Oilfield Water Weekly

Wednesday October 27, 2021

An exceptionally busy news week is recapped below – we encourage readers to scroll through all of the deal, regulatory, and other big industry headlines.

While there was plenty of big news, the biggest was the new Delaware Basin SRA that rattled the water midstream sector this week even as more earthquakes that rattled Midland. The TX RRC crackdown continues on WTX disposal as regulators try to head off the seismicity surge.

The new regulatory development was both predicted and discussed at length by industry thought leaders at the Houstonian two weeks ago during our 3rd Annual Oilfield Water Industry Update Conference.

The new SRAs have big implications for the future of oilfield wastewater management, and these implications are sure to be hot topics at our next event, March 10-11, 2022. Details and online registration are on event the website here… please plan to join us and hundreds of your peers for two days of networking and knowledge sharing early next year.

And now this week’s news…


News Digest

YESTERDAY: 3.4 Mag Quake & 3.6 Mag Aftershock Hit Ector County

The United States Geological Survey is reporting 3.4 and 3.6 magnitude earthquakes struck West Texas Tuesday afternoon. According to USGS, the epicenter of the first quake struck 9 kilometers or roughly 5.5 miles north/northeast outside of Odessa, close to Gardendale just before 5 p.m. A second quake came less than 10 minutes later, slightly more intense than the first one registering at 3.6.

The Permian Oilfield Water Crackdown Continues… Now Delaware Disposal Capacity At Risk Of Regulatory Removal

During the 3rd Annual Oilfield Water Industry Update in Houston a couple weeks ago, the TX RRC’s seismicity-induced move to crackdown on disposal injection was the hottest topic. One of the predictions was that more action was coming, and it would ensnare the Delaware Basin next. That action that came last Friday. Here's what's new, the big picture implications, the specifics, and more resources...

Quantifying The Delaware Disposal Deletion [Chart Of The Day]

Here is a data-driven look at the SWD impact – well by well and owner by owner. In the chart, the red shows the previously permitted capacity that is wiped out if the SRA’s provisions are enforced

Northern Culberson-Reeves Seismic Response Area – Up to 2 M Barrels per Day of SWD Injection Held at Bay for Area Operators

In another blow to SWD operators in Texas, on October 20,2021, the Texas RRC established the Northern Culberson-Reeves (NCR) Seismic Response Area (SRA) due to an increase in 4.0 M or greater seismic events in the region.

If This Becomes The Standard Approach To Seismic Activity Mitigation, Water Management Costs Will Increase Dramatically

On 9/24, the RRC issued a Seismic Response Action (SRA) to the Gardendale area of the Midland Basin. Friday, the RRC issued an SRA for the Northern Culberson-Reeves area.

Breakwater Launches TX RRC Commission Research Webpage

The page helps to understand key elements of the RRC’s Seismic Gardendale Response Action (SRA)...

Crestwood to Acquire Oasis Midstream Partners in $1.8 Billion Transaction

Highly complementary Williston Basin and Delaware Basin assets enhance Crestwood’s competitive positioning in its core growth basins.

Altus and EagleClaw Announce All-Stock Business Combination; Creates a Leading Pure-Play Permian Integrated Midstream Company With a Capital Return Focus

Combination forms the largest integrated midstream company in the Delaware Basin with an estimated enterprise value today of $9 billion

Aris Water Solutions Provides Operations Results Update

Based on preliminary financial and operating results for the third quarter of 2021, Solaris Midstream Holdings, LLC, the predecessor of Aris Water Solutions, Inc. (the “Company”), expects to report revenue of approximately $59 million to $60 million.

Quick Thoughts On Three Deals Of Note – One Each In Water, Frac, & E&P

Aris Water Solutions (formerly Solaris Water Midstream) priced their IPO and started trading under ticker ARIS

Houston-based midstream water co. prices IPO below range, stock price jumps in NYSE debut

Aris Water Solutions is the new holding company for Solaris Midstream Holdings LLC, which reportedly had confidentially filed for an IPO in August.

Matador Resources Disposal Wells Coming to Permian in SE New Mexico

The Dallas company said it started operating a fifth operated drilling rig in August for its midstream affiliate, San Mateo Midstream, LLC and for the purpose of drilling an additional salt water disposal well in the company’s Greater Stebbins Area of Eddy County, New Mexico.

Light mag. 3.2 earthquake - Culberson County, Texas

53 mi south of Carlsbad, Eddy County, New Mexico, USA, on Thursday, Oct 21, 2021 10:33 am

WTX Sherriff Is Searching For Goodnight Midstream Burglary Suspects

The Ector County Sheriff’s Office is asking for help from the community to identify two men accused of theft. Around 12:56 p.m. on August 7, ECSO was called to Goodnight Midstream to investigate the burglary of a building. According to a Facebook post, the pair pictured in this article made off with about $1,500 worth of property, including copper wire.

Regulator lays charges against Tidewater Midstream for acidic water release

The Alberta Energy Regulator has laid charges against Tidewater Midstream and Infrastructure Ltd. for a release of acidic water in west-central Alberta.

Permian disposal restrictions to open up oilfield water recycling

Increased earthquake activity has prompted the oil & gas regulator in Texas to take a tough stance on the underground injection of produced water. It signals a lasting change for water management in the Permian Basin.

Unlined waste disposal pits endanger groundwater in San Joaquin Valley

For decades, lax oversight has allowed oil and gas developers to dump billions of barrels of toxic wastewater into the ground, endangering California’s San Joaquin Valley’s dwindling groundwater supplies.

Diamondback Energy Divests Permian Water Assets in $160 Million Dropdown

The dropdown transaction consists primarily of water midstream assets acquired by Diamondback Energy through its acquisitions of QEP Resources and Guidon Operating earlier this year.

Akin Gump Advises Diamondback Energy In Drop-Down Sale Of Water Midstream Assets

Rattler Midstream LP, a subsidiary of Diamondback Energy, Inc., has announced that Rattler Midstream Operating LLC entered into a definitive purchase agreement to acquire certain water midstream assets from subsidiaries of Diamondback for $160 million in cash in a drop-down transaction. A team from Akin Gump advised Diamondback in the deal.

EVX Midstream Partners helps Producers reduce their Carbon and Water Footprint in Eagle Ford Basin

VX Midstream Partners, LLC ("EVX") today announced that its water gathering, recycling and disposal systems along with other innovative solutions have made positive environmental impacts in the Eagle Ford Basin.

We Lost Two Great Gentlemen Recently: Warren Sumner, President of Orion Water Solutions, Passes Away

Rest in peace, Warren.

We Lost Two Great Gentlemen Recently: Steve Toon, Editor-in-Chief of Oil & Gas Investor, Passes Away

Rest in peace, Steve.

Oilfield Service Companies Can’t Catch A Break

Supply bottlenecks, shipping restrictions, and labor shortages have led to high costs for all kinds of economic sectors, but few have been hit as hard or as swiftly as the energy industry.

A Rig Count Rarity – US Land Rig Count Down For Only 2nd Time ALL YEAR!

Although we expect continued rig count gains to keep up with completion demand against a backdrop of soft DUC inventory, the rig count doesn’t go up and to the right forever; and this week saw an unusual step back in the short-term history of the rig count.

NM Produced Water Research Consortium to host public workshop in Farmington

The New Mexico Produced Water Research Consortium and San Juan College School of Energy will host a public education workshop on the status of current research and development on fit-for-purpose treatment and reuse of oil and gas produced water.

Martins Ferry (OH) leaders tour Austin Master Services frack waste processing plant

The Mayor said the facility looked clean and tidy, but he noted company officials were aware that they were going to receive visitors. Davies said he believes the plant is “operating inside the rules set forth” by the state.

Aramco warns world's spare oil supplies are falling rapidly

It’s a “huge concern,” Chief Executive Officer Amin Nasser said in an interview in Riyadh, Saudi Arabia’s capital. “The spare capacity is shrinking.”

Big Oil is about to post highest cash flow in more than 13 years

The Western world’s biggest oil companies likely just generated more cash than at any time since the Great Recession, and investors are about to find out what they’ll do with it.

Texas adds 2,900 oil exploration and production jobs in September

Oil exploration and production companies in Texas added 2,900 jobs in September as the industry continues to recover from the pandemic-driven oil bust.

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