Good morning, y'all, so we'll get started here. I'm John Schmitz. I'm the Founder and Chairman and CEO of Select Water Solutions, a public traded company on the New York Stock Exchange. All right, we'll walk through the slides today, and be glad to answer any questions you got. Disclaimer statement: it is a public traded company, and what I'm telling you is what I know today, might change tomorrow. You know, the company itself is a very clear mission to it. It's Lower 48 land only. It has to deliver solutions to the oil and gas operators across the Lower 48, mostly unconventional, primarily unconventional, so the application of long lateral well completions and production, and we fit in the middle of that.
We're the water sustainability company, so either the water that's needed to drill and complete these Lower 48 unconventional wells, we're a solution for that water, and then we're in the lifecycle water, the water that actually is produced as they produce the oil and gas through the life of the well. Yeah. We are the market leader. If you look across the Lower 48, we have a footprint that goes across all the basins, so Canada to Mexico. We have our recycling facilities, so take a piece of produced water and recycle it to a point where it could be reused to actually complete the well. We're the number one there, and we're probably three times bigger than the number two on it. We have a service component and a chemistry component that is very integral to that infrastructure piece of water.
And both of those pieces of our business, whether the water service piece and the last mile logistics or the chemistry that's used in this water, those are very high free cash flow conversion pieces of our business, and is used as we invest in our infrastructure build-out for the lifecycle of the well. The balance sheet is very strong. We are a portion of our business, and you know, if you look at the history of the company, it was really a call-out service business, and so it was really highly levered to cyclicality of drilling completion, dollar spend across the United States, so we've been very conservative in how we manage our balance sheet.
Now, that is changing some because of our infrastructure, long-term contracts, production life of the well on it, but a very conservative balance sheet. We have been very acquisitive lately. We came out of COVID with no debt and a very strong balance sheet of cash, and we took advantage of the opportunity coming out of COVID of companies that weren't that fortunate, and we did a lot of acquisitions and have continued to do those acquisitions, so a lot of M&A inside the company. We've been very strong in our shareholders' returns. We bought back quite a bit of our stock. We put in place a regular quarterly dividend, and we continue to support the increasing of that dividend on it, and you know, it is a water sustainability company.
We do recycle water for reuse instead of disposal, and then we manage that water in the life cycle of the well in the most strategic way for our customer base. So water sustainability is really what this company is about. We report under three segments. The first one is the growth segment, that's the water infrastructure. So that's pipelines to gather the water, pipelines to distribute the water, recycling facilities that are fixed, and like manufacturing plants or, you know, chemical plants where you actually run the water through to turn it back into a usable stream from a waste stream. The disposals themselves, so disposal wells that are drilled and dispose of the waste stream, and then the storage capacity.
As you gather to recycle or dispose that storage, or you actually have recycled, and you're putting it in storage to be ready and available in a manner that you can deliver it back into the completion of the well. The water services piece is the last mile logistics, so the water is recycled, it's distributed out to big quantities in storage, and then you move it from storage to the actual job site where they're fracking the wells. This could be a 40-day job. We lay out temporary piping systems to that job, and we move that water in high quantities to that frac job while the job is ongoing.
And then the chemical technology, this is chemistry that's used to treat the water, to make it usable, and then to actually put in the water while they frac the well, as the fracking chemistry that's used in the completion of the well. This page is all the boxes of where we exist, and you'll see in the center there, the white box, that's the hydraulic fracturing horsepower, that's the frac company. We don't do that. We source, treat, store, and deliver into that frac horsepower. That's everything on the left. Everything on the right is what happens after the well's been completed. That's production life of the well. So this water is produced during the life of the well, while they produce oil and gas. We recycle, and we use that for source water.
You can see the line going back in the top and to the left, or it's moved through containment, storage, and the disposal of the fluid itself. You can see the white box at the very top right, that's beneficial reuse. The industry today is very focused on what can we do with this water, other than just recycle to reuse in the completion or the fracking of wells? You know, how can we take a piece of the stream and use it for agriculture, municipality, industrial? What can we do with the water different than just recycling it to frac with? This is our footprint. It's a couple of very important pieces of this, these footprints in the upper left-hand, that's the Upper Delaware. That's Eddy and Lea Counties, New Mexico.
That's probably the best rock in the United States for oil and gas exploration and production. It's in New Mexico, so it is a state that is telling the industry: "We don't want you using fresh water. We want you to start using sources that are not fresh." And it is a state that's saying: "We don't want you disposing of the water as well." So they're really pushing recycling, beneficial reuse, technologies to apply, and as I said, this is some of the most valuable oil and gas rock in the United States. If you look at the lower right-hand side, that's the Haynesville Shale, so that's a gas basin. It's the closest to LNG export. It is very prolific.
Gas today is, you know, the market value of gas today is compressed, and the activity in the Haynesville Shale is compressed, but we're actually growing in the Haynesville. That system is a produced water gathering system. It's the only one that exists in the Haynesville Shale. It takes that water out of Louisiana, and takes it into Texas, and where there's prolific disposal opportunities on it. So that's production life of the well, and it's actually growing, even though gas activity is compressed today. This is the customer base. Primarily, it's gonna be the upstream players, so E&P companies. It's all gonna be Lower 48 land. They're gonna be unconventional players.
You do see a couple pressure pumpers in there, the Halliburton and Liberty, and the reasons they're there is our chemistry flows through that frac horsepower to frac the well, so sometimes our chemistry is sold to those frac horsepower. But primarily, you know, high 90% for this company, the oil and gas companies are our customers. And you'll also see there's major oil and gas companies on the page: ExxonMobil, Chevron. You know, all the mergers that are happening inside the industry today, this company is usually on both sides. So Pioneer is a big customer for us. ExxonMobil is a big customer for us. Basically, they're merging because of scale, inventory, length of lateral, how they can drill longer laterals, expose more rocks through the single vertical well. That's scale.
And basically, the acquirers, the ExxonMobil and Pioneer, they're wanting to partner with sizable companies of same scale. Another thing that's very important in the industry today is, as you convert from a fresh water source for fracking purposes to a produced water recycled source, that's a more environmental risk. And ExxonMobil and Chevron look at that environmental risk in a very risk-managed way, so they want to do business with a company like Select scale, like scale, and that piece of water that's moving through pipe and getting recycled and delivering back to the frac horsepowers now are at more environmental risk that they want to manage properly. This is the company coming out of COVID.
It probably a couple things we'll talk about on another slide, but in 2018, this company was the largest fresh water source company in the United States going into frac horsepower. It ran about $1.6 billion in 2018. It ran about right at $260 million of EBITDA. It did that with around 6,000 employees. Very highly concentrated to the completion side only, as we've now converted the company and the industry from a fresh water source water to frac with, to more of a recycled brackish water. That's what Select has done, is now transitioned into that. We were the first fixed recycling facility in the Permian Basin. We partnered with Oxy to do that.
We just had a press release not long ago, where we just delivered our 50 million barrels recycled out of that facility that we put in with Oxy, which was the first facility. But you can see the earnings of the company, and primarily the conversion of those earnings from a call-out service business around completions, to a contracted, high gross margin, fixed asset base revenue stream. A little bit different than some of the competitors we have. We are very focused on the water infrastructure piece that we described. Those are long-life contracted positions that we have. They're production-life positions.
But we have the water services and the chemistry, and those are high free cash flow businesses, so we use the free cash flow conversion of the water services and infrastructure and chemistry to actually fund a portion of the growth in the water infrastructure piece of our business. And the Select is really the only company that has this page and ability to show this page. You can see in the bottom right-hand corner, that's a Permian facility. That's actually Upper Delaware. That's that real quality rock that we were describing in Eddy and Lea County, New Mexico. That's a fixed facility. That's a long-term contract, 15-year contract. We underwrite these projects on a three-year cash-on-cash return.
We try to use that contract position to underwrite about 50% of the capacity of the plant, and then we try to commercialize the other portion of that plant that's not used in that contract to get better returns with it. This is the movement that I described. So 2018, the company ran that $1.6 billion and about $260 million of EBITDA, but you can see that heavily weighted to completion, heavily weighted to services.
As we started building out our infrastructure, moving into 2023 and now into 2024, we expect next year that with the contracted, agreed upon projects that we have in place today, just like the Permian Basin $50 million project we just looked at, we think over half of the gross margin of this business will be long-term, contracted production life, high gross margin, and three-year cash on cash. This is the recycled barrels. So Select is a sustainability company. It prides itself on being the first into the space of taking the completion side of the business off of fresh water and moving it into a recycled produced barrel. So this is the growth of those recycled barrels as we've been able to do that since 2020. This is what's really set it up.
Coming out of COVID, as I said, this company had no debt, had right at $200 million of cash. And we started doing transactions with broken companies that had assets and systems that allowed us to put in place the opportunity to do this organic contractual agreements that we've been doing with our customer base. So we bought a lot of companies that went through restructuring or that had balance sheet problems or that did not have the actual liquidity or cash to be able to put these recycling facilities and these systems in place. The left side is more of those broken companies, if you will, in 2021, 2022. The right side is more, once you've got the systems in place, what other assets could you buy?
How many more disposal wells that fit within that pipeline systems, or recycling opportunity that did not have the capital to keep up with the market demand? That's the right-hand side, the Buckhorn, the Trinity, the Breakwater, that you're gonna find those kind of companies that we did. This is the balance sheet. Today, the company does have $90 million of debt. It is a very healthy balance sheet in the sense of it's an ABL facility. It has $350 million-$400 million worth of inventory and accounts receivable. It's a $260+ million EBITDA company, $260 last year, and it's be greater this year. So, it's a very healthy balance sheet, but it does have $90 million of debt today.
We have used this facility and earnings power and the cash of this company to do $150 million of transactions, M&A transactions, since January. And we've announced $150 million worth of projects, new recycling facilities, new pipelines, and we've told the public that we our backlog has doubled in the last six months, and the intensity of that backlog or the success of being able to convert it into true contracts and projects, we weight that about 75% today. We are committed to shareholder return. We put a regular way dividend in place. We expect to support that. We did a lot of, I'd call it strategic or tactical, share buyback, especially when the banking crisis hit and stocks really got cheap. We bought a bunch of our stock back.
But today we have a, you know, a very good ability to put capital work in a very high profile of contracted, high gross margin, low capital intense, I mean, capital and maintenance, capital intensive, and low labor application. So a summary of the highlights. Like I said, we're the leader, a leader in a couple of ways. One, size both in, you know, the earnings power of the company as well as the geographic footprint of the company. But it also has the ingredients of the service business and the chemistry business that actually feeds the capital to be able to do these organic, contractual, right, infrastructure on it. Balance sheet's good. The discipline, we're very focused on staying as a water company.
We actually think the opportunity of this company to recycle that water for beneficial reuse outside the oil and gas industry is a very big opportunity. So taking water and recycling, not just for the purpose of fracking and completing wells, but for industrial, for agriculture, for electric generation, for transitional energy projects. We think this water has an ability to be repurposed for something even greater than just fracking and completing new oil and gas wells. We will support our shareholders' return. We do believe we're building a repeatable, predictable production life contracted, and that actually will give us an ability to have a good dividend program within this company. Our focus is water sustainability, and we're gonna stay focused to that. I'll take any questions you have about the company. Yes, sir?
How is the water delivered to the wells? Is it through pipelines, or how are you getting it to the Permian Basin or the Permian Shale?
Yeah, it's pipeline. So, if you go back 10 years in the company before the development of shale, most of it was truck. But those were lower quality volumes of water. It mechanically can't be moved by trucks today because it's such high volume that either through the production or actually needed in the completion. So across that 10 years, completion needs per well went from 660,000 barrels of needed water to complete a well, to 800,000 barrels of water needed to complete a well. And the production side of it, Permian Basin, would be the best example. Every barrel of oil that you take out of these wells, you're gonna get three barrels to six barrels of water with that. So the life cycle production volumes grew immensely.
So, a well that's making 2,000 barrels a day in the Permian Basin could be making 10,000 barrels of water per day. So you just simply can't move it by truck anymore. Yes, sir?
You mentioned water storage. Is that a function of you've used the water and it's now unusable somewhere, and you just have to keep it? Or are you able to get it to where you can just completely recycle it into the environment?
You can recycle it for frac purposes completely today, but when I use storage as an example, all this water is coming from multiple sources at any given time in high volumes, and you have to either dispose of it, recycle it, repurpose it, and then deliver it to the frac horsepower. That frac job moves around. It's a temporary service provider with it, so you need adequate storage to make sure that you can store while you recycle and store after you recycle, in quantities of size that you can deliver it to the frac horsepower. The best example I can give. It's a public release we did for Endeavor in the Permian Basin on the Midland side. It was completion of a multi-well pad. They used four frac fleets at one time.
They did it for 40 days in a row, 24 hours a day. The volume needed to keep that frac horsepower supplied with water was 300,000 barrels per day. So that source came from six producers, they were all different producers, through pipeline, that went into storage, that went into 300,000 barrels a day of recycling facility at one location, put into storage, that got distributed to those four frac crews to keep them fracking for 40 days. So very complex, very engineered, very water balanced. There's technology involved, mostly on the data capture and machine learning side of it. The actual treatment is not that technology advanced.
Once you move from recycling or treating water to be used as frac water, to be able to use it in some beneficial reuse, in, you know, industrial crops, things, that's more technical advanced treatment. But what we do today is not that technical advanced, it's more on the actual management of the water balancing.