Greetings, and welcome to Select Water Solutions' third quarter earnings conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chris George, Senior Vice President, Corporate Development, Investor Relations, and Sustainability. Thank you, Mr. George. You may begin. Thank you, operator, and good morning, everyone. We appreciate you joining us for Select Water Solutions' conference call and webcast to review our financial and operational results for the third quarter of 2023. With me today are John Schmitz, our Founder, Chairman, President, and Chief Executive Officer; Nick Swyka, Senior Vice President and Chief Financial Officer; and Michael Skarke, Executive Vice President and Chief Operating Officer. Before I turn the call over to John, I have a few housekeeping items to cover. A replay of today's call will be available by webcast and accessible from our website at selectwater.com. There will also be a recorded telephonic replay available until November fifteenth, 2023. The access information for this replay was also included in yesterday's earnings release. Please note that the information reported on this call speaks only as of today, November 1, 2023, and therefore, time-sensitive information may no longer be accurate as of the time of the replay listening or transcript reading. In addition, the comments made by management during this conference call may contain forward-looking statements within the meaning of the United States federal securities laws. These forward-looking statements reflect the current views of Select's management. However, various risks, uncertainties, and contingencies could cause our actual results, performance, or achievements to differ materially from those expressed in the statements made by management. The listener is encouraged to read our annual report on Form 10-K, our current reports on Form 8-K, as well as our quarterly reports on Form 10-Q to understand those risks, uncertainties, and contingencies. Please refer to our earnings announcement released yesterday for reconciliations of non-GAAP financial measures. As a reminder, the company made certain changes to its segment reporting structure during the second quarter of 2023. These changes were driven by several operational and strategic factors. However, the changes in segment reporting have no impact on the company's historical consolidated financial position, results of operations, or cash flows. Prior periods have been recast to include the water sourcing and temporary water logistics operations within the water services segment and remove the results of those operations from the water infrastructure segment. Historical segment information recasted to conform to the new reporting structure is available as supplemental financial information in the investors section of the company's website at investors.selectwater.com. Please refer to the company's current report on Form 8-K, filed with the SEC, concurrent with our earnings release, for additional information. Now, I'd like to turn the call over to our founder, chairman, president, and CEO, John Schmitz. Thanks, Chris. Good morning, and thank you for joining us. I'm pleased to be discussing Select Water Solutions again with you today. During the third quarter, we delivered substantial operating and free cash flow and continued to see steady growth in our water infrastructure segment. On the free cash flow side of things, I'm very pleased with the progress we made during the third quarter. Nick will touch on the components in a bit more detail, but our focused effort to reduce our working capital are paying off and helped deliver $118 million of cash flow from operations during the third quarter. After accounting for the $34 million in net CapEx spent during the quarter, we were able to pull through about $85 million of free cash flow, well exceeding our adjusted EBITDA for the period. We made tremendous strides in our working capital reduction efforts during the quarter, substantially outpacing our full-year performance targets a quarter early. Strong third quarter free cash flow enabled us to execute on a number of capital allocation priorities, including repaying all the outstanding borrowings on our Sustainability-Linked Credit Facility, increasing shareholder returns by raising our upcoming quarterly dividend payment by 20%, and funding more than $35 million of capital expenditures, heavily weighted toward our water infrastructure growth capital projects, supported by long-term contracts with attractive returns. Having now repaid our remaining outstanding borrowings during the third quarter, I expect to see a growing cash position building towards year-end. Replenishing our cash war chest provides us with ample opportunities to review our capital allocation priorities, including continuing to weigh incremental shareholder returns against additional organic growth projects and bolt-on and strategic M&A opportunities. We remain steadfast in our vision to be the recognized leader and trusted partner in sustainable water management solutions and believe our continued dedication to achieving operational excellence across the entire organization will further enhance that vision. Our focus for 2023 has been on acquisition integration, improving efficiencies and operational margins across the organization, and executing on infrastructure projects and free cash flow generation. While we have made great progress in many of these focus areas, especially around integration, infrastructure growth, and free cash flow, there is still more work to be done around the efficiency and operational excellence. While we did see some downward impact to the consolidated revenue of the business from more than a 10% decline in U.S. onshore completions activity, according to industry data, our water services and chemical technology segments both outperform the activity levels overall, with revenue declines well inside of the overall activity levels. Although we were able to hold chemical technology margins relatively steady during the third quarter, we took a modest step back in water services margins during the quarter. We can and must find continuing margin improvements in this segment, and I am firmly committed to getting to both our near-term and long-term targets of mid- to high-20% gross margins before D&A, respectfully. We continue to look closely at the entire scope and scale of the company, where appropriate, make the continuing determination to consolidate facilities or relocate assets across our areas of operation for certain non-performing service locations, particularly around our water service segment. We remain attentive to every dollar of capital we deploy, and we'll prioritize capital allocation to the most strategic areas of our business, especially where we have the most opportunity to add proprietary application of automation, chemistry, or recycling technology, and integrate full lifecycle water infrastructure and chemistry solutions around our existing asset base. Our recent organic recycling and disposal infrastructure projects have delivered strong performance, including driving water infrastructure to 6% sequential revenue growth and 40% gross margins in the third quarter. We saw growth across all areas of water infrastructure segment during the third quarter of 2023, with recycling volumes increasing by 5%, pipeline volumes up nearly 12%, and disposal volumes growing by 2% as compared to the second quarter of 2023. By boosting network utilization across our high operating leverage systems, we were able to drive incremental gross margins of more than 80% on every incremental revenue dollar during the third quarter. I expect to see this momentum continue in the fourth quarter and beyond into 2024. In the past 12 months, the water infrastructure segment has seen revenues grow 86% and gross profit before D&A more than double in size, growing by 113% year-over-year. Water infrastructure now accounts for more than 25% of the gross profitability of the company, and I expect to see this segment continue to grow as a contribution percentage of the company's overall profitability in 2024. Even with the recent activity volatility, we continue to experience increased demand for our new infrastructure development opportunities across all basins, as water infrastructure constraints remain to be a significant challenge for our customers. With our strategic infrastructure footprint, we are well positioned to strengthen the contractual relationship we have with our customers and expand the scope of integrated water and chemical solutions that we're able to provide around the infrastructure base. I believe our latest infrastructure project announcements demonstrate the value of our asset base and the continued opportunity to create long-term value for both our brownfield and greenfield investment projects across multiple basins. As you saw in our recent Haynesville contracts, we also have a great opportunity to incorporate contractual service capture through these relationships as well. I am excited about what the future holds for Select and look forward to further executing on this vision through additional profitability growth and cash flow generations in the quarters ahead. Ultimately, these profits and cash flows will provide us with the further opportunity for incremental shareholder returns and opportunistic M&A execution in the coming quarters. And importantly, Select is uniquely positioned to continue to deploy technology and chemistry solutions around our growing contracted infrastructure footprint. We are firmly focused on these initiatives, as I discussed, and I look forward to unlocking more cash and enhanced profitability in the quarters ahead. At this time, I'll let Nick speak to our third quarter results and outlook in a bit more detail. Nick? Thank you, John, and good morning, everyone. I'm pleased to report that our intensified focus on generating cash out of both the business and working capital produced operating cash flow of $118 million during the third quarter, which after adjusting for net CapEx, yielded free cash flow of $85 million. With this sum, we completely retired the balance on our credit facility, while leaving us with $25 million cash on hand. In this era of rising interest rates and capital markets volatility, Select's pristine balance sheet and abundant liquidity through our undrawn Sustainability-Linked Credit Facility enables us to both advance shareholder returns, as well as expand our water gathering, recycling, and distribution systems across multiple basins. We're excited to announce new dedicated acreage and pipeline volume additions to our Northern Delaware and Haynesville systems this quarter, as well as a 20% increase to our regular quarterly dividend. Growing both our infrastructure footprint and shareholder returns within annual cash flow from a solid balance sheet, is the model we expect to deliver for 2023 and the years ahead. While the water infrastructure segment met our expectations of a solid quarterly step-up in both revenue and margin, the industry's activity backdrop softened over the summer and into the third quarter, impacting our water services and chemical technology segments. Overall, consolidated revenues declined just under 4% to $389 million during the third quarter, from $405 million in the second. With net income of $15.3 million and adjusted EBITDA of $63 million during the third quarter. With drilling and completions activity appearing to be bottoming, along with the benefit of a more robust commodity price environment than we saw over the last couple of quarters, we believe that 2024 will resume upward momentum in other parts of the business, in tandem with the continued positive secular growth of our Water Infrastructure segment. In the interim, the near-term remainder of 2023 should see some customer budget and seasonal constraints. Our priority for the Water Services side will be a continued focus on operational excellence, closely evaluating peripheral or low-performing locations, driving down costs through procurement and operational efficiency initiatives, and working closely with customers to deliver advanced solutions with technology and automation. Industry data suggests that the third quarter saw average rig count and completions activity, each decline by about 10%. Against this backdrop, our water services segment's revenue declined by a little under 5%, with a portion of this decline coming from closed yard operations, to $252 million in the third quarter from $265 million in the second. Gross margins, which we customarily speak of in terms of before depreciation and amortization, declined from 21.9% to 20.5%. We expect the fourth quarter to bring mid-single-digit percentage revenue declines, with stable margins, which are poised to positively inflect in 2024 back towards our near-term target of mid-twenties, with high twenties remaining our longer-term target for this segment. Chemical technologies was also affected by the macro environment, with revenue declining a bit over 6% to $79 million sequentially. Though manufactured volumes in our plants were down about 10% sequentially, our higher dollar proprietary product demand held revenues inside of that volumetric decline, and our efficient manufacturing process held margins essentially flat, just above 20%. We anticipate modest low- to mid-single-digit percentage seasonal declines to revenue and margins of 19%-20% in Q4, but continued product research and development at our laboratory facilities, along with a stable to improving activity environment in 2024, should support the resumption of the segment's growth beyond next quarter's results. Our water infrastructure segment delivered to our forecast, growing revenue just under 6% or $3.1 million quarter-over-quarter, pressing just beyond our targeted gross margins of 40%. The backlog of development opportunities for this segment remains very strong. In addition to the multiple new contracts announced yesterday, we are actively evaluating well over a dozen additional organic opportunities in partnership with customers, as well as other growth avenues. We expect this segment to grow sequential revenue by mid-single digits again during the fourth quarter, and to advance margins another 200-300 basis points on higher utilization and continued system build-outs. I previously outlined a couple of 2023 targets related to cash flow and working capital. First, we targeted to reduce accounts receivable by $100 million between the end of Q1 and 2023 year-end. Second, we plan to exit the year with a debt-free balance sheet. I'm pleased to report that we exceeded both of those goals a quarter in advance, with accounts receivable declining by $137 million since Q1, and us having paid down the remainder of our credit facility balance during the third quarter, with $25 million of cash on hand left over. As our systems integration efforts progress, our consolidated accounts receivable days sales outstanding reduced to a level not seen since the third quarter of 2021, before we began our recent M&A acceleration. Select now has ample liquidity to capitalize on a range of potential strategic opportunities, and we expect to continue making additional progress on the cash flow and working capital front to finish the year. While I'm pleased with the progress we've made, I do believe there is continued opportunity to improve DSO further in 2024. Additionally, with the investments we've made, the company is in a much better position to manage and absorb future acquisition integrations. SG&A increased sequentially to $39 million, up $4.7 million from Q2, due primarily to an approximately $3 million increase in transaction and rebranding costs. We will be finishing the current rebranding initiative and related costs by year-end, which should provide for a modest reduction in SG&A from current levels by early 2024. Our third quarter net CapEx of $34 million was similar to the previous quarter's $36 million, with new infrastructure development representing the majority of that number. We are actively investing in our strategic infrastructure development in multiple basins, where we feel we have strong advantages, such as our established Permian and Haynesville systems. Accelerating the build-out pace of our systems, where backed by long-term contract opportunities, is a core priority for 2024. Our 2023 net CapEx forecast remains within its previous range, with a tightening to $120 million-$130 million after giving effect to roughly $15 million in expected full-year asset sales. We expect depreciation and amortization expense to continue at around $35 million per quarter, and both tax and interest expense to remain minimal through 2023. We added more than $55 million of liquidity during the quarter to finish with approximately 250 million of total liquidity. Coming one year after its initiation, we recently announced an increase in the regular quarterly dividend by 20% to $0.06 a share. We plan to continue to evaluate our dividend on an annual basis at a minimum. In addition to the dividend, we have about $12.5 million remaining capacity on our stock buyback program and may seek to utilize or add to that capacity as we monitor operating and capital market conditions. With shareholder returns at our core and substantial infrastructure growth investment opportunities ahead, we believe our blended model of growing both committed and tactical shareholder returns while deploying enhanced cash flow into long-lived, contracted water solutions networks across multiple basins, all accomplished from a solid balance sheet, will deliver substantial value to investors over the long term. Thank you, and with that, we'll open it up to questions. Operator? Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your questions from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. The first question comes from the line of Jim Rollyson with Raymond James. Please go ahead. Good morning, gentlemen, and nice to see beating the targets ahead of schedule on the free cash flow and AR, you know, working capital stuff. Nick, you mentioned a little teaser about evaluating more than a dozen new contract opportunities in the water infrastructure segment. Any way to just kind of frame up what the maybe total size or CapEx kind of associated with that is, so we can think about that, what the future revenue opportunity might look like? Sure, Jim. And as you've seen from this press release and then earlier ones, that there is a fair amount of variation in the total capital investment in these projects. We've done projects, pipeline as high as $40 million. We have a $2 million minimum announced for this quarter. And so you're kind of working within that window there. So, when we're talking about a dozen, those do vary. There's some in the kind of mid-single digits there, and there's some that are well into the double digits. So I'd say on average, you know, that if putting those together, that could reach triple digits. Obviously, we probably won't have all of those reach fruition. At the same time, we have some very early-stage discussions that some of which may lead to projects in 2024. So great opportunity set in front of us. The more we're adding on to our networks across multiple basins, the more opportunities we have, and we're looking to take advantage of our first-mover status in a lot of these basins. Jim, this is Michael Skarke. I think it's fair to say that infrastructure CapEx, we're going to see growth in that relative to what we had this year. It's an area where, as we've mentioned in the past, we think a vast majority of our growth CapEx will go there because of the opportunity set that Nick mentioned and the backlog that we continue to see developing behind it. Yeah, and the margins aren't exactly terrible either. On the, on the DSOs, Nick, you mentioned... Obviously, you've made great strides this year, and you mentioned more, more potential progress next year. Where do you think DSOs should normalize here over the next few quarters? Sure. So, as you noted, we've achieved those goals faster than we anticipated. A lot of hard work across the organization to do that. And so we're effectively back where we were before M&A. Now, I think we do have some opportunity ahead of us. It's not the same size of the opportunity that we've successfully taken advantage of this year, but I think we can get that down into the mid-seventies. Our customers do customarily have some terms and conditions that we have to live by as far as waiting for invoices. And so that - I think that'll effectively bottom us out there in the mid-seventy days of DSOs. But if we're successfully firing on all cylinders here, I think we can get to that mid-70s figure, which would put us, you know, with another $30 million or so off of AR from where we currently stand. Very helpful. Fantastic. And one last question. On the two other business lines, water services and the chemical technologies, obviously, kind of market headwinds didn't help margins this quarter go to maybe where you were hoping or where your ultimately long-term goals are. But as we think about getting both those divisions back on track to move to the mid-20s or higher margins as you guys are kind of targeting, do you-Is this all something that can happen from internal moves that you're doing? Or do you also need kind of the market to bounce back a bit to get there? I'm just trying to think about how this unpacks over the next few quarters as you guys strive to get to mid-20s margins. Yeah, Jim, this is Michael Skarke. Chemicals, I think we've guided to kinda 20s, which is really where we are. We think that we can kind of hold in that despite some seasonality in Q4 and have, you know, upside to it over the near and medium term as we look at manufacturing processes and reformulations of our technologies. On the services side, you know, we have guided to mid- or high 20s, and we think that where the market is today, that's still very achievable through kind of just organic, kind of grinding and operational efficiencies. We're very focused on, you know, implementing further automation on yard rationalization, on leveraging strategic relationships with infrastructure contracts. And just gets down to doing what we do, but doing it a little better. And so we're focused on it. There's gonna be some near-term friction. There's gonna be a little bit of a top-line disruption as we look to rationalize yards, but we think the gross margin will follow and trend upwards after that. And then any tailwind you get from the recovery kind of outlook for next year is just bonus points, I presume? Correct. Great. I'll turn it back. Let someone else ask questions. Thank you. Thank you, Jim. Thank you. Next question comes from the line of Luke Lemoine with Piper Sandler. Please, go ahead. Hey, good morning. Just to follow up on Jim's first question. In Water Infrastructure, you've had pretty explosive year-on-year growth this year, and you signed up a number of notable projects this year and talked about kind of the dozen projects you're evaluating, both brownfield and greenfield, that could be coming in the coming months. I guess kind of with these current and future investments, you know, how should we start thinking about, you know, the outlook for 2024 within this segment? From a margin perspective, I mean, we're at 40%, which is where we kinda said we'd be. We've guided kind of medium term to 50%. I don't know that we're gonna, you know, hit 50% for the full year. That'd be obviously a big jump on where we are today. But we've got a lot of projects that are coming online, you know, some this quarter, that are gonna be accretive to that margin. We still plan on infrastructure and chemicals being a majority of our gross profit for next year, with infrastructure really being the lion's share of the increase. So we're pretty aggressive in terms of what we think we can do, both top line and from a gross profit standpoint on infrastructure, just because of the asset base we've put together and the opportunity set that we've seen in front of us. And Luke, I'd add that this quarter, between the revenue increase in that segment and the margin increase, we grew gross profit about 12% quarter-over-quarter. And that was done, as I mentioned, with a not so favorable macro backdrop. And so you see that. I think we'll see similar steps forward here as we get quarter-over-quarter, add these new projects in, continue to work that margin higher, and grow that, as Michael mentioned, to that 50%. We're in the early stages of pulling together our thoughts for 2024, but I don't think it's unreasonable to think that infrastructure could be a third of the gross profit for next year. Okay. Got it. Perfect. Thanks a bunch. Thank you. Next question comes from the line of Tom Curran with Seaport Research Partners. Please go ahead. Morning, guys. Morning. For the water services division, Nick and Michael, when it comes to these three main levers you expect to pull internally to expand the division's gross margin, first to the mid-20s percent, next year, and then beyond that, to the high 20s percent. You've got technology enhancements like the pump and manifold automation, efficiency initiatives, such as centralizing procurement, moving third-party support internally, and then leveraging the growing infrastructure network. For each of those three, could you expound on how far along you think you are? And just, you know, if phase one is getting to the mid-20s percent, how should each of the three contribute to the mid-20s percent? And then as we look from the mid-20s percent to the high 20s percent, should there be a shift in terms of the weightings of the three? No, it's a great question, Tom, and I wouldn't—I couldn't have articulated it better. I would add that there's a fourth lever there, which is really yard consolidation and rationalization. So, you know, we've put a lot of assets together and a lot of yards together, and there is some overlap, and there's, frankly, some underperforming. And so that is gonna be a material lever that we're just now really starting to get into. We had a few that occurred this quarter, but we're expecting more. And I think that one's gonna be, you know, material, and we're very early innings in addressing it. In terms of leveraging infrastructure, contracts, and relationships, you know, that's also one that's relatively early in terms of us addressing.... You know, I would point that in the announcement yesterday, we had the announcement in the Haynesville, where we secured a long-term service contract, at the customer's request, off of the infrastructure contract that we put in place. And so we think those kind of opportunities, you know, exist, and that's gonna be, market share, but also margin accretive for both, for both segments. Supply chain, that was something we put in place this year, really centralizing supply chain, moving to, something that's more formalized in structure. Nick, I'd probably look to you as to where you think we are on that development. Yeah, I think as far as the getting the contracts in place and the procurement centralized, we're, we're in early innings. I think in terms of seeing the results financially, very, very early there. So I think the bulk of that will come in 2024. That's probably contributing just a, a few basis points in the current service margin. And then the final one you mentioned, Tom, was automation, and that's the one that I would say that we're furthest along. We've really been, you know, a pioneer in terms of water solution automation. It's something that we think is a differentiator. It's something that a way that we can do something safer, more cost-effective, and more reliable than relying on, you know, sometimes lower-skilled labor. And so it's something that we're while we're further along than the other initiatives, it's one that you're never done in. There's always more. And so that one would be later innings, but still pretty good runway. Got it. Helpful breakdown and additional color there. Thanks for that. And then, Nick, I realize, you know, you are still finalizing the plan and expectations to provide formal 2024 guidance, but maybe just some preliminary, you know, metrics here for cash flow in 2024. Are you still targeting a conversion rate for EBITDA to free cash flow of about two-thirds and expecting maintenance CapEx to run about $50 million per quarter, give or take $5 million-$10 million? Tom, I'd see maintenance CapEx as lower than that. I'd say, again, preliminary basis, I'll talk more about it next quarter, but we're probably looking at $60 million for the full year, maintenance CapEx. But for now, give me, you know, $10 million on either side of that, and we'll get a little more direct next year. I think the two-thirds free cash flow of EBITDA, that was partially driven by the working capital opportunity we had for this year. So I think for next year, it's probably gonna be a little lower, but as I think about our free cash flow for this year, we had $75 million debt outstanding in the first quarter. We've taken that to zero with $25 million cash on hand. We've paid out over $65 million of shareholder returns this year on top of that. And then we've executed on our CapEx budget and stayed within that budget while adding some really critical projects. So, this is a strong cash flow generating business here. It'll be strong next year. I think we do probably have initial growth infrastructure projects, as Michael mentioned, that are likely to come in higher than this number, this year's number. So I'm excited about that, and we're gonna do that, as always, with a very conservative, solid balance sheet and look at all the opportunities, both organic and potentially M&A related as well. One point, just to reiterate on the growth infrastructure projects for next year. You know, those projects have strong contractuals, long-term contracts around them. They're generally production weighted or being driven by secular trends such as recycling. So we feel really good about those investments in a flat or even, you know, slightly down market because of the contractual support and because of the production and secular trends that exist there. Got it. And just to be clear, I was saying $15 million per quarter or $60 million for the year, so it does sound as if that's unchanged, Nick? Sorry, I misheard you there, Tom. So that 15 per quarter, maintenance CapEx- Okay Sounds like a good number there. Not 50. Got it. I thought he said 52. Right. Yeah, exactly. All right. Thanks, guys. I'll turn it back. Thank you, Tom. Thank you. Thank you. Next question comes from the line of Don Crist with Johnson Rice. Please go ahead. Morning, gentlemen. I wanted to ask about specialty chemicals. I know it's been a couple quarters now since you've been doing the tailored solutions per formation, and you're getting more, data back, flow back data, et cetera. Any kind of updates there, and, and is the demand increasing still in that specialty chemical segment? Yeah, a couple of things on that, Don. First, we're seeing operators continue to be more and more focused on chemistry and its compatibility with produced water and just well results. And so we're getting really good reception as we have those conversations with our customers. In terms of the results that we've seen, I mean, we're pretty happy with the improvement in market share and margins we've seen with chemistry over the last few quarters. And we really contribute it to, you know, what we're doing in terms of creating more water-tolerant solutions designed for produced water. And so we've gotten some pretty good feedback with the customer, with our customers on that. We've got, you know, direct, open dialogue with both operators and pressure pumpers. And additionally, just the more... As you know, the more produced water you have, the harder it is on chemistry, the more the 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. You know, we took a step back this quarter. It is completion driven, but we're still pretty excited about it. I appreciate the color there. And John, maybe one for you. You know, obviously, there's 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? Yeah, Don, we think it is. You know, a lot of those transactions you're seeing were on both sides because we are, you know, we are sort of, you know, sizable, and we do have a good customer base. But just as important, you know, we're also integrated a lot, with a lot of our customers' infrastructure now. So we, you know, 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 seeing are very good customers, for us with alignment because of the size of our either automation, the technology, the sources, you know, the movement, within it. 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 is favorable to the buyers here. John, if I may add, I mean, 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, you know, produced water from multiple sources. And there's just not a lot of companies. I don't know that there's another company that can pull off a job like that. And so it, it's gonna be the larger companies that are gonna do things at that kind of scale. And in doing that, they're gonna look to a trusted partner that can, that can accomplish a project like that, and I think that's Select Water. I appreciate the color. I'll turn it back. Thanks, guys. Thank you. Thank you. Next question comes from the line of John Daniel with Daniel Energy. Please go ahead. Hey, guys. Thanks for having me. 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, you know, a reasonable growth rate that you would expect over the next couple of years? You know, we've got about 3 million barrels or so of daily capacity. You know, roughly half of that's gonna be fixed facilities, half of that's gonna be mobile facilities. We're adding to both, but really focused on the fixed facilities because those are gonna be the ones that are supported by, you know, long-term contracts. A majority of those facilities are in the Permian, as you're aware, John. Yeah. 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 those other basins transition, you know, the opportunity for recycling just continues to expand. You know, in terms of where we can take it, you know, we're pretty ambitious. We think that the market's gonna continue to transition. It's gonna need an industry leader, and I think that's us. I'd probably stop short on saying where we're gonna be this time next year, but if it's not materially higher, everyone in this room will be very disappointed. Yeah, fair enough. And a little bit of an add-on or 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 gonna say, more sophisticated operators are the clients and not the small guys, or am I mistaken on that? It's actually kind of interesting because we really have interest in our recycling solutions from, you know, the largest operators to some that I really honestly wasn't aware of until these 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, you know, I wouldn't ignore the small ones, but it's definitely heavier weighted to midsize and larger. I'd add that it demonstrates the value this brings. It's, you know, it's great for the environment, it's more sustainable, it's leaving fresh water in the ground, it's 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. I think that's a good point, Nick. The larger and mid-size operators are generally those that are more focused on the stewardship... and the environmental component. Right. So that would be a bias towards them as well. Right. So in this case, the consolidation is actually a positive for you, simplistically, right? Yeah, John, John, it's a very big positive, and you can point to- Yeah one of the past ones that we actually announced, and that, that's one of the, you know, acquired companies that just got announced. And- Right 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. Got it. A final question. I think you mentioned in your response to a question, was a portion of your customers are, in fact, the pressure pumping companies. Did I hear that correctly? On the chemical side. On the chemical side, yeah. So Chemical Technologies works for both, pressure pumpers as well as direct operators. Okay. Are you having or seeing any signs of payment issues with any of the smaller pressure pumping companies? No, John, we're not. You know, part of the... I'll circle back to an earlier question there, and you know, how low can our DSO get, when we do sell to pressure pumpers that are in turn paid by operators through Chemical Technologies division, which has both operators and pressure pumpers as customers. Yeah You know, that dynamic there is one of the things that keeps us from getting, you know, call it below 75 days, eventually. However, the- Right P ayment issues, you know, we're having the same performance that we've typically had there. No sign of deterioration. We do work for a lot of very large, successful pressure pumpers, and they're paying on schedule. Yeah, I mean, I would expect that for them, but you've seen the sort of carnage in the spot frac market. I just didn't know if those super, super small frac players were having any issues. So that's the question. We really don't do a whole lot with the super small frac players. We have a hard time on that side with the chemistry, just given the size of those tickets. Got it. Okay. I think it's fair to say, John, we also don't do a lot of business with even larger companies that are heavily weighted to spot. We don't. Fair enough. Well, thank you for including me and for your time today. Thank you, John. Thank you. Next question comes from the line of Jeff Robertson with Water Tower Research. Please go ahead. Thank you. Good morning. About the revenue split is about 70% completion and 30% production. Michael, do you see that changing over time as companies drill longer laterals, and maybe even if they're drilling bigger pads, do you see the amount of water that they'll have to move off locations increasing? And is that an area that will drive your margin opportunity in the water infrastructure business? Yeah, I think that's a good question, Jeff, and there's really two parts. So we do see continued longer laterals and more water per pad, as I mentioned with the Endeavor job that we released a couple months ago. And so that's certainly an opportunity for us as a, you know, water management company in providing the water and managing the water and taking it away. In terms of the split between completion and production, I really look at that a little differently. I do see the production weighting continue to increase, and that's largely as a result of our focus around infrastructure. I mean, that's really where... As I mentioned, that's where we're going to spend a majority of our growth capital for next year, and a good portion of that's gonna be related or really derived from production revenue. I think that's what's gonna drive a split, something more towards a, you know, 60/40 in the near term. So Michael, as that increases, I think you alluded to earlier, that also could help drag up margins in the water services and maybe even the chemicals business. Is that right? That, that's exactly right. We're, we're really looking to leverage those infrastructure relationships and, and long-term contracts, to provide, you know, more, opportunities for services and chemistry. And it's, it's not, it's not really a bundling. A bundling is, is usually a cost-based approach. This is a service logistics-based approach, where we can provide the complete solution at the correct price, for the customer. And just last- I'd refer everyone to what we did in the Haynesville. I mean, we were asked to provide that solution by our customer. It wasn't a bundled offer. It was the answer they needed, and we were grateful to be able to do it for them. My last question kind of is a take on that. As you see consolidation in the industry, are you seeing some of your customers who only want to deal with one water company and allow you to put more of your offerings in front of them at a better margin opportunity for Select? Yeah, I think John really nailed the question about consolidation and how we think about it. I mean, to your point, when you're working for the largest operators out there, you know, safety, environmental, automation, you know, size, scale, reputation, all of these really matter, and there's only a few companies that can check those boxes. And, you know, fortunately, we're one of them. And so, we're not afraid of consolidation. We're embracing it. We're proactive. We think it creates opportunities for us, on really all three segments: services, infrastructure, and chemistry. Yeah, and I would add on to that. I mean, Nick talked about our efforts in the procurement area for this company. One of the focuses with centralized procurement is to, you know, to do more with less on the vendor side for us. Our customers are doing the same thing. They're very much focused on more of a partnership approach, especially in the infrastructure piece. But as it relates to chemicals and water services, they look at that as a value as well into doing business with fewer companies and more strategic value add as we move forward in the area that we're in, which is this water solutions business. Thank you for taking my questions. Thank you. Thank you, Jeff. Thank you. There are no further questions at this time. I would like to turn the floor over to John Schmitz for closing comments. Yeah, thanks to everyone for joining the call. Thank you for your interest in learning more about Select Water Solutions, and we look forward to speaking to you again next quarter. Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.