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