Aris Water Solutions, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Property, Plant and Equipment

Property, Plant and Equipment

9 Months Ended

Sep. 30, 2021

Solaris Midstream Holdings, LLC and Subsidiaries

Property, Plant and Equipment

Property, Plant and Equipment

5.Property, Plant and Equipment

Property, plant and equipment (“PP&E”) is stated at cost, less accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful service life of the asset.

PP&E consists of the following:


(in thousands)	September 30,		December 31,
	2021		2020
Wells, Facilities and Related Equipment ⁽¹⁾	$	321,983	$	331,322
Pipelines		314,178		276,433
Water Ponds		4,795		3,774
Land		2,063		2,063
Vehicles		6,023		5,123
Computer and Other Equipment		10,104		8,994
Office Furniture, Equipment and Improvements		625		609
Assets Subject to Depreciation		659,771		628,318
Projects and Construction in Progress		32,460		33,128
Total Property, Plant and Equipment		692,231		661,446
Accumulated Depreciation ⁽¹⁾		(60,757)		(43,258)
Total Property, Plant and Equipment, Net	$	631,474	$	618,188

⁽¹⁾ In late third quarter 2021, management completed its evaluation of the performance of a saltwater disposal asset, located in Eddy County, New Mexico and concluded that the well should be shut-in and taken out of service. We drilled this well in the second quarter of 2017 and encountered technical difficulties requiring significant incremental capital expenditure. The asset was put into service in May of 2018. During July 2021, we re-entered the well bore to address anomalies. After technical testing, management concluded that it was probable that abandoning the asset was the most prudent course of action as the well is unable to remain in service in its current condition. Accordingly, we have removed the cost and the associated accumulated depreciation and recognized a charge of $27.4 million for the remaining net book value of the well. The charge has been reflected in Abandoned Well Costs in the Statements of Operations.