WaterBridge: Oil and Water - [Business Breakdowns, EP.228]

This is Business Breakdowns. Business Breakdowns is a series of conversations with investors and operators diving deep into a single business. For each business, we explore its history, its business model, its competitive advantages, and what makes it tick. We believe every business has lessons and secrets that investors and operators can learn from, and we are here to bring them to you. To find more episodes of breakdowns, check out joincolossus.com. All opinions expressed by hosts and podcast guests are solely their own opinions. Hosts, podcast guests, their employers, or affiliates may maintain positions in the securities discussed in this podcast. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. This is Matt Russell, and today we are breaking down the recent IPO Waterbridge. I was joined by James Davalos from Horizon Kinetics, and this one was a long time in the making. As you will hear in the episode, HK has a long history in these unique capital light, high cash flow potential businesses, most notoriously with TPL, Texas Pacific Land Trust. And I had been in pursuit of getting HK as guests, but it wasn't until friendly listener, Chris Polk, made the connection that this all came to life. So we start the episode with a bit about HK's history with, again, these very unique businesses that are off the radar for many with TPL, Landbridge, and now Waterbridge. And then we get into the weeds and nuances about what this business actually does, why this disposal water and this service that they're providing is so incredibly important, particularly with US shale and where they are in the Peruvian Basin. So this is an interesting one from all different angles, and it's a timely one, which is always special. So please enjoy this breakdown of Waterbridge. Alright, James. I am excited to have you here. It's a timely business breakdown. We're here to talk Waterbridge. I think we're gonna get into a bit about Landbridge as well, the overall space, and what these businesses kind of represent in the market. Maybe you could just start us off with a simple introduction, how you would describe Waterbridge, maybe even Landbridge as well, to a broader audience to get them familiar with what's going on at these businesses. Sure. First, I wanna say thanks for having me. I've been a big fan of the podcast and everything at Colossus for a long time now. I think let's start with Waterbridge. So Waterbridge came public yesterday, and Waterbridge is the leading water infrastructure company in Texas. And so unlike traditional water infrastructure you might be familiar with, which are utilities that generally treat, dispose, and move water around in residential and commercial systems for consumption, this is actually a waste byproduct that is part of the oil and gas extraction industry. I think a lot of the listeners will be surprised to learn that in the Delaware Basin, which is …