Select Water Solutions (WTTR) The 15th Annual East Coast IDEAS Conference summary

Business overview and strategy

• Focuses on water infrastructure for oil and gas, with expansion into municipal and industrial water markets.

• Leads in water recycling, with the first recycling plant in the Permian Basin and a strong position in fixed recycling facilities.

• Operates three segments: water infrastructure (recycling, gathering, disposal), water services, and chemical technologies.

• Converts 70%-80% of earnings to cash, emphasizing low CapEx and high free cash flow.

• Uses profits from services and chemistry to fund infrastructure growth, especially in high-margin, long-term contracted projects.

Financial performance and capital allocation

• Maintains a strong balance sheet with conservative debt, less than one year of EBITDA.

• Raised its dividend by 17% last year and has repurchased about $200 million in stock since 2021.

• Infrastructure segment delivers higher gross margins and more stable, contracted revenue than services.

• Capital allocation is focused on building out infrastructure and expanding into municipal/industrial water markets.

• Expects continued high free cash flow and positive capital allocation choices for investors.

Growth initiatives and market expansion

• Entered the municipal water market with a major project south of Denver, Colorado, consolidating water rights and investing up to $146 million.

• Plans to lease water rights long-term to municipalities (for drinking water and housing) and industrial users (agriculture, data centers).

• Colorado project expected to generate $40-$60 million in gross profit, with contracts anticipated in 24-36 months.

• Sees opportunity for further expansion in Texas and Colorado, leveraging expertise in water law and rights.

• Municipal contracts can last 30-50 years, providing stable, escalating revenue.