As announced by IC Potash Corp. (IC Potash), the company and Intercontinental Potash Corp. (USA) (ICPUSA) have received a formal offer from H20 of Lea County (H20) to purchase ICPUSA’s Capitan Reef Complex Aquifer water.
H20 is engaged in building the required infrastructure and providing the equipment that costs approximately US$2 million at no cost to ICPUSA. The potential annual revenue for ICPUSA is US$4 million - US$6 million under the proposed offer by H20.
Mehdi Azodi, President and CEO of IC Potash stated: “We are pleased to receive such a positive proposal for the highly valuable Capitan Reef Complex Aquifer water asset”.
H20 will be responsible for identifying, purchasing and installing the required pumps, treatment facilities, pipelines, electrical power, storage facilities and related infrastructure. The ongoing operations and related monthly cost of electricity, labour, maintenance and process chemicals will also be carried out by H20.
Oil producers require 160 000 – 200 000 bbls of water per well to fracture multiple formations. There are multiple wells completed each month in South East New Mexico. H20’s expectation is that ICPUSA’s water wells, located about 10 miles northeast of the Ochoa project, drilled and available for pumping and distribution, will provide water for approximately seven fracturing jobs per month.
The proposal has been submitted to the board of ICPUSA and is valid until 10 July 2017.
Read the article online at: https://www.worldfertilizer.com/potash/29062017/ic-potash-corp-receives-offer-for-water-rights/