Jordan Blum, editorial director, Hart Energy: We're here at Hart Energy's Executive Oil Conference in Midland. I'm joined by Chris Harich, the chief operating Officer of XRI, here to talk all things water. So just a few days ago there was a 5.3 seismic scale event in the Southern Delaware. Seismic activities have been an increasing problem in the Permian. Can I get you to just elaborate on how much of a challenge that is and what's being done about it?

Chris Harich: Yeah, sure. Well, thank you for having me here today, Jordan. I sure appreciate it. Yes. The seismic events that are happening out here in the Permian are problematic, right? We're just still injecting too much water into formation and in too concentrated of areas. And so one of the things the industry is really trying to capture and do is reuse more of this water. So we're trying to use the water, recycle, reuse it, and send it back to the frac instead of send it to a battery and send it to an SWD [saltwater disposal well] and then dispose of it deep into the earth, which is causing some of this lubrication of faults in some of these seismic events.

JB: How has that kind of recycling technology evolved in recent years? It seems to be picking up a lot of steam, so to speak.

CH: Yeah, so great question. I think scale, size. We at XRI, we recycle about a million barrels a day, so that's definitely changed over the last couple of years. Really increasing the equipment footprint, being able to be more mobile with equipment, recycle higher volumes closer to the frac is some of the keys that we try to do. One of the problems is we have this liquid logistics problem, right? We just frac a bunch of wells that might be six miles away. The next pad is say, 10 miles away. We've got to get all that recycled water to the next location for use. And so some of that supply-demand is still what we're facing today. Sometimes it's easier just to dispose of it, but a lot of the times companies like us are really focusing on trying to recycle as much of that volume as possible and give it back to the operators.

JB: So obviously there are still some logistics challenges and whatnot, like you said. Are things increasingly becoming more economical each and every day, basically?

CH: The economics have really changed over the last three, four years for sure. What used to be 40 cents a barrel is definitely crawling down into the 20 cents a barrel. I think size and scope has helped us with that. I also think teamwork, working with collaboration with different shareholders that are out there, sharing assets, sharing pipelines, sharing ponds maybe to do recycled jobs and bring water back to the next customer. So getting one supermajor to help another supermajor and have a recycler in the middle is something that's really driven the cost down over time.

JB: Great. Well, thank you so much for joining us here for this Heart Energy Live exclusive interview at the Executive Oil Conference in Midland. To read and watch more, please visit online at hartenergy.com.

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