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Gas Oil Museums Midstream Expansion Crucial to Keeping the U S Economy Competitive Blockchain IoT and Wearables Enter the Digital Oilfield Interview Dr Lee Hunt Partner Hunt Petty LP p 8 p 9 p 12 p 18 THE MAGAZINE FOR LEADERS IN AMERICAN ENERGY March April 2018 OilmanMagazine com

Exhibit Booths and Sponsorships Still Available 2018 Expo Alliance Annual Meeting April 24 25 2018 Wichita Falls Texas Hall t i b i e cas Exh w n i o h s nt S ooth e B m will 0 ip Q u B q 35 B E tern eople side s t e u p W O y 2 000 r t n x o ou sium C d appr o p ym fee as S G tion ent il p m e O a c Re urn tail f To l k o c G h Co it Hall c t s a il P hib nitie u t r O ide Ex l o opp ssiona ins g n e i rof ork etw sual p N t ca in a ronmen i env Featuring Top Industry Professionals and Exhibiting Companies from across the U S Call Donna Brown or Jo Ann Baker at 800 299 2998 for exhibitor or sponsorship information

IN THIS ISSUE Feature Subsea Technology Artificial Intelligence and Robotics Pushing Boundaries in Offshore O G By Samuel Cook pages 20 and 21 In Every Issue Letter from the Publisher page 2 OILMAN Contributors page 2 OILMAN Crossword Puzzle page 3 OILMAN Online Retweets Social Stream page 4 Downhole Data page 4 Oil Gas Museums page 8 OILMAN Crossword Puzzle Answers page 17 OILMAN PRIDE First Offshore Drilling Platform by Thomas Rowland May 4 1869 page 5 Oil Rig on Barge Caddo Lake Louisiana 1911 page 6 OILMAN COLUMNS Steve Burnett Oilman Cartoon page 3 Thomas G Ciarlone Jr Oil and Gas Law 2018 Thus Far page 7 Eric R Eissler Midstream Expansion Crucial to Keeping the U S Economy Competitive page 9 Tata L N Murthy Legal Statutory Compliance for Commencing Oil Gas Production page 10 Eric R Eissler Blockchain IoT and Wearables Enter the Digital Oilfield page 12 Mark A Stansberry America s Energy Transformation page 14 Dave McCarthy Using IIoT to Improve O G Operations page 15 Jay Lehr Ph D Offshore Drilling Tread Carefully page 16 Tonae Hamilton Interview Dr Lee Hunt Partner Hunt Petty LP page 18 Josh Robbins Massive Opportunities page 19 Dusty Cooper Mobile Apps Boost Efficiency page 22 Dan Larson Interview Angie Binder Executive Director Colorado Petroleum Association page 23 Phil Neray Growing Cyber Threats to Oil Gas Facilities page 24 Eric R Eissler Interview with Stream Systems Executive Team page 27 Jason Spiess Tidwell Proves the American Dream Can Still Be Great Again page 28 Oilman Magazine March April 2018 OilmanMagazine com 1

LETTER FROM THE PUBLISHER The United States is the leading natural gas producer in the world Shale has virtually eliminated our need for gas imports and continues to produce well in fact very well in the Delaware and Eagle Ford Basin The Bakken is seeing improvement and the Niobrara region continues to perform well in the Denver Basin after two years of falling production In our last issue we profiled Louisiana s oil and gas market The Haynesville Basin in northwest Louisiana continues to outshine the southern inland water and offshore oil and gas market The feature in this issue dives into subsea technology and while onshore producers are doing well what about offshore E P and its long term future in the U S Deepwater GOM producers have more financial development and operating challenges to overcome than their onshore counterparts The capital involved to explore produce and operate an offshore well is significantly more than shale Over the last few years of lower crude prices offshore producers were forced to cancel projects and reduce their workforce to survive Now most offshore operators are minimizing their investment in new fields and instead investing in existing producing assets or brownfields They have determined that enhanced oil recovery technology is a better investment than risking large capital outlays into deepwater exploration that can take years to bring online and recoup investment As a result the Gulf of Mexico has seen a decline in new producing fields which in turn decreases growth for the entire oilfield equipment industry that relies on the GOM region for revenue For now oilfield service companies are relying on the scarce brownfield expansions to survive A bright spot for future offshore development is the announcement by President Trump to open up oil and gas exploration in the Atlantic and Pacific continental shelves If the plan proposed by the Trump administration survives court challenges which are expected we could see the first offshore lease go on sale in 2020 Emmanuel Sullivan Publisher OILMAN Magazine MAGAZINE MARCH APRIL 2018 PUBLISHER Emmanuel Sullivan MANAGING EDITOR Samuel Cook FEATURE WRITER Eric Eissler GRAPHIC DESIGNER Kim Fischer CONTRIBUTORS Dan Briggs Steve Burnett CONTRIBUTORS Biographies Don Briggs Don Briggs is the President of the Louisiana Oil and Gas Association The Louisiana Oil Gas Association known before 2006 as LIOGA was organized in 1992 to represent the Independent and service sectors of the oil and gas industry in Louisiana this representation includes exploration production and oilfield services Our primary goal is to provide our industry with a working environment that will enhance the industry LOGA services its membership by creating incentives for Louisiana s oil gas industry warding off tax increases changing existing burdensome regulations and educating the public and government of the importance of the oil and gas industry in the state of Louisiana Mark A Stansberry Mark A Stansberry Chairman of The GTD Group is an award winning author columnist film producer radio talk show host and 2009 Western Oklahoma Hall of Fame inductee He has been involved in the oil and gas industry for over 39 years He is currently serving as Chairman of the Board of the Gaylord Pickens Museum Oklahoma Hall of Fame Vice Chairman of the Board of Regents of the Regional University System of Oklahoma Board of Directors of OKC Port Authority Board of Governors of the Recording Academy Grammys Texas Chapter Lifetime Trustee of Oklahoma Christian University and Board Emeritus of the Oklahoma Governor s International Team He has served on several private and public corporate boards Jason Spiess Jason Spiess is an award winning journalist talk show host publisher and executive producer Spiess has worked in both the radio and print industry for over 20 years All but three years of his professional experience Spiess was involved in the overall operations of the business as a principal partner Spiess is a North Dakota native Fargo North Alumni and graduate of North Dakota State University Spiess moved to the oil patch in 2012 living and operating a food truck in the parking lot of Mac s Hardware In addition to running a food truck Spiess hosted a daily energy lifestyle radio show from the Rolling Stove food truck The show was one of a kind in the Bakken oil fields with diverse guest ranging from U S Senator Mike Enzi WY to the traveling roadside merchant selling flags to the local high school football coach talking about this week s big game Thomas Ciarlone Jr Joshua Robbins Josh Robbins is currently the Chief Executive Officer of Beachwood Marketing He has consulted and provided solutions for several industries however the majority of his consulting solutions have been in manufacturing energy and oil and gas Mr Robbins has over 15 years of excellent project leadership in business development and is experienced in all aspects of oil and gas acquisitions and divestitures He has extensive business relationships with a demonstrated ability to conduct executive level negotiations He has developed sustainable solutions successfully marketing oil and natural gas properties cost effectively and efficiently Thomas G Ciarlone Jr Tom is a litigation partner in the Houston office of Kane Russell Coleman Logan PC where he serves as the head of the firm s energy practice group Tom is also the host of a weekly podcast on legal news and developments in the oil and gas industry available at www energylawroundup com and a video series on effective legal writing available at www theartofthebrief com Phil Graves Joshua Robbins Story Sloane III Jason Spiess Mark Stansberry SALES Eric Freer To subscribe to Oilman Magazine please visit our website www oilmanmagazine com subscribe The contents of this publication are copyright 2018 by Oilman Magazine LLC with all rights restricted Any reproduction or use of content without written consent of Oilman Magazine LLC is strictly prohibited Steve Burnett I was raised in a small West Texas town where the school mascot is a roughneck Growing up with a roughneck as the town symbol how could I not spend most of my adult life working in the petroleum industry I started working in the oilfields age 16 In Texas you had to be 17 with a signed minors release from your parents but my parents were glad to keep me working I had been working since my first job working on a commercial elephant garlic farm at age 12 By the time I reached 16 I had enough work experience to prove I knew how to hold my own on a work crew Anybody whose parents survived the great depression can attest to the fact that their children learn the value of a solid work ethic Phil Graves Phil Graves has spent nearly a decade working in the oil and gas industry He has served as Director of Sales and Director of Digital Development for a large national industry publication and has held various management positions with a completions company and was in charge of operations in the Permian Basin and Eagle Ford shale Phil now runs a marketing and photography company focused on providing vivid images of the industry at work in multifaceted disciplines and projects All information in this publication is gathered from sources considered to be reliable but the accuracy of the information cannot be guaranteed Oilman Magazine reserves the right to edit all contributed articles Editorial content does not necessarily reflect the opinions of the publisher Any advice given in editorial content or advertisements should be considered information only CHANGE OF ADDRESS Please send address change to Oilman Magazine P O Box 771872 Houston TX 77215 800 562 2340 Cover Illustrations www 123RF com 2 Oilman Magazine March April 2018 OilmanMagazine com

OILMAN CARTOON OILMAN CROSSWORD PUZZLE Across 26 ____ flying lead 1 Umbilical ____ assembly 31 Government s energy org 7 Not operational 9 Texas Alliance of ___ Producers 32 Touch 33 ____ continental shelf 34 Material safety ____ sheet 10 Factory Acceptance____ Down 11 Foot digit 2 Coral structures 13 Type of braking system 3 Gold bar 14 Hydraulic ____ lead 4 Morning time 18 Dutch airline for short 5 The I in AI 20 Bureau of Safety ___ Environmental Enforcement 6 Votes against 21 Add with up 12 Relating to 22 Office for Health Management 15 Short for the internet of things 23 Drilling __ aka drilling fluid 24 Blowout ____ 1 Subsea ___ 8 Salt Lake city state abbr 19 Subsea control ____ 27 PC brain 20 Increase with up 28 Body mark 16 Florida s __ Bowl 23 Augusta s state for short 29 Route for short 17 Like a rig that is not in use 25 Oklahoma city 30 Fla neighbor 26 Very long time in geology See page 17 for answers Oilman Magazine March April 2018 OilmanMagazine com 3

DIGITAL DOWNHOLE DATA For The Week Ending March 23 2018 Connect with OILMAN anytime at OILMANMAGAZINE com and on social media OilmanNEWS Stay updated between issues with weekly reports delivered online at OilmanMagazine com OIL RIG COUNTS Source Baker Hughes Colorado 33 Last month 32 Last year 26 Louisiana 60 Last month 59 Last year 52 North Dakota 49 Last month 44 Last year 34 Oklahoma 121 Last month 117 Last year 101 Texas 482 Last month 466 Last year 386 U S Total 978 Last month 947 Last year 754 Per Barrel CRUDE OIL PRICES Source U S Energy Information Association EIA Brent Crude 64 68 Last month 69 81 Last year 56 34 WTI 61 91 Last month 64 45 Last year 54 02 Barrels Per Month SOCIAL STREAM RETWEETS CRUDE OIL PRODUCTION Source U S Energy Information Association EIA November 2017 Colorado 12 481 000 Last month 12 496 000 Last year 9 563 000 Louisiana 4 009 000 Last month 3 893 000 Last year 4 385 000 North Dakota 35 327 000 Oklahoma 14 914 000 Last month 36 085 000 Last month 15 281 000 Last year 30 793 000 Last year 12 229 000 Texas 116 716 000 U S Total 301 138 000 Last month 117 091 000 Last month 299 288 000 Last year 95 129 000 Last year 266 282 000 Million Cubic Feet Per Month NATURAL GAS MARKETED PRODUCTION Source U S Energy Information Association EIA November 2017 facebook com OilmanMagazine 4 OilmanMagazine Oilman Magazine March April 2018 OilmanMagazine com Colorado 141 971 Last month 145 750 Last year 141 394 Louisiana 204 636 Last month 200 265 Last year 137 719 North Dakota 62 799 Last month 63 633 Last year 52 872 Oklahoma 219 464 Last month 225 807 Last year 195 366 Texas 681 102 Last month 694 840 Last year 638 439 U S Total 2 873 415 Last month 2 886 113 Last year 2 672 624

1 OF 2 FIRST OFFSHORE DRILLING PLATFORM BY THOMAS ROWLAND MAY 4 1869 Pride Photo courtesy of American Oil Gas Historical Society Oilman Magazine March April 2018 OilmanMagazine com 5

2 OF 2 OIL RIG ON BARGE CADDO LAKE LOUISIANA 1911 Pride Photo courtesy of Louisiana Department of Natural Resources 6 Oilman Magazine March April 2018 OilmanMagazine com

OILMAN COLUMN Oil and Gas Law 2018 Thus Far By Thomas G Ciarlone Jr Although the New Year is still young there are already many legal developments to report in the oil and gas sector Some are of greater significance than others but each is important enough to merit our attention In no particular order this is what has emerged at the intersection of the law and the energy industry thus far in 2018 courts The new test articulated by the Fifth Circuit has two basic elements First the trial court must ask whether the subject agreement covers services aimed at the production of oil or gas in navigable waters Second the court must then ask whether the agreement states or the parties reasonably anticipate that a vessel will play an integral part in the delivery of the services Only if the court answers both questions in the affirmative will maritime law apply to the service contract The case is In the Matter of the Complaint of Larry Doiron Inc No 16 30217 in the United States Court of Appeals for the Fifth Circuit Wastewater Disposal Wells DoubleDipping by Uncle Sam In Parker County Texas the tax appraisal district continues to levy taxes separately on i underground wastewater disposal wells and ii the surface of the tracts on which the wells are situated The disposal well companies have complained that this constitutes Non Operator Can Challenge impermissible and perhaps even Operator s Assessment of unconstitutional double taxation In Gathering Fees in Texas Court the Second Court of Appeals however According to a non operator in a the well companies did not fare very BHP Billiton operated well BHP well the appellate panel there held was assessing excessive gathering fees that the appraisal district was within in violation of the applicable joint its rights to tax the wells in addition operating agreements Since BHP to the surface This had the effect was a part owner of the gathering of overturning the well companies company in question its interests were successful motions for summary alleged to be at odds with those of the judgment at the trial level where they non operators who themselves had had argued that the inherent value no stake in the gathering company of the subsurface for saltwater and After the non operators filed suit chemical storage purposes is already BHP argued that the district court in incorporated into the tax assessment Houston lacked jurisdiction because of the fair market value of the the Texas Railroad Commission overriding surface estate The Texas is statutorily vested with exclusive Supreme Court is scheduled to hear jurisdiction over the reasonableness oral arguments in this dispute at the of rates charged by gas utilities The end of February The case is Bosque Fourteenth Court of Appeals was Disposal Systems LLC v Parker unimpressed with BHP s argument on County Appraisal District No 17mandamus review In the opinion of 0146 in the Supreme Court of Texas the appellate court the non operators were not arguing that the gathering Maritime Law When Does It Apply fees charged by the BHP affiliate were to Offshore Service Contracts The unreasonable Rather the crux of the United States Court of Appeals for the petition was that while there may Fifth Circuit in January handed down a be a number of gathering companies decision that substantially streamlines with rates that are different but the analysis of this surprisingly still all reasonable under governing common question one which has utility regulations an operator may at times confused district judges and nevertheless violate its duties to nonyielded inconsistent results in the trial operators by retaining one of the more expensive gatherers in which it has an ownership interest The case is In re BHP Billiton Petroleum Properties N A LP No 14 1700436 CV in the Thomas G Ciarlone Jr Fourteenth Court of Appeals in Houston Mineral Owner Can t Sue Operator for Failure to Spud Well Under a purchase and sale agreement covering mineral rights owned by Pine Resources Statoil was contractually obligated to spud at least two gas wells by a specified deadline The parties agreement did not however include a companion provision expressly obligating Statoil to actually produce any gas from the wells In the absence of such a provision according to the trial judge Pine Resources has no damages case and thus its claim for breach of contract fails as a matter of law In other words although Statoil indisputably breached the spudding clause of the purchaseand sale agreement the lack of any explicit obligation to produce gas left the mineral owner with no remedy for the breach The case is Statoil USA Onshore Properties Inc v Pine Resources LLC No 2 14 cv 21169 in the United States District Court for the Southern District of West Virginia Tom is a litigation partner in the Houston office of Kane Russell Coleman Logan PC where he serves as the head of the firm s energy practice group Tom is also the host of a weekly podcast on legal news and developments in the oil and gas industry available at www energylawroundup com and a video series on effective legal writing available at www theartofthebrief com Oilman Magazine March April 2018 OilmanMagazine com 7

Oil Gas Museums Titusville PA Smackover AR Oblong IL Bartlesville OK LOUISIANA STATE OIL GAS MUSEUM Oil City LA Ponca City OK Beaumont TX Museum Arkansas Museum of Natural Resources California Oil Museum Conoco Museum Drake Well Museum Fort Worth Museum of Science History Energy Blast Gaston Museum Healdton Oil Museum Illinois Oil Field Museum International Petroleum Museum Exposition Midland TX Galveston TX El Dorado KS Address City State 3853 Smackover Hwy Smackover AR 71762 870 725 2877 www amnr org P O Box 48 1001 E Main Street Santa Paula CA 93061 805 933 0076 www caoilmuseum org Ponca City OK 74601 580 767 2143 www conocomuseum com 202 Museum Lane Titusville PA 16354 814 827 2797 www drakewell org 1600 Gendy St Fort Worth TX 76107 817 255 9300 www fwmuseum org 501 W South Avenue Zip Phone Website Post Office Box 301 Joinerville TX 75658 903 722 9016 gastonmuseum org 315 East Main St Highway 76 Healdton OK 73438 405 229 0317 www blogoklahoma us 10570 North 150th Avenue Oblong IL 62449 618 562 4664 www theonlyoblong com oil_field P O Box 1988 Morgan City LA 70381 985 384 3744 www rigmuseum com Kansas Oil Museum 383 East Central Ave El Dorado KS 67042 316 321 9333 www kansasoilmuseum org Kern County Museum 3801 Chester Avenue Bakersfield CA 93301 661 437 3330 www kernpioneer org LA 71061 www sos la gov HistoricalResources VisitMu 318 995 6845 seums LouisianaStateOilAndGasMuseum Louisiana State Oil Gas Museum Luling Oil Museum Northwoods Petroleum Museum Ocean Star Offshore Drilling Rig Museum Oil Patch Museum Oklahoma Oil Museum Panhandle Plains Historical Museum P O Box 897 Oil City 421 E Davis St Luling TX 78648 830 875 1922 www lulingoilmuseum org Highway 45 32 Three Lakes WI 54562 715 617 0566 www northwoodspetroleummuseum org 2002 Wharf C Pier 19 20th St Harborside Drive Galveston TX 77550 409 766 7827 www oceanstaroec com P O Box 245 Russell 1800 Hwy 9 West Wrangler Blvd Seminole 2503 4th Ave Canyon KS 67665 785 483 3637 www russellkshistory com OK 74868 405 382 1500 www seminoleoklahoma com museum TX 79015 806 651 2235 www panhandleplains org Petroleum Museum 1500 W Interstate 20 West Midland TX 79701 432 683 4403 www petroleummuseum org Phillips 66 Museum 410 Keeler Bartlesville OK 74004 918 977 6166 www phillips66museum com 1570 South Dairy Ashford Suite 113 Houston TX 77077 281 496 2212 www sloanegallery com Sloane Gallery Texas Energy Museum 600 Main Street Beaumont TX 77701 409 833 5100 www texasenergymuseum org West Virginia University 401 Evansdale Drive Morgantown WV 26506 304 293 4609 wattsmuseum wvu edu West Kern Oil Museum P O Box 491 Taft CA 93268 661 765 6664 www westkern oilmuseum org Wood River Refinery History Museum P O Box 76 Roxana IL 62084 618 255 3718 www wrrhm org The Royce J Caroline B Watts Museum