Multiple firms announce water services in Permian, Delaware shale

By Luke Geiver | June 13, 2017

The largest water well drilling company in the U.S. has announced new plans to provide water and infrastructure to shale oil producers in Texas. Layne Christensen Co. is adding a new energy infrastructure business to its offerings. The plan is to build high-capacity water pipeline for Delaware Basin producers. 

The new business is an extension of the company’s water-focused platforms, according to Michael Caliel, president and CEO of Layne. “The recent increase in drilling activity, coupled with technology advancements driving greater horizontal lateral lengths are creating a growing demand for water in fracking operations,” he said. “Today, many fracking operations require between 500,000 and 700,000 barrels of water per well completion. Based upon industry forecasts of longer lateral lengths and increasing drilling activity, we expect water usage within the energy sector to more than double over the next two years, with much more of the demand in areas such as the Delaware Basin.” 

Layne currently serves clients in the municipal, agricultural and industrial sectors. Layne currently has a water infrastructure system in the construction phase that is located near Pecos, Texas. The system will include wells, pump station and in-ground storage facilities. The water system can move 100,000 barrels of non-potable water per day. At a cost of roughly $18 million, the system Layne will used to serve oil and gas clients extends roughly 20 miles. 

The company has already secured a four-year water contract including a minimum volume purchase from a publicly-traded oil and gas producer, according to the company. The Layne team still believes it can serve multiple other clients and plans to expand its reach and system in the future. 

The Texas Pacific Land Trust based out of Dallas, is also looking at the opportunities with water and shale. The company has formed Texas Pacific Water Resources LLC to provide water to operators focused in the Permian Basin. The newly formed group intends to provide services for brackish water sourcing, produced water gathering, produced water treatment and recycling, water disposal, water tracking, and analytical and well testing. The company said it has a “significant focus on the large-scale implementation of recycled water options.” 

Robert Crain, a former water resource operations expert from EOG Resources that worked in the Eagle Ford and Permian, has been brought on to lead the water infrastructure and services offering.