WaterBridge Resources LLC is entering into a long-term produced water management services agreement with Cog Operating LLC, a subsidiary of Concho Resources Inc. WaterBridge will also acquire Cog’s produced water assets in the southern Delaware basin, Texas, according to a Jan. 3 press release.

WaterBridge will manage all of Concho’s produced water transportation and disposal within an 800,000-acre area of mutual interest spanning portions of Reeves, Pecos and Ward counties. Assets acquired from Concho include three disposal wells with a capacity of 45,000 barrels per day (bpd) and around 44 miles of pipeline.

The acquisition and agreement are part of a broader plan by WaterBridge to expand their water management activities in the southern Delaware basin. The company installed 10 water disposal facilities and 121 miles of pipeline in the area in 2018 and previously signed agreements to acquire water disposal assets from Halcón and NGL Energy Partners. WaterBridge currently oversees 1.2 million bpd of produced water disposal capacity in the southern Delaware basin.

The Delaware basin comprises the southwestern portion of the Permian Basin, the largest petroleum-producing basin in the United States, located in west Texas. Produced water, a byproduct of oil and gas exploration and production, often contains heavy metals and must undergo treatment before disposal or recycling.

Spending on water management in the Permian Basin is expected to nearly double to $22 billion by 2023 according to data from IHS Markit. Bloomberg reported in August 2018 that the rise of new rigs and rapidly filling disposal facilities — which will force producers to move wastewater further from their wells — will likely drive the increased spending.