Issue #51 | Is The Water Deal Pipeline Plugged…

Oilfield Water Weekly

Wednesday March 25, 2020

Deal flow is likely to temporarily pause because of shelter-in-place mandates. But when the coronavirus health crisis abates, what will become of the many E&P divestitures processes that are either in motion or being evaluated? 

Will sales / JVs be put on hold because of value concerns and volume risk? Or will they accelerate because E&Ps will need a source of cash and must focus more than ever on core acreage development activity? 

In future editions of this newsletter, we’ll be reaching out to the esteemed speakers at our now postponed Oilfield Water Markets Conference to share their current perspectives with you amid this chaos.

Until then, there are some hot takes on deal flow in today’s news digest below… 

Also, you may have noticed that we include premium research notes published by Infill Thinking’s subscriber service in this newsletter. They cover upstream and water trends with deeply researched analysis that can’t be found anywhere else. And today, we wanted to let everyone know that Infill Thinking is doing their part to help the oilfield industry through these troubling times by offering free access for any oilfield folks being laid off in this crash or small business owners severely impacted in the pullback.

Hopefully this need doesn’t apply to you, but if it does, check out the details of their relief offer here – their premium content is a great way to keep your head in the game, stay marketable, and find your next opportunity.

Stay safe out there folks.

And now for this week’s top oilfield water industry headlines…


News Digest

E&Ps Are Hardstopping US Oilfield Activity [Voice Of The Industry Survey From The Past 7 Surreal Days]

Here’s what the Infill Thinking team heard about activity plans during phone calls with many of our oilfield contacts (including E&Ps and OFS firms) over the past 7 days...

OWL Still Making Deals?

"Heard from the patch that Oilfield Water Logistics (OWL) just acquired the water assets & infrastructure from another major E&P in the Midland basin."

A Dash Of WTI Optimism As COVID Stimulus Package Arrives

Oil rides U.S. risk rally though worries over global glut linger...

EPA to waive environmental requirements for industry challenged by coronavirus pandemic

The Environmental Protection Agency is planning to push back several compliance deadlines, including for oil refiners to switch to summer-grade gasoline, according to a report from the Wall Street Journal...

Railroad Commissioner Ryan Sitton invited to OPEC's June meeting

Railroad Commissioner Ryan Sitton, one of three officials elected to regulate the oil and gas industry in Texas, has been invited to attend OPEC's next general meeting in June....

Not the first time OPEC has pulled up a chair for Texas

The crisis in the oil industry is so bad that Texas regulators are weighing whether to coordinate production cuts with OPEC. If they’re seeking advice, they should look no further than the man who first went to Vienna on behalf of the state’s oil industry.

NAM E&P Operators Have Retracted $17 Billion Of Planned 2020 US Investment In Two Weeks [free trial unlocks]

Here is an operator-by-operator summary and stats on the 32 US E&Ps that have quantified cuts to their planned capital budget programs, and the total updated guidance they gave amounts to $17.3bn of planned US E&P spending being pulled back in about two weeks....

Hess Midstream Cuts The Budget

Reducing 2020-21 expansion capital expenditures by an aggregate $200 million compared to our previous plan, including reductions of $75 million, or 20%, in 2020, and $125 million, or 55%, in 2021....

California Desal Plant Workers Begin Shelter-In-Place To Keep The Water On

As of Friday, 10 workers are quarantined inside the Claude “Bud” Lewis Carlsbad Desalination Plant for the next three weeks, monitoring and adjusting gauges and switches, watching for leaks, and doing whatever is needed to safeguard San Diego County’s only significant local source of drinking water...

Emerging Debate: Will E&Ps Sell Or Hold On To Water In This Collapse? Here's What One Market Participant Says...

"Wonder how many E&P's will start considering selling off their water assets & infrastructure just to free up cash?...."

Superior Pipeline Teams Up With STACK Producer

Superior Pipeline Co. LLC has entered a long-term, fee-based gas gathering and processing agreement with an active producer in the STACK play. It replaces a prior contract with Superior, expanding the producer’s dedication area to 345,000 gross acres....

UTPB developing way to treat produced water

University of Texas Permian Basin’s College of Engineering has filed a U.S. patent application for technology to treat produced water....

New Technology For Soil Remediation Of Spill Sites

The product (or technology) is commercially used in many industries like Oil and Gas, Municipal and Industrial wastewater treatment and Agriculture. It facilitates abnormally expeditious remediation and natural balances in soils, air quality and treats water for things like TSS reduction, hydrocarbon recovery, and H2S elimination....

Oil spills in U.S. western states threaten water and health, residents fear

Oil spills and gas leaks in the U.S. West, along with the oil industry's boom-and-bust business model, are worrying people who live near fossil fuel operations....

Infill Thinking Offers Relief To Laid-off Members

Unfortunately, thousands of extremely talented and dedicated oilfield business people are being let go right now through no fault of their own. So this week, Infill Thinking will begin offering 90-days free access to any oilfield business people let go from their position in these uncertain times...

More than 1 million oil workers are set to lose their jobs this year, a new analysis reveals

More than one million oilfield service jobs are likely to be cut this year in the wake of the spreading coronavirus and historic oil price crash, according to an analysis published today by the research firm Rystad Energy....

Layoffs, pay cuts loom as Schlumberger plans to cut up to 30 percent from budget

Schlumberger, the largest oilfield service company in the world, plans to cut up to 30 percent from its budget as crumbling oil prices and the coronavirus pandemic weigh on the industry...

Midstream Prices Crash: Maybe We Have Seen This Before

Midstream is in a rough spot. With the shale industry under attack from OPEC+ and demand taking a hit from COVID-19, overall energy demand looks rather bleak, particularly in crude oil. Even the quality names in the space have been shellacked, trading at significantly depressed valuations. In order for these numbers to be justifiable, we would need to see a complete upheaval in the still nascent American energy industry.

Fracking giants warn shale crash will be faster this time

Two of the world’s biggest oilfield service companies are warning of a bigger shale crash than the one that hit the U.S. and Canada just five years ago.

Tallying Up The Known Frac Crew Releases For The Public E&Ps

So far, these announced releases only add up to about 30 crews. Infill Thinking now believes that more than 150 crews will likely be idled by May, especially with crude oil prices now testing $20.

For The US Land Rig Count, It’s The Calm Before The 100-Year Storm [Weekly Rig Count]

Here’s a list of the operators that have disclosed US land rig releases in press releases. So far, headline rig reductions add up to 94 rigs.

NGL Energy Partners LP Affirms Fiscal 2020 EBITDA Guidance and Provides Update on Current Operations and Capital Expenditure Reductions

Current produced water transportation and disposal volumes on its systems have increased in March to a record 1.9 million barrels per day, including approximately 1.5 million barrels per day in the Delaware Basin

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