Sergio Chapa | Houston Chronicle | August 7, 2019

Fort Worth oilfield services company Basic Energy Services is launching a new subsidiary that will focus on moving and disposing of oilfield wastewater in the Permian Basin and other shale plays.

During a Thursday morning investors call, Basic Energy Services CEO Thomas Monroe Patterson announced the upcoming launch of the company's new subsidiary Agua Libre Midstream.

Basic Energy Services has three divisions: completions, well services and water services. Agua Libre, will receive all the assets of the company's water services division ranging from 86 saltwater disposal wells to oilfield wastewater pipelines.

Agua Libre's official debut is expected to take place at the end of August. The company's initial capital investment will take place in the busy Permian Basin where Basic has 33 saltwater disposal well and some oilfield wastewater pipeline capacity.

With higher volumes of oilfield wastewater being moved around the Permian Basin and other shale plays, Patterson said a growing number of disposal companies are using pipelines in favor of tanker trucks to move the wastewater.

"The goal is to best utilize our large network of saltwater disposal wells to support the rapidly increasing water volumes in the oil field today," Patterson said during the investors call.

The decision to create Agua Libre is already getting nods of approval from the investment community.

James West, an analyst with the investment firm Evercore ISI, wrote that Basic moved 10 million barrels of oilfield wastewater via pipeline during second quarter -- roughly one-third of the company's total volume.

"The transition from fluid service trucks to pipelines has benefited Basic's margins and reduced lease costs as the number of active fluid trucks has decreased," West wrote in an investors note.