MIDLAND, Texas—The question: How best to handle the abundant produced water Permian Basin shale wells produce?

The answer: Teamwork—producers and water midstream operators must cooperate closely to get the job done.

Executives from Guidon Energy and Waterfield Midstream jointly described their facilities and cooperating agreement Nov. 5 during a water forum presentation held in conjunction with Hart Energy’s Executive Oil Conference. Private equity provider Blackstone Energy backs both firms.

To be frank, “You’re a water company and your byproduct is oil and gas. That’s the case nowadays” in the Permian, Brett Creeser, Guidon’s COO, told forum attendees. The big basin’s unconventional plays produce many times as much water as hydrocarbons and that requires innovative ways to safely and efficiently recycle that flow to frac jobs and to disposal wells.

Guidon focuses on the Midland Basin. It has 34,000 net acres under lease in Martin County, Texas. It started up in 2016 with an initial purchase of 20,000 acres “with a lot of trades, a lot of deals,” Creeser said. That created “a lot of work for our land department” since the firm doesn’t hold rights to all producing zones beneath its surface acreage. The firm currently has two rigs running and produces nearly 25,000 barrels per day (Mbbl/d) of oil and some 50 Mbbl/d of water.

Guidon has four centralized water handling and recycling facilities and 5.6 MMbbl of water storage available. But that’s not enough, and Guidon brought in Waterfield to assist with the massive flow.

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Scott Mitchell, Waterfield’s co-founder and CEO, referred to his “serendipitous career” with multiple and differing assignments, which led him into the Permian’s important water business. He emphasized water management requires multiple skills and expertise—geology, producing well maintenance and engineering, injection well characterization, and commercialization/marketing for customers.

That varied background “shaped the lens through which I view the water midstream now,” he added.

“Technical excellence is an absolute requirement because you’re dealing with customers, whose [oil and gas] production is on the line,” Mitchell said. “You have to bring technical excellence to them, which is significant.”

Waterfield got its start in 2018 with a $500 million commitment from Blackstone. Besides Guidon, it serves such producers at Cimarex, Encana, EOG and BP Energy. It also operates a water management system in Reeves County, Texas, in the Delaware Basin in addition to its Martin County system that service Guidon.

Its Martin County system has 30 miles of pipeline connected to three Ellenberger disposal wells that have a combined injection capacity of 150 Mbbl/d. Area producers have committed 67,000 acres to Waterfield.

In Reeves County, Waterfield operates more than 58 miles of pipeline, connected to 12 Delaware Mountain Group disposal wells with a capacity of 285 Mbbl/d. Producers have committed approximately 20,000 acres to Waterfield in the Delaware.

Creeser said Guidon has emphasized “high-quality, deep-injection infrastructure” that can assure service even during peak production periods. It has worked to develop recycling capacity in addition to water disposal. It has moved to greater use of ozone injection to lessen the use of chemicals for water treatment.

For its part, Waterfield has worked to provide long-term dedication of disposal volumes, pipeline ownership that can be expanded to provide a larger footprint and volume flexibility—“so we can make the significant capital investment needed” to serve producers, Mitchell explained. “You can’t build a cheap system that doesn’t get the job done.”

Both speakers emphasized the importance of relationships that can make infrastructure work effectively. It’s important that “when you have differences you talk it out,” Creeser said, noting any partnership will see differing needs and expectations over time.

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