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Commitments and Contingencies | 12 Months Ended
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Dec. 31, 2024
Commitments and Contingencies. |
Commitments and Contingencies | 13.Commitments and Contingencies In the normal course of business, we are subject to various claims, legal actions, contract negotiations and disputes. We provide for losses, if any, in the period in which they become probable and can be reasonably estimated. In management’s opinion, there are currently no such matters outstanding that would have a material effect on the accompanying consolidated financial statements. Additionally, we are party to a guarantee related to a lease agreement with Solaris Energy Management, LLC (“SEM”), a related party of the Company, for the rental of office space at our previous corporate headquarters. As of December 31, 2024, our share of SEM’s future commitment is included in our lease liabilities. See Note 10. Leases and Note 16. Related Party Transactions. Delivery Commitment In the first quarter of 2023, we entered into an agreement with an unaffiliated water disposal company to dispose a minimum volume of produced water over a term of seven years, for a total financial commitment of approximately $28.0 million, undiscounted, and not including annual CPI adjustments. The agreement requires us to make payments for any shortfall in delivering an annual minimum volume under the commitment as well as a cumulative minimum volume over the duration of the term of the commitment. The minimum volume commitment is contingent on several performance factors to be achieved by the unaffiliated water disposal company throughout the term of the contract, which, if not achieved, would provide us with the option of cancelling the contract and discharging the remaining minimum volume commitment. We began delivering produced water under this agreement in June 2023. As of December 31, 2024, the remaining minimum commitment was $22.4 million, undiscounted, which includes a minimum annual commitment of $4.1 million for each of the years 2025 through 2029 and $1.8 million thereafter, based on the current contract rate and not considering rate increases. Other Commitments In the normal course of business, we enter into short-term purchase obligations for products and services, primarily related to purchases of pipe, pumps and other components. As of December 31, 2024, we had purchase obligations and commitments of approximately $5.1 million due in the next twelve months. We are a party to various surface use and compensation agreements by which we have committed to make minimum royalty payments in exchange for rights to access and use the land for purposes that are generally limited to conducting our water operations. These agreements do not meet the definition of a lease under ASC Topic 842. We are party to a fixed price power purchase contract to manage the volatility of the price of power needed for ongoing operations. We have elected the normal purchase and normal sale accounting treatment for this contract and therefore record it at cost. In May 2024, we extended the fixed price power purchase contact through April 2028. The table below provides estimates of the timing of future payments that we are contractually obligated to make based on agreements in place as of December 31, 2024: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | 2025 |  | ​ | 2026 |  | ​ | 2027 |  | ​ | 2028 |  | ​ | 2029 |  | ​ | Total
Purchase Obligations and Commitments | ​ | $ | 5,089 | ​ | $ | - | ​ | $ | - | ​ | $ | - | ​ | $ | - | ​ | $ | 5,089
Surface Use and Compensation Agreements | ​ | ​ | 3,714 | ​ | ​ | 11,300 | ​ | ​ | 1,350 | ​ | ​ | 1,400 | ​ | ​ | 1,700 | ​ | ​ | 19,464
Fixed Price Power Purchase Contract | ​ | ​ | 5,805 | ​ | ​ | 7,853 | ​ | ​ | 7,861 | ​ | ​ | 3,147 | ​ | ​ | - | ​ | ​ | 24,666
Total | ​ | $ | 14,608 | ​ | ​ | 19,153 | ​ | $ | 9,211 | ​ | $ | 4,547 | ​ | $ | 1,700 | ​ | $ | 49,219
​ Environmental We are also subject to various federal, state and local laws and regulations relating to the protection of the environment. For the years ended December 31, 2024, 2023 and 2022, we recognized $2.5 million, $4.6 million and $3.0 million of expenses, respectively, related to environmental matters that are recorded in “Direct Operating Costs” in the consolidated statements of operations. As of December 31, 2024, we accrued insurance proceeds and third-party receivables of $6.0 million, of which $5.1 million are included in “Other Receivables” and $0.9 million are included in “Other Assets.” As of December 31, 2023, we accrued insurance proceeds and third-party receivables of $5.7 million, of which $4.1 million are included in “Other Receivables” and $1.6 million are included in “Other Assets.” We believe these proceeds are probable to collect and are reasonably estimable. Although we believe these estimates are reasonable, actual results could differ from these estimates.

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