Cost Effective Reuse of Produced Water

In the Permian Basin

Oil & Gas Environmental Conference Dallas, TX

December, 2013

Steve Jester, Sr. Principal Environmental Engineer ConocoPhillips

With Credit to:

Ramesh Sharma, Staff Process Engineer, ConocoPhillips

Austin Shields, Associate Completions Engineer, ConocoPhillips

ConocoPhillips’ Corporate Water Sustainability Position:

As a responsible global energy company committed to sustainable development, we recognize that fresh water is an essential natural resource for communities, businesses, and ecosystems. Global population growth will increase demand for fresh water and all users – domestic, agriculture, and industry – will need to effectively manage supplies to meet demands. ConocoPhillips produces and utilizes water in its operations. We are committed to the development of water management practices that conserve and protect fresh water resources and enhance the efficiency of water utilization at our facilities. We will assess, measure, and monitor our fresh water usage and based on these assessments we will manage our consumption and strive to reduce the potential impact to the environment from wastewater disposal.

Water Life Cycle - Value Chain

Fresh Water

Flowback/ Produced

Water

Sources

Disposal

Logistics Uses

Drilling and Completions Transport

Treatment Treated

Produced Water

Storage

Storage

Transport

Non-fresh Water

Water Management in Hydraulic Fracturing – The Dilemma!

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Need 50,000 to 100,000 bbls of water for drilling and completion Wells produce <100% water after completion Each step in the water life cycle comes with a cost Is reuse the best alternative? Availability, quality and logistics are key issues

Why Look at Produced Water Reuse? – Key Drivers

Part of an overall water management strategy Implementing our company position- how can we use less fresh water? Optimize our process Alternative Sources:

Brackish/saline water Municipal wastewater Produced water? Where other water sources are scarce or expensive Where ample volumes of PW are available and easy to treat

and transport for reuse

Alternative process?

Considerations for Produced Water Reuse

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Low High Produced Water

Quality and Availability

High Low High Quality

Source Water and Availability

Adds cost Reduces cost Transportation / Logistics

Low High Frac Fluid Compatibility

Low High Formation water Compatibility

Sweet spot

Favorable Land Owner Agreements and Regulatory Considerations

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Service Company Soft Targets – Based on Fresh Water Source

Parameter FRESHWATER Target

Bacteria <1 x 105

pH 6-8

Bicarbonate, mg/L < 500

Calcium + Magnesium <2000 as CaCO3

Iron, mg/L <20

Boron, mg/L <10

Sulfate, mg/L <500

Such soft targets don’t exist for use of produced water

pH

Ferric iron (Fe+3)

Ferrous iron (Fe+2)

Total hardness

Magnesium (Mg+2)

Calcium (Ca+2)

Specific gravity

Chlorides (Cl-)

Carbonate (CO3-2)

Bicarbonate (HCO-3)

Sulfate (SO4-2)

Phosphate (PO4-3)

Silica (SI+4)

Boron (B+3)

Total dissolved solids (TDS)

Total suspended solids (TSS)

Bacteria

Water Quality Impacts on Fracturing Fluids

Total Fe >25 ppm Impacts hydration and thermal stability of polymer. Dilute or dump.

Cl- New CMC systems are intolerant

Interferes with buffers in crosslink systems. Some friction reducers are prone to precipitation.

SO4-2 >200 ppm Interferes with delayed

metallic crosslinkers. High temperature thermal stability also impacted. Precipitate out.

HCO3-1 >600 ppm

Requires pH adjustment for polymer hydration. Impacts Zr crosslinkers (delay and/or stability)

SI-4 Interferes metallic crosslinkers. PO4-3 ties of metallic

crosslinkers. Reduces fluid performance.

Too High > 9.0 poor hydration. Too Low < 6.0 poor dispersion.

Degradation of Organic Polymers Even after the bacteria have been killed their enzymes are still problematic

B >4 ppm can cause crosslinking in guar gelling agents.

Typical ionic species identified and quantified in source water analysis.

Nearly every produced water will push these limits

Produced Water Quality

Variability is the key term Individual well Well to well Field to field Region to region

Produced water typically has a much higher Total Dissolved Solids (TDS) Suspended Solids Iron Hardness/Scaling potential Boron Oil residue and organic matter

West Texas Water Management Challenges Fresh water constraints compounded by drought Purchase and Transportation costs for water sourcing Produced water locally available, but > 400 ppm H2S >1000 ppm oil (periodic)

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Tank Battery, 7000 bwpd capacity Produced water

Laboratory to Field Implementation: Treatability Testing

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Produced water: 400 ppm H2S Rxn with Peroxide Scavenger Elemental Sulfur

Right to Left: Unfiltered sample, 10 micron filtered, and 5 micron filtered

Right to Left: 10 micron filter, 5 micron filter

Laboratory to Field Implementation: Fluids Testing Slick water tests 100% produced water

XL gel tests Various blends 50-100%

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0

100

200

300

400

500

0 200 400 600 800 1000

Pump Rate (ml/min)

Tota

l Pre

ssur

e D

rop

(psi

/100

ft)

DI Water

1 gpt FR-66 in DI Water

1 gpt FR-66 in Field Treated Water, 6/10/13

No significant difference in friction reduction with 100% PW vs. fresh water

Stable fluid rheology with 50, & 75% blend

0

200

400

600

800

1000

0:00 0:20 0:40 1:00 1:20 1:40 2:00

Time (HH:MM)

Appa

rent

Vis

cosi

ty (c

p), S

hear

Rat

e (s

-1)

50

110

170

230

290

350

Temperature (degF)

Visc - 100:0 PW:FWVisc - 75:25 PW:FWVisc - 50:50 PW:FWVisc - 0:100 PW:FWShear RateTemp 115 degF

Formation Water Compatibility, and Biological Control

Parameter Untreated Treated

Calcium 2160 2000

Magnesium 826 1166

Sodium 20,026 17,353

Barium 0 0

Chloride 35,500 31,950

Bicarbonate 915 329

Sulfate 1470 2120

TDS 60,897 56,662

Oil and grease

139-1000 42-148

H2S 400-450 <0.5

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Ionic composition did not change significantly. No formation water compatibility issues identified

Parameter Untreated CFU/mL

Treated CFU/mL

Acid Producing Bacteria

10-1000 0

Sulfate Reducing Bacteria

10-1000 0

General Heterotrophy Bacteria

1-10 0

- PW treatment and biocide program was effective - No re-appearance seen after five days

Test Location

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Central Tank Battery

Well 2

Well 1

Pilot Execution

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Reaction (2x 500 bbl frac tank)

Solids Removal

Containment Pad Transfer

Flow back/produced water

Containment (frac tanks)

Oxidant addition Residual oxidant scavenging

Biocide

Feed Reaction tanks

5 um bag filter

Chemical pumps Hydrogen peroxide

H2S removed as element sulfur

Treated water tanks

Overall Produced Water Management Scheme

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CTB (Central tank

battery) Treatment Containment Pad

Transfer

Produced Water From production

field Consistent Flow Sulfide (H2S) in

water

Treatment Goals Clean Brine

Solids removal H2S Elimination

Biocide

Containment 10-12k BBL

Stage Water Fill then deliver

to pad

Water Delivery 10 BPM

Fiberspar 10-12 k BBL/well

Flow back/produced water

Containment

Completion: Vertical Well Stimulation

Surface TD 1,120

Stg 4 20# Borate XL

Stg 3 20# Borate XL

Stg 2 Slick Water

Stg 1 Slick Water

TD 7,500

FORMATION DEPTHS TVD

Vertical Well 4 stage frac

Frac Fluid

Stage-wise Progression

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Bench Scale

• Due-diligence performed • Identified the treatment scheme

Pilot

Single stage 5000 BBL

• Well 1: Stg # 3 - 100% Slick Water; Stg # 4 -20% blend XL gel

Demonstration

All 4 stages 8300 BBL

• Well 2: Stg # 1 & 2-100% Slick Water; Stg 3&4: 50% blend XL gel

Reduced fresh water consumption for a vertical well by 75%

Plan Forward Based on the success of produced water reuse pilot Completions currently working with asset team to tailor base water

management plan for future development opportunities Advanced planning and permanent facilities expected to drive water

supply costs to less than current rates per bbl Potential to offset most of the fresh water use in some areas

Successful implementation of produced water management program requires cross-functional team

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Drilling & Completions Operations Procurement/

Category Management

L48 Water SME

Water Solutions/

Technology

Land & ROW

Key Results “Fit-for-purpose” treatment scheme implemented H2S removal + microbial inactivation + suspended solids removal No changes to ionic composition (salinity remained same) Produced water going to same formation, so no compatibility issues

identified Demonstrated that produced water reuse with minimal treatment is possible for these vertical well completions The developed treatment scheme is cost effective and easily scalable Potential to offset more than 75% fresh water consumption for most

vertical jobs Completions program is now tied to water management plan Lower water supply costs, less environmental impact, no trucking Improved operational efficiency – locally abundant resource

Potential game-changer for horizontal well fracturing program

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Questions?

Backup Slides

Challenge High Oil Content

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Oil remaining in tanks after skimming

Vacuum pump to skim the oil