WTI Coninues To Fall -- August 30, 2017

WTI continues to fall: prolonged shutdowns from Harvey could strand shale output.  Harvey stories are tracked here.

Active rigs:

$46.16↓↓	8/30/2017	08/30/2016	08/30/2015	08/30/2014	08/30/2013
Active Rigs	54	33	76	194	185

RBN Energy: investing in pipes, treatment and injection wells to trim produced-water costs.

The largest single expense associated with operating wells in a number of U.S. shale plays — including the Permian — is the cost of dealing with the large volume of produced water that emerges from wells along with crude oil, natural gas and NGLs.

In many cases, produced-water disposal costs account for more than half of total well-operating costs, and every dime or dollar per barrel that an exploration and production company (E&P) needs to spend on produced water increases its break-even cost and saps its bottom line.

To rein in trucking and other produced water-related expenses, more E&Ps and midstream companies are (1) developing produced-water treatment plants that allow the water to be reused in hydraulic fracturing and (2) building centralized systems that efficiently transport untreated produced water from multiple wells to treatment plants or to regional disposal wells. Today we continue our surfing-themed series on the effect of sand and water costs on producer economics with a look at how the old ways of dealing with produced water are being replaced by the new.

In the past couple of years, there has been increasing interest among E&Ps, midstream companies and others in the hotter plays — the Permian in particular, but also the SCOOP/STACK, the Niobrara and elsewhere –– in developing extensive, interconnected produced-water infrastructure that in many ways resembles the processing and pipeline networks built (and being built) to efficiently deal with the crude oil, natural gas and NGLs being produced there. The thinking of these companies is that by investing in pipelines to transport produced water from groups of wells to centralized treatment facilities or to disposal wells, they can significantly reduce their produced-water costs — especially the cost (and hassle) of trucking.

Take the example we used above, namely, a group of eight wells in the southern Delaware Basin. Say each of the wells generates 800 boe/d and (as we said) 2.5 barrels of produced water are generated with each boe. For the eight wells, that’s 672,000 gallons of produced water a day (8 times 800 barrels of crude times 2.5 barrels of produced water times 42 gallons in a barrel). A large tanker truck can carry about 10,000 gallons, so more than 60 truck trips a day would be needed to transport the produced water from the eight wells to disposal wells. And it’s not unusual for trucks to drive 15 or 25 miles (or longer) to these disposal sites — and they need to drive back empty to the production well to pick up another load!

Jobs report today. ADP employment report to be reported later. Forecast: US added 185,000 jobs in August. Actual: holy cow! 237,000 jobs added in August.

Typically British: John Kemp, Reuters London-based energy analyst, tweet on August 17, 2017, that he would be on vacation through September 4:

ON HOLIDAY until September 4. No email. No internet. No Twitter. No news. No oil prices. Total digital disconnection. Paradise!

And true to his word: not one tweet since August 17.