Playbooks Supplements

Water Management Techbook 2017

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Page 52 of 55 | May 2017 | 51 WATER MANAGEMENT: CASE STUDIES agement supply chain, operators might consider investing in water management infrastructure. However, during the higher-intensity completions and slower development period of the past few years, investment in water logistics infrastructure has been limited. The volatility of the energy market and unpre- dictability of water flows make proper economic and financial analysis for infrastructure projects challenging. Produced water chemistries and the inefficiencies of building infrastructure to accom- modate peak flows adds environmental liability and low returns on equity that impair company value. Thus, as the energy market recovers, many opera- tors will rely on third-party midstream operators to source water and build out flowback pipeline and disposal capacity. In the meantime, finding and maintaining continuous and sufficient water, dis- posal, transfer and hauling capacity will become the biggest challenge to avoiding critical supply chain breakdowns and massive cost overruns. The free search platform is the key to ensuring operational resilience, enabling: • Identification of new, previously unknown, water management options; • Strengthening of the supply-chain with higher quantity of options; • Increased efficiency in water management logistics; • Improved community relations from fewer truck miles on roads, reduced freshwater consumption and disposal seismicity; and • Better margins through reduced operating and completion costs. Operators using Sourcewater's search tool obtain real cost savings. The labor cost to find and secure water and disposal is reduced by more than 90% online. Hauling costs are substantially reduced when fluids are not transported long distances. Disposal and sourcing costs are reduced when operators trade fluids directly. Both operators end up saving and, in some cases, reuse of water in completions can become a profit center. More importantly, reuse options and other nonfreshwater sources and uses add to the effec- tive supply of both water and disposal in convenient oilfield locations. Production managers, logistics managers and even truck drivers on the Sourcewa- ter smartphone app can optimize real-time disposal decisions trading off distance, dynamic prices that reflect available capacity, and standby times. Learnings from the Cana Woodford The value of a robust water management sup- ply chain is often overlooked. A good case study to understand the true value of a robust supply chain was presented by IHS Energy Insight in the 2013 report "The Future of Unconventionals— Water Management Strategies"; a brief outline is presented here. The story opens with the third-quarter 2012 earn- ings call transcript in which Devon Energy Corp. reported that wells drilled during second-half 2011 underperformed their expectations. In response to severe drought and increased competition for limited water resources, Devon had reduced the average volume of water used in completions. Wells completed during this time reported significant losses in both IP and mean monthly gas flow. The This heat map shows the areas of highest search intensities using Sourcewater's online platform. (Images courtesy of Sourcewater)

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