Issue #40 | Water Theme Watch List

Oilfield Water Weekly

Wednesday January 8, 2020

2020 is off to a fast start, picking up right where 2019 left off with a ton of deal-making news in water midstream.

Before we get to a jam packed news digest this week, here are five big picture themes on our radar for the business of oilfield water management as 2020 begins. Did we miss one you are watching? Drop us an email and we will include your feedback in our next newsletter.

5 Big Picture Themes For 2020

  1. More water midstream M&A headlines. The pipeline is still full of potential deals – some transformational, some extensional – and E&Ps are likely to continue to divest water systems to third-parties.
  2. Acquisition appetite. Who will be the most active buyers of water assets in 2020? Some of the usual suspects over the past few years may be close to tapped out after a string of big purchases. Will they be able to reload or will other firms and funds become the most active system purchasers? Or… is the window tightening a bit for sellers?
  3. Water will remain at the forefront of the E&P and midstream industry’s sustainability push. This encompasses many sub-themes (each very important) including more reuse/recycling, more water on pipe, more automation, shared use of infrastructure, commoditization, seismicity research, regulatory changes, ESG, etc.
  4. Fully integrated third-party water supersystems will continue to turn produced water into an asset vs. a liability, accelerate commoditization of produced water, and drive down costs.
  5. Contractual / commercial evolution and refinement to account for new risks in water midstream. For example, tight oil production growth hangs in a delicate balance (E&Ps are growing with their foot on the brakes because of cries for capital discipline from Wall Street even as oil prices rise, making production forecasting very difficult). How will this risk be handled in water midstream contracts?

And now, here is your oilfield water business news digest for the past seven days…


News Digest

Oil Prices Spike, Then Fall Sharply As Worries Over Iran Missile Strikes Momentarily Fade

Oil futures traded sharply lower Wednesday, reversing a spike higher in the wake of an Iranian missile attack on bases where U.S. troops were stationed in Iraq, on perceptions the assault could mark the end of the U.S.-Iran conflict rather than an escalation...

Oilfield Water Logistics Doubles Delaware Basin Scale With E&P Water System Purchase

OWL announced on Monday that it has acquired a portfolio of operating assets in New Mexico from a major Permian Basin oil producer, including 23 saltwater disposal wells and 300 miles of water gathering pipelines...

Expedition Acquires Two Saltwater Disposal Facilities In The DJ Basin's Core

Zachary Neal, Chief Commercial Officer & CFO and a speaker at our last conference, said: "This acquisition further solidifies Expedition's strategic position in the DJ Basin and the Wattenberg core. We are delighted to add incremental capacity at strategic locations for new and existing long-term, contracted customers."

A New Year In Oilfield Water Management Brings More Of The Same… Sort Of.

2020 starts off much the same as 2019 ended in the oilfield water management industry: with more M&A news. Two pure-play water midstream acquisitions were announced on Monday from undisclosed sellers (although we have heard some guesses about who one of those might be). Meanwhile, oilfield water M&A this year has a different feel than it did the past two years...

Drink More Recycled Wastewater!

Apache's Brian Bohm writes: "Several communities in Texas are starting to implement Recycled wastewater programs. For those not in the know, here is an educational piece on what recycled water for drinking water looks like...."

PEOPLE ON THE MOVE: Noble Midstream Names New President & COO

Robin Fielder becomes president and chief operating officer of Noble Midstream. She’s held numerous positions with Anadarko and Western Midstream...

PEOPLE ON THE MOVE: Blackbuck Resources Adds New CFO & COO

COO Barry Portman previously served as Vice President, Production Operations and Permian General Manager of Pioneer Natural Resources. CFO Jamie Liang was previously a Managing Partner at Battlecat Energy Partners LP...

Western Midstream Announces Entry Into New Service, Operating, And Governance Agreements

Western Midstream Partners and Occidental announced the execution of several agreements that will enable WES to fully operate as a stand-alone business, consistent with WES's and Occidental's joint effort to establish WES as an independent midstream company...

Gravity Oilfield Services Divests Fishing & Rental Division; Narrowing Focus On Water

Graco Fishing & Rental Tools has acquired all fishing, rental tool and related assets of Gravity Oilfield Services' Fishing & Rental Division, narrowing Gravity's focus on its core business in water midstream...

SitePro Inc. Announces SitePro Mobile

SitePro has released a mobile app to give operators greater visibility and control over their entire fluid management system. The release of SitePro Mobile is the next evolution in digital oilfield operations, bringing the remote control and monitoring of real-time data and analytics from SitePro's Command Center, the oil and gas industry's most advanced fluid management software, to the iPhone and iPad...

SitePro App Launch Party In The Permian On Jan 10

For folks in West Texas / New Mexico, SitePro is hosting an app launch party at their new office - including food and drinks and an app demo - on Friday Jan 10 from 2pm to 4pm at 12007 W County Road 100, Odessa, TX 79765...

A Delaware Basin Water Hauler Is Adding Trucks In 2020

Rival Energy Services VP Chad Evans Writes: "Despite an obvious slow down in the Delaware, we continue to add trucks and stay busy. Here’s to 2020. 45 trucks and counting..."

A Small Deal, But A Deal None-The-Less, In The Oilfield Water M&A Pipeline

Specialty heavy equipment provider for O&G and water transfer pipeline business for sale with $5.4MM in EBITDA...

Uh Oh... A Tough Headline For The Industry: "Dominion Fires Worker For Saving Ducks From Frac Ponds"

Wyo File reports: "Dominion Energy fired an oilfield worker in Rock Springs after the employee saved an estimated 50 waterfowl from wastewater ponds..."

This Permian Leading Indicator Bodes Well For 1H2020 [Charts Of The Day]

With 2019 in the books, we spent some time over the weekend becoming more encouraged about 2020 as we updated our data on...

Drilling Down: Top 10 Injection Well Operators In Texas

Some 200 companies filed for 741 injection permits with the Railroad Commission in 2019. That’s slightly down from the 210 companies that filed for 800 permits in 2018 according to the Houston Chronicle...

Governor Abbott Declares State Of Disaster Due To Drought Conditions In 17 Texas Counties

"WHEREAS, significantly low rainfall and prolonged dry conditions continue to increase the threat of wildfire across these portions of the state; and WHEREAS, these drought conditions pose an imminent threat to public health, property, and the economy; THEREFORE, in accordance with the authority vested in me by Section 418.014 of the Texas Government Code, I do hereby declare a state of disaster...

Bakken Produced Water Spill

North Dakota officials say high winds caused a power outage that led to a produced water and oil spill in Dunn County...

iPipe: Using Satellite Data To Detect Produced Water Leaks In The Bakken

North Dakota’s Energy and Environmental Research center has been doing research into ways to detect oil and gas leaks, as well as produced water leaks, under its "iPipe" program...

Iran Strike And Saber Rattling Dramatically Underscore The Big US E&P Dilemma In 2020

Bang! 2020 is off to a dynamic start. Geopolitical risk has again taken the center stage, driving out-performance in crude oil and oilfield equities vs. the broader market in early-year trading. Here's how the Infill Thinking team sees the events in the Middle East impacting a critical US E&P dilemna...

Hard as It Is, Frac'ers Should Ignore Iran

Not so long ago, an event like last Thursday assassination of Iranian General Qassem Soleimani would have set off a frenzy in oil prices and the stocks of companies producing the stuff...

Houston Company Partners With Nokia To Bring 5G Service To Oil Patch

Houston oilfield telecommunications company Infrastructure Networks has partnered with the Finnish cell phone equipment giant Nokia to bring fifth generation mobile data service to the Permian Basin and three other shale plays....

A New Midstream Legal Roadmap...

Midstream companies now have a roadmap for ensuring that a debtor remains subject to a midstream agreement...

The Top 19 Stories Of 2019 In Oilfield Water & Frac Sand

As ranked by how many members read each piece, here are the Top 19 Infill Thinking research titles of 2019 for the oilfield water management industry...

Encore Green Environmental And Wilson Farms Bring Produced Water For Ag Use

Economically treating oilfield produced water for agricultural use may become a reality in the prolific Permian Basin through a new partnership’s vision....

Summit Midstream Moves HQ To Downtown Houston

Summit Midstream Partners, LP (NYSE: SMLP) announced today that, effective March 1, 2020, it will relocate its corporate headquarters from The Woodlands, Texas to downtown Houston, Texas....

NGL Releases Unaudited Hillstone Financials

The unaudited consolidated balance sheet as of September 30, 2019 and the unaudited consolidated statement of operations for the three months ended September 30, 2019, of Hillstone Environmental Partners, LLC have been filed...

U.S. Oil Industry Warns Of Economic Fallout From Democratic Drilling Ban

The head of the largest U.S. energy industry group on Tuesday warned that Americans risk choosing the "wrong path" in the 2020 presidential election if they vote for a candidate seeking to fight climate change by banning drilling...

CNBC Article Mentions Risk From WasteWater In Shale

Some reports indicate individuals may have been harmed during the process, often due to the mishandling of wastewater or improper building of boreholes....

FROM THE OTHER SIDE OF THE AISLE: Protect The Water Rights Of New Mexicans

Rep. Nathan Small is right when he says that the current rate of freshwater use in fracking (4.2 billion gallons in 2018) is not sustainable...

FROM THE OTHER SIDE OF THE AISLE: Public Condemns Sale Of Ancestral Tribal And Public Lands For Fracking

The Sierra Club writes: Management continues to offer even more land for sale, trying to paper over the inadequacies of its environmental reviews after-the-fact using questionable water “supplemental white papers” instead of required environmental impact statements....

FROM THE OTHER SIDE OF THE AISLE: Why neither 1922 thinking Nor The Lake Powell Pipeline Is The Answer

Kanab officials unanimously agreed (a 50 year contract) to release a quantity of their sparse and precious high desert drinking water, and in unison with that vote, they understood the water would be used to “wash” the frac sand with toxic chemicals, creating the potential to contaminate the very aquifer(s) from which they acquire their drinking water. Not only did their decision defy common sense, but it imposed a reckless double whammy risk on their citizens!

Who Will Protect the Unheralded Llano River?

There is no clear boundary between private land and a public river — with the favor of ambiguity tipping toward private developers...

Texas Regulations To Watch In 2020 [Paywall]

State agencies will work to implement efforts to make drilling more efficient in unconveintional oilfields and allow the state to take over certain O&G water permitting from the federal government...

An Alternative To Fracing That Requires Less Water?? Never Say Never... But...

Eden GeoPower is a green energy tech startup that has developed a unique, electric, and environmentally technology to allow for less-water intensive hydrocarbon extraction...

Alberta Oilfields Could Give Rise To Lithium Industry Fuelled By Electric Cars

It’s long been known that Alberta’s historic oil and gas-producing Leduc Reservoir is rich in lithium deposits....

Honda's CEO Is Skeptical Of EV Demand

For Honda CEO Takahiro Hachigo, EVs are not a priority. “I do not believe there will be a dramatic increase in demand for battery vehicles,” he told Automotive News recently...

The Big Picture: Water Pioneer Robert Maliva Eyes Latest Challenges

At a time when the complexities of securing safe, reliable water supplies have increased in step with the demands of growing communities, ENR Southeast’s 2019 Legacy Award recipient, Robert G. Maliva, stands as a go-to source for insights and ideas...

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