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Permian Basin 2017

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PERMIAN BASIN: TECHNOLOGY 50 | November 2017 | hartenergy.com Supercharging is a great concept for race cars. For water disposal reservoirs, not so much. It's just one of the water management challenges facing Permian Basin operators in 2017. Michael Dunkel has thought a lot about water sourcing and disposal, beginning in his days in the 1980s and 1990s as a reservoir engineer for Marathon in the Permian Basin, and especially as a water specialist for Pioneer in the early 2010s. Now, as vice president, Water, for giant engineering firm CH2M, he sees opportunities within the challenges. Take the have/have not water situation that is common in all basins where high volumes of water are used in frack completions. One well needs 300M bbl of water for a frack. Another is flowing back a similar amount but is miles away. Recycling sounds good but the volumes aren't truck-friendly. "The best solution to moving water is via pipeline," Dunkel said. "But that is a lot of money upfront. Combine that with rig placement and oil price volatility and you're not sure exactly where to start with building infrastructure." The upper end of water volumes needed for hydraulic fracturing are significant. "We are seeing much larger fracks than previously, many 700,000 barrels and above," said Brent Halldorson, chair of the Texas Water Recycling Association. Rae Powell, president and owner of PC Drilling & Service, drills water wells in the Midland and Delaware basins. He sees a trend to tap brackish water aquifers, such as the Santa Rosa, along with traditional freshwater sources. "We see parts of the Delaware Basin with good sources of Capitan water and Rustler water," he said. "Abundance in some parts of Delaware is actually greater than in the Midland Basin. Some areas have a good amount of freshwater, which is a reason they grew so many onions out there at one time. It is up to each operator to assess their fields and see which of the deep aquifers can source their needs." In environmentally sensitive areas, staying clear of fresh groundwater is standard protocol. "Brackish water augmentation with a produced water recycling program brings numerous benefits," said Castlen Kennedy, Apache's vice president of public affairs. "By using a brackish source to meet operational water needs, Apache will not compete with needs for potable water, such as drinking and agriculture. We are actively pursuing produced water recycling infrastructure at Alpine High to meet the long-term water needs of the development." Pioneer Resources has creatively introduced municipal treated wastewater supplies from Odessa—and in 2018 will add 200 Mbbl/d from Midland. But that's not a rinse-and- repeat scenario for other operators. John Durand, president and COO of WaterBridge Resources, was with Pioneer Water Management when it was formed in 2014. He negotiated with the cities of Midland and Odessa to purchase their treated effluent water. "With Pioneer's acreage position, forming a subsidiary water company made a lot of sense," Durand said. "The cities were also very forthcoming and cooperative with Pioneer during the negotiations. The agreement with Odessa was the first one, given that the water was available from the secondary waste treatment plant already there. It was just a matter of negotiating terms, which Pioneer completed in 2014. They started flowing Odessa's wastewater in January 2016 after necessary infrastructure was put in place." Not every producer could consider such a plan. "It is a lot harder for companies with checkerboard (leases) across the Delaware Basin," Dunkel said. "This is one of the more fascinating things about how the water management plays out. Who builds that? Right now, you have big companies building their pieces, small companies building smaller pieces in their core areas. And now midstream companies stepping in saying it makes sense for a third party to do it. And all are probably right. It will continue to grow and evolve." WaterBridge Resources is one of those pure-play water midstream companies. Backed by significant financial Water: The Pressure to Manage Rises as Volumes Increase WaterBridge's Suter Farms saltwater tank battery is near the Coyanosa Field in Reeves County, Texas. (Photo courtesy of WaterBridge)

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