Aris Water Solutions, Inc. operates as a growth-oriented environmental infrastructure and solutions company that directly helps the company's customers reduce their water and carbon footprints.
The company delivers full-cycle water handling and recycling solutions that increase the sustainability of energy company operations. The company’s integrated pipelines and related infrastructure create long-term value by delivering high-capacity, comprehensive produced water management, recycling and su...
Aris Water Solutions, Inc. operates as a growth-oriented environmental infrastructure and solutions company that directly helps the company's customers reduce their water and carbon footprints.
The company delivers full-cycle water handling and recycling solutions that increase the sustainability of energy company operations. The company’s integrated pipelines and related infrastructure create long-term value by delivering high-capacity, comprehensive produced water management, recycling and supply solutions to operators in the core areas of the Permian Basin.
The company provides critical environmental solutions to many of the most active and well-capitalized companies operating in the Permian Basin, including the following companies and/or their affiliates: ConocoPhillips and Chevron U.S.A. Inc. The company’s infrastructure, advanced logistics and water treatment methods allows it to reliably gathers the company’s customers’ produced water and recycle it for use in their operations. The company’s solutions make a significant contribution to the ability of its customers to achieve their sustainability-related objectives. The company is committed to responsibly developing, operating and deploying technology to safely reduces its customers’ environmental footprint.
The company’s business strategy and operations align with the increasing focus of local communities, regulators and stakeholders on ensuring the safety of oil and gas operations and minimizing environmental and local community impacts. The company has a leading track record in environmental stewardship in the areas in which it operates by setting and meeting ambitious sustainability targets.
The company’s business provides reliable and sustainable water solutions which address the operational and environmental demands of the energy industry and actively reduce emissions. Through the company’s significant investment in permanent pipeline infrastructure to safely gather and transport produced water, it minimizes the need for produced water trucking, a major contributor of GHG emission, traffic congestion and road safety concerns in the communities in which the company operates. Additionally, the company is a leader in the evaluation, piloting and advancement of water treatment technologies, including the development of solutions for the use of treated produced water outside of the oil and gas industry. For example, the company is piloting and developing proprietary processes for treating produced water for environmental, agricultural and industrial water demand, including evaluating the use of treated produced water as process water for recharging aquifer systems and other industrial uses.
Full-Cycle Water Handling and Recycling Solutions
Produced Water
Produced water naturally exists in underground formations and is brought to the surface during crude oil and natural gas production. Produced water is produced throughout the entire life of the well and is of particular importance to operators in the Permian Basin given the high produced water-to-oil ratio prevalent across the basin.
Water Recycling
Recycling produced water displaces the use of scarce groundwater which would otherwise be used for oil and gas operations. Treatment of produced water is required prior to reuse, which involves the removal of residual hydrocarbons, reduction of free iron and other solids along with the removal of bacteria to customer specifications. The company has made a significant investment in its vast network of produced water gathering pipelines and recycling facilities, which has positioned the company as a leading independent third-party provider of recycled produced water gathered on a proprietary network in the Permian Basin. The scale of the company’s system allows it to gather significant produced water volumes across a wide geographic area from multiple customers. The increasing volumes of produced water aggregated on the company’s systems provide differentiated support for its recycling operations and ensures that sufficient volumes of recycled water are available to the company’s customers when and where needed. The company’s asset base allows it to deliver high-capacity and reliable produced water recycling solutions to operators, encouraging and enabling their rapid adoption of the use of recycled produced water while minimizing the use of groundwater in energy production.
Between July 2019 (the month when the company began recycling at scale) and December 31, 2024, it recycled approximately 433 million barrels, or approximately 18.2 billion gallons, of produced water. The company is committed to providing its customers with a more secure and sustainable alternative to fresh and other sources of groundwater through the company’s innovative technologies and recycling capabilities. By reducing the company’s customers’ dependence on groundwater, it can contribute to their sustainability efforts and the sustainability of the broader energy industry while also providing benefits to the company’s stakeholders and the communities in which it operates.
Full-Cycle Water Management
The company provides access to a substantial and growing source of produced water that can be recycled to support energy production. Energy producers will increasingly depend on its expansive integrated produced water gathering and recycling assets that are designed specifically to meet these challenges. By developing these partnerships and outsourcing full cycle produced water management, energy producers can preserve capital for their core operations and ultimately lower water management costs and do so in an environmentally responsible way.
Operations and Assets
Operations
The company manages its business through a single operating segment comprising two primary revenue streams, Produced Water Handling and Water Solutions.
The company’s Produced Water Handling business gathers, transports, and unless recycled, handles produced water generated from oil and natural gas production. The company’s Produced Water Handling business is supported by long-term contracts with acreage dedications or MVCs, primarily with large, well-capitalized operators.
The company’s Water Solutions business develops and operates recycling facilities to treat, store and recycle produced water. By aggregating significant volumes of produced water from multiple customers on the company’s connected pipeline networks, it can efficiently recycle large volumes of produced water and deliver this recycled water back to the company’s customers in the time frames, volumes and specifications required by their operations. As needed, the company also supplements its recycled produced water with non-potable groundwater to meet the demands of the company’s customers’ operations.
The company’s business is driven by gathering produced water volumes for its Produced Water Handling business and delivering recycled water volumes to customers for the company’s Water Solutions business. In the company’s Produced Water Handling business, it grew its handling volumes were approximately 1,120,000 barrels per day for the year ended December 31, 2024. Within the company’s Water Solutions business, it grew its recycled volumes sold were approximately 377,000 barrels per day on average for the year ended December 31, 2024, and the company’s groundwater volumes sold were approximately 51,000 barrels per day on average for the year ended December 31, 2024.
Assets
Produced Water Handling Facilities
The company’s handling facilities, which are designed to process, store and/or dispose of produced water that is not recycled, are essential to its ability to deliver reliable and cost-effective water gathering services to existing and prospective customers across a large geographic footprint. As of December 31, 2024, the company had 68 produced water handling facilities, which had approximately 1.9 million barrels per day of capacity.
The company has secured significant permits and rights-of-way for additional pipelines and water handling facilities. As of December 31, 2024, it had approximately 195 miles of additional permitted pipeline rights-of-way and approved permits for an additional 23 produced water handling facilities with approximately 0.7 million barrels per day of permitted handling capacity.
Recycling Facilities
The company’s recycling facilities include water filtration, treatment, storage and redelivery assets. The company’s recycling facilities are at strategic locations on its pipeline network where there is both significant customer demand for recycled produced water and high volumes of produced water available. As of December 31, 2024, the company had 20 facilities operational in the Delaware Basin with approximately 1.5 million barrels per day of treatment capacity and access to approximately 16.4 million barrels of owned or leased storage capacity.
The company also has the option to rapidly expand its recycling footprint as needed by developing an additional 10 locations that are either permitted or in the process of being permitted. The company operates and constructs both fixed treatment facilities and modular treatment systems that it can quickly assemble to capitalize on market opportunities.
Customers and Contracts
Customers
The company has long-term contracts with some of the most active and well-capitalized oil and gas operators in the Permian Basin which are increasingly focused on sustainability and minimizing the environmental impact of their operations. Since inception, it has consistently won new contracts and deepened relationships with existing customers, many of which have executed multiple contracts with the company. As of December 31, 2024, the company had approximately 100 contracts for its Produced Water Handling and Water Solutions businesses with approximately 37 different customers across approximately 625,000 dedicated acres.
As of December 31, 2024, the weighted average remaining life of the company produced water handling acreage dedication contracts was approximately 6.8 years. The company’s largest customers for the year ended December 31, 2024, were affiliates of ConocoPhillips and Chevron U.S.A. Inc. These customers represented approximately 53% of the company’s revenue for the year ended December 31, 2024.
Contracts — Produced Water Handling
As produced water volumes from oil and natural gas production in the Permian Basin has significantly grown in recent years, long-term contract structures like those used in the hydrocarbon midstream sector has been adopted for water services. In the company’s Produced Water Handling business, it primarily enters two types of contracts with the company’s customers: acreage dedications and MVCs. These contractual arrangements are generally long-term. All produced water transported on the company’s gathering pipeline infrastructure for handling or recycling is subject to fee-based contracts, which are generally subject to limited annual CPI-based adjustments.
Acreage Dedications
Acreage dedications are term contracts pursuant to which a customer dedicates all water produced from and future wells that they own or operate in a dedicated area to the company’s system. In turn, the company commits to gather and handle such produced water. During 2024, the company added approximately 10,000 net dedicated acres, while divesting approximately 10,000 acres. As of December 31, 2024, the company’s acreage dedications covered a total of approximately 625,000 acres and had a weighted average remaining life of approximately 6.8 years.
MVCs
Under the company’s MVC contracts, its customers guarantee to (i) deliver a certain minimum daily volume of produced water to the company’s pipeline network at an agreed upon fee, or (ii) pay a deficiency fee if the minimum daily volume is not met for a specified period. As of December 31, 2024, the company’s contracted aggregate MVCs totaled approximately 100,000 barrels of water per day (bwpd) of produced water, and the weighted average remaining life of its MVCs was 2.1 years.
Spot Arrangements
The company also enters spot arrangements whereby it can elect to gather and handle the company’s customers’ produced water to the extent it has capacity on its systems when they request offtake capacity. The company refers to these volumes as spot volumes. When producers have a need for produced water handling services at locations which are not otherwise contracted to the company, it will enter spot arrangements to utilize available capacity and increase volume throughput on the company’s systems.
Skim Oil Sales
As part of the company’s water processing activities, it aggregates and sells recovered crude oil, also known as skim oil.
Contracts - Water Solutions
The company’s Water Solutions contracts are primarily structured as spot contracts or acreage dedications where it agrees to supply water, including recycled water, to the company’s customers for their operations.
Innovation in Recycling and Sustainable Water Management
The company is partnered with leading oil and gas operators, technology providers, scientists and universities in the field of water treatment to identify, adapt and demonstrate innovative technologies for beneficial reuse of produced water. With a focus on commercialization, the company is evaluating both technical and economic aspects of best available technologies to safely and effectively generate clean water from produced water. The company has identified potential opportunities for clean water generated from produced water, including replenishing surface water, supplementing irrigation water demand, industrial cooling and other industrial uses, and future recharging of aquifer systems.
NAWI
In April 2024, the company signed an agreement with the National Alliance for Water Innovation (NAWI) to further investigate treatment of produced water using one of the pilot technologies, working with alliance members and Texas A&M University, New Mexico State University, SLAC National Accelerator Laboratory and other parties. Operational data was collected in November 2024 for this study, and the team is in the process of evaluating this data to further its understanding of produced water treatment.
Beneficial Reuse Joint Industry Project
In November 2022, the company announced that it had entered into a beneficial reuse strategic agreement (the ‘Joint Industry Project’ or ‘JIP’) with Chevron U.S.A. Inc. (‘Chevron U.S.A.’) and ConocoPhillips to develop and pilot technologies and processes to treat produced water for potential beneficial reuse opportunities. In January 2023, ExxonMobil Corporation joined the JIP, and in July 2024, Coterra Energy Inc. (‘Coterra’) joined the JIP. The company previously referred to this agreement as the Beneficial Reuse Strategic Agreement.
The company is leading the engineering, construction and execution of the testing protocols and pilot projects, while leveraging the combined technical expertise of Chevron U.S.A., ConocoPhillips, ExxonMobil and Coterra (collectively with the company, the ‘alliance members’). Specifically, the company has submitted two permit applications to the Texas Commission on Environmental Quality to permit discharge of clean water to a local reservoir. The company is in the planning process for Phase 2 testing which will build upon and scale Phase 1 and is expected to launch in the second half of 2025.
Water Standard Asset Acquisition
In October 2022, the company acquired certain intellectual property rights and related proprietary treatment technologies and assets from Water Standard Management (US), Inc. (Water Standard) that are being applied onsite in pilot operations to accelerate the advanced treatment and beneficial reuse of produced water in the Permian Basin.
Seasonality
In general, seasonal factors have not had a significant direct effect on the company’s business other than timing impacts of oil and gas completion activity that have historically been weighted to the back half of the year (year ended December 2024).
Environmental and Occupational Safety and Health Matters
The company is subject to a wide array of laws and regulations governing chemicals, including the regulation of chemical substances and inventories, such as The Toxic Substances Control Act (TSCA) in the U.S.
The company is subject to the requirements of the federal Occupational Safety and Health Act and comparable state statutes whose purpose is to protect the health and safety of workers. In addition, the OSHA’s hazard communication standard, the EPA’s Emergency Planning and Community Right-to-Know Act and comparable state regulations and any implementing regulations require that the company organizes and/or disclose information about hazardous materials used or produced in its operations and that this information be provided to employees, state and local governmental authorities and citizens. The company has an internal program of inspection designed to monitor and enforce compliance with worker safety requirements.
History
Aris Water Solutions, Inc. was founded in 2015. The company was incorporated as a Delaware corporation in 2021.
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