TSWR Development Launches Securitized Saltwater Disposal DST for 1031 Exchange Buyers
TSWR Development LLC, a joint venture between Sandlapper Capital Investments and Tiburon Research Holdings, has launched its TSWR Development SWD Portfolio I Delaware statutory trust investment offering which can be used as qualified replacement property for 1031 tax deferred exchanges.
The DST will acquire several undivided fractional working interests in four operational saltwater disposal wells and will lease these interests back to an affiliate of the sponsor who will become the master tenant responsible for making lease payments to the DST beneficial interest owners.
TSWR Development has invested and developed saltwater disposal well operation properties throughout the Permian Basin in West Texas since 2012.
“The Permian continues to rule the U.S. oil markets,” states Trevor Gordon, chief executive officer and co-founder of TSWR Development. “The Permian has the largest proven oil reserves in the country and the infrastructure and support in place to make drilling and production simple and lower risk than it has been historically.”
Gordon continues, “Despite recent weakness in the oil prices, drilling and production is still occurring with the bulk of domestic drilling and production in this region, and you can’t have production without the disposal of saltwater recovered in these processes. TSWR Development continues to identify opportunities and work with an industry leading operator in the region to further invest and develop income opportunities for our clients.”
Class 2 saltwater disposal wells are the only approved method to dispose of wastewater captured in the drilling and extraction of oil and natural gas and is a critical component of the entire industry.
“Oil wells produce large quantities of water in conjunction with the extraction, on an average of 10 barrels of water per each barrel of oil,” states Joseph Spagnoli, vice president of research and operations for TSWR Development. “This water has to be disposed of in an approved facility. Water transport trucks load water from the storage tanks and haul the contents to a nearby disposal well where, for us we will then skim any remaining oil and dispose of the reclaimed water.”
Spagnoli continues, “This creates two separate and distinct potential revenue streams for our operations between disposal revenue and revenue from the sale of the oil we are able to extract.”
Most DSTs on the market today own traditional commercial properties such as apartments, retail centers and industrial buildings, but SWD 1 is the first known DST to acquire undivided fractional working interests in saltwater disposal well properties and offer them as replacement property for the 1031 exchange buyer. SWD 1 has a minimum investment of $100,000.
TSWR Development participates in the acquisition and development of saltwater disposal operations throughout the Permian Basin. Based in Greenville, South Carolina, TSWR Development and/or its affiliates have owned interests in and/or participated in developing or redeveloping twenty-two salt water disposal wells in West Texas.
