Case Study

What's the best way to invest in Permian water management when there are so many unknowns?

See how our consultants create value by engaging in transaction support

The Challenge

Private equity firms are eyeing water management assets in the Permian. Today, the market is fragmented and opaque. Investors without boots on the ground struggle to get a comprehensive view of the size of the prize and associated risks in the space. Companies looking to sell midstream water assets are marketing future contracts as part of sale packages. Investors need guidance on the upside potential.

Water could be the next bottleneck of the Permian Basin. If we don't address the water problem today the Permian Basin could face the same constraints and challenges as Oklahoma." -Matthias Bloennigan

Our Approach

In the Permian basin, our relationships with customers are arguably our strongest asset. We continuously scour the market for new information and maintain open dialogues with the most important players in water management.

  • We help customers understand the macro environment and infrastructure of the Permian, allowing them to quantitatively and qualitatively assess oil, gas and water volumes.
  • We have tight relationships and ongoing conversations with the leadership of all the primary water midstream companies.
  • We quantify the amount of water that needs to be handled within a catchment area by leveraging our in-house knowledge of differing water-to-oil ratios across the basins -- we have seen ratios from 2:1 to 7:1 within the same basin.

The results

Based on our recommendations, our customer was able to quantify risks that were vital in building a valuation for a potential investment. They opted out of the investment opportunity. Without us, the firm may have made a regrettable investment.

Country Report

Permian region overview

Permian region overview
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