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• Water supply — obtaining the necessary water pursuant to the approved D&C; plan. • Transportation — getting water to the pad either by pipeline or trucking. • Storage — above-ground tanks or in-ground impoundments for storing water to be used in D&C; operations. • Treat and reuse — oilfield water treatment in mobile or fixed-based plants for reuse in completions. • Other costs — right-of-ways, easements, or other land access agreements required to run transfer lines or permanent water supply pipelines and to construct water storage facilities required to support D&C; operations. Water management costs associated with D&C; operations are usually incorporated in the well authorized for expenditure (AFE), which is a capital expense (CAPEX). By contrast, the production teams are focused on water management costs a s s o c i a t e d w i t h permanent facilities for storing and handling fluids and long- term management of produced water. Ty p i c a l O & G p r o d u c t i o n - r e l a t e d water management costs include: • Separation and storage facilities — permanent facilities for separation of oil, gas, and water from the p r o d u c t i o n stream and storage of fluids. • Transportation — gathering systems and pipelines or trucking to transport long-term produced water to its final disposition. • Treat and reuse — oilfield water treatment in mobile or fixed-based facilities for reuse in completions. • Disposal – deep well injection into properly permitted and constructed Class II underground injection control (UIC) wells. Although the produced water facilities costs are capitalized, the long-term handling of produced water is an operating expense (OPEX). Since water management costs touch many different business units and types of expense, total water- related costs are many times uncertain or unknown by E&P; companies. Total water costs can vary from 5 to 15 percent of the well D&C; cost and were not a major concern during UCOG development with $100/barrel (bbl) oil prices. However, in the present low commodity price environment, it is critical for E&P; companies to know total life cycle water management cost in order to improve operating margins. Oilfield water management decision making is challenging and has many associated considerations and components (see Figure 2). Improved water management in UCOG has been discussed in various forums ranging from the use of infrastructure to reduce costs and increase margins to managing, treating, and reusing flowback and produced water to reduce total water- related costs. However, a key component missing from these discussions is the use of decision support tools and strategic planning to focus front-end engineering and design (FEED) and the total water solutions costs. These discussions, as mentioned above, continue to separate the analysis of water management into the D&C; business units and the production business units. However, to minimize total water costs and maximize margins, decision support tools that quickly and accurately analyze costs associated with the complete water cycle in UCOG development should be implemented in the early planning phase of play development. These tools, along with water engineering expertise, can greatly reduce the time and money required to evaluate total water solutions f r o m t r a d i t i o n a l m e t h o d s , w h i c h require significant time commitments and money. Moreover, these tools allow E&P; companies to view their overall water costs (both D&C; and production water) to improve efficiencies and reduce cost, thereby improving margins. By utilizing decision support tools, the operator can analyze and compare multiple water management scenarios quickly and accurately. An example of an oilfield water management decision support tool that MWH has developed is included via the schematic displayed in Figure 3. Furthermore, by coupling this analysis with preliminary engineering, the operator can quickly evaluate water management costs associated with water supply, water infrastructure, treatment/reuse, and disposal alternatives, thereby eliminating risky investments and ensuring that the water solution is suited to the overall development goals. Small investments in such decision support tools can quickly and accurately accomplish these tasks and focus field planning and preliminary engineering, which is essential to continued operation in an environment of depressed and volatile oil prices. Economic analysis, including a financial model which builds on the preliminary engineering, is essential for quantifying wateronline.com n Water Innovations 25 PRODUCEDWATER Figure 2. Oilfield water management decision diagram 1,2