Select Water Solutions (WTTR) WTR Insights Conference: Powered by The Small Cap Showcase summary

Business overview and strategy

• Operates across Water Infrastructure, Water Services, and Chemical Technologies, with a focus on sustainable, full lifecycle water solutions for energy and emerging municipal/industrial markets.

• Water Infrastructure is the primary growth engine, emphasizing recycling-first solutions, especially in the Permian Basin.

• Growth capital is directed toward permanent infrastructure and recycling capabilities, with operations in every major U.S. basin.

• Recycling produced water offers 30%-40% cost savings for customers compared to traditional disposal, reducing both OpEx and CapEx.

• The Delaware Basin presents the largest challenges and opportunities due to high water production and regulatory constraints.

Infrastructure development and future plans

• Near-term focus is on completing the New Mexico infrastructure platform, targeting nearly 2 million barrels/day recycling capacity and over 400 miles of pipeline.

• Exploring mineral extraction (lithium, iodine) from wastewater, with partnerships in East Texas, Haynesville, and the Permian, aiming for royalty-based revenue.

• Considering treating recycled water to freshwater standards for industrial, municipal, or agricultural reuse, especially in water-scarce regions.

• Aggregated freshwater resources in Colorado are being repositioned for long-term municipal and industrial leases, leveraging expertise in water rights and storage.

• Infrastructure includes storage and pipeline systems to support water capture and delivery for diverse applications.

Financial performance and earnings visibility

• Water Infrastructure now generates about half of gross profit, supported by long-term contracts and large acreage dedications.

• Segment is expected to grow 25%-30% this year, with further growth projected into 2027, and delivers 50%-60% gross margins.

• Recurring, contracted revenues and royalty streams are improving earnings quality and reducing cyclicality.

• Free cash flow from traditional services and chemical offerings funds infrastructure investments, maintaining low leverage.

• Strategic focus on infrastructure and recycling-first approach has led to improved market valuation and growth opportunities.