WaterBridge Infrastructure LLC 2026 Q2 Earnings Call

Thank you for joining WaterBridge's second quarter 2026 earnings call. I am joined today by our Chief Executive Officer, Jason Long, our Chief Operating Officer, Michael Reitz, and our Chief Financial Officer, Scott McNeely. Before we begin, I would like to remind you that in this call and the related presentation, we will make forward-looking statements regarding our current beliefs, plans, and expectations, which are not guarantees of future performance and are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from results and events contemplated by such forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements. Please refer to the risk factors and other cautionary statements included in our filings with the SEC.

I would also like to point out that our investor presentation and today's conference call will contain discussions of non-GAAP financial measures, which we believe are useful in evaluating our performance. These supplemental measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP. Reconciliations to the most directly comparable GAAP measures are included in our earnings release and the appendix of today's accompanying presentation. I will now turn the call over to our CEO, Jason Long.

Thanks, Mae. Good morning, everyone. I am pleased to announce that we delivered another strong quarter, achieving record revenues and Adjusted EBITDA. Our results were driven by organic growth across our core business, underpinned by WaterBridge's unique ability to handle and recycle the rising volumes of produced water across our scaled, integrated network. We were able to monetize strong commercial demand for access to our existing infrastructure, especially along the state line where pore pressure constraints are limiting injection capacity. In addition to our organic growth and strong commercial execution, we also announced a number of accretive transaction to strengthen our position across the Delaware Basin. First, we closed the acquisition of Ranger Water Midstream. The acquisition increases our capacity in the highly active and disposal-constrained Lea County in New Mexico.

The acquisition includes disposal wells with approximately 70,000 barrels per day of total permitted capacity, approximately 30 miles of produced water gathering pipelines, a water treatment facility with up to 100,000 barrels per day of capacity, and 1.2 million barrels of storage capacity. The acquired infrastructure is adjacent to Speedway, creating meaningful opportunities for future integration, additional throughput, and enhanced operational flexibility for both new and existing customers. With established contracts and acres dedications with blue-chip producers already in place, we anticipate Ranger will be immediately accretive and should be a strong tailwind to WaterBridge's increasing market share in the region. We also announced two new investments that will allow us to significantly expand our synergistic environmental waste management business. First, we entered into an agreement to acquire the NDB Landfill in Lea County, expanding our waste management footprint into new markets across New Mexico.

The 560-acre NDB Landfill is a large oil field waste facility with 44 million cubic yards of permitted capacity, with open capacity currently representing more than 40 years of future volumes. This acquisition provides us with a large, scalable platform for growth in a region with high empty activity. Additionally, our board has approved the organic construction of a 280-acre environmental waste management facility in the Stateline region, which will be our fourth site in the basin. Construction is expected to begin in the third quarter with an anticipated in-service date of mid-2027. This project represents a high-return opportunity to construct an additional landfill facility with an approximately two-year capital payback period expected. Once completed, the facility will significantly expand our integrated waste management capabilities in the region and create operational efficiencies for our core water business through reduced waste hauling costs.

Together, these two waste management transactions are expected to double our total facility count and more than double our permitted waste handling capacity in the Delaware Basin. Overall, each of these acquisitions and investments reflect our disciplined approach to capital allocation. They provide attractive standalone returns, support the economics of our existing water infrastructure assets, and support market share growth through new and existing customer relationships. As a result of these accretive acquisitions, as well as a number of new or accelerated commercial capital projects expected in the second half of this year, we have increased our 2026 guidance, raising volume and Adjusted EBITDA guidance for the second quarter in a row and raising capital expenditures guidance as we capitalize on compelling opportunities. Scott will provide further details on the increases in his remarks. I'd like to now turn the call over to Chop Reitz.

Thanks, Jason. Operational performance was strong across the platform in the second quarter, and I'm happy to announce that Speedway Phase I launched on schedule with first volumes coming online in July as expected. Speedway is one of our most important near-term growth projects. It connects growing produced water volumes in Lea and Eddy County to long-term out-of-basin disposal capacity, supported by our infrastructure network and our access to vast pore space through LandBridge. We expect volumes to continue ramping through the second half of the year, adding high-margin volume growth for this year and beyond. Momentum behind Speedway Phase II continues to build. Customer demand for this second phase has been robust, which is consistent with what we shared last quarter, and our commercial and operational discussions are advancing towards underwriting the project, a milestone that we hope to share very soon.

Customer activity remains strong across the footprint, reflected in our volume and revenue performance this quarter. Operators are prioritizing development in areas where WaterBridge has meaningful infrastructure density, particularly in New Mexico, subsequently driving demand for access to our out-of-basin and state line disposal assets. WaterBridge offers responsible long-term disposal solutions in a state line ecosystem where capacity is shrinking due to pore pressure limitations. That dynamic is already creating new growth opportunities for us in the near term. Part of the increase to our CapEx guidance this year comes from a number of commercially driven new build and bolt-on infrastructure projects across our footprint. These smaller projects are a strong signal of growing customer demand for our network, and they're a very attractive use of capital alongside larger organic projects like Speedway, delivering build multiples of five times or better.

We're also building momentum into 2027 by accelerating construction on previously announced New Devon project, which moves up its in-service date. This pipeline will transport volumes from New Mexico to low-pressure LandBridge-owned pore space in Loving and Winkler Counties. By accelerating it, we expect to shift growth from this project into early 2027. It's a good example of how we direct capital toward high return opportunities as they develop, and it's one of the reasons behind our increased capital plan. Another way we're supporting high activity levels in the Northern Delaware Basin is through the acquisition of Ranger. Beyond the immediate contribution from existing assets and contracted volumes, Ranger is highly complementary to our Speedway Phase I and anticipated Speedway Phase II infrastructure. In the second half of the year, we plan to invest in connecting Ranger and Speedway, which will fully unlock the operational advantages of the acquired infrastructure.

Once they're connected, we'll have even more flexibility to enable recycling and treated water supply, and we'll be well-positioned to maximize throughput as customer development continues across the region. Our recent investments in our environmental waste management business are a complementary growth driver that adds value to our core business. The NDB landfill acquisition delivers immediate high-margin revenue upside, and the construction of a fourth solids facility along the state line is an attractive opportunity to grow our business with high return on capital revenue realization beginning in 2027. Looking out further, WaterBridge is uniquely positioned to participate in the digital infrastructure opportunity rapidly developing across the Delaware Basin. This is where our operating model and our partnership with LandBridge really sets us apart, positioning WaterBridge to move beyond traditional oil and gas enablement by potentially serving as a full-scale utility partner to hyperscalers.

This opportunity is a direct result of the scale of our infrastructure in place today. We have access to large and growing produced water volumes, approximately 5 million barrels a day of handling capacity in the Delaware Basin, with roughly 2.6 million barrels a day of total active volumes in the second quarter. Through our partnership with LandBridge, we're also well-positioned to be an infrastructure partner for brackish water supply, with access to approximately 13.4 million acre feet, which satisfies multi-gigawatt scale data center water needs almost indefinitely. Our integrated network connects those resources directly to the high-demand growth centers and industrial corridors where the digital infrastructure is taking shape.

Because we manage the entire water life cycle, backed by more than a decade of disposal expertise, we can supply data center water needs for cooling, then recycle and dispose of the liquid and solid waste by-products. That full-cycle capability from supply through disposal is critical for data center operations, and the scale of infrastructure required gives WaterBridge a distinct advantage over its competitors. From near-term projects like Speedway and the New Devon project to longer-term opportunities in digital infrastructure, we've never had more attractive, high-return growth in front of us. With that, I'll hand it over to Scott to walk you through the quarter's financial results.

Thank you, Chop, and good morning, everyone. We reported strong second quarter results, capping off significant growth for the first half of the year. As Jason referenced, we are raising our full year 2026 guidance and now expect full year volumes of 2.55 million barrels per day-2.75 million barrels per day and Adjusted EBITDA in the range of $435 million-$475 million due to the expected second half impacts of the Ranger and NDB Landfill acquisitions. We are also raising our CapEx guidance by $100 million to a range of $530 million-$590 million, reflective of the planned investments in Ranger, construction of a new landfill facility in the Stateline region, acceleration of the New Devon project, and other commercially driven new build and bolt-on infrastructure projects.