Issue #29 | Best House In A Bad Neighborhood

Oilfield Water Weekly

Wednesday October 23, 2019

In a newsflow spotlight section in today’s digest below, you’ll find a series of articles from the past week that we’ve categorized as “TROUBLE IN SHALE.”

It will come as no surprise to our informed readership that the tight oil and shale gas industries are under intense pressure these days. From E&P to OFS, the downturn playbook is in full swing.

Remember when takeaway capacity and 2018 budget exhaustion late last year were thought to be temporary blips? That late-2018 angst has spilled over into even bigger business challenges this year. And now oilfield market conditions are deteriorating further here in the seasonally soft fourth quarter.

What readers of this newsletter should take solace in is the fact that oilfield water management is a bright spot in the US onshore business. It remains shrouded in an aura of growth opportunity – an aura that is supported by strong counter-cyclical forces. Water specialists are helping the broader E&P industry solve urgent problems around a critical path function – that need isn’t going away.

Is the water sector immune to oilfield pain? Certainly not. But right now, oilfield water management is the best house in the bad neighborhood that is the US onshore oil business.

It’s the one area of the Lower 48 O&G onshore market where more companies are growing than shrinking. Strong water teams still have good access to capital. And as oilfield water midstream matures, it could help improve things for everyone in the neighborhood by reducing capital intensity for E&P operators, empowering them to focus on what they do best – develop hydrocabron reserves.

We expect the excitement about the full-cycle oilfield water sector to be felt in full force at our May 2020 Oilfield Water Markets Conference. We’ll be press releasing the news that registration has opened to the broader market next week, but here is a special heads up for our newsletter readers today. The event website is now live with early-bird pricing on registration (check it out here). There is also an outline posted of the exciting opportunities to gain exposure for your brand, which this event will deliver unlike any other!

And now for this week’s news… tons of important stories this week… so freshen up that cup of coffee before scrolling on…


News Digest

Water Management Is Becoming Big Business In US Shale [Paywall]

Energy Intelligence attended and wrote about our October 4 Oilfield Water Connection Industry Update conference. Check out their full story here...

Oilfield Water Connection Posts Conference Video & Photos From A Second High Quality Event In 2019

Oilfield Water Connection announces that conference photos from our October 4, 2019 Industry Update have been posted. Here's access instructions and an event video documenting our second high quality event in 2019...

Chevron Sees ‘Boom Boom Boom’ Permian Despite Signs of Slowdown

Chevron Corp. sees a “boom boom boom kind of economy” in West Texas, shrugging off signs of a Permian Basin slowdown showing up in everything from jobs to hotel rooms...

Chevron Outlines Permian Water Strategy

US supermajor putting measures in place to deal with huge increase in produced water expected from prolific play in the coming decade...

4 Reasons Wood Mac Likes Exxon’s Permian Growth Campaign

Exxon is clearly on target with a development approach unlike anything we’ve seen before in a shale basin. The supermajor is running an unprecedented 60 rigs in the Permian, up three-fold from just 20 rigs a year and a half ago. And it’s just getting started...

Old Black Water, Keep On Rollin': Tackling Produced Water In Unconventional O&G

Glad to see we aren't the only Doobie Brothers fans out there (see our October 9 newsletter title)... Kidding aside though, this is a thoughtful piece addressing commercial considerations around produced water...

Bobcat Group Announces Sustainable Platform In The Permian Basin

Bobcat Group was introduced at our October 4 conference by co-founder Shea Morenz and to the broader market in this LinkedIn post after the event. The outfit traces its roots back to historic Texas ranches like the Spike S Ranch in 1872 and the BLV Ranch in 1910, and to the Quintana Companies dating back to the 1930s. Today, Bobcat Group provides surface and mineral rights owners with long term partnership capital and sustainable water solutions through a collaborative approach..

PEOPLE ON THE MOVE: Pearl Water Midstream Formed By Gage Herrmann, A Highly Regarded Speaker At Our Events

Gage wrote: "Happy to announce that I've left Lagoon Water Solutions to start Pearl Water Midstream..."

Bison And Chaparral Enter 15-Year Water Infrastructure Agreement

Under the agreement, Bison will exclusively manage all of Chaparral's produced water infrastructure and water hauling logistics, including any future acreage acquired or operated by Chaparral, within a ~1.9 million-acre dedicated area across Canadian, Grady and Blaine counties...

BHGE Changes Its Name to Baker Hughes Company

Baker Hughes, a GE company recently announced its successful name change to Baker Hughes Company. The company started trading under a new ticker, BKR, on October 18...

NEXT WEEK: Edwards Aquifer Protection Program Public Hearing With TCEQ

The TCEQ will conduct public hearings to receive comments about ways to protect the Edwards Aquifer from pollution starting October 28...

TROUBLE IN SHALE: Matthan Beard Shares GS Warning

“This puts an end to a decade of credit fueled shale oil hyper-growth...”

TROUBLE IN SHALE: Big Red Is Poised To Keep Cutting Even Deeper Than In A “Normal” Downturn

"We thought it was notable that CEO Jeff Miller again focused his opening remarks on international markets first. This is something he’s done for two quarters in a row now. We noted the signaling shift last quarter since for the prior seven conference calls, Jeff had spoken about North America (NAM) first..."

TROUBLE IN SHALE: Schlumberger posts $11.4 billion loss amid hefty pretax charges

"Sustained international activity drove overall growth despite mixed results in North America," Le Peuch said. "The North America business saw strong offshore sales with minimal growth on land due to slowing activity and further pricing weakness..."

TROUBLE IN SHALE: Faded Glory - Will The U.S. Shale Boom Go Bust?

The Great American Shale Boom appears to be losing steam, with profound consequences for the broader economy and financial markets. Even if you’re not an energy investor, here’s why you should care...

TROUBLE IN SHALE: Prospect Of President Warren Spooks Energy Investors [WSJ]

Of all the market-moving tweets these days, one in particular from Democratic presidential hopeful Sen. Elizabeth Warren is sending shivers through the oil industry....

TROUBLE IN SHALE: Frackers Float ‘Shale Bonds’ As Traditional Investors Flee [WSJ]

Desperate for cash, shale companies are trying to court investors with a new and potentially risky financial instrument that resembles mortgage bonds....

TROUBLE IN SHALE: Cost-Cutting Won’t Save The O&G Industry. Customer Focus Will

In the long run, an inward-looking strategy based on cost-cutting will damage the companies unless their goal is to explore strategic options. A better way forward starts with customer value to focus the company’s strategy...

NMDOT Announces New Safety Corridor

The New Mexico Department of Transportation announced last week the designation of a new safety corridor on N.M. 128 from mile marker 5 to mile marker 50 near the New Mexico/Texas State Line

Sierra Club Demands Action In NM After The Recent Study That Tied W TX Earthquakes Fracing

In the wake of a recent study, The Sierra Club Rio Grande Chapter has called on the State of New Mexico to adopt stricter regulations for well density in hopes of preventing seismic events....

NM Begins Discussion On Reusing Oilfield Water

The potential to turn wastewater from the oil industry into a resource has sparked conversation in arid New Mexico...

NM Governor Michelle Lujan Grisham's O&G Wastewater Plan Panned By Enviros

New Mexico Gov. Michelle Lujan Grisham’s plan to address oil and gas waste water drew criticism from environmentalists as the State begins public outreach efforts to find uses for produced water outside of the energy industry...

Texas RRC Gets A New Look

The Railroad Commission of Texas (RRC), recently unveiled updates to its logo that preserve the legacy of Texas’ oldest regulatory agency, while better reflecting its modern duties and responsibilities...

WY Governor Names Gebhart New Water Development Office Director

In his new position, Gebhart will serve as chief executive officer to the Water Development Commission. He will oversee the WWDO’s planning and construction of new water supply projects and the rehabilitation of existing water supply projects....

Trump Announces Deputy Energy Secretary To Replace Perry

WASHINGTON - President Donald Trump said Friday he would nominate Deputy Energy Secretary Dan Brouillette to helm the Department of Energy, following Rick Perry's announcement he would resign by the end of the year...

Canadian Oilfield Water Acquisition

Inclusive Energy is pleased to announce its acquisition of a north Alberta service company’s assets specializing in water management including: frac water super heaters, frac tanks, transfer pumps, manifolds and hoses, winch trucks, Texas bed trucks, straight trucks, and scissor neck 40 ton trailers...

Quenching Thirst In The Duvernay

Although Kaybob has the highest volume of total water pumped every year, operators in the East Shale Basin have used larger volumes on a per well basis than operators at Kaybob since 2017...

Privately Held Mewbourne Oil Competes With Permian’s Big Boys

As some of the top, family-owned oil producers are absorbed by the biggest players, Mewbourne Oil, a little known firm out of Tyler, has emerged as the Permian Basin’s top private operator...

New Study Doesn’t Settle Question Of Whether Living Near O&G Sites Always Poses A Health Risk

DENVER -- The Colorado Department of Public Health and Environment published a study on Thursday showing a rare health risk of living near oil and gas development in Colorado when certain conditions are met...

TREAD Coalition: Cities, Water Authorities Issue Warning To Federal Government: Make Permian Highway Pipeline Comply With ESA

The TREAD Coalition applauds a coalition of Central Texas cities and conservation organizations who are notifying the federal government they will sue if it fails to hold Kinder Morgan’s Permian Highway Pipeline (PHP) project accountable to requirements outlined in the Endangered Species Act (ESA)...

Water Scarcity Drives Industrial Reclamation Efforts

‘Reduce, reuse, recycle’ is not a mantra only for saving space in landfills. It has become an increasingly necessary push for water management in industrial operations. Here’s why you might need to reconsider your water usage...

Drilling Not Seen As Draining South Texas Water Supply

As drilling booms in the Eagle Ford shale, water used by oil and gas companies to drill and hydraulically fracture wells is an increasing concern. A common refrain from two experts: There likely is enough water in South Texas to drill wells and use hydraulic fracturing to complete them because the Carrizo-Wilcox Aquifer that lies above much of the Eagle Ford formation contains vast amounts of water...

The Importance Of Sand Monitoring In Separator Tanks

Excessive build-up of sand in a separator tank can clog the drain pot, resulting in damage to devices further downstream and requiring an unscheduled shutdown for cleaning. Reliable sand detection is vital and, as Emerson’s Marianne Williams explains, the latest vibrating fork level detectors provide an effective solution...

Drilling Down: Houston Company Makes Big Push In Spraberry Play

Houston oil company Birch Resources is planning a big push in the Permian Basin’s prolific Spraberry field. The company is seeking permission from the Railroad Commission of Texas to develop 19 horizontal wells targeting the Spraberry at total depths ranging from 7,600 to 9,1000 feet...

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