Is anyone selling water to companies for a certain $/barrel? I'm trying to compare price terms. Appreciate any information you are willing to share.
Ben--- I recall some talk on this site couple years ago about selling water and 40-60 cents was what i remember-- try search see what come up on site
It depends on where you are and how much you have to sell. If you don't have enough for an entire frac job or hydrotest it might not be worth it to them. The frac jobs can get up towards 300,000+ barrels now I hear so I doubt anyone will pay $150,000 per frac but you can always start there. I think 25-35 cents is a more realistic rate but again it all depends on who your dealing with and how bad they want it. It's also a good idea to work in water wells, electricity, pond work, volume surveys etc. if you can because more than likely whoever wants water has more wells in the area and if you can fill your pond back up you can sell more water to them on the next job. I think services might be tax free too but not sure about that. I've heard they will pipe it over 5miles at times so get on the RRC map viewer and see who's in your area and don't be afraid to do some leg work and contact their local production group. Good luck and keep us posted.
Ben, while working in the Eagle Ford this past summer, water for fracks was priced at 0.25/barrel. Interestingly, landowners were not allowing, or getting (depending on how to phrase this), any type of operator offers to improve the price over time. Having read some surface offers, nothing allowed the landowner to improve his price in the future. Would language addressing this be appropriate to allow for inflation? Possibly tied to CPI?
Thnx for your comments and helpful ideas!!
I'm just trying to get discussion going for people to share prices and locations. It's all negotiable so I thought it might be helpful for people to compare prices.
Thanks for asking the question. I think the problem is that companies are used to getting water for free and don't want to pay anything for it. Our attorney told us that in the Eagle Ford, companies are paying $0.50 a barrel, which seems cheap. However, just try getting a company to agree to pay that amount and it is like pulling teeth. An oil company is currently offering me $0.15 a barrel. When you look at what a bottle of drinking water costs, the price per barrel is very high. Groundwater shouldn't be any less valuable, in my opinion.
Thanks for the reply Troutman. Since water sales are typically a matter of contract between the landowner and operator, the landowner can certainly include that type of language. Just a matter of getting agreement on it.
OK, gotcha...prices I mentioned were with HOC in Wilson County, summer 2012. I'd be interested to know if others have different pricing and where.
Can you share more of the terms under which you were offered $0.15/bbl - Was the operator going to supply its own wells, and build its own ponds, and simply pay you for that privilege? Or is that the pricing from an existing pond, or from wells you have? Are you going to provide any transport/piping/ROW/filtering/treatment?
There are a lot of variables that can go in to the cost of a barrel of water, and it can make it hard to compare anecdotal pricing. From the various river authorities further to the east, rates of $0.007 to $0.02/bbl are common, with the operator providing all transport, treatment and ROW. I've seen landowners paid considerably more than $0.50/bbl, but they were providing ponds, pumping, and transport
The oil company will be drilling the water well and paying for the equipment. The payment to me is for the actual water used. They are not allowed to use any existing water well, pond, lake, etc.
What type of document/agreement are they placing before you to sign? PM me and I can get you some water use doc examples.
Hopefully, you haven't signed, yet.