Oceans of Permian...Water


“The (volume and related cost) numbers are very great,” said Lnsp “Naggs” Nagghappen, vice president of Veolia North America. “Every day those numbers are changing, and it’s only going up. Operators contact us every day asking what they can do with this water.”





In the past four years the volume of produced water from HZ tight oil wells in the Permian Basin has doubled, reaching nearly 23MM BWPD at the end of 2H21 (NaturalGasIntelligence).

That equals approximately 4.5 BW for every barrel of oil produced in the Permian Basin and is a lot of water. So much water, in fact, it poses a very real threat to future HZ tight oil production in West Texas, as WoodMac describes in an article, here:


https://www.woodmac.com/news/editorial/3-ways-produced-water-could-hamper-permian-production/





Water to oil ratios in the Permian Basin; source, shaleprofile.com, click to enlarge

Source, an anonymous, petroleum engineer working the Permian Basin. Twitter can sometimes be a wealth of valuable information about reality because really smart people spill the beans without fear of retribution.



In the vast Delaware Basin, where America is counting on 40 years of future shale oil production, water to oil ratios (WOR) are going thru the roof...



Long lines at SWD facilities and the increase in disposal rate costs per BW because of higher and higher injection pressures can cause water costs to be upwards of $3 per bbl if it has to be trucked to disposals. Some of those water expenses get shoved over into drilling and completion costs under the auspices of post frac, flow back water disposal and disappear in the economic analysis.


There are over 8,480 SWD wells in the Permian Basin and increasing 950 wells per year according to the Texas Railroad Commission.


In heavily saturated sweet spots, big operators build their own disposal infrastructure and drill their own very, VERY expensive disposal wells (some SWD wells are now being drilled to Ellenberger and even Cambrian aged rocks, near the basement floor, to find more room for produced water. I've looked at lots of SEC filings and damn if I can find out where these water infrastructure costs go and how produced water facilities are allocated to actual barrels of water in OPEX. Water costs also get conveniently diluted on a BOE basis. The CEO of PXD use to boast about having $2.50 per BOE of incremental lift costs, at 6 MCF to 1 BO ratios, until smart people caught on to THAT dookey.


There has been so much water stuffed into shallow Triassic, Delaware Mountain formations and in the Permian, San Andreas (Midland Basin) over the past 100 years that drilling the vertical section of HZ Wolfcamp wells is a nightmare and intermediate stings of protective casing must be set across these injection zones. That causes well costs to be much higher than they normally would be.

On the right is WoodMac's estimate of produced water costs as a percentage of total OPEX...its far more than 40%, I assure you. And water costs will NOT be going down, they will be going way up.



Initial 25% oil water ratios suck. They really suck on a $9MM HZ well struggling to payout. If you need the cash flow and don't give a rats ass about long term reservoir management, or have over-drilled your core spots and are suffering from pressure depletion, you are going to put your HZ tight oil well on ESP, or gas lift immediately; the only way to lift that 8.8 pound per gallon salt water is artificially.


For fun, imagine a 500 BOPD Bone Springs well in Reeves County that is making 2000 BWPD. At $2.50 per BW that's over $10 per incremental BO OPEX costs, just for water disposal. Wells might be a little better in the Delaware (they sure are gassier), but OPEX is way more than reported.

Hauling produced water on SH 385, "The Highyway of Death;" Delaware Basin.


Don't buy the bullshit about produced water being recycled either. Less than 20% of it is. The NMODC is stopping the use of groundwater for frac reasons, Texas is not. New Mexico is also putting the breaks on gas flaring, Texas is not (fast enough).


New Mexico feels it has a problem disposing of all its produced water in its state, so the Texas Railroad Commission, in its infinite regulatory wisdom, allows New Mexico water to be trucked across the State line to be disposed of in Texas.


Earthquakes For Asia


Wait, there's more. Water costs are high and going higher but that's half the story. The other half is all that water is causing West Texas to rumble. As deeper disposal wells are drilled toward the basement, the more shaking there will be and someday, soon, there'll be a biggun' that breaks all on Grandma's china in Pecos and flattens chicken houses in Wink. They know that in Austin but production tax revenue is good for Texas and folks with high paying shale oil jobs always vote for the Drill Baby Drill crowd.

Looky, here! A 3.5 shook the Midland Basin on Labor Day, just day before yesterday! The epicenter of this one was about 15 miles NW of Midland, right flat dab in the middle of this highest produced water disposal volumes in the basin, below....


This produced water thing, its a BIG problem, people. Way bigger than you think.


Potable water for livestock, agriculture, even human consumption is withdrawn from groundwater sources to use as frac source water in arid West Texas. When its done its duty that water is injected back into the ground and the volumes are so great, earthquakes occur.


Why? So 65-85% of HZ tight oil production from the Permian Basin can be exported to Asia, including China?


Does that make sense to you?






Shale oil and shale gas are the last of our nations hydrocarbon resources; when those resources are fully developed and depleted, and soon that will be...that is all she wrote. The lying and half truths about abundance and economic sustainability have to stop, NOW, in the name of conservation, preservation of bottom hole pressure, and long term energy security for our country and our children.