Select Water Solutions Inc (WTTR) 2024 Q2 法說會逐字稿

Greetings, and welcome to the Select Water Solutions second-quarter earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎參加 Select Water Solutions 第二季財報電話會議。（操作員指示）謹此提醒，本次會議正在錄製中。

It is now my pleasure to introduce your host, Chris George, Executive Vice President and Chief Financial Officer. Thank you, Chris. You may begin.

現在我很高興向您介紹主持人克里斯喬治（Chris George），他是執行副總裁兼財務長。謝謝你，克里斯。你可以開始了。

Thank you, operator, and good morning, everyone. We appreciate you joining us for Select Water Solutions conference call and webcast to review our financial and operational results for the second quarter of 2024. With me today are John Schmitz, our Founder, Chairman, President, and Chief Executive Officer; and Michael Skarke, Executive Vice President and Chief Operating Officer.

謝謝接線員，大家早安。我們感謝您參加 Select Water Solutions 電話會議和網路廣播，回顧我們 2024 年第二季的財務和營運表現。今天與我在一起的有我們的創辦人、董事長、總裁兼執行長約翰‧施密茨 (John Schmitz)；執行副總裁兼營運長 Michael Skarke。

Before I turn the call over to John, I have a few housekeeping items to cover. A replay of today's call will be available by webcast and accessible from our website at selectwater.com. There will also be a recorded telephonic replay available until August 14, 2024. The access information for this replay was also included in yesterday's earnings release.

在我把電話轉給約翰之前，我有一些家務事項需要處理。今天的電話會議將透過網路廣播重播，也可透過我們的網站 selectwater.com 存取。 2024 年 8 月 14 日之前也將提供錄音電話重播。這次重播的存取資訊也包含在昨天的財報中。

Please note that the information reported on this call speaks only as of today, July 31, 2024, and therefore, time-sensitive information may no longer be accurate as of the time of the replay listening or transcript reading. In addition, the comments made by management during this conference call may contain forward-looking statements within the meaning of the United States federal securities laws. These forward-looking statements reflect the current views of Select's management.

請注意，本次電話會議報告的資訊僅截至今天（2024 年 7 月 31 日），因此，在重播收聽或閱讀文字記錄時，時間敏感的資訊可能不再準確。此外，管理階層在本次電話會議中發表的評論可能包含美國聯邦證券法含義內的前瞻性陳述。這些前瞻性陳述反映了 Select 管理層當前的觀點。

However, various risks, uncertainties and contingencies could cause our actual results, performance, or achievements to differ materially from those expressed in the statements made by management. Listeners are encouraged to read our annual report on Form 10-K, our current reports on Form 8-K, as well as our quarterly reports on Form 10-Q to understand those risks, uncertainties and contingencies.

然而，各種風險、不確定性和意外事件可能導致我們的實際結果、績效或成就與管理層聲明中表達的結果有重大差異。我們鼓勵聽眾閱讀我們的 10-K 表年度報告、8-K 表當前報告以及 10-Q 表季度報告，以了解這些風險、不確定性和意外情況。

Please refer to our earnings announcement released yesterday for reconciliations of non-GAAP financial measures.

請參閱我們昨天發布的收益公告，以了解非公認會計準則財務指標的調節表。

Now I'd like to turn the call over to John.

現在我想把電話轉給約翰。

Thanks, Chris. Good morning, and thank you for joining us. I am pleased to be discussing Select Water Solutions again with you today. During the second quarter, we continued to make progress on our key objectives, such as improving our consolidated operating margins, generating strong free cash flow, and executing on our water infrastructure strategy.

謝謝，克里斯。早安，感謝您加入我們。我很高興今天再次與您討論精選水解決方案。第二季度，我們繼續在關鍵目標上取得進展，例如提高綜合營運利潤率、產生強勁的自由現金流以及執行水利基礎設施策略。

On a consolidated basis, we were able to improve gross margins by 2 percentage points sequentially. In addition to these operational gains, we reduced SG&A by 11% during the second quarter, allowing us to grow net income by $11 million and adjusted EBITDA by $10 million on a flat consolidated revenue relative to the first quarter.

綜合來看，我們的毛利率較上月提高了 2 個百分點。除了這些營運收益之外，我們在第二季將 SG&A 減少了 11%，使我們的淨利潤增加了 1100 萬美元，調整後的 EBITDA 增加了 1000 萬美元，合併收入與第一季持平。

At a segment level, we grew water infrastructure revenues by 8% and gross profit before D&A by 17% sequentially. I'm very pleased with the continued progress we've made towards the execution of our water infrastructure growth and margin improvement strategy, resulting in another quarter of record-high revenue and gross profit for the segment. Our accretive acquisitions and recent organic recycling and disposal infrastructure projects have delivered steady performance, and we continue to increase the utilization of the legacy assets as well.

在細分市場層面，我們的水基礎設施收入較上季成長了 8%，D&A 之前的毛利較上季成長了 17%。我對我們在執行水基礎設施成長和利潤改善策略方面取得的持續進展感到非常高興，這使得該部門的收入和毛利又一個季度創下歷史新高。我們的增值收購和最近的有機回收和處置基礎設施項目帶來了穩定的業績，我們也持續提高遺留資產的利用率。

In addition to the revenue gains, more importantly, we've made tremendous progress in improving the profitability of the segment, increasing gross margins before D&A for water infrastructure to 51% during the second quarter. In doing so, we've been able to achieve the 50% margin target we set for this segment much earlier than we planned.

除了營收成長之外，更重要的是，我們在提高該部門的獲利能力方面取得了巨大進展，第二季水基礎設施的D&A前毛利率提高至51%。透過這樣做，我們比計劃更早實現了為該細分市場設定的 50% 的利潤率目標。

Looking at the water services and chemicals segments, while the activity outlook has become more challenging in recent months, I am confident we can continue to find ways to reduce our maintenance capital, gain market share, and improve our operational efficiency. These efforts support continued consolidated margin improvements across the business and steady free cash flow generation.

看看水務和化學品領域，雖然近幾個月的活動前景變得更具挑戰性，但我相信我們可以繼續尋找方法來減少維護資本、獲得市場份額並提高營運效率。這些努力支持整個業務的持續綜合利潤率提高和穩定的自由現金流產生。

On the M&A front, in addition to the previously announced April acquisition of Trinity Environmental Services, we completed the acquisition of additional disposal assets in the northeast region during the second quarter.

併購方面，除了先前宣布的4月收購三一環境服務外，我們在第二季完成了東北地區額外處置資產的收購。

On a combined basis, these strategic acquisitions added more than 615,000 barrels per day of permitted disposal capacity, primarily in the Permian. This includes 25 active disposal wells, one well in development and 10 additional disposal permits available for future development.

這些策略性收購合計增加了超過 615,000 桶/日的許可處置能力，主要是在二疊紀盆地。其中包括 25 個活躍處置井、1 個正在開發的井以及 10 個可供未來開發的額外處置許可證。

Including our first-quarter deals, we've now completed acquisitions in six of our seven primary operating regions this year, adding substantial scale to our leading infrastructure platforms across the Lower 48. While we continue to grow our water infrastructure business through acquisitions, we also continue to grow through new organic business development.

包括第一季的交易在內，我們今年已完成了七個主要營運區域中六個的收購，大幅擴大了我們在 48 個州的領先基礎設施平台的規模。在我們透過收購繼續發展水基礎設施業務的同時，我們也透過新的有機業務開發繼續發展。

During the second quarter, we signed multiple new contracts with leading operators that added new acreage dedication in the Northern Delaware Basin. These agreements contributed more than 30,000 acres of additional primary dedication and another 110,000 acres under right of first refusal for potential future development projects.

在第二季度，我們與領先的營運商簽署了多份新合同，增加了北特拉華盆地的新土地面積。這些協議貢獻了超過 30,000 英畝的額外主要用途，以及另外 110,000 英畝的優先購買權，用於未來潛在的開發項目。

This brings the Northern Delaware system to a total of more than 90,000 acres under combined dedication and more than 200,000 acres under right of first refusal. These contracts underwrite the construction of up to 360,000 barrels per day of incremental water recycling capacity and 4 million barrels of storage and will significantly expand the capacity and geographic footprint of our Northern Delaware system.

這使得北特拉華州系統的聯合奉獻土地面積總計超過 90,000 英畝，優先購買權土地面積超過 20 萬英畝。這些合約負責建造每天最多 36 萬桶的增量水回收能力和 400 萬桶存儲，並將顯著擴大我們北特拉華系統的容量和地理覆蓋範圍。

Select remains the clear market leader in produced water recycling, and I look forward to getting these new facilities up and running by the first quarter of 2025. More importantly, I'm excited to create the value for our customers through these new projects, and I remain grateful for their continued trust in Select's ability to provide them with safe, efficient, and sustainable full lifecycle water solutions.

Select 仍然是采出水回收領域明顯的市場領導者，我期待在 2025 年第一季之前讓這些新設施投入運作。更重要的是，我很高興能夠透過這些新專案為我們的客戶創造價值，我仍然感謝他們對 Select 為他們提供安全、高效和可持續的全生命週期水解決方案的能力的持續信任。

As I mentioned last quarter, our business development opportunity set has continued to increase in size and certainty. We continue to negotiate a number of other potential projects. And looking forward, I'm very confident that we will continue to see additional long-term contracts get to the finish line throughout the rest of 2024 and into 2025.

正如我上季度所提到的，我們的業務發展機會集的規模和確定性持續增加。我們繼續就一些其他潛在項目進行談判。展望未來，我非常有信心我們將繼續看到更多的長期合約在 2024 年剩餘時間和 2025 年完成。

As demonstrated by the breadth and quality of our recent acquisitions and projects, I believe that Select's operational and geographic diversity is one of our core strengths and competitive differentiators. This diversity provides us with a wide array of capital allocation prospects and optionality that allows us to make the best decision to drive long-term shareholder value.

正如我們最近收購和專案的廣度和品質所證明的那樣，我相信 Select 的營運和地理多樣性是我們的核心優勢和競爭優勢之一。這種多樣性為我們提供了廣泛的資本配置前景和選擇性，使我們能夠做出最佳決策，並推動長期股東價值。

While we continue to refine our water services and chemical technologies segments, our core focus is on continuing to grow and expand our production base and long-term contracted revenue within our water infrastructure segment. I believe each of these recent acquisitions and projects align with this strategy.

在我們繼續完善水服務和化學技術領域的同時，我們的核心重點是繼續發展和擴大我們的生產基地以及水基礎設施領域的長期合約收入。我相信最近的每項收購和專案都符合這項策略。

Chris will discuss the second quarter's financial performance in more detail. But overall, I'm pleased with our team's ability to deliver increasing consolidated operating margins during a period of reduced activity and changing industry trends. We are well positioned to continue to generate free cash flow and a strong return on assets while returning capital to our shareholders and investing and growing in our business.

克里斯將更詳細地討論第二季的財務表現。但總的來說，我對我們的團隊在活動減少和行業趨勢不斷變化的時期提供不斷增加的綜合營運利潤的能力感到滿意。我們處於有利位置，可以繼續產生自由現金流和強勁的資產回報率，同時向股東返還資本並投資和發展我們的業務。

At this point, I'll hand it back to Chris to review our second-quarter financial results and remaining 2024 outlook in a bit more detail. Chris?

此時，我將把它交還給 Chris，以更詳細地審查我們的第二季財務業績和 2024 年剩餘前景。克里斯？

Thank you, John. During the second quarter, we saw solid growth in our overall profitability, generated strong free cash flow, and continued to execute on strategic acquisitions to support our water infrastructure growth strategy.

謝謝你，約翰。第二季度，我們的整體獲利能力穩定成長，產生了強勁的自由現金流，並繼續執行策略性收購以支持我們的水基礎設施成長策略。

Accordingly, our water infrastructure segment continued its steady growth trajectory, once again achieving record high quarterly revenue and gross profit results during the second quarter. While oil prices have generally held steady at levels that provide an attractive economic return for our customers, natural gas prices have been more challenging, pressuring overall activity levels in the first half of the year.

因此，我們的水務基礎設施業務持續保持穩定成長軌跡，第二季營收和毛利再次創下歷史新高。雖然石油價格總體穩定在可為客戶提供有吸引力的經濟回報的水平，但天然氣價格更具挑戰性，給今年上半年的整體活動水平帶來壓力。

Our water services and chemical technologies segments have seen the impact of these activity levels, and particularly on the completion side. However, with the support of our latest strategic initiatives and continued growth in water infrastructure, we generally remain on track towards achieving our key 2024 objectives.

我們的水服務和化學技術部門已經看到了這些活動水準的影響，特別是在完工方面。然而，在我們最新戰略舉措和水利基礎設施持續成長的支持下，我們總體上仍有望實現 2024 年的關鍵目標。

Furthermore, Select's ongoing transition to a more infrastructure-based production-levered full lifecycle water company continues to align our future profitability and cash flow generation with critical secular growth drivers unique to our business, particularly as we continue to add more long-term contracts into the portfolio, such as the large 15-year acreage dedication agreement we entered into in the Northern Delaware Basin during Q2, which significantly expanded our partnership with a core customer in the region.

此外，Select 正在向一家更加以基礎設施為基礎、以生產為槓桿的全生命週期水務公司轉型，這將繼續使我們未來的盈利能力和現金流生成與我們業務特有的關鍵長期增長驅動因素保持一致，特別是當我們繼續在其中添加更多長期合約時投資組合，例如我們在第二季度在北特拉華盆地簽訂的為期15 年的大型土地奉獻協議，該協議顯著擴大了我們與該地區核心客戶的合作關係。

The industry continues to seek creative solutions for the challenges created by growing produced water volumes, including increasing induced seismicity. We believe Select is well positioned to be a leading driver of our industry's ability to solve these challenges through increasing produced water recycling, expanded infrastructure networks, and strategic commercial water balancing.

該行業不斷尋求創造性的解決方案，以應對採出水量不斷增加（包括誘發地震活動增加）所帶來的挑戰。我們相信，Select 透過增加採出水回收、擴大基礎設施網路和策略性商業水平衡，有能力成為業界解決這些挑戰的主要推動者。

Additionally, as our E&P customers continue to extract value through industry consolidation, we believe there will be growing demand for high-quality partners with the size, scope, and networks to serve the largest operators and consolidators, supporting continued growth opportunities for Select. During Q2, the water infrastructure segment benefited from these trends, seeing increased utilization of existing assets as well as the benefit of multiple strategic acquisitions.

此外，隨著我們的勘探與生產客戶繼續透過產業整合獲取價值，我們相信，對具有規模、範圍和網路的高品質合作夥伴的需求將會不斷增長，為最大的營運商和整合商提供服務，從而支持Select 的持續成長機會。第二季度，水利基礎設施領域受益於這些趨勢，現有資產的利用率提高，並受益於多項策略性收購。

We increased both recycling and disposal volumes during the second quarter, generating revenue growth of approximately 8% to $69 million. Although revenue came in slightly lower than expected, gross margin significantly outperformed our expectations.

第二季度，我們增加了回收和處理量，營收成長了約 8%，達到 6,900 萬美元。儘管收入略低於預期，但毛利率卻大幅超出我們的預期。

Q2 still delivered strong sequential revenue growth. And more importantly, the Water Infrastructure segment gross profit, which we customarily provide in terms of prior to depreciation, amortization, and accretion improved to $35 million. This represents an increase of 17% compared to Q1 and a tremendous 67% growth rate from where we were just one year ago.

第二季度仍然實現了強勁的連續收入成長。更重要的是，水基礎設施部門的毛利（我們通常以折舊、攤提和增值之前的形式提供）提高到了 3500 萬美元。與第一季相比成長了 17%，與一年前相比成長了 67%。

On a relative basis, gross margin before D&A increased to 51% during Q2, an increase of 4 percentage points compared to Q1 and a 13-percentage-point increase from where we were a year ago. We are excited about the significant improvements we've made in the profitability of this segment in such a short period of time, and reaching the 50% margin target ahead of plan was a terrific achievement for the team.

相對而言，第二季D&A前毛利率增至51%，較第一季增加4個百分點，較去年同期增加13個百分點。我們對在如此短的時間內在該細分市場的盈利能力方面取得的顯著改善感到興奮，提前達到 50% 的利潤率目標對於團隊來說是一項了不起的成就。

We have also been able to efficiently integrate acquired assets into the portfolio, while reducing costs along the way and believe our ongoing projects under construction and under future development provide additional long-term opportunity to drive further margin improvement. In the immediate near term, we expect to see comparably steady mid- to high single-digit percentage revenue growth during Q3, supported by our recent acquisitions and enhanced utilization of existing assets and steady gross margin of 50% to 52%.

我們也能夠有效地將收購的資產整合到投資組合中，同時降低成本，並相信我們正在進行的在建和未來開發項目提供了額外的長期機會，以進一步提高利潤率。短期內，我們預計第三季營收將實現相對穩定的中高個位數百分比成長，這得益於我們最近的收購和現有資產利用率的提高以及穩定的 50% 至 52% 的毛利率。

While we originally expected to see a small contribution from our new Thompson pipeline in the Bakken region during the third quarter, certain permitting delays have impacted the construction timeline, though we still fully anticipate the pipeline coming online by the end of 2024.

雖然我們最初預計第三季巴肯地區的新湯普森管道將做出少量貢獻，但某些許可延遲影響了施工時間表，但我們仍然完全預期管道將於 2024 年底上線。

Looking out more medium term, we continue to believe that with a very strong project and deal backlog, water infrastructure remains on track to become the largest component of our profitability by the end of 2025, underpinned by repeatable, predictable, high-margin, and contracted revenue streams. Though we may see some seasonal impacts to margins in the fourth quarter, we otherwise expect to maintain and potentially improve upon this 50%-plus margin profile for the segment moving forward into 2025.

展望更中期，我們仍然相信，憑藉非常強勁的項目和交易積壓，到 2025 年底，水基礎設施仍有望成為我們盈利能力的最大組成部分，其基礎是可重複、可預測、高利潤和合約收入流。儘管我們可能會看到第四季度利潤率受到一些季節性影響，但我們預計到 2025 年該細分市場將保持並可能改善這一 50% 以上的利潤率狀況。

Our continued new project wins in the Northern Delaware demonstrate our ability to add value to our existing infrastructure networks through incremental networking and commercialization. These expanded systems will deliver enhanced utilization and water balancing capabilities that will make these projects highly accretive, and we look forward to executing more contracts in the quarters to come.

我們在北特拉華州不斷贏得的新項目證明了我們有能力透過增量網路和商業化為現有基礎設施網路增加價值。這些擴展的系統將提供增強的利用率和水平衡能力，這將使這些項目具有高度增值性，我們期待在未來幾季執行更多合約。

Switching to the water services segment, we were able to outperform both industry activity levels and our own internal expectations, modestly growing revenues by about 1%, while improving margins by 2 percentage points to 22.5%. Revenue gains during the quarter were driven in part by traditional water sourcing volumes.

轉向水服務領域，我們的表現超出了行業活動水平和我們自己的內部預期，收入小幅增長了約 1%，同時利潤率提高了 2 個百分點，達到 22.5%。本季營收成長部分得益於傳統水源採購量。

Notably, we were able to pull forward key water sourcing opportunities with both our future Thompson pipeline, anchor tenant in the Bakken as well as two key customers in the Northern Delaware. In the Northern Delaware, these are the same two customers we just signed new contracts with to develop additional infrastructure projects in the region. And in the short term, we will supplement their ongoing activities with traditional water sourcing ahead of the new recycling facilities getting up and running in early 2025.

值得注意的是，我們能夠透過未來的湯普森管道、巴肯的主要租戶以及特拉華州北部的兩個主要客戶來推動關鍵的水資源採購機會。在特拉華州北部，我們剛剛與這兩家客戶簽署了新合同，以在該地區開發更多基礎設施項目。短期內，我們將在新的回收設施於 2025 年初投入運作之前，透過傳統的水源補充他們正在進行的活動。

Offsetting these gains is the continued trimming of revenues from other areas of the business, notably our legacy fluids hauling service line. This remains an area where we continue to focus on cost efficiency and consolidation opportunities as we continue to increase the amount of volume we transport via pipeline over time.

其他業務領域收入的持續削減抵消了這些收益，特別是我們傳統的流體運輸服務線。隨著時間的推移，我們將繼續增加通過管道運輸的數量，這仍然是我們繼續關注成本效率和整合機會的領域。

These efforts also act as the primary driver for what is expected to be a mid- to high single-digit revenue decline in Q3 for water services, though we expect to maintain margins in the 22% to 23% range in spite of additional yard closure costs. We continue to believe that we can push margins further over time and remain vigilant in our search for efficiency in this segment.

這些努力也是預計第三季供水服務收入出現中高個位數下降的主要驅動因素，儘管我們預計儘管有更多的堆場關閉，利潤率仍將保持在 22% 至 23% 的範圍內成本。我們仍然相信，隨著時間的推移，我們可以進一步提高利潤率，並在尋求該領域效率的過程中保持警惕。

On the chemical technology side, we certainly had a more challenging second quarter. With the continued decrease in overall industry activity levels, we saw a roughly 9% decline in our manufacturing volumes during the quarter rather than the modest growth we anticipated. Accordingly, the decreased volumes resulted in a lower absorption rate through our manufacturing plants, delivering slightly lower gross margins of 16.4%.

在化學技術方面，我們的第二季無疑更具挑戰性。隨著整體產業活動水準持續下降，本季我們的製造量下降了約 9%，而不是我們預期的溫和成長。因此，銷量減少導致我們製造工廠的吸收率降低，毛利率略有下降，為 16.4%。

Looking at the third quarter, while we expect to see steady overall volume demand from our direct-to-operator E&P customers, we are seeing continued activity reductions from some of our pressure pumping customers. There are a number of additional completion crews that have been identified for idling during Q3 that had been utilizing our high-margin full chemical suite.

展望第三季度，雖然我們預計直接面向營運商的勘探與生產客戶的整體需求量將保持穩定，但我們看到一些壓力泵客戶的活動持續減少。還有一些額外的完井人員已被確定在第三季度處於閒置狀態，這些人員一直在使用我們的高利潤全套化學品套件。

In response, we believe we have a path towards recouping these recently retreated volumes. However, until we do, we likely will see a constrained ability to get margins back to our target of 20% in the near term. In the meantime, we are undertaking a number of cost reduction initiatives that are expected to be completed by the end of the year.

作為回應，我們相信我們有辦法收回最近下降的銷量。然而，在此之前，我們可能會發現短期內將利潤率恢復到 20% 目標的能力會受到限制。同時，我們正在採取一系列降低成本的舉措，預計今年底完成。

For the third quarter, we anticipate flat to modestly down low single-digit percentage revenues with margins in the 14% to 16% range. Looking at other cost reduction efforts, SG&A during the second quarter decreased by more than 11% or $5 million relative to the first quarter. While the transaction-related costs have slowed compared to earlier in the year, with acquisitions continuing throughout Q2, we will continue to incur a modest balance of transaction and integration-related costs during the third quarter.

對於第三季度，我們預計收入將持平或小幅下降個位數百分比，利潤率在 14% 至 16% 範圍內。從其他成本削減措施來看，第二季的銷售、行政管理費用（SG&A）較第一季下降了 11% 以上，即 500 萬美元。儘管與今年稍早相比，交易相關成本有所放緩，且收購在整個第二季持續進行，但我們將在第三季繼續承擔交易和整合相關成本的適度平衡。

Looking forward, we expect SG&A to continue to trend closer to 10% of revenue during the back half of the year. Altogether, for the second quarter of 2024, we generated net income of $15 million and adjusted EBITDA of $69.5 million during the second quarter, a substantial increase of $10 million relative to the first quarter and ahead of our guidance of $64 million to $68 million.

展望未來，我們預計 SG&A 在今年下半年將持續接近營收的 10%。總的來說，2024 年第二季我們的淨利潤為 1,500 萬美元，調整後 EBITDA 為 6,950 萬美元，較第一季大幅增加 1,000 萬美元，高於我們 6,400 萬至 6,800 萬美元的指導。

For the third quarter, we expect consolidated adjusted EBITDA of between $66 million and $70 million, relatively steady to Q2 as continued water infrastructure gains are offset by some of the ongoing consolidation and elimination efforts in the water services segment.

對於第三季度，我們預計綜合調整後EBITDA 將在6,600 萬美元至7,000 萬美元之間，與第二季度相比相對穩定，因為水務基礎設施的持續收益被水服務領域正在進行的一些整合和消除工作所抵消。

Driven by the substantial growth in our water infrastructure segment over the course of 2024, we continue to believe we will see our water infrastructure and chemical technologies segment reach 50% of consolidated gross profit by the end of the year, as expected. And water infrastructure is on a great path for continued growth well into 2025.

在2024年水基礎設施業務大幅成長的推動下，我們仍相信我們的水基礎設施和化學技術業務將如預期在年底前達到合併毛利的50%。水利基礎設施預計在 2025 年將持續成長。

Now looking at the balance sheet, we utilized our sustainability-linked credit facility in addition to cash on hand to help fund an additional $41 million of acquisitions during Q2, ending the second quarter with $90 million of outstanding borrowings. With $83 million of operating cash flow generated during Q2, we were able to materially limit our net debt increase during the quarter to a mere $12 million even after the $41 million of acquisitions and $49 million of CapEx during the quarter.

現在看看資產負債表，除了手頭現金外，我們還利用與永續發展相關的信貸額度，為第二季額外的 4,100 萬美元收購提供資金，第二季結束時未償還借款為 9,000 萬美元。由於第二季產生了8,300 萬美元的營運現金流，即使在本季度進行了4,100 萬美元的收購和4,900 萬美元的資本支出之後，我們仍能夠將本季的淨債務增長大幅限制在1,200 萬美元。

Operating cash flow actually exceeded adjusted EBITDA for the third time in the last four quarters as we continue to make tremendous progress in further reducing our working capital, pushing total working capital below 11% of revenue, and decreasing accounts receivable days outstanding to 72 days for the period, a substantial decrease from a year ago.

營運現金流量實際上在過去四個季度中第三次超過調整後的EBITDA，因為我們在進一步減少營運資本、將總營運資本推至收入的11% 以下以及將應收帳款天數減少至72 天方面持續取得巨大進展。

These efforts still leave us with ample liquidity and a very conservative balance sheet. We will remain disciplined in our use of leverage. But with the growing contribution of our higher-margin production levered and contracted revenue streams, we have good visibility into our ability to repay these outstanding borrowings in a relatively short period of time should we so choose, while still generating cash flow to fund the growth of the business organically.

這些努力仍然為我們留下了充足的流動性和非常保守的資產負債表。我們將繼續嚴格使用槓桿。但隨著我們的高利潤生產槓桿和合約收入流的貢獻不斷增加，我們可以很好地了解我們在相對較短的時間內償還這些未償借款的能力（如果我們選擇的話），同時仍然產生現金流來為成長提供資金有機地開展業務。

Additionally, we remain committed to returning capital to shareholders with our quarterly dividend of $0.06 per share, equating to $15 million of capital returned to shareholders so far year to date. Early depreciation, amortization, and accretion remained fairly steady, though this could increase closer to $40 million per quarter by the end of the year with additional capital deployment.

此外，我們仍然致力於向股東返還資本，季度股息為每股 0.06 美元，相當於今年迄今向股東返還的資本為 1500 萬美元。早期折舊、攤提和增值保持相當穩定，但隨著額外的資本部署，到年底每季可能會增加近 4,000 萬美元。

As expected, quarterly interest expense ticked up modestly during Q2 as we employed our sustainability link lending facility to execute our recent acquisitions. And our income tax expense moved up modestly alongside our growing pretax income as well at around a 21% effective rate as anticipated.

正如預期的那樣，由於我們利用永續發展連結貸款工具來執行最近的收購，第二季的季度利息支出小幅上升。我們的所得稅費用隨著稅前收入的增長而小幅增長，有效稅率也如預期的那樣達到了 21% 左右。

Net CapEx of $46 million represented a decent step up during Q2 as our organic water infrastructure growth CapEx accelerates. Given the additional recent long-term contract wins that we mentioned earlier, growth CapEx will increase in the back half of the year.

隨著我們的有機水基礎設施成長資本支出加速，淨資本支出達到 4,600 萬美元，在第二季取得了不錯的進步。鑑於我們之前提到的最近贏得的額外長期合同，今年下半年的成長資本支出將增加。

However, we also remain quite disciplined in our approach to maintenance spending and believe we will see a $10 million to $20 million reduction in maintenance CapEx on the year. Put together, we now expect full year net CapEx of $170 million to $190 million in 2024, an increase of $30 million of debt.

然而，我們在維護支出方面仍然非常嚴格，並相信今年的維護資本支出將減少 1,000 萬至 2,000 萬美元。總的來說，我們現在預計 2024 年全年淨資本支出為 1.7 億至 1.9 億美元，債務增加 3,000 萬美元。

With our reduced maintenance CapEx targets, we continue to expect each of our water services and chemical technologies segments to provide strong cash flows at low capital intensity during 2024, returning a combined 70% to 80% of their profits and free cash flow after CapEx, helping to fund our latest contracted water infrastructure growth projects.

隨著我們減少維護資本支出目標，我們繼續預計我們的每個水服務和化學技術部門將在2024 年以低資本密集度提供強勁的現金流，在資本支出後總共返回70% 至80% 的利潤和自由現金流，幫助資助我們最新簽約的水利基礎設施成長項目。

Even with the increased net CapEx outlook, we still expect to modestly build on the $41 million of free cash flow we generated in the first half of the year with an updated target of pulling through 25% to 35% of our adjusted EBITDA into free cash flow for the full year of 2024 after accounting for all maintenance and growth CapEx spend.

即使淨資本支出前景增加，我們仍預計將在上半年產生的 4,100 萬美元自由現金流的基礎上適度發展，更新目標是將調整後 EBITDA 的 25% 至 35% 轉化為自由現金考慮所有維護和成長資本支出後，2024 年全年的流量。

We have a tremendous amount of opportunity still ahead of us, and I look forward to continuing to execute on our strategy. I'd like to wrap up by once again thanking all of our employees for their hard work and continued support, especially those that were impacted by the recent severe weather events around Texas, including Hurricane Beryl.

我們面前仍然有巨大的機會，我期待繼續執行我們的策略。最後，我想再次感謝我們所有員工的辛勤工作和持續支持，特別是那些受到德州最近發生的惡劣天氣事件（包括颶風貝裡爾）影響的員工。

With that, I'd like to open it up to questions. Operator?

說到這裡，我想提出一些問題。操作員？

(Operator Instructions) Luke Lemoine, Piper Sandler.

（操作說明）Luke Lemoine、Piper Sandler。

Hey, good morning. You all detailed the two new projects in the Delaware and the growth CapEx associated with that. I mean, you'll have a variety of projects here that you've been investing in over time. And it looks like next year, you could as well. How do you balance this?

嘿，早安。你們都詳細介紹了特拉華州的兩個新項目以及與之相關的資本支出成長。我的意思是，隨著時間的推移，您將在這裡擁有各種您一直在投資的項目。看起來明年你也可以。你如何平衡這一點？

And how should we think about the returns of other North American service companies, and they don't have the growth lag that you do? So when just kind of thinking about incremental CapEx, incremental projects, can you just kind of help frame the returns and how we should think about this?

我們該如何看待其他北美服務公司的回報，他們沒有像你們那樣的成長落後？因此，當只是考慮增量資本支出、增量項目時，您能否幫助確定回報以及我們應該如何考慮這一點？

Sure, Luke. This is Michael Skarke. A couple of thoughts there. I think part of the growth profile is really the core focus we've got around infrastructure and probably more specifically, recycling as it relates to the Northern Delaware.

當然，盧克。這是邁克爾·斯卡克。有一些想法。我認為成長概況的一部分實際上是我們圍繞基礎設施的核心焦點，可能更具體地說，是與北特拉華州相關的回收。

There's a bit of a secular tailwind there as we're looking at competing with traditional freshwater sourcing and disposal and the challenges that exist in that area. So we're seeing a lot of traction there. The returns are really consistent with what we've said in the past. We're trying to get a three-year return on our capital under the underwritten contract with the ability to connect it beyond that with other operators to improve upon that return.

當我們正在考慮與傳統的淡水採購和處理以及該領域存在的挑戰進行競爭時，存在一些長期的順風。所以我們看到那裡有很大的吸引力。回報確實與我們過去所說的一致。我們正在努力根據承保合約獲得三年的資本回報，並能夠將其與其他營運商聯繫起來，以提高回報。

Most of the projects we've announced, unfortunately, there's a long lead time, as I know we've discussed in the past. And so we're literally looking to try to get those on by the end of the year. But we are expecting a meaningful contribution from the capital spend this year for next year.

不幸的是，我們宣布的大多數項目都有很長的準備時間，據我所知，我們過去已經討論過。因此，我們確實希望在今年年底之前實現這些目標。但我們預期今年的資本支出將為明年帶來有意義的貢獻。

And then as we build out that system and that network, we're finding projects. Really, we get more projects. So more opportunities, more extensions, more connections, more optionality with operators. All of that is what's really driving our backlog and really the enthusiasm we have around water infrastructure as we look forward to 2025.

然後，當我們建立該系統和網路時，我們正在尋找專案。確實，我們得到了更多的項目。因此，更多的機會、更多的擴展、更多的連接、更多的運營商選擇。所有這些都是我們積壓的真正原因，也是我們對 2025 年水利基礎設施充滿熱情的真正原因。

And Luke, maybe a couple of points I'll add on to that. To your question specifically around the allocation of capital and the returns and particularly how that compares to maybe the competitive landscape. I mean, I think one of the unique things about Select as a platform, we are a rapidly growing growth platform around infrastructure.

盧克，也許我會補充幾點。針對你的問題，特別是關於資本分配和回報，特別是與競爭格局相比如何。我的意思是，我認為 Select 作為平台的獨特之處之一是，我們是一個圍繞基礎設施快速成長的平台。

But we are able to self-fund a lot of that capital outlay through the strength of our leading platform around water services and chemicals. The diversified platform we have all across the US as well gives us quite a bit of flexibility and optionality to look at different basins and different components of the infrastructure supply chain as well to really find the best opportunities.

但我們能夠透過我們在水服務和化學品方面的領先平台的實力來自籌大部分資本支出。我們在美國各地擁有的多元化平台也為我們提供了相當大的靈活性和選擇性，讓我們能夠審視不同盆地和基礎設施供應鏈的不同組成部分，並真正找到最佳機會。

But to Michael's point, I mean, clearly, the expertise we have around recycling and our ability to integrate that with the logistical application of services is definitely providing us some clear differentiated project wins and success there.

但就邁克爾的觀點而言，我的意思是，顯然，我們在回收方面擁有的專業知識以及我們將其與服務的物流應用相結合的能力肯定為我們提供了一些明顯的差異化項目勝利和成功。

But I think the underwriting support, whether it's infrastructure around disposal, recycling facilities, or pipelines, we generally take a similar approach towards our underwriting economics across the board in that segment. And we're seeing that on the solid side as well with some of our more recent entry into that part of the business.

但我認為承保支持，無論是圍繞處置、回收設施還是管道的基礎設施，我們通常對該領域的全面承保經濟學採取類似的方法。我們最近進入該領域的一些業務也看到了這一點。

So it's definitely a rapidly growing capital allocation point for us in terms of making some of those decisions. But our ability to self-fund a lot of that out of the base business and utilize the liquidity we have in the facility has been quite effective for us here recently, although the pace of that is obviously picking up here in the back half of the year, but for the right reasons.

因此，對於我們做出一些決策而言，這絕對是一個快速成長的資本配置點。但是，我們從基礎業務中籌集大量資金並利用我們在設施中擁有的流動性的能力最近對我們來說非常有效，儘管這一速度在下半年明顯加快。

Okay. And then the water infrastructure margins, I mean those hopped over the 50% mark, which is pretty important. And it happened a lot sooner than we expected, I'm not sure about if you guys expected this soon as well. But could you just talk about kind of what drove the acceleration there and allowed that to happen quicker than expected?

好的。然後是水利基礎設施利潤率，我的意思是那些突破了 50% 大關的水平，這非常重要。而且事情發生得比我們預期的要早得多，我不確定你們是否也預料到了這一點。但您能否談談是什麼推動了那裡的加速並使其發生得比預期更快？

Sure. So certainly, I was very pleased to see us get to that 50% point here in the first half of the year. We were striving to get there potentially in 2024, but certainly targeting getting there by '25. So pleased with the pace of our ability to get there in the second quarter. It was contributed -- a couple of things contributed to that.

當然。當然，我很高興看到我們在今年上半年達到了 50%。我們力爭在 2024 年實現這一目標，但當然目標是在 25 年前實現這一目標。對我們在第二季度實現這一目標的速度感到非常滿意。這是有貢獻的——有幾件事促成了這一點。

When you think about the incremental utilization of existing capacity within the base infrastructure business, every incremental barrel of throughput through a piece of fixed pipe or a facility provides a pretty attractive incremental margin. And we were able to drive revenue growth in the first half of the year through both organic business development as well as bringing on accretive acquisitions that contributed to the segment on a margin basis that's higher than where we've been.

當您考慮基礎設施業務中現有容量的增量利用時，透過一段固定管道或設施的每一個增量吞吐量桶都提供了相當有吸引力的增量利潤。我們能夠透過有機業務發展以及增量收購來推動今年上半年的營收成長，這些收購為該部門帶來了高於我們以往水準的利潤率。

We've been able to take costs out of some of the recent acquisitions faster than anticipated. So there's still a little bit of work to get them integrated into the networks, particularly out in east Texas. But generally speaking, the assets that we've been able to bring into the system, we've been able to utilize quickly and get some costs out sooner than we anticipated.

我們能夠比預期更快地從最近的一些收購中降低成本。因此，將它們整合到網路中仍然需要一些工作，特別是在德克薩斯州東部。但總的來說，我們能夠將資產帶入系統，我們能夠快速利用並比我們預期更快地收回一些成本。

So all of that's really contributing. But I think, first and foremost, it's just a continued ability to drive volumetric throughput through the assets at a higher rate, and we expect to see a material continued pace of that into Q3 here that I think should stabilize those margins above 50% and give us clear visibility into continuing to take those further over the next year or so.

所以所有這些都確實做出了貢獻。但我認為，首先也是最重要的是，這只是以更高的速度推動資產吞吐量的持續能力，我們預計第三季將繼續保持實質成長，我認為這應該將利潤率穩定在50% 以上，讓我們清楚地了解在未來一年左右繼續採取這些措施。

Okay, got it. I'll turn it back. Thanks.

好的，明白了。我會把它轉回來。謝謝。

Thanks, Luke.

謝謝，盧克。

Jim Rollyson, Raymond James.

吉姆·羅利森，雷蒙德·詹姆斯。

Hey, good morning, guys. Just maybe circling back on water infrastructure. Chris, you talked about just this quarter didn't quite get to the sequential growth you originally hoped for, and you talked about Thompson pipeline as it relates to third-quarter guidance.

嘿，早上好，夥計們。也許只是回到水利基礎設施。克里斯，您談到本季度並沒有完全達到您最初希望的連續增長，並且您談到了湯普森管道，因為它與第三季度指導相關。

But if I recall correctly, kind of start of the year, you were thinking water infrastructure revenues are probably going to be up somewhere between 30% and 40%. Curious if you still think that given the delay in the Thompson pipeline? Because obviously, that implies a pretty big step up in 4Q if and when that hits.

但如果我沒記錯的話，今年年初，您認為水利基礎設施收入可能會成長 30% 到 40% 之間。考慮到湯普森管道的延誤，您是否仍然這麼認為？因為顯然，如果這種情況發生，這意味著第四季將出現相當大的進步。

Yeah, it's a good question, Jim. I'd say that the Thompson pushing into the fourth quarter is certainly going to impact the top line contribution expectations for the year. So probably coming in towards the bottom end of that guide. But I think importantly, the profitability has improved at such a pace that we're likely tracking towards something that's at the top end or potentially exceeding the top end of the growth on the profit side, which was expected to be 40% to 50% year-over-year growth.

是的，這是個好問題，吉姆。我想說，進入第四季的湯普森肯定會影響今年的營收貢獻預期。所以可能會進入該指南的底部。但我認為重要的是，盈利能力的改善速度如此之快，以至於我們可能會追趕利潤增長的上限或可能超過利潤增長的上限，預計利潤將達到 40% 至 50%同比增長。

So I think we're in a position we might be able to push above the top end of that range on the profitability side. So on a gross dollar basis, still on track or potentially ahead of where we expected to be at this point, even if the top line is going to be a little lower than we might have liked.

因此，我認為我們可能能夠在盈利能力方面突破該範圍的上限。因此，在總美元基礎上，仍處於正軌或可能領先於我們目前的預期，即使頂線將略低於我們可能想要的水平。

But obviously, that's really just a timing question of getting some of those assets up and running. And certainly, once they come online in Q4 and the new projects in Q1, we should see a pretty heavy pace of growth in the next six to nine months from those new projects, and those should be -- continue to be additive to the margin profile as well.

但顯然，這實際上只是啟動並運行其中一些資產的時間問題。當然，一旦它們在第四季度上線，新項目在第一季上線，我們應該會看到這些新項目在未來六到九個月內出現相當大的增長速度，而這些應該會繼續增加利潤個人資料也是如此。

Absolutely. I appreciate that. I'm just trying to make sure we get the timing right. And then on that, you're leaning into growth CapEx as opportunities are there for contracted high-return projects. I realize this is probably an ongoing moving target.

絕對地。我很欣賞這一點。我只是想確保我們把握正確的時機。然後，您將傾向於成長資本支出，因為簽約的高回報項目有機會。我意識到這可能是個不斷變化的目標。

But if you kind of add up all the projects you have contracted for now plus the recent M&A, when all this is on, let's say, it's 1Q or ramping up in the second half of next year, what kind of revenue run rate are you already -- do you already have visibility on for water infrastructure? Just trying to understand how this unpacks as we going through 2025 based on what you already have in hand today.

但如果你把現在承包的所有項目加上最近的併購項目加起來，當所有這些都發生時，比如說，現在是第一季度或明年下半年開始增加，你的收入運行率是多少已經——您已經了解水利基礎建設了嗎？只是想根據您今天掌握的資訊來了解 2025 年這一過程將如何展開。

Yeah, it's a good question, Jim. Obviously, with the dollars we're spending in the back half of this year, there's not going to be a ton of contribution from a revenue standpoint from those projects until we get into '25.

是的，這是個好問題，吉姆。顯然，考慮到我們今年下半年花費的資金，從收入的角度來看，在進入 25 年前這些項目不會做出大量貢獻。

And there'll be a continued pace of that spend in the first half of next year. I think that from an overall growth capital standpoint, I think we have a pretty high level of confidence towards seeing a comparable level of growth spend next year that we see this year with additional contract wins.

明年上半年支出將持續成長。我認為，從整體成長資本的角度來看，我們對明年的成長支出水準與今年的成長水準相當有信心，並贏得了額外的合約。

In terms of thinking about how that starts to pull through the top line and translates into a growth rate, I think you can generally think about the growth capital we're actively deploying now based on the announced projects as well as kind of the full-year guide, take that three-year cash-on-cash approach from our organic capital deployment and 50%-plus gross margin, and that's going to be a pretty good way to think about the timing of that capital contributing to the overall growth.

在思考如何開始突破營收並轉化為成長率方面，我認為您通常可以考慮我們現在基於已宣布的項目以及全面的成長資本正在積極部署。毛利率中採取三年現金現金方式，這將是一個很好的方式來考慮該資本對整體成長做出貢獻的時機。

Yes, got it. I appreciate that. I'll turn it back. Thank you.

是的，明白了。我很欣賞這一點。我會把它轉回來。謝謝。

Jeff Robertson, Water Tower Research.

傑夫·羅伯遜，水塔研究。

Thanks. Chris, just to follow up on the margins. If you're ahead on margins in water infrastructure, should we think that you will accelerate your goal of getting to the plus-50% on gross profitability before year-end 2025?

謝謝。克里斯，只是為了跟進邊緣情況。如果您在水利基礎設施領域的利潤率處於領先地位，我們是否應該認為您會加速實現 2025 年底前毛利潤率增加 50% 的目標？

I think it certainly gives us an opportunity, Jeff, to get there faster. And obviously, with the activity environment providing a little more of a governor on the completions parts of the business around services and chemicals, it provides an additional layer of profit weighting out of infrastructure in the relative near term.

傑夫，我認為這確實給了我們一個更快實現目標的機會。顯然，由於活動環境對服務和化學品業務的完成部分提供了更多的調節作用，因此它在相對近期內為基礎設施提供了額外的利潤權重。

I'd say that based on the backlog of projects we see and the timeline of when we expect to get those projects underwritten and deployed, I think that's still an appropriate way to kind of frame our expectations here. But certainly, as we look into 2025, I think there's an opportunity for us to pull that timing forward potentially, Jeff. But it would certainly require some additional contracts getting under our belt here in the back half of this year.

我想說，根據我們看到的項目積壓以及我們預計這些項目得到承保和部署的時間表，我認為這仍然是構建我們期望的適當方式。但當然，當我們展望 2025 年時，我認為我們有機會將這一時間提前，傑夫。但這肯定需要我們在今年下半年簽訂一些額外的合約。

And as you think about the business over the next several years, with an increasing share of revenue and cash flow being underwritten by long-term infrastructure projects, does that impact the way you think about capital budgeting and cash return to shareholders plan and just the ability to compound that growth into continuing to expand the water infrastructure segment?

當您考慮未來幾年的業務時，隨著長期基礎設施項目承保的收入和現金流份額不斷增加，這是否會影響您對資本預算和股東現金回報計劃的看法，以及能否將這種增長與繼續擴大水利基礎設施領域結合？

Yeah. No, it's a great question. We certainly think that we've got an ability to deploy the growth capital we have in front of us this year out of free cash flow. We've been able to grow the dividend over the last year. We were quite active from a repurchase standpoint last year, a little bit more constrained from a buyback standpoint this year as we've been picking up the pace of the organic capital deployment.

是的。不，這是一個很好的問題。我們當然認為我們有能力利用今年的自由現金流來部署我們面前的成長資本。去年我們已經能夠增加股利。從去年的回購角度來看，我們相當活躍，但從今年的回購角度來看，我們的回購有點受到限制，因為我們一直在加快有機資本部署的步伐。

Looking out 12 months from now, I think that getting more underwritten contracts in the books is definitely going to give us more optionality and flexibility into how we underwrite the business, both in terms of taking a look at the capital structure on the balance sheet as well as the stability and opportunity for shareholder return growth.

展望 12 個月後，我認為，帳面上獲得更多承保合約肯定會為我們承保業務的方式帶來更多選擇和靈活性，無論是從資產負債表上的資本結構來看，以及股東回報增長的穩定性和機會。

So I think for now, we've certainly kind of shifted focus from an M&A standpoint in the first half of the year towards an organic capital deployment standpoint in the back half of this year. We remain with a $21 million authorization on the share repurchase that we'll continue to have for tactical deployment.

因此，我認為目前我們肯定已經將重點從上半年的併購角度轉向了今年下半年的有機資本部署角度。我們仍保留 2,100 萬美元的股票回購授權，並將繼續用於戰術部署。

But I think the pace of opportunity in front of us from an organic project standpoint is picking up at a rate that that's the best opportunity for us to put good capital to work here if we can continue to add long-term 10-, 15-year underwritten contracts for new growth in water infrastructure.

但我認為，從有機項目的角度來看，我們面前的機會步伐正在加快，如果我們能夠繼續增加長期的 10-、15-今年承保了水利基礎設施新增長的合約。

And I think that's a really important point. I mean our strategy is working. We've been really more successful at growing water infrastructure revenue and profitability than we anticipated so far, and we really are focused on and going to continue to execute that strategy.

我認為這是非常重要的一點。我的意思是我們的策略正在發揮作用。到目前為止，我們在增加水基礎設施收入和盈利能力方面確實比我們預期的更加成功，我們確實專注於並將繼續執行該策略。

And it's fueled by driving more volume through existing systems and networks, as Chris mentioned. And also, as I mentioned earlier, the fact that as we expand our systems and networks, we're seeing more and more deals that are just expansions of those existing systems. So we're really excited about the opportunity to drive further growth despite what is a softer uncertain macro environment.

正如克里斯所提到的，它是透過現有系統和網路增加銷售量來推動的。而且，正如我之前提到的，隨著我們擴展系統和網絡，我們看到越來越多的交易只是現有系統的擴展。因此，儘管宏觀環境較為疲軟且不確定，但我們對推動進一步成長的機會感到非常興奮。

And maybe to your specific question around contracts, Jeff, probably around half of the infrastructure segment today is supported by long-term contract. And looking forward into next year, that should, with the new projects coming online, make up a substantial majority of that segment's revenue and profitability by the time we get to the end of 2025.

也許對於你關於合約的具體問題，傑夫，今天大約一半的基礎設施領域可能是由長期合約支持的。展望明年，隨著新項目的上線，到 2025 年底，這應該會佔該細分市場收入和獲利能力的大部分。

So having that visibility into a growing segment with a large base of underwritten contracts is definitely going to give us that optionality to make different decisions. But ultimately, it's going to give us the opportunity to make good decisions.

因此，對擁有大量承保合約的不斷增長的細分市場的了解肯定會給我們提供做出不同決策的選擇權。但最終，這將使我們有機會做出正確的決定。

Thank you.

謝謝。

Tom Curran, Seaport Research Partners.

湯姆‧柯蘭，海港研究夥伴。

Good morning. Chris, by my calculations, that the water infrastructure division is average annual revenue per recycled barrel. So this is excluding chemical technologies on the fly revenue. Just for that water infrastructure division, my calculation so that annual average revenue per recycled barrel doubled in 2022 and then grows roughly another 50% in 2023.

早安.克里斯，根據我的計算，水基礎設施部門是每個回收桶的平均年收入。因此，這不包括即時化學技術的收入。僅就水基礎設施部門而言，我的計算是，每桶回收桶的年平均收入將在 2022 年翻一番，然後在 2023 年再成長約 50%。

Assuming my math is accurate enough, could you break down those steps up in revenue intensity by key driver contribution? And then do you expect that uptrend to continue into 2025?

假設我的數學夠準確，您能否按關鍵驅動因素的貢獻來細分收入強度的這些步驟？那麼您預計這種上升趨勢會持續到 2025 年嗎？

Yeah. It's certainly an interesting way to look at it, Tom. We have seen a very rapid pace of growth from a top-line standpoint and a volumetric standpoint across both the recycling and the disposal side of the business.

是的。湯姆，這確實是一種有趣的看法。從收入角度和業務量角度來看，我們看到了回收和處理業務的快速成長。

From a disposal standpoint, we've obviously been adding to that part of the business through acquisition this year, whereas on the recycling side, it's been adding more through organic project development. So we're adding from kind of both parts of the strategic channels there.

從處置的角度來看，我們今年顯然透過收購增加了這部分業務，而在回收方面，它透過有機專案開發增加了更多業務。因此，我們正在從戰略管道的兩個部分進行添加。

From an actual recycling rate of growth, we saw a substantial growth in excess of 250 million barrels recycled in 2023, and we think that, that's going to continue to pick up a rapid pace of growth similar to some of the things you were talking about, Tom. I think that looking forward, the contracts that we just announced are really recycling-based facilities bill out.

從實際回收成長率來看，我們看到 2023 年回收量大幅成長超過 2.5 億桶，我們認為，這將繼續加快成長速度，類似於您所談論的一些事情，湯姆。我認為展望未來，我們剛剛宣布的合約確實是基於回收設施的帳單。

So we should see the pace of growth in recycling be the majority of the driver into 2025. Whereas this year, that split, last year was more recycling weighted this year is probably going to be more disposal weighted with the acquisitions and the continued utilization of those assets as we network them into the system. So I think you're probably going to have an inversion of that growth this year, reverting back to being a recycling heavy-weighted growth next year.

因此，我們應該看到回收的成長速度將成為 2025 年的主要動力。而今年，去年的拆分，回收權重更大，今年可能會更多地考慮處置權重，因為我們將這些資產聯網到系統中，收購和持續利用這些資產。因此，我認為今年的成長可能會逆轉，明年將恢復到回收重磅成長。

Maybe, Tom, just to put a finer point on it, what Chris said, from a disposal capacity, the acquisitions we made have given us about a 30% uplift in our available capacity. And on the recycling, the announcements we just had in the script and earnings that's going to expand our fixed facilities, which I think is what you referenced capacity by 20%. So from today to really first quarter, kind of mid-late first quarter of next year, we should have a 20% uplift in our fixed facility capacity for recycling.

湯姆，也許只是為了更清楚地說明這一點，克里斯說，從處置能力來看，我們進行的收購使我們的可用能力提高了約 30%。關於回收，我們剛剛在劇本和收益中宣布將擴大我們的固定設施，我認為這就是您提到的產能提高 20% 的情況。因此，從今天到第一季度，即明年第一季中後期，我們的固定設施回收能力應該會提高 20%。

And that's obviously on a capacity basis. But we've got, obviously, an ability to pull through increased utilization of the existing asset base that provides us quite a bit of opportunity to grow at a rate comparable or higher than.

這顯然是基於容量的。但顯然，我們有能力提高現有資產基礎的利用率，這為我們提供了相當多的機會以可比或更高的速度成長。

And that's really where the interconnections come into play in the system expansion. That's the importance of those two.

這正是互連在系統擴展中發揮作用的地方。這就是這兩個人的重要性。

Got it. I was more trying to dig into sort of disaggregating by anchor tenant ramp then scaling up the facility further by tying in additional customers and then maybe pushing pricing as improved yourself and your market reputations expanded. But I could get into that more with you in a follow-up call.

知道了。我更嘗試根據主力租戶坡道進行分類，然後透過吸引更多客戶來進一步擴大設施規模，然後隨著您自己的改善和市場聲譽的擴大，可能會推動定價。但我可以在後續電話中與您詳細討論這一點。

Just, Michael, regarding the water infrastructure division's organic opportunity set, for the Permian projects that we're most optimistic about winning, can you give us an idea what the rough split is between the midland and Northern Delaware? And then what percentage of those high probability awards?

只是，邁克爾，關於水基礎設施部門的有機機會集，對於我們最有希望贏得的二疊紀項目，您能否告訴我們特拉華州中部和北部之間的粗略劃分是什麼？那麼那些高機率獲獎的比例是多少呢？

Again, the ones you're most confident about getting across the finish line here over the second half, how many of those include fixed recycling capacity, whether it's a brownfield expansion or new build construction?

再說一遍，您最有信心在下半年衝過終點線，其中有多少包括固定回收能力，無論是棕地擴建還是新建建築？

Sure. So we've got a diverse footprint, Tom, as you know, and are really excited about that. I think John mentioned that the operational and geographic diversity is one of our strengths and differentiators and he's exactly right. I mean we've got -- we've executed business development opportunities in five basins; we've had strategic M&A in six.

當然。湯姆，正如你所知，我們的足跡非常多元化，對此我們感到非常興奮。我認為約翰提到營運和地理多樣性是我們的優勢和差異化因素之一，他是完全正確的。我的意思是，我們已經在五個盆地執行了業務發展機會；我們已經進行了六次策略併購。

So we're really focused everywhere, but the Northern Delaware is where we're primarily focused. It's where we announced these two deals. It's where the majority of our high-confidence business development opportunity set lies. Most of that is around the water recycling. And that's just -- that's where the market is trending.

因此，我們確實關注各地，但特拉華州北部是我們主要關注的地方。我們就是在這裡宣布這兩筆交易的。這是我們大部分高度自信的業務發展機會。其中大部分是圍繞著水循環利用。這就是市場的趨勢。

We're the market leader in water recycling. We have kind of a first-mover advantage. But frankly, it's become a core competency of ours.

我們是水回收領域的市場領導者。我們有一定的先發優勢。但坦白說，它已經成為我們的核心競爭力。

And so it's a real strength, and it's something that we're looking to advance and capitalize on. And that's why you're seeing the increase in CapEx. That's why you're seeing the increase in contracts, and that's where I suspect we will continue to execute over the back half of this year.

因此，這是一種真正的優勢，也是我們尋求提升和利用的優勢。這就是您看到資本支出增加的原因。這就是為什麼你會看到合約增加，這就是我懷疑我們將在今年下半年繼續執行的地方。

Hey, Tom, this is John. One thing to add about the upper Delaware, to Michael's point, I mean, two counties in New Mexico. It's really developing as it relates to coming off freshwater and getting on produced recycled water.

嘿，湯姆，這是約翰。就邁克爾的觀點而言，關於上特拉華州需要補充的一件事是，我的意思是新墨西哥州的兩個縣。它確實在發展，因為它涉及淡水和生產的循環水。

It's really developing in water exchange. It's heavily weighted to needing the solutions that Select has. So it demands really the capital and the solutions for this acreage to be developed and developed correctly. So we feel really strong about our position in the Northern Delaware.

它確實在水交換方面得到發展。它非常需要 Select 擁有的解決方案。因此，它確實需要資金和解決方案來正確開發和開發該地區。因此，我們對自己在北特拉華州的地位感到非常堅定。

Got it. And then last one for me. I would love to hear all three of you weigh in on this. But on the solids management front, how would you describe Select's strategy at this point and the full scope of what you seek to do commercially in advancing wastewater treatment and cleanup toward or ever closer to economically viable, beneficial reuse?

知道了。然後是我的最後一張。我很想聽聽你們三個對此的看法。但在固體管理方面，您如何描述 Select 目前的策略，以及您在推動廢水處理和清理以實現或更接近經濟上可行的有益再利用方面尋求商業化的全部範圍？

Specifically for solids management, do you plan to stick with just separation and disposal for now? Or do you already intend to expand into extracting and monetizing valuable mineral deposits like lithium, cambium, and bromine?

特別是對於固體管理，您目前是否打算堅持僅進行分離和處置？或者您已經打算擴展到開採鋰、形成層和溴等有價值的礦藏並將其貨幣化？

Tom, this is Michael. I'll take a shot. I think that's probably a three- or four-part question. So you'll have to bear with me as I wade through it. So starting with solid management, I mean, from an operational and financial perspective, it really fits nicely with water infrastructure.

湯姆，這是麥可。我會射擊。我認為這可能是一個由三部分或四部分組成的問題。所以當我艱難地經歷它時，你必須忍受我。因此，從紮實的管理開始，我的意思是，從營運和財務的角度來看，它確實非常適合水利基礎設施。

The financial profile, the returns, the operations, the employee intensity all matches very well. It allows us to manage the total waste stream, and we're excited to be able to provide that total solution for our customer.

財務狀況、回報、營運、員工強度都非常吻合。它使我們能夠管理整個廢物流，我們很高興能夠為我們的客戶提供整體解決方案。

It leverages the existing water infrastructure footprint. So we're really pleased with what we've acquired so far. And I think we would look to kind of strategically expand that if the right opportunity were to arise.

它利用現有的水基礎設施足跡。因此，我們對迄今為止所取得的成果感到非常滿意。我認為，如果出現合適的機會，我們會尋求策略性擴展。

Beneficial reuse, we really think of as separate from solid management. There's certainly a component of it. We have a very strong team focused on it. We're partnered with a very large operator in a joint development agreement.

我們確實認為有益的重複使用與可靠的管理是分開的。肯定有它的一個組成部分。我們有一支非常強大的團隊專注於此。我們與一家非常大的營運商簽訂了聯合開發協議。

We had a successful field trial earlier this year and are gearing up for another one, another trial in the back half of this year. So it's something we've invested real time and money in the last couple of years and are continuing to do so.

我們今年稍早進行了一次成功的現場試驗，並正在為今年下半年的另一次試驗做準備。因此，我們在過去幾年中投入了實際時間和金錢，並將繼續這樣做。

Our primary focus on that is really taking cost out of the system. The challenge there is not the technical feasibility, but more the economic effectiveness. And so we're focused on reducing both CapEx and OpEx in that system, obviously while still developing reliable and adaptable systems to the changing water qualities.

我們的主要關注點是真正降低系統成本。那裡的挑戰不是技術可行性，而是經濟效益。因此，我們專注於減少該系統的資本支出和營運支出，同時仍開發可靠且適應性強的系統來適應不斷變化的水質。

So that's not something that we've talked a lot about, but it is something we're going to continue to work on. And we do think the market is heading in that direction, and we're going to be ready for it.

所以這不是我們談論很多的事情，但這是我們將繼續努力的事情。我們確實認為市場正在朝這個方向發展，我們將為此做好準備。

The last part, at least the one that I recall, was around mineral extraction. That's again, something that we're paying attention to. We know that there are several different elements that exist in produced water that do have economic viability. We've measured it across our extensive footprint and are working and engaged with companies to see what that would look like in terms of extracting it, who would do what, what the economics would be.

最後一部分，至少我記得是關於礦物開採的。這又是我們正在關注的事情。我們知道採出水中存在著幾種確實具有經濟可行性的不同元素。我們已經在廣泛的足跡中對其進行了衡量，並正在與公司合作和接觸，看看提取它會是什麼樣子，誰會做什麼，經濟效益會怎樣。

But that's still similar to beneficial reuse in the earlier stages of becoming a true economic solution. But it's something that we're obviously aware of, we're evaluating, and seeing what role we would play.

但這仍然類似於成為真正經濟解決方案的早期階段的有益再利用。但我們顯然已經意識到這一點，我們正在評估，並看看我們將扮演什麼角色。

And maybe a couple of things I'd add to it, Tom, to Michael's point around the cost management side of beneficial reuse and your point around solids. One of the things that you ultimately have come to bear when you're treating water to a beneficial reuse level of quality is you generally have a freshwater quality on one side and a heavy concentrated brine on the other side as well as solids that have to be managed.

湯姆，也許我想補充一些內容，以補充邁克爾關於有益再利用的成本管理方面的觀點以及你關於固體的觀點。當您將水處理到有益的再利用質量水平時，您最終要承受的事情之一是，通常一側是淡水質量，另一側是濃鹽水以及必須去除的固體。

So it provides a kind of more vertically integrated cost management approach if we have that solids piece as an integrated part of a solution. And then that concentrated brine that you get on the backside also provides more optionality around looking at that mineral extraction as a part of that system that's already necessary for that water treatment to get to a beneficial treatment quality.

因此，如果我們將這個實體部分作為解決方案的整合部分，它就提供了一種更垂直整合的成本管理方法。然後，您在背面獲得的濃縮鹽水還提供了更多選擇，可以將礦物提取視為該系統的一部分，這對於水處理達到有益的處理品質來說已經是必需的。

So it does provide kind of a full opportunity set as you go across the different applications of how you might approach this. And so we're certainly looking at that on an integrated basis as well as analyzing the various technologies and the various geographic discrepancies between what those water qualities look like and the demand for both the waste stream management as well as the extraction.

因此，當您了解如何處理此問題的不同應用程式時，它確實提供了一個完整的機會集。因此，我們當然會綜合考慮這一點，並分析各種技術以及水質狀況與廢物流管理和提取需求之間的各種地理差異。

Got it. Thank you for all the very thoughtful answers.

知道了。感謝您提供的所有非常周到的答案。

Bobby Brooks, Northland Capital Markets.

布魯克斯 (Bobby Brooks)，北國資本市場。

Hey, good morning, guys. Thank you for taking my question. First one that I've got is just could you help quantify how much of a revenue headwind were the divestments and consolidations of noncore assets within water services? The segment was up slightly sequentially above the low single-digit decline guide that you guys have given.

嘿，早上好，夥計們。感謝您回答我的問題。我要問的第一個問題是，您能否幫助量化供水服務領域非核心資產的剝離和整合對收入造成的不利影響有多大？該細分市場的漲幅略高於你們給出的低個位數下降指引。

So just looking for a little bit more color on what drove the strength. And are those factors causing the strength in the second quarter expected to dissipate in the third quarter given the mid- to high single-digit decline or maybe that decline is more a factor of divestments that you are looking to execute? Just looking for color on that.

所以只是尋找更多關於推動力量的因素的色彩。鑑於中高個位數的下降，導致第二季度強勁勢頭的因素是否會在第三季度消散，或者這種下降更多是您希望執行的撤資的因素？只是在尋找顏色。

Yes. Good question, Bobby. So if you think about the -- obviously, we, I think, outperformed what we thought we'd be able to do in the second quarter. And that was largely on the back of the pull forward of some water sourcing opportunities that we were able to get with our kind of key infrastructure contracts and customers.

是的。好問題，鮑比。因此，如果你考慮一下 - 顯然，我認為我們的表現超出了我們在第二季度的預期。這很大程度上是由於我們透過關鍵基礎設施合約和客戶獲得了一些水資源採購機會。

So we were able to do that in both the Delaware side of things as well as up in North Dakota with the customer off that Thompson system to meet their completions demand in the near term as we get those projects continue to build out over the next couple of quarters.

因此，我們能夠在特拉華州以及北達科他州做到這一點，讓客戶脫離湯普森系統，以滿足他們在短期內的竣工需求，因為我們讓這些項目在接下來的幾個時間裡繼續建造宿舍。

So that was the substantial driver of what got us to growth to counteract what continues to be some active consolidation efforts, as we've kind of mentioned, primarily around the more commoditized application of fluid hauling. Everything that we can do to get a piece of water onto pipe is obviously a high-margin benefit to the company. And so there's definitely an application of approach towards continuing to focus on getting volumes off a truck and on the pipe over time, and you'll continue to see that as we build out the systems.

因此，正如我們所提到的，這是推動我們成長的重要動力，以抵消一些積極的整合努力，主要是圍繞著更商品化的流體運輸應用。我們所能做的一切將水輸送到管道上顯然會為公司帶來高利潤。因此，隨著時間的推移，肯定會應用一種方法來繼續專注於從卡車和管道上獲取流量，當我們建立系統時，您將繼續看到這一點。

But year to date, if you look at the last six months, really the kind of entire majority of the volume or the revenue dollars we've seen come off the segment from a water services standpoint year to date, relative to Q4, are out of that fluids hauling segment. So we've seen quite a bit of stability in other parts of services, particularly around our water transfer and logistics business that's pretty core to supporting the overall efforts around infrastructure.

但今年迄今為止，如果你看看過去六個月，從供水服務的角度來看，相對於第四季度，我們所看到的該細分市場的大部分數量或收入確實已經消失了該流體運輸部分。因此，我們在服務的其他部分看到了相當大的穩定性，特別是在我們的輸水和物流業務方面，這是支援基礎設施整體工作的核心。

And so we'll continue to focus on what that might look like over the back half of the year here. But overall, the decisions we're making should ultimately be margin accretive to the segment over time. And I think that they're beneficial to the overall strategic efforts of getting that volume put on pipe over time and into our infrastructure networks.

因此，我們將繼續關註今年下半年的情況。但總的來說，隨著時間的推移，我們所做的決定最終應該會增加該部門的利潤。我認為它們有利於整體戰略努力，即隨著時間的推移將這些數量投入管道並進入我們的基礎設施網路。

Got it. Appreciate that color. Then switching to water infrastructure, a nice 8% sequential revenue growth there. You guys have talked about -- you mentioned increased utilization, but in terms of a driving factor there.

知道了。欣賞那個顏色。然後轉向水利基礎設施，收入環比增長了 8%。你們談到了利用率的提高，但就驅動因素而言。

But you guys also had a couple of acquisitions, right, that would have contributed there. So I was just looking to get a sense on how much of that growth was through organic development or increased utilization of legacy assets versus inorganic acquisitions growth there.

但你們也進行了幾項收購，對吧，這會對那裡有所貢獻。因此，我只是想了解一下，與無機收購成長相比，這種成長有多少是透過有機發展或提高遺留資產利用率來實現的。

Yeah. For the second quarter, the gross profit gains in infrastructure was about a 50-50 split contribution from additional acquisitions and contribution from organic growth and enhanced utilization of the existing asset base. On a year-to-date basis, taking the first quarter into account, it's certainly going to have a higher weighting towards acquisition, probably more of a 75-25 split on a year-to-date basis.

是的。第二季度，基礎設施領域的毛利成長大約是來自額外收購的 50-50 貢獻，以及來自有機成長和現有資產基礎利用率提高的貢獻。從年初至今的角度來看，考慮到第一季度，收購的權重肯定會更高，從年初至今的比例來看，收購比例可能會更高，為 75-25。

But I would say that even though the back half of the year will continue to be focused around the organic project buildout. There's still quite a bit of utilization enhancement we can get out of the acquired assets. There's a little bit of effort and undertaking to get those networked into the system. And as we get those networked, it's going to give us quite a bit of opportunity to enhance the utilization of those acquired assets.

但我想說，儘管今年下半年將繼續關注有機項目建設。我們仍然可以從收購的資產中獲得相當多的利用率提高。需要付出一些努力和承諾才能將這些網路連接到系統中。當我們將這些網路連接起來時，這將為我們提供相當多的機會來提高這些收購資產的利用率。

That's really the strategic reason for a number of these deals. And so I think looking forward, we'll be able to drive utilization improvement across the business. But that will be both on the existing assets as well as the recently acquired assets beyond what we've been able to see on a day one or quarter-forward basis from the recent deals.

這確實是許多此類交易的戰略原因。因此，我認為展望未來，我們將能夠推動整個企業的利用率提高。但這既涉及現有資產，也涉及最近收購的資產，超出了我們從最近的交易中第一天或未來一個季度所能看到的範圍。

Got it. And when you're saying the split, you're comparatively -- I mean, year to date, are you comparing that to first half 2023, comparatively, right?

知道了。當你說分裂時，你正在比較——我的意思是，今年迄今為止，你是否將其與 2023 年上半年進行比較，對嗎？

Good question. I was comparing that sequentially coming off of Q4. So picking up the first acquisitions in the early part of January in 2024.And that relative split was on a sequential basis looking at Q4 of 2023 forward into Q1 and the first half of the year on a consolidated basis.

好問題。我正在比較第四季的順序。因此，我們在 2024 年 1 月初進行了第一批收購。

Got it. Thanks for that clarification. And just last question for me is on the PR, you mentioned how the Northern Delaware system expansion will effectively triple the capacity of your current system there.

知道了。感謝您的澄清。我的最後一個問題是關於公關的，您提到北特拉華州的系統擴展將如何有效地將您當前系統的容量增加三倍。

So my question is, is all of that added capacity already dedicated to certain long-term production agreements? And essentially, when that's up and running in the first quarter of 2025, its utilization is going to already be at 100%?

所以我的問題是，所有增加的產能是否都已專門用於某些長期生產協議？本質上，當它在 2025 年第一季啟動並運行時，其利用率將已經達到 100%？

And if that is so, all that is all the added capacity that will be -- I'm sorry. And if that's so, where all the added capacity is going to be utilized once it's up and riding? Does the tripling in capacity essentially translate to a tripling in terms of financial impact?

如果是這樣的話，那麼這就是所有增加的容量——我很抱歉。如果是這樣的話，一旦它啟動並運行，所有增加的容量將被利用在哪裡？容量增加兩倍是否實質上意味著財務影響增加兩倍？

Bobby, this is Michael to talk about the operational side of it. So all of that capacity is not dedicated to a single operator. So when we underwrite these projects, we underwrite somewhere between a third and really probably closer to half of the capacity by the cornerstone customer. And they're going to have kind of the right of first refusal on the asset.

鮑比，我是邁克爾，要談談它的營運方面。因此，所有這些容量都不是專用於單一操作員的。因此，當我們承保這些項目時，我們會承保基石客戶容量的三分之一甚至接近一半。他們將對資產擁有某種優先購買權。

But then we work to commercialize it, the remaining portion. And so we do expect the anchor tenant to come online in Q1 and really ramp up in Q2 as we work through some of the kind of early inefficiencies of building a system. But we do expect to have additional excess capacity and meaningful excess capacity on the system that we would commercialize with offset operators in the area.

但隨後我們會努力將剩餘部分商業化。因此，我們確實預計主力租戶將在第一季上線，並在第二季真正增加，因為我們正在解決建造系統的一些早期低效問題。但我們確實希望系統上有額外的過剩產能和有意義的過剩產能，我們將與該地區的補償運營商將其商業化。

And Bobby, one of the -- I mean, the clear strategic benefits and value adds to the customer of getting these recycling facilities up and running is it provides effectively a disposal off ramp for the produced water that they need to manage and get rid of.

鮑比，我的意思是，啟動和運行這些回收設施給客戶帶來的明顯戰略利益和價值增加是，它為他們需要管理和處理的產出水提供了有效的處理出口坡道。

But it also provides an opportunity to match and manage water in the marketplace to the completion demand across multiple operators. So it really is a water balancing effort to bring in multiple operators into those assets so that you have a steady pace of production coming into the system from multiple operators.

但它也提供了一個機會，可以根據多個運營商的完井需求來匹配和管理市場上的水。因此，將多個操作員引入這些資產實際上是一項水平衡工作，以便多個操作員將穩定的生產節奏引入系統。

And then that provides optionality to redeploy that treated barrel back towards new development across multiple operators as well. And the more you can add that flexibility with additional operators, it creates a more effective balanced network overall.

然後，這也提供了將經過處理的桶重新部署回多個運營商的新開發的選項。您可以透過更多電信商來增加靈活性，從而創建一個更有效的平衡網路。

Got it. That's a very virtuous cycle. I appreciate the time. Congrats on the good quarter, and I'll return back to queue.

知道了。這是一個非常良性的循環。我很感激時間。恭喜這個季度的好成績，我會回到隊列。

Thanks, Bobby.

謝謝，鮑比。

Thank you, Bobby.

謝謝你，鮑比。

(Operator Instructions) John Daniel, Daniel Energy Partners.

（操作員說明）John Daniel，Daniel Energy Partners。

Hey, guys. Thank you for keeping this call going. And I'm going to apologize in advance for my water 101 questions. But when you look at the expansion you've got in the Northern Delaware, to the dedication of 81,000 acres and then the right of first refusal for 162,000 extra, do you have, at this point, visibility into the customers' activity levels for 2025?

嘿，夥計們。感謝您讓本次通話繼續進行。我要提前為我的水 101 問題道歉。但是，當您查看特拉華州北部的擴張計劃，請投入 81,000 英畝土地，然後獲得額外 162,000 英畝土地的優先購買權時，此時您是否了解 2025 年客戶的活動水平？

And if you do, is it -- are they simply moving assets, rigs and so forth from one area to the other? Or is it incremental gains if you were to exercise that 162,000?

如果你這樣做了，他們只是將資產、鑽井平台等從一個地區轉移到另一個地區嗎？或者如果你要鍛鍊這 162,000 次，這會是增量收益嗎？

So when we enter an agreement like this, John, we partner with the operator. We need to understand their long-term development plan as well as kind of their near-term needs to make sure that we're sizing the system correctly, we're building it out to where they need it built out first. And so we're really partnered with the operators.

所以當我們簽訂這樣的協議時，約翰，我們與營運商合作。我們需要了解他們的長期發展計劃以及他們的近期需求，以確保我們正確調整系統規模，我們將其建置到他們首先需要建造的地方。所以我們確實與營運商合作。

So we do get regular schedules, drilling schedules. Obviously, they change, and we're working to accommodate those changes. But this is a long-term planning with our customer. And so we know what they're doing in 2025 and beyond.

所以我們確實有定期的時間表、鑽井時間表。顯然，它們發生了變化，我們正在努力適應這些變化。但這是與我們客戶的長期規劃。所以我們知道他們在 2025 年及以後會做什麼。

Yeah. It's a material change to the relationship and a partnership approach there, John. And as it relates to the active acreage dedicated as well as the opportunity and the look towards the ROFR acreage, those are active ongoing dialogues that are underway.

是的。約翰，這是雙方關係和合作方式的重大改變。由於它涉及專用的活躍區域以及 ROFR 面積的機會和前景，因此這些都是正在進行的積極對話。

So it's really around how do we meet the needs of their current schedules, and what they have visibility into over the visible period of 12, 24 months? And then how do we think about what that translates into around the larger acreage footprint as they also potentially add acreage from their own acquisition opportunities in the future as well.

所以這實際上是關於我們如何滿足他們當前日程安排的需求，以及他們在 12 個月、24 個月的可見期間內能看到什麼？然後我們如何考慮這會轉化為更大的種植面積足跡，因為他們也有可能在未來透過自己的收購機會增加種植面積。

And we see the ROFR is important because it really -- once you have the system, just expanding it a little bit here or there is a natural solution for both us and the operator. Again, speaking to the importance of balancing long and short within the operator, but for other operators as well, as Chris mentioned.

我們認為 ROFR 很重要，因為它確實 - 一旦您擁有該系統，只需在這裡稍微擴展它，或者對我們和運營商來說都有一個自然的解決方案。正如克里斯所提到的，再次談到平衡運營商內部多頭和空頭的重要性，但對於其他運營商也是如此。

And so we're really looking to see how that -- our customers' needs expand and grow within the dedicated interest, but within the larger ROFR period as well so that we can expand our system to take care of those customers and offset operators there as well.

因此，我們真的很想看看我們的客戶需求如何在專門利益範圍內擴大和增長，但也在更大的 ROFR 期內，以便我們可以擴展我們的系統來照顧這些客戶並抵消那裡的運營商以及。

And John, John mentioned it earlier as well. But I mean, frankly, these solutions are becoming critical to the customer's ability to even develop the acreage they have in some of these areas, particularly in northern New Mexico.

約翰，約翰之前也提到過。但坦白說，這些解決方案對於客戶開發其在其中一些地區（尤其是新墨西哥州北部）的土地的能力變得至關重要。

So I think that it's changed the way that they approach water. It's changed the way that we partner with them around water, and it changes the way they evaluate opportunities to grow further on their own side. So we definitely are focused on how we match those solutions to their needs and what they see as their opportunity.

所以我認為這改變了他們接觸水的方式。它改變了我們與他們在水資源方面的合作方式，也改變了他們評估自身進一步發展機會的方式。因此，我們絕對關注如何將這些解決方案與他們的需求以及他們認為的機會相匹配。

John, when I think about it, when we say dedicated, we got to know where they're going to drill, how many they're going to drill, what time they're going to do that, and we are full contact in conversations planning with them as we get that dedicated position, as we invest that money that we wrap around that three-year cash-on-cash or 50% plus gross margin.

約翰，當我想到這一點時，當我們說專注時，我們必須知道他們將在哪裡進行鑽探，他們將進行多少次鑽探，他們將在什麼時間進行鑽探，並且我們在當我們獲得專門職位時，當我們投資三年期現金現金或50% 以上的毛利率時，與他們進行對話計劃。

But that ROFR stuff, that is really holding hands to make sure that we can plan the system out in the future to bring that value to them and to make sure that we can move that water properly and we don't duplicate the asset base that's already been put in place because of poor planning.

但是 ROFR 的東西，確實是牽手確保我們可以在未來規劃系統，為他們帶來價值，並確保我們可以正確地轉移水，並且我們不會重複現有的資產基礎由於規劃不善，已經到位。

Okay. And then just a few more, and if you want to hang up on me, that's cool. But when you talk about constructing the multiple recycling facilities and the upgrades, is that for the 81,000 acres? Or is that for the 81,000 plus the 162,000?

好的。然後再聊幾句，如果你想掛斷我的電話，那也沒關係。但是，當您談論建造多個回收設施並進行升級時，這是為了 81,000 英畝的土地嗎？還是 81,000 加上 162,000？

That would just be for the 81,000, John. So the ROFR acreage will be incremental and well beyond that. So that's additional long-term development potential for us.

約翰，那隻是針對 81,000 人的。因此，ROFR 面積將會不斷增加，並遠遠超出這個範圍。這對我們來說是額外的長期發展潛力。

Got it. Okay. Turning to the acquisitions, I recognize not all SWD facilities are created equally. But when you look at the -- compare sort of the northeast where you get one active well and one uncompleted one, and you essentially buy that for $9 million, and you compare that to, say, the Trinity deal where you got 22 SWDs and a lot of other stuff.

知道了。好的。談到收購事宜，我承認並非所有社署設施的創建都是平等的。但是，當你看看東北部的情況時，你會得到一口活躍井和一口未完工的井，你基本上以900 萬美元的價格購買它，然後你將其與Trinity 交易進行比較，其中你獲得了22 個SWD，還有很多其他的東西。

Is there -- I assume there's differences in volumes, the capacity per well. Or is this perhaps suggestive that just the Northeast market is structurally better than the Permian?

是否存在—我認為體積、每口井的容量有差異。或者這暗示東北市場在結構上優於二疊紀？

I wouldn't say that it's better than the Permian, John. It's just different. The disposal wells in the northeast are considerably smaller than the ones in the Permian. So you can have a 15,000, 20,000, 25,000 barrels a day disposal well in the Permian. You don't have anything like that in the Northeast. You're going to have 3,000 or 5,000 barrels a day well, and that might be a good well.

我不會說它比二疊紀好，約翰。只是不同而已。東北部的處理井比二疊紀的處理井小得多。因此，您可以在二疊紀擁有一個每天處理 15,000、20,000、25,000 桶石油的處理井。東北沒有這樣的東西。你每天會有 3,000 或 5,000 桶油井，這可能是一口好井。

The pricing is materially different in the northeast and the Permian. I mean those are probably two of the most extreme markets that we participate in, and it gets back to the volume of the well. So they're just fundamentally different markets.

東北部和二疊紀地區的定價有很大不同。我的意思是，這可能是我們參與的兩個最極端的市場，這又回到了油井的體積。所以它們只是根本不同的市場。

You can compare disposal wells within a basin of similar depth. It's much more challenging to compare disposal wells in different basins, particularly if they have different depths. What I would say that is consistent, though, is how we've made the acquisitions, whether it's the Northeast or East Texas or the Permian.

您可以比較類似深度的盆地內的處理井。比較不同盆地的處置井更具挑戰性，特別是當它們具有不同的深度時。不過，我想說的是，我們進行收購的方式是一致的，無論是東北部、德州東部或二疊紀盆地。

We're pretty consistent in our valuation. We're going to make sure that it is accretive on a historic and go-forward basis. And that's really the case, whether it's a $9 million acquisition or a $22 million acquisition.

我們的估值非常一致。我們將確保它在歷史和未來的基礎上不斷增值。事實確實如此，無論是 900 萬美元的收購還是 2,200 萬美元的收購。

Okay. That's all for me. Yes, John?

好的。這就是我的全部。是的，約翰？

John, when you're buying disposal wells, this company is a little bit different in some respect because if you think about it, we got three different ways of looking at it. One, just needed volume in a certain area. They need to be able to dispose water that they're creating as they complete these wells in certain areas.

約翰，當你購買處置井時，這家公司在某些方面有點不同，因為如果你仔細想想，我們有三種不同的看待它的方式。第一，某個區域只需要體積。他們需要能夠處理在某些地區完成這些井時產生的水。

But then we have pretty large pipe systems now that gather water and take it to a place that you can dispose of it in higher volumes or at a lower cost to bring value to that customer, get it off a truck, get it on pipe, and actually save money disposing of it. But what we've realized and probably this is developed under our nose is that we also now have these systems that are really water exchange systems.

但是，我們現在擁有相當大的管道系統，可以收集水並將其運送到可以大量或以較低成本處理的地方，從而為客戶帶來價值，將其從卡車上取下，將其連接到管道上，並且實際上可以節省處理它的錢。但我們已經意識到，這可能是在我們眼皮底下開發的，我們現在也擁有這些真正的水交換系統。

You dispose -- you have a capacity of disposal that these wells fit into that are needed sometimes, but not all times because sometimes that piece of water is getting recycled, and it's a needed recycled barrel for completion. So it becomes a water exchange system of water balancing. And these assets fit into those equations in all three ways.

你處置——你有這些井所適合的處置能力，有時需要，但不是所有時候都需要，因為有時那塊水會被回收，並且它是一個完成所需的回收桶。這樣就成為一個水平衡的水交換系統。這些資產以所有三種方式符合這些方程式。

Got it. Okay. Well, congrats. Thanks for letting me join the call, and congrats on hitting the 50% margin threshold.

知道了。好的。好吧，恭喜。感謝您讓我加入電話會議，並祝賀您達到 50% 的保證金門檻。

Thank you, this now concludes our question-and-answer session. I would now like to turn the floor back over to John Schmitz for closing remarks.

謝謝大家，我們的問答環節到此結束。現在我想請約翰‧施密茨 (John Schmitz) 致閉幕詞。

Thank you to everyone that joined our earnings call today and for your continued support and interest in learning more about Select Water Solutions. I look forward to speaking to you again next quarter.

感謝今天參加我們財報電話會議的所有人，感謝你們的持續支持以及對了解更多有關 Select Water Solutions 的興趣。我期待下個季度再次與您交談。

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines at this time. Have a wonderful day.

女士們、先生們，感謝您的參與。今天的電話會議到此結束。此時您可以斷開線路。祝你有美好的一天。