Produced Water Reuse: 

Rockies Shale Plays Initiative 2013 October 29-30, 2013 Denver, Colorado

BY: Pat Jackson 

Tom Murphy 

PRODUCED WATER CHALLENGE AND 

AN INTEGRATED PLANNING SOLUTION 
Comet Ridge Resources 

Denver based oil & gas explorer 

Backed by NY-based private equity 

Projects in Colorado, Washington, and Montana 

Fully bonded 

Committed to responsible development 
3 

Source: 

Stephen Trammel, Research Director & 

Advisor in Energy, HIS 

North American Tight Oil: Plays That Deliver 

Energy M&A & Financing Forum 

February 15, 2013 

Denver 

Recent Exploration Plays 
Location of our two presently active plays 

Comet Ridge 

Resources 

As an explorer we 

spend significant time 

and energy predicting 

the economic viability of 

our projects before 

investing. 

Efficient Water 

management (especially 

in Tight Oil) is a critical 

economic factor!! 
Objectives of Presentation 

! Demonstrate that Produced Water Management analysis is a 

complex issue 

! Present an approach for evaluating disposition and treatment 

technologies on a cost per barrel basis 

! Analyze and define how key drivers for water management 

impact the economic viability of a project 

! Assess how environmental regulations, environmental issues, and 

public perception can impact water management strategies 

and cost 

! Analyze the magnitude and disposition of produced fluids 

through time to support ongoing field development 
The Challenge: A Lot of Water 

! 21 billion BBL of produced water generated 

each year in US (NETL) 

! Estimated 56 million BBL of produced water 

generated daily in US (GOA 12-156, 2012) 

! Water-to-oil ratio is 5:1 to 8:1 for mature 

fields; lower in tight shale and sand plays 

(NETL) 

! High volumes of water needed for short periods 

during horizontal drilling and frac operations 

(50,000 to 200,000 BBL) 

! Management of flowback (short term) and 

produced water (long term) wastewater streams 

throughout life of well/field 

! Generally poor water quality 
Water Management Costs 

Activity BAKKEN FIELD 

 

Acquisition Costs Cost, USD / BBL 

Raw Water 0.25–1.75

Transportation 0.63–5.00 

Disposal Costs 

Transportation 0.63–9.00 

Deep-well Injection 0.50–1.75

Average Total Costs 2.00–16.80 

Source: University of North Dakota’s Energy 

and Research Center 2010
Challenges Related to Produced 

Water Use and Disposal 

Produced 

Water 

Increased 

Regulation 

Availability 

of Water 

Water Quality 

Public 

Perception 

Disposition 

of Waste 

Stream 

Environmental 

Impacts 

Reservoir 

Characteristics 

Corporate 

Governance & 

Stockholders 

Long-Term 

Financial

All these impact the cost of water management 
The Solution: Integrated Produced 

Water Planning Approach 

Develop a quantitative economic 

evaluation and planning tool that can 

provide operators with the ability to 

develop detailed, regulatoryacceptable scenarios regarding the 

use, treatment, and disposition of 

flowback and produced water 
Objectives for a Planning Model 

! Overall 

! Identify best management practices for the water 

management in O&G development operations from a cost 

basis 

! Early-Stage Project Objective 

! Inform the operator of possible produced water strategies 

available and how to approach their evaluation and 

implementation 

! Ongoing Project Objective 

! As the project matures and more concrete water information 

is captured, support decision-making regarding an optimal 

water management strategy 
Specific Frac Water Objectives 

! Optimize flowback/produced water use 

! Handle frac water/formation water/formation (solid/fluid) 

chemistry 

! Recognize balance of frac water reuse and purchase of 

“Makeup” water 

! Show meaningful metrics for frac water treatment and 

disposition 
Applications of Planning Models 

Planning 

Model 

Acquisition of 

Field/Land 

Field 

Development 

Planning 

Future Water 

Management 

Approach 

Water 

Management 

Impact on 

NPV 

Monitor 

Existing Field 

Operations 

Alternative 

Water Sources 
Key Functionality of a Planning Model 

• Demonstrate the magnitude and disposition of produced water 

through time in terms of ongoing field development 

Analysis Over Time 

• Optimize comprehensive water management, lower per-unit 

operating expenses and improve field economics 

Technical Evaluation

• Demonstrate the potential financial impact that a selected water 

management approach has on the profitability of the project 

Financial Impact 

• Monetize issues related to environmental impact, corporate 

governance, and public perception 

Environmental Issues 

• Simplify the inputs to distill the solution down to a common 

denominator: $$$ through time 

Simplify Magnitude Down to Costs 
Planning Model Decision Process 

Produced 

Water Inputs 

Oil & Gas 

Production 

Inputs 

(as required) 

Impact 

of 

Produced Water 

Approaches 

 on 

Project 

Treatment & 

Disposition 

Time 

Weighted 

Analysis 

Key Metrics 

& 

Costs 

Challenges 

& 

Opportunities 

Inputs 

Iterative 

Selection 

Process 

Outputs Strategic 

Planning 

Results 
Technical Functionality of the Model 

! Complex field development plan through time 

!Water mixing and mass balances 

! Flexible frac’ing and water flood handling 

! Sequential water treatment stages 

! Flexibility in changing capacities through time 

! Variety of water treatment options and mechanisms 

! Multiple water disposition streams 

! Multiple water disposition options 

! Complete flexibility in project metrics 
Evaluation Over Time 

! Select alternative periods: month, quarter, or year 

! Change input parameters over time 

! Compare multiple disposition scenarios at a time 

! Evaluate chemical changes over time 

! Demonstrate water management costs through time 
Input Parameters 

Produced and Flowback Water Volume Data 

Water Chemistry Data 

Possible Water 

Disposition Methods 

Production 

Data 
Iterative Selection Process 

Initial 

Produced 

Water 

Treatment 

Selections 

• Volume 

• Unit Costs 

• Chemistry 

Optimal 

Disposition 

Selection 

Chemical Limits 

Time Constraints 

Distance 

Model 

Inputs 

Model 

Outputs 

Corporate Governance 

Regulatory Issues 

Environmental Constraints 
Selection of Dispositions 

Water Disposition Options 

Class II Injection Well 

Irrigation 

Impoundment 

Industrial Use 

Stream Discharge 

Recycling for Frac’ing

Wildlife Watering 

Water Flood 

Municipal Wastewater 

Evaporation Pond 

Stock Animal Watering 

Site 

Specific 

Recycling 

Injection 

Well 

Stream 

Discharge 

Evaporation 
Assessing Treatment 

Options 

Treatment/ 

Proprietary Options 

Cyclones 

Skimming 

Aeration 

Flocculation 

Reverse Osmosis 

Forward Osmosis 

Ion Exchange 

Evaporation 

Distillation 

Electro-Coagulation 

Micro-Filtration 

Ultra-Filtration 

Ultraviolet 

Custom 

Treatment 

System 

Filtration 

Aeration 

Rev. Osmosis 

Proprietary 

System 

Pre-Treatment 

Treatment

Polishing
Does Selected Treatment Meet 

Regulatory/Management Requirements 

Treatment 

Package 1 

Treatment 

Package 2 

Treatment 

Package 3 
Transport Distance as a Key Factor 
Challenges Become 

Evident from Analysis 

Vegetation & Wildlife Effects of Trucking 

Pre & Post Frac Fluid Management Fresh Water Demand 
Key 

Metrics 

and Data 

Volumes and 

$$ Over Time Trucking Costs 

Treatment 

Costs 

 Decision Model Outputs 

Iterative 

Selection 

Process 

Challenges & 

Opportunities 

Dust & Erosion 

Fluid 

Management 

Affects on 

Hydrologic 

Cycle 

Strategic 

Planning 

Results 
PETRANERO Project 

Produced Water Integrated Planning Model

! The Produced Water Integrated Planning Model 

! Secondary Water Flowback Table 

! Tables for Production Inputs 

! Water Treatment Strategies Inputs 

! Quantitative Results of Selected Treatments 

! Graphical Results of Disposition Options 

! Critical Variables and Measures of Performance 

! Logic Test Table to Test Model Results 

! Cost/Benefit Calculations 

Table of Contents 
Fluid Tracking Over Time 

Oil 

Production 

Total 

Produced 

Water 

Treated 

Water 

Produced 

Water 

BBL Produced & Treated Water 

BBL Oil & Flowback Water 
Case Study 

! 10 well/group 

! Initial Oil Production 100 BBLs/day/well; Decline/yr of 10% 

! Price of Oil at $85/bbl 

! Initial WOR 10; Change in WOR/yr of 10% 

! Initial Water Production 10,000 bbls/day 

! Production days 325 days/yr for 20 yr period 

! One Frac at year 7 

! 200,000 bbls water/frac 

! Four alternative disposition solutions evaluated 

! Class II injection well 

! Evaporation pond 

! Stream discharge 

! Reuse for frac’ing
Case Study: Graphical Results 
Results' Class'II'Injec.on'

Well'

Evapora.ve'

Pond'

Stream'

Discharge'

Reuse'for'

Frac'

Total'Oil'Revenue' $309,305,726* $309,305,726* $267,018,257* $320,681,211*

Total'Produced'Water'Cost' $160,914,860* $206,069,389* $285,528,761* $196,945,594*

Total'Produced'Water' 72,343,118* 72,343,118* 55,230,882* 77,933,497*

Average'Cost'of'Produced'Water/'BBL' $2.22* $2.85* $5.17* $2.53*

Total'Treated'Water' 72,343,118* 48,268,951* 38,172,927* 64,440,440*

Total'Treated'Water'Capital'Cost' $0* $3,330,000* $6,584,225* $12,861,800*

Total'Well'Capital'Cost' $40,000,000* $40,000,000* $40,000,000* $40,000,000*

Total'Well'Opera.ng'Cost' $5,400,000* $5,400,000* $4,320,000* $5,760,000*

Net'Present'Value'of'Water'Costs' ($91,777,474)* ($127,859,109)* ($95,414,478)* ($87,359,684)*

Net'Present'Value'of'Total'Project' $164,217,004* $161,599,504* $161,421,177* $166,009,858*

Trucking' $109,714,677* $81,435,159* $4,592,582* $62,276*

Pipeline'Capital'Cost' $0* $0* $150,000* $0*

Case Study: Cost Results 
Effect on 

NPV 

Meeting 

Projects 

Water 

Needs 

Minimize 

Treatment 

Costs 

Public 

Relations 

Strategic Planning Results 

Unacceptable Iterative Impact? 

Selection 

Process 

Model 

Outputs Impact 

of 

Produced Water 

Approaches 

on 

Project 
Summary – Integrated Produced Water 

Planning Model Solution 

Water 

Planning 

Models 

Quantitative 

economic 

evaluation tool 

Evaluate detailed 

scenarios for 

water 

management 

solutions 

Capable of 

characterizing 

operational and 

chemical data 

See produced 

water in terms of 

field development 

through time 

Should distill 

large set of 

parameters into 

$$$ 

Can calibrate 

environmental, 

public & 

regulatory 

challenges 

Show water 

management 

impact on NPV 
Questions? 

Thank You!!