3 January 2020
Water management changes key to Antero’s improved cashflow
Antero embarks on a cost reduction strategy in which water savings initiatives play a central role .
Appalachia-focused operator Antero Resources is targeting $1.35 billion-1.55 billion in cashflow improvements through 2023. The plans, published in a December presentation, entail reducing overall internal costs by $1 billion-1.1 billion through increased water blending operations and reduced trucking costs for flowback and produced water, as well as decreased drilling & completion costs. The company has already achieved about 65% of this goal.
So far, Antero has lowered produced water costs by $6/bbl, an improvement expected to translate into total lease operating expense savings of $74 million. Of that, $42 million is tied to water from existing wells and another $32 million in savings is related to water anticipated from new wells that will be drilled in 2020.
According to Antero CEO Paul M. Rady, part of the reductions achieved thus far can be attributed to the idling of the company’s $500 million Clearwater treatment facility in September. In a Q3 2019 earnings call, Rady noted that the closure “accelerated well cost savings.”
Despite Antero’s cost reduction outlook, questions still linger as to why the company shut down the 60,000 bbl/d Clearwater plant, a move which led to $457 million in impairment charges and $12 million-17 million in idling expenses. Some have speculated that the facility had become obsolete or uneconomical as the adoption of more robust frack chemistries allowed for the use of lower-quality water for completions. Others have taken Antero’s comment that the plant was unable to “operate at its intended specifications” to mean that the treatment system (see description below) faced performance issues.
As Antero closes the door on extensive treatment, it has embraced other outlets for its produced water. The company began blending operations in August and had already achieved a blending rate of 60,000 bbl/d by the end of October. Rady said in the Q3 earnings call that Antero is aiming for a 100% blend rate for its flowback and produced water.
Clearwater treatment process, as described by Water Desalination Report editor Tom Pankratz in his December 2, 2019 issue:
“Tank trucks deliver influent to the Clearwater treatment facility at a 16-bay offloading station. It then flows to one of two grit clarifiers, where it is mixed with leachate from the adjacent landfill, before being pumped to a larger equalization tank. Both the clarifier and equalization tanks include oil removal systems.
Water is then pumped from the equalization tank to a reactor tank, where select constituents, including radium, are chemically precipitated and removed in the downstream Actiflo high-rate clarifier. A second-stage solids contact clarifier provides incremental water treatment and optimal chemistry so that the effluent can be fed to the thermal crystallizer.
Steam from two natural gas-fired boilers drives the thermal evaporator and crystallizer. A portion of the feed is deaerated, with the vent routed to the thermal oxidizer.
The pretreated feed is then fed to four-effect Veolia CoLD process evaporator-crystallizer where it is distilled. The distillate is then biologically post-treated using Veolia’s AnoxKaldnes moving bed biofilm reactor to reduce ammonia and benzene before undergoing a final clarification step to produce effluent suitable for discharge to the environment.
Oil collected during pretreatment is trucked offsite, while the settled solids are pumped to a sludge dewatering facility, from which the dewatered solids are removed for landfill disposal and the filtrate is returned to the head of the plant. All of the pretreatment and process tanks are covered and vented, with off-gas routed to a flare, or thermal oxidizer.”