Select Energy Services, Inc. (WTTR): Business Model Canvas [11-2024 Updated]
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Select Energy Services, Inc. (WTTR) Bundle
In the dynamic landscape of the oil and gas industry, Select Energy Services, Inc. (WTTR) stands out with its innovative business model that effectively addresses the critical need for water management solutions. Through strategic partnerships and a robust array of services, the company delivers comprehensive water sourcing, treatment, and logistics tailored for its diverse clientele. Discover how Select Energy Services aligns its operations with the demands of the market and positions itself as a leader in sustainability and efficiency.
Select Energy Services, Inc. (WTTR) - Business Model: Key Partnerships
Collaborations with E&P companies
Select Energy Services, Inc. (WTTR) engages in strategic collaborations with exploration and production (E&P) companies to provide essential water services. In the recent period, the company reported that approximately 62.8% of its total revenue, amounting to $692.3 million, originated from Water Services, which primarily serves E&P companies. The company operates in key regions like the Permian Basin, Eagle Ford, and Rockies, which collectively account for a significant portion of their revenue.
Partnerships with chemical suppliers
WTTR maintains partnerships with various chemical suppliers to enhance its Chemical Technologies segment. This segment generated $196.6 million in revenue, which represented 17.8% of total revenue for the current period. The company focuses on developing and supplying chemicals used in hydraulic fracturing and other oilfield applications, which are critical for E&P operations.
Relationships with regulatory bodies
WTTR actively engages with regulatory bodies to ensure compliance with industry standards and regulations. This is vital to mitigate risks associated with environmental impacts and operational practices. The company's operations are influenced by regulations that govern water sourcing, disposal, and treatment, which are critical for maintaining sustainable practices in the oil and gas sector.
Alliances for technology development
In pursuit of technological advancements, WTTR forms alliances aimed at developing innovative solutions for water management and chemical applications. The company has made significant investments in technology, as evidenced by its capital expenditures totaling $124.7 million for the nine months ended September 30, 2024. These collaborations are designed to enhance operational efficiency and reduce costs across its service lines.
| Partnership Type | Key Data | Revenue Impact |
|---|---|---|
| E&P Companies | 62.8% of total revenue from Water Services | $692.3 million |
| Chemical Suppliers | 17.8% of total revenue from Chemical Technologies | $196.6 million |
| Regulatory Bodies | Compliance with industry regulations | N/A |
| Technology Alliances | Capital expenditures for technology development | $124.7 million |
Select Energy Services, Inc. (WTTR) - Business Model: Key Activities
Water sourcing and transfer services
For the Current Period, Select Energy Services reported revenue of $692.3 million from its Water Services segment, which constitutes approximately 62.8% of total revenue. This segment has seen a decrease of $98.8 million or 12.5% compared to the Prior Period, primarily due to lower customer activity levels driven by macroeconomic factors.
The costs associated with Water Services were $545.9 million, resulting in a gross profit of $146.4 million and a gross margin of 21.1%. The company focuses on effective cost controls and higher water sourcing margins to enhance profitability.
Chemical logistics and management
In the Chemical Technologies segment, Select Energy Services recorded revenue of $196.6 million for the Current Period, down $53.6 million or 21.4% from the previous year. The costs of revenue in this segment were $165.8 million, leading to a gross profit of $30.8 million and a gross margin of 15.6%.
Key activities in chemical logistics include sourcing raw materials for chemical production, managing logistics for chemical distribution, and ensuring compliance with safety and environmental regulations. The company incurred raw material costs of $54.8 million during the Current Quarter.
Water treatment and recycling
Revenue from the Water Infrastructure segment increased to $214.1 million, reflecting a growth of 26.6% compared to the Prior Period. The costs of revenue for this segment were $102.8 million, resulting in a gross profit of $111.3 million and a gross margin of 51.9%. This segment's growth is attributed to acquisitions and an increase in recycling activities, which have positively impacted gross margins.
Water treatment services involve processes such as filtration and chemical treatment to ensure water quality meets regulatory standards. Additionally, the company has increased its focus on recycling wastewater, which is becoming a critical service as environmental concerns grow.
Infrastructure maintenance for water systems
Select Energy Services allocates resources to maintain its infrastructure for water systems, which is crucial for operational efficiency. The company incurred depreciation, amortization, and accretion expenses of $113.2 million for the Current Period. This reflects the ongoing investment in maintaining and upgrading facilities and equipment critical for service delivery.
In the Current Quarter, the company reported capital expenditures of $124.7 million, emphasizing its commitment to enhancing infrastructure. The robust maintenance of infrastructure ensures reliability and efficiency in delivering water services to customers.
| Key Activity | Current Revenue (in millions) | Cost of Revenue (in millions) | Gross Profit (in millions) | Gross Margin (%) |
|---|---|---|---|---|
| Water Sourcing and Transfer Services | $692.3 | $545.9 | $146.4 | 21.1% |
| Chemical Logistics and Management | $196.6 | $165.8 | $30.8 | 15.6% |
| Water Treatment and Recycling | $214.1 | $102.8 | $111.3 | 51.9% |
| Infrastructure Maintenance | N/A | $113.2 (depreciation) | N/A | N/A |
Select Energy Services, Inc. (WTTR) - Business Model: Key Resources
Skilled workforce in water management
The workforce at Select Energy Services is a critical asset, with labor and labor-related costs totaling approximately $419.0 million for the nine months ended September 30, 2024. The company employs skilled professionals who specialize in water sourcing, management, and distribution, vital for supporting their operations in the energy sector.
Advanced chemical technologies
Select Energy Services leverages advanced chemical technologies to provide innovative solutions for hydraulic fracturing and other oilfield applications. The Chemical Technologies segment generated revenue of $196.6 million for the nine months ended September 30, 2024, despite a 21.4% decrease compared to the prior period. This segment is integral for developing customized chemical solutions that enhance operational efficiency.
Water sourcing and distribution infrastructure
The company has established a robust water sourcing and distribution infrastructure, which includes produced water gathering systems and saltwater disposal wells. As of September 30, 2024, the Water Infrastructure segment reported total assets of $614.99 million, reflecting significant investment in infrastructure. Revenue from this segment was $214.1 million for the nine months ended September 30, 2024, marking a 26.6% increase compared to the previous period.
Strong financial position for capital investments
Select Energy Services maintains a strong financial position, with cash and cash equivalents totaling $10.9 million as of September 30, 2024. The company also had $127.8 million in available borrowing capacity under its Sustainability-Linked Credit Facility. For the nine months ended September 30, 2024, the company reported a net income of $37.6 million, despite a decrease from the prior period.
| Key Resource | Description | Financial Data |
|---|---|---|
| Skilled Workforce | Labor and labor-related costs | $419.0 million (9 months ended Sept 30, 2024) |
| Chemical Technologies | Revenue from chemical solutions | $196.6 million (9 months ended Sept 30, 2024) |
| Water Infrastructure | Total assets in infrastructure | $614.99 million (as of Sept 30, 2024) |
| Financial Position | Cash and available borrowing capacity | $10.9 million cash, $127.8 million borrowing capacity (as of Sept 30, 2024) |
Select Energy Services, Inc. (WTTR) - Business Model: Value Propositions
Comprehensive water management solutions
Select Energy Services, Inc. (WTTR) provides a full suite of water management services, which generated revenue of approximately $793.5 million for the nine months ended September 30, 2024. This segment includes water sourcing, transportation, and disposal, serving the energy sector's needs for efficient water management throughout the lifecycle of oil and gas wells.
| Service Type | Revenue (in thousands) | Operating Income (in thousands) |
|---|---|---|
| Water Services | $793,484 | $66,828 |
| Water Infrastructure | $215,700 | $45,478 |
| Chemical Technologies | $197,724 | $10,845 |
Custom chemical solutions for oil and gas
The Chemical Technologies segment, which includes the development and provision of tailored chemical solutions for hydraulic fracturing and cementing, recorded revenues of $196.6 million for the nine months ending September 30, 2024. This reflects a strategic focus on providing customized services that optimize operational efficiency for clients in the oil and gas industry.
Enhanced operational efficiency for clients
Select Energy Services emphasizes operational efficiency through its integrated solutions. The company reported an Adjusted EBITDA of $202.2 million for the nine months ended September 30, 2024, indicating strong operational performance and effective cost management. Furthermore, their comprehensive service offerings are designed to streamline processes for energy producers, helping clients reduce downtime and operational costs.
| Metric | Value (in thousands) |
|---|---|
| Adjusted EBITDA | $202,155 |
| Free Cash Flow | $61,314 |
Commitment to sustainability and environmental safety
Select Energy Services has made significant strides in sustainability, with a commitment to environmentally responsible practices. As of September 30, 2024, the company had approximately $127.8 million in available borrowing capacity under its Sustainability-Linked Credit Facility, which promotes investments in sustainable practices. Their focus on minimizing environmental impact while providing essential services positions them favorably in a market increasingly prioritizing sustainability.
| Financial Metric | Value (in thousands) |
|---|---|
| Cash and Cash Equivalents | $10,900 |
| Available Borrowing Capacity | $127,800 |
Select Energy Services, Inc. (WTTR) - Business Model: Customer Relationships
Contractual agreements with fixed pricing
Most of Select Energy Services' customer agreements are short-term, typically lasting less than one year, with a few exceptions in the Water Infrastructure segment that may contain longer-term agreements. The contracts allow either party to terminate at any time without substantive penalties, ensuring flexibility in customer relationships. Revenue for the Water Services, Water Infrastructure, and Chemical Technologies segments constituted 62.8%, 19.4%, and 17.8% of total revenue, respectively, for the nine months ended September 30, 2024, reflecting a diverse contractual base.
Focus on long-term partnerships
Select Energy Services emphasizes building long-term partnerships with its customers, particularly in its Water Infrastructure segment. The company has seen a revenue increase of $45.0 million, or 26.6%, in this segment for the nine months ended September 30, 2024, compared to the same period in the prior year. This growth is driven by additional revenue from acquisitions and expansion in recycling business lines.
Responsive customer service and support
The company maintains a robust customer service framework that enables prompt responses to client needs. Select Energy Services reported a gross profit increase of $6.2 million, or 11.0%, for the quarter ended September 30, 2024, attributed to effective operational execution and customer support. Moreover, the selling, general, and administrative expenses have decreased by $1.7 million, indicating improved efficiency in supporting customer relationships.
Tailored solutions based on client needs
Select Energy Services provides customized solutions tailored to the specific requirements of its clients. The company has invested in technological advancements and capital expenditures of $115.9 million for the nine months ended September 30, 2024, aimed at enhancing service delivery and operational capabilities. In addition, the acquisition of customer relationships valued at approximately $8.2 million during recent acquisitions indicates a strategic focus on enhancing service offerings.
| Segment | Revenue (Current Period) | Revenue (Prior Period) | Change (%) | Gross Profit (Current Period) | Gross Profit (Prior Period) |
|---|---|---|---|---|---|
| Water Services | $692.3 million | $791.1 million | -12.5% | $175.3 million | $177.1 million |
| Water Infrastructure | $214.1 million | $169.1 million | +26.6% | $46.1 million | $30.2 million |
| Chemical Technologies | $196.6 million | $250.2 million | -21.4% | $48.5 million | $63.0 million |
Select Energy Services, Inc. (WTTR) - Business Model: Channels
Direct sales through field representatives
Direct sales are facilitated by a dedicated team of field representatives who engage with potential and existing clients to provide tailored service solutions. For the nine months ended September 30, 2024, Select Energy Services reported total revenue of $1.1 billion, with substantial contributions from direct sales efforts in key operational regions such as the Permian Basin and Eagle Ford, which collectively accounted for approximately 71% of segment revenue.
Online platforms for service inquiries
Select Energy Services utilizes online platforms for customer inquiries and service requests. This digital approach allows for streamlined communication and service delivery. As of September 30, 2024, the company reported a significant increase in customer engagement through its online channels, contributing to a more efficient sales process and improved customer satisfaction metrics. The company’s digital presence supports the facilitation of service contracts, which are generally short-term in nature, with most lasting less than one year.
Industry trade shows and conferences
Participation in industry trade shows and conferences remains a vital channel for Select Energy Services. These events provide opportunities for networking, showcasing new technologies, and demonstrating the company's capabilities to potential clients. In 2024, Select participated in several key industry conferences, enhancing its visibility in the market. The company’s engagement in these events has historically led to new contracts and partnerships, further solidifying its market position.
Partnerships with industry stakeholders
Strategic partnerships with various industry stakeholders enhance Select Energy Services' market reach and service offerings. These collaborations enable the company to leverage complementary strengths, such as technology sharing and resource pooling. For instance, partnerships in the water management sector have facilitated access to advanced technologies and expanded service capabilities. As of 2024, Select reported $18.1 million in revenue from partnerships related to its water infrastructure segment, illustrating the financial impact of these alliances.
| Channel Type | Revenue Contribution | Key Metrics |
|---|---|---|
| Direct Sales | $1.1 billion | 71% of segment revenue from top regions |
| Online Platforms | Significant Increase | Improved customer satisfaction metrics |
| Trade Shows | Contract Acquisition | New contracts from participation |
| Partnerships | $18.1 million | Enhanced service capabilities |
Select Energy Services, Inc. (WTTR) - Business Model: Customer Segments
Oil and gas exploration and production companies
Select Energy Services primarily serves oil and gas exploration and production (E&P) companies. In the nine months ended September 30, 2024, revenue from Water Services, which includes water sourcing, transfer, and management, was $692.3 million, accounting for 62.8% of total revenue. The overall market for E&P companies has faced challenges, leading to decreased activity levels and price reductions, which significantly impacted revenue generation in this segment.
Industrial clients requiring water solutions
Industrial clients that require comprehensive water solutions are another key customer segment for Select Energy Services. The Water Infrastructure segment generated $214.1 million in revenue for the nine months ended September 30, 2024, representing 19.4% of total revenue. This segment includes services such as water recycling and produced water gathering, which are increasingly critical for industries seeking sustainable water management practices.
Contractors in the energy sector
Contractors operating within the energy sector are also significant customers of Select Energy Services. The Chemical Technologies segment, which provides chemical applications and technical solutions, generated $196.6 million in revenue for the nine months ended September 30, 2024, accounting for 17.8% of total revenue. The services offered cater to contractors needing specialized chemicals for hydraulic fracturing and other processes.
Municipalities needing water infrastructure
Select Energy Services serves municipalities that require robust water infrastructure solutions. The company has been expanding its capabilities in this sector, with the Water Infrastructure segment seeing a revenue increase of 26.6% year-over-year. The growth in revenues from this segment highlights the demand for comprehensive water management solutions that municipalities are seeking to implement.
| Customer Segment | Revenue (9 months ended September 30, 2024) | Percentage of Total Revenue |
|---|---|---|
| Oil and Gas E&P Companies | $692.3 million | 62.8% |
| Industrial Clients | $214.1 million | 19.4% |
| Contractors in Energy Sector | $196.6 million | 17.8% |
| Municipalities | Growth in Water Infrastructure segment | Increasing demand |
Select Energy Services, Inc. (WTTR) - Business Model: Cost Structure
Variable labor and operational costs
Labor and labor-related costs represent the largest portion of Select Energy Services' operational expenses. For the Current Quarter, these costs amounted to $134.2 million, while for the Current Period, they were $399.2 million. In the Prior Period, these costs reached $419.0 million.
Equipment maintenance and depreciation
Select Energy Services incurs significant costs related to vehicle and equipment maintenance. For the Current Quarter, the total costs for these aspects were $80.0 million, and for the Current Period, they amounted to $238.5 million, compared to $235.9 million in the Prior Period. The depreciation, amortization, and accretion expense increased to $113.2 million for the Current Period, from $102.8 million in the Prior Period.
Transportation and fuel costs
Transportation costs, which include fuel and freight, are variable and significantly influenced by market conditions. In the Current Quarter, these costs were $19.7 million, while for the Current Period, they were $64.7 million, a decrease from $88.7 million in the Prior Period.
Administrative and overhead expenses
Administrative and overhead expenses, which include selling, general, and administrative costs, totaled $120.2 million for the Current Period, up from $109.1 million in the Prior Period. This increase can be attributed to higher compensation costs and increased legal and professional fees. The breakdown of these expenses is as follows:
| Expense Type | Current Quarter (in millions) | Prior Quarter (in millions) | Current Period (in millions) | Prior Period (in millions) |
|---|---|---|---|---|
| Labor Costs | 134.2 | 140.6 | 399.2 | 419.0 |
| Vehicle and Equipment Costs | 80.0 | 79.8 | 238.5 | 235.9 |
| Transportation Costs | 19.7 | 27.8 | 64.7 | 88.7 |
| Administrative and Overhead Expenses | 120.2 | 109.1 | 120.2 | 109.1 |
Select Energy Services, Inc. (WTTR) - Business Model: Revenue Streams
Service fees from water management
In the Water Services segment, Select Energy Services generated revenue of $692.3 million for the nine months ended September 30, 2024, compared to $791.1 million for the same period in 2023, reflecting a decrease of 12.5%. The decline was primarily due to lower customer activity and reduced frac crew deployments.
Sales of chemical products and services
Revenue from the Chemical Technologies segment decreased to $196.6 million for the nine months ended September 30, 2024, down 21.4% from $250.2 million in the prior year. This decrease was attributed to macroeconomic factors affecting pricing and demand.
Rental income from equipment leasing
In the area of accommodations and rentals, Select Energy Services reported approximately $20.1 million in rental income for the current quarter ending September 30, 2024, compared to $19.5 million in the prior quarter. This revenue is recognized on a straight-line basis under ASC 842 lease guidance.
Long-term contracts for infrastructure services
The Water Infrastructure segment experienced a revenue increase to $214.1 million for the nine months ended September 30, 2024, representing a growth of 26.6% from $169.1 million in the previous year. This growth was driven by acquisitions and an expansion in recycling services.
| Revenue Stream | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | Change (%) |
|---|---|---|---|
| Water Services | $234.0 | $251.9 | -7.1% |
| Water Infrastructure | $82.0 | $58.4 | +40.5% |
| Chemical Technologies | $55.3 | $79.0 | -30.0% |
Updated on 16 Nov 2024
Resources:
- Select Energy Services, Inc. (WTTR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Select Energy Services, Inc. (WTTR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Select Energy Services, Inc. (WTTR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.