This week, we joined more than 350 of the water midstream industry’s top pros for a productive couple day of learning and networking at the Forth Worth Convention Center during the 3rd Oilfield Water Markets Conference. It was great to see many Infill Thinking members there!
The oilfield water industry is managing an ever growing daily wave of water – Permian production alone now eclipsing 22 million bwpd. Alongside candid acknowledgement of the volumetric challenges associated with produced water as demand for U.S. oil production increases, there was recognition of how far the industry has advanced in recent years and discussion about cutting-edge innovation.
Something that stood out to everyone in attendance at this event was the market participants’ deep care for and investment in environmental stewardship,” said Joseph Triepke and Pete Cook, managing partners at Oilfield Water Connection. “E&Ps and water midstream firms alike are investing tens of billions of dollars in new infrastructure to increase water stewardship and mitigate risk.
Here are a couple key recurring themes discussed at the event this week.
- Seismicity Peaked? On a positive note, participants (including top regulators, geoscientists, and water managers) showed data evidence that the SRAs and proactive steps by industry to curtail disposal in seismic hot zones in the Midland Basin are working. Specifically, seismic occurrences in the NCR SRA are down 26% y/y and events above 3.5 mag are down by 50%. This has been a key concern for flow assurance as we’ve written extensively for several years now and the industry is making encouraging progress.
- Inching Closer To “Commoditizing” Produced Water As Pore Space Value Rises. The holy grail of water becoming an asset folks want to take instead of waste they want others to take remains elusive, but steps are being made to unlock beneficial reuse. The event featured a panel discussion between a super major, a large Independent E&P, a leading water midstream player, the top water engineer at TX RRC, and a produced water consortium representative discussing how to unlock beneficial reuse at scale. Multiple bodies at the state, academic, and industry level are now working to establish technical standards for treatment ahead of potential discharge applications. As a key takeaway, we have never seen the kind of industry collaboration and appetite for pilot projects as we saw at this conference for beneficial reuse – we aren’t there yet and there are still many “unknown unknowns” as one speaker said, but we are getting closer to this becoming a reality at scale. Several market participants predicted that in the years ahead, this event will be increasingly focused on water as an asset instead of a liability. One very interesting angle discussed was looking at produced water as a source for hydrogen – this would be a fascinating renewables tie-in. Speaking of renewables, the increasing value of pore space was also a central theme as injection zones are increasingly stressed and the disposal industry is also facing increased competition for pore space from CCUS.
- Water Midstream Valuation Multiples & Deal Trends…
- Peak Management Is A Big Challenge…
- …And Interconnectivity Is Becoming Key…
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