WaterBridge: Oil and Water - [Business Breakdowns, EP.228] | Business Breakdowns

In this episode of Business Breakdowns, Matt Reustle interviews James Davolos from Horizon Kinetics about Waterbridge, a water infrastructure company in Texas focused on disposing of waste byproduct from oil and gas extraction. They discuss the history of Horizon Kinetics' involvement in similar businesses like Texas Pacific Land Corporation, the unique dynamics of water production in the Permian Basin, and the importance of water disposal for oil producers. The conversation covers Waterbridge's infrastructure, contracts with E&P companies, the role of FivePoint Infrastructure, and the potential for future growth and M&A in the water infrastructure space. They also touch on Landbridge, FivePoint's land company, and its opportunities in data centers and beneficial water reuse, concluding with a discussion on valuation and key investment lessons.

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WaterBridge: Oil and Water - [Business Breakdowns, EP.228]

Business Breakdowns

Introduction to Business Breakdowns and Waterbridge

Overview of Waterbridge and Horizon Kinetics' Investment Philosophy

Defining Investment Strategy: Land, Royalties, and Water Infrastructure

The Importance of Water Disposal in the Permian Basin

Waterbridge's Infrastructure and the Dynamics of Water Production

FivePoint Infrastructure and the People Behind Waterbridge

Separating Landbridge and Waterbridge and the Landbridge IPO

Waterbridge's Contracts and the Increasing Difficulty of Switching Providers

Potential for M&A and the Escalating Importance of Water Management

Maintenance Costs, Sour Gas Opportunities, and Valuation Approaches

Key Variables, Lessons Learned, and Concluding Remarks

WaterBridge: Oil and Water - [Business Breakdowns, EP.228]

Business Breakdowns

00:03Introduction to Business Breakdowns and Waterbridge

Introduction to Business Breakdowns and Waterbridge

02:12Overview of Waterbridge and Horizon Kinetics' Investment Philosophy

Overview of Waterbridge and Horizon Kinetics' Investment Philosophy

06:20Defining Investment Strategy: Land, Royalties, and Water Infrastructure

Defining Investment Strategy: Land, Royalties, and Water Infrastructure

10:35The Importance of Water Disposal in the Permian Basin

The Importance of Water Disposal in the Permian Basin

17:26Waterbridge's Infrastructure and the Dynamics of Water Production

Waterbridge's Infrastructure and the Dynamics of Water Production

25:25FivePoint Infrastructure and the People Behind Waterbridge

FivePoint Infrastructure and the People Behind Waterbridge

31:10Separating Landbridge and Waterbridge and the Landbridge IPO

Separating Landbridge and Waterbridge and the Landbridge IPO

37:11Waterbridge's Contracts and the Increasing Difficulty of Switching Providers

Waterbridge's Contracts and the Increasing Difficulty of Switching Providers

45:45Potential for M&A and the Escalating Importance of Water Management

Potential for M&A and the Escalating Importance of Water Management

52:30Maintenance Costs, Sour Gas Opportunities, and Valuation Approaches

Maintenance Costs, Sour Gas Opportunities, and Valuation Approaches

1:01:01Key Variables, Lessons Learned, and Concluding Remarks

Key Variables, Lessons Learned, and Concluding Remarks