What are the barriers to entry?

What are some of the negatives regarding oil well investments?
November 9, 2016
How do facilities operate?
November 9, 2016

What are the barriers to entry?

Disposal operators are very careful to place new wells in an area that is not serviced by an existing disposal facility. Extensive research is performed before a disposal well is placed. Typically, if there is an established well in an area, others will not locate nearby. The reason only two to three new high volume disposal wells can be placed per year is because the best way to develop these larger facilities is to be located in the middle of the next big oil or gas field. In order to do this you have to really be ahead of the curve and know where the oil companies are going to be drilling and developing new wells. Developing relationships with the numerous water hauling companies is important as well. They are a good source of information on where to locate future disposal wells.