5thAnnualProducedWaterQualityRecycling&Reuse2016

BeneficialUseandTreatmentofProducedWaterinRockiesAnd

Oklahoma

Presenta(onOutline

•  RoleofWaterinOilandGasProducEon•  ProducedWater•  OverviewofSanJuanBasin•  BeneficialUseofProducedWater-CoalbedMethane•  TreatmentofProducedWaterforSanJuanBasin•  ProducedWaterTreatment–OklahomaWaterflood

RoleofWaterinOilandGasProduc(onAroundTheWorld

TypeofOilandGasProduc(on

Conven(onal CoalbedMethane ShaleOil&Gas HeavyCrude OilSands

DrillingS(mula(on

DrillingS(mula(on

DrillingSteamflooding

DrillingSteaminjec(on

U(liza(onofWater/WaterBasedProducts

ProducedWaterGenerated

-Lowvolumeini(ally-Increasedvolumeover(me-Highlife(meproducedwater

-Highvolumeofwaterproducedini(ally-Decreasesover(me

-Lowlife(meproducedwater

-Producedwaterfromsteamflooding

-Producedwaterfrominjectedsteam-Wastewatergeneratedfromminingproduc(onandprocessingsteps

DrillingS(mula(on

EnhancedRecovery

ProducedWater

•  ExtracEonofoilandgasfromundergroundreservoirsisaccompaniedbywaterorbrine,whichisreferredtoasproducedwater

•  ProducedwateristhelargestsinglefluidstreaminexploraEonandproducEonofoilandgas

•  Structuredandintegralapproachisrequiredformanagementofproducedwater

•  CostofhandlinganddisposingoftheproducedwateroUendefinestheeconomiclifeofafield.

BeneficialUseofWater-CoalbedMethaneProduc(on

CBMProduc(on

•  Theamountofwaterremoveddependson–  Originalwaterpressureinthecoal–  Capacityofcoaltoholdwater–  Extenttowhichcoalisconnectedto

adjacentgeologicalformaEons

•  WaterproducEondecreasesexponenEallywithEme

OverviewofCBMProduc(on

•  CoalstoressixtosevenEmesmoregasthanconvenEonalgasreservoirs.

•  Methaneisboundtocoal-heldinplacebythewaterpressureinthecoal.

•  InCBMdevelopment,waterisremovedfromthecoalbed(pumping)anditallowsgastodesorbfromcoalandflowupthewell.

•  WaterproducedfrommostCBMwellsisrelaEvelyhighcomparedtoconvenEonalnaturalgaswellsduetopresenceofmanyfractures(cleats)

MajorAreasofCoalBedMethane(CBM)Produc(on

PowderRiver

SanJuanBlackWarrior

Raton

•  2014USCBMproducEonwas1.4TCF,5.3%ofalltheUSdrygasproducEonthatyear.

•  MostCBMproducEoncamefromColorado,WyomingandNewMexico.

•  MostproducEvecoalbedmethaneareaistheSanJuanBasininColoradoandNewMexico

Basin State GasProduc(on(2014)TCF

WaterProduc(on(2014)MMBW

PrimaryDisposalMethodforWater

BlackWarriorAlabama 0.06 40 SurfaceDischargePowderRiver Wyoming 0.22 175 SurfaceDischargeRaton Colorado,NewMexico 0.1 62 InjecEonSanJuan Colorado,NewMexico 0.61 43 InjecEonUinta Utah 0.03 8 InjecEon

Uinta

Source:EIA

SanJuanBasin

•  StructuralBasininFourCornersregionofNWNewMexicoandSWColorado

•  NaturalgasproducEonfromconvenEonalresourcesandEghtgas,CBMandshale

•  CBMproducEonflourishedin1990s,primarilyduetofederaltaxcredits

•  Basedonprovedreservesin2013,SanJuanBasingasareais4thlargestnaturalgasfieldinUS

Gas Production, San Juan Basin Slide10

•  Fruitland Coal drilling increased the basin’s daily gas production rate from 1.5 - 4 Bcfd

•  Fruitland Coal production reached a peak of 2.6 Bcfd in 1999

•  Current production from CBM is more than 1 Bcfd

Data – IHS Energy, 2015

Gas and Water Production, San Juan Basin Slide11

•  Gas-in-place estimates for Fruitland CBM are ~ 50 Tcf

•  Cumulative production to date is ~ 20 Tcf

•  Mostly primary recovery process (pressure depletion)

Data – IHS Energy, 2015

SanJuanBasinProducedWaterManagement

FruitlandCoalCBMWellSchema(c

•  ThewellsareconstructedwithmulEplesolidsteelcasingstringscementedinplaceandextending2,000feetormore.

•  CBMgasproducedfromFruitlandFormaEon.

•  WaterwellconstructedintheshallowaquifercomposedofupperAnimasformaEon.

•  Typicalwaterwelldepthsare300feetorless.

•  InbetweenaquiferandFruitlandcoalisathicklayerofimpermeableshaleandsandstone(KirtlandformaEon).

CBMWaterChemistry

•  PrimaryconsEtuentsofproducedwateraresodiumbicarbonateandsodiumchloride

•  BasinswithsodiumbicarbonatedominaEngwaterchemistryhavehighsodiumadsorpEonraEo(SAR)index

•  ThehighSARIndexistheleadingcomponentprevenEngtheuseoftheCBMwaterinSanJuanforirrigaEonorsurfacedischargetostreams.

•  AcoupleofreverseosmosissystemsinColoradotocleanupthewaterforsurfacedischargetotheriverwereinplacebutmaintenancewastohigh.

StateSpecificApproachforProducedWaterManagement–NewMexico

•  CBMwaterfromSanJuanBasinismostlydisposedtoclassIIdisposalwell.

•  ContainslowtohighconcentraEonofsaltsandtotaldissolvedsolids(TDS).

•  Duetopoorquality,producedwatercannotgetNaEonalPollutantDischargeEliminaEonSystem(NPDES)permittodischargeintosurfacestream.

Drillingmud

ProtectedWater

SurfaceCasing

Cement

Tubing

Packer

PerforaEons

AnnularSpace

InjecEonZone

StateSpecificApproachforProducedWaterManagement-Colorado

TheclassificaEonofCBMproducedwaterchangedin2009•  CBMproducEondesignatedasbeneficialuseofwater•  Requirescompliancewiththewaterrightsactsandawater

wellpermitissuedbytheStateEngineer•  AugmentaEonplansmayberequiredinColoradotoreplace

depleEonstoimpactedstreamsystems.•  OnemethodofaugmentaEonisthroughacquiringrightstoan

upstreamreservoirandcontrollingthereleasefromthereservoirtomatchthemodeleddepleEonimpacts.

•  ProducedwaterfromtheCBMwellsisdisposedtodeepsubsurfaceformaEons

CBMProducedWaterTreatmentforDisposalWell

Producedwaterfromfieldthrough

pipelineWaterTanks

Filtra(on PumpTreatwithH2Sscavenger,

corrosionandscaleinhibitor

ClassIISaltWaterDisposal

WellMaintenanceinvolved•  Filterchangeout.Filterpluggingfrom

–  coalfines–  hydrocarbons–  oilfieldchemicals

•  Limitedvendorsupply

ProducedWaterTreatment–OklahomaArea

Waterflood

•  WaterfloodisusedtoincreasetheproducEonofoilandisknownassecondaryrecovery

•  PracEceofreinjecEngproducedwaterintosubsurfaceformaEonsbeganin1920s

•  WaterinjecEonhelpstodisposesalineproducedwaterandimprovesoilrecovery

•  Sourceofinjectedwater–  Producedwater–  Seawater–  Aquiferwater–  Riverwater

Waterfloodbegins

OklahomaProduc(onOverview

•  100%ofproducedwaterisreinjectedforoilrecovery

•  Amountofproducedwaterfromthefieldisnotsufficientforwaterfloodrequirementssoitiscommingledwithanothersourceofwater

•  CompaEbilitytestofproducedwaterandwatersupplywellisconEnuouslyperformed.

Limita(onofWaterInjec(on

•  CompaEbilityofinjectedwaterwiththereservoir’sconnatewater

•  InteracEonoftheinjectedwaterwiththereservoirrock•  Injectedwatertreatmenttoremoveoxygen,bacteria

andundesirablechemicals•  ProducedwatertreatmentforseparaEonwithoiland

reuseforinjecEon

StepsTakenbyFieldTeamforManagingWaterInjec(on

•  DiagnosisofoilandwaterproducEontodetermineinjecEonvolumes–  monitoringfluidlevelsinproducingwells–  determiningsweepwater

•  RunninginjecEonprofileininjectorstodetermine–  wellintegrity–  monitorfluiddispersion–  findoutofzonelosses–  providepictureofoverallacEvitydownhole

•  Injectedwatersamplingandqualitycheck

InjectedWaterQuality

Monthlysamplingofwaterforqualitycontrol•  Oilinwateranalysis•  MilliporefiltraEonforsuspendedsolidsidenEficaEon•  WateranalysisforchemicalcomposiEon

–  ScalepredicEon,totalsuspendedsolids(TSS)•  Wateranalysisforacidproducingbacteria(APB)andsulfate

reducingbacteria–  sulfatereducingbacteriaresultsinhydrogensulfide–  microbialinducedcorrosion(MIC)

•  DissolvedGases(Oxygen,H2SandCO2),bicarbonateconcentraEons–  corrosivity

TreatmentofInjectedWaterforOklahomaWaterflood

Basedontheresultsoftestsonwatersample,followingtreatmentisperformedupstreamofwatertank•  Acroleintreatment

–  Bacteria(SRB)–  IronSulfide

•  ConEnuousscaleinhibitor–  BariumSulfate

TreatmentdoneattheproducEonheader•  Biocide•  Corrosioninhibitor•  H2Sscavenger

ProducedWaterTreatmenttoEnhanceOilRecovery

FromWells Separator

LineHeater

WaterTanks Injec7onPumps

Injec7onWells

GunBarrel

OilTanks

WaterSupplyWell

WaterQualityCheck

ChemicalTreatment

Filtra7on

WaterQualityCheck

Sales

Summary

•  ProducedwaterisgeneratedinlargevolumesacrosstheUnitedSatesfromconvenEonalandunconvenEonalresources.

•  Majorityoftheproducedwaterisreinjectedbackintopetroleumreservoirs.

•  Thecostofproducing,handlinganddisposingoftheproducedwaterdefinestheeconomiclifeEmeofafield.

•  WaterproducEonisanintegralpartofcoalbedmethaneproducEon.

•  PressuremaintenanceandwaterfloodaremainbeneficialusesofproducedwaterinoilandgasproducEon

ThankYouforYourA_en(on