Direct Midstream Agrees to Operate 52 New Mexico Wells
Direct Midstream has entered a conditional agreement to run a portfolio of oil production and saltwater disposal wells in New Mexico for Phoenix Energy Solutions.
Updated on Nov. 4, 2026 in Oil and Gas
Direct Midstream entered a conditional agreement with Phoenix Energy Solutions, LLC to provide operating and management services for 52 oil production and saltwater disposal wells in New Mexico. Phoenix Energy Solutions is in the process of acquiring the portfolio and would retain ownership of the assets and oil production revenue.
Why it matters
The agreement expands Direct Midstream's existing New Mexico operations, adding oil production operating services to its produced water management and disposal capabilities. For New Mexico's oil sector, it reflects a model in which operating expertise is separated from asset ownership.
The conditional deal covers 52 wells, with Direct Midstream projecting more than $2 million in annual operating and management revenue and Phoenix Energy projecting about 1,000 barrels of oil per day within 12 months. The well-count breakdown remains subject to verification and start-up is contingent on pending approvals and acquisition steps.
The players
Direct Midstream
An oilfield services company focused on produced water management and disposal in the Permian Basin, now expanding into operating oil production wells in New Mexico.
Phoenix Energy Solutions, LLC
The company acquiring the 52-well portfolio, which would retain ownership of the assets and oil production revenue under the agreement.
Vivakor
A company pursuing a proposed $40 million acquisition of Direct Midstream, which would add a Permian Basin disposal platform to its holdings.
The details
Under the arrangement, Direct Midstream would operate and manage the wells while Phoenix Energy Solutions retains ownership and oil revenue. Vivakor separately announced a proposed $40 million acquisition of Direct Midstream, subject to a definitive purchase agreement, which would add a Permian Basin platform with 17 saltwater disposal facilities and nine fresh water and brine stations.
Timeline
October 23, 2026: Vivakor completed its due diligence review of Direct Midstream.
November 4, 2026: The New Mexico conditional agreement was announced.
Within 12 months of commencing operations: Projected production reaches about 1,000 barrels of oil per day.
Market Landscape
The deal reflects a pattern in which oilfield service firms take on operating roles for asset owners rather than holding the wells themselves. It also fits a broader consolidation pattern in the Permian Basin, where disposal capacity and water infrastructure are increasingly bundled with operating platforms.
For New Mexico residents, the deal signals more operating activity around existing wells and disposal infrastructure, though production targets remain projections. Households and businesses are not directly affected by the transaction itself unless they hold energy-sector employment or royalty interests tied to these wells.
The takeaway
Operating-services agreements like this one separate day-to-day well management from ownership, which can shift who handles production and who collects revenue. Watch whether the conditional terms, permits, and fee schedule are finalized before treating the projected output as settled.
Further reading
For broader context, explore Oil and Gas coverage on New Mexico's energy sector.
Source note: This article includes information reported by The Manila times.
