Select Water Solutions Inc. (WTTR) reported record quarterly EBITDA of $93 million and trailing twelve-month EBITDA of $253 million as the company accelerates its shift from legacy call-out services to higher-margin water infrastructure projects.
The Permian Basin operator, which manages 1.5 million barrels of produced water daily, outlined plans to deploy $200 million to $250 million in capital expenditures across Eddy and Lea counties in New Mexico during 2026, with an additional $160 million in recently announced projects. Maintenance spending is projected at $50 million to $60 million annually. The company’s debt remains below one turn of EBITDA, with a debt-to-equity ratio of 0.28 and a current ratio of 1.58.
Select Water’s stock has surged 165% over the past year, trading near its 52-week high with a P/E ratio of 74. The company’s market capitalization stands at approximately $2.9 billion. At the EnerCom Denver conference, CEO John Schmitz highlighted the company’s transition from a model historically comprising roughly 80% call-out services to its current focus on contracted infrastructure, a shift that gained momentum post-2020.
Operational capacity includes recycling facilities handling 2.8 million barrels per day, with 1.7 million barrels in the Northern Delaware asset. The company operates 118 disposal sites and maintains 29 million barrels of storage capacity in the Upper Delaware region. Dedicated acreage spans 2.5 million acres across the U.S., including 1.5 million acres in the Upper Delaware.
Gross margins for the water infrastructure segment range from 50% to 60%, with some applications reaching 70%, compared to legacy call-out services at 22% to 23%. The company targets a companywide EBITDA margin of approximately 35%. Recycled water offers a 30% cost advantage in completion operations versus fresh water, while reducing disposal costs by a similar margin. Infrastructure projects typically target a four-year cash-on-cash payback using 50% to 60% contracted capacity initially.
Schmitz noted the company’s 2027 financial outlook has been pulled forward into 2026, and a major contract announced at the conference extends a customer relationship by 12 years. The company also highlighted a 100-year agreement with a Japanese firm operating in Oklahoma for iodine extraction over the next 50 years.
