Allstream Insiders Summary

Select Water Solutions is planning a 19-mile, large-diameter produced-water pipeline project in the Northern Delaware Basin under a seven-year agreement supported by a 128-million-barrel minimum volume commitment.

The agreement includes the conveyance of 14 saltwater disposal well facilities and related assets in Lea and Eddy counties, New Mexico. Select expects the full project to cost approximately $25 million to $30 million and to become operational within 12 months of its August 4, 2026, announcement.

Select also completed two additional Northern Delaware disposal-facility acquisitions during the second quarter, bringing the number of saltwater disposal wells added through the new agreement and acquisitions to 16. The company increased its expected 2026 net capital expenditures to $250 million-$290 million, compared with the $200 million-$250 million range reported after the first quarter.

A separate August 18 announcement outlined another Northern Delaware expansion involving approximately 100 miles of pipeline, three million barrels of storage capacity and 60,000 barrels per day of additional recycling capacity. Select has not publicly identified the operator in either announcement, and the available disclosures do not establish that the two agreements involve the same customer or project.

What Is Select Water Solutions Building in the Northern Delaware Basin?

Select agreed to construct 19 miles of large-diameter pipeline that will connect with its existing Northern Delaware Basin network. The system is intended to transport produced water for recycling or disposal as part of a longer-term water-management arrangement with an unnamed public operator.

The seven-year contract includes a 128-million-barrel minimum volume commitment, meaning the customer committed to a stated minimum volume over the contract term. Select’s Form 10-Q describes it more precisely as approximately 127.75 million barrels and identifies it as the largest minimum volume commitment in the company’s history.

Under the agreement, the operator conveyed 14 saltwater disposal well facilities and related assets to Select in Lea and Eddy counties. The company did not disclose a separate purchase price or assigned value for those conveyed assets.

Select expects the combined pipeline and disposal-integration project to cost approximately $25 million-$30 million and to be operational within 12 months of the August 4 update. The cost and schedule are company estimates rather than guaranteed outcomes.

The acquisition amounts are separate transaction values. They should not be added to the $25 million-$30 million combined pipeline and disposal-integration project estimate and described as the cost of one larger project.

How Did Select Add 16 Saltwater Disposal Wells During the Quarter?

Select reported adding 16 saltwater disposal wells during the second quarter through two different transaction types:

• Fourteen facilities were conveyed by the operator under the new seven-year Northern Delaware agreement.
• Two facilities were purchased through separate acquisitions in New Mexico and Texas.

The New Mexico acquisition, completed May 29, included an operational disposal facility in Lea County together with integrated infrastructure, equipment, an office building and associated contracts, permits and leases.

The Texas transaction, completed May 1, added an operational saltwater disposal well in Reeves County with approximately 30,000 barrels per day of permitted disposal capacity. The acquired assets also included about 33 acres, freshwater wells and pits, and the related permits and contracts.

The 30,000-barrel-per-day figure is the permitted disposal capacity reported by Select. It is not reported actual throughput or a guaranteed operating volume.

What Did Select Acquire at Black River Ranch?

Select acquired Black River Ranch in Eddy County, New Mexico, for $18.6 million on May 1, 2026. The property includes:

• 4,463 total acres, consisting of 3,753 acres of fee land and 710 acres of federal grazing-lease land
• 1,800 acre-feet of annual water rights
• Land and water resources located within Select’s Northern Delaware operating area

Select said the acquisition is expected to support its Water Infrastructure operations through water sales and by simplifying rights-of-way associated with ongoing infrastructure projects. The company also identified possible future recycling, disposal and related infrastructure development at the property.

Those future uses remain company-described possibilities. Select has not disclosed a separately sanctioned recycling or disposal construction project at Black River Ranch in the second-quarter materials.

Why Did Select Raise Its 2026 Capital Outlook?

Select said its latest infrastructure contract awards and development opportunities supported an increase in expected 2026 net capital expenditures to $250 million-$290 million.

The prior outlook issued after the first quarter was $200 million-$250 million. The revised range is a company-wide net capital forecast and is not the budget for the 19-mile pipeline alone.

Select reported that approximately 1.5 million barrels of produced water per day were recycled or disposed through its Water Infrastructure operations during the second quarter. That operating volume provides scale for the company’s existing network, but it is not the nameplate capacity of the new pipeline or any individual disposal facility.

What Is Select’s Iodine-Development Agreement?

Select’s Form 10-Q identifies ISE Chemicals Corporation as its partner in a definitive agreement to develop commercial-scale iodine extraction and refining facilities using produced water from Select’s infrastructure across Texas, New Mexico and Oklahoma.

Under the disclosed agreement, ISE Chemicals would fund, construct, own and operate the facilities, while Select would provide produced-water sourcing, transportation, storage, pretreatment, recycling and infrastructure support.

The filing says the initial commercial facility is expected to be commissioned in the Permian Basin during 2027, with the collaboration targeting approximately 3,000 tons of annual iodine production by the end of 2030.

Select did not disclose a construction cost, exact facility location, equipment package or contractor award for the initial iodine project. The 2027 commissioning date and 2030 production target remain forward-looking expectations.

What Did Select Announce After Its Second-Quarter Update?

On August 18, Select separately announced an amended 12-year water-management agreement describing an additional Northern Delaware infrastructure expansion. The disclosed scope includes:

• Approximately 100 miles of additional pipeline
• Three million barrels of storage capacity
• 60,000 barrels per day of additional recycling capacity
• More than 875,000 dedicated and right-of-first-refusal acres across the broader agreement
• An estimated project cost of $100 million-$120 million
• A company target to place the expansion in operation by year-end 2027

Select said that project adds contracted capital deployment in 2027 and does not change its 2026 capital-expenditure outlook at this time.

Because the operator remains unnamed and the company did not expressly connect the August 18 agreement to the 19-mile project announced with its second-quarter results, Allstream is treating them as separate disclosures. Their costs, pipeline mileage and reported acreage totals should not be combined without further clarification from Select.

What Could the Projects Mean for Contractors and Suppliers?

Based solely on the publicly disclosed project configurations—not on announced procurement packages—the Northern Delaware work could involve:

• Large-diameter pipeline materials, construction and integrity testing
• Pumps, valves, metering and produced-water transfer equipment
• Electrical, instrumentation, controls and communications systems
• Disposal-well interconnections and facility integration
• Storage construction and recycling-system equipment
• Rights-of-way, surveying, civil work and environmental compliance
• Commissioning and startup support

The announcements do not identify open bid packages, contractor selections or equipment awards. These are potential industrial work categories inferred from the disclosed physical scope and should not be presented as available solicitations.

Allstream Perspective

The principal near-term project signal is Select’s $25 million-$30 million Northern Delaware system, backed by a seven-year customer commitment and scheduled by the company to enter service within 12 months of the August 4 announcement. The addition of 14 conveyed disposal wells and two separately acquired facilities expands the network alongside the new pipeline.

Select’s later announcement separately describes a $100 million-$120 million infrastructure scope involving pipeline, storage and recycling capacity targeted for operation by year-end 2027. Keeping that disclosure separate from the second-quarter agreement is important because Select has not publicly identified the customers or confirmed that the agreements are related.

Select’s higher $250 million-$290 million 2026 net capital outlook provides broader spending visibility, but it remains a portfolio-level forecast. The clearest project-specific value in the second-quarter update is the $25 million-$30 million estimate assigned to the 19-mile pipeline and disposal-integration project.