Evalua&ng)The)Economics)Of)Crea&ng)&)Opera&ng) Your)Own)Disposal)Well)Vs.)Using)A)Third)Party)To) Determine)The)Most)CostEEffec&ve)Op&on 

# PRODUCED)WATER)REUSE) INITIATIVE)2014)

# Presenta&on)Topics)

2! Evalua&ng)The)Economics)Of)Crea&ng)&)Opera&ng)Your)Own)Disposal)Well)Vs.) Using)A)Third)Party)To)Determine)The)Most)CostEEffec&ve)Op&on

➧ Comparing!the!costs!and!2me!commitment!of!drilling!and!opera2ng!your!own! disposal!well!to!trucking!water!off!to!a!third!party! ➧ Iden2fying!the!most!cost;effec2ve!strategies!for!iden2fying!loca2ons!for!and! drilling!a!disposal!well! ➧ Detailing!the!key!equipment!required!for!opera2ng!a!disposal!well!and!how!to! op2mize!it!to!keep!costs!down! ➧ Providing!insight!into!emerging!techniques!for!disposing!of!wastewater! without!the!need!for!a!disposal!well!or!trucking!to!a!third!party!

# Owned)vs)Third)Party)Disposal)

3! 

## ➧ A!Risked!Life!Cycle!Model!Evalua2on! ➧ Differen2a2ng!Risk!Factors! ➧ Regulatory!Approval! ➧ Local,!County,!State,!Federal! ➧ Disposal!Well!life! ➧ Volume!Envelope! ➧ Decline!curve! ➧ 3 rd !Party!availability!/!capacity! 

### ➧ Life!Cycle!Model!Variables! ➧ Transporta2on!Costs! ➧ U2li2es!–!Fuel!vs!Electric! ➧ Disposal!Water!Forecast! ➧ Downhole!Maintenance!

# Water) Disposal)Forecast)

4!!! Monthly)BBLS)!! December) January February) March) Budget) 209,392! 152,134! 134,606! 146,248! Field)Es&mate) !!!!!!!156,518! 131,837! 129,837! 148,584!!! Variance) Field)Es&mate/) 25.3%!! 13.3%! 3.5%! ;1.6%!! Budget 1)

1 December!to!January!Variance!due!to!squeeze!work! 0! 1,000! 2,000! 3,000! 4,000! 5,000! 6,000! 7,000! 8,000!)BBLS/Day)
Wedge!

Base!

Capacity!

Field! Es2mate! New!Disposal! Well!online! Forecasted)

flowback

# Drilling)and)Opera&ng)Commitment)

5! Comparing!the!costs!and!2me!commitment!of!drilling!and!opera2ng!your!own! disposal!well!to!trucking!water!off!to!a!third!party!



## ➧ Costs! ➧ Time!(spud!to!first!disposal)! ➧ Permiang!Time! ➧ State!/!County!! 

### ➧ Drilling!Sequence! ➧ On!pad!/!Off!pad!Decision! 

## ➧ 3 rd 

## !Party!Considera2ons! ➧ Hauling!Fees! ➧ Contract!Tipping!Fees!

# Con&nuous)Comparison

Water)Hauling)

➧ Contract!Hauling!$1.30!or!$1.40! ➧ Disposal/2pping!Fee:!$0.40!

6! Month) Bbls )Hauled) LOE) $/ Bbl

November! 10,160! $15,443! $1.92!

December! 8,980! $9,309! $1.44!

January! 10,893! $13,012! $1.59!
February! 9,551! $10,421! $1.49!

March 9,225! $9,985! $1.48!

Preliminary financials 

### ➧ Truck!driver!
➧ DOT!Cer2fica2on! ➧ Wage!/!Compensa2on! ➧ Truck!Maintenance!

# Addi&onal)Infield)Opportuni&es

Piping)from)well)pads)to)SWD)Infrastructure)

➧ Drucker!1N!well!pad!2e;in! ➧ 378!BWPD!gross! ➧ 10!mo.!payout,!121%!IRR! ➧ Installed!and!pressure!tested!



## ➧ Dallas!SWD! ➧ 210!BWPD!exis2ng! ➧ Poten2al!Kirby!20!#1!Shut;in!(~190!BWPD)! ➧ Drill!SWD!well!on!Dallas!21!#2!site!

7!

# Disposal)Well)Loca&on)Strategy)

8! ➧ Forma2on! ➧ Vicinity!to!exis2ng!well!bores!/!cement!tops! ➧ Electric!U2lity!vs!Gas!Driven!Generator/Pump! ➧ Pipeline!ROW! ➧ Road!Access! ➧ Mileage/travel!2me!to!largest!producing!wells!/!route!map! ➧ Frequency! ➧ Eleva2on!change!

# Key)Equipment)

9! Detailing!the!key!equipment!required!for!opera2ng!a!disposal!well!and!how!to! op2mize!it!to!keep!costs!down!

➧ Tank!Bakery! ➧ Offload!sta2ons! ➧ Separa2on! ➧ Pump! ➧ Reciproca2ng!Piston/Plunger! ➧ Centrifugal! ➧ Filtra2on! ➧ Skid!Building! ➧ Par22on!wall!to!separate!Electrical!room!(non;classified)!and!the!Pump!room!(Class!I! Div !II).! ➧ Non;Residen2al!Modular!Housing!Division!to!meet!Resolu2on!35!!



# ➧ Water!Analysis!/!Material!Selec2on!

# SWD)Facility)

10!

# Alterna&ves)

11! Providing!insight!into!emerging!techniques!for!disposing!of!wastewater!without! the!need!for!a!disposal!well!or!trucking!to!a!third!party!

➧ Variability!of!feed!Stock!!

# Process)Treatment)

12!

# Alterna&ves)

13!

# Centralized)Storage)and) Handeling

14!

# Reclama&on)&)CleanEup)costs)

15!

# Ques&ons)E)Discussion)

16! Michael!Rynearson,!P.E.! Opera2on!Manager! Caerus!Oil!and!Gas! MRynearson@Caerusoilandgas.com!

# Credits)

17! Slide!12:!picture!diagram!from!futuretechme.com! Slide!13:!pictures!from!oilandgasonline.com!