Look for ways to decrease operating costs
Ambient Water (OTCQB: AWGI), a leading provider of atmospheric water generation systems for extracting water from humidity in the air, today commented on the recent falling prices of oil and the resulting ripple effect that could be felt throughout the oil and gas industry should the market not immediately rebound.
Oil prices fell below $50 a barrel last week, the latest milestone in a severe decline that has seen oil's price per barrel fall by 50 percent since June of 2014. Prices have not been this low since 2008-2009 and have led to many of America's largest drillers to announce layoffs and investment cuts as they look for ways to decrease operating costs. One such area that could be considered is that of trucking/piping in source water for fracking hydraulic wells.
"We haven't seen prices this low for a barrel of oil in quite some time so naturally as price goes down, drillers will need to find a way to decrease manufacturing costs in order to offset the revenue they are losing. It can be extremely costly to bring water to a hydraulic fracking site, but fortunately there are cost effective alternatives, like atmospheric water generation, that could serve the industry well," said Keith White, Founder and CEO of Ambient Water.
This is especially crucial for areas already battling water scarcity, like Texas, according to a recent study by Texas A&M University. The study reports that it can require roughly five million gallons of water to frack each well in Texas, a stressful demand given the growing population's own water needs. The study also reported that within the Eagle Ford Shale, located in South Texas, groundwater aquifers are currently overdrawn annually at 2.5 times the recharge rate.
"Water is an expensive resource for the oil and gas industry, especially when operating in areas like Texas where there is a premium because it is already so scarce. When you have to have it brought in to the site, you're adding trucks, storage, and labor, so costs can soar into the millions, only to be repeated for each well," continued White. "Ambient Water's atmospheric water generation technology provides oil and gas companies with a virtually endless source of water on site. This results in a dual benefit of decreased costs for oil companies, and reduces the strain on water supplies in the surrounding communities."