Produced Water Society

Water Management for Onshore Oil and Gas

Michael Dunkel
February 4, 2019

www.jacobs.com | worldwide
 Who are we?

1. Who is based in Texas?

2. Who is from outside of the Lone Star state?
3. Who works for a producing company?
4. Who works for a service provider?
5. Who is an engineer?
6. Who thinks engineering was too boring to study?

Not us
Outline

1. Impact of development history

2. Trends in water management nationally
A. More source water & more produced water
B. More water infrastructure: pipelines, SWDs, impoundments,
treatment plants
C. Water Midstream companies
3. Examples by Basin
4. Future for Water Infrastructure
What is Conventional Water Management?
What is Water Management with
sourcing, reuse & disposal?

Fresh or brackish water

for hydraulic fracturing

Water to
disposal well
 Locator Map: Main Plays
• Unconventional plays
are widely spread
across the U.S.

• Each region has

unique characteristics
that impact water
management

6
Figure modified from EIA
Development History: Oil Production by Basin
Bakken: first oil Oil Price • Economics and
unconventional play impacts development activity
production varied over the
recent past.
Eagle Ford’s
Permian rapid growth • Volatility of oil prices
conventional
affect planning.

• Unconventional
development is still
a new industry

Data
7 from
EIA
Development History: Water Management Evolves
Droughts & Cost is Planning
Today
NGOs impact driver again
• Proven plays allow
Growth of water planning
Water less water demand
important
than proving • Optimization of
acreage costs and risks

• Infrastructure is
key component

8
Natural Gas Production by Basin
Appalachia gas
dominates

Permian &
Haynesville
growing fast.

9
Rig Count Correlates to Water Source Needs
Multipliers
• Drilling wells faster
• Drilling longer laterals
• Using more water per
foot of lateral
U.S. Oil Rigs
Water sourced correlates
to produced water
U.S. Gas Rigs

Data from
10 BakerHughes
Trend: Non-Fresh Water

1. Companies with non-fresh water objectives

A. ExxonMobil, Shell, Chevron, BP, ConocoPhillips, EOG, Oxy,
Anadarko, Pioneer and Concho
2. Brackish – especially Eagle Ford & Permian
3. Produced water reuse – Appalachia and Permian
4. Municipal wastewater (Odessa, Midland, Carlsbad & others)
5. Pipelines allow low cost conveyance
 Water Storage Practices Vary
Water Storage Solutions:
• “Frac-on-the-fly” with produced water
• Frac tanks
• Above-ground storage tanks (ASTs)
• Impoundments
Key Factors: Layne Midstream in Permian
• State regulations (TX vs. PA)
• Length of drilling plans (months vs. years)
• Reuse of produced water
• Space
12
for impoundments
 Produced Water – Can I drink it?

Key Constituents:
• Iron & Total Suspended Solids (TSS)
• TDS – often blended with fresh or brackish
• Bacteria
• Scale:
13
Barium Sulfate, Calcium Carbonate
 Treatment for Reuse

• Minimal treatment common: Iron & (TSS)

• TDS – almost never treated
• Bacteria – biocide at frac site
• Treatment for scale – if needed
14
What is the Cost?

Trucking: $1.5 - $4/BW

$0.4 - $1.0/BW
Fresh or brackish water
for hydraulic fracturing

$0.3 - $1.0/BW Water to $0.3 - $0.5/BW

disposal well
Produced Water Disposal in Permian
• Permian has the most rigs

• Wells produce more water

throughout the life of the
well

• Water pipelines can reduce

transport costs and facilitate
reuse

Data from IHS

16
Oklahoma Water Disposal by County in 2017
• Top 5 counties dispose of
half of the water (out of 66
counties)
• Mississippi Lime play
major contributor to top
two counties.

17
 Advent of Water Midstream
Water Midstream: own & operate water pipelines & storage to deliver
source water or take-away & dispose of produced water. May involve
treatment & reuse.
Positives Negatives
▪ Reduce costs ▪ Potential concern over control
▪ Minimize Capex for producers ▪ Commitment needed from producers
▪ Allow producers to complete more wells ▪ Water mixing/Source water criteria

▪ Balance water supply and demand ▪ Complexity of system

better

18
 Water Midstream Companies
Company Basins/Regions Comments

Blackbuck Resources Permian Private equity funding

Crestwood Equity Bakken,Nov. 2018
Delaware, – Western
Appalachia Part ofGas
an oilbuys
and gasAnadarko’s
midstream MLP water,
EQT Midstream gas & oil midstream
Appalachia assets
Affiliated for $4 Billion.
with producing company
Goodnight Midstream Bakken, Permian, Eagle Ford
Hess Midstream Bakken Producer affiliated oil, gas & water midstream MLP
H2O Midstream Permian & others Private equity funding
Lagoon Water Solutions Oklahoma Private equity funding
Layne Permian & Oklahoma
Oilfield Water Logistics Permian and Powder River Private equity funding
Pioneer Water Management Permian Producer affiliated
Solaris Water Midstream PermianJan. 2019 – WaterBridge acquires
Texas Pacific Water Resources PermianConcho’s water assets in Permian.
Part of Texas Pacific Land Trust
WaterBridge Permian and Oklahoma Private equity funding
Western Gas Multiple Producer affiliated oil, gas and water midstream
Many
19
formed within the last couple of years! Not a complete list.
 Permian Water Infrastructure Projects
• Large Permian producers: Shell, XTO, Chevron, ConocoPhillips, EOG,
Apache, Pioneer, Concho, Anadarko, Marathon, Devon, Diamondback…
• Smaller producers: Laredo, SM Energy, Matador, Fasken, 3ROC, Approach
• Midstream: Solaris, WaterBridge, H2O Midstream, Layne, Goodnight
SM Energy Water Network Apache wellsite in Permian

20
 Permian Drivers for Water Infrastructure
• Reduce water costs
• Limited source water & high demand
• Potential limits on disposal & increasing water production
• Concentration of drilling activity & production of water
• Reduce trucking impacts

Photo by Evan
21 Dunkel
 Marcellus/Utica Water Infrastructure Projects
• Producers: Antero, EQT, Range Res., Southwestern Energy & others
• Midstream Companies: Eureka Res., Fairmont Brine, Hydro Recovery, Fluid
Recovery, RES Water

Antero Recycle Plant in WV • Terrain makes pipeline installation

more difficult
• Impoundments not supported by
Pennsylvania
• Limited disposal in PA & WV

22
Eagle Ford
• Extensive use of brackish water.
• Very limited produced water reduces practicality of pipelines to
disposal. Most produced water is trucked.
• No large water source or disposal networks exist.

Cheniere
LNG facility
on Gulf Coast

23
 Oklahoma Water Infrastructure Projects
• Producers: Continental, Newfield, Devon…
• Midstream: Lagoon Water, Kingfisher Midstream, D&B

• Seismicity peaked in 2015, linked

to water disposal
• Fractionated surface ownership
makes right-of-way challenging
• Produced water volumes low

24
Newfield’s water network
 Niobrara/DJ Water Infrastructure Projects
• Producers: Anadarko, EOG, Laramie…
• Reused produced water and brackish water are used for completions
• Most source water is piped to the frac site

Anadarko’s
Wattenberg water
network (recently
sold to Western
Gas)

25
 Bakken Water Infrastructure Projects
• Producers: EOG, Hess, …
• Midstream: Goodnight
• High TDS water may require
dilution to reuse
• Replacing trucking of water is
objective
• Overpressuring of disposal
formations is a concern

ConocoPhillips’
26
Bakken site
 Haynesville Water
• Few water infrastructure projects
• Drilling is spread out making
infrastructure more difficult
• No reuse is ongoing
• Using surface water for sourcing
• Using commercial SWDs

Only one operator has more than 10% of

Haynesville production & 19 producers
make have 1% to 8% of the production Typical
according to Hart Energy. producer
acreage
position
27 spread
 Future for Water Infrastructure
• More water pipelines for sourcing & produced water
• Key drivers: cost, reduce trucking, increase reuse, disposal limits
• Each basin/county has different water factors for infrastructure
• Large & small producers installing water infrastructure
• Water midstream companies: growing role

28