DALLAS—San Mateo Midstream LLC on June 14 announced that its wholly-owned subsidiary, Black River Water Management Co. LLC, has entered into a long-term agreement with a wholly-owned subsidiary of Marathon Oil Corp. (NYSE: MRO) in Eddy County, N.M., relating to the gathering and disposal of Marathon Oil’s saltwater. The agreement includes the dedication of over 65 wells, which are located within five miles of San Mateo’s existing saltwater gathering system in Eddy County.

In addition, San Mateo has started drilling its fourth commercial saltwater disposal well in Eddy County and expects to begin drilling a fifth commercial saltwater disposal well in Eddy County later in the second quarter or early in third-quarter 2018. Upon completion of these additional saltwater disposal wells, San Mateo expects to have total saltwater disposal capacity in excess of 230,000 barrels per day (bbl/d) in Eddy County, N.M., and Loving County, Texas.

San Mateo expects to dispose of over 200,000 bbl/d of saltwater as early as first-quarter 2019, which includes expected volumes from the agreement announced above as well as expected volumes from San Mateo’s other contracted producers in Eddy County and Loving County.

Matt Spicer, vice president and general manager of San Mateo, said, “We are pleased to announce that we have entered into this significant contract with Marathon Oil for saltwater gathering and disposal in Eddy County, New Mexico. This contract, and others we have entered into in late 2017 and early 2018, have diversified San Mateo’s customer base as we continue to provide first-class midstream services to our anchor customer, Matador Resources Co., and to other producers in the area. We pride ourselves on generating value for our customers by providing services across all three production streams—oil, natural gas and salt water—and look forward to continuing to be a full-service midstream solution for producers in the northern Delaware Basin.”