How Much Water Does Apache Potentially Need to Develop Alpine High?

Gabriel Collins, “How Much Water Does Apache Potentially Need to Develop Alpine High?,” Texas Water Intelligence™, Water Note #5, 19 June 2017

Apache Corporation’s Alpine High play has become a centerpiece of the company’s growth strategy moving forward. The desert oasis at Balmorhea State Park lies near Alpine High’s geographic center, and questions increasingly arise concerning how to best manage drilling, hydraulic fracturing, and wastewater disposal operations in such a special and hydrologically sensitive area. The Texas Parks and Wildlife Department has already launched what the Houston Chronicle dubs “an unprecedented environmental study” of the San Solomon Springs that feed the oasis, as well as their surroundings.

To help bring some additional context to the discussion, this note shares estimates I’ve made based on data from Frac Focus and energy industry sources that aims to quantify how much water Apache could require to support well completion operations under a number of development scenarios. The estimate assumes the use of covered water storage pits that minimize evaporation losses in the area’s dry and windy climate.

On the more bearish, slow development end of the spectrum, 4 rigs drilling 51 wells per year with an average lateral length of 4,100 feet could require an average of 27 thousand barrels per day of frac water, assuming wells are rapidly completed upon the conclusion of drilling. To put that number in perspective, 27 thousand barrels of water is the equivalent of approximately 1.7 Olympic swimming pools, or in more locally relevant terms, enough to irrigate a 50 acre farm with about 1 inch of water. 

At the high end of the potential development spectrum, completing 153 wells per year, each with a 10,000 ft lateral length (drilled by a 12-rig program), could require an average of approximately 200 thousand barrels per day of water. Two hundred thousand barrels of water is roughly 26 acre-feet (i.e. enough to cover 26 acres under 1 foot of water). Translated into practical farm irrigation terms, that is roughly equivalent to a sprinkler system putting 1 inch of water onto a 310 acre farm. Southern Reeves County, where much of the Alpine High acreage sits, has numerous farms that are bigger than 310 acres, and whose water needs during hot dry spells can, in aggregate, significantly exceed even a high-end oilfield Alpine High frac water demand scenario.

In considering frac water demand estimates, it is important to note that instantaneous demand rates during period of intense completions activity can significantly exceed the annualized “average” figure. Also, water use is often highly localized, since each play tends to have “sweet spots” that attract greater development activity levels. If Apache were to build a high-volume pipeline loop, as Pioneer Natural Resources is doing in the Midland Basin, this could help diversify water sources and minimize specific local water withdrawal impacts by allowing frac jobs anywhere near the loop to more easily–and cost-effectively– obtain water from multiple sources across the play.

The Texas Parks and Wildlife Service and other environmental and ecosystem researcher are doing essential work to protect the San Solomon Springs. The numbers here provide a useful starting basis for the conversation between industry and various interested parties such as landowners, conservationists, and the broader public.

The data also strongly suggest that the water volumes Apache needs can very likely be sourced in ways that protect the Springs and their source flow. This would likely entail using a combination of produced water recycling and deeper brackish aquifers in the area–such as the Capitan Reef resources that Wolfcamp Water Partners seeks to sell to the oilfield–or importing brackish water resources from further afield, such as Pecos SS‘s project northeast of Fort Stockton, which are almost certainly not hydrologically connected to the San Solomon Springs.

  Wells Drilled Per Year Implied Water Demand, kbd (4,100 ft avg. lateral) Implied Water Demand, kbd (6,500 ft avg. lateral) Implied Water Demand, kbd (10,000 ft avg. lateral)
Wells per year, 4-rig program 51 27 44 67
Wells per year, 6-rig program 76 41 65 101
Wells per year, 10-rig program 127 69 109 168
Wells per year, 12-rig program 153 82 131 201

Key Assumptions and Inputs:

API Completion Date Well Name Lat Long TVD, Ft. Lateral Length, Ft. Total Base Water Volume, Gal   Gal/lateral Ft.
42-389-35087-00-00 6 Jan 2016 Spanish Trail 1H 30.9672 -103.73526 10,767 4,100 5,946,570   1,450
42-389-35177-00-01 13 May 2016 Weissmies 1H 31.01 -103.73 10,809 3,445 6,316,128   1,833
42-389-35175-00-00 19 May 2016 Ortler 1H 30.93601221 103.7477228 10,515   8,851,626    
42-389-35184-00-00 7 Jun 2016 Mont Blanc 1H 31.21 -103.90 12,074 4,306 8,390,934   1,949
42-389-35186-00-00 13 June 2016 Cheyenne 1H 31.05331539 -103.7483623 10,296 3,653 6,621,720   1,813
42-389-35191-00-00 20 June 2016 Pollux 1H 30.96814474 -103.7840247 9,823 2,944 5,843,880   1,985
42-389-35227-00-00 12 July 2016 Mont Blanc 3H 31.21 -103.90 11,421 4,502 8,839,488   1,963
42-389-35223-00-00 17 July 2016 Mont Blanc 2H 31.21 -103.90 9,147   7,669,830    
42-389-35215-00-00 26 Jul 2016 Fox State 1H 31.12 -103.76 11,119 4,842 9,996,756   2,065
42-389-35233-00-00 14 August 2016 Denali 1H 31.00550182 -103.7982993 10,029 5,391 12,316,668   2,285
42-389-35274-00-00 27 September 2016 Redwood 1H 31.27 -103.98 14,009 4,172 9,719,472   2,330
42-389-35364-00-00 26 November 2016 Weissmies Unit A 3H 31.01 -103.73 10,843 3,975 8,213,268   2,066
42-389-35372-00-00 30 November 2016 Weissmies 5H 31.01 -103.73 10,231 2,630 5,341,644   2,031
42-389-35279-00-00 11 Jan 2017 Redwood 4H 31.27 -103.98 10,843   9,723,126    
42-389-35276-00-00 22 January 2017 Redwood 2H 31.27 -103.98 12,937 4,292 10,551,954   2,459
42-389-35508-00-00 28 Jan 2017 Black Hawk State 7H 31.15135 -103.77826 9,499   9,038,694    
42-389-35542-00-00 30 Jan 2017 Weissmies 7H 31.0090116 -103.7377541 10,006   8,189,580    
42-371-39416-00-00 5 Feb 2017 King Hidalgo 5H 30.78 -103.47 12,713   9,383,976    
42-389-35277-00-00 21 March 2017 Redwood 3H 31.2688495 -103.9774719 13,341   10,778,208    
                   
Average water use per frac, gal             8,512,291 Average gal/lateral ft 2,019
Average water use per frac, bbl             202,674 Implied use for 6,000 ft lateral, bbl 288,433
                Implied use for 9,000 ft lateral, bbl 432,649
  • 25 days to drill a well approximately as deep and in some cases longer, than what will likely be drilled at Alpine High. Estimate takes shorter times for Bone Spring and Wolfcamp wells in the Northern Delaware Basin by operators such as Matador, and adds times based on the fact that Alpine High is still not in industrial development mode. “June 2017 Investor Presentation,” Matador Resources Company, http://investors.matadorresources.com/phoenix.zhtml?c=248247&p=irol-presentations 
  • 2.5 days to move a rig between locations and set it up to drill the next well.
  • 5 wells completed per month per frac crew. Sourced from Collins, Gabriel and Kenneth B. Medlock. 2017. Assessing Shale Producers’ Ability to Scale-up Activity. Issue brief no. 01.17.17. Rice University’s Baker Institute for Public Policy, Houston, Texas.  http://www.bakerinstitute.org/media/files/files/7bfea3e9/BI-Brief-011717-CES_ShaleScale.pdf 

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