American Oil and Gas Reporter - March 2020 - 67

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SpecialReport: Permian Basin Activity

Water Management Crucial In Permian
By Al Pickett
Special Correspondent
The Permian Basin is not only the
epicenter of U.S. oil and gas activity, but
it is also is driving the development and
refinement of technologies ranging from
drill bits to completion tools and water
treatment systems. Water management is
a particularly critical issue in West Texas
and Southeast New Mexico considering
that freshwater resources are scarce in
the arid Permian, and operators use millions of barrels of water a day to hydraulically fracture horizontal wells.
But the big numbers do not apply
only to water consumption. Operators in
the Permian region produce three-four
times more water every day than they
use to fracture wells-much of it pumped
as slickwater during fracturing treatments
and flowed back during the initial weeks
of production. This creates opportunities
to recover and reuse flowback and produced water for a range of oil field activities, not the least of which is stimulating
new wells.
Accordingly, recycling is one of the
defining trends in water management
strategies in the Permian, according to
industry observers. It dovetails with two
other defining trends: longer laterals
and larger proppant volumes per foot
of lateral (which mean more water as
the carrier fluid), and outsourcing water
treatment and disposal to third-party
midstream companies that aggregate
and consolidate water management assets
to achieve an economy of scale that is
beyond the scope of any operator going
it alone.
Barry Clark, president of Sabalo Energy, says his company initially built a
"robust system" to fulfill its water needs
in its horizontal development program in
Howard County in the northern Midland
Basin. However, Clark says, Sabalo recognized the economic and operational
advantages of outsourcing water management functions, rather than trying to
maintain them in house. It decided to
sell its dedicated system to a third party,
H2O Midstream, and reinvest the capital
generated from the sale on its core revenue-producing activities: drilling and
completing horizontal Wolfcamp and
Spraberry wells.
Sabalo owned nine saltwater disposal

wells with a combined injection capacity
of 105,000 barrels a day on four Ellenburger disposal permits and 37 miles of
water pipeline adjacent to H2O Midstream's existing Howard County operations, making it a natural fit for the water
midstream company, Clark relates.
"We are a small shop with only about
20 employees," he offers. "By selling
our water system to a third party, it has
allowed us to focus on drilling and development and not have to fool with
water. We are an oil and gas company,
not a water company. We want to invest
our time and resources in producing oil
and gas."
Two Business Models
Mark Patton, president of Hydrozonix
in Conroe, Tx., says his company operates
two business models. First, it operates
water management systems as a thirdparty services provider. Second, it also
sells equipment to producers that operate
their own water management systems.
"Operators are taking both approaches
in the Midland and Delaware basins, but
more companies are choosing to outsource
water management," observes Patton. "Either way, we are definitely seeing more
and more companies recycling water, especially in New Mexico."
Part of the water management process
is logistics, according to Patton. "Not all
water is in the right location, so infrastructure has to be built to get it to where
it is needed," he states.
Another factor that can impact the
installation of water pipelines is land access and landowner restrictions on using
freshwater, according to Patton. "New
Mexico has a produced water act," he
points out. "If the operator wants to recycle water, but has an agreement to buy
freshwater from a landowner, that agreement is null and void on all state and
federal lands as long as the operator recycles."
Patton claims the Hydrozonix H2O
Trio™ program replaces a conventional
chemical program with a more effective
control of bacteria, iron and sulfide at
lower cost. The automated oxidation system treats produced and flowback water
in gathering systems.
"We make ozone on the site, which
significantly lowers the carbon footprint,"
he explains. "If you can do carbon capture

and reduce emissions by not having to
truck liquids, that is a win-win for everyone. It can also mean a savings of up to
90 percent."
The company's portable aeration system aerates and mixes water in storage
pits and tanks to maintain water quality,
while the third phase of the Trio program
is an on-the-fly oxidation system that
disinfects water without chemicals (which
can be incompatible with frac fluids).
"We are seeing better chemistry and
more robust chemicals, which means
that another trend is cheaper costs for
recycling water," Patton adds. "Operators
are looking for a way to carry the sand
in the fracturing process so you do not
need super-clean water."
Hydrozonix also offers a new product
that one might not associate with water
management. Patton says it is using a
wet scrubber approach, similar to scrubbers used in industrial applications, to
scrub flare gas. The flare gas is scrubbed
in a chamber, and the water is evaporated
and ultimately returned to the hydrologic
system.
"It is a brand new system," he comments. "Companies have to find things
to do with flare gas, and there is a lack of
take-away capacity. With negative pricing,
there is pressure to continue flaring. We
can reduce emissions and evaporate the
water for the same cost structure as a
disposal well."
Water Disposal
A water management system involves
securing freshwater sources, building
treatment and transportation infrastructure
to get treated water to the well site, installing large pits to store the water, and
then investing in a recycling and treatment
system to reuse the flowed back water.
The final step in the water management
process is disposal wells.
Ken Fairchild is the operations director
for Agua Libre Midstream, a wholly
owned subsidiary of Basic Energy Services. He maintains recycled water can be
used only four or five times before it becomes too laced with chemical compounds, minerals, iron and bacteria to be
compatible with frac fluids, without exorbitant treatment costs. At that point,
the produced water must be injected into
a disposal well.
His job is to not only operate disposal
MARCH 2020 67

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