## Development of Cost-Effective Systems for Handling Produced Water June 2013 Presented at: Mississippi Lime Production & Produced Water 2013 American Business Conferences Oklahoma City Cecil N. Colwell, Director of Commercialization & Operations Chuck Maybee, Operations ManagerJune 2013



# Introduction Who is Source Energy Partners?
• Private equity company with main office in Denver. • Experienced team of professionals. • Active in Mississippian play in SE Kansas since 2011. • Extensive acreage position in Eastern Kansas. • Currently drilling 5 th 

### horizontal well. • Still learning the rock and area.

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# Presentation

• Water handling challenges • Disposal volume requirements • Disposal well design • Disposal system design • Other potential solutions

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# Water Handling Challenges
• Large volumes of produced water per well • Mississippian is naturally a low oil cut play ~ 5% to 10% • Significant dewatering can be required before oil production • High initial production rates ~ 5,000 to 7,000 bpd • High Chloride content water ~ 85,000 to 100,000 ppm • Total volumes of 4 Mbbls of water or more per horizontal • Reuse can help but is an insignificant solution 

### • No existing infrastructure for magnitude of water • Historically vertical well production with low rates ~ 20 to 200 bpd • Few commercial disposal wells and those not designed for horizontal rates now required • New horizontal well volumes make trucking impractical so ... 

## Onsite disposal or pipeline to central disposal is most economical solution 4June 2013



# Disposal Requirements Assuming: • An average 5% oil cut in the system • 200 ft of stimulated reservoir thickness • 10% average porosity • An average 80% water saturation • 160 acre drainage with 20% recovery 

# 3,200,000 bbls of water to dispose of per well with 50% in the first 5 years

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# Disposal Rate Forecast Example of development drilling

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# Disposal Well Design Required rate is primary well sizing variable

Hydrostatic - Arbuckle Pressure Maximum Surface Pressure Approved by KCCMaximum Rate From Forecast ~24,000 bpd

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# Disposal System Design System should be scalable for development

1 SWD well / 8 horizontal wells 4 sections of development 8June 2013



# Disposal Transfer Line Design Line sizing using SDR 7 PE4710 HDPE

Hazen-Williams Equation: L =( dP *(150^1.85)*(ID^4.8655))/ 4.52*(GPM^1.85) Hazen-Williams Equation: GPM=(( dP *(150^1.85)*(ID^4.8655))/4.52*L)^-1.85 Sizing for maximum forecasted rates with full field development as an end goal results in maximum system effectiveness and useful life. How much length for a rate How much rate for a length

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# Other Potential Solutions Hard to match SWD well economics when considering full development 

### 1 SWD @ $400K / 8 wells with 25.6 MMbbls = $0.015/bbl Plus any monthly op cost (pumps, chemicals, etc.) Other technologies do exist • Dual use wells (long string SWD, short string production) + Less expensive than standalone SWD well and no pipelines - Not able to take high rates due to tubing size limitations • Recycling (filtration or other method to reduce Chlorides) + Reduce freshwater requirements and slightly reduce SWD - Not enough demand to eliminate SWD and is more costly • Recovery of water to surface use quality for ag use or discharge + Potential revenue stream with water and removed solids - Initial cost about the same as drilling SWD + $/bbl op cost 10June 2013



# The Bottom Line For the Mississippian play in our part of the world Economics require produced water underground disposal Early area development with few horizontals = 1 SWD / Horizontal Full development with 2 horizontals / section = 1 SWD / 8 Horizontals The Arbuckle formation enables Mississippian development. 

## Source Energy Partners

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