The Shift Towards Recycling & Re-Use in Oilfield Water Management:

3 Unique Case Studies

Brent Halldorson

Fountain Quail Water Management

Atlantic Council Workshop – Fossil Fuel Produced Water: Asset or Waste? Washington DC June 24-25, 2013

Drilling ScheduleDrilling Schedule

Al Fast-Line or Yellow-Jacket?Al Fast-Line or Yellow-Jacket?

CEO DirectivesCEO Directives

Brackish Water?Brackish Water?

Environmental Footprint

Environmental FootprintSilica DepositionSilica Deposition

NORM ManagementNORM Management

Availability?Availability?

2

A Complex Issue?There are many factors to consider in oilfield water management…

Water NeedsWater Needs

Disposal IssuesDisposal Issues

StorageStorage

LiabilityLiability

Transfer IssuesTransfer Issues

Downhole IssuesDownhole IssuesScaling Index?

Scaling Index?

Lined?Lined?H-11?H-11?

Saltwater LeakSaltwater Leak

Volume?Volume?What Quality?What Quality?

Public OpinionPublic Opinion

Impact Frac Performance?Impact Frac Performance?

Microbial ControlMicrobial Control

CorrosionCorrosion

H2SH2S Odor Issues?Odor Issues?

Organic FoulingOrganic Fouling

Carbonate FoulingCarbonate Fouling

Sulfate FoulingSulfate Fouling

PermitsPermits

WeatherWeather

Induced Seismicity?

Induced Seismicity?

RegulationsRegulations

ContractsContracts

Closure CostsClosure Costs

Clean-Up CostsClean-Up Costs

What Technology?What Technology?

Pit Cover?Pit Cover?

We need to keep it simple and take a

step-by-step approach.

We need to keep it simple and take a

step-by-step approach.

Freshwater

•Higher cost (thermal distillation).

•Lower risk – store and transport freshwater.

Saltwater

•Lower cost (minimal treatment).

•Difficult logistics (storage + transport)

Saltwater or Freshwater?Saltwater or Freshwater?

The Big Question

Charting a Logical Path

SALTWATERSALTWATER

1

RE-USE ZLD

(BASIC) TSS/POLYMER REMOVAL ONLY

(CUSTOM) REDUCE HARDNESS, SCALING INDEX, ETC.

IS THE COST WARRANTED?

LOGISTICS.

FRESHWATERFRESHWATER

2

Freshwater

•Higher cost (thermal distillation).

•Lower risk – store and transport freshwater.

Saltwater

•Lower cost (minimal treatment).

•Difficult logistics (storage + transport)

Case Study A

Background:Early on everyone used freshwater for fracs.Disposal was limited (until Ellenburger used for disposal).Devon has a large acreage position held by production.FQWM had to become very efficient to compete with low cost Ellenburger disposal.

Objectives:

①Move recycling (disposal + freshwater) close to drilling activity.

②Frac with freshwater (minimal storage & transport issues).

③Reduce disposal volume.

④Tie in nearby well flowback & PW using poly pipe.

Fountain Quail Mobile NOMAD Recycling Facility.

3 Hydraulic Fracture Stimulations using distilled & fresh water

NYSE: DVN www.devonenergy.com

Mobility Key to LogisticsDevon’s recent water recycling locations

WiseDenton

Parker

Tarrant

Hood

Johnson

Devon has two units operating at one strategic location:

Lateral “C” (S Wise Co.)

Past locations:

Johnson Ranch (E Wise Co.)

Godley (W Johnson Co.)

Circle R (W Johnson Co.)

Dove Hill (SW Denton Co.)

McCurdy (SW Denton Co.)

Spain (SE Wise Co.)

Casto (SW Denton Co.)14 Sites total (since 2004)

Devon (Lateral-C) – Currently Operating

Case Study B

Background:Customer has 17 wells tied into central SWD. Dispose of 5,000-7,000bpd.Freshwater is limited and costly. Customer prefers fraccing with and handling freshwater.Heavy brine (9.5-10#) has value to operator and others in the region.Early flowback hauled long distance to disposal.

Objectives:

①Use PW as source water to create freshwater using NOMADs. Become independent of groundwater.

②Reduce SWD volume & extend SWD life.

③Re-use NOMAD concentrate brine (9.5#) for drilling & completions.

④Treat high-solids flowback near source.

• Evaporation rate is very high (dry, windy).

• Nature concentrates NOMAD waste brine to 10# at no cost.

Recycling Center – Hub for Water

Flowback

Produced Water

Other Treatable Water Streams

Segregate, skim oil, remove solids, treat

water.

Distilled Water (re-use for fracs)

Clean Heavy Brine (re-use for drilling)

Solids + any un-treatable water for disposal.

Maximize Recovery of Value-Add Products

Oil ($$$)

Recycling

Facility

Optimize & Protect SWD Capacity

PAST: Disposal OR Recycling

FUTURE: Disposal AND Recycling

Case Study C

Background:The Eagle Ford is in “drill-to-hold” mode.Producers need a very mobile solution and can re-use saltwater in nearby fracs.Customer objective was to clean flowback and PW for re-use (high capacity, low cost). Remove TSS, iron and polymers.

Objectives:

①Test flowback (early, middle and late) and PW removal efficiencies at the well site level.

②Set-up in 12 hours and be ready for flowback.

Case Study C

High capacity (10,000bpd).

Solids removed prior to re-use.

Current ROVER Project – Permian Basin

• Customer using PW from SWD disposal well as source water.

• High H2S (~200ppm)

• FQWM and Select put together a package deal for customer (containment, transfer and recycling).

Before / After ROVER Treatment

Keep solids out of recycled water containmentPrevents bacteria blooms & messy cleanupPW is now a resource

Current ROVER Project – Permian Basin

Current ROVER Project – Permian Basin

Remove solids prior to containment.

Direct re-use or “floc-n-drop” into containment.

ROVER Solids Control

Solids build up & reduce effective volume of containment

Bacteria blooms Lower cost initially Expensive clean-up

1 2

Keep solids out of recycled water containment. 100% volume available for HF supply.

Clean brine can be stored longer Dry solids can be buried on

location

TSS Removal

TSS + TDS Removal

Central Plant(60,000bbl/d capacity)

NOMAD Mobile Plant(2,000bbl/d capacity)

ROVERMobile Clarifier(10,000bbl/d capacity)

1

32

Flexibility

New Trends

① Pit covers (prevent evaporation).

② Combine Recycling & Disposal (not Recycling OR Disposal).

③ More use of brackish water and saltwater – be careful about hydrogeology.

④ Have a common sense discussion with parties involved: Landowners are often writing leases stating that E+Ps

must buy groundwater from them.

⑤ Incentivize, not mandate recycling (i.e.: TWRA). www.txwra.org

1. Common Sense Approach. Ask the right questions & keep it simple (saltwater or

freshwater).

2. Range of Solutions. Look for a proven track record. Talk to the customers. Technology must be based on real science backed up with real

results.

3. Flexibility. Solution must be adaptable to the changing needs of the

industry.

4. Cooperation. Share results and experiences (good and bad). We can learn

as much, or more, from what has not worked.

What is Needed?