Issue #28 | E&P M&A Implications For Water

Oilfield Water Weekly

Wednesday October 16, 2019

The E&P M&A narrative continues to factor heavily into another weekly oilfield newcycle after “Merger Monday” (one actual deal, one rumored deal reported involving four publicly traded Independent E&Ps). 

We believe E&P operator consolidation in the US onshore business is a trend with legs. When the dust settles, we wonder how many of the 50 or so public Independents that entered this cycle will remain? …30? …20? …10 Super-Independents?

Operator consolidation has big implications for the whole oilfield service/supply chain, including water midstream and full-cycle oilfield water management. In the short-run, it could mean more significant divestiture / JV transactions of water systems in the wake of headline E&P deals, more strategic evaluations of in-house water at a minimum, accelerated conversion to profit centers from cost centers, and increased scale of operation and evolving footprints as water systems merge. In the long-run, it points to more extensive water system integration, manufacturing mode, supersystems, and improved prospects for sustainability, optimization, and alternative use. 

More analysis on the interplay between E&P M&A and water midstream themes can be found throughout the top story links below. But before hopping into the news digest, three quick housekeeping items:

  1. Pictures. Photographs from our October 4 Industry Update event will be posted to the conference website by the end of this week. We’ll include information about how to access them in our next newsletter, but you are welcome to check the link above later this week for a first look.
  2. May 2020 Event Registration Is Opening Soon. New details on our two-day May 2020 Oilfield Water Markets Conference will be released later this week. Sponsorship and registration are also opening soon. Check out oilfieldwater.com on Friday to get a first look.
  3. Astros vs. Nationals?? Congrats to all our Washington DC readers on the Nationals clinching their first-ever World Series appearance last night (in a sweep no less). Astros vs. Nationals would be a great Series battle that would create some potentially productive meeting opportunities around the games for Houston oilfield water industry folks and DC-based policymakers / interest groups. Fingers crossed that the Astros will close out the ALCS (all apologies to any Yankees fans reading…but this newsletter’s readership skews heavily towards Houston!)

And now, here is your weekly oilfield water business news digest…


News Digest

Goodnight Midstream Announces Ben Daitch As Chief Financial Officer [People On The Move]

Yesterday evening, Goodnight Midstream announced a change in their C-Suite. Goodnight has named Ben Daitch as its new Chief Financial Officer. Ben joins from Paradigm Midstream, where he was also CFO - Paradigm has yet to name his replacement...

A Big Permian Property Auction With Historic Significance Is Imminent….

There's a multi-parcel land auction scheduled for later this months that is likely to turn some heads in the Permian Basin - both in the ranching community and in the O&G industry. Today, it is primed for Delaware Basin infrastructure development. In the property's past is a rich history involving the fortunes of some of Fort Worth most prominent old money families...

New Study Blames Some Permian Basin Earthquakes On Fracking

A new study from the University of Texas at Austin released yesterday afternoon is blaming hydraulic fracturing activity on some earthquakes in the Permian Basin of West Texas...

Parsley Energy Announces Acquisition Of Jagged Peak Energy For $2.3bn

Jagged Peak has invested nearly $90 million developing significant fresh and produced water infrastructure across its acreage position, which is located nearby Parsley's existing water assets. Integration of Jagged Peak's water infrastructure network increases corporate flexibility and operational scale.

Reuters: M&A Between Whiting And Abraxas Could Be Next...

Whiting is in deal talks with San Antonio-based Abraxas Petroleum Corp, two people familiar with the matter told Reuters....

Parsley’s Latest Thinking On Water Infrastructure & Frac Sand After The Jagged Peak Merger Announcement

Recall that Parsley is evaluating strategic alternatives for their oilfield water assets. On Monday, Parsley's CEO provided an update on a potential transaction and discussed how Jagged Peak's assets fit in...

Parsley / Jagged Peak Deal Slides Highlight Oilfield Water Fit

In Slide 12 of their M&A deal deck, Parsley shows a map merging Jagged Peak's water system with their own in the Delaware Basin...

UW Center Of Excellence In Produced Water Management Receives $1.5mm Grant

Congrats to John Brant and team at CEPWM who participated in our October 4 conference and are now in the news for a DOE grant...

Tallgrass Energy Updates The Market On Going Private Proposal

The Proposal continues to be reviewed, evaluated and negotiated by members of an independent conflicts committee. While the committee process is ongoing...

Bison O&G Closes $155mm Term Loan Facility with Vӓrde Partners To Accelerate DJ Basin Development

"The DJ Basin continues to offer some of the best drilling economics in the country, and we are excited to use this capital to accelerate the development of our inventory of more than 300 permitted drilling locations across multiple proven benches of the Niobrara and Codell formations."

Beyond Stevens, A Report Lays Out Tough Times For Drivers Operating In Permian Basin

"The good news for the trucking industry is that upstream operations still need trucks to haul frac sand, water used in hydraulic fracturing, and produced water generated when wells are producing crude and associated gas."

Drawn By The Salary, Women Flock To Trucking

Last year, Rebekah Koon left her job as an assistant manager of a gas station in Fort Bragg, N.C., to train as a truck driver, inspired by watching her uncle hit the road as a long-haul trucker when she was growing up...

Midland County Commissioners Discuss Road Projects

"With the increased truck traffic that we have on our county roads they'll see less wear and tear, fewer potholes, fewer areas that have the edges broken off," said Donnely...

Infinity Energy Resources And Haas Petroleum Enter Into Operating Agreement In Kansas Involving Disposal Capacity

Haas will implement Infinity's exploration and development plan regarding the Company’s planned purchase of existing production and mineral rights to the Properties in Central Kansas. The Properties include one existing horizontal producing well, one horizontal saltwater injection well, one conventional saltwater disposal well...

Hearings Scheduled For Oil Waste Project South Of Fort McMurray

Two public hearings are being held in Calgary to discuss a project south of Fort McMurray. The Alberta Energy Regulator is holding these meetings in November to discuss the Hangingstone oilfield waste management facility...

Ring Energy Completes Central Basin Platform Saltwater Disposal Infrastructure Project

From the company's 3Q ops update... "In addition to our drilling activities, we performed nine pump conversions, which will substantially reduce future operating costs, and completed one small infrastructure project on the CBP related to our saltwater disposal system..."

IHS Data Video Introduces An Experimental Concept For History Matching Initial Water Production From Wells

In the first month of a well's production data, sometimes it can be very hard to history match the water production, even with a numerical multi-phase models. Fracing can increase the pressure around the wellbore and increase water saturation. IHS shares an idea to set up a numerical model to have the conditions prior to beginning production to better model fluids including early water production...

Andreessen Horowitz Leads $300 Million Investment in RigUp

WSJ reports that "Financing brings the valuation of the startup aimed at energy contractors to $1.9 billion..."

Wastewater Line Replacement To Close Road In Andrews TX

The replacement of a water line will be causing road closures in Andrews for the next few weeks....

Texas Attorney General, On Behalf Of TCEQ, Goes After Sand Company For Wastewater Management

“Companies that pollute Texas waterways will be held accountable,” says TCEQ Executive Director Toby Baker. “Every business has a responsibility to respect laws that protect the environment and public health, and I applaud the attorney general for acting swiftly on my request to hold Triple P.G. Sand Development fully responsible..."

The New Era Of Data Driven Methane Management: Q&A With BPX Chief Innovation Officer

BPX: "By monitoring emissions via our drone LDAR program and analyzing the data for patterns, we identified an opportunity to improve the design and operating practices for an important safety device on our water tanks which significantly reduced emissions..."

Oasis Donates To WSC Transportation Program

Oasis has donated a $240k piece of equipment central to mixing water and frac sand pre-frac to the Williston State College Transportation Technology Program...

And In Broader Midstream News... FERC Is On Board With Sendero's Gateway Pipeline...

"We will grant Gateway’s requested authorizations, subject to conditions..." The Gateway Project is a 23-mile pipeline that will transport residue gas from a processing plant owned by a Gateway affiliate in Eddy, NM to a downstream interconnection point in Culberson County, TX in order to access regional markets.

...But Glick Dissents

"The Commission again refuses to consider the consequences its actions have for climate change. Neither the NGA nor NEPA permit the Commission to assume away the climate change implications of constructing and operating this project."

Finally Today... A Little Oilfield Water Humor

"No sir it was only a couple barrels spilled..."

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