Saturday, June 30, 2018

Produced Water Problem In The Permian -- June 30, 2018

There are many issues associated with produced water, everything from economics for a single well; to economics for a US shale producer; and, then, the environmental cost and the issue of injected-related earthquakes.

My takeaway from all this:
  • the Bakken is in much, much better shape compared to the Permian with regard to produced water
  • in fact, there may be no comparison
  • the Bakken has been dealing with this issue for the past ten years
  • the Bakken has nowhere near the amount of produced water that the Permian has
  • the Permian, in boom stage right now, will get worse before it gets better
  • the Bakken, in the "manufacturing stage," has probably been through the worst
  • Permian production (oil and water) is likely to increase significantly
  • Bakken production may be near steady-state levels
I don't know how many caught this from FracFocus yesterday. It was the first time I noticed it, but it's likely there are other examples that I simply missed.

Look at the frack data for this well, from FracFocus:
  • 17100, 240, CLR, Mountain Gap 31-10H, Rattlesnake Point, t6/08; cum 123K 5/18; 
  • original frack, May 30, 2008; open hole, 1.1 million lbs sand;
  • more recently, 17 days of 26,682 production extrapolates to 47,000 bbls over 30 days; API 33-025-00734; according to FracFocus, this well was fracked in Jan/Feb, 2018 (recently); 9.97 million lbs of water, but look at this:
    • water: 70.797%
    • sand: 11.85%
    • produced brine water: 4.85%
  • those percentages add up to 87.49%
  • I can't account for the other 12%
  • the chemical cocktail is very, very small, maybe a percent or two 
The reason I bring that up is the subject of the article in North American Shale. Data points:
  • produced water is becoming a significant problem in the Permian
  • what to do with it
  • people talk about the "produced water" problem in the Bakken, but look at this data, with regard to the ratio of produced water (to crude oil, I assume):
    • DJ (Basin): might be 1:1
    • Delaware Basin (the "most prolific basin" in the Permian):
      • generally, 4:1
      • extreme cases, 7:1
      • worst cases: 10: 1
  • the Permian operators are dealing with an unprecedented amount of produced water
  • could impact pricing by as much as $6/bbl
What’s different now it that unconventional development in the Permian doesn’t allow for the same water management practices. By that I mean if you’re drilling conventional wells, most of the produced water can be reinjected for water floods or EOR (enhanced oil recovery). Whereas now, the operators, many are testing some of the tertiary recovery techniques, but nothing’s being done on a wide scale.
Note: it's my understanding that water flooding unconventional tight shale could end up turning the clay into gumbo -- i.e., a failed well. 

I've never tracked produced water in the Bakken, but a quick look at a few wells suggest the ratio is "never" worse than 1:1 (see below). Often, after the initial "regurgitation" after the initial frack, produced water drops off significantly, but then may increase as the well ages.

From BTU Analytics, 2014 . When you look at this graphic, remember, the Permian produced a whole less oil than it is producing today (one cannot say the same thing for the Bakken):

From researchgate:
  • Two graphics. The first graphic without any additional markings; the second graphic is the same with my annotations since it is hard to read. This is water to oil ratio during initial production; that often changes significantly after well matures:

For additional reading, the best one for the Permian is the "pubs - 7b02185" link below:

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