Green Tide Salt Water Disposal Facility
Imperialhas developed a supremely located salt water disposal facility branded as “Green Tide”.
All wells in the Barnett Shale (the biggest gas producing structure in Texas) must be fractured (“Frac’ed”) to produce. After the frac treatment, the water used in the frac is pushed back up to the surface by the gas. The well produces this frac water for years after the well is frac’ed. The frac water picks up salt and other contaminants whilst in the ground. These, combined with the chemicals added prior to the frac, require that the water be disposed of in a safe and ecological manner, the most efficient way being by disposing back into the ground into a naturally salty water formation via a salt water disposal well.
Green Tide provides this very solution in the heart of the Barnett Shale.
In September 2012 Imperial reopened Green Tide to dispose of up to its permitted capacity of 15,000 barrels of salt water a day. The Company’s acquisition and development of the Green Tide land, assets and disposal permit is expected to save in excess of $4,000,000, compared to a new build cost.
Previous owners attempted to operate the facility using a shallow well which was problematic. The Texas Railroad Commission, recognizing that the approved facility had a vast amount of capital already expended, approved it to continue operations into a deeper formation, the Ellenburger, which has a far greater capacity. Imperial deepened the well in 2011 into this formation.
The Ellenburger is the favoured formation for disposal purposes in this part of Texas as it is separated by thousands of feet of rock from any fresh water bearing formations. A subsequent lack of funds required to deepen the well to the Ellenburger has provided this opportunity to Imperial. The Imperial plan is to deepen the existing well to the approved depth and re-open the facility. It is also Imperial strategy to secure contracts with the water hauling companies to assure itself of success on a monthly basis and consistent cash flow. Once operations have been proven successful, Imperial will request that the Commission increase the daily rate permit, which is expected to be granted administratively.
Green Tide is the very best located disposal well in the area being the closest disposal facility to the “historical core area” of the Barnett Shale i.e. the area of the Barnett with the largest concentration of wells. The Barnett Shale is the largest gas play, by number of wells, in Texas. There are approximately 6,000 wells within a 20 mile radius of the Facility, which will continue to produce water for many years to come;
Barnett Shale gas wells flow back contaminated fracture water for years, producing a constant and known demand for disposal;
One of the most cost effective ways to increase production on a Barnett Shale gas well that has depleted is to re-frac, starting the entire production cycle over again as well as the entire water disposal cycle over as well;
Perpetual license to dispose of 15,000 barrels (current prices between $0.45 and $0.60 per barrel) of contaminated water per day with a strong possibility to increase to 30,000 per day after 6 months of operations;
Estimated to generate over $300,000 per month gross (at full capaicty) to Imperial after year 2 with early cashflow increasing up to that amount during the proceeding months;
New competition unlikely due to environmental barriers to obtain waste disposal licenses and current competition at full capacity despite being relatively remote from the main producing wells;
Effectively unlimited total volume disposal capacity, virtual perpetual asset;
Well Bore Deepened, the well has been deepened into the Ellenburger formation depth, a massive 2,000 thousand feet thick formation capable of sustaining constant input of huge amounts of disposal water without contamination risk to other oil and gas producing formations;
Experienced personnel still available and ready to go back to work;
Green Tide is on 42 Acres allowing Imperial to offer value added services: truck parking close to the field, pipe yard, etc.;
Immediate Imperial valuation uplift expected on sucessful completion: highly desirable business in best location in field, over $5m invested in the facility to date;
Significant oil sales income from oil recovered from the disposal water in addition to disposal fees.
Green Tide – salt water disposal facility with limited competition in a highly developed, major gas field.