Halliburton's new CleanWave Water Treatment Service trucks take the produced water from fracking and simply reuses it. It takes out what was thought to be the critical treatment step. It's also changed the price point for drillers.
While that's a large and looming threat, the new system has only been applied to around 60 wells in the Permian Basin and Bakken. It likely won't work everywhere as some areas, such as the Eagle Ford, don't give back a lot of water and the Marcellus already has a well-developed recycling system. The potential is there to have a major effect on Heckmann's business, which means that this technology needs to be watched closely.
In the near term, Heckmann's business is being built around its full-cycle system and deep-seeded customer relationships. Because of these relationships as well as Heckmann's growing size and scale it is able to effectively compete based on more than just price.
That's an advantage that appears to get stronger with each passing quarter, as evidenced by the tremendous revenue growth. The company recently reiterated its guidance of $750 million-$825 million in revenue for the year, which is a big jump for a company that delivered revenue of just $153 million in 2009. While it took several mergers to get there, Heckmann's ability to continue to consolidate its way to the top should keep its competitive advantage intact for the foreseeable future.
Secondly, produced water doesn't come from fracking, Flowback comes from fracking, produced water comes from production flow...for example in some areas such as the Miss Lime...it can flow as high as 90% water to 10% oil/liquids...hence the need for SWD wells. You think HAL can park rig on a well like that and filter the water....sell it to the cows at 25 cents a bottle ?....Don't believe all the stuff you read on Motley fool, seeking alpha, etc. These are just folks getting paid per page view...and you gotta do your own DD...if you don't work at really knowing facts and learning the sectors you invest in you'll always be at the mercy of others....and you don't want to be in that place..it's generally not profitable. So if you or the author misuses the term produced water with flowback water......well someone doesn't know enough to be offering advice. I mean to be sincerely helpful in what I'm saying....it's kind of crude
(pun intended)...but it's true. GLTA...LSP