Introduction...Last week we discussed here The Surprising Discovery Of One Oil Executive. This week we want to continue that discussion by getting into the Three Keys To Successful Commercial Salt Water Disposal (CSWD) Facility. The ATM of the oil patch as described by insiders.
- Location – The proximity of the 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 located approximately three miles from one of the larger producing fields in area. This producer disposes of approximately 325,000 barrels of water per month in the county. A larger portion of this producer’s water is produced in close proximity to our next facility, as way of illustration. This producer wiill commit a large portion of their produced water to us.
- Water Commitment – The commitment of water directly from the operator / producer is important to the our next facility. This allows the management to contract the water either directly with our preferred trucking company. Our preferred trucking company will base a number of their trucks at the facility and haul all water they have access to within a 20-mile radius.
- 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. The facility will aslo provide driver amenities such as clean restrooms, cold water, and snacks.
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 that has good facilities that can be acquired. Drop me an email if you desire additonal information on this discovery.
This has been Bill Moist, MS, CPA reporting today Three Keys To Susccessful CSWD facility.