Category Archives: Salt Water Disposal Wells

World Class Strategies For Business Growth

CEO Insights

Introduction...Monday & Tuesday, May 22 & 23 Julie and I attended the C-Suite Network national conference in Dallas.  C-Suite Network is the world’s most trusted network of C-Suite Leaders. Here is my summary of the most important items shared.

Click here to watch World Class Strategies For Businss Growth.

If better, faster disposal proeject that plays faster intrigures you, drop me a note and we can discuss further.  Bill@billmoist.net

 

Dumping Billions In Canadian Assets For Premian Basin

Permian Basin Assets Replaced Canadian Assets

Introduction…Marathon Oil (NYSE: MRO) is selling its Canadian subsidiary, including the company’s 20 percent non-operated interest in the Athabasca Oil Sands Project, to Royal Dutch Shell PLC and Canadian Natural Resources Ltd. for around $2.5 billion in cash, according to a March 9 release.

Additionally, Marathon scooped up 70,000 acres in the Permian Basin from Midland, Texas-based BC Operating Inc. in a deal worth about $1.1 billion, per the release. That includes about 51,500 acres in the Northern Delaware Basin portion of the Permian.

According to the Wall Street Journal, Shell announced it’s selling all of its Canadian oil-sands projects for around $7.25 billion. Shell will keep a 10 percent interest in Athabasca with Canadian Natural (NYSE: CNQ). Meanwhile, Irving, Texas-based rival Exxon Mobil Corp. (NYSE: XOM) recently said production wasn’t profitable in the region and removed around 3.3 billion barrels of oil from its stated reserves, much of which was attributed to the oil sands, the WSJ reports.

In conclusion... Canadian oil sands are falling out of favor with majors due to its high production costs.  On the other hand, Permian Basin oil and gas production is highly favored due to its relatively low production cost and its well established iinfrastructure .

Permian Basin is also favored by our partners who are purchasing saltwater disposal wells due to increased production of water from the new oil production.

Why Saltwater Disposal Wells Attract Investors

Saltwater Disposal Wells

Introduction...Last October we discussed here The Surprising Discovery Of One Oil Executive.    Now we want to continue that discussion Why Saltwater Disposal Wells Attract Investors by enjoying the ATM of the oil patch as described by insiders.

  • Location – The proximity of the Saltwater Disposal Wells “CSWD” to producing fields is critical, as the cost of transporting produced water to a disposal facility is one of the larger recurring expenses that an operator incurs. Our next facility is one of three in this immediate area.  However, none of them will accept saltwater from outside truckers.  They use their wells for the water they produce only.  As a result, the truckers are driving by this property and driving as much as an additional 50 miles to dispose of their water.
  • Water Commitment – Our well currently under contract is being utilized for only 10% of its daily licensed disposal capacity.  With trucks driving past the property every day, it will be relatively easy to convert them to customers.  The good news is contract requires the grandson of the seller be allowed by dispose of his water which is the current 10% utilization.  By the way, this small utilization is profitable as is.
  • Commitment to the Customer – The management of our next facility also operates producing properties.  The management understands the other issues that concern an operator as it relates to choosing their disposal partner.  These Issues such include safety, ease and speed of off-loading.  Accurate and readily available reporting is important to the trucking company.

Conclusion: The steady cash flow that is not dependent on oil pricing or new discovery makes prime CSWD properties a valuable asset.  That is one reason these ATM’s of the oil patch rarely come up for sale.  However, we have found a seller who is retiring and wants to spend more time with his wife.  Does this intrigue you? Drop me an email if you desire additional information on this discovery.  We have a current property under contract that meets  these requirements.

This has been Bill Moist, MS, CPA reporting today Why Saltwater Disposal Wells Attract Investors.

Permian Basin Rig Count Explodes

Apache Corp. Drilling In Andrews County, TX

Introduction…The most attractive oil exploration and production region in the United States and perhaps the world has added 101 active drilling rigs since just May 13, 2016. That’s a giantic 84% gain in rigs in just in seven months.

The Permian basin in West Texas and southwestern New Mexico which is 250 miles wide and 300 miles long has become the most attractive drilling region due to the major infrastructure that reduces time and expense to getting oil and gas to the market.

The first commercial oil well in the Permian Basin was completed in 1921 in Mitchell County, on the east side of the basin; completed at a total depth of 2,498 feet, it was the discovery well of the Westbrook field.

With the coming of World War II the need for oil was urgent, and it became economically justified to drill more and deeper tests.

The entire Permian Basin during 1966 produced a total of 607 million barrels of oil and 2.3 trillion cubic feet of gas for a total of $2 billion. A cumulative total of 11.3 billion barrels of oil had been produced.

Conclusion...Intrastate and interstate gas pipeline systems were expanded throughout the area, and Midland-Odessa was the headquarters for the oil and gas industry in the Permian Basin area. Hundreds of millions of dollars have been spent on petrochemical refineries and supplemental construction work in the Permian Basin, which was rated the largest inland petrochemical complex in the United States. Is it no wonder the Permian basin is the most attractive oil exploration and production region in the United States and perhaps the world?

Take away...One business that benefits greatly from the new oil exploration and development is the saltwater disposal wells. These properties tend to have a consistent cash flow and a short payback period. Drop me a note if this intrigues you.

Wanted: SWD Wells

swd3Salt Water Disposal

While salt water disposal isn’t a sexy part of the oil and gas industry, it is very necessary.  According to the Texas Railroad Commission, there are 7,500 active SWD wells in Texas as of 2013, the last year reported.

You probably remember the story of the 1849 California Gold Rush.  By 1852, 100,000 people had moved to California to find gold.  A total of $2 billion worth of precious metal was extracted from the area during the Gold Rush, which peaked in 1852.

But, very few actually found gold.  However, Levi Strauss found his gold mine that is still producing today.  Mr. Strauss sold what the 49ers needed.  Blue jeans to wear.  In 2014, Levi Strauss’s sales were $4.75 billion worldwide.

So, we have capital to purchase that oil and gas infrastructure called Salt Water Disposal Wells.  Send me a note if you have access to any that are for sale.