And additionally just more, as you know, the more produced water you have, the harder it is on chemistry, the more their need is for specialty chemistry. And frankly you know one of our bigger customers is internal. We’re providing the chemistry for all of our recycling. And so there’s been a number of kind of tailwinds around that special chemistry that’s delivered the returns where we are. We took a step back this quarter. It is completion driven, but we’re still pretty excited about it.
Don Crist: All right, I appreciate the color there. And John, maybe one for you, obviously there has been some large M&A in the basin – or in the Permian Basin in particular. Any thoughts on that consolidation and how that may benefit Select going forward, is it better for you given your larger company bias?
John Schmitz: Yes, Don, we think it is. A lot of those transactions you’re seeing were on both sides because we are sizable when we do have a good customer base. But just as important, we’re also integrated a lot with a lot of our customers’ infrastructure now. So we have integrations to take our asset bases, our different wells pipes recycling facilities and put them in a system. And that system just got larger with this. So – and I’ll also say that the acquirers here that we keep saying are very good customers for us with alignment because of the size of our either automation, the technology, the sources, the movement within it. And there – they’re doing this primarily with produced water and we all know produced water has a different environmental effect to it and we’re very focused on whether it’s hose development automation control, leak detection, that environmental application risk profile was favorable to the buyers here.
Michael Skarke: And John, if I may add, I mean, I – Don, I’d point you to the release we had in August with Endeavor where we announced 300,000 barrels a day of recycled water delivering almost $8.5 million barrels to a single location. I mean, that’s a really sophisticated technical highly engineered solution moving produced water from multiple sources, and there’s just not a lot of companies. I don’t know if there is another company that can pull off a job like that. And so it’s going to be the larger companies that are going to do things at that kind of scale and in doing that they’re going to look to a trusted partner, they can accomplish a project like that and I think that Select Water.
Don Crist: All right, I appreciate the color. I I’ll turn it back. Thanks, guys.
Michael Skarke: Thank you.
Operator: Thank you. Next question comes from the line of John Daniel with Daniel Energy. Please go ahead.
John Daniel: Hi, guys, thanks for having me. I’m away from my computer so I don’t have all the data in front of me but I’m curious, can you remind me what your recycling capacity is today, sort of what the utilization of that capacity is, and then just a reasonable growth rate that you would expect over the next couple of years.
Michael Skarke: We’ve got about $3 million barrels or so of daily capacity, roughly half of that is going to be fixed facilities, half of that’s going to be mobile facilities where we’re adding to both, but really focused on the fixed facilities because those are going to be the ones that are supported by long-term contracts. A majority of those facilities are in the Permian as you’re aware, John. There’s one in the DJ where a majority of the current opportunity set we’re looking at are in the Permian, but there are several that are outside of the Permian. And as other basins transition the opportunity for recycling just continues to expand. In terms of where we can take it, we’re pretty ambitious, we think that the market is going to continue to transition, it’s going to need an industry leader.
And I think that’s us. I’d probably stop short on saying we’re going to be this time next year, but if it’s not materially higher everyone in this room would be very disappointed.
John Daniel: Yes, fair enough. A little bit of an add-on a follow on to Don’s question, like when you all start building out the recycling capabilities, is it safe to assume that the larger – I’m going to say more sophisticated operators are the clients that are not the small guys or am I mistaken on that?
Michael Skarke: It’s actually kind of interesting because we really – we have interest in our recycling solutions from the largest operators to some that I really honestly wasn’t aware of until those conversations took off. I think there’s more opportunity on the larger because the economies of scale that exist but there’s certainly the ability to pull together a couple of smaller opportunities and still underwrite a commercial recycling facility and move forward and further integrate it into other solutions. So, I wouldn’t ignore the small ones, but it’s a definitely heavier weighted to midsize and larger.
Nick Swyka: And I’d add that – really there, it demonstrates that the value this brings, it’s great for the environment. It’s more sustainable. It’s leaving freshwater in the ground, addressing seismicity, but it’s also reducing costs for our customers. And we do this at scale economically and whether you’re a small operator or a large operator, we can help your wells be more productive at a lower cost.
Michael Skarke: And I think that’s a good point, Nick. The larger and mid-sized operators are generally those that are more focused on the stewardship and the environmental component, so that would be a bias towards them as well.
John Daniel: Right, so in this case the consolidation is actually a positive for you simplistically, right?
John Schmitz: John, it’s very big positive, and you can point to one of the past ones that we actually announced and that’s one of the acquired companies that just got announced. And as that acquired company got announced, we added two more deals to that recycling facility because of the scale and scope of the surrounding acreage that got put in the deal.
