WaterBridge Infr Q3 2026 Earnings Call Transcript

WaterBridge Infr (NYSE:WBI) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

WaterBridge Infr reported a record third quarter with produced water volumes reaching 2.8 million barrels per day, record revenue of $240.2 million, a 10% sequential increase, and adjusted EBITDA of $124.2 million.

The company raised its full-year 2026 volume and adjusted EBITDA guidance by 2% and 4%, respectively, while lowering the midpoint of its capital expenditures guidance due to shifts in project spending to 2027.

Strategically, WaterBridge Infr is focusing on expanding its infrastructure in the Delaware Basin, with strong performance in Speedway Phase 1 and ongoing commercial discussions for Phase 2.

The company is also capitalizing on the growing value of water resources in West Texas, with significant progress on water supply solutions for industrial projects, including a large-scale data center and PowerBridge’s Alpha Digital campus.

WaterBridge Infr strengthened its financial position by increasing its revolving credit facility and issuing additional senior unsecured notes, enhancing its liquidity and financial flexibility.

Management remains optimistic about the company’s growth trajectory, highlighting organic and inorganic growth initiatives, disciplined capital allocation, and strong operational performance.

Full Transcript

OPERATOR

We will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to May Harrington, Director of Investor Relations. Please go ahead.

May Harrington (Director of Investor Relations)

Good morning and thank you for joining WaterBridge Infr’s third quarter 2026 earnings call. I’m joined today by our Chief Executive Officer Jason Long, our President & Chief Operating Officer Michael “Chop” 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’ll now turn the call over to our CEO, Jason Long.

Jason Long (President & CEO)

Thanks, May, and good morning, everyone. I’m pleased to report another great quarter. We delivered record produced water volumes of 2.8 million barrels per day, along with record revenue and adjusted EBITDA, outperforming on both volumes and margin. I’d like to spend a few minutes on why we expect this performance to continue. First, the Delaware Basin has some of the best upstream economics in North America, and today’s commodity price environment amplifies that advantage. Our customers are responding with higher activity, and nowhere is that more visible than along the state line and in New Mexico, where water volumes are growing quickly.

Second, that growth is creating a larger water challenge. Produced water volumes in the basin far exceed what can be recycled and reused in completions, and the gap widens as activity accelerates. At the same time, disposal capacity in the most active parts of the basin is constrained by elevated pore pressure. As a result, the barrels that can’t be recycled need a reliable, long-term solution. Third, that is exactly where WaterBridge Infr is differentiated. Our large, integrated network lets us move water out of pore-pressure-constrained areas like the state line in New Mexico to areas of low pore pressure where disposal capacity is reliable for our current and future customers. That means they can develop their assets with confidence, knowing their water will move every day for years to come. It’s why we have seen meaningful outperformance in Speedway Phase 1.

And as we continue commercial discussions on Speedway Phase 2, we are confident in the long-term value proposition of our out-of-basin infrastructure. Fourth, water is a resource in West Texas, an opportunity that is becoming more valuable, not less. Communities across Texas are rightly asking how large industrial projects, particularly data centers, will affect their water supply in West Texas. We believe the answer can be they don’t have to. The region holds vast volumes of brackish and produced water that can be treated and put to productive use, so industrial growth doesn’t compete with the water that families, farms, and municipalities rely on.

Few companies can source, treat, and deliver that water at scale. WaterBridge Infr can through our integrated network, our operating expertise, and our access to surface and pore space in the right locations. Our relationship with Landbridge is central to that advantage. Landbridge’s more than 350,000 surface acres in the Delaware Basin provide the land to site treatment and delivery infrastructure, the pore space to responsibly manage what remains, and the ability to locate industrial development right next to the water resources needed to support it.

Together, we can offer industrial customers complete water solution that doesn’t draw on community supplies. That opportunity is moving quickly. We’ve made significant commercial progress on a water supply solution for a large-scale data center, and we look forward to sharing more when appropriate. In addition, PowerBridge recently broke ground on its Alpha Digital campus on Landbridge acreage in Reeves County, where it is committed to using no municipal or community water for industrial purposes. PowerBridge expects WaterBridge Infr to source, treat, and deliver the non-potable water for the campus’s cooling system and to manage produced and discharged water from the site.

We believe this is the model for responsible industrial growth in West Texas, and we’re well positioned to lead it. These drivers give us confidence in the growth trajectory of the business, and I’m pleased to share that we are raising our full-year volume and adjusted EBITDA guidance for the third quarter in a row. We’re also lowering the midpoint of our capital expenditures guidance as the timing of certain project spends shift into 2027. Scott will provide further details in his remarks. WaterBridge Infr’s record quarter reflects the value of the organic and inorganic growth initiatives we have pursued in the years since our IPO.

The results we’re seeing today reinforce our view of the long-term growth potential of the platform and our ability to create compelling value for customers and shareholders. I’ll now turn the call over to Chop Reitz.

Michael “Chop” Reitz (President & Chief Operating Officer)

Thank you, Jason. Operations were strong across the platform in the third quarter. We handled a record 2.8 million barrels of produced water per day. That’s up 6% from last quarter. The growth came from both new customers and existing ones, and our expanding network is meeting that demand. Just as important, margins held up. Produced water handling revenue was 77 cents per barrel excluding skim oil. That’s up 7% from 72 cents a year ago, and it’s growing faster than our operating costs. Two things are driving that improvement. First, contract rates continue to improve. Long-haul pipelines like Speedway carry higher long-term rates, and in pressure-stressed areas like the state line, demand is lifting our short-term interruptible rates.

Second, we’re keeping a tight grip on operating costs. As we scale, we’re switching to more cost-effective fuel at our busiest facilities. And although our large-diameter Speedway pipeline generally carries higher opex, we’re leveraging the Speedway pipeline’s footprint to lower costs on our existing New Mexico infrastructure where possible. Now, Speedway Phase one: we started moving volumes in July, and the ramp is continuing. Demand for capacity is strong. Utilization is beating our expectations. On the western portion of the system, throughput is performing well above what we expected. We’ve also signed several new agreements with E&P customers onto the Speedway pipeline. These volumes need very little additional capital, so they bring attractive returns. They’ll lift returns on Phase one, and they support our growth outlook into 2027 and beyond.

On Phase two, demand for long-haul out-of-basin capacity keeps growing. We expect to commercialize the project in the near term. Phase one’s strong performance lets us set the timing for Phase two on our terms. We’ll line it up with firm customer commitments and Phase one utilization so we’re maximizing returns across the system as a whole. Meanwhile, engineering and planning continue so we can move quickly once those commercial milestones are met.

With that, I’ll hand it over to Scott to walk through the financials.

Scott McNeely (Chief Financial Officer)

Thank you, Chop. And good morning to everyone joining today. We reported strong third quarter results with record produced water handling volumes, revenue, and adjusted EBITDA. Based on the volume and margin outperformance that Jason and Chop described, we are raising the midpoints of our full-year 2026 produced water handling volume and adjusted EBITDA guidance by 2% and 4%, respectively. We now expect full-year volumes of 2.65 to 2.75 million barrels per day compared to our prior range of 2.55 to 2.75 million barrels per day, and adjusted EBITDA in the range of $465 to $485 million compared to our prior range of $435 to $475 million.

We are also narrowing our capital expenditures guidance to a range of $530 to $560 million from $530 to $590 million previously, which lowers the midpoint by 3%. This reflects the shift of capital outlay for certain projects from 2026 into 2027. Turning to the quarter, we delivered record revenue of $240.2 million, a 10% sequential increase. Revenue growth was primarily driven by higher produced water handling volumes, including the continued ramp of Speedway Phase one, and higher rates on contracts that became operational during the quarter. Adjusted EBITDA was $124.2 million, a 7% sequential increase. Adjusted EBITDA margin was approximately 52%, within the range of 50% to 53% that we have delivered over the last four quarters.

Capital expenditures were $123.9 million during the quarter. Spending was primarily driven by the construction costs from the first phase of Speedway. and continued investments across our Delaware Basin infrastructure footprint. We ended the quarter with total liquidity of 539.7 million, including 34.7 million of cash and approximately 505 million of available borrowing capacity under our revolving credit facility. Total debt was 1.8 billion and our covenant net leverage ratio was 3.5 times. We remain committed to our long-term leverage target of sub three times.

During the quarter, we also strengthened our liquidity and extended our financial flexibility. In August, we amended our revolving credit facility, increasing commitments from 500 million to 750 million and reducing applicable margins by 25 basis points across the pricing grid. Also in August, we issued an additional 150 million of our 6.5% senior unsecured notes due 2033 under the existing indenture, bringing the total outstanding principal amount of those notes to 750 million.

We used the proceeds to repay borrowings under our revolving credit facility. With no significant maturities before 2030, we are well positioned to continue funding high-return capital projects. We remain disciplined in how we allocate capital, guided by three priorities. First, driving organic growth across our infrastructure network alongside accretive acquisitions such as Ranger and NDB Landfill. Every project we pursue is held to the same criteria, which include long-term contracts, creditworthy counterparties, fixed fees with CPI escalators, build multiples below five times, and the ability to fund them while maintaining the strength of our balance sheet.

Second, maintaining a conservative balance sheet and prudent capital structure that maximizes financial flexibility and contributes to our long-term leverage target. And third, opportunistically returning capital to our shareholders. Today we announced a dividend of $0.05 per share, payable on December 10th to shareholders of record as of November 25th. To close, our results this quarter reflect a growing business with strong operations, a disciplined approach to capital, and a balance sheet built to support growth. Record volumes, a third consecutive raise to our volume and adjusted EBITDA guidance, an upsized revolver, and our dividend all point to the same thing: durable, high-return growth. And we’re carrying that momentum into 2027. Our outlook for the next year is meaningfully stronger than when we went public.

Driven primarily by organic growth on infrastructure that we already have in the ground today, as well as new infrastructure underpinned by recent commercial wins, we are in a position of strength. This lets us be judicious in deploying capital for M&A and large commercial projects, given the attractive growth that’s already underway. We look forward to sharing our 2027 guidance with our fourth quarter results. We’re confident in the path ahead and our ability to keep creating value for our shareholders.

Thank you for joining us today. Operator, we are now ready to take questions.

OPERATOR

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of John McKay with Goldman Sachs.

John, your line is open. Please go ahead.

John McKay (Analyst at Goldman Sachs)

Hey team, thank you for the time. Maybe we’ll start on the commercial side. You mentioned, you know, success and kind of winning new agreements for Speedway Phase One. Looks like you’re being a little more capital efficient around the timing for Speedway Phase Two. Maybe just catch us up on kind of what commercial momentum has looked like, what you’re hearing from your producer customers in terms of their specific willingness to sign incremental blocks of water.

Jason Long (President & CEO)

Yeah. Hey, good morning, John. No, I think very topical question. I mean, I think I kind of boil it down into three main considerations here. I mean, first, because we have so much existing infrastructure in place, we can really kind of capture the growth, capture these commercial wins in just a very capital efficient way. You know, Speedway Phase One is a great example of that. It’s meaningfully outperforming our expectations today, and it still has open capacity that we can utilize over the next several years.

And you kind of alluded to the fact that we’ve signed several new agreements that really require, you know, very little incremental capital because we can capitalize on that existing infrastructure, and those barrels carry just very high, kind of attractive returns. And so, you know, being thoughtful about when to put new capital on the ground I think just is always top of mind because we want to be capital efficient as we work through these projects.

You know, the second consideration I’d point to is really just on timing on the customer side. I mean, we’ve seen, you know, a really fantastic year as it relates to E&P consolidation, just given the macro backdrop. And so as the dust has settled from that E&P consolidation and folks are working through their new budgeting cycles, many of the operators we’re talking to just wanted to see those efforts get across the finish line before stepping into any long-term commitments.

At the scale we’re talking about with Speedway Phase Two, we do think that comes here in the coming months and, you know, those could very well support an FID on Phase Two. But in this interim period, again, we’ve been able to capitalize that infrastructure, you know, on the ground. And the third point, and I think this is a really important one to communicate, is there have been a number of just other smaller commercial projects and wins and opportunities just across our system, you know, that oftentimes come at fantastic returns. And they may be, you know, smaller and not quite as easy to talk to as a large project like Speedway Phase Two, but in aggregate they can easily add up to the same type of cash flow contribution, oftentimes at much better returns, but just without the, you know, the fancy name like Speedway Phase Two.

And so, you know, we’re in a great spot where we can be patient, you know, and ultimately I think we’re going to get Phase Two FID here in the near term, you know, as some of those things come to fruition, but really focus on, you know, aligning that with when firm commitments are in place, when we think Phase One has been kind of properly utilized. And in the interim here, we’ll just continue to push the engineering and planning efforts forward so we can pull the trigger and move quickly when the time is right.

John McKay (Analyst at Goldman Sachs)

That’s great, thanks for that. And just second one for me, you guys talked a lot about the off digital opportunity on the LandBridge call as well. But maybe more high level, when you’re thinking about some of these water opportunities with data center customers, I guess are you still having kind of technical or, let’s say, operational conversations with them, or is that pretty buttoned up now in terms of their comfort in using this kind of water source?

And now really it’s mostly just around, let’s call it, the commercial side. Thanks.

Jason Long (President & CEO)

Yeah, no thanks. I think there’s an enormous amount of comfort at this point with using non-potable brackish water. You know, the treatment efforts there aren’t by any means new. So the confidence around the operational and the commercial viability I don’t think is really a question at this point. I think it’s really just buttoning up some of the finer points and getting these to a point where we can announce them here in the near term. Now, when you think through treated produced water, there’s obviously a little longer runway there, more involved in terms of the treatment that’s required, and a bit more complexity on the side of the regulators. But again, I would say there’s a very high conviction ultimately on the operational and commercial viability of that. And I think there’s a lot of excitement to transition to using treated produced water for cooling here in, you know, call it the medium term.

John McKay (Analyst at Goldman Sachs)

That’s great. Thank you for the time.

Jason Long (President & CEO)

Thanks, John.

OPERATOR

Your next question comes from the line of Ellie Yosin with JP Morgan Securities LLC. Ellie, your line is open. Please go ahead.

Ellie Yosin (Analyst at J.P. Morgan)

Hey guys, thanks for the time. I just wanted to start on the broader permitting landscape. You know, obviously some changes across the RRC and want to just think about how you guys are strategically advantaged on permitting and, you know, whether you can expect any changes at the state level and, yeah, broader color there’d be great. Thanks.

Jason Long (President & CEO)

Hey, good morning, Ellie. I appreciate the question. Yeah, I mean, ultimately we don’t expect the election to drive any abrupt change on how produced water is regulated. You know, I think it’s more important to recognize, as kind of you alluded to, that our conservative approach actually positions us very well should any change arise. I mean, just a few kind of key points to hit. I mean, first, if you’re not familiar, the structure of Texas regulatory bodies is actually built for continuity and stability. And so when you look at the RRC, you look at the TCEQ, there is a staggering and sequencing of kind of key personnel there really designed to ensure, you know, on one single day there isn’t a hard pivot in terms of policy. And when you’re adding the time it takes to actually legislate and work the rulemaking, you know, the framework just can’t change overnight.

But I think the second, third point, you know, more important— I mean, the second point: we have worked over time to develop incredibly strong, lasting relationships with the RRC, the TCEQ, as well as the other state agencies. We remain incredibly transparent and in kind of constructive, constant dialogue with them, and we don’t see that changing as a result of the election in any way whatsoever. And third, and kind of most importantly here, is really kind of how we operate. You know, we’ve always been incredibly conservative on how we permit and how we site and how we build our infrastructure. I mean, by design, you know, we spread our facilities out over a broad geographic footprint and maintain minimum spacing, really designed to avoid any kind of concentrated pressure or other risks. Further, we have in-house expertise as it relates to seismology and we certainly lean on outside experts before we develop anything.

We’ve chosen not to operate any kind of deep disposal wells in Texas. This is a further mitigant to risks. And so when you think through any potential for the RRC tightening whatsoever, I would say we’re in an incredibly strong spot, to the point where if you look at even last year when they did step out— they, being the RRC— and tightened its permitting guidelines, we at WaterBridge Infr spoke out publicly endorsing the change. This already largely reflects how we’re operating.

So, I mean, there may be some, you know, other operators who maybe toe the line a bit as you think through staying close to the regulatory limits, and, you know, they’re going to be more exposed to even small changes in policies. But given we have so much kind of cushion there and given our engagement with the regulatory bodies, I think we’re well positioned to ultimately navigate what’s around the corner. And if anything, any tightening of standards should drive more volumes towards more responsible, well-capitalized systems like our own.

Yeah, no, good follow-up on — yeah, I mean, on the water side as it relates to digital infrastructure, I would say the return profile we’re seeing in these projects are absolutely competitive with how we look at returns across, you know, the rest of our investment opportunities. You know, ultimately we’re ensuring here that what we do on a risk-adjusted return basis remains competitive. As we work through capital allocation, I think we’ve been able to hold to that.

Now in terms of, like, do we see expanding to further bolster the opportunity set here, we’re constantly looking at what makes sense. You know, we do think this kind of utility-style, you know, water model is going to be a growing part of our business going forward. You know, Alpha Digital is a great first step and validation of that. Like we mentioned in our prepared remarks, there is more exciting things around the corner. But as we’ve said from the get-go, we’ve always viewed, you know, water in West Texas, whether it’s non-potable brackish water or produced water, as a resource.

And we knew the time was going to come when that was proven to the market. And I think we’re in a great position to really show that now. And so, yeah, whether it’s M&A, whether it’s greenfield development, I think we’ll continue to grow that piece of our business just given the financial upside we see there as well as just the runway we have in that particular industry.

OPERATOR

Your next question comes from the line of Derek Whitfield with Texas Capital. Derek, your line is open. Please go ahead.

Derek Whitfield (Analyst at Texas Capital)

Thanks. Good morning all and thanks for your time. I’ll start bigger picture and spare you guys a 2027 specific question. There’s been a lot of focus from industry on several deeper intervals across the Delaware and we’re seeing that manifest in 15 Bcf per day of new gas long-haul pipes over the balance of a decade. While no one’s drilling for gas at the moment, the longer-term implication is that as the industry gets more comfortable with underwriting gas and the wells get gassier, the water ratio tends to creep higher as well.

Are you seeing evidence from industry that they’re marrying this gas growth outlook with a water disposal outlook?

Jason Long (President & CEO)

Yeah, I certainly think the gas takeaway dynamic has been very material in terms of just growth in the Delaware already, even before we start looking at the deeper, more exploratory benches that E&Ps have been looking at. So, I mean, if you just look earlier this year, you know, the lack of gas takeaway from the Delaware was actually an impediment to E&P operators and just the regular-way oil operations, because the lack of takeaway just forced them to shut in volumes even when oil is over $100.

And so having that come online, I think one, is going to be great in terms of debottlenecking the Delaware in general. But as you point out, I think that there’s going to be a growing demand for gas for very obvious reasons. And those deeper zones come with a lot of water. I don’t think the industry outlook as a whole has really caught up with that. Certainly nothing that we’ve seen from third parties is really leaning in on the fact that water growth is going to be a byproduct of this demand for gas. We certainly see that as upside, but that’s not something we’re, call it, predicating the success of our business on here in the near term.

Derek Whitfield (Analyst at Texas Capital)

Great. And then from my follow-up, I wanted to shift over to your recent acquisition and investment waste management. Could you speak broadly to the supply-demand fundamentals you see for solid waste management in the Delaware and if you’re seeing additional opportunities for growth given the attractive build multiples?

Jason Long (President & CEO)

Yeah, thanks for that question. We really love the space and we see the demand for it continuing to grow alongside water. We think the fundamentals for that business really marry well with our water business. And so we’ll continue to look for opportunities to grow that business and continue to improve margins there.

Derek Whitfield (Analyst at Texas Capital)

Terrific. Great update, guys.

Jason Long (President & CEO)

Thanks, Derek.

OPERATOR

Your next question comes from the line of Teresa Chen with Barclays. Teresa, your line is open. Please go ahead.

Teresa Chen (Analyst at Barclays)

Hi, could you provide an update on the Ranger assets now? You bet. You’ve had them in hand for a few months. Are there any details to share on how this could be or has been further integrated into your existing infrastructure, including Speedway? And how are these assets augmenting your growth outlook from here?

Michael “Chop” Reitz (President & Chief Operating Officer)

Hey, Teresa, good to hear from you. And good question. We have integrated that system into our Speedway system. So that just adds more reliability to not only the Speedway system but also that Ranger platform that had a lot of good opportunities for growth. We’ve had, you know, a lot of great conversations with the producers on that system and we do expect that to continue to grow. And so we’ve got the ability to really scale that system without having to deploy capital for deep wells in New Mexico.

And we can take advantage of that Speedway pipeline and adding incremental capacity at extremely attractive pricing.

Teresa Chen (Analyst at Barclays)

Thank you.

OPERATOR

Next question comes from the line of Alexander Goldfarb with Piper Sandler. Alexander, your line is open. Please go ahead.

Alexander Goldfarb (Analyst at Piper Sandler)

Hey, good morning. Morning down there. So, two questions. First, just thinking about the capex and the push of some of it into ’27, how much of this is, you know, either because projects are maybe taking a little longer and therefore you don’t need to spend the money this year, but, you know, the money gets spent next year, versus trying to manage the capex load relative to EBITDA and free cash flow?

Scott McNeely (Chief Financial Officer)

Hey, good morning, Alex. It’s really more just a byproduct of just working capital timing. I mean, we have some large construction efforts going on through year-end. You know, as you know, we report cash capex. And so, to the extent that cash left the door in Q4 versus Q1 is almost, call it, not material in terms of when projects are coming online. You know, when we were looking at expectations through the back half of the year last quarter, there was the real possibility that some of that cash left the system in December, and so we wanted to just kind of risk-weight an increase in guidance to the street in case that were to come to fruition.

You know, as we’re a little closer to year-end now, we’re just seeing some of that cash flee in January versus December. And so there’s really not a meaningful shift in timing whatsoever. It’s just a byproduct of some of these larger projects we have just driving lumpier capex payments and, you know, some of those hitting in the first part of Q1 versus the latter part of Q4.

Alexander Goldfarb (Analyst at Piper Sandler)

Okay, so what you’re saying is literally it’s just a matter of a few months. It’s not like it’s like a six-month or longer. Okay. Okay. The second question is just going back to the election and I know you talked about on LandBridge and others have asked about it here, but obviously the market’s reacting pretty heavily. Are you guys — it sounds like you’re saying that really there’s no impact from any changes that could happen because either the way you run your assets from having, like, very vast pore space, not over-concentrating, or that rig count hasn’t gotten out of whack and the Delaware remains just hugely profitable regardless of where oil is — that you don’t see really any change. Is that the case? Or are there things that could happen from a political or regulatory standpoint where it’s like, hey, if these things happen, yeah, our business could be impacted and it’s something that we watch for?

I’m just trying to understand what you guys are watching for as politics changes. I mean, you know, Texas hasn’t been blue since the early ’90s, so it’s a pretty big shift. So just trying to understand what things you guys are really watching that would give you cause for concern versus saying right now the way the business is run, we feel pretty good.

Jason Long (President & CEO)

Yeah, it’s a good question. I mean, just through the course of this year, despite having an incredibly constructive macro backdrop as it relates to pricing, we haven’t seen a massive ramp in activity levels from producers for a number of reasons. And so first, as we think through, you know, what does that mean stepping into next year and the year after, is there’s not, you know, this massive ramp in activity that would somehow need to be unwound in the near term.

You know, I think ultimately what we see in the Delaware Basin is just the best economics in the Lower 48. I think you’re going to see ongoing development there, regardless of what you see from the political side. We’ve seen New Mexico continue to grow volumes meaningfully over the last several years, and they have been a blue state for as long as I can remember. And so it serves as a really good analog in the fact that oil and gas activity is not necessarily, call it, opposed by Democrats in oil and gas states.

I think, as we’ve seen in New Mexico, they can certainly coexist. There’s certainly benefits to the state, you know, and Texas is an oil and gas state through and through, and I don’t think the incoming administration is going to really think differently there. Now, we’re certainly, you know, keeping an eye on producer sentiment, on permitting, on commodity prices, on all of those kind of leading indicators that can ultimately drive changes in behavior. But at the end of the day, you know, we don’t see a massive pivot — status quo in terms of expectations next year or the near term whatsoever for many of our operators, just based on the recent election.

Alexander Goldfarb (Analyst at Piper Sandler)

Okay. And then just to confirm, so this year there’s been no ramp in E&P activity that would cause you concern. And then New Mexico, you know, has been a steady grower in water volumes, you know, over the past however many number of years, which — and the water volumes are consistent with oil drilling volumes, or it’s as those wells get deeper that maybe the oil volumes don’t change, but the water volumes do as the wells get deeper. I’m just trying to understand that.

OPERATOR

There are no further questions at this time. I will now turn the call back to Scott McNeely for closing remarks.

Scott McNeely (Chief Financial Officer)

Yeah, thank you, operator. And thank you for everyone joining us today. Obviously we’re very excited with where we’re at. The business. There is just fantastic momentum heading into year end and into 2027, as we mentioned in prepared remarks. You know, really look forward to getting out at the end of the year and speaking to full year 2027 expectations with, with the Street. But until then, if there are any questions, please feel free to reach out and we appreciate your time.

OPERATOR

This concludes today’s call. Thank you for attending. You may now disconnect.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.