Select Water Solutions, Inc. (WTTR)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this report, as well as the historical consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on February 18, 2026 (our “2025 Form 10-K”) and in our Quarterly Report on Form 10-Q for the period ended March 31, 2026, filed with the Securities and Exchange Commission on May 6, 2026 (our “Q1 2026 Form 10-Q”). This discussion and analysis contains forward-looking statements based upon our current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors as described under “Cautionary Note Regarding Forward-Looking Statements” and other cautionary statements described under the heading “Risk Factors” included in our 2025 Form 10-K, our Q1 2026 Form 10-Q and this Quarterly Report on Form 10-Q. We assume no obligation to update any of these forward-looking statements.

This discussion relates to the three and six months ended June 30, 2026 (the “Current Quarter” and the “Current Period”, respectively) and the three and six months ended June 30, 2025 (the “Prior Quarter” and the “Prior Period”, respectively).

Overview

We are a leading provider of sustainable water and chemical solutions to the energy industry in the U.S. These solutions are supported by our water infrastructure assets, chemical manufacturing and water treatment and recycling capabilities.

Recent Developments

Infrastructure Investments and Contracted Growth Initiatives

We are prioritizing investments in Water Infrastructure projects, which often bring a more predictable and steady revenue stream through long-term contracts and production-related operations. These investments typically produce higher gross margins and also foster stronger partnerships with customers, as we become an integral partner in ensuring well productivity for ongoing customer production over the life of a well. Our focus is on integrated solutions that enhance contracted infrastructure projects with logistics services and chemical solutions, and expanding the value we provide to our customers. Our approach has been to streamline operations and offer a more comprehensive and valuable overall package to customers that is built around optimizing the entire water lifecycle, as such integrated solutions drive revenue growth and enhance overall value to clients.

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Water Infrastructure

During the Current Quarter, we continued executing our strategy of expanding our Water Infrastructure segment as a key component of our long-term growth platform. Our integrated water management systems support operators by providing produced water gathering, transportation, recycling, and disposal services designed to reduce costs to our customers, reduce trucking activity, improve operational reliability, and increase water management efficiency across development programs.

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Our infrastructure footprint in the Northern Delaware Basin represents a core area of development for our business. Our in-service and under construction systems in New Mexico in Eddy and Lea counties include approximately 1.7 million barrels per day of active fixed recycling capacity, more than 400 miles of pipeline, and 22.2 million barrels of storage capacity across more than 1.5 million dedicated acres. This interconnected infrastructure network positions us to manage large volumes of produced water and support customer development programs across the region.

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Peak Rentals Update

In August 2025, we announced that we had started an evaluation of strategic alternatives for Peak Rentals business within our Water Services segment. Peak Rentals currently includes our accommodations and rentals platform, including distributed power solutions, as well as our well testing and flowback operations. This evaluation includes a range of potential paths forward, including capital structure initiatives and other portfolio optimization opportunities. As of June 30, 2026, no transaction is pending or imminent, and we continue to own 100% of the business. We are continuing to evaluate strategic alternatives for Peak Rentals in the ordinary course; however, there can be no assurance that any particular outcome will ultimately be pursued or completed.

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Chemical Technologies

During the Current Quarter, we continued to compete across a range of completion chemistry applications through our Chemical Technologies segment. Our in-basin manufacturing capabilities and continued research and development investments support our ability to supply friction reducers, surfactants and other completion chemistry products used in increasingly complex completion designs, including longer laterals and high-intensity completion programs. Demand for friction reducers and customized surfactant offerings remained supported by completion activity levels and the increasing use of recycled produced water in hydraulic fracturing operations.

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Long-Term Contract Revenue

During the Current Quarter, we entered into a long-term produced water transportation agreement with a major operator to design, construct, and operate a new large-scale pipeline system in the Delaware Basin. The agreement includes the largest minimum volume commitment in the Company’s history, totaling approximately 127.75 million barrels over the initial term, and provides for firm long-term throughput supported by deficiency payment provisions. In connection with the agreement, we received ownership of multiple saltwater disposal wells as non-cash consideration, further enhancing our disposal capacity and integrated water infrastructure footprint in the region. This transaction reflects a strategic partnership with a key customer and is expected to strengthen our long-term earnings through contracted volumes and expanded asset integration.

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During the Current Quarter, we continued to expand our portfolio of contracted and recurring revenue opportunities through new and amended commercial agreements across our water infrastructure footprint, including produced water takeaway and disposal arrangements, water supply agreements, minimum volume commitments, acreage-wide right-of-first-refusal arrangements and additional delivery point commitments. These included multiple agreements in the Northern Delaware portion of the Permian Basin, including a water treatment and supply agreement with a minimum volume commitment, multiple water sales agreements and several interruptible takeaway arrangements. We also executed a water treatment agreement in the Midland Basin and a produced water disposal agreement in the Bakken with a minimum volume commitment, a disposal agreement in the Northeast with a right-of-first-refusal structure, a disposal agreement in the MidCon region, supported by a four million barrel minimum volume commitment, and an interruptible takeaway arrangement in the Haynesville region. Collectively, these agreements are intended to drive higher utilization of existing infrastructure, support capital-efficient growth and provide greater certainty around future revenue streams.

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Diversification

During the Current Quarter, we continued advancing certain diversification initiatives, including opportunities related to municipal and industrial water markets, lithium extraction partnerships, and beneficial reuse technologies. These initiatives are intended to evaluate potential opportunities to leverage our existing water infrastructure platform across additional end markets.

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During the Current Quarter, we entered into a definitive agreement with subsidiaries of ISE Chemicals Corporation (“ISE”) providing for the development of commercial-scale iodine extraction and refining facilities utilizing produced water sourced through our Water Infrastructure network across Texas, New Mexico and Oklahoma. Under the

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agreement, ISE Chemicals would fund, construct, own and operate the facilities, while Select would provide produced water sourcing, transportation, storage, pretreatment, recycling and infrastructure support in exchange for royalty payments. The initial commercial facility is expected to be commissioned in 2027 within our Permian Basin footprint, with the collaboration targeting approximately 3,000 tons of annual iodine production by the end of 2030.

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In addition, lithium extraction partnerships across the Haynesville, Midland, and Northern Delaware basins continue to progress, with initial royalty-based revenues currently expected to begin in 2027.

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We also continued pilot testing of advanced treatment technologies intended to evaluate beneficial reuse opportunities for produced water in the Permian and DJ basins. These pilot programs are designed to assess the feasibility of converting produced water into resources that could potentially be used in agricultural or other applications.

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Market Trends and Outlook

Geopolitical Conflicts

Geopolitical tensions and related hostilities across the Middle East continued during the second quarter of 2026, resulting in increased instability in oil and gas-producing regions as well as in key adjacent shipping lanes and supply chains. These developments have heightened concerns over potential supply disruptions and transportation risks, contributing to volatility in global oil and natural gas prices. In particular, disruptions to maritime traffic through key shipping corridors, including the Strait of Hormuz have adversely affected global energy markets and contributed to volatility and elevated prices for oil and natural gas.

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Further, disruptions to maritime traffic through key shipping corridors have caused disruptions to the global chemicals and oil-derived goods markets, reducing supplies and availability worldwide and resulting in increased prices. While we are not reliant on any chemicals or other commodities that are exclusively transported through any single shipping corridor due to our continued focus on domestic sourcing, such global disruptions to commodities markets can have downstream effects in the domestic markets, including elevated domestic prices, reduced supply and business interruptions to our suppliers. While the ultimate duration, impact and magnitude of these disruptions is currently unknown, a prolonged interruption to the global chemicals commodities and oil-derived goods markets has the potential to materially adversely affect our business and operations and those of our suppliers.

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Additionally, the armed conflict between Ukraine and Russia has continued into 2026. Severe sanctions imposed by the U.S., U.K., European Union and other actors on Russian entities have driven significant volatility in global oil and natural gas prices. U.S. actions in Venezuela, including tanker seizures and a limited military intervention in early 2026, have added uncertainty; as relations stabilize, the potential release of previously sanctioned oil into global markets could depress prices. Changes in sanctions, regimes, waivers, export restrictions or other governmental actions affecting the global energy markets may have a significant effect on hydrocarbon prices. Such commodity swings, combined with higher inflation and interest rates that have raised our cost of capital, have created a more challenging planning environment for us and our customers. The ultimate outcomes remain unpredictable and could materially affect the world economy, customer activity levels, and demand for our services.

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Commodity Prices

Industry conditions during the first half of 2026 reflected a r

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ITEM 7.              MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes thereto in Part II, Item 8. “Financial Statements and Supplementary Data”. This discussion and analysis contains forward-looking statements based on our current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors as described under “Cautionary Note Regarding Forward-Looking Statements” and Part I, Item 1A. “Risk Factors.” The following information updates the discussion of our financial condition provided in our previous filings, and analyzes the changes in the results of operations between the years ended December 31, 2025 and 2024. Refer to our 2024 Annual Report filed February 19, 2025 for discussion and analysis of the changes in results of operations between the years ended December 31, 2024 and 2023. We assume no obligation to update any of these forward-looking statements.

Overview

We are a leading provider of sustainable water and chemical solutions to the energy industry in the U.S. As a leader in the water solutions industry, we place the utmost importance on safe, environmentally responsible management of oilfield water throughout the lifecycle of a well. Additionally, we believe that responsibly managing water resources through our operations to help conserve and protect the environment in the communities in which we operate is paramount to our continued success.

Across many of the regions in which we operate, there is growing concern surrounding the volumes of water required for new well completions, as well as the volumes of produced water injected into subterranean formations where induced seismicity may occur. In response, we are working collaboratively with our customers and local communities to advance more sustainable, cost-effective water management solutions that reduce both freshwater consumption and disposal volumes. Through our integrated infrastructure networks, we provide permanent and mobile solutions that enable the gathering, treatment, and reuse of produced water, which in turn reduces demand for freshwater resources and limits reliance on saltwater disposal wells. In select regions, we have also secured access to non-potable alternative water sources, including brackish groundwater and municipal or industrial effluent, to further support water reuse and reduce competition for freshwater. Leveraging our in-house chemical expertise and proprietary FluidMatch™ design platform, we provide tailored water profiling, treatment assessment, and fluid system optimization to enable the economic use of these alternative sources without compromising well performance. Additionally, we help our customers lower emissions and minimize environmental impact through the deployment of combustion solutions for field-based methane control and the use of temporary layflat hose systems and permanent pipeline infrastructure. These water delivery systems are supported by our real-time automation and remote monitoring technologies, including leak detection, pressure monitoring, and volume tracking, which enhance the safety, reliability, and efficiency of our operations. By reducing the reliance on trucked water logistics, these solutions materially reduce greenhouse gas emissions, improve public safety, and help limit traffic congestion and road damage in the local communities where we operate.

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Recent Developments

Recent Acquisitions

During 2025, we executed a series of strategic asset acquisitions totaling $25.4 million to expand our water infrastructure footprint across both the Permian Basin and the Northeast Region. In the Permian, we acquired surface acreage, multiple SWDs, water storage assets, and a pipeline system connecting a key customer’s operations to a Select recycling facility. These assets are located across Lea County and Eddy County in New Mexico, as well as Howard County, Upton County, and Winkler County in Texas, further strengthening our integrated network of treatment, disposal, gathering, and recycling infrastructure in core production areas of the Permian Basin. In addition, certain acquired SWD sites allow for the potential development of additional wells or recycling facilities in the future. In the Northeast, we acquired three SWDs in Ohio, expanding our market leading disposal presence in the region. Collectively, these transactions enhance Select’s ability to deliver full-cycle water management solutions across its footprint,

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supporting both near-term operations and long-term growth. Additionally, we also acquired certain wastewater treatment facilities for the accommodation and rentals business line in the Permian and Eagle Ford regions for $1.7 million.

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Omni Transaction

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On July 1, 2025, we acquired a high-margin Bakken platform anchored by long-lived infrastructure from Omni: a special-waste landfill with approximately 3.2 million cubic yards of remaining capacity, a processing and recovery facility for reclaiming diesel and other hydrocarbons from oilfield waste, a permitted Class II SWD with capacity of approximately 12,000 barrels per day, and a commercial tank farm with approximately 24,000 barrels of oil storage. As part of the same transaction, we divested certain lower-margin operations including trucking operations in the Bakken, Northeast and MidCon regions, rental operations in the Bakken and one MidCon SWD. Approximately 280 fluids-hauling employees moved with those businesses, which together represented approximately 8 percent of Water Services segment revenue in the first half of 2025. This transaction expanded our market leading solids management business in the Bakken, while reducing exposure to noncore trucking and hauling.

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Streamline Fluids Hauling

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As part of our continued focus on capital discipline and portfolio optimization, we also took steps to streamline our fluids hauling operations to prioritize higher-margin, infrastructure-integrated markets. Specifically, we wound down our fluids hauling operations in the Haynesville region and divested the remaining lower-margin operations in the MidCon region. We continue to operate our more integrated and higher-margin fluids hauling businesses in the Permian, Rockies, and Eagle Ford regions, where these services are closely aligned with our operational infrastructure.

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See “Note 3—Acquisitions” for further discussion.

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AV Farms Investment

In February 2025, we made a $72.1 million equity method investment in a newly formed partnership focused on consolidating and commercializing a large-scale portfolio of senior water rights, irrigated farmland, and reservoir storage assets in Colorado. The investment, centered in the Arkansas River Valley region, is intended to support long-term water infrastructure development and reliable delivery to agricultural, municipal, and industrial stakeholders. As of December 31, 2025, we had contributed $72.1 million to AV Farms and held an approximate 39% ownership interest in the partnership and a 25% interest in the general partner. We expect to contribute up to an additional $74 million over a multi-year period to support future water rights acquisitions and infrastructure buildout. The governing agreements also include call and put option structures beginning in 2028 that could result in our acquisition of the remaining ownership interests, subject to defined valuation mechanics and partial equity settlement provisions. This investment reflects our strategic focus on long-term water resource development and positions us to participate in sustainable water solutions across high-priority basins in the Western United States (Refer to “Note 2—Significant Accounting Policies” for further discussion on AV Farms).

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Peak Rentals Update

In August 2025, we announced that we had started an evaluation of strategic alternatives for Peak Rentals, our equipment rental and distributed power business within the Water Services segment. Peak currently includes our accommodations and rentals platform, as well as our well testing and flowback operations. This evaluation includes a range of potential paths forward, including capital structure initiatives and other portfolio optimization opportunities. As of December 31, 2025, no transaction is pending or imminent, and we continue to own 100% of the business. We are continuing to evaluate strategic alternatives for Peak Rentals in the ordinary course; however, there can be no assurance that any particular outcome will ultimately be pursued or completed.

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New Sustainability-Linked Credit Facility

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On January 24, 2025, we entered into a $550.0 million sustainability-linked senior secured credit facility and extinguished our prior debt. The new facility consists of a $300.0 million revolving credit facility and a $250.0 million

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term loan, both with a five-year maturity, and provides the flexibility to upsize by an additional $200.0 million. Proceeds from the term loan were used to repay all outstanding borrowings under our prior facility, which was concurrently terminated. This new structure enhances our liquidity position and extends our maturity profile through 2030. It also better aligns our capital structure with our long-term infrastructure growth strategy by supporting investment in contracted, production-linked assets and enhancing our flexibility to pursue disciplined, return-focused capital deployment (Refer to “Note 10—Debt” for further discussion of the Sustainability-Linked Credit Facility).

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Infrastructure Investments and Contracted Growth Initiatives

Select is prioritizing investments in Water Infrastructure projects, which often bring a more predictable and steady revenue stream through long-term contracts and production-related operations. These investments typically produce higher gross margins and also foster stronger partnerships with customers, as Select becomes an integral partner in ensuring well productivity for ongoing customer production over the life of a well. Our focus is on integrated solutions that enhance contracted infrastructure projects with logistics services and chemical solutions, and expanding the value we provide to our customers. Our approach has been to streamline operations and offer a more comprehensive and valuable overall package to customers that is built around optimizing the entire water lifecycle, as such integrated solutions drive revenue growth and enhance overall value to clients.

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During 2025 and 2024, Select has made strategic Water Infrastructure investments across five of the seven regions in which we operate. A summary of the resulting system capacity and current state of operations and resulting competitive advantages is outlined below.

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Permian

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The Permian remains our largest and most strategically important Water Infrastructure region, anchored by a fully integrated network of 43 active SWDs, 17 active recycling facilities, as well as pipeline connectivity both within our system and with key customer infrastructure. We signed multiple new long-term customer agreements throughout 2025, including dedicated acreage, ROFR acreage and MVCs. A number of these commercial arrangements are expected to commence in 2026 and are anticipated to drive incremental system utilization, expand our high-margin recurring revenue base, and deepen customer relationships across the basin.

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The platform was expanded through the 2024 acquisition of Trinity, which added SWDs, pipelines and customer connectivity. During 2025, we completed seven additional bolt-on acquisitions, further enhancing our regional scale and footprint across disposal and pipeline infrastru

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