Water Not

Texas contractor Fountain Quail distills recovered frac water so

oil shale producers can practice recycling and work more efficiently

on remote drill sites

Texas-based contractor Fountain Quail Water Management has found a niche in

the shale gas market by purifying water used in hydraulic fracturing. The

key to their service is a series of mobile distillation units that may not

only help reduce the cost of disposing of the water through deep well

injection, but also provides operators with a steady supply of frac water

for ongoing operations.

Fountain Quail was founded in 2002 by oil industry veteran Delzon Elenburg,

who was looking for a way to recycle shale operation wastewater. The

company’s head office is located in Roanoke, part of the Dallas-Fort Worth

metropolitan area, on top of the gas-rich Barnett Shale.

Elenburg found a technology compatible with the company’s business plan in

Calgary, Alberta-based Aqua-Pure Ventures Inc. Aqua-Pure’s offering: a

series of evaporation units designed to purify landfill leachate, and

industrial process water, including water used in the Alberta Oil Sands. What

Aqua-Pure needed most: a service business capable of generating recurring

revenue.

“In a traditional Texas shale operation, it takes about 120,000 barrels of

water to frac a well,” says Richard Magnus, chairman of Aqua-Pure. “The

cost of deep well injection in Texas, for example, is only about 65 to 75

cents a barrel. It’s the cost of transporting the water from the shale play

to the injection well that’s the clincher. When you figure that a really

big tank truck holds maybe 130 barrels, you can see that anything that reduces

water transportation costs helps the bottom line.”

EVAPORATING TECHNOLOGY

Aqua-Pure recycles fracking water by employing patented Mechanical Vapor

Recompression evaporation, a process that combines evaporation with

state-of-the-art heat exchanger technology. In 2002, however, the technology

required some fine-tuning to target the Barnett Shale. That task was

masterminded by current Fountain Quail/Aqua-Pure CEO Jake Halldorson.

“Jake put engineers on the case and redesigned the technology so the units

could fit on lowboy trailers,” says Magnus.

The first ready unit, dubbed Nomad, was built and deployed in 2004, the same

year that Aqua-Pure purchased Fountain Quail outright. The Nomad is

transported on three skids each – about 12 by 40 feet – standard lowboy

trailer loads. On the ground, the system footprint occupies about 60 by 60

feet. Full out, the Nomad produces about 2,000 barrels a day of distilled

water at a rate of about 65 gallons per minute.

The company’s first client was Devon Energy Corporation working in the

Barnett Shale. Hydraulic fracturing techniques were pioneered in the Barnett

by George P. Mitchell, whose Mitchell Energy & Development Corp. was sold

to Devon in 2001.

“We thought we’d be raking in the green in short order,” says Magnus. “In

reality, it was a little harder to get going. The first year we purified about

30,000 barrels with two units, but we gained valuable shale play expertise

that’s made us far more efficient. We’re oil and gas guys who got into the

water business, not water guys making a late entry into oil and gas.”

OPERATIONS RAMP UP

To date, the company has purified in excess of 700 million gallons of water

in shale operations. The company currently operates nine Nomads with more

in the works.

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Standard operating procedure for a shale contract involves working with the

shale operator to determine the optimum location for the Nomad. The units

are either placed in a central location, roughly equidistant from several

wells but no more than 15 miles away, or placed in near-field settings, moving

along with the drilling action.

“It’s a game of logistics,” says Fountain Quail chief operating officer

Brent Halldorson, Jake’s son. “Natural gas exploration leases offer a

window of time to drill and fracture and if that expires, the exploration

company needs to release that property, so there’s a lot of financial

pressure to drill on schedule. If the client is in the north end of the Barnett

and decides it’s time to look at some leases in the south end, we’ll move

to where the activity is.”

When the call comes, the contractor loads the equipment on trailers then

drives it to the new well area. The ground is prepared for the Nomad by the

shale operator who flattens the soil and lays down a pad of crushed gravel

or limestone. The Nomad is then hauled into place on lowboy trailers and is

offloaded using a crane. Although the unit can operate on a number of fuel

sources, it most often uses the most readily available fuel –natural gas

from the wellhead itself.

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FLOWBACK TREATED FIRST

Once slickwater and fracking sand are pumped into the well, the first water

to return to the surface from the well bore – flowback – is driven not only

by water pressure, but the additional pressure of released natural gas. The

process water contains polymers used to reduce the viscosity of water,

biocide, dirt, clay, salt and trace metals. Initial flowback represents up

to 30 percent of the water injected into the shale.

“The next round of water is the much saltier ‘produced water,’ which

continues to flow from the well at rates of up to 200 barrels per day,” says

Halldorson. “The average Barnett well produces about 50 barrels per day.”

Between 15 and 30 percent of the water appears to remain permanently

underground.

“We don’t really know how much of that will come back over the long term,”

says Halldorson. “Every shale is different, but undoubtedly some of it will

remain in the shale formation.”

The flowback and produced water is transported by truck or fused poly pipe

the short distance to the Nomad site, then stored in raised ponds, separated

from the ground below with an impermeable liner.

Solids are removed from the process water using a clarifier, and the remaining

salt water is sent to tanks, to be distilled in the evaporator. Employing

the evaporation technology, the water is converted to steam using about 5

percent of the energy required for traditional direct-fired distillation.

Concentrated saltwater is pulled off and stored in brine tanks. “That can

either be used as kill fluid to contain gas while work is being done at the

wellhead, or injected into a saltwater disposal well,” says Halldorson.

“We’re also working on other reuse options such as using the concentrate

as a component in water-based drilling mud.”

The distilled freshwater is pumped into a large pit that can store up to 17

million gallons of purified water. In the Barnett Shale, that water is

transported back to new wells for fracking using temporary aboveground

aluminum irrigation pipelines called “fastlines.”

“We operate the units 24/7 across 364 days a year, with a day off at

Christmas,” says Halldorson. “Typically we have two to three people per

shift at a site, although it takes the same number of people to run three

or four Nomads at a site as it does just one.”

During occasional maintenance breaks, one unit is taken offline, cleaned and

put back in operation by the end of the shift.

MUST BE COST-EFFECTIVE

“We’re very much a water management contractor,” notes Halldorson.

“Recycling water has to be cost-effective to be useful. If deep well disposal

is cheaper than recycling, we make recycling less expensive by cutting down

the transportation cost and eliminating disposal cost simultaneously.

Depending on the available sources of freshwater in the shale play, we can

provide the operator with recycled water for the next round of hydraulic

fracturing, offering that water right where production is happening.”

However, water issues differ from region to region. In Texas’ Barnett and

Eagle Ford Shales, water is a scarcer commodity, and deep well disposal is

permitted, but transportation costs are high. Arkansas’ Fayetteville Shale

and Pennsylvania’s Marcellus Shale plays have access to ample freshwater,

but environmental concerns are constraining disposal options.

It’s the efficiencies developed on the Barnett Shale that have poised the

contractor for expansion into shale plays across the continent. Increased

concerns about shale gas water disposal coupled with tougher environmental

regulations have made the technology more attractive.

The company has operated in the Marcellus Shale in partnership with Eureka

Resources for more than a year. There, the region’s geology makes

underground disposal problematic. Process water is often transported as far

away as Ohio for deep well disposal. In May, the Marcellus Shale Coalition

agreed to end the grandfathered practice of discharging wastewater brine from

shale gas drilling operations into area waterways after processing it through

metals-precipitation plants only.

“We already have three Nomads at Eureka’s facility in Williamsport,

servicing a range of exploration companies in the area,” says Halldorson.

“We expect that site to become even busier.”

In June, the company announced a five-year deal with NAC Services, LLC to

set up operations on the Eagle Ford Shale in South Texas, says Halldorson.

“This operation will be similar to the one in the Marcellus – a shop to

service multiple shale gas producers.”

Fountain Quail has also been approved for a National Pollutant Discharge

Elimination System permit under the federal Clean Water Act in Arkansas.

Concerns that deep-water injection wells may be contributing to earthquakes

has seen many of the state’s injection wells shut down.

REPUTATION IS PARAMOUNT

“We’ve already bought a plot of land for a site right in the middle of the

Fayetteville play,” says Halldorson. “Recent issues limiting disposal

options have led to an increased interest in water recycling in the state.

For Arkansas, we’ll be using Nomads for creating freshwater that will be

reused to irrigate crops. This benefits the environment by retaining the

water in the hydrological cycle.”

Fountain Quail is counting on emerging environmental regulations and an

increased emphasis on shale gas extraction as part of the North American

energy mix to fuel future business. But building on its reputation is just

as important.

“You have to be capable of delivering what you promise,” says Halldorson.

“In the oil field industry, a service company’s reputation is sacred.”

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Engineer Julie Holden operating a Fountain

Quail Nomad evaporator in the Barnett Shale region. (Photo by Ed

Lallo/Newsroom Ink)

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