Bakken magazine article for investors

Fracwatertreatmentprojectyields
positiveresultsforHoustoncompany
Reprint from THE BAKKEN, Feb.2013
A water treatment company based in Houston and Los Angeles is looking to make an
impact in the Williston Basin. Following the promising results of a frac water treatment
project in Dickinson, N.D., Sionix Corp. may be able to do just that. In January, the
company completed its first round of testing on Bakken-based frac water using a
proprietary treatment that involves chemical pretreatment, water clarification, water
filtration and, dissolved air flotation technology that utilizes tiny bubbles to float
contaminants to the surface of a wastewater holding tank.
When the company began officially testing its process, Clear Water Services, an
experienced independent water treating company, came in to observe the system,
handle samples and provide those samples to an independent lab in N.D. "There was a
very elaborate chain of custody," said Henry Sullivan, an independent director of Sionix.
Although the third-party testing results have not been totally completed, Ken Calligar,
Sionix CEO, believes the company’s internal testing results bode well for the future. The
company currently has treatment facilities in operation or under development in the
food, beer and agriculture industries, but the company chose Dickinson for two reasons.
“The reason we went to the Bakken is to demonstrate quantitative results for potential
customers that will prove we can take the water that they are currently paying to
dispose of, treat it, and let them use it again without buying more fresh water. We aren’t
asking people to be environmental heroes, we are asking people to save money,”
Sullivan said.
And for the second reason, both Calliger and Sullivan point to the growth potential and
long-term demand forecast in the Williston Basin. “We picked North Dakota because the
Bakken could be the largest new producing strata in the world; we see 25 years to 40
years of growth in that region,” Sullivan said.
"Under current conditions, most drilling firms use two million to more than four million
gallons of water to frac one well," Sullivan said. "For each barrel of water, a company
will pay from 25 cents to more than one dollar per barrel to purchase clean water and as
much as $6 to $8 per barrel in transportation costs depending on where the well is
located and the source of clean water. In addition, the driller has trucking and disposal
well costs to dispose of flow back and production water".
In Dickinson, Sionix operates in an enclosed and heated facility that is located adjacent
to a frac water disposal well. "We didn't want to do this on test water, we wanted to do
this on the real thing," said Calligar. "The Dickinson set-up treated water at a rate of up
to 100,000 gallons of waste water per day but the company is capable of greater
volumes. We are currently designing a unit capable of treating 500,000 gallons per day
for a potential project in the Marcellus Shale in Pennsylvania," added Calligar.
Although the Sionix team is confident that their process will help drillers save money
and move trucks off the water cycle routes, they are still working through the final price
projections. "Every drilling operation uses its own magic formula for drilling," Sullivan
said, "but the flow back water that is produced during the first month of drilling and
production is similar for most wells."
The company plans to begin a second round of testing in the next few weeks and
continues to look for the right firms to work with in the state. “We would love to serve
drillers that care about the environment. We would like to communicate with them and
have samples, not of their best water, but their worst,” said Sullivan.
The first round of tests for the Sionix frac water treatment project were completed in
January. PHOTO: SIONIX
Locating adjacent to a frac water disposal well has allowed Sionix to test the dirtiest
water in the Bakken. Testing thus far has shown positive results.
PHOTO: SIONIX
Left: Flow back water from the hydraulic fracturing process used in the Bakken before
treatment. Right: Recycled and treated frac water by the Sionix air flotation and
filtration system.
PHOTO: SIONIX