Shale Water Expo 2015—What We Learned

December 15, 2015 | By | Reply More

104Despite challenging times facing the industry, this year’s event in Houston drew E&P leaders, technical experts and end users from all segments of the water-management supply chain.

By SPWM Staff

A wide range of conference sessions were presented, digested and discussed at the NRG Center, October 13th and 14th. In addition, there was an exhibit hall featuring an outdoor equipment display of mobile water-transfer and treatment solutions, as well as more than 90 individual exhibits.

Over the course of two full days, it became apparent that, despite the difficulties faced by the oil and gas industry, the water-management niche continues to evolve and adapt to changing market conditions.
The segment is proving to be fertile ground for gaining efficiencies and reducing costs, and Shale Water Expo 2015 proved once again that “one size doesn’t fit all” when it comes to water solutions for operators and service companies.

With technical and operational topics ranging from frac-water treatment options and exclusive project updates in the Permian, to water-management market analysis and where we are likely to be a year from now, the seminars covered the gamut of business and technology insights for industry experts and thought leaders.

Shale Water Expo 2015 emphasized the importance of collective collaboration, knowledge sharing and networking in difficult times for the industry. If you were not able to join us in Houston this year, here are some of the highlights.

The Big Picture: Market Trends in Turbulent Times

In their presentation, Samir Nangia and Purav Patel from PacWest reported that excess supply will keep downward pressure on prices through mid-2016 as U.S. and global production adjusts. Among their findings:

  • D&C water requirements will decline, but at a slower rate than activity levels due to a higher share of HZ wells and higher frac-water volumes.
  • Prices are expected to rebound somewhat in the second half of 2016 as lower prices spur demand growth.
  • Drivers for the discrepancy between water demand and activity growth rates include: higher proportion of HZ wells (62 percent in 2014 to 72 percent in 2015), frac stage growth due to increasing lateral lengths and decreasing stage widths.
  • Frac-water volume per well continues to increase across almost all key plays with the U.S. land average increasing 14 percent YoY in 2015.
  • Aside from the Barnett and Haynesville, all key plays exhibited meaningful growth in frac-water demand per well from 2014 to 2015. The Anadarko Basin, Eagle Ford and Utica had the most growth during this period.
  • While a slowdown in D&C activity has alleviated some pressure on water scarcity, increasing frac-water volume per well continues to pose an issue regarding the availability of water.

“Going Big” in the Permian

In two separate and popular sessions, Pioneer Water Management and Wolfcamp Water Partners shared exclusive details on their major water-distribution projects in southwest Texas.

John Durand and Nick Hines from Pioneer’s water-management team updated attendees on the impressive build-out of their company’s permanent water infrastructure project that features a 100-mile mainline, 30 inches to 36 inches in diameter with up to 25 subsystems, 120-plus frac ponds used to meet peaks and valleys of demand, and significant utilization of produced water for drilling and completion demand, while minimizing disposal needs. The operator’s goal is to create diversified supply means, including local and external sourcing, using reclaimed municipal effluent water and brackish water supplies. Pump stations are the heart of the system with nine currently planned 10 miles apart.

Another well-attended session spotlighted a major new project development by Wolfcamp Water Partners (WWP) that will be capable of transporting 200,000 bbl per day or more of a low total dissolved solids (TDS) brackish water that is highly suited for drilling, cementing and frac operations. Located on 32,000 acres of dedicated water rights, lying west of Pecos, Texas, the Capitan Reef Complex Aquifer will be harnessed to provide water to the Permian Basin for more than 30 years—estimated at 38 billion barrels of water resource in place. Additional details on this exciting new water-distribution system in the Permian can be found on page 6 in this issue of Shale Play Water Management.

Meeting room image 1Need-to-Know Updates for Water Treatment, Reuse and Disposal

New technologies for treatment and reuse were spotlighted, with efficiency and cost reductions driving the discussions. Nalco Champion, APATEQ, Dow Water, Abengoa, Hydrozonix, X-Chem, MIOX and other companies shared their latest treatment advances, which included specific water-chemistry steps for improved disinfection and effective biocide applications.

The relationship between hydraulic fracturing, wastewater disposal and seismic activity, particularly in states like Oklahoma, was addressed during two important sessions. David Alleman from ALL Consulting discussed the critical factors affecting seismicity from injection of wastewater. Gareth Block of Advantek Waste Management Services reviewed best practices for water injection, in particular, the three key drivers for successful injection, earthquakes and “induced seismicity,” and using real-time surveillance to keep injection wells healthy.

 

In another presentation, Laura Capper of CAP Resources began her talk by asking the question: With rigs down more than 50 percent, why are water-management costs still so high? Her in-depth discussion took stock of the current state of our industry, which included downturn impacts on water-management programs, potential regulatory changes that could affect bottom-line costs, proposed focus areas for substantive water-management cost reduction and reduced environmental, health and safety (EHS) liabilities using automation and mobile systems. Laura’s timely session was well received, as were so many others presentations.

“In a very tough market for both individuals and organizations, the shale industry’s resilience and long-term viability shined at this year’s Expo,” notes SPWM Publisher David A. Hill. “Our thanks go to those who attended, as well as our exhibitors and sponsors who enabled Shale Play Water Management magazine to host this important industry event. See you at the NRG Center for Shale Water Expo 2016.”

 

 

 

 

 

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