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Evolve: Sourcewater leads upstream firms down to the waterside

‘How do we find everybody who owns a frac pond, in at least West Texas? It turns out it’s not that easy.’

Sourcewater Founder and CEO Josh Adler talks about his company's orgins. (Image: FreightWaves)

This fireside chat recap is from Wednesday’s Evolve: The Next Evolution of Oil & Gas, a virtual summit presented by Digital Wildcatters and FreightWaves.

FIRESIDE CHAT TOPIC: The energy intelligence revolution: AI, machine learning and geospatial big data. 

DETAILS: Max Gagliardi chats with Josh Adler about Sourcewater’s origins and the company’s role in helping upstream companies find water resources for their fracking operations through the use of satellite imagery, regulatory data and subsurface insights. 

SPEAKERS: Adler is the founder and CEO of Sourcewater, and Gagliardi is a partner and co-founder of Ancova.

BIOS: Adler is an angel investor and veteran dealmaker who has founded energy, real estate, medical technology and internet companies. He also served as a senior economic policy official for President George W. Bush. 

Gagliardi has started and grown multiple businesses across energy marketing, midstream, consulting, real estate and digital media. He has participated in a variety of roles on deal teams for over $16 billion in M&A transactions across the energy industry. 


“Moving the saltwater that comes up with the oil and getting rid of it can be not just the largest single operating cost of pumping oil out of the ground, it can be a majority of the total production cost for every barrel of oil, especially if you’re putting it on trucks. It’s a huge, huge part of the business and really one that most operators didn’t wake up to until 2015, 2016.”

“How do we find everybody who owns a frac pond, in at least West Texas? It turns out, it’s not that easy.”

“What we discovered was there was no government regulatory data about where frac ponds are, what’s in them, who owns them. Nothing. It turns out it’s one of the most important things in the oil and gas supply chain because every frac needs … a frac pond built with water before you can frac. Always. … We stumbled upon the idea of maybe we can see these squares of water from space.”

“It seems not to have occurred to anyone before that you could use satellite imagery to see what’s going on in the upstream side of the business as opposed to the downstream.”

“One of the things that’s actually kind of crazy about the water business and the water disposal business is it’s actually fundamentally much harder than the crude oil business. Why do I say that? Because if you drill an oil well and it actually produces oil, it’s a, y’know, pretty darn good bet that you can sell that oil to somebody at some price. That’s not really in doubt. … [But] if you invest that exact same amount of money … building a saltwater disposal well, same cost as a nice, long horizontal oil well and you put it in the wrong spot … you just built a $10 million hole in the ground that nobody wants.”

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Joanna Marsh

Joanna is a Washington, DC-based writer covering the freight railroad industry. She has worked for Argus Media as a contributing reporter for Argus Rail Business and as a market reporter for Argus Coal Daily.