American Oil and Gas Reporter - March 2020 - 69

pages 67-69_Layout 1 3/9/2020 9:29 AM Page 2

wells, but also to construct pipeline
systems to transport produced water to
the disposal wells, thus taking trucks off
the road. Finding the best zones to use
for saltwater disposal depends on the
basin, according to Fairchild.
For example, the Delaware Mountain
Group is the formation of choice for disposal in the Delaware Basin. However,
because of increased seismic activity, especially in Reeves County, Fairchild says
disposal wells are moving into deeper
zones such as the Ellenburger.
"From the public data I have seen on
TexNet and the U.S. Geological Survey
websites, earthquakes are normally deeper
than the commonly used disposal formation depths, so there are obviously vertical
fractures running deeper, down into the
earth," he notes. "It is hard to say what is
actually causing the earthquakes, but disposal activity is being watched closely."
A map of active disposal wells in
the Delaware Basin shows that there
are many more disposal wells on the
Texas side of the state line in Loving,
Culberson and Winkler counties. The
reason for that, according to Fairchild,
is that New Mexico allows a surface injection pressure of only 0.20 psi/foot of
formation depth while Texas allows 0.50
psi/foot of formation depth. Because of
that, there are a lot more disposal wells
on the Texas side within five miles of
the state line.
However, Fairchild predicts that
changes are on the way. "I suspect new
requirements in Texas will decrease
maximum allowable surface pressure
and limit disposal volumes in the
Delaware Mountain Group, in the near
future," he states.
Meanwhile, the San Andres is historically the formation of choice for disposal
in the Midland Basin, Fairchild claims.
The San Andres' depth varies from 4,000
feet in the northern part of the basin to
6,000 feet in the southern part. Fairchild
notes that in a part of the basin ranging
from the north end of Upton County
northward through Howard County, a
significant portion of the San Andres is
pressured up, which requires an extra
string of casing in wells drilling below
the San Andres formation.
"Disposal wells are moving deeper
into the Ellenburger. The Ellenburger in
West Texas and the Arbuckle in Oklahoma
are similar in that they both lie on top of
the granite basement. The Texas Railroad
Commission now requires Ellenburger
disposal wells to be plugged back 100
feet after drilling into the Ellenburger
because of concerns that it will lubricate
the interface between the Ellenburger and

granite underlying it. In the seismic prone
area of Oklahoma, the OCC reduced surface pressures and volumes in disposal
wells, and that has significantly lowered
the magnitude of earthquakes."
Fairchild explains that there are three
types of disposal contracts between water
management companies and producers.
Two of the contracts are comparable to
gas gathering agreements. One is an
acreage dedication, where the disposal
company is guaranteed to receive all of
the produced water on a defined, and
dedicated amount of acreage.
The second type of contract is a min-

imum volume commitment for the disposal of produced water. "This contract
is similar to a take-or-pay gas contract.
It is not popular with producers, but it is
like a hedge on oil prices," he continues.
"The producer has a fixed cost for a
specified length of time. This option
can be attractive to the operator that has
plans to take an acreage position, develop
it and then flip it."
The third type of contract is a simple
pricing agreement in which the disposal
company is paid a specified amount per
barrel of water per day.
❒

A pump without pulsations
meets API 675 without stress.

Hydra-Cell® Metering Pumps
With its unique hydraulically-balanced,
multiple-diaphragm design, Hydra-Cell
provides smooth, linear, virtually
pulse-free 昀ow without the
need for expensive pulsation
dampeners.
Our Metering Solutions pumps
more than meet-they exceed
API 675 performance standards
for accuracy (+1%), linearity (+3%)
and repeatability (+3%).
Contact us today for details and pricing.

www.Hydra-Cell.com/metering * 612-332-5681
MARCH 2020 69
http://www.Hydra-Cell.com/metering
American Oil and Gas Reporter - March 2020

Table of Contents for the Digital Edition of American Oil and Gas Reporter - March 2020
