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Oilman Magazine Sept/Oct 2018

THE MAGAZINE FOR LEADERS IN AMERICAN ENERGY
September / October 2018
OilmanMagazine.com
OIL & GAS
SOFTWARE
Interview: Tom Williams, President of
Research Partnership to Secure Energy
for America (RPSEA)
p. 36
Small Energy Businesses
Need Smart Technology
to Compete
p. 4
Interview: Shoshi Kaganovsky, CEO
and Richard Haun, Vice President
Engineering, SensoLeak
p. 20
RPA Creating the Oil
and Gas Workforce of
the Future
p. 24
AFE On Demand
Production On Demand
Land On Demand
WellEz On Demand
Fund projects
faster.
Buy, sell, and
manage leases.
Analyze well site
operations.
Capture, allocate, and
report on production.
Drilling & Completion
Accounting
Land Management
Production
Run with the power of one.
Unify your operations with a complete
upstream solution deployed in just 60 days.
www.quorumsoftware.com
Run your E&P business with the speed and
savings of software in the cloud.
Upstream Software On Demand
IN THIS ISSUE
Feature
The Evolution of Efciency
in Oil and Gas Software
By Sarah Skinner - pages 18 & 19
In Every Issue
Letter from the Publisher – page 2
OILMAN Contributors – page 2
OILMAN Online // Retweets // Social Stream – page 3
Downhole Data – page 3
Texas Oil & Gas Industry Overview – page 9
Product Showcase: Fox Thermal – page 10
OILMAN Columns
Jason Spiess: Oil and Gas Industry Energizes Multimedia Kidtrepreneur’s View on Capitalism – page 6 & 8
Josh Robbins: Early Winter – page 12
Mark A. Stansberry: American Natural Gas and NATO – page 15
Tonae’ Hamilton: Interview: Shoshi Kaganovsky, CEO and Richard Haun, Vice President Engineering, SensoLeak – page 20 & 22
Tonae’ Hamilton: Revamping the Oil Industry with Technology and the Millennials – page 25
Eric R. Eissler: Permian Basin Outgrows Pipeline Infrastructure, Construction Boom Underway but has Growing Pains – page 28
Tonae’ Hamilton: Interview with Phillip Bird, Collector, Oklahoma Oil and Gas Memorabilia – page 30 & 31
Eric R. Eissler: Natural Disasters Strike, but the Oil and Gas Community is Ready to Repair and Pull Through – page 32 & 33
Tonae’ Hamilton: Innovating the Industry with an Energy Start-up – page 34 & 35
Thomas G. Ciarlone, Jr.: The Neverending Story: “Fixed” vs. “Floating” Royalties in Texas – page 35
Eric R. Eissler: Interview: Tom Williams, President of Research Partnership to Secure Energy for America (RPSEA) – page 36 & 37
Gifford Briggs: Elections: What’s at Stake – page 37
Jason Spiess: Meridian Energy Group Meeting Timeline Objectives for Davis Renery
While Expanding Engineering Operations in Houston – page 38
Guest Columns
Matthew Mott: Small Energy Businesses Need Smart Technology to Compete – page 4
Susan Synder: Earthquakes, Wind, Fire & Storms: Onshore Oil & Gas Production Operations Disaster Preparedness – page 5
Nick Spanos: With Blockchain, the Energy Industry will Soon Become Unrecognizable – page 11
Corrosionpedia: Four Reasons Oil and Gas Pipelines Fail – page 14 & 15
Rich Radi: Are Fleet Accident Costs Hiding in Your Blind Spot? – page 16
Allen Yoho: RPA Creating the Oil and Gas Workforce of the Future – page 24
Brian Schrader, Esq., BIA: Why Oil and Gas Companies Should Consider eDiscovery as a Standard Business Process – page 26
Oilman Magazine / September-October 2018 / OilmanMagazine.com
1
AFE On Demand
Production On Demand
Land On Demand
WellEz On Demand
Fund projects
faster.
Buy, sell, and
manage leases.
Analyze well site
operations.
Capture, allocate, and
report on production.
Drilling & Completion
Accounting
Land Management
Production
Run with the power of one.
Unify your operations with a complete
upstream solution deployed in just 60 days.
www.quorumsoftware.com
Run your E&P business with the speed and
savings of software in the cloud.
Upstream Software On Demand
Gifford Briggs
Gifford Briggs joined LOGA in 2007 working
closely with the Louisiana Legislature. After
nearly a decade serving as LOGAs Vice-
President, Gifford was named President in
2018. Briggs rst joined LOGA (formerly
LIOGA) in 1994 while attending college at
LSU. He served as the Membership Coordinator and helped
organize many rsts for LOGA, including the rst annual
meeting, Gulf Coast Prospect & Shale Expo, and board
meetings. He later moved to Atlanta to pursue a career in
restaurant management. He returned to LOGA in 2007.
Mark A. Stansberry
Mark A. Stansberry, Chairman of The GTD
Group, is an award-winning author, columnist,
lm 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 Macís
Hardware. In addition to running a food truck, Spiess hosted
a daily energy lifestyle radio show from the Rolling Stove food
truck. The show was one-of-a-kind in the Bakken oil elds
with diverse guest ranging from U.S. Senator Mike Enzi (WY)
to the traveling roadside merchant selling ags to the local
high school football coach talking about this week’s big game.
Joshua Robbins
Josh Robbins is currently the Chief Executive
Ofcer of Beachwood Marketing. He has
consulted and provided solutions for several
industries, however the majority of his consulting
solutions have been in manufacturing, energy
and oil and gas. Mr. Robbins has over 15 years
of excellent project leadership in business development and
is experienced in all aspects of oil and gas acquisitions and
divestitures. He has extensive business relationships with a
demonstrated ability to conduct executive level negotiations. He
has developed sustainable solutions, successfully marketing oil
and natural gas properties cost effectively and efciently.
Thomas G. Ciarlone, Jr.
Tom is a litigation partner in the Houston ofce
of Kane Russell Coleman Logan PC, where he
serves as the head of the rm’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.
Steve Burnett
Steve Burnett has been working in the oil
industry since the age of 16. He started out
working construction on a pipeline crew and
after retirement, nishes his career as a Pipeline
Safety Compliance Inspector. He has a degree in
art and watched oil and art collide in his career
to form the “Crude Oil Calendars.” He also taught in the same
two elds and believes that while technology has advanced, the
valuable people at the core of the industry and the attributes they
encompass, remain the same.
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.
There has been a huge leap in the oil and gas space to embrace
software to improve productivity on the corporate side, in
eld locations and at production sites. Over the last few years
the industry has been introduced to technology terms such
as big data, machine learning, articial intelligence and IoT or
Internet of Things. Blockchain and bitcoin has also entered
the oil and gas arena. Data visualization is another popular
tool used today to quickly interpret and process data as it is
created and displayed. At the same time, there has been a push
to transfer all productivity data to remote servers or to a cloud
storage. However, the industry has been slow to fully adopt this measure. Maintaining
control of critical data is still a priority for many oil and gas companies. There are now
several companies in the oil and gas industry creating software tools that improve the
way employees complete work assignments in various departments from accounting and
procurement to design and production. In this issue of OILMAN we dive into how the
oil and gas industry deploys software that allow personnel to do more tasks in less time
and how the industry is using technology to pull and review information in the eld that
was once a manual process. The race is on to connect human capital to technology that
will position the oil and gas industry for growth.
MAGAZINE
SEPTEMBER OCTOBER 2018
PUBLISHER
Emmanuel Sullivan
MANAGING EDITOR
Sarah Skinner
ASSOCIATE EDITOR
Tonae’ Hamilton
FEATURES EDITOR
Eric Eissler
GRAPHIC DESIGNER
Kim Fischer
CONTRIBUTING EDITORS
Gifford Briggs
Steve Burnett
Thomas Ciarlone, Jr.
Joshua Robbins
Story Sloane III
Jason Spiess
Mark Stansberry
SALES
Eric Freer
To subscribe to Oilman Magazine, please
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com/subscribe. The contents of this
publication are copyright 2018 by Oilman
Magazine, LLC, with all rights restricted.
Any reproduction or use of content without
written consent of Oilman Magazine, LLC
is strictly prohibited.
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reliable, but the accuracy of the information
cannot be guaranteed. Oilman Magazine
reserves the right to edit all contributed
articles. Editorial content does not
necessarily reflect the opinions of the
publisher. Any advice given in editorial
content or advertisements should be
considered information only.
CHANGE OF ADDRESS
Please send address change to
Oilman Magazine
P.O. Box 771872
Houston, TX 77215
(800) 562-2340
Cover images courtesy of Elnur Amikishiyev
and Juan Pablo Gonzalez – www.123RF.com
LETTER FROM THE PUBLISHER
CONTRIBUTORS — Biographies
Oilman Magazine / September-October 2018 / OilmanMagazine.com
2
Emmanuel Sullivan, Publisher, OILMAN Magazine
Oilman Magazine / September-October 2018 / OilmanMagazine.com
33
For The Week Ending August 31, 2018
DIGITAL DOWNHOLE DATA
Colorado: 30
Last month: 32
Last year: 37
North Dakota: 52
Last month: 57
Last year: 52
Texas: 528
Last month: 524
Last year: 456
Louisiana: 55
Last month: 52
Last year: 66
Oklahoma: 139
Last month: 137
Last year: 130
U.S. Total: 1,048
Last month: 1,048
Last year: 940
OIL RIG COUNTS
*Source: Baker Hughes
Brent Crude: $74.41
Last month: $74.16
Last year: $52.69
WTI: $69.97
Last month: $69.88
Last year: $47.26
CRUDE OIL PRICES
*Source: U.S. Energy Information Association (EIA)
Per Barrel
Colorado: 12,680,000
Last month: 13,849,000
Last year: 9,846,000
North Dakota: 36,610,000
Last month: 38,326,000
Last year: 30,697,000
Texas: 132,308,000
Last month: 131,583,000
Last year: 102,440,000
Louisiana: 3,861,000
Last month: 4,030,000
Last year: 4,215,000
Oklahoma: 15,775,000
Last month: 16,409,000
Last year: 13,246,000
U.S. Total: 320,230,000
Last month: 323,739,000
Last year: 272,214,000
CRUDE OIL PRODUCTION
*Source: U.S. Energy Information Association (EIA) – June 2018
Barrels Per Month
Colorado: 144,811
Last month: 154,834
Last year: 134,382
North Dakota: 57,573
Last month: 60,314
Last year: 46,449
Texas: 620,079
Last month: 631,041
Last year: 560,639
Louisiana: 232,818
Last month: 239,568
Last year: 169,788
Oklahoma: 241,846
Last month: 243,891
Last year: 203,690
U.S. Total: 2,618,170
Last month: 2,683,080
Last year: 2,340,784
NATURAL GAS
MARKETED PRODUCTION
*Source: U.S. Energy Information Association (EIA) – June 2018
Million Cubic Feet
Per Month
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Oilman Magazine / September-October 2018 / OilmanMagazine.com
4
Small Energy Businesses Need Smart
Technology to Compete
By Matthew Mott
As we emerge from a challenging economic
environment, the oil and gas industry is facing
short-term volatility, growing demand, and
less potential supply available. In fact, the
IEA (International Energy Agency), has been
projecting that a supply crunch could be on the
horizon since 2016.
As such, oil and gas companies are faced with
the challenge of developing a resilient strategy
to mitigate these risks, boost their production,
and future-proof their business. For startups
and small businesses in the upstream oil and
gas industry, now is the time to transform
operations by leveraging advanced digital
solutions to accelerate growth and meet
demand.
Small upstream businesses
can better manage,
operate, and optimize
assets through adopting
modernized software that
will scale and adapt in the
long term. Beyond the
back ofce, cloud-based
applications can increase
productivity and efciency
in the eld with enhanced
capabilities that support the modern energy
workplace.
For example, Fleur de Lis Energy, LLC, a private
E&P operator headquartered in Dallas, Texas,
was looking to generate attractive, risk-adjusted
returns and stable cash distributions to its
investors through the acquisition, exploitation,
and operation of a diverse portfolio of oil and
gas properties in North America. The company
had quickly acquired new acreage and needed to
collect accurate, timely, and robust production
data while minimizing their IT footprint and
overhead.
“We wanted to stay in the cloud with as many
applications as possible,” said Terry Farmer,
director of IT at Fleur de Lis Energy. “Our
tools needed to be lean, agile and implemented
quickly.
After researching the technology available in
the market, Fleur de Lis decided to turn to
Houston-based company Quorum Software.
For Fleur de Lis, myQuorum Production
On Demand proved to be the most mobile,
cost-effective, and user-friendly easy to use
solution for those working in the eld. As Fleur
de Lis continued to grow through operational
excellence and asset acquisition, their Quorum
software tools performed and scaled to meet the
demand.
“With the most recent acquisition, we had 90
days to make the transition to our systems and
Quorum deployed their solution and trained
our eld guys with no problem,” said Farmer.
By utilizing an integrated solution built on
Microsoft Azure, Fleur de Lis and Quorum
formed a partnership that drives innovation
and operational efciency on both sides. “The
amount saved in overhead
by using cloud applications
is enormous, probably
$4 million per year,” said
Farmer. “I would have to
hire 20 more people to
maintain and support on-
premise installations.”
The company plans to
continue integrating other
cloud-based Quorum
software to complete its
end-to-end production management suite,
including AFE and a data hub for reporting.
“We will be using Quorum’s production data
as the gold standard in our organization and
link all other data in a reporting database,” said
Farmer. “We’ll then place our BI tools on top of
it and use this data to make important business
decisions at Fleur de Lis. That shows you how
much value we place on our data being collected
and reported by Production On Demand and
SCADA.”
Small businesses need technology that is
affordable, quick, easy to implement, and
built purposely for a growing business. That’s
why Quorum recently introduced a full suite
of integrated upstream solutions specically
tailored to high-growth businesses like Fleur de
Lis. Cloud solutions provide businesses with
seamless upgrades and the latest features and
functionality, plus users can access data from
anywhere without the need for expensive IT
overhead.
With the launch of Upstream On Demand,
Quorum is delivering one integrated software
solution that will give small businesses the
power to build out their suite of tools as their
business grows. E&P operators can streamline
operations from land management, through
drilling and completion, production, and
accounting.
Applications include:
Land O
n Demand – enables businesses to
buy, sell, and manage leases and agreements
with integrated GIS mapping.
AFE On Demand – assists businesses with
preparing cost estimates, reducing approval
cycles, and monitoring project budgets.
WellEz On Demand – reports drilling and
completion operations, tracks eld costs, and
analyzes performance.
Production On Demand – manages S
CADA,
optimizes production, and visualizes
allocations.
Now more than ever, oil and gas businesses
need proven solutions that are affordable and
can be deployed quickly in an ever-changing
market. Companies that choose cloud-based
applications are more likely to see an increase
in overall business agility, operational efciency,
and a quicker transition of their personnel into
the modern energy workforce.
Regardless of where the market and technology
go, an investment in a exible, adaptable
software infrastructure can help provide a
foundation for growth now and into the future.
Matthew Mott is Senior
Product Marketing
Manager, Drilling &
Production at Quorum
Software. He has spent
the last six years helping
independent oil and gas companies make
the digital transformation to cloud-based
upstream applications through support,
customer success, and marketing roles. In
his current role, Matthew works to connect
customers, support teams, and product teams
to help Quorum deliver the modern energy
workplace.
OILMAN COLUMN
Quorum’s Upstream
on Demand Software
is Built with the Latest
Cloud Capabilities for
Land Management,
Drilling and Completion,
Budgeting, and Production
Management
Oilman Magazine / September-October 2018 / OilmanMagazine.com
5
Earthquakes, Wind, Fire & Storms:
Onshore Oil & Gas Production
Operations Disaster Preparedness
By Susan Synder
The scope of this article is to assist onshore oil
and gas production businesses in understanding
what a “Recoverable Disaster” posture is;
meaning an onshore oil and gas production site
that can resume production as quickly, safely and
economically as possible after a disaster.
Proper “Disaster Preparedness,” as dened by
FEMA (United States Department of Homeland
Security/ Federal Emergency Management
Agency), is achieved by “a continuous cycle
of planning, organizing, training, equipping,
exercising, evaluating, and taking corrective action
to ensure effective coordination during incident
response.” This sounds great and it would work to
reduce risk and save money if you had a renery
or large industrial facility that typically comes with
many qualied workers that can participate and
contribute to the disaster planning process, but in
the oil patch Larry the Pumper and Bob, Eddie
and Juan the Roustabouts are about the only
personnel you have at your disposal.
In this article for the sake of expediency and
editorial space, we will focus on few to no
workers, a small upfront investment that will
save countless dollars in repairs, replacement,
environmental challenges and possibly some bad
PR on the evening television news. Even more
narrowly, let’s limit the discussion to onshore
drilling operations, completions or production
operations and the one cyclic event that challenges
even the most robust of oil and gas installations;
Mother Earth’s sky-borne re and fury, the
thunderstorm. Storm related disasters such as
oods, hail and wind have a devastating impact to
high prole surface constructed infrastructure, but
nothing can compare to the losses and elevated
risks created by the lightning generated by an
approaching thunderstorm. Lightning’s impact
to unprotected infrastructure is destructive,
expensive and extremely dangerous to a worker
in or near an unprotected site. Cloud to ground
lightning discharges can release large amounts of
short circuit current exceeding 100,000 amps and
voltages up to and over 1,000,000 volts, not to
mention the release of large amounts of thermal
radiation, full spectrum light up to 50,000K and
a sound intensity that’s near immeasurable. That’s
only the rst strike and depending on the region
in which your installation is operating, there
is a higher probability of the reoccurrence of
another lightning strike or what is also known
as a “re-strike.” Just add a combustible liquid
hydrocarbon within an enclosed tank or two and
the mixture for a multi-tasked disaster is borne.
Goodbye to that brand new million-dollar
installation you nished last month and hello to
the insurance adjuster’s questions about what
your lightning risk mitigation tactics were. Pray
there were no workers in or near the site when
the lightning strike happened. You could only
imagine the discharge of environmental noise,
inhalants, and sound waves generated by the
lightning and the resulting explosions.
The lightning generated by a thunderstorm and
its impact to unprotected infrastructure is no
doubt highly destructive, but it also impacts
other infrastructure and installations near to
and even far away from the original site of the
lightning’s impact. Electrical transients and
surges create long lasting problems to electrical
equipment grounding systems, solid state
devices such as electronic controllers, LCD &
LED monitors, micro-processor based devices,
computers, UPS systems and even non-oil and gas
related infrastructure like the rancher’s water well
equipment and even the electric utility’s protection
and control equipment. Lightning related disasters
are likely the costliest event to recover from at any
onshore industrial oil and gas site. It’s not a matter
of if you take a lightning strike, it’s a matter of
when it occurs, its overall impact to the site and
at what point during your production process. To
be frank, most unprotected sites usually require
complete demolition with full environmental
remediation of contaminated soils and an
expedited reconstruction of all onshore industrial
oil and gas infrastructure that will come at a much,
much higher cost than in its earlier greeneld days.
These costs don’t even include the loss of access,
loss of use and the loss revenue. At this point in
the discussion a “Recoverable Disaster” posture
is out the window. The current posture in play is a
very expensive lesson in risk mitigation on which
you are on the losing end.
Lightning protection is a cheap security blanket
that helps minimize the impact of the destructive
nature of lightning. A well-engineered, properly
documented and properly installed lightning
protection system on the front end followed by
a proper maintenance program during its service
life, will minimize the destructive nature of the
high amounts of electrical current and voltage that
will more than likely travel the lightning protection
system to a well bonded path to ground. After the
storm, you will be making repairs to a few produc-
tion related pieces of equipment and possibly
installing a new lightning protection system. These
costs are pennies on the dollar to the aforemen-
tioned situation. Value adding out or trying to
save a few bucks on the installation of a lightning
protection system on your onshore industrial oil
and gas site should be a non-starter. As stated
previously, a properly installed lightning protection
system will offer a lifetime of protection. Its ROI
(Return on Investment) is recognized very quickly
and its should be valued as jobs saved, not jobs
lost. Additionally, it’s an ecosystem and environ-
ment that’s saved not damaged.
One last note; qualifying the company that installs
your lightning protection is a must. Ed’s Drywall,
Taxidermy and Lightning Protection Service
may not be who you want to install the zones
of protection on your onshore industrial oil and
gas infrastructure. Investigate and interview the
various companies that professionally install and
maintain the various methodologies of lightning
protection.
OILMAN COLUMN
Photo courtesy of Abshier Energy
Oilman Magazine / September-October 2018 / OilmanMagazine.com
6
Oil and Gas Industry Energizes Multimedia
Kidtrepreneur’s View on Capitalism
By Jason Spiess, Photos courtesy of The Crude Life
Otis began an entrepreneur’s journey at the age
of 30 days old. Video Arts Studio was working
on a new program for Discovery Channel and it
just so happened they needed a one-month-old
baby for the cover art and pilot program “Sheri
Daniel’s Baby 101.” Although the pilot was not
picked up, this opportunity became the catalyst
for Otis to begin building his multimedia
resume.
Right around the same time, during his rst
month of life, Rock and Roll icon Alice Cooper
held baby Otis on a Springtime visit to Fargo,
ND and proclaimed, “Otis! He will do amazing
things in life!”
At the age of two, Otis landed an opportunity
to do voice work for the highly-rated “Tom
Wynn and Friends” morning show on 790
KFGO-AM in Fargo. From Christmas radio
imaging, to station liners, to ad copy, Otis’
voiceover talent grew with the demand. He
continued voice work for a variety of AM and
FM radio stations and programs in the Dakotas
and neighboring states. It was around that time,
when Otis was ve-years-old, that his family
temporarily moved to the Bakken oil elds.
Otis continued honing his craft in the oil patch
by reading the “Daily Lunch Room Report”
for iHeartMedia North Dakota, formerly Clear
Channel. This daily feature, on three Dickinson
radio stations, had Otis reading lunch menus
for all the local and surrounding schools. People
called into the station to nd out when the
Daily Lunch Room Report was scheduled to
air so they could build their morning commute
around it. Kids and adults enjoyed hearing Otis
tell them what they could expect for lunch later
that day. Otis took an active role in writing and
producing the daily program for the Bakken
region, as well as for online streaming listeners.
During this time in Otis’ life, he also worked as
a host and cashier for the family-owned, multi-
media food truck. His innate curiosity about
people and their stories made him a natural at
engaging customers during their visits to “The
Rolling Stove” at Mac’s in Dickinson.
After a year, Otis returned to Fargo and began
looking for his next professional endeavor. After
having lunch with entrepreneur Marty Riske,
Otis found his next job, restocking shelves for
a video game store after they remodeled. Otis
began working for VidCycle in Fargo, learning
the value of hard work, the meaning of time
cards, and how to work with managers to learn
new skills. He did such a good job stocking
shelves, they added the duty of customer service
on the oor. Otis was living the dream, talking
to people about one of his biggest passions—
video games.
OILMAN COLUMN
Otis and Dad
Otis interviewing U.S. Senator John Hoeven and Amy Klobuchar
Continued on page 8...
Otis interviewing Mike Henderson, Vice President, Marathon Oil
Otis interviewing Harold Hamm,
Chairman and CEO, Continental Resources
Otis interviewing Jack Stark, President,
Continental Resources
Otis and Brian Sullivan, Anchor
and Journalist, CNBC
Oilman Magazine / September-October 2018 / OilmanMagazine.com
8
When the video store was sold, Otis found
himself out of a job at age nine. So, he
decided to branch out into a new area
of entrepreneurism and began walking
neighborhood dogs after school. This turned
into a ve-day-a-week, after school job.
Otis decided to take his passion for making
money and giving back to the next level. This
time, it was a podcast. The Kids and Capitalism
KidCast was created, a mentor in the media
was secured and now some radio stations
even air his program. Kids and Capitalism has
also hosted fundraising and sporting events,
supporting the mission to work hard, create
business plans, give back, learn etiquette and
have fun.
As Otis approached middle school, he became
more focused on using his broadcasting
talents in the area of competitive gaming. To
that end, he submitted an application to be
a gamer commentator for the Grand Forks,
ND, DakNo Gaming Tournament’s live
Twitch broadcast. Not only was Otis selected
to work the tournament, he was the youngest
contributor by over a decade. He also had the
most media experience of any broadcaster at
the tournament.
Otis was used as a
color commentator
and roving sideline
reporter for the
E-Sports event.
After years of
participating in
capitalism role
playing, Otis
decided to learn
how capitalism
truly works. He
knows from personal
experience, living and working in the Bakken,
that there is no better industry to learn from
than the oil and gas industry. In May 2018,
Otis attended the Williston Basin Petroleum
Conference (WBPC) in the Bakken region of
North Dakota. During the conference Otis
was able to interview everyone from executives
to interns to business owners. While at the
WBPC, Otis also took advantage of a media
networking opportunity and met the staff from
CNBC, including Brian Sullivan, Anchor &
Senior National Correspondent of “Worldwide
Exchange.
Otis is currently in discussion with several
energy companies for a future tour of
technology centers and possibly a well site.
Currently, Otis is host and producer of the Kids
and Capitalism KidCast, gives presentations to
young kidtrepreneurs, contracts voice work for
agencies, media organization, and sponsors. He
is also in the infant stages of starting his own
Twitch Channel to monetize his passion for
playing video games with his friends across the
United States.
OILMAN COLUMN
Otis interviewing U.S. Senator Heidi Heitkamp Otis broadcasting at the DakNo
Gaming Tournament
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Texas Oil & Gas
INDUSTRY OVERVIEW
TOP 5 PRODUCERS:
XTO Energy INC. 9.98%
Devon Energy Production Co, LP 7.58%
Lewis Petro Properties, INC 5.13%
TEP Barnett USA, LLC 4.32%
Enervest Operating, LLC 3.87%
TOP 5 OIL & GAS SCHOOLS:
Texas A&M – College Station
University of Texas – Austin
Texas Tech University
University of Houston
Texas A&M – Kingsville
TOP 5 CITIES FOR
ENERGY JOBS:
Houston
Austin
Dallas
San Antonio
Midland
1
1
1
2
2
2
3
3
3
4
4
4
5
5
5
Figures represent percentage
of state production.
Source:
RRC of Texas - 2017
Source: US World News Based on population growth.
TOTAL EMPLOYEES
Oil & Gas Industry
325,439
According to the Houston Chronicle
March 31, 2018
TOP 5 LARGEST OIL FIELDS:
by estimated production
Eagleville*
Sparaberry Trend Area
Briscoe Ranch*
Wasson
Sugarcane
*Eagle Ford Shale
1
2
3
4
5
Source: EIA
Oilman Magazine / September-October 2018 / OilmanMagazine.com
10
PRODUCT SHOWCASE
FOX THERMAL has launched a new product - the
Model FT4X Thermal Mass Flow Meter - ideal for
serving Oil & Gas and Industrial applications.
The new FOX Model FT4X allows the user to enter
a Custom Gas Composition to optimize the ow
meters calibration and calculate Density and Gross
Heating Value.
The FT4X is a high-end ow meter, and it features
a robust design. The notable new feature of the
Model FT4X is the Data Logger. The
FT4X Data Logger records ow rate,
totals, and other events and alarms.
The advanced features of the Model
FT4X Data Logger include:
40 daily totals
Settable Contract Time denes
Contract Day
Time/date stamped alarm & event
logs; 7 year history
Power off totalizer; power failure
creates event log entry
View Density and Gross Heating
Value of selected gas
The logs in the Model FT4X also
display information about the meter’s
setting and functionality:
• Gas or gas mix composition
Flowmeter’s conguration settings
• Calibration Validation historical test data
• Logs of events and alarms
The FT4X has a long list of other advanced features:
• 2nd generation non- cantilevered DDC-Sensor™ -
Advanced Direct Digitally Controlled sensor
• Expanded Gas-SelectX® Menus – 3 onboard
gas selection menus
• CAL-V™ - In-situ Calibration Validation
• RS485 Modbus RTU or HART - Communications
options
• Standard USB Port – Connect a PC
FT4X View™ - Software for conguring,
graphing, and logs
The 2nd generation DDC-Sensor™ eliminates the
sensor element vibration which can lead to metal
fatigue and failure. Its unique design provides a
technology platform for calculating accurate gas
correlations for the Gas-SelectX® feature.
The FT4X was designed to be used in Oil & Gas
and Industrial applications. It is ideal for monitoring
pure gases or even complex are gas compositions.
Gas-SelectX® provides an expanded selection of
gases from 3 menus:
• Pure Gas Menu (11 common gases)
• Mixed Gas Menu (11 common gases - mix in
0.1% increments)
• O&G Gas Menu (C1 – C9+, Nitrogen, and
CO2 gases - mix in 0.1% increments)
The FT4X’s CAL-V™ feature allows users to
conrm that the meter is functioning properly and
accurately -- with just a simple push of a button.
FT4X View™ software allows easy adjustments
to the meter conguration, evaluation of alarm
conditions, collection of process data, and
measurement viewing from your PC or control
station. Moreover, this software can be used to
initiate CAL-V™ -- and it automatically logs the
results of each CAL-V™ test. If any regulatory
submission is required, the software will generate
a certicate for easy recordkeeping.
Greg Smith, Sales Support & Customer Service Manager
FOX THERMAL, Inc.
399 Reservation Road, Marina, CA 93933
(831) 384-4300 | www.foxthermal.com
Fox Thermal
Precision Mass Flow Measurement
An ON
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Oilman Magazine / September-October 2018 / OilmanMagazine.com
11
With Blockchain, The Energy Industry
Will Soon Become Unrecognizable
By Nick Spanos
Who could have ever guessed, that when Satoshi
released the white paper for the technology behind
Bitcoin, known as blockchain, that it would also
herald a revolution in the oil and gas industry?
Writing as an early innovator at the conuence
of blockchain and oil and gas — and as someone
who regularly travels to the furthest reaches of the
world’s leading producers, from Iraq to Venezuela,
to Saudi Arabia, this marks the biggest leap since
the beginning of oil production.
Currently, there are three overarching applications
for blockchain in the oil and gas sector. First, the
blockchain insulates sensitive data and systems
from cyber terrorism. Second, it is used to
streamline production, supply chain, and shipping,
with seamless auditing. Third, a number of
countries see blockchain in the production and
shipping process as the basis for an asset-backed
digital currency — a revolution in developing-
world economics.
But rst, what is blockchain? Blockchain is the
distributed ledger platform known best for the
cryptocurrencies which operate on it, such as
bitcoin. In a basic sense, think of a spreadsheet
that everyone has access to, where all users have
consensus on who has what assets at any given
time. The revolutionary development here is
that there is no middleman or clearing house: all
exchange on the network are directly peer-to-
peer within this trust protocol. Since the ledger
is decentralized, it cannot be hacked. In order to
force a single change, you’d have to compromise at
least 51 percent of the devices running the ledger.
That’s millions of computers.
Now think back to how many leading companies
suffer catastrophic hacks — like Aramco, whose
2012 hack of 30,000 workstations was the most
devastating cyber-attack in history at the time.
Blockchains ability to encrypt and distribute
information across devices, instead of keeping
data in a centralized database, means that data
and automated operations can no longer be so
easily compromised by even the most powerful
adversaries. A New York Times report in March
reveals these attacks still happen behind the
scenes, and authorities are scared to admit even
where they occurred and what infrastructure was
impacted. Imagine if the industry could nally
nd relief from the lingering shadow of always
wondering not if, but when the next cataclysmic
attack will succeed.
Just as blockchain is an immutable, permission-
less, and secure basis for transactions, rms can
even write ‘smart contracts’ and decentralized
applications — which are self-executing digital
contracts that enjoy the same properties of the
blockchain. Yet up until recently, the blockchain
was limited to its own ecosystem for information:
the big caveat was that the blockchain could not
respond to dynamic real-world data and events
happening on the outside. With the arrival of
vendors for blockchain smart contracts, rms
can now set abstract conditions within smart
contract code that allow trusted outside data
sources to trigger nancial and other events on the
blockchain.
So, what does this mean for oil and gas?
The story of oil production in the age of
blockchain begins from the moment oil leaves the
ground, when a digital ow meter measures each
barrel. The ow meter sensor reports the event to
the blockchain smart contract, which automatically
generates a corresponding token for each barrel.
Before these barrels can be moved or accepted
by another party, the tokens must be held or
transferred at each step of the process. This brings
unprecedented transparency, as each point down
the line, sensors and RFIDs embedded in valves
and barrels, pipelines and trucks, are continuously
reporting the status and location of the oil, from
upstream to downstream.
The trucker, the environmental auditor, the
tax assessor, the water hauler — any vendor or
contractor you can name — everyone will be paid
automatically only at the precise moment that the
sensors have recorded a movement of the crude,
and only for the exact amount that is physically
veried to have transferred. Thanks to this chain-
of-custody process, accounting is on-the-spot
and settlements are simultaneous. Human error,
manipulation, and disputes suddenly become of
least concern, while overhead is slashed as back
ofce nance professionals and traders become
obsolete.
This leapfrog from the archaic past, from a still-
paper-based system, to blockchain, is already in
full swing. In Dubai, terminal operators can now
simply upload the bills of lading to the blockchain,
which is then encrypted and transferred within
moments to the recipient. In a similar manner,
crude tankers can be traded, with transactions
veried on the blockchain within minutes, instead
of hours or days — and without error.
All of these benets suggest that the S&P Platts
estimate of ve percent cost savings is probably
quite coy — especially when they possibly didn’t
consider the benets of blockchain for the
industry’s data security.
For those who seek the security and seamlessness
of blockchain, but who hesitate at the level of
raw transparency blockchains distributed ledger
can offer, there too is a solution. The data can be
encrypted, with access permissioned within the
system in such a way that only the “need-to-know”
senior company ofcers and regulators are privy
to the data.
During a visit to campuses in Venezuela last
year, my team witnessed the lead-up to the birth
of the world’s rst national cryptocurrency, the
Petro. Concocted as an answer to the paper
Bolivar’s inationary meltdown, the Petro was to
be “backed” by the nation’s oil reserves. While
the Petro’s creators were gravely wrong to think
they could create a token “secured” by crude deep
within the earth — lacking any redeemability for
the underlying asset — they were onto something.
What this demonstrates, in principle, is that the
marriage of nite natural resources and digital
scarcity is a recipe for greater monetary sovereignty
and economic stability. This phenomenon will feed
itself back into a more positive climate for energy
production, lowering prices over the long term,
and other natural resource-rich economies are
taking note.
Following Venezuela, we then traveled back
some half-dozen times to the Middle East. On
one of these trips, we were invited by the Saudi
Arabian chamber of commerce for the rst-
ever blockchain conference, and by the end of
a whistle-stop tour of leading campuses, tech
hubs, and social organizations, had signed MOUs
for academic partnerships — and are already
welcoming Saudi students to Manhattan for
intensive blockchain courses.
The surge of interest seen rsthand, ranging from
Saudi Aramco’s headquarters, to little-known
operators in Texas, is overwhelming.
Nick Spanos is founder of
Zap.org’s EnergyLedger,
which tailors Zap’s next-
generation blockchain
smart contract solutions
for the energy sector.
EnergyLedger is currently
adding to a roster of industry advisors ahead
of approval for the rst patent for blockchain
in the industry — making it one of the earliest
leaders in blockchain innovation for oil and gas.
In 2013, he founded Bitcoin Center NYC, the
world’s rst-ever live cryptocurrency trading
oor, directly across from the NYSE. He is
also known for his role in Netix’s Banking on
Bitcoin, and within the industry for his awarded
patents on the multi-branch blockchain and
blockchain-secure voting platforms.
OILMAN COLUMN
Oilman Magazine / September-October 2018 / OilmanMagazine.com
12
Early Winter
By Josh Robbins
After attending this year’s summer NAPE
(North American Prospect Expo) event, the
common theme was “2019.” Everyone was
preparing, planning and ineld developing for
exits in early 2019. The amount of marketed
operated deals at the event (and as a collective
total across all platforms) was minimal through
Quarter three. Unless you have a target
acquisition in mind (on or off-market) and are
willing to pay higher than PV-10, the amount
of transactions by the end of the year should
be in single digits. It’s the start of an early
winter. With that being said, 2019 looks to
be a great year. With ineld developments
propping up higher BOPD numbers, the exits
(both private equity backed and not) will be
publicized in December and January.
On the off-market side, we are nding nearly
half a dozen deals a week and closing about
four deals a month. The transactions are
only happening because of on-the-ground
communication and not interpreted data. It’s
actual conversations between the people that
own and operate the wells today, and the
people that want to own and operate the wells
tomorrow. It’s that communication (especially
in today’s tech driven world) that has caused
the marketed stall of deals.
We have seen a shift in the type of assets
companies are looking for, as they are more
concerned that the price of oil will drop to
$40 than they are if the price remains at $70.
Each operator we talk to is looking for low
cost operations, a technically sound team
(both in the eld and in the ofce) and those
requirements are not in large supply. The labor
force and assets are both available, but the
companies that are buyers are only considering
decline curves and asset value based on
reserves. Which is a great start, but having
a 30-year veteran
in the eld running
the operations is an
asset that is highly
undervalued in 2018.
Low labor numbers
(or inexperienced
labor) will account for
a huge hurdle for the
remainder of 2018. I
heard three different
stories about frac jobs gone wrong because of
inexperience. Teams with knowledge will be in
the highest demand, and the acquisition market
won’t be any different.
Brace yourself for an early winter as the deals
come to a freezing point, or nd a team that
can help you target off-market deals to get
something bought before the marketed frenzy
of 2019.
OILMAN COLUMN
Josh Robbins
Conference
Oilman Magazine / September-October 2018 / OilmanMagazine.com
14
Four Reasons Oil and Gas Pipelines Fail
By Corrosionpedia
OILMAN COLUMN
Since their rst introduction in the late 19th
century, oil and gas pipelines have gone on to
become the primary transportation system for
extraordinary quantities of energy products
to various consumers in numerous industries.
The United States alone consists of 2.6 million
miles of oil and gas pipelines - all tasked with
supplying approximately 65 percent of the total
energy consumed. According to data from the
U.S. Energy Information Administration, of this,
oil accounts for 40 percent of consumed energy,
while natural gas provides the other 25 percent.
Although pipelines are generally considered
to be the safest way to transport fuel (over
70 times safer than tanker trucks and freight
trains), like any other engineering structure,
they are susceptible to several types of failure.
And when they do fail, the outcome is often
catastrophic. Fires, explosions and spills caused
by pipeline failures can lead to human casualties,
environmental pollution, and signicant
economic losses. According to statistics from
the Pipeline & Hazardous Materials Safety
Administration (PHMSA), between 1998 and
2017, there have been a total of over 11,700
oil and gas pipeline failure incidents resulting
in 1,293 injuries and 331 fatalities at an overall
cost of approximately $US 7.3 billion. These
incidents have brought pipeline safety to the
forefront of international attention and highlight
the importance of pipeline failure prevention
and mitigation measures.
The causes of pipeline failures are varied and
are dependent not only on their design and
operation but also their maintenance and
management. Statistical data compiled from
almost 700 oil and gas pipelines from 2004 to
2015 attribute the most common causes of
failure to corrosion, excavation damage, pipe/
weld material failure and equipment failure.
Pipeline Corrosion
Corrosion is, by far, the leading cause of pipeline
leaks and ruptures in the oil and gas industry
– accounting for 25 percent of failures in oil
pipelines and 18 percent of failures in natural
gas pipelines. According to studies conducted
by NACE (National Association of Corrosion
Engineers), the cost of corrosion damage
can range anywhere between $US 471 to $US
875 million per year. This gure is expected
to increase as pipelines continue to age. It is
estimated that over 60 percent of oil and gas
pipelines in the U.S. are over 40 years old.
Internal pipeline corrosion is typically caused
by the presence of carbon dioxide (CO2),
hydrogen sulde (H2S) and free water in oil and
gas products, whereas external corrosion occurs
due to the reaction between the surrounding
environment (soil, air or water) and the metal
pipe. These substances react with the pipe
material, causing the metal to deteriorate and
gradually reduce in thickness. The subsequent
weakening of the pipe’s walls can result in leaks
or ruptures due to the internal pressures and
stresses acting on the pipeline.
Corrosion is commonly characterized by pitting,
uniform corrosion or stress corrosion cracking
on the surface of the pipe.
Excavation Damage
Excavation damage presents one of the most
signicant challenges to pipeline safety. This type
of damage is usually accidental and is caused by
the impact of construction equipment on the
pipeline under consideration. Excavation may
be in the form of digging, trenching, grading
or boring during highway maintenance, home
or building construction, or farming activities.
According to PHMSA statistics, excavation
damage accounts for 15 percent of failures in oil
pipelines and 22 percent in natural gas pipelines.
Accidental damage due to excavation may be
observed as dents, scrapes, punctures, cuts or
protective coating removal. While direct contact
between the excavation equipment and the
pipeline can cause sudden and catastrophic
failure, scratches and dents can remove
protective coatings and eventually lead to failure
in the short to medium term. Coating damage
can promote accelerated corrosion, which in
combination with physical damage can increase
the potential for leaks.
Pipe or Weld Material Failures
Pipe welds and other types of joints are
usually weaker relative to the rest of the pipe
structure. Moreover, earlier methods of welded
longitudinal seams on some pipes are known
to have been inferior in quality and more
susceptible to failure. Although modern welding
techniques have dramatically improved, weld
failure continues to be a cause for concern.
No w Av A i l A b l e : T h e Cr u d e l i f e Cl o T h i N g
w w w .s h i r T s i C l e .C o m /T h e C r u d e l i f e
Oilman Magazine / September-October 2018 / OilmanMagazine.com
15
American Natural Gas and NATO
By Mark A. Stansberry
In the fall of 1997, I was approached by a
friend of mine, Vladimir, who asked if I could
assist his native country the Czech Republic in
getting into NATO. At the time, he told me the
Czech Republic’s leaders needed to meet with
key U.S. Senate leaders. The U.S. Senate would
have to ratify the Czech Republic going in to
NATO by two-thirds of the Senate votes in
order to be considered.
Vladimir, a prominent Czech artist, and
his family escaped from Czechoslovakia in
October, 1981. The escape occurred three
days before hearing a verdict from the Czech
Communist regime.
The Russians invaded Czechoslovakia in 1968.
Vladimir and his artists’ group painted posters
about the invasion. He spent several months
in jail along with probation. Vladimir was told
that he could never practice art again. Part of
the punishment for not joining the Communist
party was that he could not get a job. However,
about a year later he was able to get a job as a
laborer.
Years later in 1981, the case was reopened.
He was going to have to go to court and
prove his innocence. There was no proof
of guilt. The decision to escape was evident.
In 1982, Vladimir and his family arrived
in Oklahoma with only two suitcases and
speaking no English. Vladimir and his family
were welcomed to Oklahoma and to the U.S.
with open arms. Families of Czech descent in
Tulsa, Oklahoma City and other communities
welcomed them. He began painting again.
Vladimir and I met for the rst time in early
1997. I was so fond of his art that I bought
a painting. He had talked to me several times
about the Russian invasion, about his love for
the U.S., and his love for the Czech Republic
and its people.
Though I lived in Oklahoma, I had a small
business location in Washington, D.C. in
1997. I reached out to several of my friends
and contacts. I was able to arrange a meeting
between the Majority Leader of the U.S. Senate
and the Prime Minister of the Czech Republic
in November 1997.
In November 1997, there were only about 40
U.S. Senators in favor of the Czech Republic
entering NATO meaning at least 27 Senators
were needed for
ratication. By
spring of 1998, the
necessary two-third
votes were in place.
By March 1999,
the Czech Republic
entered NATO.
I only played
a small part, a
meeting between
two world leaders.
Vladimir played a crucial part. He knew what
the price of freedom was. He fought for it.
Vladimir was concerned about how Russia
controlled Eastern Europe especially with the
supply of natural gas. He hoped to see the day
where that control would end, at least curtailed.
The U.S. Administration recently stated that
“Europe will be a ‘massive’ buyer of LNG to
diversify its energy supply. And we have plenty
of it.” Natural gas will be a key player in the
future of economic development in Europe
and of its freedom.
Mark A. Stansberry
OILMAN COLUMN
Additionally, some of the older pipes - joined
with substandard welding - are still in use today.
Weld failures usually manifest as cracks at the
welded joint and can be caused by:
Improper welding techniques
Improper welding inspection
Presence of impurities in the welded steel
Welding of contaminated surfaces
Adverse reaction between the weld puddle
and the surrounding environment.
Failure may also originate from defects in the
piping material itself. Impurities can become
trapped in the molten steel during the manu-
facturing process, resulting in weaknesses in the
metal’s crystalline structure. Although unwanted
impurities during steel production were more
prevalent in earlier manufacturing processes,
defects in modern steel materials still account
for a small percentage of pipeline failures. Mate-
rial failure may come in the form of laminations
and inclusions, or blisters and scabs.
Based on the statistical sample data, material/
weld failure is responsible for 22 percent of oil
pipeline failures and 24 percent of gas pipeline
failures.
Equipment Failure
Equipment failure is used to refer to any failure
caused by a pipeline component or device
other than the pipe itself. These include pumps,
compressors, valves, meters, tanks or any other
component essential for safe operation of the
oil and gas transportation system. Equipment
failure typically results in the release of
hazardous uids into the environment, usually
in small quantities. Since oil and gas equipment
is generally located on company property and
subject to limited access, these releases seldom
result in injury to the general public.
Equipment failure can be caused by improper
usage, lack of maintenance or improper
component selection for the given application.
Seventeen percent of oil and 11 percent of
natural gas pipeline failures are brought on by
faulty equipment.
Conclusion
Overall, these four types of failures account for
over 75 percent of pipeline leaks and ruptures
in the oil and gas industry. Incorrect operating
procedures, natural forces and other external
forces acting on the pipeline account for the
other 25 percent.
The devastation caused by oil and gas pipeline
failure underscores the importance of safety
and reliability in these systems. The data from
failure events collected by PHMSA and other
departments worldwide are, however, useful
in understanding the weaknesses that occur in
pipeline management, and are necessary for
continued risk identication, mitigation and
prevention.
Corrosionpedia aims to provide the rst steps
in the research journey for asset integrity
professionals the world over.
Oilman Magazine / September-October 2018 / OilmanMagazine.com
16
Are Fleet Accident Costs Hiding
in Your Blind Spot?
By Rich Radi
On average, approximately 20 percent of a
company’s eet will be involved in an accident
this year - each incident bringing a signicant
cost to your company. These expenses include
direct costs such as medical bills and vehicle
repairs as well as potentially signicant indirect
costs that may be hidden in your business’
blind spot.
The nancial impact is striking. OSHA
(Occupational Safety and Health Administration)
reported that motor vehicle crashes are costing
employers $60 billion annually in medical
care, legal expenses, property damage and lost
production, alone. The average crash costs
employers about $16,500 and jumps to more
than $74,000 for a crash with injuries and even
$500,000 or more if there is a fatality.
That means a company with a eet of 1,000
vehicles should set aside at least $3.3 million
annually to manage the nancial impact of
accidents.
Calculating the True Cost of a Crash
The true cost of accidents goes far beyond just
repair costs and insurance deductibles. While
most direct costs are typically covered by insur-
ance, these expenses represent only a portion of
the overall cost to your business. According to
conservative insurance agency estimates, $1 of
direct accident cost translates to approximately
$3 of indirect costs. These indirect costs are
often a challenge to identify and even more dif-
cult to measure, but still affect your organiza-
tions day-to-day operations and bottom line.
These “hidden” costs can take many forms,
depending on the severity of the accident. A
few of the more common ways accidents can
affect a company include:
Lost productivity
Increased insurance premiums
Signicant exposure to legal liabilities
Potentially permanent damage to your
corporate image
Diminished vehicle value
Increased administrative burden
Negative publicity
Workers compensation claims
Litigation expenses
Employee morale
Do you know how much eet accidents are
really costing your business? Every time a
driver gets behind the wheel, your company is
vulnerable to repercussions that go far beyond
just repairing a vehicle if you’re not proactively
addressing safety and driver behavior. To
mitigate your corporate risk and control accident
costs, you must establish a corporate safety
culture that protects both your employees and
your business.
Capitalize on Proactive Driver Optics
Most traditional driver safety programs are
reactive in nature instead of proactive: an
accident or driving infraction occurs, then
corrective training is prescribed. Motor vehicle
reports (MVRs) are pulled annually for each
driver, but if an incident occurs in February and
MVRs are run annually in January, another 11
months will pass without management visibility.
Both practices are too little, too late and still
leave your company at risk.
A truly effective driver program is built on a
foundation of monitoring driving habits in
real-time. Rapidly evolving technologies such as
telematics and advanced data analytics allow you
to quickly identify and address high-risk behavior
to improve performance, minimize risk and
reduce accident costs.
Understanding what behaviors your drivers are
exhibiting on the road at any given moment
empowers your company to quickly pinpoint
who needs immediate training to help prevent
accidents from happening in the rst place.
For example, if a driver exceeds the speed
limit on a frequent basis, safety training can
be assigned with the goal of reducing his or
her speeding habit.
Data integration is giving companies real-time
optics into areas they couldn’t track even just
a few years ago. Now, it’s possible to combine
a driver’s motor vehicle report, your corporate
eet policies, telematics data, driver risk scoring
and accident data into a consolidated view of
what’s actually happening behind the wheel.
This seamless integration of data points delivers
enhanced visibility so that you can improve eet
safety and reduce the impact of accidents on
their bottom line.
Drawing a Roadmap to Driver Safety
Success
To effectively remove blind spots from your
corporate safety culture, a successful driver
safety program is both proactive and reactive.
As you’re building your program, include the
following elements:
1. Monitoring MVRs on a consistent, on-going
basis rather than just annually
2. Moving the eet safety policy online and
combining it with a program of online
training modules to promote comprehension
3. Establishing a personalized onboarding
program for new drivers that includes a
driver skills assessment program to identify
poor driving habits and assigns corrective
training before an incident occurs
4. Monitoring drivers through telematics and
advanced analytics to identify high-risk
behavior in real time
5. Prescribing online training modules to
match specic driver weaknesses to improve
behavior
6. Incorporating a scorecard once your
program is well-established to encourage
friendly competition among drivers and
reward your safest drivers
Discover the savings of a crash that never
happens. By injecting technology into your
driver safety program, you’re now less
vulnerable to crashes you previously couldn’t see
coming. Your company’s investment in safety
for the long haul will open drivers’ eyes to their
impact of their behavior, empowering you to
improve their performance, minimize risk and
reduce accident costs.
Rich Radi is Director of
Driver Excellence for
ARI, one of the world’s
largest eet management
companies, with
approximately 1.5 million
vehicles under management in a wide variety
of industries in North America, the United
Kingdom and Europe.
OILMAN COLUMN
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Oilman Magazine / September-October 2018 / OilmanMagazine.com
18
FEATURE
As the oil and gas industry grows, the IoT
(Internet of Things) gets more advanced and in
turn, grows along with it. This growth is crucial
and as advances are made to deliver important
data to oil and gas companies, they are presented
with a plethora of software companies from
which to choose. Oil and gas software is so
versatile now that the clientele it benets is spread
across all sectors and ranges anywhere from
small, private engineering rms to large, publicly
owned corporations. The software market is
extremely competitive, with more developers
emerging by the minute. When presented with so
many options, companies have quite the challenge
of nding the perfect software that meets their
needs in a sea of options.
Death of Paper and Value of Time
Since the invention of the printing press, the
world has survived on paper. At the time of its
inception, it was a revolutionary invention. The
subject has long been debated whether or not
it was, in fact, the greatest invention of all time.
Companies across the globe have utilized paper
for decades, centuries even. The oil industry was
no exception. On the ofce side, drafting was
done on large tables or oors, depending on the
size of paper, with protractors and pencils. In
the oil eld, pressure and production readings
on wells were hand written on paper and faxed
into to the corporate ofce each day. The paper
was then led and kept for years until eventually
they were moved off-site where they continued to
be stored for years. Paper meant time and it also
meant manpower – two extremely crucial factors
when it comes to a company’s prot margin.
Time is a huge factor here and it can be a benet
or burden, depending on how it’s managed.
The concept of advanced technologies allowing
companies to manage, report and analyze data in
real-time, is an incredible asset. It’s a tool, that to
be able to have a competitive advantage in an ever
evolving oil market, a company or individual must
possess in order to keep up with the times.
Industry Software Leaders
Drillinginfo, based out of Austin, Texas is the
leading SaaS (Software as a Service) and data
analytics company for energy exploration and
production decision support. Their technologies
– intelligence, analytics, tools and services
combined into one, can benet anyone from
royalty owners and small independents, to
large corporations. Allen Gilmer, founder of
Drillinginfo, was an independent oilman for
seven years, co-founding three protable E&P
(Exploration and Production) companies prior
to founding Drillinginfo in 1999. Together
with some other independent operators with
seismic and land backgrounds, “We thought,
‘what can we do to make this process better and
more efcient? What tool can we invent that no
one has ever seen before to improve on this?’
We were the very rst in our eld to go out
to market selling to the small guys rst,” says
Gilmer. Drillinginfo is now one of the most
popular and widely used oil and gas software
with approximately 50,000 users. Time is essential
to their mission, as they provide instantaneous
access to everything a company could possibly
desire in their eld. Because of the advantage
they offer, time is saved and excessive manpower
that would normally be needed to complete these
tasks, is no longer required.
Oildex is another company making remarkable
strides in the O&G software industry. They are
the leader in nancial automation solutions for
the industry. They allow their users to seamlessly
and securely collaborate with their business
partners, automate critical business processes
and eliminate the high cost and errors associated
The Evolution of Efficiency
in Oil and Gas Software
By Sarah Skinner
Photo Credit: Chutima Sonma – www.123RF.com
Oilman Magazine / September-October 2018 / OilmanMagazine.com
19
FEATURE
with the handling of paper. In May of this year,
Oildex announced its
OpenTicket
, which is the
next generation of the company’s digital eld
ticket solution.
OpenTicket
is the industry’s only
comprehensive, end-to-end cloud-based platform
that provides operators and service providers
with all the software they need to generate,
review and approve digital eld tickets. “Highly
inefcient paper eld tickets are the last obstacle
to overcome when it comes to automating and
digitizing the oileld,” said Craig Charlton, CEO
of Oildex. “
OpenTicket
solves this problem and
allows service providers to quickly and easily
submit eld tickets while allowing operators to
quickly and easily approve those eld tickets.
Coupled with our Openinvoice platform and
recently announced Supply Chain Finance
program, we are creating the most efcient
source-to-settle ecosystem in the oil and gas
industry.”
OpenTicket
is a complete solution for
both operators and service providers, it provides
ofine mobile support for service providers,
support for D&C (Drilling and Completions)
“Virtual Company Man” capability and optimized
processing which expedites approval. Before
OpenTicket
became available, it would typically
take 4 to 8 weeks to accept a eld ticket and
approve the invoice. Now the process can be
done in around an hour.
On August 13, 2018 it was announced that
Thoma Bravo, LLC, a leading private equity
investment rm has agreed to acquire Quorum
Software. The transaction is expected to close in
the third quarter of this year. Quorum is another
cutting-edge software industry leader. They
focus on helping oil and gas companies meet
their long-term goals using familiar Microsoft
technologies, enabling enterprise integration,
driving faster deployment and providing access
to clean, consistent and consumable data. The
focus of Quorum is the user experience and
cloud-based software, which allows any and every
important piece of data to be accessed from
anywhere. “The North American oil and gas
industry continues to grow, with a heightened
focus on operational efciencies and maximized
capital productivity. Quorum’s comprehensive
capabilities across the value chain with advanced
technical innovation and deep domain expertise,
coupled with our strong brand, positions us
well for continued growth. We look forward
to beneting from Thoma Bravo’s expertise in
helping companies grow through their prudent
investment strategies. We are also thrilled to
partner with their software industry experts to
harness exciting new growth opportunities,
says Perry Turbes, Chief Executive Ofcer of
Quorum Software.
The Challenge of Transitioning
Although it would be ideal, companies cannot
purchase software, sign a check and expect
to have their whole organization transformed
overnight. Reasonably speaking, the transition
and training that goes into converting, plays a
large role. It is an immense commitment for all
personnel involved from interns to the CEO.
Drillinginfo offers a Customer Resource Center,
which is a central location for customers to
nd links to instruction materials, product
documentation, submit a support ticket,
ask questions, submit ideas, nd out about
Drillinginfo events or even sign up for training.
They also offer live webinars, many of which
are free for subscribers and potential customers
that are curious about what they offer. In-person
training or “transform courses” are paid in-depth
training courses designed to assist the new or
experienced user to accomplish key workows
with hands-on, instructor-led exercises. Courses
are half or full day and cover topics from data
loading and visualization through interpretation,
velocity modeling and multivariate statistics. Each
face-to-face course includes access to a training
computer with appropriate datasets and a hard
copy training manual which can be used as a
desktop reference after the training course. When
asked how long it generally takes to “go live”
with one of the Drillinginfo products, Gilmer
said, “Since most of what we do is app-based,
the access and information is instantaneous. The
larger and more specic packages may require
additional training.”
In regard to setup and transition, Quorum has
very specic timelines set forth on their website.
It is in place to develop a plan that minimizes
disruption, enhances business processes and
speeds time to value. With a team of deployment
experts, there are three options of integration:
Rapid – Using out-of-the-box standard
conguration, the Rapid Deployment Package
gets clients fully operational with myQuorum
applications in three to four weeks.
Rapid+ – Using a variety of conguration
options, the Rapid+ package delivers an
entire suite of fully integrated myQuorum
applications in ten to twelve weeks.
Tailored – Beginning with a comprehensive
needs assessment, the Tailored Package
features a custom engagement and fully
deploys in as little as three months.
Companies can choose to send their employees
to Quorum’s education center or host the training
at their facility. Either way, the education and
training services help get the most from the
myQuorum investment.
Oildex has a dedicated team of implementation
specialists that assist operators with deploying
OpenTicket
. The team uses a proven
methodology that focuses on the adoption of
the software by both operators and their service
providers, not just setting up the software
and training users. The methodology builds
on Oildex’s 15 years’ experience deploying its
OpenInvoice product to oil & gas operators
and to oileld service providers. The Oildex
team works with each operator licensing
OpenTicket
to develop a rollout strategy that
meets their particular needs. Most operators use
a segmented rollout strategy where they onboard
targeted regions and supplier types sequentially,
as opposed to a single big-bang company-
wide rollout. Implementation timeframes vary
with the size and complexity of the operator.
Typical projects take 30-45 days from the initial
kickoff meeting to initial ‘go live’, followed
by ongoing efforts to continue growing the
supplier community.
OpenTicket
implementation
teams typically manage the project, congure
OpenTicket
to support the customer’s unique
business rules, help the operator’s eld personnel
learn how to use the new system to review and
approve digital eld tickets, and work with the
operator’s suppliers to get them onboarded.
A major problem companies run in to with
conversion, is the unwillingness for some of the
older generation to adapt to these practices. They
are set in their ways and doing things the only
way they have known for decades. It is a challenge
to get them to accept and utilize the new
technologies out there. Because of the experience
they provide, the knowledge some of these
employees possess is invaluable and companies
do not want to lose them. This makes transition
delicate and it’s so important that the focus is on
making them feel comfortable and condent in
this new role. For the software to be successful,
everyone has to be on board.
Each of these software companies, in addition
to the many others out there, are offering a
service. It is not just any service, though. They
are offering the ability to gain an advantage
in an extremely competitive market. So, when
presented with this software, the question is not
“if ” we will convert over to cloud-based software,
but “when.” When the decision is made to make
that leap, which one will be chosen? What sets
one apart from the other? Distinguishing factors
that come into play are the personalization
aspects. All of them can be tightly integrated,
customizing the software to t every need of
an oil and gas company, which makes them
invaluable. Extensive research is key though. Do
the homework. The information is all there for
an educated decision to be made to nd which
software will be the best t for the company’s
bottom line. Once the decision is made, and
personalization and training have occurred,
actually “going live” becomes a reality. At that
time, it will be a wonder how the industry ever
survived without it.
Oilman Magazine / September-October 2018 / OilmanMagazine.com
20
Interview: Shoshi Kaganovsky, CEO
and Richard Haun, Vice President
Engineering, SensoLeak
By Tonae’ Hamilton
Below is an interview with SensoLeak CEO, Shoshi
Kaganovsky and Vice President Richard Haun. The
interview text has been left in tact, with only minor
grammatical adjustments.
Tonae’ Hamilton: What inspired you to work on
creating articial intelligence for the oil and gas
industry?
Shoshi Kaganovsky: It began eight years ago when I
developed a system for helicopter engine monitoring.
I decided to combine AI and machine learning to
prevent critical failures by “identifying” the defects
when they rst begin and before they escalate into a
critical failure. With the development of the product,
we then had the ability to alert a pilot to abort,
minutes before a potential crash. I also realized that
the energy industry suffered from some dated pipeline
networks and related systems. Naturally, failure of
these systems does occur and can have had long term
effects on the environment and pose a danger to
personnel and the general public. Failures still occur
despite the best efforts of operators ranging from
eruptions of gas and product lines, spills, leaks, etc. As
a result, I decided to create a system that could identify
the occurrence of pipeline leaks quickly and provide
means to track the events. My intent was to develop a
system that could be accepted as an industry standard
and to provide a game changing improvement in
safety and risk management. Articial intelligence
can be looked at in many different angles and can be
benecial when used in the energy industry. At this
point, I am very focused on the energy industry as
my main target for safety improvement using articial
intelligence.
TH: Being a female innovator in a male-dominated
industry, are there any challenges you’ve faced while
working in the industry?
SK: There have been a lot of challenges. In an
industry such as this one, my position is unique and
usually, I am pitching my ideas primarily to men. With
my name being “Shoshi” which is not gender specic,
many assume I am a man. When I show up, I have
been told that they are waiting for Shoshi until I tell
them I am Shoshi and we have a laugh. All in all, it’s
ne and I enjoy the business. It’s a pleasure to work
with the guys and gals across the industry and it is
enjoyable to be in this vibrant industry.
TH: When did you begin working at Sensoleak and
what advancements have you seen your company
make in the oil industry since you began?
SK: I founded the company in 2016! However, I
started development of the technology in 2010.
During that time, I was developing products and
working as a tech scout. I also guided several start-
ups. I would watch companies go under because of
underdevelopment of their technology as well as their
inability to predict all of the expenses. My strategy
was to not enter the market before the technology
was ready and be cautious regarding costs from day
one. I had my technology ready for commercialization
in 2016 and incorporated Sensoleak. I traveled for
over 200 days that year and reached out to industries
in many countries to get Sensoleak some traction.
My team and I started offering proof of concepts
(POCs) as a method to provide client familiarity with
the technology. Some of these developed into long
term agreements. As the company solidied further,
I identied the U.S. as the best place for Sensoleak
Global HQ. I planned the move to Houston, Texas
in August 2017 just in time for Harvey, the hurricane,
to ood my new hometown. I ended up volunteering
with the Red Cross during the nights and helping with
more physical tasks during the days. In December
2017, I opened my stand-alone American company
and started recruiting people to grow the Houston
business in the O&G industry rst focusing on
pipeline networks. I hired top consultants to get a
handle on improving the technology at a quicker
pace. Compared to when I started, we improved the
technology on accuracy and with great methodology.
The machine learning and AI provides a solid
basis for identication of systems deviating from
the norm. I am very happy with the development
progress of our systems and our strong team. With
Richard as our VP of Engineering, I am amazed at
how the entire Wikipedia of pipeline knowledge and
engineering can t into a human’s head! Our entire
team’s role is very important to the business and
tech development. We managed to develop a system
that has ease of implementation and can be easily
introduced into existing systems. For decades, data has
been collected from pipelines and our focus at this
point is to minimize the false alarm rate toward zero.
We want our system to assess issues that are the real
problems, that are serious concerns for the operator.
If there is any deviation from the norm, our system
will catch it. Our system learns to detect any deviation
from the norm and to make it visible to operators.
False alarms are more than just a nuisance since they
can eventually mask a real issue. Real issues result in
bad press, and a lot of expenses for operators that
can be avoided (environmental nes, clean-ups, idle
time, maintenance, etc.). False alarms interfere with
real alarms and we provide methodology so that
our system can accurately separate real issues versus
operational deviations in our systems. Companies in
the past have tried to predict what will happen based
on past events and have entered into comprehensive
programs to prevent future incidents. Our system
contributes to this approach in that it learns in real
time 24-hours a day and 365-days a year, providing the
best integrity picture in real-time. The AI recognizes
trends in increased pressure drop over time, pigging
events, start-ups, shut-downs, opening laterals to
divert ow, and operational irregularities. This allows
the system to identify and catch real issues early by
separating the normal-though constantly changing-
system parameters. With our system, we track the
pipeline network functions and performance allowing
the technology to learn on the y. With any serious
issue identied, it will automatically localize the
individual system segment that has the underlying
cause and provide operators with precise notication.
During its normal operation, the technology
continually evaluates the sensors providing data to
yield notice to the operator of malfunctions occurring
either due to an individual sensor or a zone. As the
algorithms identify sensor malfunctions, they will
ignore them until they again begin providing improved
results. With the AI, machine learning and combined
physics the technology contains all the necessary
parameters to oversee a task such as providing early
warning of a system aw occurrence while assisting
with maintenance by identifying questionable sensors.
Richard Haun: I joined in May and was immediately
impressed with the level of tech that they had on
the table, from their data systems to their data
scientists. What I hoped to bring to the table was my
50 years of experience with pipelines, much of it in
the eld. My background includes a great deal of
analytical work associated with the pipeline business
and software development to resolve the tougher
problems. I have written hundreds of programs in
the course of my career. One of the things we do at
Sensoleak is combine AI with principles of physics,
sound judgement, and engineering analysis. The
disadvantages of strictly using engineering software
with pipelines is that when you rst start a system, you
can only provide estimates of ttings, line roughness,
product density and viscosity which can lead to
inaccurate estimates of predicted to measured values.
The initial evaluations for owing gauge pressures
in pipelines are therefore always based on estimates
OILMAN COLUMN
Continued on page 22...
Shoshi Kaganovsky
Oilman Magazine / September-October 2018 / OilmanMagazine.com
22
OILMAN COLUMN
and as internal roughness increases over time, the
estimates are further away from reality. Because of
these considerations the pipeline parameters are
best identied by the operational characteristics. By
incorporating AI and machine learning, the advantages
are that you can actually learn from the system and
resolve parameter evaluations internally over time.
Because operating procedures are complex, our
systems are constantly monitoring changes and once
an anomaly is identied, the system automatically
drills down in the anomaly where you can decide if
the anomaly is operational, if there is a leak, or if
anything is abnormal due to sensor detection. If it is
found to be an unusual operational procedure result,
it can be picked up through the system and learned
to be acceptable. Naturally this is useful for future
operations of the pipeline. Of course, with any new
pipeline network detection system, operators still
have to provide information so that any anomaly
occurrence is properly characterized to prevent a false
alarm. You can drill down and read the pipeline better.
TH: With Sensoleak’s move to Texas, how do
you think the move will affect the company and,
furthermore, the oil and gas industry?
RH: The center of the oil and gas industry is Texas
and with our move, there is more access to many
engineers in Houston to help support the implemen-
tations. Most of the international companies are in
Houston. I believe that being so available to the oper-
ating companies as well as the reneries and pipeline
operators, we will be able to catch on very quickly as a
preferred provider. We already have things to do here
and the storm (surge in clientele) is coming. I think it
is an ideal location and we will be very successful here.
We will be able to expand our role in the oil and gas
industry through one successful implementation after
another.
SK: I second that. I used to y so much to the U.S.
and would realize that if you don’t have a local pres-
ence, it is a difcult way to promote the business. I
learned from Americans that unless they are looking in
the “white of your eye,” nothing will be found. I also
learned that if I am present and working in their time
zone, the demand is higher and we can accomplish
way more. Just seeing the team working in one space
makes me happy. When I just started, I had a couple
of developers in Israel, but because there isn’t really an
industry there, I had difculty recruiting local O&G
engineers so I hired remote ones from Canada and
the U.S. Now we can collaborate better and everyone
can brainstorm and write ideas on the board which is
more convenient. Houston is an international hub and
you can feel and see a lot of languages and cultures
which is way more interesting. The timing is right with
our move to Texas, as O&G majors seem to be ready
to adopt new tech. I feel welcomed now in Houston,
but whenever there’s a need to explain my personal
style I say that I’m not impolite and I’m not aggressive,
I’m just Israeli – hands on approach, hard work and
a very fast pace. This is how the culture is there. As
ex-military I am used to trying to take things forward
fast, keep the best interest of my company and team
in mind while presenting the best solutions to existing
problems. As for the machine learning experimenta-
tion Richard mentioned, we want to see this company
become successful and I can see it is beginning to hap-
pen now. We are about to establish our presence in the
industry pretty soon. We are meeting with companies
big and small and discussing how we are able to assist
them in ways most benecial to them. If our move
here helps to improve the industry and has a favorable
impact, then this would be our real success – seeing
this technology beneting the industry.
TH: Can you describe the articial intelligence (AI)
technology you have in mind to replace the current
pipeline infrastructure?
RH: I really like it. The AI, methodology, and tech
applications we’re using are state-of-the-art and very
cutting edge. The analytics and learning methods
are based on engineering logic of the pipeline
network system. The overall AI system is automatic,
can drill down into circumstances, and identify if
a circumstance is an operational event. The system
can learn the data as it comes in and predict analyti-
cal benchmarks and nd anomalies. Anything that
deviates from the norm is called an anomaly. They are
discovered and rationalized to determine whether or
not individual sensors are being affected. The system
is a lot smarter and faster than an individual. It gives
individuals overseeing the pipeline networks the op-
portunity to work smarter and you dont get the ‘crying
wolf scenario’ of false alarms. The system gives you
honest alerts and includes the engineering knowledge
automatically in the intelligence software. Regarding its
teaching and learning times, the algorithms are being
taught and are developing norms. The algorithms are
automatically updated as norms change. The system
can readily adapt and learn with current happenings
which the pipeline systems today could really use.
Once you have the correct information it is also really
clear which components require maintenance. This is
an added ‘plus’ of the system implementation.
SK: The innovation lies in the correlations and shows
how variables affect each other. The beauty in machine
learning is that it can learn over time and teach itself
and adapt to changes. In terms of developing technol-
ogy, we want to get to the point where machines can
learn specic alerts, be able to prevent failures, and
identify what is happening in the pipeline network and
what should be done. Right now, the algorithm helps
decision makers make decisions regarding mainte-
nance, operations, safety and identies the network
segment which encountered a problem. We plan a
more robust system in the future that can output de-
scriptions of the recommended maintenance schedule
items and procedures in a timely manner for more
efciency.
TH: What effect do you expect the new technology/
AI to have on the pipeline infrastructure and on the oil
industry as a whole?
SK: The aging infrastructure needs attention although
the industry is very diligent. It is important to protect
nature and water bodies that we have and our system
which allows network segmentation, can allow the
algorithm to ‘tighten up’ evaluations in different
segments per client wishes. As an example, segments
of pipelines that go near residential areas, schools,
churches, wetlands, lakes or rivers, can be automati-
cally identied to allow the algorithm response to be
more sensitive for anomaly detection. We optimized
a process of data analysis and we are putting data in
order and making it more accurate than in the past.
Although, our system can be applicable to monitor
anything that can be equipped with sensors, pipeline
networks are our current focus. With our system, we
can help preserve the environment, improve safety,
save litigation, and create a friendlier public environ-
ment for operators. If we take for example one of the
ofine projects we ran with one of the three largest
O&G companies in the U.S., we were provided with
several months’ data (pressure, ow, temperature and
density) and managed to identify all the defects, all the
failures and all the false alarms while our competition
identied all the false alarms as leaks. Major problem
that costs the industry tens if not hundreds of millions
of dollars annually – where the operators respond to
these (false) alarms by shutting down the pipelines, dig
along the line, just to realize there’s no leak. Sensoleak
is trying to minimize false alarm rate to zero and
provide the operators only with real alerts that require
their attention.
TH: Besides the inclusion of articial intelligence and
other innovations, what other changes do you think
need to happen to improve the current state of the oil
and gas industry?
RH: I think the operators of oil and gas are very
conscientious and I believe that they are striving for
the best. It’s difcult to change an old industry and it
has been on a slow though steady improvement for
the last 50 or 60 years. I have to say that the oil and gas
companies are staffed with very responsible people. I
have many colleagues in the industry and they never
take safety for granted and are environmentally-con-
scious. The companies work diligently and have tough
standards for the employees and if employees do not
follow through with policies, they will be terminated.
I love the industry and have been in it for a long time.
I think the industry is also quite responsive to imple-
menting available improvements that improve system
integrity. Company executives that are operating pipe-
line networks have to answer to government agencies,
shareholders and peers. I think they have been very
responsive in moving system integrity improvements
forward. This AI system may be the next selection for
many of them.
TH: What changes or innovations would you like to
see happen in the oil industry or specically in Sen-
soleak going forward?
RH: I’d like to see our system installed in all of the
pipeline control rooms, but if not in the primary
systems, at least in the sub-systems. Everyone has a
system which is an excellent approach. Having a pri-
mary system in place with another unobtrusive parallel
system running essentially off-line is something I think
to be a great benet.
TH: Are there any other types of articial intelligence
and technology you are working on for other issues in
the oil industry?
SK: Applications are innite. When I researched new
industries while working on aircraft, I considered
both the oil and medical industry. Back in the 60s,
our vascular system was compared in similarity to oil
applications. A question that came to my mind was,
“What if we used systems for the oil industry to detect
problems with the heart or other organs in the body
which can save a life?” If I can save one persons life I
would know that I left behind something meaningful
with my work. Since the medical industry is rather
difcult to penetrate, I felt the oil industry was ready
for us and there were many issues ready to be solved.
In the future, I am hoping to develop applications that
can prevent anything that can affect our well-being.
We can use data to improve current systems whether
it be for oil and gas, wind energy, rotating equipment,
aircrafts, or health.
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Oilman Magazine / September-October 2018 / OilmanMagazine.com
24
OILMAN COLUMN
The latest trend in digital transformation is
leveraging RPA (Robotic Process Automation)
to automate between 30 to 45 percent of manual
work. There are ever increasing reports of
organizations using RPA to accelerate execution
of tedious, monotonous tasks in nance and
accounting, human resources, recruiting, supply
chain and other oil and gas functions. There
is mounting evidence that organizations that
implement RPA can achieve a 40 percent average
reduction in processing time and a 50 percent
average reduction in costs. RPA implementation is
enabling improved accuracy, increased reliability,
and strengthened controls. It appears that RPA
is helping combat skilled labor shortages in data
management and analytics positions, by creating
easier and more efcient access to operational data
and real-time information.
While RPA has been leveraged more in the back-
ofce space, there are big opportunities within
oil and gas operations, such as joint venture (JV)
and revenue accounting, drilling and completions,
production engineering, eld operations,
subsurface, and operational data management.
Joint Venture Accounting and Revenue and
JIB Netting
Those oil and gas companies that use RPA
to automate their monthly close process have
experienced 30-50 percent improvement in closing
times. The expectation is that JV accounting and
revenue and JIB netting processes could benet
from leveraging RPA, as well. The necessary levels
of IT integration between the various internal and
external systems is challenging to implement and
maintain. If the systems cannot be integrated, then
considerable man hours are spent transferring data
from one system to another. RPA can be used,
in a non-invasive way, to create a bridge between
the various systems. RPA can also automate
high volumes of adds, changes, and deletions to
the accounts. Lastly, RPA bots can be used to
mitigate staff shortages, build expert knowledge
into processes, and free up resources to work on
activities that add more value.
Drilling and Completions
As oil and gas teams are drilling wells, they must
compile and analyze data from multiple sources
to ensure they’re drilling in the right direction at
the right costs. If the team is heading in the wrong
direction, it must be identied quickly. RPA can
provide valuable support for operational reporting
and drilling performance by automatically pulling
data from systems, such as WellView, to help in
the analysis process. RPA can also pull vendor
well data, purchase order data, costs, and forecast
data into a data warehouse to be used for more
comprehensive analytics. Drilling engineers can use
RPA to look at data and see differences between
processes across rigs. This creates substantial
time savings and streamlining, which can result in
signicant nancial improvements over the year.
Work Over Optimization
A signicant amount of human resources is spent
identifying in which wells to invest workover time
and effort. Typically, the investigation process
requires conducting analysis using multiple tools
to then compile an evaluation. The end-to-end
process requires data to be captured, transformed,
and transferred from one system to another – a
tedious and burdensome process. So much so, that
many teams utilize best guesses to evaluate and
make decisions, which doesn’t always translate to
pursuit of the best targets. RPA can be used to
automate the repetitive activities, which will free
up time for resources to conduct value adding
evaluations to identify the best workover targets.
Production Engineering
Production teams are in regular need of historical
well data that provides a performance story for a
well, from beginning to end. To pull together this
type of information, team members will spend
many hours obtaining information from analytics
tools and multiple sources (legacy databases, excel
les, engineers’ knowledge, etc.). RPA is built to
handle this type of task, as it sits next to existing
tools and data sets and mimics the steps humans
take to gather information from the disparate
sources. An RPA bot can be set to execute hidden
commands in the legacy systems to speed up
processing. It can also run unattended, 24 hours
per day and 7 days per week. The result is an
efcient process with superior results.
Field Operations (Field Asset Team)
The team members who are hands-on in the eld
need access to well information and analytics to
be able to safely optimize, operate, and maintain
wells and all surface equipment on the lease or
facilities. The challenge becomes getting these
team members the information they need in a
usable format. Having information delivered in an
easy to access, user-friendly manner is critical to
eld operations teams. RPA can be used to gather
information from various systems, compile the
information into a ranked issues report, and deliver
the report to eld operations’ team members by
email or another report out method. Using RPA
will free operations support staff to work on
higher value activities.
Subsurface Data Management and Operations
Data Analytics
For geoscientists, drilling, operations, and
production engineers to conduct data analysis
that helps move the needle for the business,
they must have data available in a usable format.
Subsurface data management and operations
data analytics team members are instrumental to
making the data available. Unfortunately for many
organizations, these team members are in high
demand and are stretched to capacity. RPA can
expand the capabilities of these team members
through automation of data request processing;
data capture from legacy systems; data cleanup;
data storage in a warehouse; and conducting QA
/ QC steps on the data to ag potential problems.
When there is an increase in project volume or
data ingestion, data processing capacity can be
expanded to meet the increased demand.
The briey described ways that RPA can be
leveraged by oil and gas operations provides a
view of some of the benets that can be achieved.
RPA helps companies do more with the limited
resources available. RPA also helps to reduce
costs, sometimes by as much as 35-65 percent
for onshore process operations, and can improve
efciency by as much as 50-75 percent. In some
transaction-heavy applications, the time to process
data can be reduced by up to 95 percent. Another
known benet of RPA technology is that it offers
an investment recovery period between six to nine
months, which has proven to be a major driver for
RPA market.
With this in mind, one might wonder if oil and gas
companies have time to waste when it comes to
implementing RPA. We think not.
Allen Yoho is a management
consulting with Enaxis Con-
sulting. Yoho has over 10
years project management
experience, as well as an
established track record of
leading projects from incep-
tion to operation utilizing project management
best practices to deliver superior results. Over
the past seven years he has worked extensively
in the oil and gas industry. Yoho earned a BS
of Business Administration in Finance from
California State University – Sacramento, as well
as an MBA from University of Warwick.
RPA Creating the Oil and Gas
Workforce of the Future
By Allen Yoho
Oilman Magazine / September-October 2018 / OilmanMagazine.com
25
Revamping the Oil Industry with
Technology and the Millennials
By Tonae’ Hamilton
Technology has become so prevalent in our society
that it has worked its way into various industries.
Industries such as retail, nance, education, and,
of course, IT have all implemented technology in
varying extents. One industry however, that had
remained unaffected by the spread of technology
for a long time, is the oil and gas industry. Until
recently, the oil and gas industry had remained
stagnant in traditional methods of operation with
little signs of innovation. With the spread of
technology coupled with the rise of millennials, or
young adults, the oil industry has now experienced
a slew of developments and technological
innovations, which some may say were overdue.
We recently sat down with a young geologist and
technical advisor for Drillinginfo, Ian Thomasset
who weighed in on the impact technology and the
younger generations have had on the oil industry.
Before his position with Drillinginfo, Thomasset
got his start in hydrology. Through his own
research, he became more familiar with the energy
industry and saw how energy shapes the global
economy and how necessary and signicant of
an impact it makes. He stated how the energy
industry has an “impact on the day to day lives of
individuals” and how he wanted to be a part of
that. At that point, Thomasset found a position
with Consol Energy (now known as CNX gas)
where he gained his rst real exposure to big data
in the oil and gas industry. Acquiring immense
knowledge in big data while at Consol Energy,
he later transitioned to Drillinginfo as a technical
advisor in January. Wanting to further apply his
geology degree to the energy industry, Thomasset
saw Drillinginfo as the perfect t.
Since working at Drillinginfo, Thomasset has
helped companies gure out solutions with big
data and analytics. He mentioned that being a
part of a “generation that has seen technology
throughout their lives and have been constantly
exposed to it” has allowed him, as well as his
peers, to more easily embrace change and take
on different approaches. “The running joke I’ve
heard is that all the easy oil and gas has already
been found and nowadays it is trickier,” said
Thomasset. With technological developments in
place, Thomasset mentioned how the industry has
become a lot more willing to change the course
of how to nd oil and gas. “I came in with the
mindset that industry veterans may resist change
but found that as long as they see the science
behind it, they are open to those changes,” said
Thomasset. He further described how he has
seen industry veterans and newcomers alike work
together to embrace change.
Contrary to the way the oil industry was in the
past, Thomasset expressed how people now
involved with unconventional oil have the mindset
of “I am most likely going to nd something.” He
further described how people now consider the
operational costs and ROI (Return of Investment)
they will receive from their prospects. “There has
denitely been a major shift from conventional
prospect thinking to unconventional prospect
thinking and weighing out the cost-benet analysis
more,” said Thomasset.
When it comes to whether or not the oil and gas
industry has become a more “attractive” eld for
the younger generations, Thomasset mentioned
how he’s seen a huge boom in industry interest,
including from his colleagues while in graduate
school. “It is that new technology that makes
the industry more positive and attractive to the
younger generations,” said Thomasset. With a
surge of new, younger workers coming to the
industry, Thomasset was asked how that may
affect the industry. Thomasset stated, “With all
the talk involving big data, it is going to be a real
co-mingling of the old school ways of working
in the industry and the new data strategies
and approaches that come from the current
generations. This intermingling is what is helping
the industry become what it is today.”
With technology’s larger role in the oil industry
today, Thomasset was asked whether he believed
this implementation of technology was a positive
change. Thomasset stated, “Technology has
denitely positively affected the industry. It has
provided transparency and a level playing eld.
The small guys from smaller companies can have
the same access to information as the major
companies, so long as they obtain the right data
set. The industry will be a lot safer because we’ll
have an abundance of good information available
for everyone to see.” Thomasset added “Being able
to get a leg up in the industry and use information
to compete with bigger companies is great. The
independence of small companies to be able to
leverage such information is huge. At Drillinginfo,
the idea to use data to level the playing eld is
key and fundamental to our purpose. Using data
to make things clearer eliminates those unknown
and murky aspects of the business. The younger
generations denitely have a grasp on technology
and are very comfortable using it, meaning we are
able to do more with less.”
Drillinginfo, serves clients in various roles
throughout the energy industry and Thomasset
mentioned how he has helped his customers
know how to utilize decision support solutions
and big data and handle products with ease. “I
think it’s been fun driving value into their acreage
positions. Helping guide people to quicker, faster
decisions and providing them with solutions in
relation to our products is what I enjoy doing,
said Thomasset. When asked what developments
he hopes to see going forward in the industry,
Thomasset expressed he’d like to see a cleaner
reporting system in regard to well spacing.
“Finding out which wells may be interfering with
each other is something I’d like to see possible in
the near future. Having a greater understanding of
information and data now is what can help drive
out solutions,” said Thomasset.
OILMAN COLUMN
Photo Credit: Evgeniia Kuzmich– www.123RF.com
Oilman Magazine / September-October 2018 / OilmanMagazine.com
26
Why Oil and Gas Companies Should Consider
eDiscovery as a Standard Business Process
By Brian Schrader, Esq., BIA
OILMAN COLUMN
One unfortunate aspect of owning a business is
that, from time to time, there will be a disagreement
with another party — be it a client, employee,
contracted partners or an outside organization —
that cant be resolved by any other means but a
lawsuit.
In the oil industry, issues surrounding land use
factor prominently into lawsuits. For example,
disputes commonly arise over contracts for the
operation of pipelines or the leasing of land
where wells are located. Royalty income is another
frequent focus of litigation, as royalty owners battle
over the income to which they feel they’re entitled.
In addition, oil and gas businesses continue to see a
rise in legal matters related to environmental issues.
As different as these civil lawsuits are from one
another, the legal process for each one plays out
roughly the same. Litigation requires both parties
to go through discovery, during which they gather
any relevant les to respond to document requests
and to support their side of the case. What was
once a tedious task of gathering physical documents
by hand, has evolved into a fully digital process
that sweeps up a wide variety of data much more
efciently.
During electronic discovery (eDiscovery), these
disparate forms of data are collected, processed,
analyzed, ltered, reviewed and ultimately produced
to opposing parties. If you’ve ever started this
process from scratch, you know that it can be time-
consuming, stressful and — if your company’s data
isn’t well managed to begin with — fairly chaotic.
It’s true that for some companies, lawsuits only
come around once in a while (if you’re lucky). But
when the need for eDiscovery occurs, it doesn’t
help anybody to handle it each time in the same
haphazard, frantic way. In addition to putting
unnecessary stress on your IT department to collect
the necessary data, working on an accelerated time
frame can result in data being lost or mishandled
that might make the difference between winning or
losing a case.
All of this can be avoided by taking a step back and
thinking about eDiscovery instead as a long-term,
standard business process. Assuming that you’ll be
involved in one or more lawsuits during the life of
your company — and chances are you will — it’s
simply a smart business decision to establish a
system that allows you to respond to eDiscovery
needs more quickly and with the condence that
you have every relevant document available to use
in your case.
Here’s how you can start creating a standard
eDiscovery process:
1. Take stock of your situation
Taking on a company-wide standardized eDiscovery
process may sound overwhelming. Particularly if
you have multiple ofces or have previously merged
with another company, you may not have a good
handle on what data even exists and where it’s
located.
So, obviously, that’s the rst step. In as detailed a
way as possible, map out where your organization’s
data is – what les are with what people and in what
departments, when they were created or modied,
and who has access to them. Go beyond what you
might think is relevant — in addition to invoices,
maintenance records, contracts and land-lease
agreements, data including emails, voicemails,
photos, videos, Slack messages, social media posts
and even texts are all admissible in court.
Also outline your processes for managing litigation
holds, the method by which your data will be
collected and if you will do any initial ltering of
your collected data. However, be cognizant of the
time it might take. If you’re adding one or all of
these tasks onto your IT department’s already heavy
workload, consider whether its in your best interest
to nd a software solution and/or to hire an outside
vendor to do the job.
2. Choose an effective eDiscovery platform
To save both time and money in your eDiscovery
process, select a platform (or multiple platforms
— more about that in a second) that is capable of
collecting and processing your data and preparing
it for legal review. Look for a comprehensive
solution capable of automating legal holds, doing
remote collection of targeted groups of data and
culling down your les. Ideally, your platform will
also provide preliminary data analytics — allowing
you to weed out irrelevant documents early in the
eDiscovery process, understand the amount of data
you’re working with and predict potential costs.
Most companies choose to also use a second,
compatible platform for reviewing the les. This
platform typically can do more in-depth analysis
and search the data to determine relevance. As
complex as this might sound, it all saves money in
the long run if it prevents your legal team from
having to unnecessarily dig through documents at
what will certainly be a high hourly rate.
There’s one additional benet of having a
centralized eDiscovery platform, and it’s a huge
one — once your documents have been collected,
reviewed, tagged and processed as part of a case,
they’re there to stay in a safe, centralized place.
There’s no need to collect them or have them go
through legal review a second time, and they can be
used again if future cases call for them.
3. Keep your review costs down with advanced
planning
Document review is usually the most expensive
part of the eDiscovery process. The most effective
way to reduce this cost is to make sure that the data
you’re handing over for legal review is pared down
as much as possible. One increasingly popular way
of doing that is to use TAT (Technology Assisted
Review). It’s a form of articial intelligence that
can be taught to identify relevant documents, and
the system gets better at its job over time. TAR is
a game-changing innovation that can streamline
the review process dramatically, reducing costs
and maintaining a high level of quality. TAR’s only
drawback at the moment is that it hasn’t advanced
to the point where it can accurately categorize
spreadsheets or les that contain mostly formulas
and graphs.
Lastly, once you’ve prepared your data for the
review process, you’ll need to decide whether
you’ll outsource a legal team, which could include
contract attorneys or a full-time managed review
services team supplied by an outside vendor.
Alternatively, your in-house attorneys could do the
work. Although each option has its advantages,
your primary concern should be that the team has
the background knowledge and training to do their
work effectively. Using the same team each time you
need documents reviewed will provide institutional
knowledge and ensure consistency, quality, accuracy
and speed — so whatever you decide, make sure
you’re thinking long-term.
Because litigation is almost a fact of life for suc-
cessful businesses, particularly in the oil industry,
it’s smart to be prepared rather than tackling a
large, important job under tight time constraints.
A standard eDiscovery process goes hand in hand
with your company’s information management
procedures, it will enable you to respond to any
legal issues quickly and effectively, and it will save
signicant time and money compare to an ad-hoc
approach.
Brian Schrader, Esq., is
President & CEO of BIA
(www.biaprotect.com), a
leader in reliable, innovative
and cost-effective eDiscovery
services. With early career
experience in information
management, computer technology and the law,
Brian co-founded BIA in 2002 and has since
developed the rm’s reputation as an industry
pioneer and a trusted partner for corporations
and law rms around the world. He can be
reached at bschrader@biaprotect.com.
www.beachwoodmarketing.com
Beachwood navigates teams
to find deals that no one else can.
2828 NW 57th Street, Suite 309 l Oklahoma City l (405) 463-3214
We don’t market to test the waters, we hit the market to make waves.
Oilman Magazine / September-October 2018 / OilmanMagazine.com
28
OILMAN COLUMN
Permian Basin Outgrows Pipeline
Infrastructure, Construction Boom
Underway but has Growing Pains
By Eric R. Eissler
Oil production in the Permian is growing at an
800,000 barrel per day (BPD) annually. With
production recently averaging 3.3 million BPD,
the industry is on pace to outstrip its 3.6 million
BPD of pipeline capacity in only a matter of a
few months, according to an estimate by leading
regional driller Pioneer Natural Resources. The
Chairman Scott Shefeld told Bloomberg in late
June that wells will have to be shut down due to
lack of pipeline capacity. However, not Pioneer’s
wells, the company was able to bypass this problem
by thinking ahead and reserved a majority of their
pipeline space in order to continue production and
grow their own production.
More pipelines required: construction in
full swing
With pipelines in the Permian reaching capacity,
construction is in full swing and at the right
time, too. With higher oil prices and the Trump
Administration pressing on Iran and now Turkey,
oil prices will continue to rise due to turmoil in
the region.
Taking advantage of the situation, mid-stream
company, Plains All American Pipelines, is working
around the clock to push up the timetable as much
as possible. The company has two major pipelines
expansions under way: Sunrise and Cactus II. The
scheduled in-service dates for these projects are
projected to be around January 2019 for Sunrise
and partial service early in the fourth quarter of
2019 for Cactus II.
In addition to these projects already under
construction, Plains All American Pipelines is
working with super-major ExxonMobil on a large-
scale oil pipeline project that will ship more than 1
million BPD out of the region. Plains and Exxon
are quickly laying the foundations for this project
in hopes of breaking ground soon, with the aim of
having it in service by 2021. More detail about the
pipeline was made available in a press release from
ExxonMobil:
The proposed common carrier pipeline would
be designed to ship more than one million
barrels of crude oil and condensate per day,
providing a safe, efcient and cost-effective
option to transport ExxonMobil and other
third-party production to market destinations
in Texas. The pipeline would originate in both
Wink and Midland, Texas with delivery points
in Webster, Baytown and Beaumont, Texas.
A priority would be placed
on using existing pipeline
corridors to help limit
potential community and
environmental disruptions.
If that was not enough, there is
yet another pipeline in the works,
The Gray Oak Pipeline, which
is being built by multinational
Phillips 66 and Canadian
Enbridge, aims to carry more
than three million barrels per day
from West Texas to the Corpus
Christi and Houston regions.
The pipeline is expected to come
online during the second half of 2019.
Finally, Kinder Morgan, this summer, also just
announced that it too would join the pipeline
building frenzy. The company announced it has
teamed up with Apache Corp and a Blackstone
subsidiary on the construction of a $2-billion,
2-billion-cu-ft gas pipeline project that will take
natural gas from the Waha area to the Gulf Coast
and to Mexico.
With all the investment in pipeline infrastructure in
the Permian Basin, it is easy to see that the region
is expected to remain hot for a long time and
continue on an upwards trajectory in terms of oil
production.
Regulators support pipeline expansion
Even though Texas is one of the most oil and gas
friendly states in the union, there is still regulation
and regulatory bodies, namely the Railroad
Commission of Texas, which oversees the entire
oil and gas industry of the state. However, this
time around, the Permian Basin is in luck because
earlier this summer Ryan Sitton, a commissioner
on the Railroad Commission of Texas tweeted,
“We need investment in energy transportation
infrastructure like pipelines and ports to realize
Texas’ full potential.” Rightly said, because without
it, the industry will slow, which would affect supply,
and supply would affect consumer prices, which
adversely affects the economy.
Bottlenecks are not only for pipelines:
Electricity consumption spikes
As more and more operators settle into the
Permian Basin, the region is going though
expansion pains that were notable in the boom
towns of North Dakota earlier this decade. While
there not enough pipelines in the basin to get the
oil out, there is now a problem with supplying
enough electricity to the region because many
operators have taken the cheaper and more
environmentally friendly method to get energy,
that is, hooking up to the grid. However, the grid
was never intended to support such demand from
a growing oil and gas industry. To remedy this
issue, the state will build more transmission for the
electric grid, but that is going to cost money. To
top it off, those who are hooked up to the system
are expected to share the cost of expansion. Under
state regulations, the costs of transmission projects
are shared by all users of the power grid, regardless
of whether they are served directly by the
transmission or the utility building it. Dallas power
utility Oncor, which serves the Permian Basin,
is asking regulators to expedite two transmission
projects, costing an estimated $223.6 million, to
meet the spiking demand in the Permian.
Boom is back, but with challenges
While the Permian is poised to see record growth
in the coming years, it will not be an easy growth
that the region has been accustomed.. There will
be many infrastructure challenges that lie in the
way. However, within these challenges lie great
opportunity for all the companies involved with
the oil and gas industry in the Permian Basin.
While there are constraints in the short term, the
Permian is set to be transformed by 2020 with a
larger pipeline network and an electric grid that will
be able to handle the future demands of an even
stronger industry within the next few years.
OILMAN COLUMN
Oilman Magazine / September-October 2018 / OilmanMagazine.com
30
OILMAN COLUMN
Interview with Phillip Bird, Collector,
Oklahoma Oil and Gas Memorabilia
By Tonae’ Hamilton
Below is an interview with Oklahoma Oil &
Gas memorabilia collector Phillip Bird. The
interview text has been left in tact, with only minor
grammatical adjustments.
Tonae’ Hamilton: What inspired you to start
collecting memorabilia?
Phillip Bird: I got into collecting several years
ago. I had a lot of friends in Oklahoma and Texas
that were in the business and if you live in either
state, you’re bound to know many people in the oil
business. I started collecting because I loved the oil
business and gas industry. It was an industry that
employed a lot of people. Here in the south, we
didn’t have the big buildings like in the east, but we
supplied the fuel to build them. That fact amazed
me and made me proud to be from Oklahoma. I
was a lender years ago and had clients in the oil
business as well. They truly are a different breed
of people and are very hard working. Over time,
I acquired over 1400+ books. I have a yearbook
of Webb City that was called “The Driller” and
it is amazing how you can just build a city over
night. There are several cities like that in Oklahoma
including Three Sands. With that said, through
friends in the business and an appreciation for the
oil industry, I was inspired to collect memorabilia.
Everyone collects something but oil and gas is my
favorite stuff to collect. I have many little oil rigs
and other smaller items that I collect.
TH: When did you begin collecting memorabilia
and what was the very rst piece you acquired?
PB: It began in the 1980’s, though I cannot
remember the exact rst piece. I had several pieces
from the beginning and actually lost a few pieces
unfortunately during moves. Having had so many
pieces from the beginning, I unfortunately cannot
recall the rst piece.
TH: Out of all the items you collected, can you
share what your favorite piece is?
PB: That’s a tough one. I have one book that is a
reproduction of an older book created by Aubrey
Mcclendon. It talks about Chesapeake Energy and
features pictures of Oklahoma City oil elds. I also
have books and pictures where you can see the old
oil elds under the Capitol Site and pictures of the
Mary Sudik which is all so fascinating. The Mary
Sudik no.1 is from 1930. I also like the Tulsa oilman
and the Gusher pieces which truly exemplify Okla-
homa. Therefore, I dont have just one or two favor-
ites, rather I have several pieces that I really like.
TH: What made you decide to sell your collection
now and why did you decline the rst time?
PB: Though I really enjoy my collection, a lot of
people I know have gotten out of the oil business,
passed on, or moved and I just don’t get to enjoy
it as much as I used to. I really enjoyed showing it
to people but I just dont have that many people I
can show it to anymore. Many people used to come
by every week to check the collection and would
have to come by several times just to see everything
because of the size of the collection. I was offered
money the rst time to sell my collection, but I was
not ready at that time. I enjoy showing it still but I
just cant show all the pieces in the way I want due
to a lack of space. I go by a philosophy that if you
can’t show it, you don’t need it anymore. There are
so many little pieces of memorabilia that I have that
it is just amazing seeing how many there are. I have
Rufnex Yearbook, Crooked
Oak High School, 1960s
J.R. Ewing from the
TV series Dallas
Oil Well at Oklahoma
State Capital
Mary Sudik Oil Well Gusher Webb City High School
Yearbook, 1935
Tulsa Oil Man, Oil Well Gusher, Decanters and a Drill Bit from the Tar Creek Project Derrick Yearbook, Victoria,
Texas, 1960s
Oilman Magazine / September-October 2018 / OilmanMagazine.com
31
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had it for so long, but sometimes you just need to
move on.
TH: Are there any pieces of your collection that
you plan not to sell or may pass on to your family?
PB: No, I do not intend on keeping any pieces.
It all needs to go together.
TH: What makes your oil & gas collection unique
or different from other collections of the same
type?
PB: My stuff is more local than others you’ll see.
When people think oil and gas they think like a
Shell oil sign. My collection is a tribute to the oil
industry. I have books, small oil rigs, advertising
pieces and small items that makes it different than
any other persons collection. As far as I know, no
one has as many books as I do. I have some really
unusual books and a few hundred of my books are
autographed by the authors, themselves. That makes
them worth a lot more than those books that aren’t
autographed. If there is someone that has a bigger
collection than I do, I’d like to see it. My collection
pays homage to the state of Oklahoma. You’d be
surprised of how many famous individuals are from
Oklahoma and were in the oil business. Clark Gable,
who was a top movie star in the 1930s and 40s used
to work in the oil elds!
TH: Do you currently have any other types of
collections?
PB: I also collect high school and collegiate
yearbooks, which some you will nd in my oil
collection. I also collect masonic items. I was able
to connect my high school yearbook collection
to the oil collection through locations the high
schools were in, such as Victoria, TX. Such
locations in Texas and Oklahoma are big on the oil
industry. Additionally, I collect antiques and movie
memorabilia as well as guns and coins.
TH: If you could pick a place for your collection to
go after you sell it, where would you like to see it?
PB: I’d like to see it in a restaurant, club, or cafe.
A bagel shop would also be a great place for my
collection so customers have books to read and so
they can learn about the oil and gas business and
learn about Oklahoma and its history. It would be
nice to have it in a restaurant where I could go and
see it. I think it would be neat to be able to go visit a
restaurant and see my collection.
TH: Do you plan on starting any new collections in
the future?
PB: I’m not sure what my next collection would be
since I haven’t planned on that yet. Something like
that you can’t plan on, often these kinds of collec-
tions start by accident. People collect some of the
strangest items sometimes and don’t plan on it.
Oklahoma Oil and Gas Books
(Approx. 1,400) and Other Collectables
Oklahoma Oil and Gas
Memorabilia For Sale
The collection is a fantastic showcase
representing the Oklahoma Oil and Gas
industry and is perfect for displaying in a
restaurant, bar, coffee shop or museum.
For more information, contact Phillip Bird
at 405-463-0636 or morgtagebird@cox.net.
Oilman Magazine / September-October 2018 / OilmanMagazine.com
32
Natural Disasters Strike, but the Oil and Gas
Community is Ready to Repair and Pull Through
By Eric R. Eissler
OILMAN COLUMN
Natural disasters have always been something
everyone must think about from time to time. While
it might not ever happen to you or your company, it
still happens, and it is happening more and more as
the Earth’s weather patterns change. In the oil and gas
industry, managers must think about the possibility of
natural disasters striking more often. This is imperative
due to the location of oil and gas wells in extreme
locations such as in the sea, on the coast, in the
desert, etc. All of these locations have unique weather
patterns. Additionally, there are also earthquakes,
tornadoes, hurricanes, and massive tidal waves that
need to be considered, too. All of these threats will
lead to signicant damage if the right precautions are
not in place. Finally, do not forget about getting the
proper insurance.
To get a better idea of what some companies are
doing to mitigate the damage that could occur from a
natural disaster, we reached out to a company to learn
more about their processes.
Logistics industry faces changing weather
Dominic Dupre of Dupre Logistics provided some
insight into how some companies are gearing up for
more and more natural disasters that are occurring
in the U.S.
Unfortunately, our emergency response
surrounding natural disasters is put to work
once every 2-3 years as we operate along the
Gulf Coast, from Florida to South Texas, so we
have been able to adjust and learn from each
experience. In the crude hauling division, we
operate a central dispatch model with remote
login capabilities that ensure continuity of the
business even when the ofce is closed down.
Additionally, our eld execution is segmented
by area with multiple maintenance facilities that
ensure the business continues to run in the
event that operations are shut down in certain
geographical areas.
Besides natural disasters, there are also disasters that
come from within oil and gas equipment and can
trigger a massive disaster that can give way to other
environmentally damaging effects. For example, the
most recent The Deepwater Horizon oil spill began
on April 20, 2010, in the Gulf of Mexico on the
BP-operated Macondo Prospect. At approximately
9:45 pm, methane gas from the well expanded into
the drilling riser and rose into the drilling rig, where it
ignited and exploded, engulng the platform. There
were 126 crew members who were on board at the
time: seven BP employees, 79 from Transocean and
employees from other companies. The Deepwater
Horizon sank on the morning of April 22, 2010. It
was considered to be the largest accidental marine
oil spill in the history of the petroleum industry. The
U.S. Government estimated the total discharge at 4.9
million barrels of oil into the ocean.
Government and regulatory bodies are here to help
The National Petroleum Council prepared a paper
entitled, “Enhancing Emergency Preparedness for
Natural Disasters: Government and Oil and Natural
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Oilman Magazine / September-October 2018 / OilmanMagazine.com
33
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OILMAN COLUMN
Gas Industry Actions to Prepare, Respond, and
Recover.” The paper, published in 2014, found
the following challenges in addressing emergency
situations:
It is critically important for government emergency
response organizations to have a baseline under-
standing of the dynamic nature of the oil and gas
supply chains.
Improved situational awareness about the status
of oil and gas infrastructure and service disruptions
from industry would enable DOE and other gov-
ernment agencies to more effectively respond.
A major challenge during emergency response is
effective communication between and within federal
and state agencies and with industry.
The maintenance of a trained, knowledgeable
response organization within government agencies
should be a priority along with processes to sustain it.
Within industry and across all levels of government,
leadership commitment and funding are required
to continuously improve and ensure a state of
readiness to respond to supply chain disruptions.
Be prepared, not scared
At a recent API (American Petroleum Institute)
meeting this past May 2018, a subject of debate was
that of being prepared in the oil and gas industry.
This is imperative as the
southern United States is well
into Hurricane season, which
runs from May 15 (previously
June 1 and now has grown by
15 days. However, this is still up
for debate.) to November 30.
Hurricanes are one of the biggest
natural disasters for the U.S.
and the rening industry, due to
rening units’ proximity to water.
Jeff Gunnulfsen, Director of
Security and Risk Management
at the American Fuel and
Petrochemical Manufacturers,
said the following on his
commitment to safety in the
eld at the API Meeting: “The
rening and petrochemical industries practice
emergency response, every day, 365 days a year.
No two storms or emergencies are alike, and our
industries prepare vigorously and consistently for all
types of disruptions. Preparation is the rst step in
managing major events, and by working diligently
with industry partners, we’re able to minimize the
impacts of unpredictable events.
More information on the steps oil and gas industry
professionals are taking in the midst of Hurricane
season can be found here: https://www.api.org/
news-policy-and-issues/hurricane-information.
Eye of the storm
While the weather is changing, the oil and gas industry
is adapting and developing new technologies and
procedures to weather the storm. New protocols are
being established and more time is being dedicated
to safety training for handling natural disasters. While
natural disasters cannot be prevented, tactics can be
employed to help mitigate the damage caused by a
storm or worse. While mother nature has the upper
hand in this battle, humans are resourceful and full
of ingenuity in coming up with innovative ways to
prevent damage or to make repairs on the y.
Oilman Magazine / September-October 2018 / OilmanMagazine.com
34
OILMAN COLUMN
Building and launching a start-up in any industry
can be difcult. Building a business requires time,
money/investment, experience, and connections.
Nevertheless, more individuals nowadays are taking
the entrepreneurial route to expand their careers.
With the spread of technology, building a business
in recent years has become more practical. Two
young entrepreneurs, Tyler Moehlman and William
Vandiver have recently developed a start-up, with
the aid of technology, in the oil and gas industry,
an industry once known for being very traditional
and not technologically advanced. Moehlman and
Vandiver have entered the energy industry with
plans to innovate current processes and improve
operations. They describe what it’s like being young
entrepreneurs in the industry and their plans for
change through technology.
Both Moehlman and Vandiver graduated from
Texas A&M, with Moehlman studying petroleum
engineering and Vandiver studying engineering
technology, respectively. Moehlman admitted that
he originally majored in the eld for the high-end
salary, but realized that choosing a career should
be based on what you enjoy rather than monetary
value. Moehlman chose to work at an offshore
oil rig the summer before his freshman year. “I
worked for Hercules Offshore as a roustabout and
it provided me with a very humbling experience on
how this industry works at the ground oor. That
experience also assured me I was in an industry I
wanted to be in,” said Moehlman. Vandiver also
had a positive experience with his internship in
the oil industry. “I got to see the administrative
processes of a company and see how the engineers
and geologists come together. The internship really
steered my attention towards exploration,” said
Vandiver.
Moehlman and Vandiver also shared challenges
they’ve faced while building and promoting their
startup and what experiences they’ve had being
young individuals in the oil industry. Moehlman
expressed how experience has been one of their
biggest challenges when presenting to prospects,
for example. “The oil and gas industry is lled with
entrepreneurs and their merit is weighted by what
they have done thus far in industry. Many of them
have either worked for large corporations or have
been in industry longer than I have which is always
a factor investment groups weigh when evaluating
management teams,” said Moehlman. Vandiver
also added to that sentiment, stating “A new
company is something that people would place at a
higher risk when funding new management teams.
We learned that having experience on your side
and attracting experienced personnel to your team
is something you want to have, going forward in
the industry.”
When asked why they chose to stay in Texas to
develop their start-up, Moehlman and Vandiver
expressed similar reasons for selecting Texas as
their primary location. Moehlman mentioned
how he and Vandiver actually discovered a project
in Texas two weeks before their graduation.
Moehlman felt passionate about their project and
thus requested a four month time period from
his future employer to present their idea around
town. “Houston is the energy capital of the world
so I didn’t need to travel very far to present my
prospect,” said Moehlman. Similarly, Vandiver
stated how a signicant amount of the energy
industry is in Houston and Dallas. “There are
many private equity rms and better taxes for the
business here in Texas. It is also a more attractive
place for oil businesses and there are prospects
close to home. Texas felt like a good homebase for
our startup and Tyler and I have known this place
our entire life,” said Vandiver.
Since starting their business, Moehlman and
Vandiver have made a handful of advancements in
the industry. In regards to the developments made
in their start-up, Moehlman stated, “Thinking
back to our eld analysis, I think we have been
more meticulous with how we approach looking
at a prospect and evaluating its worth. Using
Drillinginfo, we were able to view the completion
programs of offset wells around us. Fracking has
evolved tremendously these last few years and we
were able to observe which wells have or haven’t
been completed with new generation programs.”
Chiming in on the advancements made in the
industry with their start-up, Vandiver stated “We’ve
created a network and in any industry that is
important. Through developing good prospects,
we met great people in the industry who value
good, well-thought-out prospects. From getting the
project funded, to execution, we met some of the
best geologists and engineers in industry and have
had the opportunity to talk shop with them.”
Coming into an industry that is recently being
revamped with technology, Moehlman and
Vandiver described how their background in
technology overall has helped them transition
Innovating the Industry with
an Energy Start-up
By Tonae’ Hamilton
Photo Credit: drserg – www.123RF.com
Oilman Magazine / September-October 2018 / OilmanMagazine.com
35
OILMAN COLUMN
into the energy industry and excel. Moehlman
described how larger fracs, longer laterals, and
straighter wellbore creation while drilling have
all become possible through technological
advancements. “Drillinginfo’s interface, for
example, provides an array of data for each well
that you don’t have to go digging for to discover,
said Moehlman. Vandiver expressed how his
background in mechanical, manufacturing, and
engineering has allowed him to compare different
tools and their lifespan from service companies
and determine the best and most durable drilling
equipment by tool life. “Drillinginfo has also
helped with selecting equipment and has allowed
us and many other individuals to view pie charts,
decline curves, and other visual representations of
data to thoroughly evaluate potential prospects.
With technology, we are able to convey messages
and data more easily via powerpoint, excel, etc.
said Vandiver.
Moehlman and Vandiver were asked if they are
currently developing new technologies for their
start-up. Although they expressed they aren’t
currently developing any, they shared how they
follow up with other companies to gain insights
on what they’re developing and examine what
new technologies are available in the industry.
“We got to meet a startup that is using Articial
Intelligence to perform directional drilling
which I thought was an incredible concept,”
said Moehlman. Vandiver talked about current
technologies he’s impressed with, stating “With
technology currently, we have been able to receive
a better analysis of wells and drilling conditions
and we get a clearer picture of what we are drilling
through. With wider azimuth seismic we get a way
more detailed fracture analysis and a clear picture
of the stress prole on some of these brittle
carbonate reservoirs. Companies like Drillinginfo
are coming out with solutions and software
applicable to well drilling operations allowing you
to make more responsible decisions.”
When asked whether they believed the rise of
technology in the energy industry is for the
best, both Moehlman and Vandiver agreed
that technology has impacted the industry
positively. “When dealing with an industry where
the primary element you work with is nature,
the earth’s subsurface, the primary reason for
technology is to keep the wheels turning and
and leave everything functioning properly,” said
Moehlman. Similarly, Vandiver stated “Technology
is denitely going to progress and unlock new
horizons in the industry. We’ve seen it with the
shale oil revolution and with some of these
natural gas hydrate ‘ice’ elds up north that now
produce hydrocarbons. Both commercial horizons
were made possible due to leaps in technology.”
As for what future improvements they’d like to see
in the industry, Moehlman stated “I want to see
new companies with more innovative databases,
articial intelligence (AI), and automated drilling.
Automation, AI, and new databases are involved
in other industries around the world and I would
like to see our industry incorporate those same
innovations.” Vandiver stated that observing real
time data across the industry and incorporating
AI and blockchain technology into oil and drilling
solutions are improvements that would play a
major role in the industry.” Our generation will
certainly be the one to push these technologies
forward and go on to new horizons,” stated
Vandiver.
The Neverending Story: “Fixed” vs.
“Floating” Royalties in Texas
By Thomas G. Ciarlone, Jr.
The Texas Supreme Court and our Courts of Ap-
peals have now been struggling for years with the
elusive distinction between “xed” and “oating”
royalties. In application, the difference between the
two can have drastic and, depending on your posi-
tion in a mineral title dispute, potentially catastroph-
ic consequences. The case law has, by no means,
been a model of clarity or consistency, and few
hard-and-fast rules have emerged at the appellate
level to give practitioners any legitimate comfort
when drafting or interpreting conveyances.
At a purely denitional level, it is easy to differenti-
ate between these two types of royalties:
• A “xed” royalty is set in stone, for all posterity.
It is an unchanging fraction of total production.
• A “oating” royalty, by contrast, is dynamic.
It is a fraction of the royalty under the active
mineral lease.
So when the lease royalty increases, so does the
“oating” royalty. Not so with the “xed” royalty;
it is what it is, regardless of the terms of whatever
lease happens to be in effect at the time.
Sounds simple, right? In theory, yes. In practice, not
so much.
The Texas Supreme Court’s recent decision in
U.S. Shale Energy II, LLC v. Laborde Properties,
L.P. represents the latest chapter in this ongoing
jurisprudential saga.
In Laborde, the grantors had reserved to
themselves an NPRI (Non-Participating Royalty
Interest), dened as follows (emphasis added):
There is reserved and excepted from this convey-
ance unto the grantors herein, their heirs and
assigns, an undivided one-half (1/2) interest in
and to the Oil Royalty, Gas Royalty and Royalty
in other Minerals in and under or that may be
produced or mined from the above described
premises, the same being equal to one-sixteenth
(1/16) of the production. This reservation is what
is generally [sic] termed a non-participating Royalty
Reservation.
The operator under a lease with a one-fth royalty
credited the successors to the reserving parties
with one-half of the one-fth lease royalty—i.e.,
one-tenth of total production. But the successor to
the grantee cried foul, arguing that the reservation
expressly limited the NPRI to one-sixteenth of
total production. The Texas Supreme Court sided
with the operator’s interpretation.
Notably, nothing in the record indicated that
a mineral lease was in effect at the time of the
NPRI’s reservation. The majority in Laborde
accounted for this omission with the oft-repeated
refrain that, for a decades-long period in the history
of our state, it was widely assumed that the royalty
in mineral leases could only be, and would always
be, one-eighth.
Finally, punctuation also matters, or at least so it
would seem. In particular, a comma can apparently
make all the difference in the world. On this score,
according to the majority opinion, because “the
same being equal to … one-sixteenth was set off by
a comma, it constituted “a nonrestrictive dependent
clause.” In other words, wrote Justice Lehrmann for
the Court, the phrase could be “taken out of the
sentence without changing its essential meaning.”
(While the present author considers this a bit of a
stretch, he simultaneously admits that he has little
trust in people who don’t use the Oxford comma.)
Tom is a litigation partner in
the Houston ofce of Kane
Russell Coleman Logan PC,
where he serves as the head
of the rm’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 writ-
ing, available at www.theartofthebrief.com.
Oilman Magazine / September-October 2018 / OilmanMagazine.com
36
OILMAN COLUMN
Interview: Tom Williams, President of Research
Partnership to Secure Energy for America (RPSEA)
By Eric R. Eissler
Below is an interview with RPSEA President, Tom
Williams. The interview text has been left in tact, with
only minor grammatical adjustments.
Eric Eissler: Regarding the technology roadmap,
which I really like the title, “Keeping it Going for the
Long Haul – the Easy Stuff is Gone.” I have been
saying that for a long time. The technology developed
today is going to win the resource war of tomorrow.
That being said: What is new? What is the latest and
greatest coming out of RPSEA?
Tom Williams: The RPSEA R&D program was
funded through the Energy Policy Act that expired
at the end of 2016. Since then, we have been active
in technology transfer activities, conducting a variety
of studies for onshore and offshore activities, and in
reauthorizing the program.
By completing the nal report and R&D roadmap, and
supporting other government-led initiatives, there is
clearly a contrast to the quality and effectiveness of a
R&D program managed by the government versus one
like RPSEA, managed through a public-private partner-
ship. This was well documented in the R&D roadmap
and our nal report. I am overwhelmed by the support
I receive almost daily by calls, emails and at confer-
ences I attend about the need to get our program going
again. We had over 950 individuals contribute to these
reports. All our reports are posted on our website at
www.rpsea.org.
The chance of getting reauthorization is good, but
requires a comprehensive bill that includes specic
language and the support of Congress and the Trump
administration. Timing is the great unknown. The
good news is the Trump Administration and Congress
strongly support a healthy oil and gas industry built on
technology. This is how the U.S. got in the position it is
in today and is the future.
EE: Because of the competitive nature of the industry
how are trademarks, licensing, etc. handled?
TW: We are an easy-to-do-business-with group driven
by industry and researchers, not bureaucrats. Our pro-
cesses promote the technology and processes that will
help commercialize and promote the companies that
receive our research awards.
Some of the contract language in our government
award and oversight has been onerous, but the goal is
to make the process – from proposal through award –
as least painful as possible. But because they’re public
funds and the DOE has had oversight of the awards, it
is not pain-free.
EE: When you have all these top companies working
together and which compete amongst themselves, how
is the intellectual property handled?
TW: We don’t own IP. Companies bring their IP to the
table and commercialize the technology they develop.
Process and ownership are dened in the proposal and
award process. The primary way to judge the success
of a project is if someone is saving money from a new
Oilman Magazine / September-October 2018 / OilmanMagazine.com
37
OILMAN COLUMN
technology and another is making money, reinvesting it
via increases in hiring and production.
About 25 years ago, when I was at DOE, they did not
understand this. I believe the DOE National Energy
Technology Lab (NETL), which provided oversight
with our program, now do. They were good to work
with.
EE: As the quest for hydrocarbons continues, much
of the remaining vast reserves lie under the ocean
oor, which is still a great unknown. How do you visu-
alize the next steps to mapping the oceans and building
equipment that will function in the most remote areas
of the earth?
TW: Exploration in deepwater has made a lot of ad-
vances. Recent discoveries in the Gulf of Mexico and
elsewhere, internationally, show there is a tremendous
future. The evolution and application of various subsea
systems is evident; new technologies have been applied,
some developed through the RPSEA program. It can
compete with shale.
We are also blessed with a progressive offshore regula-
tor who has made a dramatic change in the past 18
months from an agency with poor communication to
one of cooperation. The culture is still evolving for
the better. This allows new, improved, safer and more
effective technologies to be developed and applied
instead of prohibited.
Investments in offshore R&D are highly needed. The
challenge includes a better way of demonstrating new
technologies, so they can be approved and applied.
Being risk adverse is warranted. We are currently work-
ing on a new R&D roadmap with the OESI program,
focused on technologies that will improve offshore
safety and environmental performance. This report will
be done this fall and has been needed for a long time.
Again, this contrasts the difference between a not-for-
prot organization like RPSEA and the government
who, for a variety of obvious reasons, are not capable
of putting out a credible report.
EE: Getting back on land, how has the unconven-
tional resources program been developing?
TW: As I noted, our base funding has expired, but
past R&D investments are the gift that keeps giving.
Technologies developed under our program – those
that better characterize unconventionals – are now
being applied and adapted, and they’re still evolv-
ing. Our reports are constantly being downloaded,
and references of this work are always being made at
technical conferences like the Offshore Technology
Conference (OTC), Society of Petroleum Engineers
(SPE), American Association of Petroleum Geologists
(AAPG) and the Society of Exploration Geologists
(SEG). It is rather remarkable!
EE: In terms of reaching tight oil and gas shales, in
addition to making them economically vital has been a
long process. What contributions has RPSEA made to
this eld? What are the next steps to further develop
technology and keep the U.S. as a leading producer of
oil and gas?
TW: The roadmap is clear. We learned we do not
know enough about the reservoirs or the ways to best
produce the reserves in the ground. We know we have
a very low-recovery factor for oil and gas, but the per-
centage is just a guess. We do know we must do more
to increase production per well and address the tre-
mendous reserve in the ground. That [addressing the
reserves in-situ] does not require much more drilling,
but instead improved understanding and the develop-
ment of better methods. The easy stuff is gone.
EE: While we cant see into the future, what is your
prediction for the next ve years in the oil and gas
industry?
TW: People who predict these things are well-paid
analysis – who are almost always wrong – and weather-
men, who are just wrong half of the time. We can
maintain our production levels through investments in
R&D. Industry must never lose focus of continuously
investing in zero-incidence goals and in being good
environmental stewards. This is a role government
co-funding can properly play, onshore and offshore,
and one that will provide a high return on those
investments. Momentum can shift on a dime when bad
things happen.
RPSEA is the Research Partnership to Secure
Energy for America, a nonprot corporation es-
tablished in the State of Texas. RPSEA has met the
requirements for a 501(c)(3) corporation and holds a
tax-exempt status with the Internal Revenue Service.
RPSEA currently consists of consortium members
representing virtually all sectors of the natural gas
and oil supply technology value chain.
Elections: Whats at Stake
By Gifford Briggs
If there ever were a time in U.S. history when
the phrase “elections have consequences” would
be most accurate, now would be that time. The
contrast between the past and current United States
President could not be more different. Under
President Obama, we experienced a moratorium on
drilling in the Gulf of Mexico, endless regulations
and negative rhetoric.
Under President Trump, we have seen a
reawakening of the oil and gas industry across
the nation. Approval processes have become
more streamlined, allowing businesses to go forth
unhindered by big government policies, and a push
is being made for U.S. energy dominance.
Louisiana is heading into another election year, but
this one will be unlike any other our state has ever
seen. With the installment of term limits, we expect
to see an increase in voter activity during the 2019
election cycle. Many expect the 2019 election cycle
to be not only one of the most expensive elections,
but one of the most pivotal elections we have
experienced.
So what all is at stake for the 2019 election year?
Before we get into that, Plaquemines Parish has
their Council and Parish President up for election
in 2018. This parish is ground zero for the coastal
lawsuits. It is important for those inside and out of
Plaquemines Parish to pay close attention to these
elections.
The 2019 election cycle will see one of the most
signicant legislative turnovers in Louisiana’s
history. Along with the Governor’s bid for re-
election, 66 legislative members are term-limited
along with a handful of others who are leaving
ofce seeking other elected ofces or are merely
choosing to end their career in the Capitol.
The implications of this election cannot be
overstated. The next round of legislators will not
only be charged with redistricting in 2020 but
possibly 2030 as well. A skilled legislator can impact
House and Senate lines and change the political
landscape of the entire state. National dollars are
pouring into states to shape legislatures to the
political makeup of their choosing. The thinking is
that if you control the legislature, you control the
lines. If you control the lines, you can inuence
policy for years to come.
For the oil and
gas industry, these
elections can be a
turning point. Decades
of abusive lawsuits
driving investment out
of South Louisiana
and the highest
severance tax rate
on oil in the nation,
all can be addressed,
inviting investment
and jobs back into our
communities that need them. 2019 will also be a
key year for the development of the Austin Chalk.
As this play comes into prominence, we need to be
sure that the people we elect are supportive of the
Chalk’s development.
The stakes in this election cycle are high, but the
reward can be even greater. To reap that reward,
citizens and business must answer the call and fulll
their civic duties to participate in the process. If you
don’t vote, you don’t have the right to complain.
Gifford Briggs
Oilman Magazine / September-October 2018 / OilmanMagazine.com
38
Meridian Energy Group is well underway
with its efforts to build the Davis Renery.
Davis, commonly referred to as the “Cleanest
Renery on the Planet,” was permitted as a
synthetic minor source by the NDDoH (North
Dakota Department of Health – Air Quality)
after an extensive 18-month review. This PTC
(Permit to Construct) issued by the NDDoH
validated all of claims Meridian had made over
the past four years when they undertook the
challenge to “clean up” the rening industry.
Meridian commenced construction in July near
Beleld, North Dakota, east of the Fryburg
Rail Terminal just a month after the NDDoH
issued the permit. The company contracted
with SEH D|B out of Bismarck, ND to
take on a signicant portion of the project,
executing grading and other site work activity
that is necessary for the renery.
SEH D|B will lead civil construction activities
by rening site grading plans to establish
nal grades and contours. Initial construction
activities will include: the installation of
erosion control devices, stormwater pond
development, and ditch shaping to establish
vegetation and ensure runoff, which will be
addressed to protect surrounding areas and
existing waterways.
According to Dan Hedrington, SEH Principal
and Senior Project Manager, “This is truly a
history-making event and we are eager to get
started on the site work. The Davis project is
an extremely environmentally sound project,
and will no doubt positively impact the rening
industry, North Dakota and its residents.”
The contract with SEH D|B employs a team
of local subcontractors from Beleld and
surrounding areas. Martin Construction Inc.,
Dickinson, North Dakota’s premier earthwork
construction company, will be the primary site
developers for the civil construction. Martin
Construction President, Kurt Martin is eager
to join the Meridian cause and deliver the
various benets the Davis Renery will bring
to the Bakken. “It’s exciting to be part of a
project that brings
economic stability
to western North
Dakota and features
key advancements
to cleaner renery
methods,” says
Martin.
Meridian has not
only been busy
with construction
in North Dakota,
the company has
also expanded its
Engineering and
Projects operations
in Houston.
Meridian recently
signed a long-term
lease with Boxer Property for a 10,000 sq.
ft. building to accommodate its Engineering
and Projects departments. The new ofces,
in the Greenspoint district of Houston, are
strategically located near both The Woodlands
and IAH Airport. This Houston location will
include a full digital integration in order to
interface in real time with Meridian ofces in
North Dakota and California.
This expansion came just two months after
Meridian was issued the PTC for the Davis
Renery in Billings County, North Dakota,
and subsequently began earthwork and other
site preparation work at the Davis site. The
continued expansion of the Meridian presence
in Houston will ensure the timeline for the
Davis Renery will remain on schedule for
design and construction of Davis, with full
commercial operation scheduled for late
2020. Meridians Houston operations will also
facilitate access to the professional stafng
required for the development, engineering
and contracting for future rening and other
projects that are currently in the planning
stages.
Lance Medlin, Meridian EVP of Projects,
led the lengthy process of determining the
ideal site for Meridians new ofce. “We are
fortunate to have developed a partnership with
Boxer Property that we allow us to continue
the development of the Davis Renery as well
as our future projects. This expansion gives
us the ability to house our Project Teams in
one facility, giving us better efciencies and
momentum for moving our projects forward,
says Medlin.
Chad Hope, Meridian CFO, also expressed his
enthusiasm for the continued expansion. “This
growth is both a result of Meridian’s progress
and the exciting future opportunities we’re
being presented with and represents the most
cost-effective manner of meeting our current
and future needs,” says Hope.
Meridian is condent the Davis Renery will
become the blueprint for all renery products
that follow it. Leveraging BACT (Best Available
Control Technology), Meridian has literally
set the new green technology design standard
for modern oil renery and has redened
what’s possible in applying true innovation
to all phases of the process – construction,
operation, emissions control, and of course,
ongoing regulation and monitoring.
OILMAN COLUMN
Meridian Energy Group Meeting
Timeline Objectives for Davis Refinery
While Expanding Engineering
Operations in Houston
By Jason Spiess
www.cleangulf.org
Improving prevention,
preparedness and response
of oil and hazardous materials
spills in inland, offshore and
marine environments
Conference Tracks Include:
• Planning&Preparedness
• Response
• SubseaandDispersant
• TrainingandExerciseBestManagementPractices
• Information/ResponseTechnologies&Research
• InlandPreparednessandResponse
• EmergingTrends
Register with VIP code
OILMAN to receive a $50
registration discount!
November 13-15, 2018
ErnestN.MorialConventionCenter
NewOrleans,LA
32585
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Future Site of the Davis Renery (Photo courtesy of Meridian Energy Group)
www.cleangulf.org
Improving prevention,
preparedness and response
of oil and hazardous materials
spills in inland, offshore and
marine environments
Conference Tracks Include:
• Planning&Preparedness
• Response
• SubseaandDispersant
• TrainingandExerciseBestManagementPractices
• Information/ResponseTechnologies&Research
• InlandPreparednessandResponse
• EmergingTrends
Register with VIP code
OILMAN to receive a $50
registration discount!
November 13-15, 2018
ErnestN.MorialConventionCenter
NewOrleans,LA
32585
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