Oilman Magazine Sept/Oct 2017
Search
About
Contact
Open Collection
Buy
Install
Share
Download
Notification
Notification
Loading...
NEWS AT A GLANCE OKLAHOMA TEXAS LOUISIANA p 28 p 30 p 33 p 34 Russia Ran Campaign Against U S Oil Gas Activity Halliburton Acquires TulsaBased Summit ESP ConocoPhillips Releases Financial Report for Second Quarter Haynesville LA Making a Comeback in the Oil Industry THE MAGAZINE FOR LEADERS IN AMERICAN ENERGY September October 2017 OilmanMagazine com Illustration Credit piscari www 123RF com
MONDAY MORNINGS CAN BE UNPREDICTABLE YOUR WORKERS COMPENSATION COVERAGE SHOULDN T BE Trusted financial stability and unparalleled customer experiences brought to you by Louisiana s Highest Rated Workers Compensation Company
IN THIS ISSUE Feature Technology and Politics Mix in the Downstream By Samuel Cook pages 22 and 23 In Every Issue Letter from the Publisher page 2 OILMAN Contributors page 2 OILMAN Crossword Puzzle page 3 OILMAN Online Retweets Social Stream page 4 Downhole Data page 4 Product Showcase pages 18 and 19 OILMAN Crossword Puzzle Answers page 19 OILMAN PRIDE Photo from Oil Gas History page 5 OILMAN TODAY Phil Graves Photography page 6 OILMAN COLUMNS Steve Burnett Oilman Cartoon page 3 Thomas G Ciarlone Jr Oil and Gas Law Notable Recent Developments page 7 Richard Perkins New to Accident Investigation Just Ask Why page 8 Jerry Browning Three Keys for Success How Oil and Gas Organizations Can Stay One Step Ahead of Digital Transformation page 10 Michael Martens Fast Loading as the Key to Success page 12 Mark A Stansberry America s Energy Global Dominance page 13 Arlene B Collee Broussard Brothers Inc A Family Run Business Serving the Marine Construction Industry for Over 70 Years page 14 Adam Leggat Understanding and Managing Environmental Protest Threats page 16 Eric R Eissler Is Artificial Intelligence and Blockchain the Answer to Cybersecurity page 17 Tim McNally Interview with Johnathan Gwyn CEO of Energy Flow Network LLC page 20 Eric R Eissler Millennials and Green Energy Death to Big Oil or Lifeline page 24 Don Briggs A Partnership Worth Keeping page 27 Josh Robbins Winter is Coming page 29 Jason Spiess The New Age of Trump Oil page 36 NEWS Shale at a Glance pages 26 and 27 News at a Glance pages 28 and 29 Oklahoma News pages 30 and 31 Texas News pages 32 and 33 Louisiana News pages 34 and 35 Oilman Magazine September October 2017 OilmanMagazine com 1
LETTER FROM THE PUBLISHER Major oil and gas producers reported healthy profit and cash flow in Q2 with several posting the most robust gains since the oil market downturn began in 2014 Exxon Mobil nearly doubled its profit compared to a year ago based on a strategy to cut production costs and complete projects that can produce profits within a few years rather than a decade While cutting expenses improved financial performance big oil companies are expected to grow largely from short term projects such as fracking which in turn will bring quicker revenue Chevron reported that its land in West Texas the hottest spot for drilling in the world can bring a 30 return including overhead Shell mentioned that it s preparing to diversify its product portfolio by moving into renewables and natural gas It now produces more gas than oil Cutting production expenses and employing better technology to increase cash flow is always a noteworthy strategy However will supply and demand be there downstream where consumers also determine big oil s potential profit It appears oil and gas producers think so and several believe that falling demand will not be a threat before 2040 In the meantime the majors are learning how to deal with low oil prices which have been hovering around the 49 mark As they see it the days of 100 a barrel may never come back Emmanuel Sullivan Publisher OILMAN Magazine CONTRIBUTORS Biographies Don Briggs Don Briggs is the President of the Louisiana Oil and Gas Association The Louisiana Oil Gas Association known before 2006 as LIOGA was organized in 1992 to represent the Independent and service sectors of the oil and gas industry in Louisiana this representation includes exploration production and oilfield services Our primary goal is to provide our industry with a working environment that will enhance the industry LOGA services its membership by creating incentives for Louisiana s oil gas industry warding off tax increases changing existing burdensome regulations and educating the public and government of the importance of the oil and gas industry in the state of Louisiana Mark A Stansberry Mark A Stansberry Chairman of The GTD Group is an award winning author columnist film producer radio talk show host and 2009 Western Oklahoma Hall of Fame inductee He has been involved in the oil and gas industry for over 39 years He is currently serving as Chairman of the Board of the Gaylord Pickens Museum Oklahoma Hall of Fame Vice Chairman of the Board of Regents of the Regional University System of Oklahoma Board of Directors of OKC Port Authority Board of Governors of the Recording Academy Grammys Texas Chapter Lifetime Trustee of Oklahoma Christian University and Board Emeritus of the Oklahoma Governor s International Team He has served on several private and public corporate boards Jason Spiess Jason Spiess is an award winning journalist talk show host publisher and executive producer Spiess has worked in both the radio and print industry for over 20 years All but three years of his professional experience Spiess was involved in the overall operations of the business as a principal partner Spiess is a North Dakota native Fargo North Alumni and graduate of North Dakota State University Spiess moved to the oil patch in 2012 living and operating a food truck in the parking lot of Mac s Hardware In addition to running a food truck Spiess hosted a daily energy lifestyle radio show from the Rolling Stove food truck The show was one of a kind in the Bakken oil fields with diverse guest ranging from U S Senator Mike Enzi WY to the traveling roadside merchant selling flags to the local high school football coach talking about this week s big game 2 Joshua Robbins At Beachwood Marketing Group our mission is to market oil and natural gas properties in the most cost effective and efficient way We strive to provide excellent leadership and unparalleled service for each of our clients Josh has been instrumental in defining Beachwood s market leading solutions and has overseen the company s expediential growth Josh is also an accomplished writer on the acquisition and divestment market and a speaker and presenter at conferences He continues to keep his focus on the strategic direction of Beachwood Marketing Group and its expansion into new markets MAGAZINE SEPTEMBER OCTOBER 2017 PUBLISHER Emmanuel Sullivan MANAGING EDITOR Samuel Cook FEATURE WRITER Eric Eissler NEWS EDITOR Tim McNally NEWS WRITER Tonae Hamilton ART DESIGNER Kim Fischer CONTRIBUTORS Don Briggs Steve Burnett Thomas Ciarlone Jr Phil Graves Joshua Robbins Story Sloane III Jason Spiess Mark Stansberry Thomas G Ciarlone Jr SALES OilmanAdvertising com Eric Freer Wyatt Hahn Steve Burnett To subscribe to the print or digital edition of Oilman Magazine please visit our website www oilmanmagazine com subscribe The contents of this publication are copyright 2017 by Oilman Magazine LLC with all rights restricted Any reproduction or use of content without written consent of Oilman Magazine LLC is strictly prohibited Tom is a litigation partner in the Houston office of Kane Russell Coleman Logan PC where he serves as the head of the firm s energy practice group Tom is also the host of a weekly podcast on legal news and developments in the oil and gas industry available at www energylawroundup com and a video series on effective legal writing available at www theartofthebrief com I was raised in a small West Texas town where the school mascot is a roughneck Growing up with a roughneck as the town symbol how could I not spend most of my adult life working in the petroleum industry I started working in the oilfields age 16 In Texas you had to be 17 with a signed minors release from your parents but my parents were glad to keep me working I had been working since my first job working on a commercial elephant garlic farm at age 12 By the time I reached 16 I had enough work experience to prove I knew how to hold my own on a work crew Anybody whose parents survived the great depression can attest to the fact that their children learn the value of a solid work ethic Phil Graves Phil Graves has spent nearly a decade working in the oil and gas industry He has served as Director of Sales and Director of Digital Development for a large national industry publication and has held various management positions with a completions company and was in charge of operations in the Permian Basin and Eagle Ford shale Phil now runs a marketing and photography company focused on providing vivid images of the industry at work in multifaceted disciplines and projects Oilman Magazine September October 2017 OilmanMagazine com All information in this publication is gathered from sources considered to be reliable but the accuracy of the information cannot be guaranteed Oilman Magazine reserves the right to edit all contributed articles Editorial content does not necessarily reflect the opinions of the publisher Any advice given in editorial content or advertisements should be considered information only CHANGE OF ADDRESS Please send address change to Oilman Magazine P O Box 771872 Houston TX 77215 800 562 2340
OILMAN CARTOON OILMAN CROSSWORD PUZZLE Across 1 Upstream and _____ 32 Turbo Machinery ____ 7 Circumference ratio Symposia 9 Throw gently 35 Very large 10 Permian ____ 36 Before to Byron 12 Fall behind on a schedule 37 Indy 500 circuits 14 That hurts 39 ____ of things 15 Building the ____ 40 Fall month 16 Conecuh County is a productive oil area in this state 18 Earned income credit for short 19 Took place 20 Christmas _____ 22 Pace of flow 24 ____ Chemical 25 Temperature control 27 Data 28 Rocky ___ 29 Weight measurement 31 Erode with away 1 2 12 5 13 6 7 10 14 17 19 11 18 20 22 23 8 15 16 21 24 25 26 1 ____ Basin 27 28 2 _____ Gallery 29 3 Haul 32 4 NFL position for short 33 34 30 31 35 36 5 Attorneys org 37 38 39 6 Creator 7 Part of a whole 8 B B 11 Overhead views 13 Oklahoma Oil ____ Expo 20 Oil _____ 4 9 Down 17 Dakota Access ____ 3 40 21 ____ of Engineers 32 Canadian province for short 23 Perfect rating Across 33 Coffee pot Upstream and _____ 26 1Word with potato and pepper 34 Intersected 30 A sign of a kind 38 Palmetto state abbr 2 _____ Gallery 7 Circumference ratio 9 Throw gently 31 10Louisiana Gulf Coast Oil ___ abbr Permian ____ 12 Fall behind on a schedule Down 1 ____ Basin See page319Haul for answers 4 NFL position for short 5 Attorneys org 14 That hurts Oilman Magazine September October 2017 OilmanMagazine com 15 Building the ____ 6 Creator 3 7 Part of a whole
DIGITAL DOWNHOLE DATA FOR THE WEEK ENDING AUGUST 25 2017 Connect with OILMAN anytime at OILMANMAGAZINE com and on social media OilmanNEWS Stay updated between issues with weekly reports delivered online at OilmanMagazine com OIL RIG COUNTS Source Baker Hughes Louisiana 66 Last month 72 Last year 42 Texas 456 Last month 462 Last year 237 Oklahoma 130 Last month 134 Last year 62 U S Total 940 Last month 958 Last year 489 Per Barrel CRUDE OIL PRICES Source U S Energy Information Association EIA Brent Crude 51 94 Last month 51 29 Last year 48 10 SOCIAL STREAM RETWEETS WTI 47 39 Last month 45 78 Last year 46 80 Barrels Per Month CRUDE OIL PRODUCTION Source U S Energy Information Association EIA May 2017 Louisiana 4 371 000 Last month 4 285 000 Last year 4 902 000 Texas 106 392 000 Last month 100 610 000 Last year 98 998 000 Oklahoma 13 420 000 Last month 13 297 000 Last year 13 288 000 U S Total 284 230 000 Last month 273 309 000 Last year 274 439 000 Million Cubic Feet Per Month NATURAL GAS MARKETED PRODUCTION Source U S Energy Information Association EIA May 2017 facebook com OilmanMagazine 4 OilmanMagazine Oilman Magazine September October 2017 OilmanMagazine com Louisiana 164 225 Last month 156 721 Last year 160 319 Texas 666 020 Last month 632 910 Last year 698 238 Oklahoma 207 434 Last month 202 545 Last year 211 836 U S Total 2 772 985 Last month 2 682 706 Last year 2 778 526
1 OF 1 HUMBLE OIL GAS PUMP Pride Photo courtesy of The Sloane Gallery Houston Texas These images and more are for sale and can be found by visiting www SloaneGallery com or calling 281 496 2212 Oilman Magazine September October 2017 OilmanMagazine com 5
1 OF 1 LUFKIN INDUSTRIES PUMPING UNIT Today Photo courtesy of Phil Graves Photography He can be reached for fine art photography at philgravesphotography com or 316 644 2508 6 Oilman Magazine September October 2017 OilmanMagazine com
OILMAN COLUMN Oil and Gas Law Notable Recent Developments By Thomas G Ciarlone Jr In a significant development out of the U S Department of the Interior the Office of Natural Resources Revenue has elected to eliminate the prior administration s new guidance for calculating royalties on leases of oil and gas interests on federal and Native American lands As detailed in a late summer notice from the Federal Register Interior is completely repealing what had been dubbed by President Obama as the Consolidated Federal Oil and Gas and Federal and Indian Coal Valuation Reform rule The rule had become effective on January 1st of this year and it operated to revise longstanding valuation rules by computing royalties as a function of arm s length transactions in the marketplace In a statement the Department of the Interior blasted the rule arguing that it would unnecessarily burden the development of federal oil and gas and federal and Indian coal beyond the degree necessary to protect the public interest This of course would be in obvious tension with the Trump administration s mandate to all federal agencies to put the kibosh on regulations that stand in the way of developing the full potential of our domestic energy resources The Interior Department went on to say that it expects that further internal assessment and analysis will lead to the development and promulgation of a new revised valuation rule that will address the various problems that have now been identified in the rule we are repealing Critics of the rollback of the Obama era rule maintain that the reinstatement of the old regulation is to take a trip back in time since the prior rule was promulgated in the 1980s This means that the aging regulation is out of sync with the many drastic changes in energy technology and markets that have taken place in the decades since In a victory for the industry the federal Fifth Circuit Court of Appeals has affirmed the dismissal of a proposed class action filed by a laid off former employee of Latshaw Drilling Company based on the theory that the driller had run afoul of the Worker Adjustment and Retraining Notification Act the so called WARN Act for short The case is Meadows v Latshaw Drilling Co LLC No 16 10988 In particular the Fifth Circuit determined that the aspirant class action failed to satisfy the WARN Act s threshold requirement of a single site On this score the statute puts the onus on employers to provide timely written notice to state employment regulators and to all impacted workers if the employer intends to lay off in excess of fifty workers at a single site It was this single site requirement that proved fatal to the plaintiff s claims The defendant s business model is such that it dispatches drilling crews to various customer sites The wrinkle here is that the company s drilling teams were never comprised of any more than 28 workers Latshaw not unreasonably therefore took the position that taken in isolation there was not so much as one work site with more than fifty employees and accordingly that the WARN Act is not even triggered The plaintiff maintained that under the circumstances it would be appropriate and more equitable to marry the various sites into a single location for purposes of analysis under the statute The Fifth Circuit however was having none of that Justice Priscilla Owen writing the opinion for an undivided appellate panel observed that the plaintiff has not pointed to any grouping of job sites in which between the sites Latshaw laid off 50 or more employees within the relevant WARN Act period His attempt to create a single site of employment by grouping drilling rigs managed by a single drilling superintendent does not cure this evidentiary deficiency nor does his conclusion that common management has been held sufficient to bind as many as eight discrete sites together as one single site of employment Notably the Fifth Circuit sided with the employer even though overall nearly 400 workers were let go by the drilling company in the wake of a slump in oil prices The Seventh Court of Appeals in Amarillo has rejected a jury verdict in favor of Hunt Cimarron in a hard fought controversy over a West Texas mineral lease The Texas intermediate appellate court determined that the lease had come to an end by operation of its own terms More particularly Hunt Cimarron had taken the position that the full leasehold had been perpetuated beyond the expiration of its primary term in 2011 by way of the mineral lease s reworking provisions Under such clauses operators can sometimes preserve the lease past its initial term if they commence operations that constitute in the words of the Seventh Court a good faith effort to cause a well or wells to produce oil or gas in paying quantities In this case the lease provided that the parties agreement continues only as to land included within a defined oil and gas production unit including wells being reworked Hunt thus took the position that it held the entire lease by reworking the wells The appellate court disagreed and held that the reworking clause covers only limited acreage surrounding each such well In particular here is what the Seventh Court observed in this regard Because the mineral lessor met its burden of showing the occurrence of the determinable condition i e the absence of production as to all other acreage and the operator failed to meet its burden of establishing the application of a savings provision obviating the application of the termination provisions as to those acres the subject lease expired as a matter of law at the end of the primary term as to those nonproductive acres The opinion is also notable for a further reason that operators should stop and take notice Aside from their main claims of lease termination the mineral lessors further contended that Hunt Cimarron had failed to execute a release setting forth the acreage and depths that were no longer held by lease The Seventh Court of Appeals agreed with the mineral owners on this point Remember most mineral leases require that such a release be filed of record within a specified period of time following the lessee s loss of acreage under a lease While some operators casually treat this as a housekeeping matter a lackadaisical attitude on this front could potentially have serious consequences if this obligation is not approached soberly Mineral lessors may take the position that an operator s failure to timely release acreage deprives it of the ability to enter into new lucrative lease arrangements with other oil and gas companies To avoid this kind of exposure operators would be wise to give their full attention to lease provisions that require them to put acreage releases in place by a specific deadline As always an ounce of prevention is worth a pound of cure Tom is a litigation partner in the Houston office of Kane Russell Coleman Logan PC where he serves as the head of the firm s energy practice group Tom is also the host of a weekly podcast on legal news and developments in the oil and gas industry available at www energylawroundup com and a video series on effective legal writing available at www theartofthebrief com Oilman Magazine September October 2017 OilmanMagazine com 7
OILMAN COLUMN New to Accident Investigation Just Ask Why By Richard Perkins LWCC Safety Services Manager Workplace accidents incidents and near misses cost companies thousands of dollars in insured and uninsured costs every year The insured costs can include medical and lost wage compensation The uninsured costs can include property and or equipment damage lost production loss of business as a result of the incident damage to a business s reputation in the marketplace and overtime for investigation time and to cover lost production When you compare insured cost versus uninsured cost the difference can be significant The generally held consensus is the uninsured cost can range from two to 10 times greater than the insured cost depending on the severity of the incident and whether or not the company carries additional insurance to offset these costs For example if the incident resulted in an insured cost of 50 000 the uninsured cost could be from 100 000 to 500 000 Ask yourself can your business sustain this type of loss and remain viable in the marketplace One method that reduces the chance of reoccurrence is to perform a productive accident investigation The goal of the investigation process is to identify all factors contributing to the incident Once identified these factors can then be used to develop and implement a control plan If you do not investigate incidents or do not feel you have the knowledge or skills to investigate you should use The Five Whys technique This method begins with the resulting injury and works backwards to identify the reason the incident occurred The Five Whys is a simple and effective way to help you determine underlying causes and address them Here is an example of an incident that could occur A scrap cutter was cutting pieces of a platform into smaller sections What happened The cutter was severely burned by a fire 8 The Whys 1 Why was he severely burned He was engulfed in a cloud of oxygen and acetylene which caught fire 2 Why was this mixture present The two hoses he used had developed leaks 3 Why did the hoses develop leaks They contained small punctures 4 Why were there punctures in the hoses The hoses are dragged across rough terrain and sharp objects in the yard during the cutting process 5 Why were they dragged This was a standard process in the yard After investigating the accident the company developed a number of procedures to reduce the possibility of similar incidents from occurring This included Fire retardant clothing is worn by all personnel cutting material All work is positioned to reduce the need for hoses to be dragged across the yard More cutting stations have been installed to reduce the need to move hoses Hoses are tested weekly for punctures All defective hoses are replaced immediately Longer cutting torches are used to increase the distance a cutter can stand from the flame of the torch They have increased the amount of fire suppression equipment available in the yard Supervision has increased monitoring of the work site to ensure new procedures are being followed Remember five is the minimum number of Oilman Magazine September October 2017 OilmanMagazine com Photo Credit olegdudko www 123RF com whys you should ask A complex incident will require you to ask more whys but the process remains the same As you can see The Five Whys is a concise and direct way to get to the root cause of accidents and incidents By using the information gained from the investigation you can increase employee safety improve work processes minimize the potential for incidents to reoccur and keep your insured and uninsured costs lower LWCC offers its policyholders free online training on site training webinars and many more value added safety resources LWCC s team of safety services consultants are located throughout the state to help policyholders create a safe workplace for their employees Richard Perkins CSP is the safety services manager for LWCC Headquartered in Baton Rouge La LWCC is a private nonprofit mutual insurance company that is rated A Excellent by A M Best Company As the largest writer of workers compensation insurance in Louisiana LWCC employs over 240 people and serves approximately 20 000 policyholders in the state Named to the 2017 Ward s 50 group of top performing insurance companies LWCC was recognized for achieving outstanding results in the areas of safety consistency and performance over a five year period 2012 2016 For more information please visit www lwcc com
REGISTER NOW www breakbulk com bbam2017
OILMAN COLUMN Three Keys for Success How Oil and Gas Organizations Can Stay One Step Ahead of Digital Transformation By Jerry Browning Jerry Browning Senior Business Consultant for IFS in North America explains how executives in the Oil and Gas industry can harness the power of enterprise software to evolve their organizations adapt to change and take advantage of new revenue opportunities As digital transformation enables rapid change in traditional operations oil and gas organizations are finding new and more efficient ways to do business Interactions between trading partners are becoming automated reducing the amount of time required to complete and manage transactions and in many cases changing the way those transactions take place The oil and gas industry relies heavily on the profitable operation of capital assets and decisionmakers are increasingly having to do more with less while predicting and quickly adapting to market changes not to mention keeping to strict regulatory environments In order to drive more efficient operations and realize new revenue opportunities there are three key areas asset intensive businesses should focus on the Internet of Things IoT reliability centered maintenance and lean asset management 1 IoT connecting people with processes No organizations are as advanced in their progress towards effective use of IoT as the those in asset intensive industries Companies in this space have been doing this well before the term IoT was created Whether we call it SCADA automatic data capture or IoT sensors on equipment can facilitate condition monitoring and condition based maintenance as well as enable real time monitoring of performance quality and reliability of all equipment anywhere any time But what makes modern IoT even more useful now are the smart devices that collect data from equipment and machinery working in the background This accumulation of equipment performance and reliability data can enable comparisons of individual pieces of equipment with others of the same type or model That comparative data can support asset lifecycle decision making at the executive level and create an accurate record and understanding of the true productive capacity and serviceability of a portfolio of asset types It can also give original equipment vendors a deeper understanding of product quality issues so they can be proactively corrected during field upgrades or design processes Within the oil and gas industry IoT applications can leverage sensors to remotely monitor equipment to help make decisions Maintenance professionals armed with this data can deliver predictive maintenance based on real time information about the condition of equipment rather than delivering a break fix service or 10 simply executing on calendar based maintenance programs 2 RCM3 getting creative Reliability centered maintenance RCM is a set of best practices for asset management that originated in the aerospace industry but has since been turned into a formal system by consulting firm Aladon The company whose trademarked RCM2 built on existing RCM strategies extended the maintenance strategy to include the environmental consequences of asset management decisions More recently Aladon released RCM3 which extends the RCM method to include risk management and more interestingly creativity According to Aladon Network member Carlo Odoardi creativity and the ability to recognize and seize opportunities as they unfold are critical even for asset intensive organizations A survey of 1 500 CEOs conducted by IBM s Institute for Business Value identifies creativity as the most essential leadership competency Odoardi said contrasting this with more traditional priorities like business discipline and managerial control This shift in thinking is because increasing global complexity is the biggest thing they re facing today CEOs see a huge gap between today s business complexity and the confidence they have in their people to handle it Today business is massively complex super interconnected and intricately interdependent from an economic social and political perspective We re managing our sites as a system of systems CEOs are turning to continuous innovative improvement and creative disruption to compete with world class companies Assets used in the oil and gas industry are missioncritical not just for their productive capacity but because failures can result in environmental damage loss of life and litigation Creativity in the management of these assets requires good access to real time data so executives can take steps to address emerging concerns Without a rigorous methodology like RCM3 even if you do have real time visibility into your asset readiness you may not be able to plan and operationalize rapidly enough to keep clear of potential safety risks or costs downtime 3 Lean asset management automating key stages of the asset lifecycle IoT is not new to the industrial space and RCM is a proven time tested system But perhaps the newest and unsung heroes that could digitally transform asset management are the tools designed to fully automate complete asset lifecycles from specification and design to construction and start up While manufacturers have relied on EAM software to streamline configure to order manufacturing processes for decades oil and gas organizations Oilman Magazine September October 2017 OilmanMagazine com have typically lacked this type of functionality This means engineering oriented companies who may design fabricate and install equipment in a facility have not digitally evolved to the same extent as their manufacturing counterparts Generating a reliable quotation for a project meant engaging in a substantive design process and substantial work and sunk cost before a company could submit a bid Once the bid was generated that proposal or bid document must be turned into a project structure bids for work and subcontracts must be let and the project executed right through the handover to operations In most oil and gas organizations these steps are disconnected and result in non value added work But with software designed for lean asset management the standard elements and configuration questions required to accurately identify cost let bids to contractors and populate and project a plan are all part of a single workflow This gives contractors the ability to submit an accurate bid much faster than their competitors as it eliminates design planning and administrative hours from the project as the final asset structure is created automatically The situation faced by oil and gas engineers can be especially challenging because recording work and information is often not done until well after the fact By enabling field workers to interact with software as they perform work rather than at the end of a shift or when they return to the office enables better decision making because there is less administration and greater data integrity Rig managers stand to benefit from this as they are now able to get an accurate project proposal to management almost instantaneously which enhances enterprise agility and lets the business seize opportunities before their competitors Once the proposal is approved the software can send out the requisite work orders send requests for quotations to contractors and enable maintenance department staff to put their time against the project as required It can also capture the cost of materials out of inventory to complete the project all with no additional administrative overhead or duplicate effort Making it real Although worthwhile implementing any of these three approaches won t be instantaneous Determining which of these approaches will help you reach your business goals and formulating a practical approach will be the first step in the digital transformation process In some cases a change in an underlying business system of record will be required and in selecting a new platform these are the three areas oil and gas organizations should focus on to ensure digital transformation can get them where they need to go now and in the future
OILMAN COLUMN Fast Loading as the Key to Success By Michael Martens Michael Martens Managing Partner of the Implico Group explains how Driver Operated Loading is taking tank terminal automation to a new level Buying chocolate from a vending machine booking a holiday on the Internet paying for groceries or furniture at a self service checkout the trend towards self service is becoming commonplace in every area of our lives It even extends to some tank terminals where drivers can now manage the entire loading process from check in to check out on their own This Driver Operated Loading concept is being made possible by modern software that supports each step of the process and ensures that the correct data is available in the right place at the right time Driver Operated Loading eliminates unnecessary waiting times It is welcomed not only by drivers but also by tank terminal operators who can turn round more trucks per day and make more efficient use of their facilities at any time of day or night It also enables them to offer petroleum dealers better prices for their services First Step Automatic Driver Identification It s Tuesday 8 30 am at a model tank terminal The driver pulls up at the entrance He is here every day Some days he makes several collections Today a petroleum dealer has asked him to collect 35 000 liters of fuel and deliver it to a smaller tank terminal At the terminal entrance the driver enters the number of his current job which was already entered into the tank terminal s automation system He swipes his vehicle s ID card through the card reader and identifies himself biometrically with a hand scanner Before the introduction of Driver Operated Loading a tank terminal employee had to manually check each truck to make sure that the driver s license and the vehicle test certificate were still valid and that the vehicle was actually authorized to collect the respective fuel In the meantime the tank terminal has switched to a fully automated system that carries out these checks in the 12 background in a matter of seconds The recently introduced terminal management system OpenTAS compares the data of the driver the vehicle and the job with the data already in the system This is not only much quicker but it also minimizes the possibility of errors due to incorrect inputs At this point the system also carries out an automatic credit check As long as the customer s account is not in arrears collection can go ahead EMCS Preliminary Assessment for Duty Suspended Movements In Europe excise duty suspension arrangements are applied when petroleum is moved between tank terminals and these must be approved in advance by customs using the Excise Movement and Control System or EMCS To prevent tank trucks from being loaded that may subsequently be refused approval a preliminary EMCS assessment takes place at the entrance OpenTAS automatically sends the relevant transport data to customs When all the checks have been completed successfully the barrier opens and the driver can drive onto the site Optimal On Site Traffic Management Just inside the entrance the lane control assistant shows the driver which loading bay he should approach This information is also provided by OpenTAS The terminal management system knows which product can be loaded at which loading bay and which bays are currently being in use by other vehicles This maximizes the capacity of the loading bay area and optimizes the movement of traffic on the site Things go quickly this Tuesday morning and the driver is directed straight to bay five Each time he makes a collection the driver must make sure that everything is ok with his tank truck This includes checking the tires for example With Driver Operated Loading the driver carries out these checks himself For some products and in some countries the truck has to be weighed before and after loading Products such as bitumen or LPG Oilman Magazine September October 2017 OilmanMagazine com Truck at entrance Implico Liquefied Petroleum gas are normally filled billed and shipped by weight rather than volume In Eastern Europe this also applies to fuel On an automated system the driver simply carries out the weighing himself The weight data is stored in the system ensuring that the gross vehicle weight is not exceeded Loading and Sealing When he arrives at the loading bay the driver logs on and connects the loading arms to the truck As all necessary data is already in the system loading can start as soon as he presses the button It takes only a few minutes to load up the quantity ordered As soon as the loading arms have been removed the truck is equipped with a seal which can be inspected upon delivery to make sure that the tank has not been opened en route Since the truck is fitted with an electronic sealing mechanism sealing is carried out automatically after loading The loading bay metering system automatically transmits the actually loaded amount to the terminal management system This relieves the driver of the task of having to copy the figures from the display and handing in a ticket at the exit Data Transmission in Real Time The terminal management system now initiates additional checks such as the final EMCS check for example and prepares the shipping documents for the driver Intelligent systems such as the OpenTAS process automation solution used in this case update the accounting system s inventory levels in real time and submit the data to the tank terminal s ERP system
OILMAN COLUMN Meanwhile the driver has arrived at the exit barrier Once again he swipes his card in the reader All the shipping documents invoices and the EMCS approval document are printed out automatically The system eliminates the need to wait while a terminal employee enters the loading data sends it over to customs and prints out all the documentation The barrier opens and the driver is on his way Measuring Performance from Arrival to Departure Thanks to the terminal management system s fully automatic operation each process step is meticulously recorded and documented Analysis of this data opens up previously unimagined gate to gate control options Does one driver take longer to load up than another Or are there differences between trucks Or at one specific loading bay The terminal manager can easily spot areas where there is potential for improvement and introduce carefully targeted measures to help his terminal operate more efficiently in the future He can even compare operations in the different storage areas Automation also offers numerous benefits for day to day operations The fact that manual data acquisition is no longer needed not only reduces the amount of administrative work but also improves the accuracy of data entries The automated processes guarantee that all movements of goods are recorded without exception while at the same time making the loading process much easier for the transport companies Not only that but the traffic control and real time monitoring systems maximize onsite security A Win Win Situation for Drivers and Tank Terminals Fully automated operation with Driver Operated Loading produces a win win situation Transport companies enjoy working with the tank terminals because the loading process is not only quicker but also much more convenient Tank terminal operators in turn benefit from the more efficient use of their facilities which enables them to offer attractive pricing which in turn leads to higher revenues In a few years time Driver Operated Loading could be just as normal as booking a holiday via the Internet America s Energy Global Dominance By MARK A STANSBERRY In 2008 my book The Braking Point was released Four years later in 2012 my book America Needs America s Energy Creating Together the People s Energy Plan was released To achieve global energy dominance the American people need to rally behind these companies and recognize the essential role they play in powering our lives 24 7 at home and at work To observe the progress and advancement of research technology and applications were dramatic between 2008 and 2012 During those four years the US did not have a strategic energy plan A recent article July 31st in Investor s Business Daily it was stated that the US is fast becoming the world s dominant energy provider and should make it a national priority to pursue this opportunity vigorously At stake are vast economic and foreign policy benefits The article focuses on seven reasons America should seek energy dominance 1 Good paying secure middle class jobs 2 Lower energy costs are essential for reviving US manufacturing 3 Catalyst for US infrastructure development 4 An improving trade balance 5 Meeting the world s growing demand for energy 6 Helping the world s poor and 7 Peaceable way to strengthen America s global influence A viable energy industry requires that the private and public sectors work together Since I entered the energy business in 1977 the industry has continually been forced to defend itself For example in 1985 I testified before the US Senate and Natural Resources Committee on the potentially devastating effects that proposed regulations could have on the oil and gas industry in terms of job loss and reductions in drilling expenditures at a time when this vital industry most needed support American oil and gas companies have a history of being major contributors to their communities by providing funds for local schools hospitals and charities The importance of energy education should be a major emphasis Therefore National Energy Talk should set the dialogue National Energy Talk is a platform engaging a national dialogue on energy issues views and solutions We address the needs plans and issues that all types of energy face today Through discussion we can create a national energy vision The founding principle of National Energy Talk remains steadfast the availability of reasonably priced energy is paramount to the economic and business development both in the United States and other countries throughout the world The oil and gas industry touches all of our lives daily There are men and women taking care in making sure 24 7 that the consumer has the necessary energy to maintain a standard of life Energy is the future of America and America Needs America s Energy Mark A Stansberry is an Awardwinning Author Energy Advocate and Chairman of The GTD Group He can be reached at National Energy Talk www nationalenergytalk com and or on Facebook at National Energy Talk join the over 23 400 likes supporters Oilman Magazine September October 2017 OilmanMagazine com 13
OILMAN COLUMN Broussard Brothers Inc A Family Run Business Serving the Marine Construction Industry for Over 70 Years By Arlene B Collee Noe Raywood Broussard better known as N R or Pedo was born in Pecan Island Louisiana in 1921 He completed high school then joined the Navy in 1942 By the time he left the Navy in 1946 he had risen from recruit to first class petty officer After returning to Louisiana N R and his brother originated a tugboat business known as Broussard Brother s Boat Service in Chalmette Louisiana significant element to preserving the local culture The jobs have sustained generations of families working in the company Father and son often work side by side Today the 5th generation of some of these families are taking a role in sustaining the company contributing considerably to keeping the Cajun Culture in Vermilion Parish alive and well The company also still employees up to 4 generations of the Broussard family In 1959 Mr Broussard moved his family back to Vermilion Parish to a low lying area at the end of a small village known as Intracoastal City Together with his brothers John Huey Broussard and Joseph L Broussard they developed the Broussard Brothers Boat business in Intracoastal City with a vision of developing a facility to better meet the growing needs of the oil industry There was absolutely nothing when we first came to Intracoastal City A lot of people thought I was more than a little crazy says N R Broussard The 80 s N R quoted something he heard once A man should work as though everything depended upon himself and pray as though everything depended on God This saying influenced the motto Everybody works At first the brothers rolled pipe all day then went into the office to do paperwork When the children were old enough to be out by their side they were taught the business The girls worked in the office during summer break alongside their mother Today a family approach to business is becoming rare especially one that has been successful for 70 years and touched so many lives Playing its Part Culture is an important part of South Louisiana and everyone has a part to play The role of Broussard Brothers in the developing oilfield industry in Vermilion Parish created an environment for new jobs allowing people to make a good living locally Broussard Brothers helped keep families together a 14 Being in business for 70 years has come with its challenges The company struggled in the 80 s bust but due to its prudent financial practices incredible work ethic and service built on a handshake the company came through it stronger All of our equipment was paid for said Broussard If not for that it would have been a lot tougher The Current Downturn In today s challenging industry as before Broussard Brothers is forced to make difficult cuts to their operating costs while still trying to protect its most valuable asset their employees The magnitude of these burdens are multiplied today due to the increased size of the company More employees and families depend on its success Thankfully there are signs that the industry is beginning to slowly turn around Over the years the brothers recognized their success would be directly tied to meeting the needs of its customers With this in mind they expanded their six acre low lying marshland area where they initiated Broussard Brothers Inc in Vermilion Parish to a commercial development containing over a mile of well developed waterfront property The business includes tugs barges and crew boat rentals as well as oilfield and pipeline construction services Today the company has grown into one of the gulf coast s premier oilfield service and construction companies The ever changing marine construction Oilman Magazine September October 2017 OilmanMagazine com and towing environment presents many challenges The company has grown and changed with the times and has consistently upgraded equipment and trained and developed an experienced workforce to meet those demands head on Capable of Providing a Variety of Services to the Oilfield and Construction Industries Broussard Brothers contribution to the business industry of Southwest Louisiana developed into a multifaceted expansion of specialized marine fabrication construction blasting and painting land and offshore crews and dock side services which ran primarily under the sister corporation known as Acadian Contractors Together the businesses provided jobs to over 700 employees Broussard Brothers Inc still operates out of their original Intracoastal City docks although the flooding of hurricane Rita drove the business office to Abbeville N R Broussard nearly 96 years old still goes into the business office daily and frequently attends company operations meetings at the Intracoastal City location The staff he has assembled to run the company often relies on his wealth of knowledge and experience to better serve customers and to keep Broussard Brothers a leader in the oilfield service industry Broussard Brothers Inc is located in Abbeville Louisiana and can be reached at 337 8935303 or at www broussardbrothers com Due to a title error Oilman is reprinting this article from our previous issue
November 1 2 Houston TX OWI 7 4th Annual OFFSHORE WELL INTERVENTION CONFERENCE GULF OF MEXICO DEVELOP A WELL INTERVENTION PROGRAM THAT INTEGRATES NEW COMPLETION DESIGNS ADVANCED WORKOVER TECHNOLOGIES A RELIABLE LATE LIFE STRATEGY TO MAXIMIZE PRODUCTION THROUGHOUT YOUR ASSETS LIFECYCLE HEAR WELL INTERVENTION INSIGHT DELIVERED BY wv REASONS TO ATTEND OWI GOM 2017 SPONSORS Market Potential Analyze GOM dynamics and activity forecasts to understand how well intervention can provide excellent ROI in the current market Production Enhancement Hear how a pro active intervention strategy coupled with new contracting models an efficient use of proven technology can increase well stock value Well Design Uncover the impact of intelligent field development on well intervention and grasp the value of a multi disciplinary approach to platform and subsea well work Late Life Management Explore how a robust well integrity and P A strategy can help maximize production for mature assets ahead of a reliable cost effective abandonment New Technology Discover how innovative approaches to eline slickline and CT can help you get the most out of your GOM shallow and deepwater assets CLICK HERE TO DOWNLOAD THE BROCHURE Very informative sessions along with solid networking opportunities Chris James SSWI Advisor Chevron
OILMAN COLUMN Understanding and Managing Environmental Protest Threats By Adam Leggat If you were hoping to read an article that gave you a guaranteed method of preventing protests on your company s property then I am going to have to disappoint you The reality for those in oil and gas industry security is that your facilities are too large too complex and often too far into rural areas to prevent protestor incursions without a completely unrealistic level of resources and expenditure If you find that hard to believe consider the budget and resources used to protect nuclear power stations and nuclear weapons facilities Greenpeace and the Plowshares Movement have successfully broken into both types of facilities on multiple occasions in the United States and in Europe The simple fact is that with the skills ingenuity and determination they possess protest groups can break into any facility they choose to So what can security staff in the oil and gas industry do in relation to the risks posed by protesters First educate yourself and your staff about what the risks really are There has been a great deal of fear mongering and misinformation recently in the media particularly on social media about who the protesters are and what they do The vast majority of those involved in protests against the energy industry are not the dangerous radicals they are often portrayed to be Most of them are actually committed to nonviolence in their protests There were thousands of individuals involved in the protests against the Dakota Access Pipeline and almost all of the acts of serious vandalism such as arson and cutting holes in the pipes was the work of just two women Second learn the tactics they are currently using There are a wide range of methods currently being used by environmental groups designed to disrupt and delay new projects at every stage Not all the protester s activities will be aimed at the project or facility itself One of the biggest tactics of the last twelve months has been the targeting of the financial institutions that finance energy companies and projects The aim is to make investment in the energy sector reputationally damaging and make finance companies withdraw their support for projects 16 Lawsuits and legal challenges to slow and even overturn planning decisions are another key area in opposition to new projects Some protest groups are now providing training in identifying breaches of safety and environmental controls during construction so they can observe construction sites and report any infractions Do not just prepare for protests at production and construction facilities corporate headquarters third party events attended by senior executives and even executive s homes have all been targets for protest in previous campaigns Third examine what in your facilities can be realistically secured and what really needs to be secured Examine the facility from the protester s perspective and identify where and why they may attempt to protest This will allow you to identify the safety critical areas where additional measures can be taken to prevent unauthorized access areas where protesters would be very difficult to remove or that they could hold for extended periods Also consider the security of commercially sensitive information in offices and the security of IT systems Protesters have in the past stolen information that they can leak to damage the company s reputation Finally but most importantly understand what the protests are really designed to achieve Even the most complex direct action protests rarely slow construction or disrupt facility operation for more than a few hours and the effect on productivity is very minor What the protests are really designed to achieve is publicity They want the story to go viral on social media and preferably become a major story in the mainstream media as well A well conducted and photogenic protest will get them part of the way there but what actually gets the greatest publicity for protests is a badly thought out or poorly conducted response from security or police As examples the Dakota Access protests were barely making it beyond the local press until the protest organizers had video footage of unlicensed security guards using dogs and pepper spray against protesters That video made the protest coverage go national When the police were seen to use levels of force that many considered to be excessive the story then became international Oilman Magazine September October 2017 OilmanMagazine com and money support and the number of protesters increased dramatically The Keystone XL protests were very similar The direct actions in Texas were getting little coverage and there was no large scale opposition to the project until the police used pepper spray and a Taser to get two activists to unlock from an excavator In the weeks following that incident the publicity made Keystone XL into the largest environmental cause in the United States The methods and level of force your staff and the police use to deal with protesters need to not only meet legal requirements but also need to meet the public s expectation of what is reasonable Protest groups can use anything that appears unreasonable even if taken out of context to create negative publicity for the company and gain additional publicity for their campaign That includes actions by the police To the environmental protesters the police are acting on behalf of the company Their actions will create the same publicity and the same reputational damage as the actions of your own staff The key individuals in the protest groups have much more experience with this than any of your staff They understand the rules of the game and which strategies and tactics will work best You need to understand those rules too Once you know what the protesters are really going to do and what they are trying to achieve you can review your security measures and prepare a realistic contingency plan that meets your needs You should implement a plan that reduces the reputational damage to the company and frustrates the protest group s aims of portraying the company in a negative light preventing the protest from gaining the publicity that they need for an effective campaign Adam Leggat is a former British Army officer who spent most of his career conducting counter terrorism and crowd management operations in Northern Ireland For the last ten years he has worked for the Densus Group providing protest intelligence for companies and police departments across the United States as well as training police officers in crowd management in the United States and abroad
OILMAN COLUMN Is Artificial Intelligence and Blockchain the Answer to Cybersecurity By Eric R Eissler The oil and gas industry is usually cited as one of the most vulnerable due to its rather conservative nature and seemingly slow pace to adopt new technologies While slow to adopt may have been before the 2014 glut hydrocarbon companies have had lots of time to make changes and investments into their systems For example Edgard Capdevielle CEO of Nozomi Networks explained how systems and processes are evolving to meet current cybersecurity needs On one hand automation and robotics can increase risk as these systems are hard to patch and contribute to complexity On the other newer equipment may have better security designed into it as compared to older equipment Security by design is still a fairly new concept that s not often found today in off the shelf solutions but it is gaining more attention So many of the newer technologies already have the security built in They are built from the ground up with security in mind and they are more secure in that respect Artificial Intelligence and Machine Learning As operational technology OT converges with information technology IT the vulnerabilities of OT are exposed and can easily be manipulated for malicious purposes Besides building in passwords and encrypting networks artificial intelligence in the system itself will be able to detect breaches and prevent them through the systems own awareness This is one of the ways systems are protected as OT and IT converge Industrial control systems ICS are the leading advancements in the industry Capdevielle elaborated on this by saying that an ICS cybersecurity solution that offers the automation of pertinent queries based upon automated learning ICS data is continuously embedded into the system recognition and anonymous recognition engine without injecting data into the network This defines what it means to have a passive ICS cybersecurity solution and it is critically important because it allows automated machine learning to occur without impacting production with out of network data There is no impact on latency no risk of intrusion and no risk of network downtime By using these techniques attacks can be detected in real time and the investigation of these events can occur quicker than traditional methods Furthermore IT administrators are greatly assisted by the system s response and alarms and alerts are consolidated into context aware incidents that reduce the time needed to go through logs of events Blockchain Technology Known as a distributed ledger system blockchain stores encrypted blocks of data through a network of connected anonymous computers What first comes to mind is Bitcoin a digital cryptocurrency that has gained lots of notoriety and has been increasing in value at an unfathomable rate While it might be surprising to some blockchain technology offers more than just cryptocurrencies and a way to track financial transactions it offers encryption and fragmented storage By fragmenting and storing information in multiple locations with encryption levels of security are improved to an almost un hackable level There is already a blockchain called Enigma that allows users to do just that As supermajors and international oil companies are starting to use biometrics for passwords this data needs to be stored in a very safe place If a hacker could gain access to the biometrics of all the employees at a major company he would be able to cause a lot of havoc within the company and chaos in the personal lives of the employees Blockchain technology could be an excellent solution for the oil and gas industry because the industry is so heavily regulated from the land environment tax risk markets etc The ledger system offers Photo Credit Konstantin Shaklein www 123RF com many advantages to an industry that comes under much scrutiny and must be accurate and transparent with the government and its investors The monolithic data trail of unalterable blocks would allow for full compliance Additionally stakeholders could observe an entire project s history and use the data therein to base future investments or address serious challenges Blockchain Payment Systems Could Save Money Another added benefit is the money that could be saved by using blockchain based payments systems which are instant and remove the bank as the middleman out of the transaction We think this could reduce costs certainly on payments by 30 percent said Marco Dunand chief executive of Swiss based Mercuria at the Reuters Commodity summit Blockchain has the potential to disrupt the banking system but it will take some time before a major shift happens because companies will have to agree to use this technology and enforce its use It would then slowly spread throughout the business world Artificial Intelligence machine learning and blockchain technology are emerging and their full potential has yet to be realized When it is recognized the way the world does business will change through an automated and technical revolution at a scale not seen before Oilman Magazine September October 2017 OilmanMagazine com 17
PRODUCT SHOWCASE Danos Danos has invented a solar powered continuous chemical injection system CCIS that significantly improves upon existing systems By leveraging its expertise in both solar power and hydraulics the company has created an improved solar powered chemical injection system that delivers more accurate injection rates fewer power failures and greater fluid capacity Prior to the invention existing solar power options had limited pumping capacity and were not capable of true continuous injection at higher volumes While working with customers at remote locations Danos automation services experts recognized the need for an improved solar powered CCIS With this new patentable design Danos customers can now achieve injection rates of more than 100 gallons per day at pressures of more than 1 200 PSI and with accurate power consumption predictions that allow for proper sizing of solar systems Danos engineers developed and tested a prototype unit that delivers twice the fluid capacity with 99 percent injection rate accuracy The company has filed for a patent for the CCIS which is now in production and available to customers around the world This solar powered system is a dramatic improvement over previous chemical injection options said Felix Dominique manager of automation services for Danos Now wellstream chemical treatments in even the most remote areas can be conducted far more efficiently and effectively using energy from the sun About Danos Founded in 1947 Danos is a family owned and managed oilfield service provider A trusted industry partner Danos offers the most responsive end to end integrated service solutions safe on time and on budget Danos achieves world class safety results and customer loyalty due to a values based approach and an unyielding commitment to employee engagement and training Learn more at Danos com Lift Off Pipe Supports A really easy way to protect your Piping All of our products are designed and manufactured in the USA WWW LIFTOFFPIPE COM For more information Email info liftoffpipe com or call us at 337 515 8590 18 Oilman Magazine September October 2017 OilmanMagazine com
PRODUCT SHOWCASE Lift Off Pipe Supports Throughout the oil and gas and allied industries the most interesting factor challenging Piping Engineers worldwide is the placement and longevity of pipe supports Of interest is both the function and the ability to inspect and maintain the supports as well as the verification of the condition of the piping wall thickness at the junction interface between the support contact point A support barrier s prime function is to isolate the braced piping from the structural support elements Failure to isolate the line leads to potential pipe wall degradation due to expansion vibration and inadequate draining of liquid from the interfaces causing coatings to blister and fail We have found that many supports are in very difficult to access locations and are often not maintained or consequently they are completely neglected In situations like this the lines and supports fail Our support materials vary with poly composite materials utilized for low temperature applications from 300 to 225 deg F to high alloy materials for elevated temperatures Field visits have proven that when barriers have not been adequately fastened to the beams the supports shear off epoxy fixing as well as the ability to expand beyond the coefficient of steel are dislodged from the support beams which render the support barrier ineffective In most cases our supports do not require bolting glues or any other attachment method as they have a non skid base The loads are spread evenly over the complete flange width coupled with a very low coefficient of friction 0 08 to 0 15 Our LOR supports are manufactured for Line Sizes from 2 to 48 to fit structural flange widths ranging from 2 to 16 and heights from 1 4 to 3 Lift Off Pipe Supports have developed our LOR LiftOff Rest and our LOV Lift off Vertical supports Our LOR is a beam flange mounted barrier that is suitable for most beams comprising of lateral lobes Other serious consequential damage is caused spread over the complete flange width This by point loads exceeding the coating allowable provides lateral horizontal and perpendicular stresses This causes the stripping away of movement for expanding lines Our LOV the coating creating a path for stray current supports are designed to ensure maximum to travel through the pipe directly into the drainage and removal of potentially corrosive unprotected pipe support grounding liquids Our supports result in big cost savings WITH or WITHOUT HOT WORK installation For more information visit www liftoffpipe com Lift Off Supports 2524 Edgewood Lane Lake Charles LA 70605 Phone 337 515 8590 OILMAN CROSSWORD PUZZLE ANSWERS Across 1 7 9 10 12 14 15 16 Upstream and _____ Circumference ratio Throw gently Permian ____ Fall behind on a schedule That hurts Building the ____ Conecuh County is a productive oil area in this state 18 Earned income credit for short 19 Took place 20 Christmas _____ 22 Pace of flow 24 ____ Chemical 25 Temperature control 27 Data 28 Rocky ___ 29 Weight measurement 31 Erode with away 32 Turbo Machinery ____ Symposia 35 Very large 36 Before to Byron 37 Indy 500 circuits 39 ____ of things 40 Fall month Down 1 2 3 4 5 6 7 8 11 13 17 ____ Basin _____ Gallery Haul NFL position for short Attorneys org Creator Part of a whole B B Overhead views Oklahoma Oil ____ Expo Dakota Access ____ 20 Oil _____ 21 ____ of Engineers 23 Perfect rating 26 Word with potato and pepper 30 A sign of a kind 31 Louisiana Gulf Coast Oil ___ abbr 32 Canadian province for short 33 Coffee pot 34 Intersected 38 Palmetto state abbr Oilman Magazine September October 2017 OilmanMagazine com 19
OILMAN COLUMN Interview with Johnathan Gwyn CEO of Energy Flow Network LLC By Tim McNally The following is an interview with Johnathan Gwyn CEO of Energy Flow Network LLC a TV network for reliable energy news Tim McNally What was the inspiration which motivated you to start Energy Flow Network Johnathan Gwyn I grew up in a kind of oil family we did hazmat removal So we did waste control we did chemical fires we responded to major oil spills As I began working in other channels I had developed my father who was retired by this time would come in and say You know son you should do an environmental television network At that time I would tell my dad Dad you re crazy that s a crazy idea After he passed I was having some thoughts about what he said and I thought Dad might have been onto something I started finding in my research that there was a need for a platform for energy for oil companies to be able to showcase the good things they are doing because oil gets such a bad rep Because my family specialized in cleaning up after these companies I know that when they spill a product and they are then contaminating the environment the rules have changed and they are on it They are paying big dollars under emergency situations because emergency response contractors are charging triple or quadruple what normal people would charge to go and clean a tank because of the emergency situation I really thought Oil companies need a better face they need a place to tell their stories So you know I credit my father I feel like I am doing it in his honor it was his idea TM There has obviously been a lot of negative news surrounding big oil recently given the coastal erosion in Louisiana and opposition to pipelines being built throughout the country So is the goal to present an objective view of the economic and environmental benefits these companies attempt to put out into the world JG Well I think it s that but I also think it s on the consumer side Consumers need to 20 better understand how important energy is to us It s important that people are informed and made aware of how important energy is No one is laying down pipelines to destroy the planet and no one wants to hurt the planet That s why so many projects especially in Houston and around the globe are being redeveloped re engineered and restructured to minimize pollution and kind of subsidize everything so we contribute a better development to the planet and put out less waste less pollution attuned to the new of the energy industry or those people who might not want to hear certain news about the industry JG First off we have to penetrate the market which is what we are doing slowly through digital media and through broadcast We are on a few affiliates right now For some of those people who don t want to hear about energy I think it s about People just see this one dark side of an oil touching on the subjects that matter them spill which is very damaging to the planet it s about the storytelling We let them know but accidents happen This channel is for that the world is changing every day but everyone when it comes to that Yeah we we are always going to need oil and gas I are big on the trading side and the politics of it but I think people just aren t informed think if we don t tell the stories from the company s side the consumer will never hear They don t understand energy and how it We have to tell stories like Algae could be essential and necessary it is for us as end the next biofuel fueling your cars it might users The channel is made for the world not happen for another 10 20 years but you I don t think it is just made for energy have to tell that side of the story too executives TM So you believe that the reason oil companies are seen through a negative light is because of a lack of information JG Right because everyone is talking about the greed and the oil and the damage it causes But no one talks about how these engineers are always developing new inventions People just don t know these things Fracking was getting such a bad rep for a long time but it is not so much the process as it is how they dispose of the water that causes the damage Doing it the proper way causes less damage to the planet These companies need to tell their stories from a global perspective It s a shame that these other big media outlets haven t seen that but it s fortunate for us TM How do you go about reaching out to those individuals who are not normally Oilman Magazine September October 2017 OilmanMagazine com TM What sort of challenges is your company facing today JG Penetrating the market is a big challenge for us You want the networks to pay attention and pick you up There s a huge transition happening right now in media as everyone is going to Roku and Apple TV the Pick your own channels kind of media It s a challenge but it s an advantage to be in that We are just at the point where we are going to be available on every digital carrier like Roku Apple TV and Amazon Fire So it s a good thing but at the same time the big companies such as Comcast and AT T aren t interested in new channels they are losing channels as we speak But I think that might be the perfect opportunity for us because we are being taken on for free so we can penetrate the market
WE DON T MARKET TO TEST THE WATERS WE HIT THE MARKET TO MAKE WAVES Regardless of the direction you think oil and gas will take tomorrow the facts remain the same The opportunity is available now and that window of opportunity is closing The longer you wait for the perfect asset the more you will miss out on There are companies that are actively acquiring daily Right now As you are reading this They are refusing to miss a second of this downturn Don t wait contact BEACHWOOD today Beachwood Marketing partners with oil and gas firms to uncover off market assets 2828 NW 57 TH ST OKLAHOMA CITY OK l 405 255 8146 WWW BEACHWOODMARKETING COM
FEATURE Technology and Politics Mix in the Downstream By Samuel Cook There s a popular phrase in American public affairs All politics is local Although the quip is more closely aligned to former U S House Speaker Tip O Neill its origins are far more unclear than a simple history textbook reference Applied more liberally it s an idiom that can hold true for any industry heavily immersed in both technological advances and political jockeying especially oil and gas Undoubtedly whoever first coined the expression wasn t waxing poetic on the state of political affairs in American oil and gas yet it s hard to understate just how true the statement is for America s key energy sector Among the many topics that seem to be particularly triggering these days for even the most apolitical American is just how the U S gets its energy Given the way technology continues to increase America s oil and gas output angering some and vitalizing others it seems almost impossible to effectively extract politics from the increasingly fertile soils of the industry In a time when renewables seem to be the cause c l bre it may seem counterintuitive and at times politically dangerous to even mention the continuing benefits of fossil fuels Yet upstream technological improvements keep pushing back the eponymous peak oil doomsday clock of yesteryear while downstream new and increasingly impressive innovations are making energy production from tried and true fossil fuels such as natural gas difficult to ignore for even the most environmentally conscious governments The Politics of Downstream It s easy to underestimate the heavy amount of political wrangling involved with downstream oil and gas production After all upstream operations tend to ignite the most fervor both among proponents and opponents of the oil and gas industry We 22 need only look at what is currently happening with America s booming shale oil drilling industry to see how positive and negative attention to the industry can morph quite easily into political discussions In 2016 for example former President Barack Obama banned oil drilling in large swaths of the Atlantic and Arctic oceans In a move that some identified as playing politics with American energy President Obama exerted executive powers enumerated under the 1953 Continental Outer Shelves Land Act As currently interpreted the Act allows a sitting US president to withdraw from what goes on downstream Nevertheless American oil production is still on the rise thanks to a singular focus on shale oil drilling where the red tape exists more in getting through federal and local permitting Better drilling methods and more advanced drilling technology have allowed energy companies to effectively squeeze increasingly larger amounts of oil and gas from the ground which in turn has produced growth in the downstream and increased demand for more downstream facilities with better technology to help transport store process and utilize America s increasing energy production Plastics in the Downstream Perhaps on the forefront of the political aspect to downstream is the increased need for more oil and gas pipelines to help run extracted oil and gas from upstream drilling operations to downstream processing facilities By some definitions those pipelines are a part of the larger chain of downstream operations and are increasingly becoming the target of large scale political protest against the oil and gas industry Photo Credit Tomasz Wyszolmirski www 123RF com disposition any of the unleased lands of the outer Continental Shelf These powers were exercised to not only disallow the sale of lands for oil drilling off the coast of Alaska but also Virginia and North Carolina While Obama isn t the first President to halt the sale of shelf land for oil drilling purposes both former Presidents George H W Bush and Bill Clinton took similar although smaller actions by disallowing the sale key offshore drilling became impossible Ultimately less offshore necessarily impacts Oilman Magazine September October 2017 OilmanMagazine com According to the US Pipeline and Hazardous Materials Safety Administration PHMSA the US added over 100 000 miles of oil and gas pipelines between 2010 and 2016 Additionally between that same period the percentage of pipelines constructed of plastics has also increased from 67 to 78 of all pipeline mileage The U S has been building oil and gas pipelines for decades Better safer building materials have always supplanted the old materials used from decade to decade The PHMSA notes that in 1940 the majority of the oil pipelines were constructed of either cast or wrought iron By 1950 steel was the material of choice while plastics became the norm by the 1970s The move away from bare steel specifically is due to bare steel s
FEATURE susceptibility to breakage over time and the cost of replacing steel pipes made headlines for months and resulted in hundreds of injuries Over time plastics have become an integral technological innovation for the oil and gas industry particularly in downstream operations like pipelines and parts construction Where metals were once standard many areas of the oil and gas industry now heavily utilize plastic parts for high stress functions The refining process in particular requires materials that are both durable and can withstand high heat and pressure For a long time the strength toweight ratio for plastics simply did meet what was required for the industry beyond a few applications On the East Coast Dominion Energy has been battling the politics on both the local and national level to get the Atlantic Coast Pipeline ACP approved Positively the ACP has been more well received than the Dakota Access Pipeline According to Frank Mack Dominion Energy Communications Project Manager the ACP has experienced a highly anticipated project There has been broad support from the beginning for the proposed Atlantic Coast Pipeline project all along its proposed path Mac explained He stated that support includes labor unions local governments and even the governors of Virginia West Virginia and North Carolina However newer innovations in plastics and in particular plastic composites comprised of carbon and glass fibers have given rise to unique thermoplastics that can perform as well or at times better than metals commonly used in oil and gas production and refining Undoubtedly metals still play a valued function across the oil industry For longterm structural support there is currently no significant replacement for metals But as we see with growing regularity of plastics in pipeline construction we are likely to see other areas become more infused with less expensive more durable materials as well Within decades many newer materials infused with carbon fibers will likely supplant the oil and gas industry s reliance on metals There s also an interesting circle of life that exists within the oil industry and its growing use of plastics The refining process in the downstream that creates materials needed for plastic production then sees those plastics return right back into oil and gas production creating a loop that is partially self sustaining However given the consistently low oil prices of the past few years plastics are more than just an innovative measure to supplant metals Lightness and durability aside plastic parts are far cheaper to replace as well Considering the stark drive in the oil industry to decrease production costs across all facets plastics may be one of the defining technologies of downstream oil and gas production in the past few decades Despite Innovations Protests Persist Downstream Still the increasing safety and necessity of oil pipelines does little to convince those vehemently against oil and gas operations Protests against the Dakota Access pipeline which was suspended under President Obama but quickly approved under President Trump While some opposition has expressed concerns regarding oil spills most pipeline spills are due to aging pipelines made with less technologically advanced materials A 2016 CNN article by journalist Chris Isodore titled Spills are more common thanks to aging pipelines explores the growing issue The fears many anti pipeline protesters have against inland oil spills are accurate Yet holding up the process to help replace aging pipeline systems and install newer ones with better materials is likely counter productive Time is never the friend of any industry heavily reliant on physical materials Given much of the oil and gas infrastructure in the U S is decades old replacing older materials with new technology is necessary not just for bringing down costs but for avoiding the type of oil spills opponents seek to stop extracting fossil fuels from using an innovative hydraulic fracturing back in the 1980s the company likely had little idea that it would be helping to create the next oil boom However as the EIA also explains the success of Barnett Shale was such that the new hydraulic fracturing technique was improved upon and mimicked in shale formations across the country As a result downstream an increasingly large number of U S power plants are using natural gas as an energy source In 1990 only 10 of power generation in the U S came from natural gas Nearly 30 years later after the viability of shale oil and natural gas extraction was proven natural gas now accounts for 33 of U S electricity generation Natural gas is the first energy source to overtake coal since data has been collected Even in a state such as California where one might think that fossil fuels are the least likely to be used in energy generation one finds a majority of the state s power generation coming from natural gas Perhaps ironically enough California invested so much in efficient natural gas power plants that the state is now dealing with an oversupply of energy Energy regulators in California are now considering rolling back upgrades to older less efficient natural gas power plants and considering halting new plant constructions While the state is slowly trying to reduce its heavy reliance on natural gas which provides over 36 of the state s energy natural gas is likely to remain an important part of the state s electricity generation Downstream Energy Production Wins Favor The Future of Oil And Gas Flows Downstream According to the EIA in 2016 natural gas played a leading role in U S energy generation A hard to ignore 34 of the 4 trillion kilowatt hours of energy generated in the U S came from natural gas the majority of which comes from increasingly efficient shale drilling operations Combined Texas Pennsylvania Oklahoma Wyoming and Louisiana produce the majority of natural gas in the country On its website the EIA highlights that there are over 30 shale formations across the country contributing to the country s energy needs In American politics hostility toward the oil and gas industry waxes and wanes Because drilling operations are typically more out of sight out of mind downstream operations often get an unfair amount of attention Despite this the industry persists in innovating downstream operations particularly given the far and lasting impact that downstream operations have on more people Meanwhile an August 2017 EIA report projects that U S crude oil production will reach its highest point at 9 91 million barrels per day surpassing the previous record high set in 1970 When the Mitchell Energy and Development Corporation began exploring the viability of Whether it s transportation of oil and gas or the transformation of gas into energy politics play a central role in the downstream Nevertheless new technology continues to help drive down energy costs and increase safety for everyone hinting at the fact that the oil and gas industry may be an easy political target but it s importance and innovations are also increasingly misunderstood Oilman Magazine September October 2017 OilmanMagazine com 23
OILMAN COLUMN Millennials and Green Energy Death to Big Oil or Lifeline By Eric R Eissler The oil and gas industry faces a unique two headed challenge the retirement of the baby boomer generation being replaced by the millennials and the major albeit slow paradigm shift from fossil fuels to renewables Given the situation some may think that the industry is doomed The millennials and the shift toward renewables are a serious impediment for big oil companies That scenario is not the case unless of course a company is unwilling to embrace the change that the market has thrust upon it Furthermore in a report by Londonbased Chatham House International Oil Companies IOCs have only some 10 years to change their business models or face obsolescence and extinction What Do Millennials Want Millennials are complete opposites of their baby boomer parents they want options they want to be passionate about their work they want to work for green companies they want to be treated fairly and well compensated entering the job market at the time of the great recession and its aftermath has been hard on salaries The entire psyche of a generation cannot be thoroughly explored here but a good general idea is presented With this knowledge IOCs and other oil and gas firms can reflect on what the industry has become and where it is going Most importantly companies can ask themselves if they want to take the leap into diversifying their energy sources Generational Change The generational change that has befallen the industry may have come at a rare opportune time for many IOCs as it has been hard to attract new talent to the oil and gas industry Reasons to being adverse to the oil and gas industry as a millennial include but are not limited to boom bust cycles that leave field workers without job security damage to the environment lack of interest in manual labor dirtiness of the 24 industry etc Companies must not only battle against competitors to be the most appealing to this generation but they must also give serious consideration as to how they engage with them the technology young people use and how this group views and equates success at work said Ryan Jenkins Millennials Expert due to speak at the OPITO Safety Competence Conference OSCC 2017 in Kuala Lumpur Malaysia Shell Takes the Leap into Green Energy The second largest publicly traded oil company Royal Dutch Shell made an announcement that grabbed attention CEO Ben van Beurden stated that the company plans to invest 1 billion per year up from 200 million per year in its New Energies Division by 2020 The division was created only in 2016 but it is a signal to the industry that oil and gas companies cannot be only focused on oil and gas if they want to remain competitive The budget increase comes as success in the clean energy sector is raising questions about the long term business model for major IOCs According to Wood Mackenzie renewables will be the fastestgrowing primary energy source worldwide over the next 20 years with average annual growth rates of 6 for wind and 11 for solar Demand for oil meanwhile is forecast to grow just 0 5 per year The generational divide makes it difficult for millennials and baby boomers to come to terms on many things However Oilman Magazine September October 2017 OilmanMagazine com Photo Credit Diana Andreea Bahrin www 123RF com with the advent of reduced hydrocarbon demand lower market prices and the rise and successful renewable power resources the market may just lend itself the perfect invitation to millennial workers who are seeking a way to work with green energy At the same time this generational transition could transform the old IOCs business models to that of a competitive green energy company of the future Not Just Renewables but Digitalization Besides the push towards green energy oil and gas companies are citing demand for new technologies and the rapid spread of digitalization the digital oilfield and the Internet of Things So this is where the IOCs need new talent with the skills to keep the oil flowing However if companies cannot attract said talent then they are just going to fall into further obsolescence and eventually out of the market Over time going green will grow the company Whereas remaining solely footed in hydrocarbons will leave the company remembered as the stubborn fossil it always was
SHALE AT A GLANCE OPEC Meets with U S Shale Producers By Tim McNally U S shale oil producers and The Organization of the Petroleum Exporting Countries OPEC met for the first time to talk about the future of the oil industry according to Forbes and to the Anadolu Agency AA a Turkish news source The Secretary General of OPEC Mohammad Barkindo stated on July 12 that this meeting has broken the ice in reaching out to shale producers in the U S OPEC has traditionally kept its dealings within the sphere of its cartel but has recently broken out of its shell to include other countries such as Russia into the mix The meeting with shale oil producers is somewhat surprising because OPEC and U S shale producers have traditionally been seen as direct competitors especially so when considering the market conditions over the past two years Any attempt by OPEC to reduce the global supply of oil has been compromised by the surge in production from U S shale producers We sat with them and we had a very productive and very useful preliminary meeting with them stated Barkindo according to AA We all agreed that we should continue these meetings he continued At the end of the day we are all agreed that we belong to the same oil market We also agreed that we share responsibility in this market Barkindo said One might speculate that the purpose of these meetings is to try to persuade the shale producers to agree to some sort of potential agreement on oil production levels Whether any sort of agreement will be developed and followed through on is an entirely different matter Further Forbes notes that there isn t any singular group which comprehensively represents U S shale producers This rather ambiguous statement by Barkindo that OPEC was meeting with shale oil producers inevitably leads to questions about which firms were actually present at that meeting Large companies would understandably be open to talks about a reduction in oil production from shale regions but smaller more financially constrained firms would probably not be able to survive if they underwent a cut in production If that were the case then any sort of agreed upon reduction in production would have a limited if any effect on the global supply of oil as an effective production cut would 26 necessitate all or at least a large majority of U S shale producers agreeing to it However as previously stated whether anything will come of these meetings is impossible to predict and as of now they have not produced any fruitful outcome Life After Shale How Dickinson ND Moves Forward After Shale Boom By Tonae Hamilton The discovery of a new profit maker can leave a lasting impact For Dickinson North Dakota the discovery was an untapped shale oil formation harboring natural gas and crude oil This discovery sparked an increase in oil drilling in the small town as well as an increase in population growth specifically in the year 2015 with a population of 25 000 compared to 2010 s population of just 17 000 According to Shawn Kessel Dickinson North Dakota s city administrator the shale boom also had a significant impact on the town s economy Three shale plays the formations where the drilling takes place that have directly influenced Dickinson s economy include The Bakken Three Forks and the Tyler formation all to different degrees as Kessel stated Additionally the shale boom has had an impact on job growth Kessel explained that 17 19 of total employment in Dickinson is related to the oil industry As it seems the shale boom has positively impacted the town of Dickinson at least in the areas of population and economic growth More Money More Issues With a hike in economic and population growth comes a hike in problems for the town of Dickinson Although the city was ranked consecutively as the 2nd fastest growing micropolitan in the US according to the US Census Bureau they also experienced a growth in taxes rent prices and crime Wage inflation was a real issue for small businesses and the housing market was super hot Kessel explained 2 400 a month apartment rents were not uncommon for a 2 bedroom unit Our sales tax revenue went up 50 hospitality tax and occupancy taxes increased significantly as well Due to these increases a significant number of residents including many long time residents were lost and crimes such as bar fights drug use and human trafficking Oilman Magazine September October 2017 OilmanMagazine com began to rise A Boom in the Quality of Life Although Dickinson s shale related issues increased Kessel describes how the impact of the shale boom has done more good than harm Due to the success of the shale boom Kessel explained We are building a new middle school added capacity in two grade schools built a new grade school and promptly added on to it the following year The shale boom and the revenue gained allowed for the town of Dickinson to focus on important factors such as education and quality of life Kessel also stated that the city invested in the construction of the West River Community Center over 12 years ago and expanded the facility two years ago Additionally he mentioned that Dickinson was able to invest in two new water towers a new Public Safety Center and a new interstate exchange It seems Dickinson has been impacted more positively than negatively from the shale boom and the small town seems only to be progressing As Kessel noted The city of Dickinson is much better off after the oil boom than before from an infrastructure perspective North Dakotan Boom Town s Growing Pains By Eric R Eissler While North Dakota has the Bakken Basin to thank for its recent prosperity it has been a double edged sword attempting to provide economic prosperity while simultaneously bringing problems of quick growth without adequate infrastructure The issue stems from the lack of infrastructure low population and population density These elements put a strain on the state and city government forcing them to allocate funds to build the proper infrastructure necessary for quick growth in boom towns Looking at the state on the macro level a report by the Duke University Energy Initiative states The lack of pre existing infrastructure for county and municipal governments has meant that these new revenues have been insufficient to manage service demands associated with the rapid growth in population and truck traffic The state allocates a large share of oil and gas revenue to trust funds an understandable approach given the unpredictable nature of
SHALE AT A GLANCE natural resource driven economic growth Dickinson is an example of how a town stagnated and then grew during the boom times but not without difficulties Dickinson City Administrator Shawn Kessel said that due to the high rents that suddenly rose with upon the advent of the boom we lost a great many residents who were living on a fixed income He also explained that many of these were long time Dickinson residents Kessel also noted an unfortunate side to the situation more crime I will also admit that certain types of crime increased such as bar fights drug use and human trafficking Kessel said He did mention that a strong investment in the police force was able to keep these issues in check and keep the city a friendly livable place Boom Bust Cycle As more oil and gas workers came to Dickinson accommodations grew sparse and with all the high wage earners saturating the town the rents skyrocketed However that came to a halt starting in 2015 with the massive oil glut pushing down prices around the world Kessel described these effects on the town in more detail Wage inflation was a real issue for small businesses and the housing market was super hot 2 400 a month apartment rents were not uncommon for a 2 bedroom unit We went from around 800 hotel rooms in town to more than 2 000 Our sales tax revenue went up 50 hospitality tax and occupancy taxes increased significantly as well Since 2015 and the precipitous decline in oil prices we have experienced a reduction in apartment rents to 500 750 a month and sales tax revenue has declined 45 Note that 17 19 of employment in Dickinson is in the oil and gas industry Kessel added on a positive note that the city of Dickinson is much better off after the oil boom then before from an infrastructure perspective The oil and gas boom allowed the city to add what it needed in order to serve its citizens OILMAN COLUMN A Partnership Worth Keeping By Don Briggs From the oil platforms in the Gulf of Mexico to the drilling rigs in the Haynesville shale play the oil and gas industry has played a vital role for our culture economy and our community It is well known in Louisiana that if you do business in our great state you are somehow involved in the oil and gas sector The oil and gas industry is a key segment in Louisiana s economy One study suggests that our industry is responsible for 300 000 jobs and over 4 billion in contributions to state and local coffers It is estimated that Louisiana s oil and gas industry has an economic impact of nearly 74 billion in our great state The oil and gas industry has been a constant economic driver for Louisiana providing not only jobs but valuable revenue that is used to protect and restore Louisiana coastal areas Between January 2009 and January 2016 Louisiana collected more than 3 billion in severance taxes from wells in the coastal zone These tax dollars are then sent to the legislature for lawmakers to decide how these fund will be appropriated for various coastal projects Louisiana also benefits from federal programs that rely on oil and gas revenues to fund coastal protection and restoration along the Gulf Coast The Gulf of Mexico Energy Security Act or GOMESA which was signed into law by President George W Bush in 2006 shares leasing revenues amongst the four oil and gas producing gulf states of Alabama Mississippi Texas and Louisiana The share funds are to be used for coastal conservation restoration and hurricane protection This act also stipulates that over 8 million acres be offered for oil and gas leasing It has been estimated that Louisiana has generated nearly 140 million a year for coastal projects since this legislation was enacted Another federal program that Louisiana has contributed to and has greatly benefited from has been the Coastal Impact Assistance Program This program allocates funds based on offshore oil and gas revenues From 2007 to 2010 Louisiana has received 300 million and is set to receive another 36 million this year all paid to coastal projects in Louisiana These numbers are impressive but they are just the dollars that Louisiana and the federal government has collected not including any private investments that oil and gas companies have made here Over the past five years Exxon Mobil s Baton Rouge sites have made approximately 1 4 billion in environmental investments The Nature Conservancy the Louisiana Coastal Protection and Restoration Authority and Chevron have invested an estimated 1 million to build a brand new artificial oyster reef in St Bernard Parish Chevron Shell and CITGO contributed to the Foundation Gulf Intracoastal Waterway GIWW Shoreline Stabilization and Restoration Project that will create four miles of embankment along both sides of the Gulf Intracoastal Waterway in Lafourche Parish The estimated investment of this project is 1 2 million The list of projects that the oil and gas industry are investing in goes on and on While Louisiana finds itself in a continual financial tailspin from upticks in unemployment we must provide an environment for the oil and gas industry to thrive The state must provide a tax environment that will encourage future investment and a legal climate that doesn t force banks and investors to look elsewhere when searching for new drilling projects The partnership that Louisiana has with the oil and gas industry must continue the success of us all depends on it Oilman Magazine September October 2017 OilmanMagazine com 27
NEWS AT A GLANCE Baker Hughes and GE O G Form 2nd Largest Oilfield Services Company Russia Ran Campaign Against U S Oil Gas Activity By Tim McNally By Alex Mills Baker Hughes and GE s Oil Gas division announced on June 3 that they had completed merging their two companies The combined firm which will be known as Baker Hughes a GE company BHGE is the second largest oilfield services company in the world and it will generate an estimated 23 billion in annual revenue Russia has been in the news just about every day this year This is the second attempt of Baker Hughes to combine with a large rival Baker Hughes originally planned to merge with Halliburton last year but in May the firms announced that the deal failed to pass the scrutiny of antitrust regulators Baker Hughes rebounded from the failed merger quite quickly as it announced the merger with GE just a few months later in October of 2016 The agreement between the companies stipulated that Baker Hughes would be converted to a partnership and that GE would contribute its Oil Gas business to the new company GE will own 62 5 of the firm with Baker Hughes shareholders owning the remaining 37 5 and receiving a one time cash dividend of 17 50 per share The combination of GE s vast technological resources with Baker Hughes extensive experience in the oilfield will give the firm a heightened level of new offerings The Baker Hughes release notes that the company will be focused on Providing a fullstream offering No other company brings together capabilities across the full value chain of oil and gas activities from upstream to midstream to downstream This portfolio positions BHGE to create new sources of value improving productivity and project economics through integrated equipment and service offerings Finding new ways to slim down operations is the new name of the oilfield game To competitively participate companies must be incessantly seeking out new opportunities wherever they can be found As the president and CEO of BHGE Lorenzo Simonelli stated Disruptive change is the oil and gas industry s new normal We created BHGE because oil and gas customers need to withstand volatility work smarter and bring energy to more people Our offering is further differentiated from any other in the industry across the value stream and enables and assists our customers in driving productivity while minimizing costs and risks 28 The top news story recently involves Russia s involvement in the 2016 Presidential elections which was highlighted in a Jan 6 report issued by the Office of the Director of National Intelligence The declassified version of the report entitled Assessing Russian Activities and Intentions in Recent U S Elections included an analytic assessment drafted and coordinated by the Central Intelligence Agency Federal Bureau of Investigation and the National Security Agency We assess Russian President Vladimir Putin ordered an influence campaign in 2016 aimed at the U S presidential election the report stated under its Key Judgments section Even though the primary focus of the report focused on the presidential election and the political process it also included Russian influence on U S energy policy including running anti fracking programming highlighting environmental issues and the impacts on public health This is likely reflective of the Russian Government s concern about the impact of fracking and U S natural gas production on the global energy market and the potential challenges to Gazprom s profitability Gazprom is Russia s national oil and gas company Now two members of Congress have sent a letter to the Secretary of Treasury requesting an investigation concerning allegations that Russia has attempted to harm the domestic oil and gas industry by funding environmental groups that seek to eliminate hydraulic fracturing in the U S and elsewhere House Science Space and Technology Committee chairman Lamar Smith R TX and energy subcommittee chairman Randy Weber R TX stated in a letter to Treasury Secretary Steve Mnuchin that Russia has tried to suppress the widespread adoption of fracking in Europe and the U S If you connect the dots it is clear that Russia is funding U S environmental groups in an effort to suppress our domestic oil and gas industry specifically hydraulic fracking said Smith Oilman Magazine September October 2017 OilmanMagazine com They have established an elaborate scheme that funnels money through shell companies in Bermuda he said This scheme may violate federal law and certainly distorts the market The American people deserve to know the truth and I am confident Secretary Mnuchin will investigate the allegations Smith said the panel is already conducting oversight into what appears to be a concerted effort by foreign entities to funnel millions of dollars through various nonprofit entities to influence the market Crude oil and natural gas production have increased in the U S since 2008 because of new technological developments in drilling completion and production techniques from shale Hydraulic fracturing and horizontal drilling have fueled an energy renaissance in the United States creating more competition between Russia and the U S for global energy markets Exports of liquefied natural gas LNG crude oil and petroleum products from the U S are in direct competition with Russian oil and gas exports which accounted for 68 percent of that country s export revenue in 2013 Citing news reports and IRS documents the congressmen requested the investigation into major environmental groups including the Sierra Club Foundation League of Conservation Voters Education Fund and Natural Resources Defense Council alleging those groups received Russian money to fund their anti fracking protests Gulf Production Up Exploration Activity Down By Alex Mills Even though crude oil production in the Gulf of Mexico remains at a record pace companies involved in exploration face tough times according to an article in the June issue of Offshore Magazine Crude oil production on federal leases in the Gulf set a record in April with 1 76 million barrels However drilling activities have declined from 54 active rigs in May 2014 to 21 last week Investment in exploration activities will continue to decline by an anticipated 36 percent this year to 9 8 billion the story stated While exploration and production activity costs and pricing are expected to creep up in 2017 the Gulf of Mexico is still searching for a bottom This is largely due to the
NEWS AT A GLANCE softened rig market Managing Editor Bruce Beaubouef wrote Although leading edge day rates are averaging 230 000 the overall average for rigs in the Gulf of Mexico is still 470 000 a legacy of contracts signed during the days of 100 per barrel Beaubouef stated quoting a study by Wood Mackenzie While smaller players have taken advantage of the softer rig market bigger players have been left behind This 240 000 gap between the leading edge and average contracted rates will be the key driver for contract cancellations or renegotiations in 2017 The report stated lower rig rates will help bring well costs down along with improved efficiency and project design The story cited Shell s Vito project that has been redesigned with a smaller facility and lower well count which has helped bring the breakeven down for 60s per barrel to the low 40s per barrel deepwater projects went online in the Gulf in 2016 For this year at least independents are expected to focus their limited budgets on development activities resulting in fewer wildcat wells the story stated Despite the persistent market gloom analysts are forecasting continued growth in the deepwater Gulf through 2020 The region currently supplies 15 percent of daily U S oil production more than the Eagle Ford in South Texas or Bakken in North Dakota and is expected to remain just as relevant by 2020 the article stated The decline in activity creates problems for service and supply companies who are feeling the squeeze on price and even having enough work for employees Only eight The article noted that the depressed market condition leaves little hope for a quick turnaround in 2017 However there is some optimism OILMAN COLUMN Winter is Coming By Josh Robbins I have no idea whether or not Games of Thrones has this title copyrighted But for the oil and gas world there is no sweeter statement The general consensus is that this winter will be by far the coldest we ve had for a while Our inventory is lower than it should be and that will play a crucial role in the value of an MCF in the winter months With that being said you can t give away a deal primarily made up of gas assets The major reason has nothing to do with winter with gas volatility or with location It has to do with current midstream contracts Unless you as an operator have a significant amount of gas going through pipe you have absolutely no leverage against the fee structure that midstream currently has in place That fee structure eats the vast majority of available profits and is causing a number of wells to be shut in entirely Shut in wells don t sell because shut in well economics start in the red These wells at least for the most part hold more acreage hold deeper rights and are less money to operate than their oil counterparts These are all very good boxes to check in 2017 And the best part is Savvy operators usually ones with enough these deals are everywhere They are easily leverage with midstream companies through negotiated and quick closes total production are picking these gas When you sit down with your team properties up for next to and sometimes less than nothing When gas jumps in price remove the word non core from the discussion Everything is core if it s in the this winter these gas wells will be well out of the red So thank goodness you can give black in 2017 Your team knows the area that is your company s bread and butter away a gas deal right now because buyers We Beachwood work with operators to can have their pick of targeted wells identify their targeted acquisition plan finding the geographic area that best suits their current acquisition needs Within this area you can find immediate acreage and production that is available today We can literally add more dollars to the bottom line with one phone call It s just knowing where to look Find your target area know your focus and add more money to your company Happy Hunting and Enjoy this Winter Oilman Magazine September October 2017 OilmanMagazine com 29
OKLAHOMA NEWS AT A GLANCE Halliburton Acquires Tulsa Based Summit ESP By Tim McNally A Tulsa based oilfield equipment supplier has gained the attention of a large multinational oilfield services provider The Oklahoma based firm Summit ESP notably impressed Halliburton as evidenced by the fact that Halliburton announced on Wednesday July 5th that it was purchasing Summit Summit ESP maintains a focus on manufacturing and servicing a comprehensive product portfolio for electrical submersible and surface pumping systems The firm s products help to maintain well pressure and focus on mitigating the downtime spent servicing such wells Reuters reported that banking billionaire George Kaiser financially backed the firm NewsOK noted that Summit was founded by a number of Baker Hughes Inc executives and employees including the CEO of Summit John Kenner We re proud of the company we ve built and thank our employees for their commitment to the company and for providing outstanding service quality to our customers stated Summit president and CEO John Kenner in a release The combination of Halliburton and Summit creates exciting opportunities for both our customers and employees We look forward to capitalizing on Halliburton s deep customer relationships and international presence to accelerate our growth Kenner continued Halliburton is reportedly pleased with the deal as well and the firm plans to headquarter its electric submersible pump business in Tulsa The acquisition of Summit expands Halliburton s existing artificial lift capabilities and increases our overall leading position in North America oilfield services stated Halliburton president and CEO Jeff Miller Summit s unrivaled service quality proven technology and U S market leadership make it a perfect fit for Halliburton Just two days prior to the HalliburtonSummit merger announcement Baker Hughes Inc BHI had announced that it had successfully combined forces with GE Oil Gas to form a new company 30 which would capitalize on both of the firm s strengths The plan to merge with GE was announced shortly after the Halliburton and BHI failed merger back in May of 2016 which left Halliburton with a termination fee of 3 5 billion payable to Baker Hughes In the end both BHI and Halliburton were able to find new companions who agreed to merge turning what seemed to initially be a poor situation into a new opportunity for both firms Devon Energy Sells 340 Million of Assets By Tim McNally Oklahoma City based Devon Energy Corp announced on July 31 that it had entered into an agreement to sell what it considers to be non core assets in Lavaca County within the Eagle Ford region The sale which is expected to close by the end of 2017 is part of the firm s larger overall plan to divest nearly 1 billion of existing assets The totality of asset sales so far including various minor asset sales besides the Lavaca sale amount to 340 million These highly accretive asset sales are an important step in executing on our 1 billion divestiture program over the next year stated Devon Energy president and CEO Dave Hager according to a release from the company The release from Devon further stated that in aggregate the overall production of the sold assets amounts to roughly 4 000 barrels per day The assets are expected to generate cash flow of approximately 30 million annually excluding overhead costs Despite the loss in cash flow the sale of these assets provides some much needed capital for the company The divestiture proceeds will further strengthen our investment grade financial position and provide us additional flexibility to build operational momentum across our toptier U S resource plays continued Hager A few days after the Lavaca asset sale announcement Devon released its earnings for the second quarter of 2017 Devon achieved another high quality operating performance in the second quarter building operational momentum Oilman Magazine September October 2017 OilmanMagazine com in our U S resource plays and accelerating efficiency gains across our portfolio stated Hager The firm generated 810 million in cash flow in the second quarter compared to 345 million for the same period last year Total revenues came to 3 3 billion compared to 2 5 billion for the second quarter of the previous year The firm s net earnings amounted to 425 million or 0 80 per diluted share These successful efforts resulted in record setting well results that drove our U S oil production above guidance expectations with a capital investment that was 17 percent below our budget year to date As a result of this strong capital efficiency we are lowering our full year capital outlook by 100 million and importantly we have not made any changes to our planned activity levels in 2017 stated Hager Continental Resources Ups Production Expectations for the Year By Tim McNally Oklahoma City based Continental Resources Inc reported their 2017 second quarter financials on August 8 2017 and updated their guidance for the remainder of the year The firm posted a net loss of 63 6 million or a loss of 0 17 per diluted share for the second quarter however the company noted that certain items that were included as part of the net loss are sometimes excluded by typical financial reports Despite the net loss the company expects that annual production will be in the range of 230 000 to 240 000 bpd up from the previous estimate of 220 000 to 230 000 bpd Continental Chairman and Chief Executive Officer Harold Hamm stated in a release that the firm is looking forward to the third quarter of 2017 as we expect third quarter 2017 production will average 240 000 to 250 000 Boe barrels of oil equivalent per day with 58 of production being crude oil Continental reported a net production level of 20 6 million Boe for the second quarter of 2017 or 226 213 Boe per day an increase of 12 458 Boe per day from the previous quarter The firm expects its rig counts to average 18 for the second half of the year with 14 of those rigs
OKLAHOMA NEWS AT A GLANCE concentrated in Oklahoma and four in the Bakken region The firm also reduced its estimated production expense per Boe lowering the range from 3 50 to 4 00 down to 3 50 to 3 90 The results have been exceptional raising our production guidance for 2017 and lowering our guidance for operating costs We now expect to exit 2017 with production up 24 to 31 over the fourth quarter of 2016 with a lower range of capital expenditures for the year targeting cash neutrality between 45 and 51 WTI stated Hamm Hamm expressed his contentment with the financial results of the firm for the second quarter as the firm has steadily been improving its bottom line results since 2016 The net loss of 119 million or 32 cents per share incurred in the first quarter of 2016 represents a 55 4 million larger net loss than the loss experienced in the second quarter of 2017 Continental remained disciplined and strategic with its capital spending during the quarter Hamm stated 3 8 Billion O G Acquisition Organized By Former Anadarko CEO pipeline Alta is the primary customer and user of Kingfisher s pipelines By Tim McNally The new company will be called Alta Mesa Resources Inc and will have a market value of approximately 3 8 billion The focus of both firms was and will presumably continue to be concentrated within the STACK region in Oklahoma The former CEO of Anadarko Petroleum Corp James Hackett has returned to the energy industry as a chief executive Hackett has been serving as the CEO of Silver Run Acquisition Corp II which conducted its IPO in March of this year at 10 a share The firm is what is known as a blank check company which according to the SEC is a development stage company that has no specific business plan or purpose or has indicated its business plan is to engage in a merger or acquisition with an unidentified company or companies other entity or person Silver Run has already initiated its plan to acquire companies as the firm announced on August 17th that it would be acquiring two oil and gas firms Alta Mesa Holdings LP an exploration and production company and Kingfisher Midstream LLC a midstream company with 300 miles of Not just survive you really need to thrive during a low price cycle like now Hackett stated in an interview with World Oil when speaking of his company s ability to turn a 25 profit per barrel That s the cool thing about this company It s an incredible machine at a higher price level but it works just fine at this price level World Oil notes that Hackett will be quite busy despite his retirement from Anadarko In addition to being the chairman of Alta Mesa will begin teaching moral leadership in economic enterprise at Rice University in Houston He is also in the midst of writing a book and will begin teaching at the University of Texas in the spring EFFICIENCY ACCURACY SAFETY AUTOMATED Whether using Spotter the Customizable Inspection App or a fully custom digital solution built to suit your business needs consider your company s biggests threats a thing of the past WHAT WE OFFER MOBILE APPLICATIONS CUSTOM SOFTWARE DIGITAL MARKETING DIGITAL WEB PRESENCE ONLINE REPUTATION SERVICES ENVOC COM ENERGY Oilman Magazine September October 2017 OilmanMagazine com 31
TEXAS NEWS AT A GLANCE Shale Drilling in Texas Provides Mixed Bag of Wealth and Environmental Changes By Tonae Hamilton An industry as large as the U S oil industry can have a lasting effect on a state s economy For Karnes County Texas the shale oil industry provided wealth power and an increase in population Formerly a location filled with ranchlands and fields Karnes County has become the leading producer of shale oil in Texas In September 2016 Karnes County pumped more than 5 million barrels of oil The shale oil boom has helped the community financially providing funding for grade schools and repairs to highways With a growing industry came a booming population but also a rise in air pollutants such as carcinogen and benzene due to burning oil Long term residents of Karnes County have noticed the positive changes in the county s economy as well as the change in scenery of the environment with an increase of oil wells as a result of the shale oil boom Oil County USA According to reports from the Railroad Commission of Texas Karnes County was among the state s top producers of natural gas and the light oil condensate Long term resident named Luc Jasso labels Karnes County as the Flare City referring to how you can always see flares from the shale oil plants One plant known as the Encana plant processes up to 9 000 barrels of oil per day The oil boom in Karnes County has led to the growth of the oil industry in other Texas counties as well Dimmit County and Webb County have also become leaders in the oil industry being the top producers of light oil condensate and natural gas respectively Residents of Karnes County have described the flares that come from the oil plants as lights noting how during the night you can vividly see the color of the grass Still the county has become dedicated to their profit maker working day and night to produce oil for the state and neighboring states The shale oil boom has also led to an increase in workers for the oil industry providing many residents with steady jobs and a steady workflow Profit Plus Problems With success and profit occurring in the community residents have acknowledged some issues within their oil centered community and have attempted to make efforts to improve it Priscilla Villa a community organizer for Earthworks has made efforts to help the community improve some of the recent emissions in the environment as a result of the oil industry While the oil industry produces some side effects on the environment it can be considered a positive impact on the welfare of the county As residents have noted the once ranchfilled Karnes County has transformed into an industry leader being one of the most successful oil producers in the nation The county has witnessed an increase in job growth and improvements on roadways and education institutions Although the effect on the community s environment Safety and Dividends Go Together Like Oil and Gas We want to fuel your profits with safety that s why we provide group and individual dividends to companies that keep their people safe Plus as members of the Texas Oil and Gas Association Safety Group you may receive a greater discount on your workers comp premium We re helping our policyholder owners be safer and stronger and we think you are going to find it very rewarding To see how safety can power your dividends contact your agent or Jim Sierra at 512 796 5467 or jsierra txoga org While we can t guarantee dividends every year Texas Mutual has returned more than 2 2 billion to safety conscious policyholder owners since 1999 Texas Mutual Insurance Company is rated A by A M Best Company 2017 Texas Mutual Insurance Company 32 Oilman Magazine September October 2017 OilmanMagazine com
TEXAS NEWS AT A GLANCE hasn t been looked upon too pleasantly the county overall has made improvements and the welfare of its residents continue to progress ConocoPhillips Releases Financial Report for Second Quarter By Tim McNally ConocoPhillips its latest financial report released on July 27 reported a significant step forward in the move to meet financial and operational goals The Houston Texas based firm has like many of its competitors been attempting to improve its financial position during these past few years as the oil price has lingered around a relatively low position As large oil and gas companies have strived for profitability in this downturned market decreasing costs has become a huge focus for many companies This has come in the form of layoffs a reduction in overall drilling activity and an appetite for modern technologies which can offer more reliable and consistent results in the oilfield ConocoPhillips has utilized some of these cost reducing methods but the economic environment still causes even the largest of companies to struggle to produce a positive net income ConocoPhillips reported a second quarter 2017 loss of 3 4 billion a loss of 2 78 per share as compared to a 1 1 billion net loss or 0 86 net loss for the second quarter of 2016 The firm highlights the fact that cash from operating activities exceeded capital expenditures and dividends for the fourth quarter in a row The firm also fortified their balance sheet by reducing debt by 3 0 billion with a commitment to retire another 2 4 billion in debt in the third quarter This quarter highlights the significant progress we ve made in transforming our company In just six months we ve exceeded the three year plan we laid out in late 2016 We ve reset our portfolio through strategic dispositions that generated substantial proceeds allowing us to accelerate key financial and operational priorities stated ConocoPhillips chairman and CEO Ryan Lance We are on track to far surpass our initial debt reduction and shareholder payout targets while accelerating strong underlying financial and operational performance We remain focused on lowering our breakeven price for the business generating free cash flow and delivering strong per share growth with improving returns through the price cycles This is the right approach for value creation in the upstream sector especially at a time of uncertainty in the commodity markets continued Lance Texas Petro Index Increases for Eighth Straight Month By Tim McNally On Wednesday August 23 the Texas Alliance of Energy Producers released their Texas Petro Index TPI analysis for July the results of which showed a continual increase in all of the factors that the index tracks The TPI a composite index which summarizes the results of a number of upstream economic indicators including rig count drilling permits and the overall value of Texas produced crude oil and natural gas rose to 176 9 a 15 percent increase from July 2016 s TPI of 154 Oil and gas producers in Texas and across the U S responded swiftly to wellhead price increases that occurred when OPEC and other oil producing nations agreed to curb output to fight excessive supplies on world oil markets stated Karr Ingham the economist who created the TPI according to the Texas Alliance of Energy Producers OPEC production curtailments did not achieve the desired price outcome and once again Texas and the US are the chief offenders and I say that with great pride Ingham continued Total estimated Texas crude oil production in July came to 13 5 million barrels a nearly 6 increase from the same period last year Overall value for the oil was approximately 4 46 billion or 43 10 per barrel about 9 6 more than the previous year s figure For natural gas Texas produced roughly 700 billion cubic feet of gas which represents a 3 5 percent decline from July 2016 The total value of Texas produced gas was 1 9 billion was an increase of 2 3 percent from the previous year The analysis notes that the Baker Hughes active rig count averaged 464 units an astounding 125 2 percent increase from July 2016 s figure of 206 rigs The number of drilling permits issued was 1 011 60 2 percent higher than the 631 permits issued in July of the previous year The analysis estimates that there was an average of 212 667 Texans who were on upstream oil and gas payrolls which represented a 10 percent increase from July 2016 but a 28 percent decrease from the high of 295 168 experienced in December 2014 Harvey Creates Issues for Texan Oil Industry By Tim McNally The catastrophic flooding and high velocity winds accompanying Hurricane Harvey had overarching effects on both residents and businesses in the Gulf Coast area particularly in Texas The difficulty for oil and gas firms is mainly concentrated within the downstream portion of the market as refineries have been unfortunately positioned to face the brunt of the storm CNN Money reports that ten oil refinery plants in the Houston and Corpus Christi areas were shut down as of August 28th due to the perilous conditions caused by the storm Closed refineries included Exxon Mobil s refinery in Baytown which yields a processing capacity of up to 584 000 barrels of oil per day The entirety of the Gulf area accounts for roughly one third of the United States refinery capacity The fact that the energy market is already highly saturated with oil lessens the potential effects that the storm could have on the price of oil In addition the issues caused by the storm are primarily causing problems for the refineries in the Gulf Coast region which is why U S gasoline futures still saw a 7 increase when markets opened Monday The short answer is that gas prices are going higher They re going higher at an annoying rate not an apocalyptic rate but it will be noticeable particularly east of the Rockies in the next few days Tom Kloza global head of energy analysis at Oil Price Information Service told CNBC Meanwhile the price of oil fell 3 on Monday August 28 and continued to fall further on the following day As CNBC noted multiple firms with considerable interests in the region experienced noticeable declines in the prices of their stocks Carrizo Oil and Gas experienced an 11 39 percent decrease in the price of their stock from Friday the 25th to Tuesday the 29th dropping to a low of 11 83 per share before recovering 5 33 percent to 12 46 per share during the last half of Tuesday EOG Resources Chesapeake Energy Devon Energy Sanchez Energy and Wildhorse Resources also experienced to varying degrees comparable price movements in each of the companies respective shares Oilman Magazine September October 2017 OilmanMagazine com 33
LOUISIANA NEWS AT A GLANCE Haynesville LA Making a Comeback in the Oil Industry By Tonae Hamilton The oil industry is filled with fierce competitors all vying to be the leading producer of shale oil In Louisiana the town of Haynesville is among those competitors as it gradually climbs the ranks of shale oil producers in the nation Being dismissed three years ago by the industry and considered a nonthreat the town of Haynesville has shown this year that it is in fact a force to be reckoned with The Haynesville shale play is now the third largest play in the U S The formation holds nearly 500 trillion cubic feet of gas and accounts for 13 of shale gas production alone The shale play also accounts for gas production up to 6 3 billion cubic feet per day Bcf d Make Way for Haynesville The town of Haynesville has been on the rise in the oil industry with an increasing number of oil rigs which now stands at 37 since November of last year The region has also been lucky enough to acquire some advantages in the oil competition over other oil competitors For one the town s shale play is located near several major pipelines Secondly oil production is second nature to the citizens of Haynesville Playing a significant part in the town s culture oil production is bound to thrive with the dedication of the town s citizens within the oil industry Once pushed out of the competition a few years back due to a favorable low supply cost for the Utica and Marcellus shale plays the Haynesville shale play has truly made a comeback According to a statistic from World Oil magazine the refracturing of the Haynesville shale play has led to an increased gas rate of over 700 The Haynesville play is now back and apparently stronger than ever with gas production rates on a rise and the demand for oil gas from the play increasing Moving Forward The shale play in Haynesville continues to impress with a predicted peak of producing 10 million cubic feet per day 34 Photo Credit Pierre jean DURIEU www 123RF com Mcf d of gas There is speculation of at least six liquefied natural gas LNG export facilities operating by 2022 conveniently located near Haynesville Haynesville could potentially capitalize on this endeavor and potentially become the leading exporter of shale oil in the nation Additionally export hubs to Mexico and soon LNG plants will all be established in a location geographically close to Haynesville The Haynesville shale play has come a long way from being a pawn in the oil competition as a result of being re fractured alongside significant downstream growth in the region It is possible that with the recent track record of the shale play and its multiple successes it could become the king of the oil industry LOGA Executive Sees Huge Litigation Costs for O G Companies By Tim McNally In the ongoing legal battle between O G companies and various Louisiana parishes litigation costs are expected to be devastatingly high for the companies operating in the state The blame for the continuous erosion of the Louisiana coastline has been put mainly upon the shoulders of the oil and gas companies which are accused of contributing to the loss of wetlands that serve as a sort of protective barrier against hurricanes One Louisiana Association executive stated that the total costs could even get into the tens of billions If you carry it all the way out and at the end of the Oilman Magazine September October 2017 OilmanMagazine com day and the industry loses which we don t believe we will the numbers get thrown around are 30 40 50 billion stated Gifford Briggs vice president of the Louisiana Oil and Gas Association according to Platts You start put numbers like that it it likely signals the end of the industry in Louisiana Briggs added on a rather grim note Briggs comments came shortly after Councilman Jason Williams postponed his plans to ask Mayor Mitch Landrieu to sue oil and gas companies on behalf of the city We do not have to accept full destruction of our coastline as inevitable We can make significant strides today and in the days following to fortify the future of our region Williams stated according to NOLA com The coast is a dynamic living system which with necessary investment and care can survive this downward spiral We must build consensus and a strong coalition with all stakeholders on this issue On July 7th the St Bernard Parish gained ground in its lawsuit when a federal judge in New Orleans determined that the case could be heard in a state court The ruling by U S District Judge Carl Barbier became part of 28 other lawsuits filed by various parishes which were sent back to state court by the ruling judge NOLA notes The lawsuits against oil and gas companies have come under fire for being a ruse to simply line the pockets of the lawyers involved in the suits who are set for
LOUISIANA NEWS AT A GLANCE is used to protect and restore Louisiana coastal areas Between January 2009 and January 2016 Louisiana collected more than 3 billion in severance taxes from wells in the coastal zone These financial accommodations are then set aside for lawmakers who then decide how to appropriate the funds for coastal restoration The statement also notes how Exxon Mobil s Baton Rouge sites have contributed nearly 1 4 billion in environmental investments in the state Chevron worked with the Nature Conservancy and the Louisiana Coastal Protection and Restoration Authority to finance the building of an artificial oyster reef in St Bernard Parish Photo Credit crackerclips www 123RF com a large payday if the companies should are found at fault for the erosion of the coastline Of course the proponents of these arguments are those who are in some way involved in the O G industry in Louisiana but they like to point out the fact that some of these companies have contributed financially to the restoration of the wetlands After all they argue it is in the best interest of these companies to keep the wetlands in good health so that they can continue to operate in Louisiana LOGA Highlights Importance of Relationship with O G Industry By Tim McNally To demonstrate the importance of the oil and gas industry to the state of Louisiana the Louisiana Oil and Gas Association LOGA released a statement on July 27 outlining the relationship between the state and the industry Given the recent negative rhetoric concerning the oil and gas industry s operations in Louisiana largely due to the industry s alleged contribution to the extensive erosion of the Louisiana wetlands the statement shows another side of the industry and its economic contributions to the state The oil and gas industry has undoubtedly played a massive role in the development of the Louisiana economy The statement notes that one study suggests the O G industry has produced nearly 300 000 jobs in and generated 4 billion for the state and local facilities The total effect of the industry on the state is estimated to be somewhere around 74 billion The statement from LOGA notes The oil and gas industry has been a constant economic driver for Louisiana providing not only jobs but valuable revenue that It is easy to forget the beneficial effects the oil and gas industry has had on the state of Louisiana especially because many political figures are so keen on framing the oil and gas companies as being responsible for the entirety of the wetlands erosion The attempts of such governmental individuals to force the O G companies to dole out cash to stimulate a revival of the wetlands will cost quite a fortune if the prosecution proves to be successful When considering the impact of the litigation surrounding coastal erosion it is important to remember the current setting of the oil and gas industry The consistently low oil price and companies ensuing efforts to maintain profitability with slimmer than normal margins have created an unstable environment for these companies Burdening these firms even further with legal and financial liabilities could convince some firms Louisiana is no longer an attractive location for oil and gas business Oilman Magazine September October 2017 OilmanMagazine com 35
OILMAN COLUMN The New Age of Trump Oil By Jason Spiess Recently President Donald J Trump joined Energy Industry Executives members of Congress and Cabinet Officials at the Department of Energy to deliver remarks on unleashing America s boundless capacity for energy production We re here today to usher in a new American energy policy he declared The President explained that his focus isn t so much on energy independence but rather dominance In fact the program is being called American Energy Domination This is an outstanding development Daniel Fine associate director of the New Mexico Center for Energy Policy at New Mexico Tech said Since 1973 we have been dependent on importing oil After the embargo of 73 from the Middle East and OPEC our entire energy focus was whether we were going to have a disruption or not Who will cut us off next What do we do The Unites States began conservation methods alternative fuels and other strategies like ethanol That has all ended Fine said With a Trump administration we reverse that Fine explained further how the United States is on their way to self sufficiency along with partner nations We are on our way to self sufficiency with Canada and eventually Mexico Fine said I call it continentalism North America can stand alone Fine believes the strategy behind American Energy Domination is already set in motion and could potentially come to fruition in the next 5 years He also circled back to clarify Mexico s role in Trump Oil Mexico will eventually be included in Trump Oil after the NAFTA negotiation Fine said Mexico is a buyer of the continent It imports natural gas but it does not import oil nor does it export oil to us United States This will create a paradigm shift in the oil and gas industry The North American continent will have its own market Fine said We will make the price of oil Fine believes the 36 West Texas Intermediate WTI price will become the North American price Trump has announced we are going in that direction and this is an outstanding change from dependency Fine said The benefit will be that we have stability of price producers will know the price speculators will not have much to do with it the trading of oil will be here centered in North America He added that whatever happens in other parts of the world will not endanger or threaten our oil production and price U S Congressman Kevin Cramer R ND who often advises President Trump on energy policies sees Trump Oil as a boon to American security and its economy It s interesting to me because President Trump then candidate Trump took his nationalistic culture on the road and became president largely as a result of that Cramer said We should be viewing our energy security with a continental approach He added that it isn t just because the United States is at the center of the continent Rather it is because the natural resources span beyond borders Together as a continent of friends and allies we really supercede the Middle East in terms of oil and gas in terms of our ability to market North American energy security and North American energy products Cramer continued saying the diversity and differences between the three countries will actual benefit everyone involved Sometimes it is easier to build an export terminal in Canada than it is in the United States Cramer said Mexico is an emerging economy and is a large buyer of our natural gas The more we can do to help them develop their economy the more demand there is for our products John Yates Jr president of Abo Empire sees Trump Oil stabilizing oil and gas prices for longer periods of time This actually happened in the mid 1950s when Eisenhower was President and he saw the need for a healthy domestic oil and gas industry Yates said By presidential Oilman Magazine September October 2017 OilmanMagazine com President Trump and U S Congressman Cramer Photo provided by Jason Spiess decree he put quotas on foreign crude and stopped allowing imported crude to come into refineries in the U S According to Yates this created an environment with stabilized oil prices from the mid 50s until the 1970s when the Oil Embargo took place That period in history allowed operators to somewhat depend on at least a ceiling and floor price Yates said Operators could do adequate planning and have a stable environment to try and drill for oil and gas Yates believes the direction of Trump Oil will create a quota situation once again slowly eliminating the Middle East s influence on American energy He explained how his company s production has grown considerably over the past decade and there is even more potential on the horizon The only thing standing in the way of their company s potential and growth is political red tape There s a lot of opportunity out there to grow our production and we are just waiting for someone to step up to the plate that is going to sanction our message Yates said
NEW DATES TURBOMACHINERY PUMP SYMPOSIA DECEMBER 12 14 2017 GEORGE R BROWN CONVENTION CENTER HOUSTON TEXAS TPS is the premiere conference for rotating equipment engineers and technicians worldwide spanning oil and gas petrochemical chemical power aerospace and water industries The expert selected technical program combined with an international exhibition spanning 216 000 gross square feet is the perfect platform for networking with colleagues and suppliers and learning about new problem solving methods and technologies register now at tps tamu edu
Improving oil and hazardous materials spill prevention preparedness and response for inland offshore and coastal incidents H December 5 7 2017 George R Brown Convention Center Houston TX Conference tracks include Response Planning and Preparedness Subsea and Dispersants Inland Preparedness and Response Emerging Trends and Information Response Technologies and Research Register online using VIP code OILMAN to receive 50 off a full conference pass www cleangulf org
