Our quantity progress is mixed with continued price enhancements to contribute to full 12 months 2025 professional forma revenues of $790,000,000, a 19% annual improve in comparison with professional forma 2024 revenues. Shortly, Michael will stroll us by means of how we plan to proceed our operational and business momentum in 2026 after which Scott will translate that into particulars for our 2026 steerage. However first, I wish to stroll by means of some context of the enterprise at the moment.
WaterBridge Infrastructure LLC supplies progressive and full-cycle produced water options to E&Ps and is well-positioned to satisfy evolving trade wants by way of our produced water dealing with capability of greater than 5,000,000 barrels per day of produced water dealing with capability throughout over 2,600 miles of built-in pipeline to 112 produced water dealing with amenities. With this in depth produced water dealing with and provide community, and deep operational and geological experience within the Delaware Basin, probably the most prolific oil and pure gasoline basin in North America, we’re properly positioned to be a sought-after associate for years to come back.
Our worth proposition of offering progressive, geologically centered, technologically superior options for our E&P companions has translated into a powerful observe document of progress as demonstrated by our greater than 22% CAGR in produced water dealing with quantity since 2022. Because of the important remaining stock of low breakeven areas, produced water volumes proceed to develop alongside and even not too long ago outpacing oil quantity progress within the Delaware Basin, the place the water-to-oil ratios are among the many highest within the U.S. Our everlasting built-in water infrastructure community is strategically positioned to satisfy this want, and we anticipate continued income progress within the coming years.
To fulfill that progress, we proceed to dedicate important capital to high-return natural progress tasks and pipelines within the basin, specializing in long-haul and out-of-basin options for New Mexico prospects as they proceed to extend operational focus within the high-return, high-inventory Northern Delaware Basin. The sturdy demand and optimistic response we obtained throughout the open season for the primary part of the Speedway Pipeline Challenge led us to proceed these discussions with prospects by way of the not too long ago introduced Speedway Section Two pipeline. As a long-term move assurance associate of selection within the basin, we count on to proceed dialogues with present and new prospects within the area to make sure that we are able to develop water infrastructure capability in keeping with their growth wants.
With that, I’ll flip it over to our COO, Michael Reitz, to speak about operational momentum and priorities for 2026.
Michael Reitz: Thanks, Jason. On the operational degree, we proceed to prioritize delivering important move assurance for our prospects by means of unparalleled pore house entry in addition to our superior expertise and measurement programs. Our continued execution is mirrored in our produced water dealing with quantity progress, and within the fourth quarter, we achieved a single-day document of two,900,000 barrels per day of water dealing with. In 2025, we achieved 99.7% operational uptime with measurement variance of lower than 1% throughout our system, pushed by our proprietary forecasting capabilities and real-time measurement and monitoring applied sciences. Industrial efforts proceed to advance meaningfully. In 2025, we introduced high-value new infrastructure on-line and expanded present amenities throughout our community, enabling 15% year-over-year mixed quantity progress.
Particularly, we introduced the Kraken mission on-line, representing an preliminary capability of roughly 450,000 barrels per day. This mission will proceed to drive quantity progress in 2026 with a midyear minimal quantity dedication, or MVC, improve. As beforehand introduced, this mission features a 10-year MVC from BPX to assist its long-term growth plans within the area. We additionally meaningfully superior the event of our Speedway Challenge, which can present produced water transport and dealing with within the Northern Delaware Basin, connecting oil and gasoline growth to out-of-basin pore house owned by Landbridge within the Central Basin Platform.
Section One was oversubscribed, and we anticipate the mission to be put into service in the midst of this 12 months with the majority of key contracts and MVCs going into impact within the third quarter. The primary part of Speedway is predicted to drive quantity progress in 2026 and past, because it continues to ramp by means of 2028. Speedway’s Section Two open season was launched in February 2026, and demand is already outperforming expectations. We additionally anticipate with the ability to speed up some early Section Two tasks into 2026, which represents a possibility to leverage not too long ago constructed Section One property, unlocking operational synergies and subsequently offering an incremental EBITDA contribution in 2027.
The success of the Speedway mission emphasizes the continued advantages from our synergistic relationship with Landbridge, which not solely supplies important entry to underutilized, high-quality pore house, but in addition continues to develop its floor and subsurface portfolio, subsequently derisking future wants. Entry to pore house by means of Landbridge and different massive strategic landowner relationships is a key differentiator for WaterBridge Infrastructure LLC and a important part of the dependable, redundant move assurance resolution that we offer our prospects. Lastly, we count on to start building on the beforehand introduced new Devon mission in 2026 and can proceed to execute incremental high-return capital tasks to satisfy the prevailing buyer demand all through our infrastructure footprint.
With that, I’ll flip issues over to our CFO, Scott McNeely, for an replace on our monetary outcomes and formal 2026 steerage.
Scott McNeely: Thanks, Michael, and good morning to everybody on the decision at the moment. We entered 2026 with important business momentum, having realized main successes in 2025 with our IPO, the launch of Kraken, and the success of the Speedway Section One mission, all whereas executing on document water dealing with volumes for the complete 12 months as Jason and Michael talked about. Within the fourth quarter, our first full quarter as a publicly traded firm, we achieved document income of $208.9 million, up 2% in comparison with the professional forma third quarter income. Fourth quarter internet loss was $13.6 million, and adjusted EBITDA for the quarter got here in at $103.8 million with a 50% adjusted EBITDA margin.
For the 12 months, we delivered professional forma income of $790.0 million, representing 19% year-over-year professional forma income progress. Full 12 months professional forma internet loss was $58.1 million. Full 12 months adjusted EBITDA was $402.8 million, a 16% year-over-year improve. In This fall, we additional optimized our steadiness sheet by closing on an inaugural $1.425 billion senior unsecured notes providing, which can assist WaterBridge Infrastructure LLC capitalize on the numerous compelling alternatives earlier than us. We ended the 12 months with whole liquidity of $527.0 million, together with $52.0 million of money and money equivalents and $475.0 million undrawn beneath our new $500.0 million secured revolving credit score facility.
Our covenant internet leverage ratio was 3.3x on the finish of the 12 months, and we stay dedicated to our long-term purpose to be beneath 3.0x levered. Capital expenditures within the fourth quarter have been $89.2 million, primarily pushed by spending on the event of Speedway Section One and continued growth tasks on our Stateline programs as we proceed to develop our footprint with high-quality property. Our disciplined capital allocation framework permits us to successfully deploy free money move and handle our prime priorities, which incorporates, first, prioritizing high-return capital tasks, constructing out our water infrastructure community, and sustaining our business relationships. This additionally consists of selective strategic acquisitions.
Second, sustaining a conservative steadiness sheet and prudent capital construction to make sure most monetary flexibility over time. And at last, returning capital to shareholders by means of opportunistic share repurchases and dividends. This quarter, we declared an inaugural quarterly dividend of $0.50 per share. As anticipated, we’re initiating annual steerage this quarter. For full 12 months 2026, we count on produced water dealing with volumes of two,500,000 to 2,700,000 barrels per day, pushed by the midyear BPX Kraken MVC improve and Speedway Section One. We additionally count on CapEx to be between $430,000,000 and $490,000,000. Importantly, our expectations for Speedway Section One CapEx haven’t materially modified.
This information contemplates roughly $100,000,000 of newly sanctioned CapEx attributable to the incremental Speedway Section Two tasks Michael mentioned in addition to different business tasks all through our acreage. Lastly, we count on 2026 adjusted EBITDA between $420,000,000 and $460,000,000, representing 9% annual adjusted EBITDA progress. That is anticipated to be weighted in direction of the second half of 2026 following the Kraken MVC improve and initiation of Speedway Section One. With our ongoing business success and in anticipation of Speedway Section Two, expectations for 2027 are meaningfully greater than beforehand contemplated.
To conclude, we’re proud to have delivered a powerful 12 months of progress and stay up for persevering with to ship for our prospects in 2026 and past as we meet the rising demand for produced water dealing with throughout the Delaware Basin and innovate for the long run. We are going to now open for questions. Operator?
Operator: We are going to now start the query and reply session. Please restrict your self to at least one query and one follow-up. If you want to ask a query, please press 1 in your phone keypad. To withdraw your query, press 1 once more. Please decide up your handset when asking a query. If you’re muted domestically, please bear in mind to unmute your system. Please stand by whereas we compile the Q&A roster. Your first query comes from Derrick Whitfield of Texas Capital. Your line is open.
Derrick Whitfield: Good morning, all, and congrats on a powerful 4Q. Hey, good morning, Jason. I wished to begin together with your 2026 produced water dealing with volumes steerage of two,500,000 to 2,700,000 barrels per day. In our view, it appears that you’ve baked some extent of conservatism in your plan relative to the place you exited the 12 months. May you communicate to when this exercise projection was assessed and what value forecast is assumed, and at last, spotlight any timing concerns that might place you on the higher facet of your forecast.
Scott McNeely: Thanks for the query, Derrick. I’d reply it in two alternative ways. First, we had a really sturdy fourth quarter. Volumes got here in and form of exited the 12 months in that place of power, which is what we wished to see, and so we really feel actually good moving into 2026. I’d say the second piece, after we labored by means of budgeting for this 12 months, like many others did so on the finish of 2025, we have been simply in a really completely different macro atmosphere than we’re in at the moment. The majority of the volumes which might be baked into the steerage are knowledgeable by producer suggestions that was offered when oil was within the mid to excessive fifties.
The place we’re sitting at the moment, it’s only a drastically completely different atmosphere, and as such, we predict that there’s a lot of upside, notably within the again half of the 12 months, if the present macro backdrop holds. I feel we really feel actually good concerning the conservatism baked into the steerage. Once more, we did that by design, however the world we live in at the moment may be very completely different than the one we have been dwelling in after we obtained that producer enter. I feel in consequence, there’s much more upside now than we might have anticipated to see again then.
Derrick Whitfield: After which for my follow-up, I wished to shift over to the Devon and Coterra merger and suppose by means of that for a bit. With the understanding that clearly the merger is just not closing, it could appear logical to us that the consummation of that merger might current incremental progress alternatives for WaterBridge Infrastructure LLC. Primarily based on previous discussions with each counterparties, do you see or count on to see higher alternative from the Coterra facet of the home primarily based in your working relationship with Devon? I do know that Coterra’s Franklin Mountain asset actually sits on prime of Challenge Speedway.
Scott McNeely: It’s a nice commentary. We’re clearly excited for the Devon workforce and the Coterra workforce. They’re going to be stepping out of the merger in a really sturdy place. We now have an ideal relationship with the Devon workforce, with a variety of the oldsters that we work with each day as a part of that new administration workforce, so I feel we’re excited to step into conversations with them about what’s subsequent for his or her plans. We now have had nice relationships with Coterra prior to now as properly, and so I feel a variety of these, we hope, will proceed to accrue to our profit. Stepping out of this, we’re excited.
The mixed firm goes to be an ideal one within the Delaware Basin. We’re excited to work for them, and we’re excited to ship our half in enabling what’s subsequent for his or her firm.
Derrick Whitfield: Thanks. Nice replace.
Scott McNeely: Thanks, Derrick.
Operator: Your subsequent query comes from the road of Elias Jossen of JPMorgan. Your line is open. Please go forward.
Elias Jossen: Thanks, everybody. I wished to begin on the acceleration of progress mission alternatives you alluded to. I feel you talked about some alternatives to speed up in 2026, leveraging a few of the ongoing building. Are you able to simply communicate extra particularly to the magnitude of that, assist us perceive what the form of 4Q exit price would possibly appear to be, and the general framing you see for 2027? Thanks.
Scott McNeely: Yeah. Hey, Elias. I recognize the query. We’re in a extremely great place proper now the place we now have obtained plenty of inbound inquiries and are working by means of plenty of completely different business discussions, which is in the end what sparked the announcement round Speedway Section Two. Along with that, we even have a number of business tasks which might be pretty firmed up at this level that can serve considerably as the inspiration for Speedway Section Two as properly. We added one other $100,000,000 to capital expectations for this 12 months. That’s nonetheless considerably front-weighted for the 12 months, however the bulk of that additional $100,000,000 goes to be tied to those new tasks that can function the inspiration for Speedway Two.
There’s a smaller quantity—I’m not going to quantify it—however we’ll say a smaller quantity which goes to be associated to the Devon tasks. In case you recall, Devon has an MVC with us that comes on-line in 2027. We’re simply accelerating the development of that infrastructure by just a few months, and it’s actually simply to derisk the development part. On account of that, we count on just a bit more money to exit the door on the finish of this 12 months versus 2027.
So no actual change within the scope of that mission, however recognizing the truth that money could depart the system a bit of bit sooner than we have been considering, once more by design, simply to derisk the event there.
Elias Jossen: Thanks. After which shifting to the capital allocation philosophy subsequent to the expansion mission spend, it looks as if there is perhaps a little bit of a free money move inflection as you get Speedway Two in service and, I assume, the Devon mission as properly. As that spend involves a conclusion at 2027, perhaps 2028 seems to be extra like an inflection on free money move. How do you consider what the capital allocation framework seems to be like at that time?
Scott McNeely: It’s a nice query. As we stated throughout the IPO course of, we’ll proceed to prioritize these higher-return natural progress tasks. You have a look at Kraken, you have a look at Speedway, we might count on for Speedway Section Two to be extremely engaging from a return standpoint. That can proceed to be probably the most accretive use of the money move that we’re producing as a enterprise. I don’t count on that adjustments, and we intention to proceed discovering artistic methods to proceed to generate those self same sorts of returns. Past that, we’ll proceed to discover M&A.
It does must compete with the natural progress tasks that we’re working by means of as we predict by means of our capital allocation framework, however to the extent there is a chance that checks all of these bins on a risk-adjusted foundation, we might completely be open to pursuing M&A as one other strategy to proceed to feed progress to the corporate. Lastly, we predict by means of steadiness sheet administration and return of capital. Ensuring that we work by means of this progress whereas maintaining the steadiness sheet wholesome is a prime precedence. Staying form of at mid-3s at max throughout progress is one thing we’re snug with, however getting sub-3.0x is actually a longer-term—name it medium-term—purpose for us.
Past that, we now have initiated this primary dividend. We aren’t trying to overly lean into dividends right here, notably by means of this progress part, however there’s potential for these to develop going ahead relying on different competing makes use of of capital. Likewise, we might probably discover buybacks sooner or later when it is smart within the context of different capital allocation choices we now have, in addition to the float and the float dynamics on the time.
Elias Jossen: Nice. Thanks very a lot.
Scott McNeely: Thanks, Elias.
Operator: Your subsequent query comes from the road of John McKay of Goldman Sachs and Firm. Your line is open. Please go forward.
John McKay: Hey, guys. Thanks for the time. Possibly I’ll return to the primary one across the 2026 information. I recognize the feedback, however I wished to comply with up. If you find yourself speaking about it probably being conservative, how a lot is that primarily based on perhaps feedback that the upper oil deck will incentivize new exercise versus simply saying you might be baking a bit of little bit of wiggle room into these numbers? Are you anticipating exercise to choose up at this greater deck? As a result of we’re typically not seeing it elsewhere.
Scott McNeely: Hey, John. Good query. The conservatism was actually within the context of what was a high-$50 oil atmosphere after we labored by means of that funds. Once I suppose by means of the conservatism at the moment, I’d make the argument that it’s that rather more conservative given the context of the place WTI is at and expectations by means of year-end. We now have actually heard some preliminary chatter on ideas from producers, though most of that was actually across the thought technique of: is that this a short-term blip, or will we count on to see a extra enduring elevation of WTI by means of year-end?
During the last couple of weeks, the market actually appears to suppose that WTI goes to remain escalated a minimum of to a sure extent by means of year-end at this level, as we now have seen the backwardation begin to fall off barely. It’s too early to mixture suggestions from producers and producer response simply but, however what was a conservative outlook in a high-$50 oil atmosphere, I feel, is once more very conservative now, notably within the context of the strip by means of year-end. To the extent producers are capable of capitalize on that, I’d count on a few of them will, though, as everyone knows, there are completely different idiosyncrasies with completely different producers on the market.
All that to say, I’d say we now have a lot stronger tailwinds now than we had in late 2025 because it pertains to the macro backdrop.
John McKay: Thanks for that. And perhaps only a fast follow-up on Speedway Two. I do know the open season closes subsequent month. Are you able to stroll us by means of expectations for reaching FID? After which on the CapEx for this 12 months, how a lot of whole mission CapEx—or perhaps in case you are ready—are you able to examine it to what the construct for Section One appeared like? Thanks.
Scott McNeely: We now have gotten just a few of the core business offers we count on to be a part of Section Two buttoned up at this level. That’s the reason the CapEx is included within the funds now. These are tasks that we are going to pursue whatever the consequence of the broader Section Two course of, and I wish to make that completely clear that this isn’t speculative CapEx that’s constructed into the funds. These are discrete tasks that we count on nice returns from even on a standalone foundation, though they may actually function the business basis for broader Section Two.
It’s too early to say precisely what the combination capital spend or returns will appear to be on the broader Section Two, however I’d count on these to be pretty in step with what we noticed for Section One, if not barely extra engaging, simply relying on how the mud settles.
John McKay: Cool. Sounds good. Wanting ahead to Thursday. Thanks.
Scott McNeely: Thanks, John.
Operator: If you want to ask a query, please press 1 in your phone keypad. To withdraw your query, press 1 once more. Please decide up your handset when asking a query. If you’re muted domestically, please bear in mind to unmute your system. Your subsequent query comes from the road of Theresa Chen of Barclays. Your line is open. Please go forward.
Theresa Chen: Hello there. On the subject of Speedway and the business growth momentum that you’ve seen to this point, is there a chance or chance at this level for Section III? Is there a chance that you’ll loop the 30-inch system given the demand for the egress?
Scott McNeely: Hey, Theresa. I recognize the query. The quick reply is sure. We see a variety of demand all through New Mexico, Eddy and Lea County, and I’d say expectations actually haven’t dropped. They’re rising quickly as builders search for water options out of what’s a really challenged atmosphere, and we’re clearly positioned to ship that. The timing of that can in the end be pushed by the result of business discussions for Section Two and when preliminary working functionality goes to be wanted for Section Three. We’re having all these discussions now.
What’s thrilling, should you have a look at Kraken, you have a look at Speedway Section One, you have a look at Devon coming on-line, we now have already set the stage for what’s nice progress exiting 2026, 2027, 2028. These new business tasks plus Speedway Section Two are solely going to additional bolster the again half of 2027 moving into 2028. As you allude to, there’s a want for Speedway Section Three. There’s a want for extra water takeaway, and we see implausible progress over the subsequent a number of years. We’re working very diligently to make sure that we’re being considerate across the underwriting, we’re derisking these tasks with MVCs, and we’re setting ourselves up for long-term, derisked progress.
Theresa Chen: Obtained it. And on that be aware of simply persistent tightness in provide and demand for water takeaway, what are you seeing within the evolution of charges at this level? What’s the going price at this juncture as you attempt to commercialize the second part of Speedway along with future natural endeavors versus your legacy $0.60-per-barrel-ish price?
Michael Reitz: Thanks, Theresa. That is Michael. Charges are rising over time, as you’ll count on, as capital wants for these tasks improve over time. We’re seeing extra demand, and charges are rising together with that demand.
Scott McNeely: Relative to the mid-$0.60 form of common that we had by means of the center of final 12 months, these new charges—Kraken, Speedway, a few of these others that we’re working by means of and speaking by means of—are meaningfully greater. To Michael’s level, a few of that’s to underwrite the capital popping out of New Mexico, and a few of that’s only a response by the market to the supply-demand economics for water takeaway.
Scott McNeely: Thanks, Theresa.
Operator: Your closing query comes from the road of Kevin MacCurdy of Pickering Vitality Companions. Your line is open. Please go forward.
Kevin MacCurdy: Hey. Good morning. Possibly to comply with up on the query about charges. Your 2026 EBITDA steerage was in step with expectations, however perhaps on barely decrease volumes than anticipated. Are we proper to suppose that margins will likely be a bit of bit greater in 2026 in comparison with what we noticed in 2025? If that’s the case, any feedback you possibly can present on the near-term driver of that?
Scott McNeely: Hey, Kevin. Good query. Sure is the reply. As we see Kraken step up, we see Speedway come on-line, and we see these different new business tasks come on-line, we might count on the upper unit-level income from these contracts to proceed to drive margin growth throughout the system. We might count on that pattern to proceed going ahead for all the explanations I simply walked by means of with Theresa. Clearly, a few of that’s going for use to underwrite the capital that’s wanted for a few of these bigger tasks, and a few of that is also only a response to the supply-demand economics for water takeaway at the moment.
Kevin MacCurdy: Thanks for that reply. I recognize your feedback on what you might be seeing on the bottom when it comes to exercise pickups, or not seeing thus far but. I’m curious what your capability is to deal with extra produced water volumes in each the quick and the close to time period. You probably did 2,900,000 barrels within the fourth quarter. Is {that a} near-term cap, or might you go even greater?
Scott McNeely: We might go even greater than that. There are some regional dynamics which might be concerned, and the system clearly is just not wholly fungible from another level of the system, so operational realities come into the combo. The purpose I’d make is, should you look by means of our common of roughly 2,600,000 barrels a day towards our peak of two.9 million, it’s a actual reflection of the criticality of getting infrastructure of scale in place at the moment.
Producers are working by means of a lot bigger properly pads that deliver on a lot greater peaks, and you need to have the operational experience and the infrastructure already in place that may accommodate these peaks and achieve this with the understanding that’s wanted by these E&P operators. There’s a actual aggressive moat that’s launched because of that.
Once you stay up for 2026 and suppose by means of our skill to seize the upside potential, I’d make the argument we have already got these property in hand to do fairly a little bit of that at the moment, and that’s earlier than we deliver Speedway on-line midyear, which solely provides us an extra asset to proceed to seize what we might count on to see as some upside popping out of New Mexico in at the moment’s commodity value atmosphere. We really feel superb about being properly positioned by means of the 12 months to proceed to allow a few of the E&P growth, notably within the again half of this 12 months, that’s ensuing from the macro evolution we now have seen over the past couple of months.
Kevin MacCurdy: Thanks, and congratulations on the quarter.
Scott McNeely: Thanks, guys.
Operator: There aren’t any additional questions presently. I’ll now flip the decision to Scott McNeely, Chief Monetary Officer, for closing remarks.
Scott McNeely: Thanks, operator, and due to everybody for becoming a member of us at the moment. We’re very proud of how we exited the 12 months and the way we’re moving into 2026. We really feel like there’s a variety of upside for us in 2026 moving into 2027, and, as I discussed, there are a variety of business alternatives on the market for us to proceed to pursue and drive progress. As all the time, please be at liberty to achieve out to our workforce right here if there are any questions. In any other case, we hope everybody has an ideal week and we stay up for staying synced up. Thanks.
Operator: This concludes at the moment’s name. Thanks for attending. You could now disconnect.
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WaterBridge (WBI) This fall 2025 Earnings Name Transcript was initially printed by The Motley Idiot
