XRI Announces New Delaware Basin Water Infrastructure Supersystem

MIDLAND, Texas–XRI Holdings, LLC (“XRI” or the “Company”), a leading water midstream company with owned infrastructure throughout the Permian Basin, announced today the completion of its Northern Delaware Basin Supersystem with water pipeline infrastructure spanning more than 125 miles throughout the core areas of development activity in New Mexico’s Lea and Eddy Counties. The new system will be supplied by environmentally responsible, non-potable and industrial water resources owned or controlled by the Company as well as recycled produced water volumes from regional XRI Water Exchange TerminalsTM using the Company’s Fountain Quail Water Management technologies. This Delaware Basin system expansion complements the Company’s existing Delaware Basin infrastructure situated in Texas’ Reeves and Loving Counties which serves multiple customers under multi-year contracts.

In developing this Northern Delaware Basin Supersystem, XRI has designed and built infrastructure necessary to mitigate unnecessary disposal and water transportation costs for its customers through the blending, reuse and pipeline transportation of produced water volumes from its Water Exchange TerminalsTM. XRI has also signed a long-term exclusive agreement with Kinder Morgan, Inc. (NYSE: KMI) whereby XRI holds exclusive, long-term rights to source and deliver industrial-use water owned by Kinder Morgan in New Mexico. XRI’s combined Delaware Basin Supersystem will be capable of producing more than 100 million barrels per year of industrial and non-potable water with pipeline throughput capacity exceeding 350,000 barrels per day. The water is delivered via a network of buried, permanent 16-inch and 20-inch pipelines, pump stations and storage facilities under multi-year, fee-based contracts with customers, including major international and large independent E&P companies. XRI is also in discussions with additional Delaware Basin producers to grow system capacity and non-potable water supplies over time.

The expanding Delaware Basin system complements XRI’s existing Midland Basin water networks, which have been operational since 2013 and serve numerous oil and gas producers in the core development areas of Midland, Upton, Reagan, Howard, Martin and Glasscock Counties. In aggregate, the Company’s Midland Basin systems are comprised of nearly 200 miles of wide-diameter, high-capacity, permanent buried pipelines.

“We are excited to see the impressive drilling results that our customers are delivering in the Delaware, and we are committed to continuing to expand our water infrastructure footprint to serve producers’ growing water needs efficiently and effectively across both the Delaware and Midland Basins,” said XRI CEO Matthew Gabriel. “XRI has established the leading third-party water infrastructure system in the Midland Basin and the expansion of our Delaware Basin footprint represents a natural extension of our Company’s asset base and a commitment to provide economical, environmentally responsible, long-term water solutions to our customers throughout the Permian Basin.”

About XRI 

Headquartered in Midland, Texas, XRI is a leading full-cycle water midstream company with integrated infrastructure assets strategically located throughout the Permian Basin. XRI has over 300 miles of permanent, buried pipeline infrastructure and is engaged in the development, production, treatment and transportation of water for use in the exploration & production industry. XRI is dedicated to bringing deep technical expertise and industry leading service to provide cost-effective, reliable and environmentally responsible water solutions to our customers throughout the Permian Basin. XRI is a portfolio company of Morgan Stanley Energy Partners. For further information about XRI, please visit www.xrifq.com.

About Fountain Quail Water Management 

Headquartered in Irving, Texas, Fountain Quail Water Management provides customers with proprietary oilfield water treatment, reuse, and recycling solutions used for on-site filtration and treatment of produced water and ultimate reuse in well completion operations. Fountain Quail Water Management is a wholly owned subsidiary of XRI.

About Morgan Stanley Energy Partners

Morgan Stanley Energy Partners, the energy-focused private equity business of Morgan Stanley Investment Management, is a leading energy private equity platform that makes privately negotiated equity and equity-related investments in energy companies located primarily in North America. Morgan Stanley Energy Partners pursues a differentiated investment strategy, focused on the buyout and build-up of strategically attractive, established energy businesses across the energy value chain in partnership with world-class management teams. For further information about Morgan Stanley Energy Partners, please visit www.morganstanley.com.BusinessWire.com

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