A Houston area company has plans to drill more than 100 water wells in West Texas so it can sell water to oil companies in the Permian Basin.
Layne Christensen is partnering with the state of Texas in the project. The deal is with the Texas General Land Office headed by George P. Bush and is the first known partnership with a public company to sell the state-owned water. Under the partnership, Layne will develop 88,000 acres in Reeves and Culberson Counties in the Delaware Basin.
The Company will drill the wells, build the pipelines and construct storage ponds. Water will be sold and used in fracking.
“This is kind of a gold mine in the making,” said Layne Chief Financial Officer Michael Anderson, referencing both the state and the company. Layne isn’t releasing the profit-sharing details for now. “We think it’s a very fair split. I think both parties are going to be really happy.”
Layne already figures there are 58 drilling rigs in the two counties and they could need nearly 500 million barrels of water a year for their fracking needs.