excited about the ability to continue to develop our relationships with some of the names on this page. I mean, we publicly announced the recycling that we do for Oxy, for instance, in both the Midland Basin and the Delaware Basin. As they continue to expand, that just creates more opportunity for Select and specifically. With all of this growth, inevitably, there’s a question of how do you fund it.

We’re fairly debt averse, as you’ll see on the next slide. Really, much of the financing of the infrastructure build-out, specifically in New Mexico, is coming from free cash flow from our other two segments, from chemicals and water services. Both of those have a high cash flow conversion, 75%. It’s creating a lot of free cash flow that we’re using to redeploy to further advance the shift that we have from services to infrastructure and do so in a way that protects the balance sheet. We’re very conservative by nature. We’ve generally been inside of one or one and a quarter times debt to EBITDA. I think you’ll see us continue to be conservative. We want to be aggressive in our build-out, provided that it continues to be underwritten by long-term contracts.

We want to put as much capital to work in that scenario as we can while maintaining a conservative balance sheet and really services and infrastructure would allow us to do that. The dividend is something we instituted in 2022. It’s really something that’s a core tenet to Select, being capital disciplined. We’ve done tactical share buybacks, but really building that base dividend, we’ve increased it twice since we formed it. This is something that’s competing with capital for us. To the extent that the infrastructure spend starts to slow down because the meaningful opportunities just aren’t there and able for us to get a four-times return on our investment, to continue to get a two-plus times return or MOIC, you’re going to start to see a bigger focus on shareholder returns because it’s going to be a more attractive use for that capital.

It is something that we’ve done. We will continue to do this. You’ll see it, I think, become a bigger part of the story as that infrastructure spend starts to roll off. That is really it. I guess just to summarize, we think we have the fastest growing infrastructure platform in the market. We really love our focus in Lea County, which is the most economic rock. We think it’s highly protected by the contracts we have in position. We are generating substantial free cash flow, and that will increase as the growth CapEx, which is at our discretion, starts to subside when we have our system fully built out. In terms of the growth profile, the capital investments we’ve made this year will continue to show up in the next year.

We have embedded growth on investments we’ve already made, and we expect that to extend into 2027, given the capital plans we have for next year. We do have a strong commitment to shareholders, and we will maintain a very strong and conservative balance sheet. With that, I’m happy to take any questions. I know I went quickly. I wanted to make sure I gave you all ample time to ask me anything about the company or anything we just shared. I’ve also got John Schmitz, our CEO and founder, in the room, and Chris George, our CFO. In case you outstrip my ability to answer questions, I will phone a friend. Yes, sir. What’s the biggest impediment or choke point to getting recycled from 50% to 85%? Yeah, no, it’s a great question.

The question, what’s the biggest choke point or impediment in taking recycling from 50% in the Permian to 85%? I would tell you it’s the infrastructure build-out. Recycling, you can recycle every barrel of flowback and produced water in the Permian. From a technical standpoint, from an economic standpoint, that’s easy. The challenge is logistics. You can’t put it on truck. It’s expensive on temporary solutions. You need in-ground permanent solutions. When you have the infrastructure built out like this, and we’ll hope to continue to build it out. Again, we’ve announced long-term contracts requiring build-outs on a quarterly basis, and I don’t think that’s going to continue anytime soon. Once you get the infrastructure built out, you will be able to efficiently recycle much more than you’re doing today.

I don’t know exactly the percentage, but there’s no reason technically and logistically you couldn’t get to something approaching 90%. That’s very much what we’re focused on. We’re seeing that with our core customers. If you think back to Oxy, they’ve made some public announcements around what they’ve been able to do from recycling, and we’re recycling all of their water. They are at 85-90% today. There’s no reason we couldn’t get the other operators that were listed on this page to something similar to that. Thank you for the question. Yes, sir. Who are some of your competitors, especially in the New Mexico, Delaware area, and what’s the difference here for you versus competitors? Sure. The question is, who are our primary competitors, specifically around water infrastructure in New Mexico and what the major differentiator is?

I would say that our competitors would be the traditional gathering and disposal companies. That would be WaterBridge, WBI. It would be Aeris, who was recently acquired by Western Midstream. There are a couple of private companies that are considerably smaller. NGL has an asset base there as well. There is a very big differentiator between us and all of the companies I just mentioned. The companies I just mentioned are disposal first. They have assets that are geared towards gathering produced water and disposing of it into saltwater disposal wells. Some of them are in New Mexico. Some of them would be on the state lines. There are regulatory challenges with that.

We’re recycling first, and we’re recycling first very much by choice, partly because we think it’s the winning solution and the better value proposition to our customers, but also because we’re not burdened and saddled with a large investment in disposal. They’re going to be disposal first. Disposal will always be part of the equation. If you think back to the water curve that I showed you from New Mexico, you’re going to need disposal to help fill that. There’s no reason that you can’t increase the recycling. For our contracts, our contracts are around the water. If we can’t recycle it, then we can take it to disposal. That’s why you’ve seen us add disposal capacity. In short, they’re all good companies. They’re trying to solve the water problem.

We’re just going about it a different way with recycling first, followed by disposal. Any other questions? Yes, sir. You showed the slide where you mentioned the municipal and industrial and future state. Are there some actionable things, initiatives that you’re already doing to get to that? I think this is the slide you were referencing when you look at future state and how we look at kind of the increase in gross profit margin, the increased length of duration, the reduced cyclicality. I would say absolutely. It’s really this slide here. It starts with the municipal water rights that we’ve procured in Colorado and are in the process of securing a contract to lease those. What we like about this is it’s a non-depleting resource. We’re leasing it for 30, 40, 50 years with cost escalators.

The intent would be to release that when the duration moves up. This is really the first foray into it. I think you will, assuming we’re successful here, which obviously I believe we will be, I think you’ll see us try and do more of this because it really fits our core DNA as who we are from a water guise. That answer your question? Yep. Thank you. Was there another question over here? Yes. Thank you. CapEx expectations for this year next? CapEx for this year, I think we’re $250 million-$275 million in net CapEx with 80% of the growth CapEx, which would be the majority of that, going to the system build-out that I showed you in New Mexico. Next year, that will come down a little bit based on what we know today, something closer to $225 million-$250 million.

Is that fair, Chris? Good starting point. $225 million to $250 million. And then from a project standpoint, we would see that coming down further in 2027. Yes, sir. If regulatory issues should come along, how are those dealt with in long-term contracts? Say they lead to higher costs. Good question. I’m going to answer your question, but I’m going to start someplace slightly different. Regulatory issues will come along in the water management. I think as we’ve seen increased seismicity, as we’ve seen reduced pore space, as we’re seeing or hearing articles about zombie wells and surface breaches, you’re going to see the regulators get more and more involved, and you’re already starting to see that. Fortunately, as a recycling-first organization, recycling does not require any pore space.

We will be far less impacted by regulatory issues than any of our competitors because our primary solution—and again, if you go back to the volumes, you can see we’re recycling three times, four times, five times the volumes that we’re disposing of. We’re less concerned about that. From a contractual standpoint, to the extent that there’s increased costs, our contracts typically pass those along or split the increased costs with the operator. We are protected generally with CPI escalators and with regulatory clauses to make sure that as the market environment changes, again, we have an 11-year weighted average duration. Over 11 years, they were able to continue to operate and operate efficiently and execute at a similar margin dollar as we did when we set the contract. Yes, sir.

Maybe just to come back on the question, I guess looking at their diversification to municipal, agricultural, and industrial assets, can you tell us a bit more about that and what type of assets are looking at agricultural and industrial? Right. The question is, when we think about diversification beyond upstream oil and gas and look at municipal, industrial, and agricultural, what kind of assets we’re looking at? There are a couple of different asset classes we’re looking at. I’m probably not going to give you an exact name if that’s okay. This one is really representative of what we’re doing. This is, again, the one I mentioned and we publicly announced in Colorado. We think there are more projects like this in Colorado. Colorado has a unique regulatory environment that makes it challenging to buy water. You cannot speculate on water in Colorado.

It keeps it to be a very efficient market that’s not artificially bid up by investors or other funds. It’s one that we like, that market. We think there’s a similar opportunity in Texas. In Texas, it could be municipal. It could also be supporting the data center, the cooling of data centers along the Panhandle and in West Texas. That’s something that we’ve been involved in conversations around. One of the things that we find very interesting, if you go back to beneficial reuse, and again, I mentioned that we believe we’re a leader in beneficial reuse, you’re going to have a large volume of distilled water. What you do with that distilled water, that could be an embedded source.

Rather than finding groundwater like you’re doing in Colorado, we could literally be transforming produced water into distilled water that would have an application to meet the needs of what you’re discussing. Any other questions?

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