Issue #59 | Water Weekly Digest

Oilfield Water Weekly

Wednesday May 20, 2020

We had productive conversations with many of our conference sponsors this week. Thanks to all of you for sticking with our delayed event through the pandemic. We can’t wait to gather the industry together again to discuss market trends and make new connections when it is safe to do so.

More details to come soon regarding plans for the postponed gathering… plus, please also stay tuned for information on our first virtual think-in coming soon.

And now for this week’s oilfield water industry news and analysis digest…


News Digest

Centennial Terminates $225mm Water Infrastructure Asset Deal With WaterBridge

Centennial Resource Development announced May 15, 2020, the previously announced divestiture of saltwater disposal wells and associated produced water infrastructure located primarily in Reeves County, Texas to a subsidiary of WaterBridge Resources LLC has been terminated....

Is The Water Deal Pipe Going Dry? What WaterBridge Walking Away Says About E&P H2O System M&A

This failed deal gives us a reason to step back and rethink everything we think we know about the E&P divestiture driven oilfield water system M&A trend in light of new market conditions. What are the considerations for buyers, sellers, bankers and backers in the fast evolving oilfield water deal landscape? We discuss...

Operator Says: Hire Your Own ESP Techs

ESP run life at SM in the Permian averages close to 1 yr. In some formations it nears 2 yrs. Do you know the one thing we did that lead to the biggest step change in run life improvement? We hired our own ESP techs....

First Of Their Kind? Highpeak Goes Horizontal SWD

It appears Highpeak Energy Holdings has initiated the #swd permitting process for 2-4 disposal wells in Howard County to be completed horizontally in the Ellenburger formation (~9,000' TVD)...

Here’s What The Boots On The Ground Say About Active Frac Crews, Basin-By-Basin [Data Table]

Here are oilfield market consensus ranges for total active frac fleets by basin in mid-May 2020 based on the bottoms-up, boots-on-the-ground market analysis of multiple industry insiders...

US Shale E&Ps Should Thank Google After Google Says It Won’t Support O&G Exploration With AI

After reading the article at the 'read more' link below, our take is this: great news since the global oil market is oversupplied and US onshore companies don't need Google AI to find unconventional oil and gas deposits. We already know where the sweet spots are in the Lower 48. And the US E&P Independents are light years ahead on US onshore reservoir modeling vs. any tech company on the planet. Plus, you don't drill dry holes in shale (there's no "E" in US "E&P" any more). So who does this cringe-worthy decision actually hurt? It probably hurts foreign oil and offshore oil interests that depend much more on exploration efforts. Oh and it also probably hurts Google's bottom line too in terms of business travel and server energy expense. By the way, are Google employees still allowed to drive to work in gasoline burning cars? If not, is the company going to reimburse EV purchases for every employee? Hmm..... ok, rant over.

Just One Of So Many Good Things The O&G Industry Is Doing For The Communities We Work In

EagleClaw Midstream announced it has raised more than $33,000 for the West Texas Food Bank through an online donation campaign that kicked off in early May.

New Mexico Regulatory Consultant Recommendations

Good leads in these comments responding to the question: anyone have a good New Mexico regulatory consultant they want to refer? Someone that does SWD permitting, oil and gas permits, etc....

Shatterproof - There Is Somewhere To Hide In The Lower 48 Frac Market

The US onshore drilling market began to shatter on Friday the Thirteenth in March 2020. In the wreckage of the land drilling market, there’s a clear bifurcation of fortunes...

Crops Grown With Kern Oilfield Water Are Safe, Panel Finds

Fruits and vegetables grown with recycled oilfield water in Kern County got a final stamp of approval in April, nearly five years after the Central Valley Regional Water Quality Control Board began what it thought was going to be a three-month process investigating the water’s safety....

Oil Prices Plunge, But California Oil Permits Rise 7.8%

As the price of oil plunged to below zero and dozens of oil tankers carrying over 20 million barrels of oil idled off the California coast, new oil and gas drilling permits actually increased 7.8 percent under Governor Gavin Newsom during the first quarter of 2020 through April 4 as compared to the first quarter of 2019, according to a report issued by two watchdog groups on May 7....

Fracsgiving? Analysts Are Increasingly Predict A Completions Recovery This Fall

It's a trend! We are hearing much more from all the top industry analysts about activity increasing after the summer. Here's one take...

Brent oil trades near $35 with demand rebound lifting prices

Oil held near a two-month high of $35 a barrel as supply curbs tighten the market and demand rebounds in the world’s largest consuming countries.

Oil posts 2-month high amid demand recovery, vaccine hopes

Oil rose to levels not seen since Covid-19 lockdowns paralyzed the world’s largest economy, lifted by signs of recovering demand and news of a viable coronavirus vaccine....

Hope for producers as oil clears $30 a barrel

The oil price crash got so bad that Jim Wilkes, president of a small, private Texas shale producer, felt relieved Monday as prices surpassed $30 per barrel for the first time since mid-March.

Bakken Produced Water Volumes Down Big With Thousands Of Wells Shut-Ins

The Bakken Restart Task Force that was created by state leaders and agencies to help the oil and gas industry rebound reports that commercial well produced water volumes have dropped significantly in North Dakota in recent weeks...

Bakken Produced Water Spill

A leak in a pipeline running from a treater to a produced water storage tank caused a spill on a well pad located 10 miles northwest of Keene. The well is operated by Newfield Production Company...

Water Midstream Case Study: NGL's Lea Co. Express Pipeline delivering water to the Salty Dog

Highlights:
- Large diameter pipeline
- 6 wells permitted for a total of 180 Mbbls/day of injection...

Locus Bio-Energy surfactant qualifies for severance tax credit

Environmentally friendly well treatments manufactured in Midland have officially qualified for a substantial tax credit. The Texas Railroad Commission recently approved the first H13 tax credit for the use of Locus Bio-Energy Solutions’ AssurEOR treatment program....

Can US Shale Producers Innovate Themselves Out of Trouble?

WTI crude at under $20 a barrel, is less than half the $40-plus-a-barrel breakeven needed by the shale industry. The slump in crude prices and a supply glut lasting into the foreseeable future leaves the shale industry with stark choices: to limit production, cut costs and increase productivity.

U.S. gas production forecast to bottom out in November

U.S. gas production is expected to bottom out in November as energy companies shut down rigs in response to the coronavirus-driven oil bust...

Zinke says Biden’s plan to ban fossil fuel drilling on federal lands is ‘nuts’

Joe Biden, the presumptive Democratic nominee, would threaten U.S. energy security with his proposal to end fossil fuel drilling on federal lands, former Interior Secretary Ryan Zinke said....

Town Says Fracking Waste Well Violates Pa. Constitution

Marcullus SWD dispute...

Gavilan Resources files for Chapter 11 bankruptcy

Gavilan Resources, a Houston oil and gas company backed by Blackstone Group, has filed for bankruptcy protection, a casualty of the coronavirus-driven oil crash and a legal dispute with a joint venture partner....

Water Pipeline for NEPA Shale Drillers Restarts Construction

A relatively short pipeline project to flow water from the Susquehanna River in Tunkhannock (Wyoming County), PA to a water impoundment about seven miles away, began construction in February 2019 (see Water Pipeline for NEPA Marcellus Drillers Begins Construction). The project was supposed to be built within six months. It never happened. On again off again…is now on again.

Oil glut makes storage a pricey commodity of its own

Even as oil prices inch above $30 a barrel, U.S. producers waiting for a better return are finding that storage has become its own valuable commodity that in short supply could erase crude’s recent gains.

U.S. Oil, Gas Permitting at Record Low in April, but Strengthening Seen in Early May

The collapse in drilling activity deepened in April, with permitting for oil and natural gas wells at a record low, but there are glimmers of gains so far this month, according to an analysis by Evercore ISI...

COVID-19 Will Change the Water Industry, a Trilogy: Engage in Strategic Planning, Risk Assessment and Learning

Plans have implicit, often unrecognized “bets on the future.” Putting strategic into planning means thinking critically about fundamental assumptions and asking what the potential is for the future to look differently than the past.

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