WBI

Hello, everyone. Thank you for joining us. Welcome to the WaterBridge first quarter 2026 results. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. I will now hand the call over to Mae Herrington, Director of Investor Relations. Please go ahead.

Good morning, thank you for joining WaterBridge's first quarter 2026 earnings call. I am joined today by our Chief Executive Officer, Jason Long, our Chief Operating Officer, Michael "Chop" Reitz, and our Chief Financial Officer, Scott McNeely. Before we begin, I'd like to remind you that in this call and the related presentation, we will make forward-looking statements regarding our current beliefs, plans, and expectations, which are not guarantees of future performance and are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from results and events contemplated by such forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements. Please refer to the risk factors and other cautionary statements included in our filings with the SEC.

I would also like to point out that our investor presentation and today's conference call will contain discussions of non-GAAP financial measures which we believe are useful in evaluating our performance. These supplemental measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP. Reconciliations to the most directly comparable GAAP measures are included in our earnings release in the appendix of today's accompanying presentation. I'll now turn the call over to Chief Executive Officer, Jason Long.

Thank you, Mae. Good morning, everyone. I'm pleased to report that we delivered a strong first quarter, underscoring the value of our integrated water and infrastructure network and the sustained growing demand for responsible produced water handling solutions across the Delaware Basin. The operational momentum we built through Q1, combined with increased visibility and conviction in our commercial demand outlook for the remainder of the year and a more supportive macro environment, gives us the confidence to raise our 2026 guidance today. As Scott will detail, we are increasing our full year volume guidance to 2.525 million-2.725 million barrels a day and our adjusted EBITDA guidance to $425 million-$465 million. 1st quarter produced water handling volumes came in at approximately 2.5 million barrels per day.

That represents a modest sequential decline from Q4, which we anticipated. Activity levels at the start of the year are typically lower following a strong prior quarter, and the fourth quarter was particularly active. Volume growth accelerated through the quarter, and we have strong operational momentum heading into Q2. On the financial side, first quarter revenue was $201 million, and adjusted EBITDA was $102.9 million, with adjusted EBITDA margins of 51%. Gross margin per barrel improved sequentially from $0.18 per barrel in Q4 to $0.20 per barrel in Q1, a meaningful improvement that reflects the operating strengths of our model. Let me turn to our two key growth drivers for the back half of the year, Speedway Phase One and the Kraken Project.

Speedway Phase One is on track for a mid-year in-service date as we prepare for the pipeline to come online. We are already signing interruptible contracts with customers looking to utilize available capacity in the second half. To be clear, these are non-obligatory agreements for both sides. We would not build them into our guidance, but they are a meaningful demand signal. They indicate that interest in Speedway capacity extends well beyond our committed customer base, and they represent potential incremental upside as the pipeline ramps. The Kraken Project MVC increase is expected mid-year as well. Together, Speedway Phase One and Kraken are the primary volume and revenue growth drivers for 2026, and both are progressing on schedule. The other headline from the quarter is the conclusion of our Speedway Phase Two open season, which represents up to 500,000 barrels per day of incremental capacity.

The formal process wrapped up in April, and the results were strong. I'll let Chop provide some details shortly on what we saw through that process and our expectations going forward. Finally, as our E&P partners require capacity and integrated solutions, WaterBridge will continue to scale our network to meet demand in the most efficient way possible. At the same time as our infrastructure network continues to grow, we are more encouraged than ever as we consider new ways to create incremental value via the large and growing water resource asset that we own. There is a very interesting and rapidly shifting economic landscape for water supply and demand in the Delaware Basin. Treatment technologies continue to improve, and downstream demand from industries like digital infrastructure continue to shift the potential role of treated produced water in the historically water-stressed basin in a meaningful way.

We continue to leverage our role as an industry leader to explore these beneficial reuse opportunities and are excited about the potential opportunities that the scale and strategic geography of our assets may be able to unlock. The combination of these factors, Speedway Phase One on track for a mid-year start, Kraken ramping, a Phase Two open season that exceeded our expectations, and an operational and commercial environment that has become more supportive since we set initial guidance, is what underpins our decision to raise guidance today. Chop will give you more color on the operational specifics, and Scott will walk through the financial implications.

Thank you, Jason, and thank you to everyone joining today. First quarter was a strong start to the year operationally. As Jason mentioned, Speedway Phase One construction is progressing, and we remain on track for a mid-year in-service date. Speedway connects northern Delaware Basin producers to out-of-basin pore space owned by LandBridge, giving our customers access to high-quality, underutilized capacity at the Speed Ranch. As Jason noted, we are already receiving commercial interest in interruptible agreements, which positions us well for a strong ramp in the second half of the year. We closed the formal Phase Two open season in April and are more bullish than ever at the value that E&Ps see in this essential long-haul produced water solution.

Demand for incremental takeaway has been robust, driven by the growing New Mexico produced water handling volumes that we expect in the near to midterm as operators develop high-quality inventory in that part of the Delaware Basin. We are in advanced commercial discussions with a high-quality group of new and existing customers, which we view as a positive for the long-term risk profile of the project. As we finalize underwriting for Phase Two, we are focused on capital efficiency and speed to execution. Phase One gave us significant infrastructure on the ground in key New Mexico development geographies. We intend to leverage that foundation to build Phase Two in optimized stages that are calibrated to committed customer needs. This allows us to sequence capital more efficiently, optimize returns on each increment of the build-out, and maintain flexibility in what remains an uncertain cost environment for steel and pipe.

As noted in our 2026 capital guide, the initial development of the Phase Two build-out is expected to begin in the second half of 2026. We will continue to update the market as our underwriting progresses. Our synergistic relationship with LandBridge also supports our broader infrastructure strategy. LandBridge's access to contiguous out-of-basin pore space gives us the ability to route volumes away from areas with elevated pore pressure and concentrated upstream development. This is consistent with our historically conservative and distributed approach to produced water handling. We are excited by the progress we have made with permitting and look forward to continuing to establish new solutions for our customers. I'll now turn the call over to Scott for a review of the financials.

Thank you, Chop, and good morning, everyone. Today, we are raising our full-year 2026 guidance. We now expect produced water handling volumes of 2.525 million-2.725 million barrels per day and adjusted EBITDA of $425 million-$465 million. Capital expenditure guidance of $430 million-$490 million is unchanged. This raise reflects two changes since we set guidance in mid-March. First, our commercial and operational demand outlook has strengthened. We have a better line of sight into the second half. Speedway Phase One is on track for a mid-year start and is already attracting interruptible interest beyond our committed base. The Kraken MVC increase is expected on a similar timeline, and the Phase Two open season produced a stronger demand signal than we anticipated.

Second, the macroeconomic environment has become more supportive of E&P activity levels, and current discussions with our customers and subsequent operational visibility provides increased confidence in our expectations throughout the year. Turning to Q1 results, revenue was $201 million, a 4% sequential decrease from $208.9 million in Q4. As expected, the decline was driven by lower seasonal activity to start the year, partially offset by the continued ramp in Kraken volumes. Net income was $9.5 million for the quarter, with a net income margin of 5% as compared to a net loss of $13.6 million in Q4 2025. Adjusted EBITDA was $102.9 million, with an adjusted EBITDA margin of 51%, consistent with recent quarters.

Adjusted operating margin was $111.3 million, and gross margin improved sequentially to $48.2 million, or $0.20 per barrel, up from $46.8 million and $0.18 per barrel in Q4. Capital expenditures in the first quarter were $110.9 million, primarily driven by Speedway Phase One construction. On the balance sheet, we ended the quarter with total liquidity of $500.7 million, including $50.7 million of cash and approximately $450 million of available capacity under our $500 million revolving credit facility. Total debt was $1.486 billion, and our covenant net leverage ratio was 3.3x. We remain committed to our long-term leverage target of less than 3x. Our capital allocation framework remains consistent.

Prioritize high-return organic growth, maintain balance sheet discipline, and opportunistically return capital to shareholders. This quarter, we declared a dividend of $0.05 per share, payable on June 18th to shareholders of record as of June 4th. To close, WaterBridge delivered solid 1st quarter results consistent with our plan, and we are raising our full-year outlook to reflect what we can see from here. That raise is grounded in operational milestones with defined in-service timelines, a commercial demand picture that has continued to build confidence, and a macroeconomic backdrop that is supportive of E&P activity levels across our operating footprint. Our contract structure, long-term fixed fee with CPI escalators and Minimum Volume Commitments, means that volume growth converts to revenue and cash with high predictability, giving us increasing confidence in our long-term volume and revenue trajectory. Thank you. Operator, please open the line for questions.

Your first question comes from Derrick Whitfield of Texas Capital. Your line is open. Please go ahead.

Hey, good morning again, guys, and thanks again for your time.

Hey, good morning, Derrick.

I wanted to start with Speedway Phase Two. You guys have clearly done a nice job of articulating the need for durable long-haul disposal within the Delaware.

Following your successful open season, how would you characterize the split between new and existing clients and the need for further capacity additions beyond Phase Two as clients really start to recognize the challenges the basin will face over the next decade?

Yeah, thank, thanks for the questions. This is Chop. I'll take that one. I think that's a good question. I think it's a healthy mix of current and new customers. You know, we've seen our existing customers, we've grown with them. We've also got, you know, as I mentioned, a healthy mix of new customers that are prioritizing takeaway. They're prioritizing, you know, secure disposal takeaway as opposed to just recycling, and that's what's really important about the Speedway Pipeline.

I think there's just broad recognition now that produced water volumes are growing at a rate much greater than the need for recycling, and that's really driving, I think, just further recognition by E&Ps that long-haul flow assurance solutions are going to be critical to enable their operations over the next decade.

Great, then just with regard to your activity outlook, I wanted to focus on what you're hearing in your client conversations. While it's still clearly early in the higher price environment we have today, we are seeing industry pull forward with activity where possible. I guess, based on your conversations for water needs, how would you characterize that? Are you seeing clients increasingly look to more optimal co-development, including the deeper intervals, given the benefit of higher prices now?

Yeah, I'll take the first piece, Derrick, then hand to Chop to speak to the development strategy and approaches. You know, starting the year, I think that there was broad recognition by the E&Ps of potential oversupply risk the back half of the year, that was certainly top of mind as they worked through their budgeting and messaged their expectations to us. I think if you fast-forward to today, with the current macro backdrop, there is a recognition that in the near to medium term, the macro environment is just going to be much more constructive. I think to your point, we've seen producer expectation and movement react relative to how constructive the new environment is.

Chop, I mean, do you want to go into specifics on the development approaches we're seeing folks take to.

Yeah, I mean, we're hearing some of people looking at deeper benches given the higher commodity pricing. I think, you know, majority of our producers haven't been able to shift that quickly, but it is something they're evaluating. Yeah, we're pretty excited about that.

Great update, guys. I'll hop back into queue.

Thanks, Derrick.

Your next question comes from the line of John Mackay of Goldman Sachs. Your line is open. Please go ahead.

Hey, team. Thank you again for the time. I want to go back to the guidance. You guys talked about a couple of the upside pieces here. I think we would've thought of maybe a higher boost for the year just on some more straightforward things like skim oil alone. Can you maybe just walk us through again some of the buckets of maybe conservatism you see in there and really just how you're thinking about the balance of the year from here?

Yeah. Hey, John. Thanks for the thoughtful question. No, look, it's a fantastic point. I mean, we obviously didn't look to move our guidance in reaction to, call it direct commodity price exposure through the end of the year. You know, this was really a move and reaction to produced water expectations kind of through year-end. I mean, if you were to layer in just the strip pricing and the uptick we'd see in skim, you know, I think that alone presents meaningful upside above the midpoint today. Just given, call it how fluid that situation is and how much movement we're seeing there, we're being a bit cautious as it relates to incorporating any kind of uptick in commodity prices to our guides for messaging to the street.

All right. That's fair. Maybe just going back to Speedway Phase Two then, I understand you're still working through the commercial terms, et cetera, but generally speaking, would you expect kind of similar returns as Speedway Phase One, better, softer? Just how are you thinking about that broadly? Maybe just next would be when you'd expect to be able to come to the market with kind of more formal terms around this. Thanks.

Yeah. We're obviously still working through the tail end of the commercialization and documentation there, and I think once the dust settles, we'll certainly circle back and give the market a bit more details. Just speaking to it broadly, I think we, you know, we certainly have spoken to just the supply-demand economics of high-quality flow assurance in the basin and what that's done, you know, for us as you think through some of these more recent projects, and we continue to see that momentum here in Speedway, in Speedway Phase Two. You know, like I mentioned, we're wrapping up kind of the commercialization and documentation, and I think, you know, we are optimistic and look forward to circling back to the market once that's FID-ed with more detail.

All right. Fair enough. Thank you.

Yeah. Thanks, John.

Your next question comes from the line of Kevin MacCurdy of Pickering Energy Partners. Your line is open. Please go ahead.

Hey, good morning, guys, realize this question is kind of maybe another way to ask the previous one. Just kind of curious if, you know, if you could talk about the impact to margins that we will see from Speedway One and Two when those come online, and should we think of kind of the high demand and interest in interruptible volumes as a tailwind for those margins?

Hey, I'm good to hear from you. I mean, the punchline is we expect to see margin expansion as these higher rate contracts come online. I mean, I think they're depending on the situation, there may be different cost elements to them, but ultimately we're seeing better call it project level margins, and as a result, that's going to lead to margin expansion across the broader business here. You know, over the next several years as Kraken ramps, Speedway ramps, we would certainly see some uptick there. On the interruptible side, you know, as we've voiced over previously, we typically see interruptible volumes at a rate that exceeds the contracted rate, you know, really without any kind of expansion on the cost side. Those would be even higher margin barrels at that point.

As we continue to win, you know, more of these call it interruptible contracts and deliver that solution, I think there's also real potential for margin and expansion as a result of that.

Great answer, Scott. Maybe as my follow-up, I'll go back to slide 10. I really appreciate this slide. But thinking kind of longer term, I mean, do you guys have an expectation of when these deeper zones in the Delaware start to contribute more of the volumes? How is that kind of built into your long-term outlook?

Chop, do you want to talk to the deeper zones?

No. Go for it.

Okay. Yeah. I'm happy to jump in as well. I mean, I think we've already seen some evolution kind of in thinking here, you know, certainly as E&P operators are trying to get very smart about capital efficiency, rig efficiencies. You've seen development, you know, cube development, other folks have called it other things. The punchline is, you know, rather than targeting these shallow zones with one or twi wells going much deeper and bringing these large multi-well pads online, and as a result the, you know, the oil production is coming with a higher water cut. I don't see, nor do we kind of institutionally see the need for capital efficiency moving away from our industry anytime soon.

I think producers are getting smarter and smarter on this, and as a result, you're gonna see more and more of this on a go-forward basis. Now, how do we think through that from a forecasting standpoint? We are not modeling, call it any kind of expansion to water-oil ratios over time. There is a pretty meaningful amount of upside here. But for the sake of being conservative, that is not something that we've got layered into certainly any near-term guidance, much less any of our longer term forecast at this point.

Appreciate the time. Thanks.

Yeah. Thanks, Kevin.

Your next question comes from the line of Eli Jossen of JPMorgan Securities LLC. Your line is open. Please go ahead.

Hey, good afternoon. Just wanted to stick with Speedway. I know we're seeing more customer demand to lock in MVCs on Phase One. Can you remind us, like, roughly what percentage of that pipe's capacity has MVCs on it? Just thinking about meeting some of that elevated near-term demand, especially with the new customers. Thanks.

Thanks for the question. You know, we are fully committed on Speedway Phase One, and that we're expecting to ramp over the next two years. As we contract on Speedway Phase Two, we've got some demand that may get utilized on Speedway Phase One as we develop the Speedway Phase Two pipeline project. It's a nice way to utilize the infrastructure that's in the ground without over-committing firm capacity, because that is something that we voiced to our customers on Speedway that we're not going to do, is over-commit firm capacity. Great question. We are seeing a lot of demand. Look forward to filling that pipe with some committed volumes from Speedway Phase Two.

Got it. Then, you know, maybe just switching over to beneficial reuse. I don't know if you guys have had any discussions with different stakeholders across the industry, whether that's data centers or, you know, other opportunities, but just anything to update us on there would be great. Thanks.

Yeah. I mean, you know, we've said for a while that this water is a resource and it's only a matter of time before that's unlocked outside of the industry. I think, obviously with the meaningful ramp we've seen on the power side, on the digital infra side, I think that really shines a light on the value of the water that we have custody of. As you can probably imagine, being one of, if not the largest water handling companies in West Texas, we're right in the mix of those kinds of discussions. You know, I would say when we kind of hit that right milestone, we're excited to kind of step out to the public and kind of speak to what we expect to see and happen there.

It's probably a little premature at this point.

Great. Thanks.

Your next question comes from the line of Praneeth Satish of Wells Fargo. Your line is open. Please go ahead.

Thank you. Good morning. I guess I just wanted to go back to Speedway Phase One and make sure I understand it correctly. The pipeline is 500,000 barrels per day. I think you said you're fully contracted kind of as you look out over the next few years. Is the opportunity then, at least in the near term, there's less contracts and the opportunity for more kind of interruptible volumes on Speedway? For those interruptible volumes on Phase One, I guess just like how meaningful are those? Like, are we talking, you know, tens of thousands of barrels per day or 100,000 barrels per day? Just any kind of context there.

Hey, Praneeth. No, good question. As Chop mentioned, you know, we expect volumes to ramp on Speedway Phase One from when it comes online this summer through 2028. When we think through that being fully committed, that is, call it, once volumes hit maturity in 2028 and going forward. You know, what that means is between now and 2028 is there's a fair bit of uncommitted, unutilized capacity that we can leverage to capture some of these spot and interruptible barrels. You know, how much is that? How can we quantify that? I would say we've got more than 100,000 barrels a day of effectively uncommitted capacity here in the near term that we could deploy and potentially capture some upside on relative to what we're committed to.

To Chop's point also, as volumes ramp, when we do become fully committed, we've got to be a little bit more thoughtful in when and how we take interruptible barrels, you know, relative to our obligations with contracted customers. Those opportunities, you know, will exist, and we will continue to capitalize on those. The second piece Chop mentioned is as we commercialize Speedway Phase Two, there's also the potential to deploy some of that unutilized Phase one capacity as a resource to handle some of those Phase two volumes. Now what that solves for us is the ability to delay deploying capital to build out some of that infrastructure. By sequencing the capital out, you know, in a more thoughtful way, we're able to obviously optimize the returns out of that project.

To the extent we can do that is going to really be driven by how discussions ultimately evolve and get finalized here in the near term. You know, we continue to be very, very thoughtful in ensuring none of our capacity goes unutilized, really in an effort to maximize the returns we're getting, you know, dollar for dollar here.

Gotcha. That's helpful. Maybe just shifting gears and going back to Eli's question on data centers. I guess PowerBridge is developing a 2 GW data center in Reeves County. Can you discuss whether, A, that creates an opportunity for WaterBridge to on the water side to deliver water to the data center? Is there any framework, or kind of MOU or kind of in place where you would have the right to win that business?

I'll frame it like this. I think with all of these data center announcements in what, in the Permian, in the Delaware, inclusive of PowerBridge, there is an ample opportunity for WaterBridge to play a meaningful role as the water solutions provider there. You know, looking at PowerBridge specifically, we haven't disclosed any terms around water supply there, so, you know, I don't wanna get too far over myself in terms of speaking to that now. I would say as we come back to the market with updates there, that's certainly a piece that, you know, we look forward to communicating. At the end of the day, all of these power generation projects, all these digital infra projects need a meaningful amount of water, and that's our specialty.

We are actively involved in a number of discussions to serve as that solution.

Gotcha. Thank you.

Yeah. Thank you.

Your next question comes from Don Crist of Johnson Rice. Your line is open. Please go ahead.

Good morning, guys. Thanks for letting me in here. I had a inflation question on the construction of Speedway One and Two. You know, we've been hearing a lot of inflation on the cost of resin and polyethylene and those sort of things. Just curious as to if you've forward bought all your supplies for Speedway One to where you avoided most of those, or you've hedged out some of the cost possibly on Speedway Phase Two to mitigate those costs as well. Just anything around that would be helpful.

Hey, Don. This is Chop. I'll take that one. Good to talk to you. Yeah, you're absolutely right. We've seen increases in both steel as well as poly, you know, due to the resin market. Speedway Phase One, we committed to that poly before these increases. We're insulated to that swing. You know, on Speedway Phase Two, we're being strategic with when we purchase. We were able to secure some resin for Speedway Phase Two-related projects at attractive pricing. We continue to, you know, update our economics to account for the fact that prices are going up and they are pretty volatile. You know, luckily our producer partners are aware of that, and they're sympathetic to that.

Yeah, those conversations have been going well, and I think we're in a really good spot to weather that increase.

I appreciate that color. Just one other kind of macro question from me. You know, with the increase in oil prices, we've heard that people are eliminating white space in their completion calendars, and as a result, there may be a wall of water that is being held back right now because of natural gas takeaway. We all know that those pipelines are coming in later this year. But just any color around the potential for additional volumes coming out because of, you know, external factors related to natural gas takeaway and those sort of things that may hit later this year or early next year.

Handling walls of water are our specialty, Don. I mean, I say that half jokingly, but if you look at the peak volumes we saw in fourth quarter nearly touching 3 million barrels a day, I think we've proven even before Speedway comes online that we've got the ability to handle very massive peaks with the infrastructure of scale we have in the ground today, and Speedway is only gonna further bolster our ability to do that. We agree with your outlook there, and we're intentionally getting ahead of that, and I think we're positioned to capitalize on it.

Yeah, I would just add that.

Okay. Thank you.

the sour gas window, right?

The new infrastructure that's coming in the sour gas window is gonna create just an additional wall of water. Speedway Phase One and Two, we're strategically positioned in and around that sour gas window. We should see incremental volumes as because of that as well.

I appreciate the color, guys. I'll turn it back.

Thanks, Don.

Hello, everyone. Thank you for joining us, and welcome to the WaterBridge Infrastructure LLC fourth quarter 2025 results earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, press 1 again. I will now hand the call over to Mae Herrington, Director of Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining WaterBridge Infrastructure LLC's Fourth Quarter and Fiscal Year 2025 Earnings Call. I am joined today by our Chief Executive Officer, Jason Long, our Chief Operating Officer, Michael Reitz, and our Chief Financial Officer, Scott McNeely. Before we begin, I would like to remind you that in this call and the related presentation, we will make forward-looking statements regarding our current beliefs, plans, and expectations, which are not guarantees of future performance and are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from results and events contemplated by such forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements. Please refer to the risk factors and other cautionary statements included in our filings with the SEC. I would also like to point out that our investor presentation and today's conference call will contain discussions of non-GAAP financial measures we believe are useful in evaluating our performance. These supplemental measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP. Reconciliations to the most directly comparable GAAP measures are included in our earnings release and the appendix of today's accompanying presentation. Prior to the closing of WaterBridge Infrastructure LLC's initial public offering on 09/18/2025, WaterBridge Infrastructure LLC completed the successful combination of its legacy entities WaterBridge Equity Finance LLC, WaterBridge NDB Operating LLC, and Desert Environmental LLC. Full year 2025 key operational metrics discussed today are presented on a combined basis, and full year 2025 financial results discussed today are presented on a pro forma basis in accordance with Article 11 of Regulation S-X, assuming the combination and the IPO had occurred on 01/01/2024. I will now turn the call over to our Chief Executive Officer, Jason Long.

Thank you, Mae, and good morning, everyone. 2025 was a transformative year for WaterBridge Infrastructure LLC as we completed our upsized and highly successful IPO in September, bringing to market the largest pure-play water infrastructure network in the United States. To begin today, I am proud to announce that our fourth quarter and full year 2025 results continue to demonstrate strong operations with fourth quarter produced water volumes up to 2,600,000 barrels per day and full year combined volumes averaging 2,400,000 barrels per day, representing 15% year-over-year growth compared to combined 2024 volumes. Our volume growth is combined with continued rate improvements to contribute to full year 2025 pro forma revenues of $790,000,000, a 19% annual increase compared to pro forma 2024 revenues. Shortly, Chop will walk us through how we plan to continue our operational and commercial momentum in 2026, and then Scott will translate that into details for our 2026 guidance. But first, I want to walk through some context of the business today. WaterBridge Infrastructure LLC provides innovative and full cycle produced water solutions to E&Ps and is well positioned to meet evolving industry needs via our produced water handling capacity of more than 5,000,000 barrels per day of produced water handling capacity across over 2,600 miles of integrated pipeline to twelve produced water handling facilities. With this extensive produced water handling and supply network, and deep operational and geological expertise in the Delaware Basin, the most prolific oil and natural gas basin in North America, we are well positioned to be a sought-after partner for years to come. Our value proposition of providing innovative, geologically focused, technologically advanced solutions for our E&P partners has translated into a strong track record of growth as demonstrated by our more than 22% CAGR in produced water handling volume since 2022. Due to the significant remaining inventory of low breakeven locations, produced water volumes continue to grow alongside and even recently outpacing oil volume growth in the Delaware Basin, where the water-to-oil ratios are among the highest in the U.S. Our permanent integrated water infrastructure network is strategically located to meet this need, and we anticipate continued revenue growth in the coming years. To meet that growth, we continue to dedicate significant capital to high-return organic growth projects and pipelines in the basin, focusing on long haul and out-of-basin solutions for New Mexico customers as they continue to increase operational focus in a high-return, high-inventory Northern Delaware Basin. The strong demand and positive response we received during the open season for the first phase of the Speedway Pipeline Project led us to continue those discussions with customers via the recently announced Speedway Phase Two pipeline. As a long-term flow assurance partner of choice in the basin, we expect to continue dialogues with existing and new customers in the region to ensure that we can expand water infrastructure capacity in step with their development needs. With that, I will turn it over to our COO, Michael Reitz, to talk about operational momentum and priorities for 2026.

Thanks, Jason. At the operational level, we continue to prioritize delivering critical flow assurance for our customers through unparalleled pore space access as well as our advanced technology and measurement systems. Our continued execution is reflected in our produced water handling volume growth and in the fourth quarter, we achieved a single day record of 2,900,000 barrels per day water handling. In 2025, we achieved 99.7% operational uptime with measurement variance of less than 1% across our system, driven by our proprietary forecasting capabilities and real-time measurement and monitoring technologies. Commercial efforts continue to advance meaningfully. In 2025, we brought high-value new infrastructure online and expanded existing facilities across our network, enabling 15% year-over-year combined volume growth. In particular, we brought the Kraken project online, representing an initial capacity of approximately 450,000 barrels per day. This project will continue to drive volume growth in 2026 with a midyear minimum volume commitment (MVC) increase. As previously announced, this project includes a ten-year MVC from BPX to support its long-term development plans in the region. We also meaningfully advanced the development of our Speedway Project, which will provide produced water transport and handling in the Northern Delaware Basin, connecting oil and gas development to out-of-basin pore space owned by Landbridge on the Central Basin Platform. Phase One was oversubscribed, and we anticipate the project to be put into service in the middle of this year with the bulk of key contracts and MVCs going into effect in the third quarter. The first phase of Speedway is expected to drive volume growth in 2026 and beyond, as it continues to ramp through 2028. Speedway's Phase Two open season was launched in February 2026, and demand is already outperforming expectations. We also anticipate being able to accelerate some early Phase Two projects into 2026, which represents an opportunity to leverage recently constructed Phase One assets, unlocking operational synergies and subsequently providing an incremental EBITDA contribution in 2027. The success of the Speedway project emphasizes the continued benefits from our synergistic relationship with Landbridge, which not only provides critical access to underutilized high-quality pore space, but also continues to expand its surface and subsurface portfolio, subsequently derisking future needs. Access to pore space through Landbridge and other large strategic landowner relationships is a key differentiator for WaterBridge Infrastructure LLC and a critical component of the reliable, redundant flow assurance solution that we provide our customers. Finally, we expect to begin construction on the previously announced new Devon project in 2026, and we will continue to execute incremental high-return capital projects to meet the existing customer demand throughout our infrastructure footprint. With that, I will turn things over to our CFO, Scott McNeely, for an update on our financial results and formal 2026 guidance.

Thank you, Chop, and good morning to everyone on the call today. We entered 2026 with significant commercial momentum, having realized major successes in 2025 with our IPO, the launch of Kraken, and the success of the Speedway Phase One project, all while executing on record water handling volumes for the full year as Jason and Chop mentioned. In the fourth quarter, our first full quarter as a publicly traded company, we achieved record revenue of $208.9 million, up 2% compared to the pro forma third quarter revenue. Fourth quarter net loss was $13.6 million and adjusted EBITDA for the quarter came in at $103.8 million with a 50% adjusted EBITDA margin. For the year, we delivered pro forma revenue of $790,000,000, representing 19% year-over-year pro forma revenue growth. Full year pro forma net loss was $58.1 million. Full year adjusted EBITDA was $402.8 million, a 16% year-over-year increase. In Q4, we further optimized our balance sheet by closing on an inaugural $1.425 billion senior unsecured notes offering, which will help WaterBridge Infrastructure LLC capitalize on the many compelling opportunities before us. We ended the year with total liquidity of $527 million, including $52 million of cash and cash equivalents and $475 million undrawn under our new $500 million secured revolving credit facility. Our covenant net leverage ratio was 3.3 times at the end of the year, and we remain committed to our long-term goal to be under three times levered. Capital expenditures in the fourth quarter were $89.2 million, mainly driven by spending on the development of Speedway Phase One and continued expansion projects on our Stateline systems as we continue to grow our footprint with high-quality assets. Our disciplined capital allocation framework allows us to effectively deploy free cash flow and manage our top priorities, which includes, first, prioritizing high-return capital projects building out our water infrastructure network, and maintaining our commercial relationships. This also includes selective strategic acquisitions. Second, maintaining a conservative balance sheet and prudent capital structure to ensure maximum financial flexibility over time. And finally, returning capital to shareholders through opportunistic share repurchases and dividends. This quarter, we declared an inaugural quarterly dividend of $0.50 per share. As anticipated, we are initiating annual guidance this quarter. For full year 2026, we expect produced water handling volumes of 2,500,000 to 2,700,000 barrels per day, driven by the midyear BPX Kraken MVC increase and Speedway Phase One. We also expect CapEx to be between $430,000,000 and $490,000,000. Importantly, our expectations for Speedway Phase One CapEx have not materially changed. This guide contemplates approximately $100,000,000 of newly sanctioned CapEx attributable to the incremental Speedway Phase Two projects Chop discussed as well as other commercial projects throughout our acreage. Finally, we expect 2026 adjusted EBITDA between $420,000,000 and $460,000,000, representing 9% annual adjusted EBITDA growth. This is expected to be weighted towards the second half of 2026 following the Kraken MVC increase and initiation of Speedway Phase One. With our ongoing commercial success and in anticipation of Speedway Phase Two, expectations for 2027 are meaningfully higher than previously contemplated. To conclude, we are proud to have delivered a strong year of growth and look forward to continuing to deliver for our customers in 2026 and beyond as we meet the increasing demand for produced water handling across the Delaware Basin and innovate for the future. We will now open for questions. Operator?

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, press 1 again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from Derrick Whitfield of Texas Capital. Your line is open.

Good morning all, and congrats on a strong 4Q. Hey, good morning, Jack. Wanted to start with your 2026 produced water handling volumes guidance of 2,500,000 to 2,700,000 barrels per day. In our view, it seems that you have baked some degree of conservatism in your plan relative to where you exited the year. Could you speak to when this activity projection was assessed and what price forecast is assumed, and finally, highlight any timing considerations that could place you on the upper side of your forecast.

Thanks for the question, Derrick. I would answer it in two different ways. First, we had a very strong fourth quarter. Volumes came in and we exited the year in that position of strength, which is what we wanted to see, and so we feel really good stepping into 2026. I would say the second piece, when we worked through budgeting for this year, like many others did so at the end of 2025, we were just in a very different macro environment than we are in today. The bulk of the volume that is baked into the guidance is informed by producer feedback that was provided when oil was in the mid to high fifties. Where we are sitting today, it is just a drastically different environment, and as such, we think that there is a lot of upside, particularly in the back half of the year, if the current macro backdrop holds. I think we feel really good about the conservatism baked into the guidance. Again, we did that by design, but the world we are living in today is very different than the one we were living in when we received that producer input. I think as a result, it has a lot more upside now than we would have expected to see back in Lexington.

And then for my follow-up, I wanted to shift over to the Devon and Caterra merger and think through that for a bit. With the understanding that clearly, the merger is not final, it would seem logical to us that the consummation of that merger could present incremental growth opportunities for WaterBridge Infrastructure LLC. Based on past discussions with both counterparties, do you see or expect to see greater opportunity from the Caterra side of the house based on your working relationship with Devon? I know that Caterra's Franklin Mountain asset literally sits on top of Project Speedway.

It is a great observation. We are obviously excited for the Devon team and the Kotera team. They are going to be stepping out of the merger in a very strong position. We have a great relationship with the Devon team with a lot of the folks that we work with day to day as part of that new management team, so I think we are excited to step into conversations with them about what is next for their plans. We have had great relationships with Kotera in the past as well, and so I think a lot of those, we hope, will obviously continue to accrue to our benefit. Stepping out of this, we are excited. The combined company is going to be a great one in the Delaware Basin. We are excited to work for them. We are excited to deliver our part in enabling what is next for their company.

Thanks. Great update.

Thanks, Derrick.

Your next question comes from the line of Elias Jossen of JPMorgan. Your line is open. Please go ahead.

Thanks, everyone. Wanted to start on the acceleration of growth project opportunities you alluded to. I think you talked about some opportunities to accelerate in 2026, leveraging some of the ongoing construction. Can you just speak more specifically to the magnitude of that, help us understand what the kind of 4Q exit rate might look like, and the overall framing you see for 2027? Thanks.

Yeah, hey, Elias. Appreciate the question. We are in a really great spot right now where we have received a number of inbound inquiries and are working through a number of different commercial discussions, which is ultimately what sparked the announcement around Speedway Phase Two. In addition to that, we also have just several commercial projects that are fairly firmed up at this point that will serve somewhat as the foundation for Speedway Phase Two as well. We added another $100,000,000 to capital expectations for this year. That is still somewhat front-weighted for the year, but the bulk of that extra $100,000,000 is going to be tied to these new projects that will serve as the foundation for Speedway Two. There is a smaller amount, I am not going to quantify it, but we will say a smaller amount, which is going to be related to the Devon projects. If you recall, Devon has an MVC with us that comes online in 2027. We are just accelerating the construction of that infrastructure by a few months, and it is really just to derisk, effectively, that construction phase, and as a result of that, we expect just a little more cash to go out the door at the end of this year versus 2027. No real change in the scope of that project, but recognizing the fact that cash may leave the system a little bit earlier than we were thinking, by design, just to derisk the development there.

Thanks. And then shifting to the capital allocation philosophy subsequent to the growth project spend. It seems like there might be a bit of a free cash flow inflection as you get Speedway Two in service and, I guess, the Devon project as well, as that spend comes to a conclusion at 2027. Maybe 2028 looks more like an inflection on free cash flow. So how do you think about what the capital allocation framework looks like at that point?

It is a great question. Like we said during the IPO process, we will continue to prioritize these higher return organic growth projects. You look at Kraken, you look at Speedway, we would expect for Speedway Phase Two to be incredibly attractive from a return standpoint. That will continue to be the most accretive use of the cash flow that we are generating as a business, and I do not expect that to change. We aim to continue finding creative ways to generate those same kinds of returns. Beyond that, we will continue to explore M&A. It does need to compete with the organic growth projects that we are working through as we think through our capital allocation framework, but to the extent there is an opportunity that checks all of those boxes on a risk-adjusted basis, we would absolutely be open to pursuing M&A as another way to continue to feed growth to the company. Lastly, we think through balance sheet management and return of capital. Making sure that we work through this growth while keeping the balance sheet healthy is a top priority. Staying kind of at mid threes at max during growth is something we are comfortable with, but getting sub three times is certainly a medium-term goal for us. Beyond that, initiating this first dividend, we are not looking to overly lean into dividends here, particularly through this growth phase, but there is potential for those to grow going forward depending on other competing uses of capital. Likewise, we could potentially explore buybacks in the future when it makes sense in the context of other capital allocation options we have as well as the float and the float dynamics at the time.

Great. Thanks very much.

Yeah. Thanks, Elias.

Your next question comes from the line of John McKay of Goldman Sachs and Company. Your line is open. Please go ahead.

Hey, guys. Thank you for the time. Maybe I will go back to the first one around the 2026 guide. I appreciate the comments, but I wanted to follow up. When you are talking about it potentially being conservative, how much is that based on maybe comments that the higher oil deck will incentivize new activity versus just saying, hey, we are baking a little bit of wiggle room into these numbers? Are you expecting activity to pick up at this higher deck because we are generally not seeing it elsewhere?

Hey, John. Good question. The conservatism was really in the context of what was a high $50 oil environment when we worked through that budget. When I think through the conservatism today, I would make the argument that it is that much more conservative given the context of where WTI is at and expectations through year end. We have certainly heard some initial chatter on thoughts from producers, although most of that was really around the thought process of, is this a short-term blip, or do we expect to see a more enduring elevation of WTI through year end? Over the last couple of weeks, the market certainly seems to think that WTI is going to stay escalated at least to a certain extent through year end at this point, as we have seen the backwardation start to fall off slightly. It is too early to aggregate feedback from producers and producer reaction just yet, but what was a conservative outlook in a high $50 oil environment, I think, is again very conservative now, particularly in the context of the strip through year end. To the extent producers are able to capitalize on that, I would expect some of them will, although, as we all know, there are different idiosyncrasies with different producers out there. All that to say, we have much stronger tailwinds now than we had in late 2025 as it relates to the macro backdrop.

Thanks for that. And maybe just a quick follow-up on Speedway Two. I know the open season closes next month. Can you walk us through expectations for reaching FID? And then on the CapEx for this year, how much are total project CapEx? Or maybe if you are able to compare it to what the build for Phase One looked like. Thanks.

We have gotten a few of the core commercial deals we expect to be part of Phase Two buttoned up at this point. That is why the CapEx is incorporated in the budget now. Those are projects that we will pursue regardless of the outcome of the broader Phase Two process, and I want to make that perfectly clear that this is not speculative CapEx that is built into the budget. These are discrete projects that we expect great returns from even on a stand-alone basis, although they could serve as the commercial foundation for broader Phase Two. It is too early to say exactly what the aggregate capital spend or returns will look like on the broader Phase Two, but I would expect those to be fairly in line with what we saw for Phase One, if not slightly more attractive, just depending on how the dust settles.

Cool. Sounds good. Looking forward to Thursday. Thanks.

Yeah. Thanks, John.

If you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, press 1 again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Your next question comes from the line of Theresa Chen of Barclays. Your line is open. Please go ahead.

Hi there. On the topic of Speedway and the commercial development momentum that you have seen to date, is there a possibility or likelihood at this point for Phase III? Is there a likelihood that you will loop the 30-inch system given the demand for the egress?

Hey, Theresa. Appreciate the question. The short answer is yes. We see a lot of demand throughout New Mexico, Eddy and Lea County, and expectations certainly have not dropped. They are growing rapidly as developers look for water solutions out of what is a very challenged environment, and we are obviously positioned to deliver that. Timing of that will ultimately be driven by the outcome of commercial discussions for Phase Two and when initial operating capability is going to be needed for Phase Three. We are having all those discussions now. What is exciting, if you look at Kraken, you look at Speedway Phase One, you look at Devon coming online, we have already set the stage for what is great growth exiting 2026, 2027, 2028. These new commercial projects plus Speedway Phase Two are only going to further bolster the back half of 2027 stepping into 2028. As you allude to, there is a need for Speedway Phase Three. There is a need for more water takeaway. We see fantastic growth over the next several years, and we are working very diligently to ensure that we are being thoughtful around the underwriting, we are derisking those projects with MVCs, and we are setting ourselves up for long-term derisked growth.

Got it. And on that note of just persistent tightness in supply and demand for water takeaway, what are you seeing in the evolution of rates at this point? What is the going rate at this juncture as you try to commercialize the second phase of Speedway in addition to future organic endeavors versus your legacy in the $0.60 per barrel-ish rate?

Thanks, Theresa. This is Chop. Rates are increasing over time, as you would expect, as capital needs for these projects increase over time. We are seeing more demand and rates increasing along with that demand.

Relative to the mid-$0.60 kind of average that we had through the middle of last year, these new rates—Kraken, Speedway, some of these others that we are working through and talking through—are meaningfully higher. To Chop's point, some of that is to underwrite the capital coming out of New Mexico, and some of that is just a reaction by the market to the supply-demand economics for water takeaway.

Thank you.

Yeah. Thanks, Theresa.

Your final question comes from the line of Kevin MacCurdy of Pickering Energy Partners. Your line is open. Please go ahead.

Hey. Good morning. Maybe to follow up on the question about rates. Your 2026 EBITDA guidance was in line with expectations, but maybe on slightly lower volumes than anticipated. So are we right to think that margins will be a little bit higher in 2026 compared to what we saw in 2025? And if so, any comments you can provide on the near-term driver of that?

Hey, Kevin. Good question. Yes is the answer. As we see Kraken step up, we see Speedway come online, and we see some of these other new commercial projects come online, we would expect the higher unit-level revenue from those contracts to continue to drive margin expansion across the system. We would expect that trend to continue going forward for all the reasons I just walked through with Theresa.

Thanks for that answer. And then I appreciate your comments on what you are seeing on the ground in terms of activity pickups, or not seeing so far yet. I am curious what your capacity is to handle more produced water volumes in both the short and the near term. You did 2,900,000 barrels in the fourth quarter. Is that kind of a near-term cap, or could you go even higher?

We could go even higher than that. There are some regional dynamics that are involved. The system obviously is not wholly fungible from any other point of the system, so the operational realities come into the mix. The point I would make is you look through our average of roughly 2,600,000 barrels a day against our peak of 2.9 million. It is a real reflection of the criticality of having infrastructure of scale in place today. These producers are working through much larger well pads that bring on much higher peaks, and you have to have the operational expertise and the infrastructure already in place that can accommodate those peaks and do so with the certainty that is needed by these E&P operators. There is a real competitive moat that is introduced as a result of that. When you look forward to 2026 and you think through our ability to capture the upside potential, I would argue we already have those assets in hand to do quite a bit of that today, and that is before we bring Speedway online midyear, which only gives us an additional asset to continue to capture what we would expect to see as some upside coming out of New Mexico in today's commodity price environment. We feel very good about being well positioned through the year, hopefully to continue to enable some of the E&P development, particularly in the back half of this year that is resulting from the macro evolution we have seen over the last couple of months.

Thank you, and congratulations on the quarter.

Yeah. Thanks, guys.

There are no further questions at this time. I will now turn the call to Scott McNeely, Chief Financial Officer, for closing remarks.

Thank you, operator, and thanks to everyone for joining us today. Again, we are very happy with how we exited the year and how we are stepping into 2026. We feel like there is a lot of upside for us in 2026 stepping into 2027. As I mentioned, there are a lot of commercial opportunities out there for us to continue to pursue and drive growth. As always, please feel free to reach out to our team here if there are any questions. Otherwise, we hope everyone has a great week and we look forward to staying synced up. Thank you.

This concludes today's call. Thank you for attending. You may now disconnect.