Oilman Magazine Mar/Apr 2015 : simplebooklet.com

Oilman Magazine / March-April 2015 / OilmanMagazine.com55IN THIS ISSUEFeatures By Mike Schepper - page 16- Jobs Growth in Oil & Gas - By Jennifer Delony - page 22 

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Oilman Magazine / January-February 2015 / OilmanMagazine.com6Each month I speak with several hundred companies as part of our ad sales efforts here at OILMAN, from large E&P companies to independent service companies. As you can imagine, over the last two months there’s been a consistent theme across the board - uncertainty and fear. Both of which are understandable with the sharp decline in the price of oil. When your business and jobs are on the line, it’s easy to feel like the industry is falling off a cliff. Because of this I do quite a bit of research on the history of the oil and gas market to reassure our potential customers of two things: 1) the market has gone through dips before, and 2) each time we’ve taken a ride down, it’s been followed by a climb back up. Most recently, a climb that entered a bull market within 12 months of bouncing. For a reference, here is a graphic of the price of WTI Crude since 2002. I keep this graphic next to my computer as a constant reminder to focus our magazine as well as our customers to position for the climb up. Right now, a lot of capital is on the sidelines but that won’t last long. Do your potential customers know who you are or how your products and services are better than your competitor’s? Here at OILMAN we work to provide our customers with as much value as possible in an effort to separate ourselves from other magazines and win business. We recently implemented a data retrieval function that provides our advertisers with information on how their ads are performing so they can either keep or change their promotional message. This took most of Q4 2014 to complete and requires a lot of sweat equity to contact potential customers to let them know it’s available and included in our advertising packages. And it has already started to pay dividends, both in sales and in building relationships. To sum it up, now is the time to position yourself for the inevitable market climb back up. Where will your company be next month or next year? With every marketing message you create, and each sales call you make, keep pushing forward - and be bold.   Oilman Magazine, LLC116 W Main STNorman, OK 73069(800) 562-2340OilmanMagazine.comLuke McDonaldpublisher@OilmanMagazine.com(800) 562-2340 Ex. 5Jennifer DelonyChandler PettyKim FischerDon Briggs— LOGA President.......Mike Thomas— Pipeline inspector in the northeast region of Oklahoma.......Mark Stansberry— Chairman of The GTD Group.......Joseph DeWoody— President of Clear Fork Royalty, an oil & gas royalty investment company located inFort Worth, Texas.......Jessica Byrd— CEO of Clean Energy Chemicals @CleanEnergyChem.......Steve Burnett— CrudeOilCalendars.com....Story Sloane III— The Sloane Gallery in Houston,Texas (281) 496-2212).......Paul Flessland— Photographic Artist, PaulFlesslandPhoto.com.......Jason SpiessOilmanMagazine.com/subscribe(Controlled, free circulation to oil and gasprofessionals in Louisiana, Oklahoma and Texas)(800) 562-2340 Ex. 1advertising@OilmanMagazine.comOilmanMagazine.com/advertise© Copyright 2015 by Oilman Magazine, LLC. All rights reserved. Reproduction without permission is prohibited. All information inthis publication is gathered from sources considered to be reliable,but the accuracy of the information cannot be guaranteed.Image credits — The Sloane Gallery, Houston, TX;Jamie Rood,Photographic Artist; 123rf.com..........LETTER FROM THE PUBLISHERCONTRIBUTORS — Biographies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 oileld 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.Mike Thomas is a Doctor of Management candidate at The University of Phoenix in Organizational Leadership with over 16 years of pipelining experience. He is currently a pipeline inspector in the northeast region of Oklahoma. His expertise encompasses pipeline safety, integrity, and inspection for assorted pipeline clients.Mark Stansberry Chairman of The GTD Group, award winning author, columnist and radio talk show host Author of book, “America Needs America’s Energy: Creating Together the People’s Energy Plan”Jessica Byrd is the CEO of Clean Energy Chemicals in Huntsville, TX. CEC is an environmentally conscience global supplier of pipeline cleaning, hydraulic fracturing and biodegradable oil remediation products.Paul Flessland is an editorial, event and portrait photographer based in Fargo, North Dakota. Featured in over fteen regional and national publications, Flessland is passionate about visually telling the story of the Bakken’s impact on North Dakota and the nation. Visit his website at paulesslandphoto.comJoseph P. DeWoody (@jpdewoody) is the president of Clear Fork Royalty, an oil and gas royalty investment company located in Fort Worth, Texas. Clear Fork Royalty works with accredited investors, trusts and family ofces to provide portfolio access to oil and gas mineral rights and royalties to hold for long term investment through various direct investment vehicles. Joseph was selected by Oil and Gas Investor Magazine as a winner of the Top 20 under 40 Award, and by TIPRO and Texas Monthly Magazine as a Texas Top Producer. Joseph is a member of the Young Presidents’ Organization (YPO). He was appointed by Texas Governor Rick Perry to a six year term on the Texas Board of Professional Geoscientists. He serves on the Board of Directors for the National Stripper Well Association and the Texas Alliance of Energy Producers.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 oilelds 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 rst 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.Jason SpiessJason 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 Macís 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 elds with diverse guest ranging U.S. Senator Mike Enzi (WY) to the traveling roadside merchant selling ags to the local high school football coach talking about this weekís big game.

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Oilman Magazine / January-February 2015 / OilmanMagazine.com8FEEDBACKLetters from OILMAN ReadersJanuary-February 2015DIGITALOILMAN  SOCIAL STREAMfacebook.com/OilmanMagazine RETWEETS@OilmanMagazineKeep up the good work you folks do in representing our industry and joining us in hoping we get thru this “oil-price slump” soon! Charley Britt, Product Development Anchor Drilling Fluids | Minden, LA Selling in the oileld is about developing and nurturing relationships. Using the phone and email is ne but only when a person has established a face-to-face relationship. This is the only way trust can be built. Just this morning, I had a customer call with a SCADA radio issue and my company didn’t sell them this particular product, but my contact knew I would provide him customer service. I then tracked down someone from the factory that had been dealing with the issue and put the two together, which resolved the issue. This is the kind of thing a company needs to do for continuing to develop and nurture customer relationships. I applaud the fellow (see the article on page 16 by Mike Schepper) that took three months to dive into the Eagle Ford area to see what was going on and how he could develop relationships. Bill Parker, Sales Rep., KC5UZE Nalcom Wireless Comm., Inc. | Lindale Ofce I enjoy receiving my email version of Oilman magazine every week. It keeps me updated with current news in the industry, and I really like the photos from years past. Kevin Knight, Sales Manager Vita International | Houston, TX As a relatively new subscriber to Oilman magazine, I am trying to learn about this industry as it pertains to regions of the country that are thriving. With the prices of oil falling so much, I am concerned about the effect on companies in oil and gas. Because I provide equipment loans, this slowdown may affect me because of how much equipment will be purchased. That denitely hurts lenders who provide that capital. I also search through Oilman to nd various equipment manufacturer advertisers to connect with. Rosanne Wilson, CLP, BPB 1st Independent Leasing, Inc. | Beaverton

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Oilman Magazine / January-February 2015 / OilmanMagazine.com9INNOVATION AND TECHNOLOGYIs there a true metric that can completely identify the unbiased reliability of a product or even a company as a whole? For as long as the oil and gas industry has been evolving, there have been key performance indicators (KPI) that have helped dictate the decision to use a product or even continue its existence in the market.Without sparking a debate on who has the best metric or KPI to give the best recommendation on true reliability, let’s agree it will be an ever-growing debate between what’s fair and what’s true. When you look at consumer products you see websites such as Consumer Reports, Angie’s List, and Amazon that provide reviews from the people who actually use the product. All these companies rely on the end user of the products to leave feedback, and this approach helps convince the consumer to make informed decisions to purchase the product or not. How many times have companies drilled a well and said, “Now that we know that, how can we do it better and at less cost?While we can all agree that there are always areas to improve, we have to stop and ask, “What if we could use true end user data to identify what product or tool is the best t?” After all, the data we obtain from service providers is their information that they have collected and presented. Ask yourself this, do you always trust a car salesperson or do you look at the review from previous owners and reviewing companies?With Rig Chat, end users in the eld or in the ofce can leave reviews both by name and anonymously, thus giving companies the ability to see what really provides value in true performance.“Rig Chat provides oil and gas companies with the ability to understand their markets and services so they can improve reliability and reduce costs by managing vendors and understanding the markets view on products and services,” Rig Chat co-founder Steven Plake said. “No longer do companies have to make decisions without truly dening the value before they go down hole.”In addition to crowd sourced reviews, Rig Chat is opening the market to create a communication system that allows people in the eld to talk with people in the ofce and vice versa. It’s not just what is written in a review and given a “thumbs up” rating that counts – it is also the ability to learn what is truly needed when supply chain, nance, engineering or executive management is making a decision.“We strive on our ability to provide a system that can extend an education for the new generations and a communication window for the experienced,” Plake said.So where does reliability and performance measuring come in? These metrics are where the decisions are based for the operator and the reputation for the service provider is on the line. Rig Chat creates a secure virtual world for the operator and the provider to manage the major gaps that can help in times that are most needed – when oil drops and decisions have to be cost-effective to maintain protability. Keeping your AFE’s on track is always crucial for a project, weather the market is up or down.Ask yourself, “What if I could have unbiased ratings and reviews on a product or a service before I deploy it in the eld?” Is your budget worth the risk of not making an informed decision?Mary Faucett is the Public Relations Director for Rig Chat.Reliability and Performance: What is the right way to judge a product by its presentation?By Mary Faucett 

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Oilman Magazine / March-April 2015 / OilmanMagazine.com16OILMAN COLUMNThree months ago, I made the decision to pack my bags, rent out my house and move to the Eagle Ford Shale area to do sales and on-the-ground marketing in the oilelds. Before I left, I wrote an article about marketing in the oilelds for Oilman magazine, which you may have read. This is a follow-up on what I have learned in the last three months, and hopefully it will provide some insight into selling to the oilelds.The rst thing you should know is practical: nothing is ever close. Traveling from one town to the next might take 45 minutes. The roads are rutted due to all the semi-trucks, trailers and trafc, and travelers drive 80 mph on these small roads. You’ll be driving for hours, so plan ahead to schedule your locations, routes and travel days.Next, some of what you see in the region is an illusion: an illusion of wealth, status or company success. Money and success are not transparent in most of Texas – as you might see in other places, such as California, Washington or New York. If you do not know the little things to be on the watch for, you could end up foolishly walking away from a great lead or connection.Lastly, your new sales and connections will not happen next to a rig site, a strategic seat at a football game, a business meeting or at an expo. Your leads and sales will happen over coffee in the morning at a local café or at a dive bar made of tin that might have one jukebox and no tables. Outward appearances will deceive you. Remember, everyone has something to offer.You are going to do a lot of driving. Get used to it. In smaller oileld towns, such as Cuero, Yorktown, Kenedy, and Alice, you will drive through the main road and think you have seen the entire town. Even though most of the oileld support companies and satellite branches will be on the main roads, I have seen several companies located on dirt roads and small county roads that you Marketing & Sales in the Oilfields: Three Months of Traveling, Illusions & BeerBy Mike Schepper

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Oilman Magazine / March-April 2015 / OilmanMagazine.com17OILMAN COLUMNwould not otherwise consider checking. As for larger cities, such as San Antonio, Houston, and Dallas/Fort Worth, I wish you good luck. Houston takes a full hour to cross and is jammed with companies, trafc and people. Most the companies in the smaller towns are not listed on the internet and some don’t even have physical addresses. Finding them is a task in itself.One of the main things people in this region want from you is presence. The people are not interested in a guy who shows up, looks out of place and disappears after a week. They want to see that you are embedding yourself in the community or at least see you stop by a few times. When folks found out that I actually packed up and moved to the area, they were more receptive about who I was and why I had come to Texas. Make yourself seen a lot for several months before you expect a warm reception.We should all know better than to judge a book by its cover, but it’s a mistake that people make. In the oilelds, a huge amount of money is made and spent. You might not see all of it initially.My rst surprise encounter was a beat-up old warehouse on a fenced lot I passed while driving to Beeville. The building was rusted, patched together and looked abandoned. The company name and phone number had been painted on a plywood sign in the front of the building. I remember thinking it would be a small shop with just a few employees that was likely not generating any substantial revenue. I thought I’d go in and see what they did.Inside, the ofce was not fancy. The business turned out to be a fabrication shop. They weld trucks, tanks, and specialized piping for oil companies. The yard was full of equipment, trucks and pipes. I sat down with the owner and talked to him about how they were doing nancially. They did several million in business this past year and were growing. I told him that when I rst pulled up, I thought they would be a small, struggling business. He told me they were too busy to upgrade the building. The trucks and equipment in the yard were extras and they pay cash for all their new equipment. Everyone in the area knew of their company, so they did not feel like they needed to market or hang up big fancy signs. I thanked him for the education and left my number.I learned that money isn’t ashed here. You cannot gauge success or growth by appearance. That twenty-something roustabout sitting at the bar with a shiny (or dusty) new truck in the parking lot? He has no debt and pays for everything with cash. Yep, he will say, “it’s paid for, along with the boat attached to the back of it.” He will sit and chat with you all night about shing and drink cheap beer.The older gentleman I saw every morning during my rst month here, wearing the same jacket and old leather cowboy boots at the coffee shop, who would ask me, “Where you off to today?” each morning? He owns several hundred acres of land dotted with oil rigs and is well-known in the community and oil industry.You have to come here with an open mind and the ability to listen to people. Don’t be articial. Notice the little things and take the time to talk with everyone and hear their stories. If you rush, you will end up missing several opportunities and leads, not to mention missing an opportunity to make some good friends.Local bars, cafés and restaurants are hotspots for leads, direction and sales. Once people in the community get to know you, they want to help you.When I rst arrived in Texas, I stayed in a motel for the rst month. The oilelds are spread out, and I didn’t want to be tied into an apartment lease without knowing where I would be traveling day to day. (In fact, I’m bringing down a travel trailer this month because I found out I needed to become more mobile.) Next to the motel is a little café, and every morning as I bought coffee there, I would see the cook come out and staple that day’s lunch special in front of the café.The café is located by the shing docks, and after a few days, I mentioned to the cook that if he posted them on the corner, all the people going to the docks would see the sign and possibly come in. What can I say? I’m always marketing. The next day I suggested something else. Eventually, he asked me what I did for a living and I told him about my career in nancial sales in the oilelds and that I had been in marketing and design for a few years. As it turns out, he wasn’t the cook; he was the owner. The café was a fun little side business and his main business was located in Victoria, where he had 12 welding trucks and several oileld contracts.I told him I was having a hard time reaching other small contracting companies like his and asked if he could give me some direction. I have remained friends with him for the last several months. This same type of thing has happened to me lately in a few of the local bars. It takes time for people in the area to accept you, but if they do, they will look out for you.In Texas, people sh, hunt, go out, dance and drink a lot of beer. You will see them in small cafés and restaurants in the morning and local bars at night or on the weekends. You want to make connections? Be where they are. Do the same things they do. Don’t rush your conversations, listen carefully and try to think of a way to help them out.A few things to remember before you go to Texas:• The internet connections are horrible in the small towns, and most of the companies aren’t listed online anyway – plan on traveling to seek them out• The trucks drive fast down country roads, and they won’t slow down for you• The drive to anyplace worth going to will take longer than 30 minutes• Southern hospitality is a custom, and has nothing to do with whether someone likes you or not• Embed yourself into the community• Learn to hunt, sh, or boat or do something active that lets you identify with the locals• Don’t rush – Nothing here moves fast except the trafc• Carry a koozie, because the beer is always on ice, and it’s cheap

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Oilman Magazine / March-April 2015 / OilmanMagazine.com18INNOVATION AND TECHNOLOGYHaynesville Shale Could See Increase in ActivityBy Don BriggsThe hot topic around the world continues to be the falling price of oil. Yes, oil prices have fallen more than $60 over the last few months. The stock market has seen points fall off the board, operating companies have reduced drilling budgets for 2015, the workforce has experienced some cutbacks and the general consumer is experiencing $2 gasoline.Thankfully, Louisiana has more to offer than just oil. Louisiana is home to the second largest natural gas eld in the country. At one point, the Haynesville Shale of Northwest Louisiana was the most productive eld in the U.S. However, the Haynesville Shale has seen its fair share of decline over the last three years.Once peaked at 139 rigs in 2010, the Haynesville sits at around 20 rigs today. The Haynesville, in addition to other large natural gas elds, caused the U.S. supply of natural gas to skyrocket, while demand lagged behind. This caused a simple economics curve price drop. Natural gas fell from $13 down to around $1.80 in2012. So, while the oil market is seeing its rst signicant drop in several years, the natural gas market is a seasoned veteran to these price uctuations.How does this oil price drop affect the Haynesville Shale? As companies are evaluating their budgets, some operators might decide that drilling for natural gas is more protable than $44 oil. Comstock Resources has announced that they will be moving rigs from different oil plays back into the Haynesville Shale. (See Louisiana News at a Glance, p. 38.)While the drop in oil prices can cause operators to consider drilling for natural gas, three other factors continue to cause demand to rise in the natural gas market and thus keep the Haynesville Shale relevant. First, the completion of the rst U.S. based liqueed natural gas (LNG) exporting facility will come online later this year. Second, Louisiana continues to see a growth trend in the manufacturing sector as dozens of new facilities are relocating to Louisiana. Third, several coal- powered electric plants are converting to natural gas-red facilities.Cheniere Energy’s $20 billion LNG export plant, opening in the fourth quarter of 2015, will have the capability of exporting 3 billion cubic feet of natural gas per day. Several other LNG exporting facilities have announced construction projects in Louisiana as well.In addition to LNG exporting, Louisiana is experiencing a manufacturing renaissance. Up to $100 billion in economic development commitments have been made to Louisiana over the next three to ve years. As our is to a baker, so natural gas is the feedstock to this petro-chemical and manufacturing sector.Finally, due to the abundance of clean burning natural gas, numerous coal- powered electric plants around the country will soon be natural gas-red facilities. This conversion process takes about a year to complete and costs about $1 billion.Again, with those factors driving demand for natural gas, drills will be turning in the Haynesville for many years to come, but only time will truly tell how the price of oil will specically affect the Haynesville Shale.

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Oilman Magazine / March-April 2015 / OilmanMagazine.com20OILMAN COLUMNOn Dec. 4, 2013, at the South Texas Wildcatters Association in San Antonio, I launched the energy education campaign “It’s Time to Tell Our Story!” based upon my book “America Needs America’s Energy: Creating Together the People’s Energy Plan!” The message has been delivered through radio interviews in more than 30 states and 150 radio stations, a weekly radio show, weekly column/blog, speeches throughout the U.S., op-eds, newspaper interviews, and other media outlets.The message is clear that the oil and gas industry needs to tell the story. The oil and gas industry must effectively tell “our story.”Future generations are depending on us to keep the American dream alive. We are the ones who will have to do it, because our societal institutions have proven they are not up to the task. It is time to take a stand, evaluate our own impact on our nation, and play our part in preserving our country.Though we are now facing a downturn in oil and natural gas activity, it is time to maximize our efforts in telling our important story. Demand will increase, and we need to be ready.It is time to tell our story:• The oil and gas industry has made and is making a tremendous impact – our energy industry for decades has provided energy security and jobs, and contributed funds for scholarships, schools, hospitals, and many other causes• According to an IHS study, the shale play alone has created more than 2 million direct and indirect jobs• There are approximately 10 million jobs supported by the oil and natural gas industry and approximately $225 billion in wages paid to U.S. industry employees in 2011• Natural gas is an energy answer that is available today, and we should denitely be putting it more to use, now – for years, I have voiced my belief that natural gas reserves are critical to a strong U.S. economy and that it is extremely important for America’s energy security• Natural gas is an abundant, clean fuel that has many domestic uses – from heating our homes to serving as an alternative to gasoline – and it is important to U.S. energy sustainability• In 2012, the oil and gas industry paid more than $600 million in property taxes, accounting for nearly 9% of all property taxes paid that year• By 2040, natural gas is expected to account for 35% of U.S. electricity generation, according to the U.S. Energy Information Administration (EIA)• 70% of all oil produced in the U.S. is directed to fuels used in transportation, according to the EIA• In 2013, the U.S. exceeded Russia in oil and natural gas production, and in• 2011, the U.S. became a net exporter of petroleum products for the rst time since 1949, according to the EIA• There are thousands of petroleum based products provided by the oil and natural gas industryThese are only a few of the many facts and examples of the U.S. oil and gas industry.There are men and women taking great care in making sure – 24/7 – that the consumer has the necessary energy to maintain a standard of life. From the drilling rig to pipeline to renery to production site to oil truck to tanker – the energy industry is making a tremendous difference.Together, the people in the oil and gas industry are making a difference! We have provided jobs, economic growth, created security, brought about a renaissance in manufacturing, caused an energy revolution, and made a global impact!America Needs America’s Energy: It is Time to Tell Our Story! Go to peopleseenergyplan.com to join the effort or visit us on Facebook. It’s Time to Tell Our Story! By Mark StansberryFIELD COMMUNICATIONDigital Product & Service CatalogDIGITAL BRANDINGWHEN YOUR COMPANY IS IN NEGOTIATIONS OR YOU HAVE A CUSTOMER PERFORMANCE MEETING, IS YOUR INFORMATION COMPLETE AND ORGANIZED?Imagine how much could be accomplished if you could access performance information, approved vendors, purchase orders and assigned rigs all in one place to help manage your business. Contact Rig Chat today and stop wasting time combining all those reports.VISIT OUR WEBSITE TO SEE OUR OPERATOR DEMONSTRATION VIDEOWWW.RIGCHAT.COM OR 1-844-370-1885RIG CHAT DELIVERS THE INFORMATION YOU NEED WHEN AND WHERE YOU NEED IT.RIG CHAT DELIVERS THE INFORMATION YOU NEED WHEN AND WHERE YOU NEED IT.

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Oilman Magazine / March-April 2015 / OilmanMagazine.com23FEATUREA report on the policies that can support long-term jobs development and economic prosperity in the U.S.By Jennifer DelonyJobs Growth in Oil & Gas                                                                          Continued on next page

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FEATUREOilman Magazine / March-April 2015 / OilmanMagazine.com2424The recent trend in job cuts in oil and gas, while a stark contrast to growth trends the sectors were experiencing, should be put into perspective, explains Dan Kish, senior vice president for policy at the Institute for Energy Research.“For anybody who has been in the oil business for any period of time, we’ve seen this before,” Kish said. “But what we’re seeing now might be a little different than what we’ve seen before, and I think the chapter has yet to be written.”With the higher price of oil attracting capital over a long period of time, industry players attracted not only investments, but also personnel to try to sustain those investments, he said.“People were hiring at just incredible rates,” Kish added. “Now, with the decline in [oil] prices, there is a lot of economic dislocation.”That dislocation is the miracle of the capitalist system, Kish explained.“It’s creative destruction in a lot of ways,” he said. “It forces people to sharpen their pencils.”Kish expects that the oil and gas industry will experience a certain amount of consolidation.“Some of the weaker companies that were maybe too leveraged are going to be attractive for other people to pursue because of their investments that will gain value later,” he said. “It happens in all markets – it’s part of the natural process.”Kish believes that the market will rebound from the current downturn, as long as the government does not create a new regulatory environment that makes it more expensive to do business in the U.S. The EPA’s recently proposed methane regulations constitute “a classic example” of the government coming into the market at the wrong time with the wrong approach for a paradigm that seeks to encourage domestic investment, Kish said.Janet McCabe, Acting Assistant Administrator for the EPA Ofce of Air and Radiation on Jan. 14 released the details for a set of actions to cut methane emissions from the oil and gas sector by 40% to 45% from 2012 levels by 2025. (See News at a Glance, p. 30.) As part of that plan, the EPA will initiate a rulemaking to set standards for methane and volatile organic compounds emissions from new and modied oil and gas production sources, and natural gas processing and transmission sources.In addition, President Obama’s FY16 budget includes $15 million in funding for the U.S. Department of Energy (DOE) to develop cost-effective technologies to detect and reduce losses from natural gas transmission and distribution systems and $10 million to  

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FEATUREOilman Magazine / March-April 2015 / OilmanMagazine.com2525 launch a program at DOE to enhance the quantication of emissions from natural gas infrastructure for inclusion in the national Greenhouse Gas Inventory.The EPA’s actions on methane emissions come at a time when the reduction in methane by the oil and gas industry, according to EPA’s own reports, has been phenomenal, according to Kish.“The problem with the government coming in and doing something along these lines is that, without the government, business has already been nding it in its own interest to reduce [emissions] so rapidly that, if they give them a few more years, they may reduce it to such an extent that nobody is concerned about it,” Kish said.President Obama on Feb. 24 returned S.1, the Keystone XL Pipeline Approval Act, without his approval.In a Feb. 24 message to the U.S. Senate, Obama said that, “through this bill, the United States Congress attempts to circumvent longstanding and proven processes for determining whether or not building and operating a cross-border pipeline serves the national interest.”The Keystone XL Pipeline Approval Act, which would have approved TransCanada’s proposed Keystone XL pipeline project, had passed both the U.S. House of Representatives and the Senate, falling short of the two-thirds majority needed to override a presidential veto.Earlier this year, President Obama agreed with a Secretary of State recommendation that the Keystone XL application should be denied. In a Jan. 7 statement, he said that, as the State Department made clear last December, “the rushed and arbitrary deadline insisted on by Congressional Republicans prevented full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment.”President Obama also said that his administration would continue to look for new ways to partner with the oil and gas industry to increase energy security, “including the potential development of an oil pipeline from Cushing, Okla., to the Gulf of Mexico.”In his Feb. 24 message to the Senate, President Obama said that he takes the Presidential power to veto legislation seriously.“[B]ecause this act of Congress conicts with established executive branch procedures and cuts short thorough consideration of issues that could bear on our national 2015 Texas Job Growth Forecast Remains HealthyTexas job growth is expected to moderate but remain healthy in 2015 as lower oil prices slow growth, Keith Phillips, Federal Reserve Bank of Dallas senior economist and research ofcer said in San Antonio in January.Phillips presented the Bank’s annual Texas Economic Outlook before local business leaders at the Dallas Fed’s San Antonio Branch.Texas job growth will likely slow from about 3.6% in 2014 to between 2% and 2.5% in 2015, Phillips said. That equates to about 235,000 to 295,000 new jobs in Texas in 2015, down from an estimated 408,000 jobs created in 2014.“The sharp decline in oil prices has created much uncertainty in our outlook for state job growth this year, but we’re viewing it as a headwind for the Texas economy,” Phillips said. “However, Texas has a diversied economy, and while the drop in oil prices slows job growth, it won’t send the state into a recession like it did in the 1980s.”Sustained oil prices of $50 per barrel or lower will sharply curtail drilling and extraction in the state, Phillips said. This change will negatively affect parts of Texas that are more dependent on energy production, including the Permian Basin in West Texas and the Eagle Ford Shale in South Texas.Job growth in the Houston region, which has a large share of energy-related jobs, will slow signicantly but remain positive in 2015, he added.Slowing exports may be another headwind for the Texas economy in 2015, according to Phillips. Texas exports have declined in recent months, and a strong U.S. dollar may further dampen exports this year.     

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FEATUREOilman Magazine / March-April 2015 / OilmanMagazine.com2626interest – including our security, safety, and environment – it has earned my veto. U.S. Senate Majority Leader Mitch McConnell, R-Ky., in a Feb. 24 statement expressed his disappointment in the veto.“Even the President’s own State Department says construction of this jobs and infrastructure project would result in only minimal environmental impact,” he said. “Even though the President has yielded to powerful special interests, this veto doesn’t end the debate. Americans should know that the new Congress won’t stop pursuing good ideas, including this one.”Sen. Lisa Murkowski, R-Ala., chairman of the Senate Energy and Natural Resources Committee, in a Feb. 24 statement also criticized President Obama’s veto, calling it a “short-sighted, politically-driven mistake.”In a Feb. 24 statement responding to the veto, TransCanada said it remains fully committed to Keystone XL.“As we have done throughout the permitting process, TransCanada will keep working in good faith with the Department of State and other federal agencies to address any outstanding concerns with regard to Keystone XL, including those that were most recently raised by the EPA.”On Feb. 2, the EPA submitted a letter to the State Department with comments on the nal supplemental environmental impact statement (SEIS) for the project. In that letter, the EPA said that, given the recent variability in oil prices, it is necessary to revisit the nal SEIS conclusion that development of oil sands would lead to signicant additional releases of greenhouse gasses, and a decision not to grant the requested permit would likely not change that outcome.According to the State Department, the number of jobs associated with the construction of the estimated $10bn Keystone XL pipeline over a two year period would be about 42,000.That type of infrastructure project is exactly the development prole that President Obama has traditionally supported to boost the economy, Kish said.The jobs associated with the construction of the pipeline may be temporary, but they’re high-paying and highly skilled, he added.“They ush other jobs throughout the economy because of a consequence of people moving into an area to construct something on a large scale, and it puts new demands for services and purchases in the local communities,” he said.If the U.S. can buy and use domestic oil instead of buying oil from other areas around the world, it attracts manufacturing processes to the U.S. and provides the initial investment as well as the ongoing jobs, according to Kish.“If we’ve been used to taking hundreds of billions of dollars a year and buying energy with it from abroad and we stop doing that, and switch that focus to buying the same commodities produced in North America, we not only get the jobs from that but we also get the expansion of economic activity, the taxes, and all the wealth that goes with it,” he said.On the ip side, Kish believes that shifting policies to support export of surplus oil and gas also would greatly benet the jobs outlook.“There’s increasing discussion in Washington  

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FEATUREOilman Magazine / March-April 2015 / OilmanMagazine.com2727of the export issue because we’re nding and producing supplies of both oil and gas that are surplus to our needs, and other people are willing to pay more for those products than we are here in the U.S.,” Kish said. “It makes sense to begin discussing export of them.”Increasingly, studies are showing that if the U.S. raises the amount of oil it exports, it would help producers and consumers simultaneously – a win-win scenario that does not happen most of the time, according to Kish.“There’s a growing understanding that we have enough oil here at home to not only serve our own needs and make sure that we get it at a reasonable price, but also to export it to other people around the world,” Kish said, noting that the idea will need “a lot more ripening in Congress.”The policy side of the energy industry is currently a highly dynamic space due to the Obama Administration’s focus on global warming goals and climate change, according to Kish.“Applaud or criticize as people may, depending on where they are in the situation, the fact is that nobody should be surprised by what President Obama is doing,and as a consequence, that has major ramications for the energy picture in the U.S. and on economic growth,” Kish said. “Those actions all have a bearing on oil and gas.”EPA regulation of coal-powered plant emissions under the Clean Power Plan will change how electricity is sourced in the U.S. over the next decade. Pressure to shutter nuclear generation, despite its highly affordable prole, will grow alongside the ongoing increases in state-level renewable energy mandates.“These changes are going to necessitate huge investments not only in new natural gas power plants, but also in the transportation systems related to those plants,” Kish said.Job growth in the natural gas sector will rise with that demand, but additional policies are necessary to support the benet.That rapid growth in demand for natural gas for power plants has not been met by expediting construction of the pipelines necessary to get the natural gas to the areas it is needed the most, Kish noted.“In the very places where we need additional pipeline capacity, they’re running into trouble locally and also with federal permitting,” he said.Recent bills that seek to streamline the permitting process are gaining ground in Washington. The bills are designed to ensure that permitting and construction of pipelines IEA Forecasts Rebalancing of Oil MarketThe recent crash in oil prices will cause the oil market to rebalance in ways that challenge traditional thinking about the responsiveness of supply and demand, the International Energy Agency (IEA) said in its annual Medium-Term Oil Market Report released on Feb. 10.The U.S. light, tight oil (LTO) revolution has made non-OPEC production more responsive to price swings than during previous market selloffs, the report said, adding that this would likely set the stage for a relatively swift recovery. At the same time, lower oil prices will not provide as strong a boon to oil demand growth as might be expected.According to the report, supply will grow far more slowly than previously projected, as producers cut spending, but global capacity is still forecast to expand by 5.2 million barrels per day by 2020, and the toll on production will vary by country. In addition, growth in U.S. LTO is expected to regain momentum in the latter part of the forecast period as prices recover, and North America remains a top source of supply growth for the remainder of the decade.The report said that Russia faces lower prices, sanctions and currency swings, pushing its production into contraction, and OPEC’s share of global supply will inch up from recent lows, but will not recover to the levels enjoyed before the surge in LTO supply.“This unusual response to lower prices is just one more example of how shale oil has changed the market,” IEA Executive Director Maria van der Hoeven said during the launch of the report during International Petroleum Week in London. “OPEC’s move to let the market rebalance itself is a reection of that fact. It may have effectively turned LTO into the new swing producer, but it will not drive it out of the market. LTO might in fact come out stronger.”Assuming that international sanctions on Iran remain in place, OPEC growth in crude production capacity is expected to be limited to 200,000 barrels per day per year, the report said, adding that the overwhelming majority of that growth will come from Iraq and will be at signicant risk as geopolitical instability there persists.Political risk to supply will remain extraordinarily elevated in the next few years, both on the upside and the downside, according to the report. In addition, lower oil prices may heighten the risk of political disturbances in oil-export-dependent economies countries with low buffers, but can also offer an incentive to maximize output and stimulate production growth.

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Oilman Magazine / March-April 2015 / OilmanMagazine.com2828 FEATUREare coordinated so that there isn’t lag time between having the natural gas to re the new plants and when the power is needed, Kish said.The House Energy and Commerce Committee on Feb. 9 released a framework for advancing several energy reform initiatives that would include creating an efcient approval process for cross-border oil and gas pipelines.The committee will prepare a series of discussion drafts under its Architecture of Abundance initiative to address policies that would modernize infrastructure, develop a 21st century energy workforce, and promote energy diplomacy, efciency and accountability, according to a Feb. 9 committee statement.In a combined statement on Feb. 9, House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and House Energy and Power Subcommittee Chairman Ed Whiteld (R-Ky.) said: “Our energy realities have changed dramatically – we’ve gone from bust to boom practically overnight. Today’s energy policies are lagging far behind, and are better suited for the gas lines in the 1970s than this new era of abundance. We need policies that meet today’s needs and are focused on the future, and that starts with building the Architecture of Abundance.”The committee said it will advance the discussion drafts through the committee’s legislative process in the coming months and bring an energy package to the House oor later this year.According to the framework, a discussion draft to modernize the transmission, reliability, and security of energy distribution will address the permitting challenges for current domestic and cross-border pipelines. It will also seek to protect critical energy infrastructure with improved emergency coordination and information sharing, ensure robust and transparent energy markets, and bring added levels of accountability to decision-makers.Upton unveiled the Architecture of Abundance initiative at the Energy Information Administration 2014 Energy Conference in Washington, D.C., last July. His plan laid out several steps that the House has taken toward achieving the goals of the plan, including House passage on June 24, 2014, of H.R. 3301, the North American Energy Infrastructure Act, according to a July 2014 committee statement.The North American Energy Infrastructure Act would consolidate and standardize the cross-border approval process for pipelines by eliminating the presidential permit requirement for cross-border facilities and requiring a certicate of crossing to be issued for cross-border facilities within 120 days of completion of an environmental review. The Federal Energy Regulatory Commission (FERC) would continue to approve cross-border natural gas pipelines under the act. On June 26, 2014, the act was placed on the U.S.

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Oilman Magazine / March-April 2015 / OilmanMagazine.com2929 FEATURESenate Legislative Calendar No. 422 under General Orders, according to the House website. No further action was taken.Sen. John Hoeven (R-N.D.) introduced a similar bill – S. 2823 – to the Senate last September. The Senate read the bill on Sept. 19, 2014, and referred it to the Senate Committee on Energy and Natural Resources, according to the Senate website.As part of the Architecture of Abundance framework, the Energy and Commerce Committee said it will seek to expand the U.S. energy and manufacturing workforce to include more minority and low-income communities. The discussion drafts will support opportunities for the DOE, along with the national laboratories, community colleges, and public-private partnerships, to coordinate and leverage existing resources to foster an energy and manufacturing workforce. In addition, the committee said the discussion drafts will seek to improve coordination and strengthen energy partnerships with Canada and Mexico and to establish a process to evaluate how energy permitting decisions impact international energy security.Upton’s Architecture of Abundance framework also supports the Natural Gas Pipeline Permitting Reform Act. Introduced in July 2013 as H.R. 1900 and reintroduced in January as H.R. 161, the bill amends the Natural Gas Act to require that FERC approve or deny a pipeline certicate within 12 months of receiving the complete application.The bill requires that any relevant agencies responsible for issuing a license, permit, or approval under federal law in connection with the project approve or deny the request within 90 days after FERC’s issuance of the nal environmental document. FERC may extend the 90-day period by 30 days if the relevant agency demonstrates it cannot complete its review on time. If the relevant agency does not approve or deny the request within the specied time, approval of the request will take effect.The bill passed in the House on Jan. 21, and the Senate received the bill on Jan. 22.On Jan. 29, the Senate Energy and Natural Resources Committee heard testimony regarding the LNG Permitting Certainty and Transparency Act (S. 33), sponsored by Sens. Martin Heinrich (D-N.M.) and John Barrasso (R-Wyo.). The bill is designed to expedite the approval process for LNG exports to countries with which the U.S. does not have a free trade agreement. (See News at a Glance, p. 30.)S. 33 directs the Secretary of Energy, for proposals that must also obtain authorization from FERC or the United States Maritime Administration to site, construct, expand, or operate LNG export facilities, to issue a decision on an application for authorization to export natural gas within 45 days after the later of the conclusion of an environmental review or the enactment date of the act.

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Oilman Magazine / March-April 2015 / OilmanMagazine.com32NEWS AT A GLANCESenate Committee Hears Testimony on S.33The U.S. Senate Energy and Natural Resources Committee on Jan. 29 held a hearing on the LNG Permitting Certainty and Transparency Act (S. 33), sponsored by Sens. Martin Heinrich (D-N.M.) and John Barrasso (R-Wyo.). The bill is designed to expedite the approval process for LNG exports to countries with which the U.S. does not have a free trade agreement.Sen. Lisa Murkowski, R-Ala., issued the following opening statement for the hearing:“I have long argued that exports of liqueed natural gas should be expedited from the United States to our friends and allies overseas. I made the case in Energy 20/20 two years ago and again in two white papers: The Narrowing Window: America’s Opportunity to Join the Global Gas Trade and A Signal to the World: Renovating the Architecture of U.S. Energy Exports.“Know from the start that I fully support this bill. It is truly the culmination of years of legislative work here in the Congress. I remember Sen. Richard Lugar, who introduced in December 2012 the concept that exports for NATO members should receive expedited treatment over at the Department of Energy. As proposals came forth, more and more countries were added to this prospective list – Ukraine, Japan, India, and eventually the entire World Trade Organization. Just yesterday we voted on Sen. Cruz’s WTO amendment as part of the ongoing Keystone XL debate.“Last year, legislative activity turned to the approval process over at DOE. We saw proposals to give the department a time limit for authorizations – these licenses – with the clock starting at various points – after FERC nal authorization, after pre- ling, and so forth. Many colleagues co-sponsoring this current legislation were involved in those efforts, as was our former ENR colleague, Sen. Mark Udall.“I think we would all recognize that this legislation in front of us … is a compromise. It is imperfect, but it is the result of serious work by very serious people coming together to try to address an issue. I thank my colleagues for all their efforts to come together on this one.”S. 33 directs the Secretary of Energy, for proposals that must also obtain authorization from FERC or the United States Maritime Administration to site, construct, expand, or operate LNG export facilities, to issue a decision on an application for authorization to export natural gas within 45 days after the later of:• the conclusion of the review to site, construct, expand, or operate the LNG• facilities required by the National Environmental Policy Act (NEPA)• the date of enactment of S. 33S. 33 deems a NEPA review to be concluded when the lead agency:• publishes an environmental impact statement if the project requires one• publishes a nding of no signicant impact if the project needs an environmental assessment• determines that an application is eligible for a categorical exclusion pursuant to NEPA regulations S.33 confers upon either the U.S. Court of Appeals for the District of Columbia Circuit or the circuit in which the export facility will be located original and exclusive jurisdiction over any civil action for the review of:• a DOE order regarding the application• DOE failure to issue a nal decision on the applicationIn Jan. 29 testimony at the hearing, DOE Ofce of Fossil Energy Assistant Secretary Christopher Smith said that the DOE does not believe that S. 33’s decision-making timeline is necessary to ensure efcient and responsible action by the DOE.

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Oilman Magazine / March-April 2015 / OilmanMagazine.com33NEWS AT A GLANCEChadbourne & Parke: Cost of Capital 2015 Outlook Webinar, January 16 Q&AKeith Martin, Partner, Chadbourne & Parke What was the North American project nance bank market in 2014 compared to 2013?Tom Emmons, Managing Director, Head of Renewable Energy Finance, Americas, Rabobank, New York Branch 2014 was a year of big growth for North American project nance. Volumes were up signicantly – 45% from 2013 – $28 billion up to $41 billion. The U.S. was dominant, with 80% of that market. Canada had 15% and Mexico 5%. Sector wise, oil and gas was just under a half of the market, conventional power was about a quarter, and renewables was just under one quarter.“While we understand that the intent of S. 33 is to add greater regulatory assurance to applicants for LNG exports and the [DOE] shares the goals of transparency and certainty of process, we do not believe that S. 33 is necessary to meet these goals,” he said.America’s Natural Gas Alliance President and CEO Martin Durbin said in testimony during the hearing that the DOE process for issuing a public interest determination on export applications has not been predictable.“By requiring the Secretary of Energy to issue its public interest determination within 45 days after the conclusion of the NEPA review by FERC, S. 33 provides this clarity and timeliness,” he said. “Applicants will be better able to estimate their costs, construction timelines, and labor needs. And, these multi-billion dollar investments will be more likely to progress toward construction and operation.”In a Jan. 29 statement about the hearing, Center for Liqueed Natural Gas (CLNG) President Bill Cooper said that the hearing emphasized a wide consensus among energy experts, economists and policy-makers.“[LNG] exports will be an economic boon to the U.S., creating jobs and investment while enhancing our trading partnerships,” he said. “Thanks to our abundance of natural gas supplies, the U.S. is uniquely positioned to both meet domestic demand and still bring real wealth back into this country by selling a small percentage of our surplus natural gas to our friends and allies abroad. CLNG applauds today’s hearing participants for urging strong bipartisan legislative action to move these projects forward.” – JDThe U.S. Environmental Protection Agency (EPA) is proposing to amend requirements under the National Oil and Hazardous Substances Pollution Contingency Plan to improve the nation’s ability to plan for and respond to oil spills.“Our emergency ofcials need the best available science and safety information to make informed spill response decisions when evaluating the use of specic products on oil discharges,” EPA Ofce of Solid Waste and Emergency Response Assistant Administrator Mathy Stanislaus said in a statement. “Our proposed amendments incorporate scientic advances and lessons learned from the application of spill-mitigating substances in response to oil discharges and will help ensure that the emergency planners and responders are well-equipped to protect human health and the environment.”The proposed revisions include:• New and revised product toxicity and efcacy test methodologies for dispersants and other chemical and biological agents• New toxicity and efcacy criteria for listing agents on the Subpart J Product Schedule• Additional human health and safety information requirements from manufacturers• Revised area planning requirements for chemical and biological agent use authorization• New dispersant monitoring requirements when used on certain oil dischargesDispersant manufactures will be able to use a new, well-tested and peer-reviewed laboratory method for determining the effectiveness of their dispersant on two types of crude oils at two temperatures measured against proposed performance criteria. The EPA is also proposing an aquatic toxicity threshold so that products that meet both the performance and toxicity criteria will offer greater performance at less environmental impact.In addition, the EPA is proposing product chemical ingredient disclosure options and new evaluation criteria and a process for removing products from the Product Schedule.EPA Proposes Oil Spill Amendments

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NEWS AT A GLANCEOilman Magazine / March-April 2015 / OilmanMagazine.com34Obama Administration Takes Action on Methane EmissionsJanet McCabe, Acting Assistant Administrator for the U.S. Environmental Protection Agency (EPA) Ofce of Air and Radiation on Jan. 14 released the details of a new goal to cut methane emissions from the oil and gas sector by 40% to 45% from 2012 levels by 2025, and a set of actions to achieve that goal.Methane emissions accounted for nearly 10% of U.S. greenhouse gas emissions in 2012, of which nearly 30% came from the production, transmission and distribution of oil and natural gas, according to an EPA statement. Emissions from the oil and gas sector are projected to rise more than 25% by 2025 without additional steps to lower them, the EPA said.The plan includes a coordinated, cross-agency effort that considers the role of the Federal Energy Regulatory Commission (FERC), state utility commissions and environmental agencies, and industry.1. Propose and Set Standards for Methane and Ozone-Forming Emissions from New and Modied Sources• The EPA will initiate a rulemaking effort to set standards for methane and volatile organic compounds emissions from new and modied oil and gas production sources, and natural gas processing and transmission sources. EPA will issue a proposed rule in the summer of 2015 and a nal rule will follow in 2016. In developing these standards, EPA will work with industry, states, tribes, and other stakeholders to consider a range of approaches that can reduce emissions from the sources such as oil well completions, pneumatic pumps, and leaks from well sites, gathering and boosting stations, and compressor stations.2. New Guidelines to Reduce Volatile Organic Compounds• The EPA will develop new guidelines to assist states in reducing ozone-forming pollutants from existing oil and gas systems in areas that do not meet the ozone health standard and in states in the Ozone Transport Region. These guidelines will also reduce methane emissions in these areas. The guidelines will help states that are developing clean air ozone plans by providing a ready-to-adopt control measure that they can include in those plans.3. Consider Enhancing Leak Detection and Emissions Reporting• The EPA will strengthen its Greenhouse Gas Reporting Program to require reporting in all segments of the industry. In addition to nalizing the updates to the program EPA has already proposed by the end of 2015, EPA will explore potential regulatory opportunities for applying remote sensing technologies and other innovations in It’s just heat, caused by agitated oil in a flameless, sparkless, low-pressure environment to deliver up to 1.2 million BTUs per hour with temperatures exceeding 180°F at 7,500 CFM. But when it’s ten below and an open flame is out of the question, what it provides at your rig site is immeasurable.THERM DYNAMICS manufacturers different models with varying heating capacities. Visit thermdynamics.com for details. The TD400 Flameless Heater is just one of many THERM DYNAMICS units Globec Resources, LLC carries. As the Mid-Continent Dealer for THERM DYNAMICS, you can be assured that we have the right rig to fit your job. Give us a call today.GLOBEC RESOURCES, LLC Mid-Continent Dealer for THERM DYNAMICS(806) 669-9421

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NEWS AT A GLANCEOilman Magazine / March-April 2015 / OilmanMagazine.com35measurement and monitoring technology to further improve the identication and quantication of emissions and improve the overall accuracy and transparency of reported data cost-effectively.4. Update Public Lands Standards• The Department of Interior’s Bureau of Land Management (BLM) will update decades-old standards to reduce venting, aring, and leaks of natural gas, which is primarily methane, from oil and gas wells. These standards, to be proposed in the spring, will address both new and existing oil and gas wells on public lands. BLM will work with the EPA to ensure an integrated approach.5. Create Pipeline Safety Standards• The Department of Transportation’s (DOT) Pipeline and Hazardous Materials Safety Administration will propose natural gas pipeline safety standards in 2015.6. Drive Technology to Reduce Natural Gas Losses• President Obama’s FY16 budget includes $15 million in funding for the Department of Energy (DOE) to develop and demonstrate more cost-effective technologies to detect and reduce losses from natural gas transmission and distribution systems. This action will include efforts to repair leaks and develop next generation compressors. The budget also proposes $10 million to launch a program at DOE to enhance the quantication of emissions from natural gas infrastructure for inclusion in the national Greenhouse Gas Inventory in coordination with EPA.7. Modernize Natural Gas Transmission and Distribution Infrastructure• The DOE will:• Issue energy efciency standards for natural gas and air compressors• Advance research and development to bring down the cost of detecting leaks• Work with FERC to modernize natural gas infrastructure• Partner with the National Association of Regulatory Commissioners and local distribution companies to accelerate pipeline repair and replacement at the local level8. Quadrennial Energy Review (QER)• The Obama Administration will release the rst installment of the QER, which focuses specically on policy actions that are needed to help modernize energy transmission, storage, and distribution infrastructure. This installment of the QER will include additional policy recommendations and analysis on the environmental, safety, and economic benets of investments that reduce natural gas system leakage.Several voluntary industry efforts to address existing sources of methane emissions are underway, including the EPA’s plans to expand on the Natural Gas STAR Program by launching a new partnership in collaboration with key stakeholders later in 2015. The EPA will work with DOE, DOT, and certain companies, individually and through broader initiatives such as the One Future Initiative and the Downstream Initiative, to develop and verify commitments to reduce methane emissions.In a Jan. 14 statement about the EPA’s proposed new regulations, American Petroleum Institute President Jack Gerard said that methane emissions from oil and natural gas production are falling, and new regulations on methane disrupt America’s energy renaissance.“As oil and natural gas production has risen dramatically, methane emissions have fallen thanks to industry leadership and investment in new technologies,” Gerard said. “And even with that knowledge, the White House has singled out oil and natural gas for regulation, where methane emissions represent only 2% of total greenhouse gas emissions.”Gerard said that existing EPA and state regulations are already working, and more regulation will be burdensome.“We need our government to implement sound policies, but this plan seems to be based on politics,” Gerard said. “We hope EPA will work with industry during the regulatory process to ensure that any regulations are based on science and technology and do not impair the industry’s ability to supply America with energy.” - JD

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Oilman Magazine / March-April 2015 / OilmanMagazine.com36OKLAHOMA NEWS AT A GLANCE...Several new bills related to oil drilling bans were introduced in the Oklahoma state legislature in January.The bills are:HB2124 and HB1395, Acts relating to oil and gas that strike provisions recognizing the rights of cities and towns to provide rules and regulations for oil and gas drilling or production. The Acts allow municipalities, counties and other governmental subdivisions to enact certain reasonable laws and prohibit municipalities, counties and other governmental subdivisions from banning oil and gas operations. In addition, the Acts grant the Oklahoma Corporation Commission authority to determine if certain laws are reasonable.SB341, an Act relating to oil and gas that creates the 2015 Oil and Gas Conservation and Regulation Modernization Act. The Act modies purpose of well spacing for certain wells and modies Oklahoma Corporation Commission procedures for spacing in certain wells. In addition, the Act claries state authority over municipalities, counties and political subdivisions relating to oil and gas exploration.HB1722, HB 2178, SB468, and SB809, Acts relating to oil and gas that authorizes regulation by municipalities, counties and other political subdivisions of certain oil and gas operations and establishing setbacks and repeals 52 O.S. 2011, Section 137, which relates to the powers of cities and towns to regulate oil and gas drilling or production. –JDCore Resource Management Inc. has acquired the Oklahoma oil and gas assets of White Stone Resources LP and Royal Energy Resources Inc. in exchange for common stock equity of Core.Both White Stone and Royal are private companies. They currently own and are selling to Core nearly $1.8 million in PV10 proved developed producing properties.“The addition of these new assets to our balance sheet along with the compartmentalization of oil and gas expertise and our expertise in the capital markets of our team, puts us in a unique position for rapid expansion,” Core CEO James Clark said in a statement. “With the market price of oil declining, it has produced value buying opportunities, and we feel Core can capitalize on this current market condition.”The nal denitive purchase sale agreement and terms of the all-equity deal was executed on Dec. 12, 2014.AssetsNorthcote Energy has signed an agreement with NAPP to acquire the entire issued share capital of NAPP’s wholly owned U.S. subsidiary, NAP USA Inc.The acquisition increases the company’s working interest from 55% to 85% at Zink Ranch in Oklahoma and from 35% to 70% at Shoats Creek in Louisiana. Shoats Creek wells are expected to be the initial focus for the group. Northcote Energy will issue shares in the company to NAPP equal to 29.9% of Northcote’s enlarged issued share capital as of the date of closing.“The combination of North American Petroleum’s U.S. assets with our own creates a larger and stronger company that still retains its focus on the development of its core assets in Oklahoma and Louisiana,” Northcote Managing Director Randall Connally said in a statement. “This transaction makes sense in any environment but particularly in the current low oil price backdrop.”Jericho Oil Corp. has signed a letter of intent to acquire a 50% working interest in 2,050 acres in the Cherokee basin in northeastern Oklahoma. Upon closing,Jericho will begin the build-out of its second platform, focused on developing and optimizing legacy productive basins. The acquisition, which has both oil and gas production of approximately seven barrels of oil equivalent per day, will bring Jericho’s total acreage position to over 5,800 acres.“The market’s recent turbulence has provided us an opportunity to focus our efforts on acquiring assets with good, long-term development potential at favorable pricing,” Jericho Oil CEO Allen Wilson said in a statement. “We are excited about starting our second platform and look forward to diligencing more opportunities in Oklahoma. With a strong cash position and no company debt, it is our intention to continue down this path to patiently evaluate leases as they present themselves.”Commissioner Dana Murphy in January provided updates on the latest developments in the Oklahoma Corporation Commission’s (OCC) earthquake response measures.“As I’ve said before, it’s very important for everyone to be kept informed and understand what’s being done,” said Murphy. “At the same time, it should be stressed that additions or changes are possible at any time. We know far more now than we did three years ago, but there is obviously much more to be learned.”Developments include:1. The OCC’s “yellow light” permitting program now extends the area of seismicity review for any proposed disposal well to those:• proposed within three miles of a seismically active fault• proposed within three miles of a stressed fault, even in the absence of seismicity• proposed within six miles of an earthquake “swarm”2. A new rule has been proposed to require disposal well operators to notify the OCC at the start of a disposal well’s initial injection3. New rules have gone into effect increasing from monthly to daily the required recording of well pressure and volume from disposal wells that dispose into the Arbuckle formation4. Under the new rules, Mechanical Integrity Tests for wells disposing of volumes of 20,000 barrels a day or more have increased from once every ve years to every year, or more often if so directed by the OCC

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Oilman Magazine / March-April 2015 / OilmanMagazine.com37OKLAHOMA NEWS AT A GLANCE...5. For those wells injecting into the Arbuckle formation, any question regarding the well’s actual depth must be addressed using modern technology to determine true depth, and if there is any issue with depth, the well is directed to be shut-in and cannot be restarted until the issue is addressed and permission for restart received from the oil and gas division6. The OCC is beginning a joint project with the Oklahoma Secretary of Energy and Environment that will provide essential reservoir and other data on the Arbuckle formation.7. Recent staff changes within the OCC’s Oil and Gas Conservation Division will allow key staffers to devote their entire work day to the issue of seismicity8. The OCC is an active participant on Governor Mary Fallin’s Coordinating Council on Seismic ActivityMurphy also noted that these ongoing measures do not constitute the OCC’s nal plan for seismic activity.“What we are doing now is the result of an open, exible process based on sound scientic data, and driven by the utmost necessity to address this issue,” she said. “Above all, that process must and will continue.”Flowtex Energy recently entered into two partnerships that will focus on drilling new wells in central Oklahoma and southeast Texas. Flowtex Energy will partner with Edmond, Okla.-based Emerald Natural Resources Group Inc., a provider of drilling and consultancy services to the oil, gas and geo-thermal sectors. Together with the Emerald NRG team, Flowtex Energy will focus on developing proven oil elds in central Oklahoma. “Oklahoma is a top oil producing state and accounts for 3% to 4% of the country’s crude oil total each year, and central Oklahoma in particular is home to one of the nation’s 100 largest oil elds,” Beau Flowers, president and CEO of Flowtex Energy said in a statement. “This partnership with Emerald NRG ts perfectly with our innovative outlook, scientic approach, and rigorous due-diligence process, and empowers us to enhance our track record of success in the region.” Flowtex Energy also will partner with Buna, Texas-based H.E.X.T. Operating LTD, a provider of oileld services. Together with the H.E.X.T. team, Flowtex Energy will focus on developing oil wells in the Spindletop area of southeast Texas. “In 2014, Texas alone produced over 730 million barrels of crude oil, and almost 7 billion MCF of natural gas,” Flowers said. “This partnership with H.E.X.T. demonstrates our commitment to actively researching and developing new sources of oil and natural gas, constantly improving our methods, and meeting our high standards.” The company expects to begin drilling in Oklahoma and Texas in the second quarter of 2015.

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Oilman Magazine / March-April 2015 / OilmanMagazine.com38TEXAS NEWS AT A GLANCE...The Federal Energy Regulatory Commission (FERC) on Dec. 30, 2014, issued an order authorizing Corpus Christi Liquefaction to site, construct, and operate the company’s proposed liquefaction project located in San Patricio and Nueces counties in Texas. In addition, FERC issued a certicate of public convenience and necessity to Cheniere Corpus Christi Pipeline LP to construct and operate the company’s proposed 23-mile, 48-inch-diameter pipeline in San Patricio County, Texas.The liquefaction project and pipeline must be built within ve years of the date of FERC’s order.In addition, the order adopted Christi Liquefaction’s and Cheniere Pipeline’s proposed mitigation plans and FERC staff ’s recommendations to reduce the environmental effects described in the nal environmental impact statement. Corpus Christi Liquefaction will build the liquefaction project on the northern shore of Corpus Christi Bay, at the north end of the La Quinta Channel, northeast of Corpus Christi, Texas.The project will have the capability of liquefying for export approximately 15 million metric tons per annum (MMTPA) of LNG and vaporizing approximately 400 million cubic feet (MMcf) per day of imported natural gas. Cheniere Marketing will export and import the LNG by LNG carriers, totaling between 200 and 300 trips per year through Corpus Christi Bay, according to the order.Corpus Christi Liquefaction will build three liquefaction trains, each with a liquefaction capacity of approximately 5 MMTPA. Pending export, the LNG will be stored in three proposed 160,000 cubic meter full containment LNG storage tanks, each equipped with ve in-tank well columns and safety and monitoring systems. The liquefaction project will also include two trains of ambient air vaporizers, each with an average vaporization capacity of approximately 200 MMcf per day of natural gas.Cheniere Pipeline will build its bi-directional pipeline from Corpus Christi Liquefaction’s facilities to a point near Sinton, Texas. The pipeline will transport domestic natural gas to Corpus Christi Liquefaction’s proposed LNG terminal for liquefaction and export, as well as to transport regasied imported LNG from the LNG terminal to interconnections with the existing pipeline systems of Texas Eastern Transmission Corporation, Kinder Morgan Tejas Pipeline LLC, Natural Gas Pipeline Company of America, Transcontinental Gas Pipe Line Corporation, and Tennessee Gas Pipeline Company. As proposed, the pipeline will have a peak capacity of 2.25 billion cubic feet per day. –JDCommissioner Ryan Sitton was sworn-in on Jan. 5 as the 49th commissioner of the Railroad Commission of Texas.Texas Supreme Court Justice Don Willett administered the oath of ofce to Commissioner Sitton, who was joined by his wife, Jennifer, and their three children. The ceremony took place at the Railroad Commission headquarters in the William B. Travis State Ofce Building in Austin.“I look forward to working with Chairman Christi Craddick and Commissioner David Porter as we draw on our unique and diverse experiences to provide a stable regulatory environment that will protect our citizens and our natural resources, while allowing our energy industry to thrive,” Commissioner Sitton said at the ceremony. “To the citizens of the state of Texas, I say that we are here to serve. In that service, we want to do a couple of things. We want to be communicating with you in the language of science, technology and data. We want to make sure when there are questions about how energy is developed, that we are quick to respond and that we provide the applicable resources to answer those questions. We are going to be a service-oriented group, and we want the citizens of Texas to feel condent in that.”Medallion Pipeline Company LLC, a subsidiary of Medallion Midstream LLC, on Jan. 14 led a request with the Federal Energy Regulatory Commission seeking a declaratory order concerning two proposed expansions of Medallion’s existing Wolfcamp Connector crude oil pipeline system.The expansion projects would extend both the geographic reach of the current Wolfcamp Connector system and substantially expand its capacity, according to Medallion’s ling.Medallion’s existing Wolfcamp Connector crude oil pipeline system, which was completed and placed in commercial service in October 2014, originates in the Midland Basin in West Texas. The system extends approximately 112 miles northward through the Midland Basin, with a capacity of approximately 65,000 barrels per day (“bpd”), to a point of interconnection, currently, with the pipeline facilities of BridgeTex Pipeline Company LLC.After the commencement of operations last year, Medallion contemplated a potential westward extension of the existing system into Upton and Midland counties in Texas, called the Midkiff Lateral, as well as a potential expansion of the Wolfcamp Connector’s mainline from the existing Garden City station to the Colorado City hub, called the Wolfcamp Expansion, according to the ling. Medallion conducted a public open season from Nov. 6, 2014, to Dec. 1, 2014, to solicit long-term transportation commitments to support the commercial development of the two expansion projects and secured a binding commitment from one participant in the open season, Medallion said.The resulting committed rm service awarded through the open season amounts   

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39Oilman Magazine / March-April 2015 / OilmanMagazine.com39TEXAS NEWS AT A GLANCE...to 60,000 bpd of the Midkiff Lateral’s 75,000 bpd capacity – representing 80% of the total capacity of the lateral – and 27,000 bpd of the Wolfcamp Expansion’s 30,000 bpd capacity – representing 90% of the expansion’s capacity.In its ling, Medallion requested that FERC issue a declaratory order conrming that the open season for the expansion projects followed FERC guidelines; Medallion properly committed capacity to shippers; and the committed rates and rate structure are just and reasonable. –JDAzure Midstream Energy LLC, Marlin Midstream Partners LP, and NuDevco Midstream Development LLC have entered into denitive agreements that will result in Azure owning 100% of the general partner of Marlin and 90% ownership of the total outstanding incentive distribution rights in Marlin.In addition, Azure’s Legacy gathering system will be contributed to Marlin for $162.5 million. NuDevco will retain all of its 10.7 million LP units, or 59.2% ownership stake, in Marlin, subject to an option granted to Azure to acquire 20% units from NuDevco. Azure’s Legacy system consists of approximately 658 miles of high- and low-pressure gathering lines primarily under xed-fee contracts that serve approximately 100,000 dedicated acres predominantly in the Cotton Valle formation in east Texas and northern Louisiana, with access to seven major downstream markets.According to Azure, the partnership creates a diverse platform of midstream assets with one of the largest gathering and processing systems in the Haynesville and horizontal Cotton Valley plays in east Texas and northern Louisiana.Spectra Energy Corp and Spectra Energy Partners, through their afliate, Spectra Energy Transmission II LLC, they have entered into a purchase and sale agreement to acquire from ConocoPhillips Company 100% of the equity interests in Brazoria Interconnector Gas (BIG) Pipeline LLC, which owns the BIG Pipeline.The BIG Pipeline is a 42-inch natural gas pipeline in Brazoria County, Texas, with a capacity of approximately 1.8 billion cubic feet per day. It extends 30.5 miles between Stratton Ridge on its south end to a point near Iowa Colony in northern Brazoria County.The newly acquired BIG Pipeline will be a component of the Stratton Ridge Project, an expansion project of the Texas Eastern Transmission pipeline system to deliver up to 400,000 dekatherms per day of natural gas to Stratton Ridge, Texas. The Stratton Ridge Project, including the BIG Pipeline acquisition, has an expected capital expenditure of approximately $200 million and is anticipated to be in service the rst quarter of 2019.The acquisition is expected to close in the second quarter of 2016, subject to certain conditions.

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Oilman Magazine / March-April 2015 / OilmanMagazine.com40The Bureau of Land Management is offering competitive land leases on parcels containing acres of Federal land in Louisiana.The competitive oral auction will begin at 11:00 a.m. on March 19. The parcels are:• 28.38 acres in Caddo Parish, T18N, R15W, Louisiana Meridian, Sec 17, Lots 1 and 2• 171.41 acres Caddo Parish, T23N, R15W, Louisiana Meridian, Sec. 4, SWSW; Sec. 5, NWSE; Sec. 6, W2SW, SESW, SWSE• 50.44 acres in Point Coupee Parish, T6S, R10E, Louisiana Meridian Sec. 59, all; Sec. 60, allThe parcels are subject to BLM stipulations for cultural resources and tribal consultation, endangered species, and sensitive plant species as well as BLM lease notices/best management practices for migratory birds and federally listed wildlife, perching and nesting birds and bats, invasive and non-native plant species, pesticide application and produced water disposal. –JDComstock Resources Inc. said in December 2014 that it plans to spend $161 million for drilling 14 Haynesville/Bossier shale natural gas wells. In addition, Comstock plans to refrac ten of its existing Haynesville shale producing wells as part of its 2015 program.The company said that, in response to low oil prices, it will suspend oil directed drilling activity in its Eagle Ford shale properties in South and East Texas and in the Tuscaloosa Marine shale in Mississippi.Comstock has released its rig in the Tuscaloosa Marine shale and will postpone its drilling activity there until oil prices improve. In addition, Comstock has four operated rigs drilling on its Eagle Ford shale properties. The company also will release two of four operated rigs drilling on its Eagle Ford shale properties in early 2015 and move the other two rigs to North Louisiana to start up a drilling program on its Haynesville shale natural gas properties.The company estimates that its drilling program will generate company-wide oil production of 3.5 million to 3.9 million barrels in 2015 and natural gas production of 55 billion cubic feet (Bcf) to 60 Bcf. Comstock said that it will continue to assess the oil and natural gas markets throughout 2015 and adjust its drilling program to reect the appropriate mix of oil and natural gas wells in order to maximize returns.The Louisiana Ofce of Conservation on Dec. 19, 2014, approved a permit for Helis Oil & Gas Co.’s proposed drilling operation near Mandeville, La., in the Tuscaloosa Marine Shale. Helis plans to use hydraulic fracturing to complete the well, and water for hydraulic fracturing operations will come from private ponds and not scenic bayous or groundwater wells, according to the Dec. 19 order.The order directs Helis to drill the well using a closed-loop solids control system, and no pits or earthen pits will be allowed. Prior to acquiring water, Helis must provide information to the Ofce of Conservation to identify proposed water sources, and acquisition of water cannot proceed without Ofce of Conservation approval. In addition, Helis must provide full disclosure of the chemicals it uses to hydraulically fracture the well and monitor groundwater, air, storm water, and noise.Helis still needs a wetlands permit from the Army Corps of Engineers and a water quality certication from the state Department of Environmental Quality before any work can begin. –JDMagnolia LNG LLC has executed a memorandum of understanding (MOU) with Kellogg Brown & Root LLC, a wholly owned subsidiary of KBR Inc. and SKE&C USA Inc. (SKEC) whereby KBR and SKEC propose to execute a joint venture agreement on a 70%/30% participation basis to deliver the Magnolia LNG Project.The MOU follows the execution of a technical services agreement between Magnolia LNG and SKEC in March 2014 and a subsequent technical services agreement with KBR on Jan. 5. Under the agreements, the companies will complete all due diligence in relation to technical commercial and contractual matters that will enable the EPC JV to execute a lump sum, turnkey engineering, procurement, construction, commissioning, start-up and performance testing EPC contract for the LNG plant.The Magnolia LNG project is a proposed $3.5 billion, eight million tonne per annum mid-scale LNG facility to be located in the Port of Lake Charles, La. The companies anticipate beginning construction later this year with initial start-up operations beginning in 2018. The Federal Energy Regulatory Commission (FERC) recently said that it will prepare an environmental impact statement (EIS) for the proposed Calcasieu Pass Project and an environmental assessment (EA) for the proposed Gulf Trace Expansion Project. FERC will use the EIS and EA in its decision-making process to determine whether the projects are in the public convenience and necessity.The EIS for the Calcasieu Pass Project will examine the environmental effects of construction and operation of LNG export facilities by Venture Global Calcasieu Pass LLC in Cameron Parish, Louisiana.Venture Global plans to construct and operate an LNG export facility in Cameron Parish adjacent to the Calcasieu Ship Channel. The facility would receive natural gas from North American sources and would liquefy and store it for export. When constructed, the project could process about 487.2 billion cubic feet per year of natural gas.The Calcasieu Pass project would consist of the following facilities:• Ten liquefaction blocks• Two LNG storage tanks, each with 40LOUISIANA NEWS AT A GLANCE...

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Oilman Magazine / March-April 2015 / OilmanMagazine.com4141LOUISIANA NEWS AT A GLANCE...approximately 200,000 cubic meter (m3)storage capacity• Two marine berthing docks, to accommodate LNG carriers ranging from 120,000 m3 to 185,000 m3 of carrying capacity• A temporary oating LNG storage vessel berthed at one of the LNG berthing docks, which would be discontinued after the rst permanent LNG storage tank becomes operational• A turning basin on the Calcasieu Ship Channel• A utility dock• A gas-red electric generation facility with generating capacity of approximately 600 MW that will be constructed to provide power for the project facilities• Two natural gas pipelines to connect to existing transmission pipelines – a 23.8-mile-long, 42-inch-diameter pipeline and a 18.5-mile-long, 42-inch-diameter pipeline• A Gas Gate Station to receive gas from the two lateral pipelinesThe EA of the Gulf Trace Expansion Project will examine the environmental effects of construction and operation of facilities by Transcontinental Gas Pipe Line Company in Cameron, Calcasieu, Beauregard, Evangeline, and East Feliciana Parishes in Louisiana.The Gulf Trace Expansion Project would provide about 1.2 million standard cubic feet of natural gas per day from its Station 65 Zone 3 Pool in St. Helena Parish, Louisiana, southward along its existing mainline, existing Southwest Louisiana Lateral, and the proposed project facilities to Sabine Pass Liquefaction liqueed natural gas terminal (SPLNG Terminal) in Cameron Parish, Louisiana. The pipeline would extend from a tie-in with the existing NHI Laterals C and D to SPLNG Terminal.The Gulf Trace Expansion Project would consist of the following facilities:• About 6.97 miles of 36-inch-diameter pipeline (the Gulf Trace Lateral) in• Cameron Parish• Addition of two 16,000 horsepower (hp) gas turbine-driven compressor units at Transco’s existing Compressor Station 44 in Cameron Parish• Two 16,000 hp gas turbine-driven compressor units at the new Compressor Station 42 at the junction of Transco’s mainline and its Southwest Louisiana Lateral in Calcasieu Parish• Piping and valve modications on Transco’s mainline at existing Compressor Stations 45, 50, and 60 in Beauregard, Evangeline, and East Feliciana Parishes to allow for bi-directional ow• Two new meter stations, one adjacent to the SPLNG Terminal in Cameron Parish (SPLNG Meter Station) and one adjacent to the Texas Gas Interconnection in Evangeline Parish (Duralde Meter Station)• Piping and valve modications, and pig launcher and receivers required to tie-in the Gulf Trace Lateral with the existing NHI Laterals C and D at the milepost 6.8 valve site1 in Cameron Parish• Appurtenant underground and aboveground facilities. –JD

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Tom Petrie is the Chairman of Petrie Partners LLC, an investment rm offering nancial advisory services to the oil and gas industry. Prior to joining Petrie Partners as chairman in 2012, Petrie was vice chairman of Bank of America Merrill Lynch. Previously, he was co-founder of Petrie Parkman & Co., an energy investment banking rm based in Denver and Houston that merged with Merrill Lynch in December 2006. Petrie was also a former managing director and senior oil analyst of The First Boston Corporation.During his career, Petrie has been an active advisor on more than $200 billion of energy-related mergers and acquisitions, including a number of the larger mergers in the energy industry. He provided advisory roles to the Kingdom of Saudi Arabia on its natural gas initiative, the state of Alaska on gas pipeline options and the U.S. Department of Energy on the sale of the Elk Hills oileld.An active member of several industry associations, Petrie is a past president and member of the board of directions of the National Association of Petroleum Investment Analysts as well as others. Additionally, Petrie has been interviewed by Barron’s, CNBC, Bloomberg, Fox News and PBS. He has also authored the book Following Oil: Four Decades of Cycle-Testing Experiences and What They Foretell about U.S. Energy Independence.Q: Can the U.S. really compete with OPEC in terms of oil production?A: Whether there is even a need to compete will probably depend on the overall rate of growth in world oil consumption. At the moment, demographic trends still indicate that signicant growth in global demand over the next several decades is likely. If rates of demand fall short of expectations, there could emerge a degree of competition between the U.S. and OPEC countries.Q: Can the U.S. shale plays impact energy security?A: I believe North Dakota’s recent emergence as the second largest U.S. producer along with other plays in Texas, like the Eagle Ford and Permian Basin, Colorado (Niobrara) and Oklahoma, the Lana Woodford and possibly the SCOOP, do represent a much-welcomed improvement in America’s energy security position.It is important to note that total barrel-for-barrel independence is neither necessary nor even optimal for establishing oil security.Given the varying characteristics of different types of oil, some experts to the world markets alongside imports of oil better suited to U.S. renery needs is probably optimal.The benets to the overall U.S. strategic position in terms of a reestablishment competitiveness in manufacturing and creation of higher paying, sustainable jobs are also signicant. Finally, there are likely net positive environmental benets from the overall shale revolution due to the growing role of natural gas, both associated and dry, and the proximity of production to consuming markets. For example, these factors indicate lower emission associated with transportation of fuels.Q: What does domestic production in shale plays mean to energy prices?A: As indicated in my prior remarks, all U.S. unconventional oil development is price-sensitive. If available oil supply were to exceed demand, prices would come under pressure. In that case, the U.S. will still be an importer Q & A with Jason SpiessOILMAN COLUMNOilman Magazine / March-April 2015 / OilmanMagazine.com4242

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of oil throughout this decade under most scenarios. Thus, proximity to markets would probably provide an advantage over domestic sources. On a longer-term basis, the growing availability of shale oil production could tend to dampen the volatility of oil prices.Q: Why is energy so popular?A: We are at a major inection point regarding the interrelationship of developing the energy supplies needed for global economic growth versus legitimate environmental considerations. Technological advances in communications and rising economic aspirations around the world necessitate a focused and rational assessment of strategies to meet these human needs. Only a decade ago there was rising fear of a global peak in conventional oil output. That has now been meaningfully postponed by the revolution in developing unconventional fossil fuels. However, it will be critical to pursue these new sources wisely while evaluation and validation of alternatives involving renewable sources continues to advance over a realistic timeframe.Q: Why is discussing developing energy supplies so often polarizing?A: There are clear environmental impacts from virtually all new project developments. Introduction of greener energy solutions on a cold-turkey basis can involve disruptions and inefciencies that need to be well-understood. Some advocates of a changing energy mix appeal to asserted fears involving new projects as opposed to fact-based and rational analysis. The stakes are large and the economic consequences are sufciently impactful that reasoned judgments become crucial.Q: What are some of the important historic events that have affected the energy industry?A: In my book, I draw from my four-decade career in the energy industry. The historic events surrounding the rise of power of the Organization of Petroleum Exporting underscored the central role of energy in the national security calculus of the U.S. and its western allies. Concurrently, the emerging confrontations over development of Alaskan North Slope oil and the pioneering effort to tap large North Sea oil discoveries were used as case studies for assessing the effectiveness of capitalism in energy development on a national and even global scale. In subsequent periods, that theme became powerfully reinforced as we experienced waves of mergers, several Middle East wars, oil and stock market collapses, and impressive entrepreneurial responses to changing economic incentives. As a participant in and witness to these incidents, I think there are lessons that can be learned from such events.Q: What does domestic production mean to foreign affairs and politics?A: As I outlined in my book, energy dependence has periodically signicantly hampered U.S. exibility in foreign affairs and international politics. The price of oil has historically been driven by geopolitical events. This has been especially true since The Yom Kippur War of 1973. In subsequent years, the Iranian Revolution of 1979, the Iran/Iraq War of 1981 through 1988 and the invasion of Kuwait in 1990 all demonstrated the impact of geopolitical drivers on the petroleum sector. If utilized wisely, the new era of growing domestic supply prospects should signicantly facilitate America’s leadership in fostering global and economic stability.Q: Do you see a future where natural gas is traded at a global priceA: The connectivity of the U.S. to the international market should have some effect at bringing down the margin prices, but, I am not sure it will be full conversion. I do think it will, however, have a benet. Because what is going to happen is the Chinese are a lot more interested in buying gas here and delivering it into their system, than buying $15 gas, because it’s much more ination. So there is going to be a real dynamic there. That depends on several things happening. I was down at the Panama Canal in June of 2013, and the Panama Canal project looked like it was going to get hung up, but once the new Panama Canal comes online we are going to be talking about a much greater connectivity of U.S. gas into the market.Q: Where do you see energy heading?A: While I have addressed many of the challenges I see in developing new energy supplies, I nd myself perversely positive about the future, especially for the U.S. After four decades in which the U.S. has endured a large structural trade decit due in part to rising oil imports and prices, we are now positioned to experience a very signicant – but perhaps not total – reduction in oil import dependence. We have learned much from our past mistakes and are now capitalizing on recent technological advances. Also, if used effectively, natural gas can provide a much- needed multi-decade transition to a new energy future. In sum, we have much- improved optionality for meeting our upcoming energy needs.OILMAN COLUMNOilman Magazine / March-April 2015 / OilmanMagazine.com4343

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Oilman Magazine / March-April 2015 / OilmanMagazine.com44OILMAN COLUMNEnergy Scene with Jason Spiess    XTO Energy holds the mineral rights on the property about 20 miles northeast of Watford City and is working with Houston-based Nabor’s Drilling to drill wells and extract oil and natural gas from the Bakken shale formation about 17,000 feet underground.The oil and gas industry has invested large amounts of capital into efciency, and rig assembly is just one of the examples of it paying off.“A good rig move, assuming all the trucks and everything moves in a perfect world, will take about four days.” Olsen said. “We contract out the trucks and crane, but our crews do pretty much everything else.”A well cycle operates in three phases – drilling, completion and production. The drill is surrounded by a sea of metal, machinery, computer monitors and safety signs. It is controlled in a nearby room by directional drillers, who monitor graphs and relay instructions to the driller. The driller, in turn, precisely controls the drill underground.As the well is drilled, multiple layers of steel pipe, casing and cement are lined to separate the oil and gas. The well is equipped with a blowout preventer (BOP), which acts as a backup in case there are any issues in the process.The BOP is a large, specialized mechanical device used to seal, control and monitor oil and gas wells. The BOP controls the extreme erratic pressures and uncontrolled ows or kicks emanating from the well reservoir. Additionally, the BOP controls the down hole pressure and ow of the oil and gas.“Tyson and I have put the BOP together more times than I care to recall,” Nabor’s Greg Burquist, drill superintendent said. “The BOP is the fail safe device.”

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Oilman Magazine / March-April 2015 / OilmanMagazine.com46Oilman Magazine / March-April 2015 / OilmanMagazine.com46ENVIRONMENTAL & SAFETYTECHNOLOGYOilman Marketplace...........For advertising information call 800-562-2340 ex. 1, 8am-5pm CST OR EMAIL ADVERTISING@OILMANMAGAZINE.COM MARKETPLACEPIPELINE CLEANING/OIL REMEDIATION3190 Highway 30 W, Box # 8758Huntsville, TX 77340Ph: 936-439-4319Website: www.cleanenergychemicals.comEmail: info@cleanenergychemicals.comTwier: @CleanEnergyChemCEC is an environmentally conscience global supplier of hydraulic fracturing and Biodegradable oil remediaon products. We service the Oil, Gas and Marime Industries by delivering our opmal green, nontoxic, biodegradable and low- toxicity products. We aim to contribuon to the preservaon of our environment, as protecng people, wildlife and the environment is our top priority here at CEC! Our focus is to connually improve industry processes and products, making performance in the eld more eecve, ecient and safe. Our Chemists develop innovave proprietary technology that improves the health and safety for workers, service organizaons, wildlife and the environment. Our products are used worldwide in many dierent scenarios. You will be amazed at the results of our Glut Free Biocide, NASA Award winning PRP for hydrocarbon spills on water/land and our Biodegradable Rig Wash, BLAST IT just to name a few.We look forward to reducing your risk and operang costs while increasing your protability! Please contact Jessica N. Byrd if you would like a tesng sample or informaon on any of our products. Let’s work together in the eld to make a dierence for many future generaons to come!Safety Management Systems2916 N. University Ave.Lafayee, LA 70507 Ph. (337) 521-3400 (800) 252-5522 (24/7)Website: www.SafetyMS.comfacebook.com/SafetyMStwier.com/SafetyMSAt Safety Management Systems, our main goal is protecng lives and changing cultures. We provide companies in the oil & gas industry with safety management and consulng services to promote and maintain an ethical workplace atmosphere that equally values health, safety, and environmental responsibility. A safe work environment is not only ethical, but essenal for a company’s success. Our Health, Safety, and Environmental (HSE) consultants and specialists are equipped and available to address your company’s relevant challenges and concerns, while also providing educaon and awareness to achieve an accident-free environment on the job.New Iberia Oce401 West Admiral DoyleNew Iberia, LA 70560Ph: 337-365-7847Oil StopHarvey Oce1208 Peters RoadHarvey, LA 70058Ph: 504-361-4321Ampol Norm RemediaonBayou Vista Oce575 Highway 182 Bayou Vista, LA 70380Ph: 985-395-2020www.ampol.netfacebook.com/AmericanPolluonControl24 Hour Emergency Response: (800) 482-6765American Polluon Control Corp. (AMPOL) is a full-service environmental remediaon company and contractor that specializes in inland, near-shore, and oshore emergency response and hazardous waste remediaon. Serving oil and gas companies, industrial companies and government agencies, AMPOL provides emergency and non-emergency toxic and hazardous materials containment, collecon and assistance with transport and disposal. Safety is top priority with AMPOL. Safety is planned into all of our acvies and is equal to the expectaons of our clients for quality and eciency. AMPOL has been recognized by the US Department of Labor and the Louisiana Workmen’s Compensaon Corporaon for its excellent safety record.ENVIRONMENTAL COMPLIANCE AND LEASE BROKERAGEEdmond, OK Oce: 3027 Willowood Rd.Edmond, OK 73034Phone: 405-340-5499Midland, TX Oce:4305 N. Gareld St. – Suite 229Midland, TX 79705Phone: 432-695-6020Web address: sco-jooilandgas.comSco-Jo Land and Environmental is the naon’s leading environmental compliance and land brokerage rm, with 35 years of combined experience in the oil and gas industry. Our environmental team specializes in EPA audits, SPCC Plans, Annual Inspecons, Tier II reports, air emissions, containment systems, and all environmental needs. Our brokerage rm specializes in lease and ROW Acquision, mineral and HBP ownership reports, BLM, BIA, State leasing, pooling applicaons, full curave measures, and due diligence with a CPL Accreditaon.Fire & Safety Specialists7701 Johnston StreetPO Box 60639Lafayee LA 70596Phone: 337.993.9377Fax: 337.216.9721Email: customerservice@TeamFSS.comwww.TeamFSS.comFire & Safety Specialists Inc. (FSS) is commied to providing re suppression systems and other safety measures to beer protect your company. Our industry experts’ experience is unmatched in the re and safety industry. Unprecedented service, an honest approach to business, superior distributor relaonships and a commitment to geng the job done right sets our company apart from the compeon. Safety and training are key components to the success of FSS. We take immense pride in our ability to professionally protect our customers’ assets and lives. Training for all personnel is an ongoing and integral part of our organizaon, and allows us to connue doing what we do best – which is to save lives. Wet Tech Energy, Inc.4598 Woodlawn RoadMaurice, LA 70555Ph: (337) 893-9992www.WetTechEnergy.comfacebook.com/WetTechEnergyWet Tech Energy is a family owned and operated company that has evolved into a diverse and unique blend of service and supply. As one of the leading buoy manufacturers in the country, what sets Wet Tech Energy apart are our service capabilies; being able to provide oshore installaon services with an Anchor Handling Vessel and specialty crews.QTECAberdeen, Houston, Louisiana Ph: 855-364-5650 Email: info@qtec-global.com www.qtec-global.comEstablished in 1992, QTEC has gained a strong track-record by providing objecve, unbiased technical recommendaons to oil and gas operators and drilling contractors worldwide.

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Oilman Magazine / March-April 2015 / OilmanMagazine.com47Oilman Magazine / March-April 2015 / OilmanMagazine.com47TECHNOLOGYOilman Marketplace...........For advertising information call 800-562-2340 ex. 1, 8am-5pm CST OR EMAIL ADVERTISING@OILMANMAGAZINE.COM MARKETPLACETRANSPORTATION & LOGISTICS201 Energy ParkwayLafayee, LA 70508Sales/Markeng: 855-686-5478Corporate Informaon: 855-686-5478Website: www.DupreLogiscs.comEmail: forwardthinking@duprelogiscs.comyoutube.com/dupremediaOver the past 10 years, we have seen huge changes in the Logiscs outsourcing business model. Third Party Logiscs (3PLs) have long led the way in logiscs outsourcing using their core business-forwarding, trucking and warehousing. However, today this oering has become a commodity service and does not provide any compeve advantage. Customers, anxious to increase their compeveness, need improved and more integrated value proposions. DRILLING & EQUIPMENTHaggard ID Wiper, Inc.Houston, TX281-330-6016Website: www.haggard-muddog.comEmail: muddogid@airmail.netOperators world-wide have saved rig me, drilling mud, improved rig eciency and safety with the Haggard MUD DOG ID WIPER - the only patented ID wiper tool. The MUD DOG wiper will do your dirty work for you while tripping drill pipe, keeping the mud in the well bore instead of the rig oor and racking area. (Messy stu to work in!) Time spent cleaning the rig oor and racking area equals BIG BUCKS. Let the MUD DOG wiper do it for you.Winn Rock LLCHighway 84 WestWinneld, LA 714834 Miles West of WinneldOce: (318) 628-3523Website: www.WinnRock.comWe at Winn Rock are proud of the history that surrounds us. Just four miles west of Winneld, Louisiana’s mber capital, there have been aggregate removal operaons in place at our locaon for over a century. First, limestone was produced, which was used for roads crisscrossing the state during and aer Huey Long’s involvement in transportaon. In 1952, when the limestone ran out, mining switched to gypsum, which was used as a retardant to control the curing me in cement. Eventually digging reached massive reserves of anhydrite, which has proven to make the best and longest lasng roads in the state. Parish Truck SalesNew Orleans10459 AirlineSt. Rose, LA70087(I-130 Exit 2-Kenner)MAIN: 504-467-9630WATTS: 800-969-6225Lafayee1101 Doyle Melacon ExtBreaux Bridge, LA 70517(I-10 East Exit 109 South)MAIN: 337-442-1600WATTS: 877-237-04483G Manifold L.L.C.Elk City, Ok 73644Website: www.3gmanifold.comAllen YoungCell: 580.799.5479E-mail: Allen@3gmanifold.comJoe WhiteCell: 580.799.5475 E-mail: Joe@3gmanifold.comDean FitzgeraldCell: 580.243.8526 E-mail: skipperdean68@yahoo.com 3G Manifold L.L.C. is bringing something new to the oileld and frac’ing industry. We have developed a system that signicantly reduces the possibility of leaks where the joints of manifold are secured together. The use of 150 series raised face anges combined with a rubber gasket allows us to prevent the spillage of uid on well locaons. We provide 12 inch sucon manifold that will allow you to pump uids at rates above 100 bbl/min on oil and gas wells. We are based out of Elk City, Oklahoma; which allows us to service the Eastern Texas Panhandle and the state of Oklahoma. 3G Manifold is able to go almost anywhere you need our services.MidSouth Technologies1219 Crescent Ave. Lockport, LA 70374Contact Name: Jamie Guidry Ph. 985.242.5100Fax: 985.242.5150Email: sales@mst.us.comWebsite: hp://www.mst.us.comFacebook: hps://www.facebook.com/MidSouthTechnologiesTwier: hps://twier.com/MstUsYouTube: hps://www.youtube.com/channel/UCE6oeEN6Y-NksYCPnbWio-A For more than 11 years, MidSouth Technologies has provided technology services to businesses around the world. Its team is trained and cered to manage the complexity of any system, with experience in VSAT Communicaons, An-Piracy & Security, Vessel Tracking (AIS), IT Infrastructure aboard vessels & port facilies, Satellite TV (DIRECTV), CCTV & DVR, and Port Security. MidSouth’s broad knowledge base allows it to integrate exisng systems with new and emerging ones. With a clear understanding of the needs and possibilies of the marime and oil & gas industry, they have the soluons for you. Located in Lockport, La, MidSouth is “Solving Problems, Exceeding Expectaons”.OIL & GAS TAX CREDITS & INCENTIVESParadigm Partners1500 S. Dairy Ashford, Suite 240Houston, Texas 77077Website: www.ParadigmLP.comCraig LaGrappe, Sales DirectorPh. (281) 558-7100 x102Email: CLaGrappe@ParadigmLP.comMike McCorkle, Account ManagerPh. (281) 558-7100 x120Email: MMcCorkle@ParadigmLP.comParadigm Partners is an internaonal consulng rm specializing in complex federal and state tax and funding incenves, for both public and private enes, across a host of industries. Paradigm Partners has disnguished itself amongst its peers by adopng a low cost, high return service model that employs a tailored two-phase approach; the Company’s business development and professional teams work hand in hand to provide accurate analyses, establish eecve client dialogues, and guarantee rapid turnaround mes.The Company’s core consulng porolio includes Global R&D Tax Credits Analyses, Hiring and Locaon- Based Incenves, Unemployment Claims Management, IC-DISC, Domesc Producon Acvies Deducon, Grant and Non-diluve Funding Advisory, Cost Segregaon Studies, Tax Controversy, Patent and Audit Defense Services.

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Oilman Magazine / March-April 2015 / OilmanMagazine.com48ADD YOUR LISTING!- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - To add your business lisng to the OILMAN Marketplace, or for more informaon about all of our aordable adversing opons, contact us at:Email: adversing@OilmanMagazine.com-orOnline: OilmanMagazine.com/adverse-orPhone: 800-562-2340 Ex. 1 PO Box 692Pearland, TX 77588-0692Website: www.ptasafety.comFacebook: hps://www.facebook.com/pages/Precision-Taccs-Advisors/239083879583935?sk=melineContacts: James Blount (832) 364-5840jblount@ptasafety.com Daniel Blount(281) 910-0228dblount@ptasafety.comPTA Safety is a premier safety and security training company located in Houston, Texas; which travels to you. Whether your needs are Health, Safety, Environmental, Security, or Quality; you have come to the right place. PTA instructors have experience in many industries and those invaluable experiences culminate into a fun and educaonal classroom experience that will not be soon forgoen. Please give us a call. MARKETPLACEINSURANCE & FINANCIAL SERVICES EDUCATION & TRAININGOIL & GAS TAX CREDITS & INCENTIVESMidSouth Bank, NALouisiana and Texas(337)237-8343 in Lafayee(800)213-BANK (2265) outside of LafayeeWebsite: www.MidSouthBank.comfacebook.com/MidSouthBanktwier.com/MidSouthBank“The mission of MidSouth Bank is to serve the communies of Louisiana and Texas by providing compeve nancial services. These services should increase shareholder wealth and yield undivided prots to protect the depositors of MidSouth Bank, NA. Realizing our future is dependent upon the development of our employees, we are commied to improving professionalism and delivery of services, while focusing on internal growth. We will deliver exible, innovave banking services which are accurate and ecient, always conducng our business in an ethical manner.”Paradigm Partners1500 S. Dairy Ashford, Suite 240Houston, Texas 77077Website: www.ParadigmLP.comCraig LaGrappe, Sales DirectorPh. (281) 558-7100 x102Email: CLaGrappe@ParadigmLP.comMike McCorkle, Account ManagerPh. (281) 558-7100 x120Email: MMcCorkle@ParadigmLP.comParadigm Partners is an internaonal consulng rm specializing in complex federal and state tax and funding incenves, for both public and private enes, across a host of industries. Paradigm Partners has disnguished itself amongst its peers by adopng a low cost, high return service model that employs a tailored two-phase approach; the Company’s business development and professional teams work hand in hand to provide accurate analyses, establish eecve client dialogues, and guarantee rapid turnaround mes.The Company’s core consulng porolio includes Global R&D Tax Credits Analyses, Hiring and Locaon- Based Incenves, Unemployment Claims Management, IC-DISC, Domesc Producon Acvies Deducon, Grant and Non-diluve Funding Advisory, Cost Segregaon Studies, Tax Controversy, Patent and Audit Defense Services.Add your business to the OILMAN Magazine Marketplace. Call 800-562-2340 Ex. 1 or email advertising@OilmanMagazine.com to submit your business listing information.Oilman Marketplace...........For advertising information call 800-562-2340 ex. 1, 8am-5pm CST OR EMAIL ADVERTISING@OILMANMAGAZINE.COMOFFICE & LOCATION SERVICESPort of IberiaFor leasing informaon contact Roy Pon: Ph. 337-364-1065Email: royp@portoberia.comWebsite: www.portoberia.com4611 South Lewis St.New Iberia, Louisiana 70560Markeng: markeng@portoberia.comAdministraon: administraon@portoberia.comGeneral Inquiries: info@portoberia.comGeneral Phone: (337) 364-1065Fax: (337) 364-3136Located near the Louisiana coast in Iberia Parish, the Port of Iberia is a 2,000 acre industrial and manufacturing site surrounding a man-made port complex. The port has access to the Gulf Intracoastal Waterway and the Gulf of Mexico through its own Commercial Canal and has access to the Mississippi River through major ports in Baton Rouge and New Orleans.24 Waterway Avenue, Suite 1100The Woodlands TX 77380 Ph. 281-719-6100Website: www.thewoodlands-commercial.com1800 Hughes Landing Blvd.The Woodlands, Texas 77380The Woodlands currently has 9.9 million square feet of high quality oce space. While much of the exisng space is already under lease, a limited number of immediate occupancy opportunies exist. See all the current available oce space.Featured Property:Two Hughes LandingBring your company home to The Woodlands’ newest desnaon – Two Hughes Landing. This new Class A, 8-story, 197,000-square-foot oce building is located in Hughes Landing on Lake Woodlands, a 66-acre mixed use development planned to include up to 11 oce buildings complemented by retail shops, restaurants, bouque hotels and urban residences. Situated at the upper end of 200-acre Lake Woodlands, Hughes Landing will be a naturally beauful, walkable environment to be enjoyed by employees, residents and visitors.

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Oilman Magazine / March-April 2015 / OilmanMagazine.com50OPEC and RednecksBy Steve BurnettThe inspiration for this cartoon is from the recent OPEC decision to not cut production, but to keep the market saturated with cut rate oil. Some analysts claim that OPEC is trying to take the shale gas out of market. It is an interesting concept. OPEC’s primary focus is to drive U.S. oil out of the U.S. domestic market. It is not like we are exporting our oil on the world market and keeping them from reaping prots from other countries. It is our own prot they are looking to knock out. It is my belief that they have greatly underestimated the strength of our petroleum industry.I think we have had enough people in the industry that have known that this could be a possible scenario all along. I know there has been a development of sonic fracking that will revolutionize the industry. I also know that it has been tested in the eld. I expect the industry to tighten its belt and cut costs, but I think we will also see a much more efcient revolution of extracting the shale oil that will keep the domestic petroleum industry as strong, if not stronger, than it has ever been before. It is also evident that OPEC is not concerned with all its members.The cut rate price they are keeping on the market is going to greatly dismantle more of its own member’s economies than the U.S. This situation looks like more of an opportunity to start a new world power structure in the petroleum industry and nally put the old OPEC powers out to pasture.Recently, I was informed that my cartoons were too “redneck.” The person that was enlightening me just happened to have moved to the U.S. from the Middle East to open a fracking business. One point that I longed to make was that this person came to “my culture” and decides to comment on my work being redneck? However, my Texas ethics kept me from making several comments that I should have made. While I admit that I have been known to be a redneck and quite proud of it, I wanted to make the point that his denition of a redneck was only something he had heard jokes about or seen on YouTube.If he really wants to be able to judge my culture, he needs to become a part of it, get a rsthand view, which you do not get from a fancy ofce in Houston or by zipping around in a corporate jet. Get out on the interstate and have your Mercedes break down at the side of the road. That person that stops to put your alternator belt on for you is that redneck that you like to look down your nose at.This person also commented that some of the 2015 CRUDE Calendar Cartoons were an example of my “redneck” humor. He said the June cartoon about the, cartel’s casa el burton mud delivery would offend his friends in Mexico. If a cartoon about the Mexican Cartel offends your friends, then buddy, your prot margin in Mexico has nothing to do with fracking. My Mexican and Hispanic friends hate the cartel just as much as everybody and see no offense in a cartoon that shows them to be stupid and inept. He also said the April 2015 cartoon about Baku Gas Detectors would offend his Russian friends. (Oh gee, there go all my Russian sales.)I guess all along the joke was on this old dumb redneck, because you see this fracking investor was looking for more cartoons about fracking so he could print up his own calendar. He had already downloaded a few of mine from the internet but wanted a few more to make his own fracking calendar. Too bad I just did not have enough time to whip him out a few more, but I have a 60 hp Johnson I need to nish putting a head gasket on.May your boots be dry, your coffee fresh, and your gloves new. Kybree Steve Burnettwww.crudeoilcalendars.comIN CLOSING

Oilman Magazine Mar/Apr 2015

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