Select Water Solutions Reports Third-Quarter Results and Reveals Pilot Deal Closed on November 2
Key Facts
Select Water Solutions reported its third-quarter 2026 results on November 9, after completing its acquisition of Pilot Water Solutions on November 2, according to the company’s filing and investor announcement. The acquisition adds a produced-water disposal and pipeline platform in the Delaware Basin to the company’s operations. Consideration included about $600 million in cash, along with the issuance of 5,149,331 Class A shares, according to Select’s filing. The purchase agreement also provides for a contingent payment of $15 million to Pilot OFS upon the achievement of specified operational milestones. The company reported second-quarter results in August and set November 9 as the date for releasing third-quarter results, with an investor call the same day at 11 a.m. Eastern Time.
Pilot’s Delaware Basin platform includes more than 700 miles of pipelines and about 2.7 million barrels per day of permitted, active disposal capacity, according to Select’s announcement of the agreement on September 24. At the time, the company estimated that the combined platform would have recycling capacity of 3.8 million barrels per day and permitted, active and undeveloped disposal capacity of 4.8 million barrels per day. It also expected the combined pipeline network to exceed 1,600 miles. These assets give the deal operational reach beyond the acquisition of a single facility, expanding the treatment and transportation network in the Delaware Basin. Select said total produced-water volumes handled by the combined platform could exceed 2.5 million barrels per day during 2027, with minimum volume commitments exceeding 600,000 barrels per day.
When it announced the agreement, Select expected Pilot to generate adjusted earnings before interest, taxes, depreciation and amortization of between $100 million and $110 million in 2026, rising to between $120 million and $130 million in 2027. The company added that it was targeting an additional $10 million to $15 million in annual cost savings, on top of its 2027 expectations, to be achieved within 12 to 18 months of the agreement announcement. Chief Executive John Schmitz said the water infrastructure segment could account for about 70% of the combined company’s pro forma gross profit before depreciation and amortization in 2027. Select said more than 80% of Pilot’s annual portfolio revenue is supported by long-term contracts, with a weighted-average remaining term exceeding 7 years. The portfolio includes a new contract based on a minimum volume of 175,000 barrels per day, within total minimum volume commitments of about 480,000 barrels per day across Pilot’s portfolio.
Second-quarter results provide a measure of the company’s performance before the acquisition: consolidated revenue was $395.8 million and net income was $22.6 million, compared with revenue of $364.2 million and net income of $11.7 million in the second quarter of 2025. Adjusted earnings before interest, taxes, depreciation and amortization rose to $92.7 million from $72.6 million a year earlier, after reaching $77.6 million in the first quarter of 2026. In the water infrastructure segment, second-quarter revenue was $101.6 million, compared with $80.9 million in the same period a year earlier. The segment’s margin before depreciation and amortization was 58.3%, compared with 55.2% in the second quarter of 2025. The segment also handled about 1.5 million barrels per day of produced water through recycling or disposal in the second quarter.
Select’s previous guidance forecast water infrastructure segment revenue growth of between 5% and 10% in the third quarter compared with the second quarter, with a margin of between 56% and 58%. For the company overall, it then expected third-quarter adjusted earnings before interest, taxes, depreciation and amortization of between $90 million and $94 million. However, this guidance does not replace the third-quarter results the company announced on November 9, and details of the actual figures in that day’s release were not verified against a reliable public page among the evidence available here. The results announcement was scheduled before the market opened, followed by the company’s investor call at 11 a.m. Eastern Time. WTTR shares closed at $16.18 on November 6, according to EL7 data, in the last trading session before the scheduled announcement.
To finance the acquisition, Select Holdings issued senior notes with an aggregate principal amount of $900 million, carrying a 7.625% interest rate and maturing in 2034, according to the filing. The company also repaid a term loan with an outstanding balance of $218.8 million at repayment. The filing thus distinguishes the consideration paid to Pilot’s sellers from the financing arrangements Select used for the deal. The contingent payment of $15 million remains tied to the achievement of specified operational milestones, under the purchase agreement. The company had indicated that produced-water volumes handled by the combined platform could exceed 2.5 million barrels per day during 2027, while it is targeting additional annual savings within 12 to 18 months of the agreement announcement.