Acquisitions

3 Months Ended

Mar. 31, 2026

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

Acquisitions

Acquisitions

Gravity Acquisition

On January 2, 2025, we purchased 100% of the limited liability company interests in Gravity Water Intermediate Holdings LLC from Gravity Water Holdings LLC (the "Seller") related to the Seller's water disposal and recycling operations in the Permian Basin and the Bakken (the “Gravity Acquisition”) for total consideration of $300.8 million, subject to customary adjustments for net working capital. The purchase price was comprised of $209.3 million in cash, consisting of a cash deposit of $22.8 million paid in December 2024, upon execution of the purchase agreement and $186.5 million paid at closing, and 2,175,209 of common units.

This acquisition was accounted for using the acquisition method of accounting, whereby the purchase price is measured at acquisition date fair value of assets acquired and liabilities assumed.

Determination of Purchase Price

The table below presents the purchase price (in thousands):

Base purchase price:	$	291,561
Less: Adjusted Net Working Capital (as defined in the Gravity Acquisition Agreement)	3,814
Plus: Various closing adjustments	5,433
Adjusted purchase price	$	300,808
Cash paid	$	209,297
Fair value of common units issued	91,511
Purchase price	$	300,808

Purchase Price Allocation

The following table summarizes the fair values of assets acquired and liabilities assumed in the Gravity Acquisition as of January 2, 2025 (in thousands):

Assets acquired:
Cash and cash equivalents	$	5,317
Accounts receivables	16,433
Inventories	1,851
Other current assets	1,681
Property, plant and equipment	191,485
Operating lease right-of-use assets	107
Customer relationship intangible (1)	66,271
Other intangibles (1)	31,921
Other non-current assets	59
Total assets acquired	315,125
Liabilities assumed:
Accounts payable	2,459
Accrued expenses and other current liabilities	5,733
Current portion of operating lease liabilities	54
Asset retirement obligations	6,022
Operating lease liabilities, net of current portion	49
Total liabilities assumed	14,317
Fair value of net assets acquired	$	300,808

(1)The acquired intangible assets amount includes the following identified intangibles:

•Customer relationship intangible that is subject to amortization with a fair value of $66.3 million, amortized over approximately 32 years.

•Rights-of-way intangibles are valued at $31.9 million, the majority of which have an indefinite life.

The fair value of property, plant and equipment was based on the combination of the cost and market approaches. Key assumptions in the cost approach include determining the replacement cost by evaluating recently published data and adjusting replacement cost for physical deterioration, functional and economic obsolescence. We used the market approach to measure the value of certain assets through an analysis of recent sales or offerings of comparable properties.

Customer relationships were valued using the income approach, with essential assumptions including projected revenues from these relationships, attrition rates, operating margins, and discount rates.

The fair values discussed above were based on significant inputs that are not observable in the market and, therefore, represent Level 3 measurements. For all other current assets and payables, their fair values were considered equivalent to their carrying amounts due to their short-term nature.