The First Hydraulic Fracturing Forum for Oil
and Gas Extraction and Production
Texas Tech University
Lubbock, Texas
January 6, 2014
Agenda
Energy and the Environment,
Davis L. Ford, Ph.D., P.E., (N.A.E.),
Visiting Professor of Petroleum Engineering,
Texas Tech University
Water Management for Hydraulic Fracturing for Gas and Oil,
Danny D. Reible, Ph.D, P.E., (N.A.E.)
Maddox Distinguished Chair,
Texas Tech University
Getting Tight Oil and Gas Out of the Reservoir,
Hans Schuessler, Ph.D.,
Professor and Chair of Optical and Biomedical Physics,
Texas A&M University
(College Station, TX USA and Doha, Qatar)
Energy and the Environment
Davis L. Ford, Ph.D., P.E., (N.A.E.),
Visiting Professor of Petroleum Engineering,
Texas Tech University
Discussion led by Dr. Davis Ford
January 6, 2014
Global Market Trends (2012)
Source: CQG Inc; Energy Information Administration, DOE
Oil Price
Global Demand Ex., U.S.*
U.S. Demand*
$150
72
22
125
70
21
100
68
20
75
66
19
50
64
18
25
62
17
07 08 09 10 11
* Million bbl/day
07 08 09 10 11
07 08 09 10 11
Proppant Sand Mining and Processing Operations
(Central Texas)
Proppant Sand Mining and Processing Operations
(Central Texas)
Processed Frac Sand, Storage, and Truck Delivery Area
to Fracking Locations
Vacuum Chamber
Detection Cylinder
Laser Source
Renewable Alternative Fuels
Water---New and Used,
Water Demands, Reuse,
Flowback and Produced
Growing Demand for Fresh Water
•
•
•
•
•
•
•
•
The use of fresh water as a fracking source brings up the question of
alternative sources, i.e.,
1. domestic wastewater effluents
2. produced (mixed) water reuse, recycle
3. treated industrial effluents
4. flowback capture and recycle
There are major technical and economic issues involved. The service
providers have the obligation to develop frack water chemistry and
formulation, critical for successful hydraulic fracking. Even though
chemical disclosures are now required, the total chemistry and
formulation for fracking water is precise and primarily proprietary.
It is also interesting to note that the revenue per gallon of irrigation
water, for example, corn, produces only a small fraction of revenue as
produced per gallon of fresh water. The ratio is approximately 15,000
more dollars produced per fack gal. as compared to irrigation gal.
As one cannot use oil as a food source like one can use corn, this
leads to a totally different field of allocating fresh water for domestic
consumption/industrial use in the most cost-effective and efficient
way.
Concept: Achieving Zero Discharge of Water
Source: Adams, Carl E., ENVIRON (July 2013)
Basic E&P Economics, Debt,
Investing
Leasing Strategy
• Eagle Ford, Giddings Field, Austin Chalk
• Formation Definition is based on age and depth---not
coordinates
• Leases with landowners have drilling depth
limitations---normally 5 year leases---drill or lose
• Landowners get a price per acre and royalties---all
negotiated
• Some leases can be “boxed in” by contiguous
production or “protection” drilling
Desta Drilling
14 Rigs
7 – 1300 HP Rigs - Triples


Drills vertical & horizontal wells
Rated to 14,000’
5 – 1300 HP RG Rigs


Drills vertical & horizontal wells
Rated to 13,500’
2 – 1000 HP RG Rigs


Drills vertical & horizontal wells
Rated to 10,000’
Rig Benefits

Utilized in our core areas of operations

Provides cost control

Provides for flexibility in Company strategy

Personnel training and advancement potential

Efficiencies from having loyal and well trained personnel

Excess capacity contracted to 3rd parties
Desta Rig #16
Reeves County, Texas
101
• There is a possibility that the
MLP “bubble” can collapse and
investors should understand the
risks!
Conveyance
Regulatory
Quick Facts
Global
Energy Consumption 2009
U.S.(%) China(%) Taiwan(%)
Oil
30-35
20
49 (IMPORTED)
Gas
25
3
7 (LNG) (IMPORTED)
Coal
20
70
32 (IMPORTED)
Nuclear
15-20
1
10
Hydro/Geo
3
5
1
Renewables
2
1
1
_________________________________________________________________________
2.4
U.S.
China
1.2
0
Total primary energy
consumption, in
billions of metric tons of
oil equivalent
2000
2009
Years
Source: International Energy Agency
Source: McComby, C. WORLD CONFERENCE
Sicily, Aug. 2013
~~~~~
Impacts of Fukushima Decisions on Swiss Policy
2013 Major Producers of Fossil Energy
1. Russia
2. Saudi Arabia
3. United States*
* Most experts expect the United States to
overtake Russia and Saudi Arabia by 2017.
Summary