Aris Water Solutions(ARIS)2024-11-05 16:35Financial Performance - Total revenue for Q3 2024 was $112.3 million, reflecting a 13% increase from Q3 2023[109]. - Net income for Q3 2024 was $16.4 million, an increase of 34% compared to Q3 2023[109]. - Adjusted EBITDA for Q3 2024 was $54.3 million, up 21% from Q3 2023[95]. - Total revenue for the nine months ended September 30, 2024, was $316,835,000, representing a 10% increase compared to $287,993,000 in 2023[111]. - Operating income rose to $80,089,000, a 36% increase from $58,886,000 in the previous year[111]. - Net income for the nine months ended September 30, 2024, was $46,373,000, reflecting a 53% increase from $30,381,000 in 2023[111]. - Total revenue for the three months ended September 30, 2024, was $112.3 million, an increase from $99.8 million for the same period in 2023, representing a growth of approximately 12.5%[143]. - EBITDA for the three months ended September 30, 2024, was $54.3 million, compared to $44.9 million for the same period in 2023, reflecting a year-over-year increase of about 21.5%[143]. - Adjusted operating margin for the three months ended September 30, 2024, was $65.8 million, up from $55.1 million in the prior year, indicating a growth of approximately 19.5%[144]. Production and Handling - Total produced water handling volumes reached 1,118 thousand barrels of water per day, a 6% increase compared to Q3 2023[95]. - Produced Water Handling revenue increased by $29,537,000, or 21%, from $143,390,000 in 2023 to $172,927,000 in 2024[111]. - Produced water handling revenues for the three months ended September 30, 2024, increased to $88.424 million from $75.610 million for the same period in 2023, representing a growth of 16.4%[122]. - The average produced water handling fees per barrel increased to $0.75 for the three months ended September 30, 2024, compared to $0.70 for the same period in 2023, reflecting a growth of 7.1%[122]. - Produced Water Handling volumes increased by 62 thousand barrels per day (kbwpd), or 6%, from 1,056 kbwpd in 2023 to 1,118 kbwpd in 2024[113]. Costs and Expenses - General and administrative expenses increased by 29% to $17.4 million compared to Q3 2023[109]. - Total operating expenses increased by 31% from $38,992,000 in 2023 to $51,251,000 in 2024[111]. - Direct operating costs per barrel remained consistent at $0.32, unchanged from Q3 2023[95]. - Direct operating costs for the three months ended September 30, 2024, increased by $1.9 million, primarily due to higher produced water volumes handled, while remaining flat on a per barrel basis[126]. - General and administrative expenses increased by $3.9 million for the three months ended September 30, 2024, primarily due to a $1.8 million rise in stock-based compensation expenses[129]. - Research and Development expenses increased by 39% from $1,867,000 in 2023 to $2,601,000 in 2024[111]. - Research and development expenses related to the Joint Industry Project (JIP) for the three months ended September 30, 2024, were $2.0 million, compared to $1.8 million for the same period in 2023[132]. Revenue Sources - Water Solutions revenue decreased by $7,083,000, or 14%, from $49,180,000 in 2023 to $42,097,000 in 2024[111]. - Skim Oil volumes for the nine months ended September 30, 2024, increased by 492 barrels per day (bpd), or 42%, from 1,171 bpd in 2023 to 1,663 bpd in 2024[121]. - Skim oil sales revenue for the three months ended September 30, 2024, rose to $10.996 million, up from $7.731 million in the prior year, marking an increase of 42.9%[122]. - The company recorded $2.0 million in "Other Revenues" for the three months ended September 30, 2024, related to a new agreement for constructing and operating a water separation facility[125]. Future Plans and Investments - The company signed a letter of intent to construct an iodine extraction facility in the Permian Basin, expected to be operational by year-end 2025[101]. - The company is leading a Joint Industry Project with major oil companies to develop technologies for treating produced water for beneficial reuse, with Phase 1 testing expected to complete by the end of 2024[97]. - Capital expenditures are expected to be between $98.0 million and $105.0 million for 2024, based on the latest outlooks from contracted customers[155]. Cash Flow and Financial Position - Net cash provided by operating activities for the nine months ended September 30, 2024, totaled $111.2 million, down from $152.5 million for the same period in 2023, a decrease of about 27%[152]. - As of September 30, 2024, the company had a cash balance of $32.8 million and working capital of $64.3 million[147]. - The company had $400.0 million in face value of Notes outstanding and $55.0 million under its Credit Facility as of September 30, 2024[147]. - For the nine months ended September 30, 2024, net cash used in investing activities was $87.0 million, a decrease from $111.8 million in the same period of 2023[153]. - The company is subject to interest rate risk, with $55.0 million of outstanding borrowings under its Credit Facility at a weighted average interest rate of 8.017% as of September 30, 2024[161]. Dividends - The company declared a dividend of $0.105 per share for the fourth quarter of 2024, consistent with previous quarterly distributions[151].