THE WOODLANDS, Texas,
Nov. 1, 2017 /PRNewswire/ -- Layne
Christensen Company, (NASDAQ: LAYN) ("Layne" or the "Company"), the
largest water well drilling company in the United States and a leading provider of
water infrastructure solutions, and the Texas General Land Office
("GLO") today announced a long-term agreement that provides Layne
with the exclusive right to develop GLO non-potable water resources
for use in oil and gas drilling and completion activities on
approximately 88,000 acres interspersed across Reeves and Culberson counties, in the heart of the
prolific Delaware Basin oil and
gas producing region.
Michael J. Caliel, President and
Chief Executive Officer of Layne, commented, "We are honored to
partner with the Texas General Land Office and are proud to utilize
Layne's 135-years of experience in water sourcing, drilling and
treatment to create significant revenue streams from the GLO's
expansive land position and water resources in the Delaware Basin. This agreement becomes part of
our growing water midstream business and further expands our
capabilities and geographic footprint to better serve the ongoing
demands for water in the energy sector."
Under the five-year agreement that contains multiple renewal
options, Layne will develop, construct, own and operate water
infrastructure to produce and sell non-potable water to oil and gas
exploration and production companies in the Delaware Basin. Layne's water infrastructure
assets on and around GLO lands are expected to include water wells,
storage ponds, pump stations, treatment facilities, pipelines and
delivery points. Layne will also utilize existing GLO water asset
infrastructure in the region to assist in conducting operations and
selling non-potable water. Revenues from water sales will be
shared between Layne and the Permanent School Fund, the land and
mineral assets of which are managed by the GLO.
Layne will immediately begin marketing non-potable water from
these GLO lands to producers in the region and serve as the GLO's
sales and marketing resource for water produced from land under the
lease agreement. Although Layne's evaluation of the full extent of
existing GLO assets and water marketing opportunities is still in
the early stages, Layne currently expects that it will begin
construction of water infrastructure assets under the agreement
during its fourth fiscal quarter beginning on November 1, 2017 and generate revenues under the
agreement beginning in early 2018.
J. Michael Anderson, Chief
Financial Officer and President of Layne Water Midstream, stated,
"We intend to responsibly develop GLO water resources to create a
long-term revenue stream for the State of
Texas, while remaining committed to the preservation of the
fresh water San Solomon Springs as GLO acreage that could impact
the springs have been excluded from this lease. Further, we
will develop and produce only non-potable water from the GLO lands
for energy use. We believe that Layne is expertly positioned
to develop, construct and manage water infrastructure assets, and
create long-term, sustainable income streams for both Layne and the
GLO."
The GLO acreage within the Delaware Basin accesses some of the most
prolific and active energy producing areas in the United
States. Layne estimates that there are currently 58 oil and
gas drilling rigs operating within three miles of the GLO's
Reeves and Culberson acreage, virtually all of which
represent potential water sales opportunities. The 58 operating
rigs total nearly 15% of all operating drilling rigs in the Permian
Basin and represent a potential water demand market for fracking
operations approaching 500 million barrels per year.
About Layne
Layne is a global water management, infrastructure services and
drilling company, providing responsible solutions to the world of
essential natural resources — water, minerals and energy. We
offer innovative, sustainable products and services with an
enduring commitment to safety, excellence, and integrity.
About the Texas General Land Office
The GLO manages state oil and gas leases and oversees over 13
million acres of land and mineral rights in Texas. The money earned by the GLO is
deposited into the Permanent School Fund, which is constitutionally
dedicated to the support of public education in Texas. The GLO also operates veterans' homes
and has been tasked by the Legislature with other important
duties.
Forward-Looking Statements
This press release may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Exchange Act of 1934. Such statements may
include, but are not limited to, statements of plans and
objectives, statements of future economic performance and
statements of assumptions underlying such statements, and
statements of management's intentions, hopes, beliefs, expectations
or predictions of the future. Forward-looking statements can often
be identified by the use of forward-looking terminology, such as
"should," "intended," "continue," "believe," "may," "hope,"
"anticipate," "goal," "forecast," "plan," "estimate" and similar
words or phrases. Such statements are based on current expectations
and are subject to certain risks, uncertainties and assumptions,
including but not limited to: estimates and assumptions regarding
Layne's strategic direction and business strategy, the timely and
effective execution of Layne's strategy for Water Resources, the
extent and timing of a recovery in the mining industry, prevailing
prices for various commodities, the timing and extent of future oil
and gas drilling and production in the Delaware Basin, longer term weather patterns,
unanticipated slowdowns in Layne's major markets, the availability
of credit, the risks and uncertainties normally incident to Layne's
industries of operation, the impact of competition, the
availability of equity or debt capital needed for the business,
including the refinancing of Layne's existing indebtedness as it
matures or accelerates, worldwide economic and political conditions
and foreign currency fluctuations that may affect Layne's results
of operations. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect,
actual results may vary materially and adversely from those
anticipated, estimated or projected. These forward-looking
statements are made as of the date of this filing, and Layne
assumes no obligation to update such forward-looking statements or
to update the reasons why actual results could differ materially
from those anticipated in such forward-looking statements.
Contacts
J. Michael Anderson
Chief Financial Officer
281-475-2694
michael.anderson@layne.com
Dennard Lascar Investor
Relations
Jack Lascar
713-529-6600
jlascar@dennardlascar.com
[LAYN-G]
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SOURCE Layne Christensen Company