OCTOBER 2013
How a Small Team Builds Huge Oilfield Equipment Page 32
Plus:
The Importance of Rig Mats to Williston Basin Well Sites Page 28
AND:
Tool Provider, Startup Expert Make Case for Operating Locally Page 16
www.THEBAKKEN.com Printed in USA
HIGHLAND PROJECTS Highland Projects is dedicated to setting a new standard in oil and gas construction and maintenance. Safety, efficiency, quality and integrity are the corner stones of our growing company. Attention to detail and customer satisfaction are always our priority. From standard projects to complex custom jobs, our team of professionals will work with you until the job is complete. We take pride in everything we do. We strive to exceed your expectations.
DIVISIONS: r Custom/Structural Fabrication r Tank Manufacturing r Field Construction Services
DEVELOPING THE FUTURE
12F-0089
HIGHLAND PROJECTS 301 Orchard Lane Billings, Montana
API Spec 12F
12F-0089
The scope of this license includes the following product: Storage Tanks QMS Exclusions: No Exclusions Identified as Applicable
Effective Date: JANUARY 9, 2013 Expiration Date: JANUARY 9, 2016
HIGHLAND PROJECTS
Ph: 406-969-2595 | Fax: 406-969-2597 | www.highlandprojects.com Field Office: 406-876-1721
HEAVY CIVIL AND PIPELINE CONTRACTOR
ND License #48928
Celebrating over 22 years of service to clients, Hal Hays Construction, Inc. (HHCI) is an award-winning, heavy civil and pipeline infrastructure construction firm specializing in oil, gas, and renewable energy throughout the United States.
CONSTRUCTION SERVICES Heavy & Civil Construction: Roads, Bridges, Drill Sites, and Remote Locations
Eagle Canyon Dam and Debris Basin, Cathedral City, CA
Site Preparation & Demolition: Earthwork/ Grading, Excavation, Decommissioning, Building Demolition, Concrete, Paving/ Asphalt, Winter Site Maintenance Infrastructure: Oil and Gas Pipeline Since its inception, HHCI has successfully delivered over 625 projects valued at over $503 million to federal, public, and private clients including U.S. Army Corps of Engineers (USACE), U.S. Department of the Navy (NAVFAC), U.S. Department of Homeland Security (DHS), U.S. National Park Service (NPS), Edison International, Hess, Enbridge, Inc., and various local city and county agencies. HHCI offers clients inhouse crews, $8.5M in owned and maintained heavy equipment, and over $120 million in bonding, as well as excellence in safety records and outstanding project evaluations.
Construct Gas Pipeline and Roadway, Fairfield, CA
U.S. Hwy 54 Overpass & Range Connectors, Fort Bliss, NM
HHCI looks forward to providing the firm’s award-winning services to support your agency/company’s key facilities and infrastructure projects. Please contact Kirby Hays at khays@halhays.com for a quote on your next job! Proud Member
$120M Bonding 161 Employees $8.5M Owned Equipment CA AZ NV TX UT CO ND
Winter Site Work, Bridgeport, CA
www.halhays.com | 4181 Latham Street, Riverside, CA 92501 | (951) 788-0703 | khays@halhays.com
CONTENTS
OCTOBER 2013
VOLUME 1 ISSUE 7
Pg 16 PRODUCTS AND TECHNOLOGY
The Power of Place The case for providing products, services or operating from within the Bakken region. BY LUKE GEIVER
Pg 22 INFRASTRUCTURE AND CONSTRUCTION
Becoming a Household Name
How a national modular housing provider is building long-term business in the Bakken. BY LUKE GEIVER
DEPARTMENTS
MAKING IT
28 Drilling On Stable Ground
Rig mats are reducing well-site operation inefficiencies by increasing surface traffic efficiencies. BY CHRIS HANSON
IN PLAY
32 Small Team Models Big Results
MW Industries is leveraging in-house engineering and a collaborative effort to build large-scale equipment. BY THE BAKKEN MAGAZINE STAFF
6 Editor’s Note
Where To Be in the Bakken BY LUKE GEIVER
8 N.D. Petroleum Council
Then and Now in North Dakota BY TESSA SANDSTROM
10 Bakken News
Bakken News and Trends
ON THE COVER: MW Industries workover rigs are used everywhere from North Dakota to Texas. PHOTO: MW INDUSTRIES
THEBAKKEN.COM
5
EDITOR'S NOTE
Where To Be in the Bakken Luke Geiver
Editor The Bakken magazine lgeiver@bbiinternational.com
Our jobs stop being jobs during those rare moments of genuine pride and enthusiasm we experience when something we’ve done or accomplished—a project, a partnership formation, a completed well—instills that same sense into those who hired us for the job in the first place. Those moments, when a client calls out of the blue just to explain his or her satisfaction, may get lost at times in the fast-paced, ever-changing atmosphere of the Bakken oil and gas play, but they do happen. Stories in this month’s issue show that. To help operators, startups or others understand the variables that make those moments more prevalent in the Williston Basin, we spoke with several groups this month who shared their stories. From those stories, a common theme became apparent. The Power of Place, as the feature title suggests, is crucial for the long-term success of many in the oil, gas and other Bakkenrelated industries. Darick Franzen, regional manager for West Coast-based Spring Capital Group, believes his transition from construction professional to Bakken startup expert came mainly from one thing: being there. The Smith family, owners of Alltite Inc., a tooling and service provider started in Kansas, were so in favor of creating a presence in Williston, N.D., the owner was willing to endure many difficult transportation and housing issues to build the Alltite name in the region. Both have offices or live mainly in the region today. The argument for opening a company branch or residing within the Williston Basin isn’t always the best possible course of action, however. Some believe providing a service or product to the region from outside the region is more advantageous to economic success. Both features this month hint at why that mode of thinking should be tweaked in some cases. As for my moment from this month’s issue, I want to point to my conversation with the team from MW Industries, the workover and service rig manufacturer from Kenmare, N.D. We were standing in front of a display rig at the North Dakota Petroleum Council’s Annual Meeting. When I asked the team about its best moments during the rig manufacturing process, Kelvin Faul, mechanical supervisor, immediately blurted out, "I know mine." I realize now that as I listened to Kelvin explain the moment when he’s standing on a freshly painted, recently assembled rig situated on a testing pad, that I wasn’t working. I wasn’t on the job for that 10 minutes because, from his hand gestures that mimicked pulling a lever or dialing a knob and the enthusiasm in his voice as he explained the last procedure he performs on a rig before they send it off to a client, it was almost like I was standing on that rig with him.
6
The BAKKEN MAGAZINE OCTOBER 2013
ADVERTISER INDEX
www.THEBAKKEN.com VOLUME 1 ISSUE 7 EDITORIAL Editor Luke Geiver lgeiver@bbiinternational.com Senior Editor Susanne Retka Schill sretkaschill@bbiinternational.com
13
American Welltest Incinerators Ltd
27
AmeriPride Services Inc.
15
ASC Construction Equipment
4
Avitus Group
Staff Writer Chris Hanson chanson@bbiinternational.com
35
Calroc Industries Inc.
Copy Editor Jan Tellmann jtellmann@bbiinternational.com
14
Ethane To Ethylene & Derivatives 2013
26
Frac Sand Logistics & Supply Chain 2013
PUBLISHING & SALES Chairman Mike Bryan mbryan@bbiinternational.com CEO Joe Bryan jbryan@bbiinternational.com President Tom Bryan tbryan@bbiinternational.com
3
Hal Hays Construction
2
Highland Projects LLC
12
Hyatt House
25
International Road Dynamics Inc.
Vice President, Sales & Marketing Matthew Spoor mspoor@bbiinternational.com
33
MT Rigmat LLC
Vice President of Content Tim Portz tportz@bbiinternational.com
20
Prairie Flats
Business Development Manager Bob Brown bbrown@bbiinternational.com
36
Quality Mat Company
30
Sioux Corporation
Account Manager Tami Pearson tpearson@bbiinternational.com
31 The Bakken Magazine
Marketing Director John Nelson jnelson@bbiinternational.com Circulation Manager Jessica Beaudry jbeaudry@bbiinternational.com Advertising Coordinator Marla DeFoe mdefoe@bbiinternational.com
21
The Bakken-Three Forks Shale Oil Innovation Conference & Expo 2014
24
Tri-Pac Engineering
18
Wells Concrete
ART Art Director Jaci Satterlund jsatterlund@bbiinternational.com
Subscriptions Subscriptions to The Bakken magazine are free of charge to everyone with the exception of a shipping and handling charge of $49.95 for any country outside the United States, Canada and Mexico. To subscribe, visit www. thebakken.com or you can send your mailing address and payment (checks made out to BBI International) to: The Bakken magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Reprints and Back Issues Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 866-746-8385 or service@bbiinternational.com. Advertising The Bakken magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about The Bakken magazine advertising opportunities, please contact us at 866-746-8385 or service@bbiinternational.com. Letters to the Editor We welcome letters to the editor. If you write us, please include your name, address and phone number. Letters may be edited for clarity and/or space. Send to The Bakken magazine/Letters, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203 or email to lgeiver@bbiinternational.com.
COPYRIGHT © 2013 by BBI International TM
Please recycle this magazine and remove inserts or samples before recycling
THEBAKKEN.COM
7
NORTH DAKOTA PETROLEUM COUNCIL
THE MESSAGE
SHOVELS AND SMILES: The Epping Ranch groundbreaking marked the transformation of a small N.D. community. In the photo from left to right: Gary Dix of Nordak Properties; Brent Dix of Nordak Properties; William Paolino, Epping Mayor; Dani and Craig Moen, owners; Tom Rolfstad, director Williston Economic Development Corp.;Lynette Maleski of Nordak Properties. PHOTO: OC REALTY & ASSOC.
Then and Now in
North Dakota By Tessa Sandstrom
“What does North Dakota even have? What will North Dakota ever have?!” It was a question my friend, Mike, from Arizona once asked me while laughing. It is a question that many North Dakotans have been asked by out-of-staters, and if they were like me, they usually went on the defensive trying to overcome a slight inferiority complex that these kinds of
8
The BAKKEN MAGAZINE OCTOBER 2013
questions sometimes caused. Yet, it didn’t change the fact that I have always loved this state and felt that many people were overlooking all that it had to offer. After graduating from college, much of my career focused on trying to improve the public perception that people both here and out of state may have of North Dakota. Today, that perception is changing. We have seen a tremendous turnaround since as recently as 2008. At that time, the issues most of our state and local leaders still faced, despite a growing economy, were outmigration, the “brain drain” of our young people, and the deterioration
NORTH DAKOTA PETROLEUM COUNCIL
of the small, rural communities where so many of us had grown up. That year, I and many other North Dakotans, including then-Gov. John Hoeven, were outraged when the National Geographic did a story that portrayed rural (and more specifically western) North Dakota as a dying place with few young people and even less hope. One of the communities National Geographic visited was Epping, where one individual remarked that a baby being born in the community was a rare cause for joy, since it was something that likely had not happened in the community for at least 20 years. The article went on to describe the imminent death of our great state saying, “That’s the rub in rural North Dakota, a sense of things ebbing, of churches being abandoned, schools shutting down, towns becoming ruins.” But that was then and this is now. In July, ground was broken on a housing development in Epping that will include 22 twinfamily homes, 43 single-family homes and two mobile park sites. Schools in Crosby, Powers Lake, Watford City and Ray are
JOINING IN: The development in Epping will bring several families to the region. Housing options include single family homes and twin family homes. PHOTO: OC REALTY & ASSOC.
filling up and are undergoing or considering expansions. Towns that were once in decline are some of the fastest growing communities in the nation. Certainly this kind of rapid growth presents challenges, especially for communities that were used to decline, but all would agree these are good challenges to have. Thanks to a booming agriculture sector, growing manufacturing, technology and research sectors, and a thriving oil industry, North Dakota has also become an economic powerhouse, ascending from being “a large, blank spot in the nation’s mind” to being in the national and international spotlight for bucking the nation’s negative employment and economic trends. Today, North Dakota has many
bragging rights, including being named the second best state for business by Forbes, having the lowest unemployment in the nation, being the second largest oil producing state in the nation, and even ranking as the best state in the nation for young people—a recognition that would have been implausible just a mere five years ago. The importance oil and gas development has played in North Dakota’s economic health is undeniable, and I take great pride in being a part of an industry that has helped with the revitalization of so many small communities in western North Dakota. In my hometown of New Town, the development of oil and gas has allowed many of my high school classmates to start their own businesses, and others have great jobs and
careers and are able to stay close to family and take advantage of the outdoor opportunities we all grew up enjoying. Needless to say, I no longer have that inferiority complex when asked where I’m from, but rather am proud to announce I’m from a state that is reducing our nation’s dependence on foreign oil and is giving individuals from across the nation a second chance through the tens of thousands of jobs available today. And often, I can’t help but look back at Mike’s question and think, what does North Dakota have? Well, I hate to gloat, but… Author: Tessa Sandstrom Communications Manager, North Dakota Petroleum Council tsandstrom@ndoil.org 701-557-7744
THEBAKKEN.COM
9
BAKKEN NEWS
BAKKEN NEWS & TRENDS
Revised Well Site Cost Calculation with Proposed BLM Fracking Rules
Jobs, Oil and the Manufacturing Industry
Primary Employment Contribution Mechanisms of Unconventional Oil and Natural Gas and Energy-Related Chemicals on Manufacturing Industries Employment, Indexed to 2012 Levels: 2012-2025
Capacity Expansion
Plastics & Rubber Products
Chemicals
Machinery
Primary Metals
Petroleum & Coal Products
Food Manufacturing
Unconventional Energy Supply Chain
89.72% Increased Capacity Utilization
Enhanced Casing Costs: $310,063,700
5.68%
Cost of Tanks over Pits: $19,613,000
Lower Energy Costs/ Sustained Employment
Textile Mills
Printing & Support Activities
1.71%
Cement Log Delay Costs: $5,914,436
1.63%
Initial Delay Costs: $5,632,585
Due to Unconventional Energy Overall Industry
0.75%
Cement Log Costs for "Well Types": $2,603,465
SOURCE: IHS ECONOMICS
0.51%
Shale Energy Pocketbook Impacts The U.S. unconventional oil and gas industry is making an economic impact outside of the country’s major shale plays. IHS Inc., a global energy research firm, has completed a series of reports on the evolution and role of unconventional oil and gas in the U.S., and according to IHS, American households are receiving a positive financial boost. In its report, “America’s New Energy Future: The Unconventional Oil and Gas Revolution and the Economy,” IHS research shows that by 2020, 3.3 million jobs will be supported by unconventional oil and gas. Last year, the aver10
age U.S. household’s disposable income increased by $1,200 as a result of unconventional oil and gas developments. The income increase is related to the energy savings harbored by energy providers utilizing U.S.-based shale-energy. By 2015, the average U.S. household will see an increase in its disposable income of $2,000 and by 2025, that number will reach $3,500. In the areas of manufacturing and chemical production, processes that rely on natural gas and petroleum for use as feedstock for process power, shale energy supports roughly 377,000 jobs. In
The BAKKEN MAGAZINE OCTOBER 2013
the development of shale plays, the study shows that another 1.7 million jobs are supported. Karen Alderman, president and CEO of the U.S. Chamber of Commerce’s Institute for 21st Century Energy, called the IHS shale reports an indicator of the effect of shale on the U.S. economy. The study shows the increase in disposable income, she said, but it also provides further evidence that energy is America’s true stimulus. Daniel Yergin, vice chairman of IHS, calls the shale industry “not only an energy story,” but also, “a very big economic story that flows throughout the U.S.
Administrative Costs: $1,765,170 SOURCE: JOHN DUNHAM & ASSOCIATES
economy in a way that is only now becoming apparent.” According to the study, workers earnings from unconventional energy development and chemical production activity totaled nearly $150 billion in 2012, but by 2015, that number will increase to $207 billion. The midstream and downstream segments of the unconventional oil and gas industry will gain roughly $346 billion in investment between 2012 and 2025. Almost $216 million of that total investment will be placed into 47,000 miles of new or modified pipeline infrastructure.
BAKKEN NEWS
The Unconventional Value Chain
US Lower 48 Economic Contribution Summary Base Case*
2012
2015
2020
2025
1,748,604 323,648 53,252
2,510,663 228,832 148,722
2,985,168 73,530 277,356
3,498,678 56,989 318,748
Employment (Number of workers) Upstream Energy Activity Midstream and Downstream Energy Activity Energy-Related Chemicals Activity
Total Activity
2,125,504
2,888,218
3,336,055
3,874,415
NOTES: Numbers may not sum due to rounding. *The unconventional activity value chain represents the sum of unconventional oil and natural gas value chains and energy-related chemicals. SOURCE: IHS ECONOMICS
How the Money is Spent
Components of Unconventional Oil and Natural Gas and Energy-Related Chemical Expenditures
could come from additional intermediate casing. JDA estimated that additional intermediate casing Steel Steel Instrumentation and electrical could total roughly 2,350 feet on Rigs Equipment Engineering and average. And, in its assessment, (rotating, heat exchangers, etc) project management JDA also said that some operators believe the additional casing averRig labor Engineering and Skilled labor management age could approach 8,000 feet. Additional casing cost per foot is Cement Labor Unskilled labor approximately $37/ft. JDA said in Pipelines Electrical Concrete its assessment that the proposed Machinery Construction and civil Construction equipment regulations “will have a significant Fabrication Insulation impact on the oil and gas production industry even without considPaint ering future discounted costs.” Piping Barry Russell, IndepenStructural steel dent Petroleum Association of SOURCE: IHS ENERGY America president and CEO, said the rules would cost the indusOverall, the IHS study helps regulation of hydraulic fracturwith a generic blanket of federal try $345 million per year. “This to illustrate the undeniable role ing on federal lands. The current regulations,” they wrote. bureaucratic burden will discourof unconventional oil and gas perspective shared by several state Earlier this year, John Dunage independent producers from to the U.S. “It [the study] puts leaders opposed to the BLM’s ham and Associates, a New York exploring for natural gas and oil the unconventional revolution in frack rules declares that states City-based economic consulting on federal lands,” he said. context as an important, but little should hold the power to regulate firm tried to assess the impact The IPAA also believes that understood pocketbook issue for hydraulic fracturing. Sens. John of new BLM proposed fracking the proposed rules, if put in place, all Americans.” Hoeven, R-N.D., and Heidi Heit- rules on an individual well basis. would put the western portion kamp, D-N.D., along with Rep. The new rules, JDA pointed out, of the U.S. (that includes the Fighting for Shale’s Future Kevin Cramer, R-N.D., recently would affect the disclosure of Williston Basin) at a disadvantage The economic stimulation wrote to the BLM in an effort to chemicals used in fracturing activifor further development, jobs and created by shale energy could be share their sentiment on the issue. ties along with well-bore integeconomic activity. in jeopardy, however. The U.S. “The federal government should rity, flowback and cement bond Department of the Interior’s Bu- allow states and tribes to continue testing. The assessment revealed reau of Land Management conto move forward with their own that the regulations would add an tinues to draw attention from the sophisticated regulatory frameaverage of $96,913 to each well. shale industry for it’s proposed work instead of stifling them The largest portion of those costs Upstream Energy
Midstream & Downstream Energy
Energy-Related Chemicals
THEBAKKEN.COM
11
BAKKEN NEWS
Bakken Firms Earn Major Recognition A marketing campaign to promote and provide information on the Western Area Water Supply Project in northwestern North Dakota has earned national recognition. Led by Advanced Engineering and Environmental Services (AE2S), the marketing campaign has won the 2013 National Marketing Communications Award presented by the Society for Marketing Professional Services. The explosive growth in northwestern North Dakota, fueled by the Bakken oil and gas play, pushed the number of rural user requests for WAWSP service from 400 in 2010 to more than 17,000 today. To help explain the system, AE2S developed a website, advertised, issued news releases, coordinated an event and shot and edited a documentary about WAWSP. “AE2S’ efforts have been instrumental in getting the word out about this public water supply project. The WAWSP is now a household name in northwestern North Dakota due to branding, media coverage, direct mail pieces
and successful public events,” said Jaret Wirtz, WAWSA executive director. Bridger LLC, a national oil handling and transport company, didn’t win any awards for its work in the Bakken play, but it was recognized by Inc. Magazine as the fourth fastest growing energy company. The company provides trucking, pipeline and pipeline injection services in the Williston Basin. Over the past three years, Bridger has grown by an outstanding 26,000 percent, putting the company in the same group of previous Top 10s as Microsoft, Oracle, Under Armour and Zappos. Of any company on the Inc. 500 list, Bridger has the highest revenue. Julio Rios, president and CEO of Bridger, said the success is a direct result of what he calls the three P’s of productivity: people, processes and products. “The top talent and innovation we have brought to the midstream energy space has been largely responsible for our success.”
TRUCK BUSINESS: Both AE2S and Bridger LLC were recognized for their work in the truck business of the Bakken. PHOTO: AE2S
Miles from where you live.Close to how you live. The new HYATT house® Minot offering spacious residentially inspired suites with full kitchens is the perfect choice for extended stays or a quick weekend escape. Conveniently located to Minot State University, local shopping and Minot International Airport. Real kitchens. Real living rooms. Real breakfast and Wi-Fi that are really free. It’s a place you can live, not just stay. To book, visit hyatthouseminot.com. HYATT house ® Minot 2301 Landmark Drive Minot, ND 58703 701 838 7300
The trademarks Hyatt ®, HYATT house®, and related marks are trademarks of Hyatt Corporation. © 2013 Hyatt Corporation. All rights reserved.
12
The BAKKEN MAGAZINE OCTOBER 2013
BAKKEN NEWS
Continental Plans to Remain Top Leaseholder Continental Resources Inc. is the Williston Basin’s No. 1 leaseholder, and based on the company’s plans for 2014, that won’t be changing. Continental is planning 300 net Bakken well completions and a drilling budget 16 percent higher than this year’s, with over 71 percent of it budgeted to the Williston Basin. The remaining portion of the drilling budget will go toward the South Central Oklahoma Oil Province. Although the Continental team may have massive monetary resources and proven techniques for developing its acreage, that doesn’t mean Continental will stop seeking additional acreage in nonderisked areas or continue to deploy the same well-completion techniques it has used to date. In the Bakken, derisking acreage
means proving the commercial viability of crude extraction through several wells. Rick Bott, president and CEO of the company, said that although the company has derisked roughly 3,800 acres for full-field development of the middle Bakken and first bench of the Three Forks formation, it will continue to push the envelope on acreage outside its derisked area. Research on the lower benches of the Three Forks will help. In 2013, the company has been running a pilot program to test the lower Three Forks potential productive footprint through a 47 gross well program. While the research will continue in 2014, Harold Hamm, Continental Resources CEO, believes the second bench of the Three Forks is much like the first bench as it features
the same well profile. In addition to its Three Forks verification research, the company is also trying new well-completion approaches. “One of the things we’ve always tried to do is to continue to look over the fence and not get locked into a certain way of doing things,” said Jeff Hume, vice chairman of strategic growth initiatives. During a conference call to explain its 2014 goals, Hume revealed that the company had just performed its first two slick water fracks, a process that utilizes friction reducers with water to provide a faster working fluid that can be pumped into a well bore at high rates. Hume did say the slick water process was more expensive, but by end of 2014, the company intends to reduce its well-completion costs by roughly 3 to 5 percent.
Grass roots and lightly developed acreage in the Williston Basin might be hard to come by, but Bott said the company still is able to find additional acreage. “We have an active and ongoing leasing program in the plays that we are in and we continue to pool and do the things that increase our equity ownership. Those [Bakken and Scoop] are the plays we love, there is no reason to not keep adding to them.”
Well Tested. Nature Approved.
No odor. No smoke. No visible flame… Excellent emissions At AWI we are dedicated to reducing the effects of oil and gas related production test flaring. We guarantee superior results, competitive rental rates and client satisfaction – that’s the AWI promise.
1 - 4 0 3 - 8 16-7116 w w w. aw i nc i nerators.com THEBAKKEN.COM
13
BAKKEN NEWS
The Bakken Goes Full Circle Since the rapid development of the Bakken oil and gas play in North Dakota began around 2007, the state’s real GDP per capita (gross domestic product divided by midyear population) has been steadily rising. Last year, the state’s real GDP per capita was $55,250, which was 29 percent above the national average. Last year also marked the second year in a row the state led the country in real GDP per capita, much of which can be credited to oil and gas development. As oil and gas resources are retrieved, the growth of several other industries also shows significant rise. The state’s mining industry has increased by 42 percent in the past year, according to the U.S. Energy Information Agency. Because transportation is a major part of the mining industry,
14
Percent change in employment, oil and natural gas industry and all private sector employment Percent change from 2007 60
Support
50 40
Extraction
30 10
Oil and natural gas industry
Drilling all private sector employment
0 -10 -20 -30 -40
2007
2008
2009
the transportation industry linked to mining has grown as well. Roughly 75 percent of what is produced at the mining sites is hauled by truck, according to the EIA. What is trucked also has to be stored before use. Between 2007 and 2012 the transportation and warehousing industries grew by 16 percent annually, with a 35
The BAKKEN MAGAZINE OCTOBER 2013
2010
2011
2012
percent increase in 2012 alone, the EIA reports. The mining industry’s growth has led to increased demand for electricity by the industrial sector as well. The growth in electricity has made it possible to construct more oil and gas processing and handling infrastructure in the state. And, as more oil and gas
SOURCE: U.S. ENERGY INFORMATION ADMINISTRATION
infrastructure comes online, more oil and gas can be moved. With more takeaway capacity, more power, a larger supply of frack sand from the state’s mining sites and a larger fleet of trucks and warehouse storage, the cycle for oil production appears to be constant.
BAKKEN NEWS
Operators Take Different Steps to Become Bakken Pure Plays For investors looking for a pure play Bakken bet, either Emerald Oil Inc. or Oasis Petroleum Inc., exploration and production firms, may be the answer. Both recently made significant but vastly different moves to enhance their respective company’s status as pure play operations focused solely on the Bakken and Three Forks formations in the Williston Basin. Oasis Petroleum acquired 161,000 net acres in the Bakken for roughly $1.5 million, putting the company’s net acreage position in the Basin at 492,000. Thomas Nusz, chairman and CEO of Oasis said the additional acres not only put Oasis near the top of the list for all Williston Basin operators, but the move also makes the company the top pure play in the
Bakken. “We’ve always said we want to build large continuous blocks where we can drive operations and efficiencies at scale,” Nusz said of the new acreage. Of the 161,000 acres acquired, 136,000 net acres are in or around the company’s West Williston project. The acres were purchased for $1.45 million. The other 25,000 acres are located in the company’s East Nesson project area. Emerald Oil took a different approach to becoming a Bakken pure play operator. Through two separate transactions, the company sold nearly all of its non-operated Williston Basin acreage for roughly $113 million. The Denver-based firm sold 26,580 acres that has a current daily production of 850 barrels of oil per day. “These di-
BIG VIEW: An Oasis Petroleum drilling and completion operation in North Dakota. PHOTO: OVERLAND AERIAL PHOTOGRAPHY
vestitures complete Emerald’s transition to a large-scale, pure play Williston Basin operator,” said McAndrew Rudisill, Emerald’s CEO. The move puts Emerald’s total Williston Basin acreage at nearly 33,300 acres. Like Oasis, Emerald intends to put a large focus on maximizing
the production and efficiencies of its current acres. Both companies point to frack design tweaks as main components of greater production. And, both companies will continue to expand. Oasis is currently operating 11 drilling rigs, with plans for 15 to 16 rigs in 2014.
YOU CLEAR THE WAY FOR PROGRESS. ?<I<½J KF KI8@C9C8Q<IJ C@B< PFL%
Smart Works.
nnn%XjZmfcmf%Zfd
EFIK? ;8BFK8
><FI>@8
9`jdXiZb (701) 250-4882 Fargo (701) 250-4882 Minot (701) 250-4882
9l]fi[ (678) 318-9500 =fi\jk GXib (770) 319-0074 JXmXeeX_ (912) 964-8079
EFIK? :8IFC@E8 8j_\m`cc\ (828) 687-0620 :_Xicfkk\ (704) 596-8283
>i\\em`cc\ (252) 754-5280 IXc\`^_ (919) 661-8710
JFLK? :8IFC@E8 K<EE<JJ<< :_Xic\jkfe (843) 414-1120 :fcldY`X (803) 791-0740 G`\[dfek (864) 704-1060
:_XkkXeff^X (423) 308-7940 Befom`cc\ (865) 525-1845
Volvo Construction Equipment THEBAKKEN.COM
15
PRODUCTS AND TECHNOLOGY
ALL IN WILLISTON: Alltite Inc. has opened a branch in Williston, N.D., to serve customers more quickly and to establish a relationship with clients. PHOTO: ALLTITE INC.
16
The BAKKEN MAGAZINE OCTOBER 2013
PRODUCTS AND TECHNOLOGY
THE POWER
OF PLACE For these companies, operating from within the Bakken has been an economic boon. By Luke Geiver
Andy Smith will always have a space in his heart for a 1998 Mercury Topaz. During his first visit to Williston, N.D., Smith was standing in the Williston Airport at the Avis Rental Car desk at 10:30 p.m. after a shaky flight from Wichita, Kansas. When he learned there were no cars for rent, and there hadn’t been for six months, he started calling around, he says. Smith, president of Alltite Inc., a tooling and tool service provider based in Wichita, was in Williston to learn about the Bakken and talk with current and potential clients about the merits of an innovative torque wrench and hydraulic tooling system offered by Alltite that could be used on well heads and natural gas infrastructure. He started making calls to every car dealership in the area. By 11:30 p.m, he found himself buying that Topaz with 200,000 miles on it from the only car dealer in the area that had picked up the phone. That night, after driving several miles away from the city, he stayed in an elderly woman’s trailer house with a group of pipeline workers because it was the only place he could find. That was 2011. Today, Smith and his team are operating a thriving Williston Alltite branch that features trucks and vans specialized for the region. The Topaz is gone, thanks to an encounter with an unfortunate deer, but the lesson of Smith's first night and first few months after that night is not. “In one day of driving around, I had about four people tell me they would give me 100 percent of their business related to bolting equipment if I would only have something local,” he says. Later that day, he called to tell his team about his trip. “I said we are getting in on the action, that there was no way we weren’t moving there.” Anne Smith, company communications director (and Andy’s sister-in-law), credits much of Alltite’s success to the decision to start a branch in Williston instead of traveling back and forth to the region to perform service and sell tools. “Williston was really our first store that was geographically out of the realm of where we wanted to be. We found that it was important to be there, to make a sacrifice to move there,” she says. It wasn’t easy establishing a location, however. Smith rented an executive apartment for $1,200 per month and first attempted to sell and service tools out of a two-wheel drive van. In one winter Williston day, he says, he got stuck
THEBAKKEN.COM
17
PRODUCTS AND TECHNOLOGY
THE FACE OF ALLTITE: Andy Smith, president of the tooling and service company, has turned a backyard business into a nationwide entity. Smith's ability to communicate the benefits of Alltite's approach to tooling, and his intense approach to business development have been crucial to growth.
in the parking lot three times. But, he quickly realized that in addition to a four-wheel drive vehicle, working in the region could be successful. “I thought I would have to do all the repairs in the van,” he says, “but people were so nice. They would let me in their shops to fix their tools. It is a different mentality of people in the Bakken area, they are looking out for each other.” His tools are a major reason why many were so happy to work with him from the
18
THE MESSAGE BUILDER: Anne Smith joined the team after stints on the marketing departments for major companies. To build the brand in Williston, she purposely chose to work with local vendors to build relationships.
start. As Anne explains, Alltite has formed a service based on safety. The service includes tool training and safety protocols that help reduce worksite accidents. “It is really important to us to not only provide the most exceptional tools,” she says, “but to also educate users on how to use them right.” And, the torque wrenches used to fasten together well heads or tighten high-pressure flanges are faster, lighter and thinner than any others on the market. The tools feature
The BAKKEN MAGAZINE OCTOBER 2013
a hydraulically powered head that can be fitted with several different sizes, shapes and styles of wrench. The company has introduced the X-driver series of wrenches to the Bakken that for Smith, a self-proclaimed tool and wrench enthusiast, is the best the Bakken has. The system allows a user to use one powerhead for several different tooling applications. In some cases, the wrenches can help a well head installer avoid striking a 16-pound sledgehammer against a 12-point
PRODUCTS AND TECHNOLOGY
socket, a tooling process used when a wrench's threads aren’t small enough to fit around one bolt without touching the adjacent bolts. Clients in the Bakken range from Weatherford to Oneok Energy Partners LP. All of them have the entire Smith family happy with their move to the Bakken. Tom Smith, (Anne’s husband, Andy’s brother) is the CEO of the company. Andy’s father, a onceretired tooling expert brought out of retirement to act as the manager for Alltite’s home base in Wichita, is also on the team that started out of Andy’s backyard. “We are expanding and its great,” Smith says. “And a lot of it has to do with oil. We are going full steam at the oil business.” Those efforts have spawned other tooling service businesses for the company, and with the successful launch of the X-driver, the team is looking to other shale plays. Much of the growth, both Andy and Anne say, can be attributed to their decision to be in the Bakken.
Becoming Mr. Go-To If Smith’s story hints at the importance of place to the success of some companies operating in the Bakken oil and gas play, then Darick Franzen’s story screams it. Before taking near full-time residence in Watford City, Franzen was in the Illinois construction business. When the construction business there went sour, Franzen was sent to North Dakota to verify and find new business. After helping to establish some construction projects for his Illinois company, Franzen found his new team, a group of timber-owning, roof-tiling entrerprenuers from Oregon. He is now the Regional Manager for Spring Capital Group. Franzen is tasked with assessing business opportunities and then, after getting the monetary go-ahead from his Spring Capital Group team, executing the launch and growth of a startup. To date, Franzen has helped launch several real estate deals, an as-
PROOF IT WORKS: At a Texas oil storage site, E&B Green Solutions has deployed its food-grade cleaner. PHOTO: E&B GREEN SOLUTIONS
A Product Supplier That Has To Be More
To deploy its food-grade cleaner in the Williston Basin, E&B Green Solutions had to become a service provider, not a product supplier. When potential clients call E&B Green Solutions to sample a cleaning product used for degreasing workover rigs, frack water tanks or a myriad of other oilfield-related equipment pieces, they will be told no. For any client, however, Ted Cordova and Pat Plugge, the team responsible for spearheading the company’s product growth in Lousiana, Kansas and North Dakota, say that initial no is a good thing. According to Cordova, marketing director for the company, as a chemical supplier, it takes more to succeed in the oil and gas industry than just providing a commodity. Plugge “We are certainly a startup organization with a new idea, a new product line and a new way of doing things in the oil and gas market,” Plugge, general manager, says. The new product is a food-based cleaning product that can be used to remove oil and other unwanted chemicals from a wide range of surfaces including concrete or steel. The product comes in highly concentrated dosages. For the 250 gallons needed to clean an average storage tank, only 1 gallon of E&B product is needed. And with the product, the E&B team provides a suite of services not typically associated with a cleaning product supplier. First, the team will schedule an onsite visit to assess the equipment in need of cleaning. Second, the team will analyze the tools used to clean the products, such as the power washer or other equipment. Third, a safety assessment and cost comparison will be given in order to give the potential client a clear picture of all the potential benefits provided by the cleaning product. Part of the reason for the intense early client effort is related to the nature of the industry, Plugge says. “The oil and gas industry has been doing things a particular way for 100 years. When you come in with something totally new, overcoming that initial skepticism is a challenge,” he says. “We are disciplined in telling people, we are not just going to send them a sample.”
What the clients do get is the result of colloidal chemistry and a mixture of food-grade oils that when activated with water are able to penetrate the hydrocarbon molecule and usher that molecule away through force (pressure washer). The company has used the product on over 280 well sites in California and currently has product in the Williston Basin. Part of its successful entrance to the Williston Basin is its ties to California. E&B Natural Solutions, based in Bakersfield, Calif., is an oil and gas producer with over 8,000 barrels of oil per day production in several mature fields located across the U.S. The production business is also a sister company to the Green Solutions arm. “Because we are a producer, we probably have one of the biggest applied laboratory testing abilities to test our products and prove the efficacy of those products,” Plugge says. In the Williston Basin, clients have gravitated toward the environmentally friendly rig and equipment cleaners. In the future, Plugge believes others will apply the company’s frack water tank cleaning products. All of the products eliminate the presence of a film after washing, reducing the likelihood of future dust and grime build up on recently cleaned equipment. “We want to try and do one of two things: increase client revenue (by providing cost savings through its initial client efforts), or decrease their total cost of ownership (by maintaining the equipment used at the well site or storage facility for a longer period of time),” Plugge says. The company has already performed several case studies from various oil and gas plays that show the ability of the product to match the claims of the company. Armed with its educational approach to product deployment and a willingness to make the trip from Bakersfield to the North Dakota communities of Minot, Williston or other oilfiled staples any time a potential client has time for a product demo, Cordova and Plugge believe they are on the right path to growing their green cleaning service in the Bakken. “We want to get folks to successfully apply these products,” Plugge says, “and employ this new technology.”
THEBAKKEN.COM
19
PRODUCTS AND TECHNOLOGY
phalt company, a gravel pit operation and recently a water flowback operation. “I think the reason I have been successful,” he says, “is that like most successful groups, I’ve been there and lived there. Some groups try and go in for two days and then come back in three weeks,” he adds, but in most cases, that doesn’t work. “To be successful anywhere in the Bakken, you have to have boots on the ground.” According to Franzen, his team was successful because many of them have spent significant time in the area and spoken with local officials who expressed a desire to work with people actually living in the region. Franzen has a house in Watford City, N.D., that he lives in when he’s not in Illinois with his wife. “One of the real challenges of starting and operating a business is that everything moves and changes so fast,” he explains. Because Franzen, who is now the Watford City Chamber of Commerce president, has immersed himself in the region, he is able to adapt to the fast change. He’s been able to leverage the power of being in the Bakken to help him find contractors, access capital, or speak with oil company executives faster than others, he says. “My role is to figure out who you call. My job is to know who do you go to to make things happen,” he says. And it,
20
MEET MR. BUSINESS: Darick Franzen has helped launch and grow several real estate developments, a flowback water company and among others, an asphalt operation.
the flowback business formed by a young group of oil executive endorsed men from Canada, the real estate developments and the asphalt business, has all happened because as Franzen says, “I’m there.” Author: Luke Geiver Managing Editor, The Bakken magazine lgeiver@bbiinternational.com 701-738-4944
The BAKKEN MAGAZINE OCTOBER 2013
TOOLS IN ACTION: Several of Alltite's tools have been designed specifically to tighten well head bolts. The hydraulically powered units are thinner than most allowing them fit onto one bolt without hitting another.
Shale Oil Innovation CONFERENCE & EXPO
February 10-12, 2014 | Alerus Center | Grand Forks, ND | www.BakkenOilConference.com
THE FRONTIER OF NEW EFFICIENCIES
Bakken Technologies and Efficiencies Are Reshaping the Global Shale Oil Landscape
BECOME A SPEAKER. NOW ACCEPTING SPEAKER PRESENTATIONS. DEADLINE: OCT. 18
MAXIMIZING EFFICIENCY. DISCOVERING OPPORTUNITY. The Bakken-Three Forks Shale Oil Innovation Conference & Expo will showcase 120+ speakers describing techniques, strategies and technology accelerating the retrieval and movement of Williston Basin crude oil. This event will provide educational and networking opportunities to grow your business, with insight from North Dakota’s leading oil industry voices.
WE ARE GOING TO TAKE TECHNOLOGY
DEVELOPED IN THE BAKKEN AND EXPORT IT AROUND THE WORLD.
– Ron Ness, NDPC
THIS IS THE LARGEST
UNCONVENTIONAL OIL RESOURCE THAT THE USGS HAS EVER ASSESSED. – Brenda Pierce, USGS
TRACK 1: Drilling, Retrieval & Production Optimization TRACK 2: Product, Service & Resource Utilization TRACK 3: Logistics & Downstream Infrastructure
THE SUCCESS RATE IN THE
BAKKEN IS PHENOMENAL IT IS A GOOD TIME TO BE IN THE OIL BUSINESS. – Bart Sweazea, Pangean Energy
PRE-CONFERENCE SEMINAR
RESERVE PREMIUM
This full-day seminar will provide professionals of all types—production and drilling companies, service providers, suppliers, consultants, engineers, investors, developers and others—with a comprehensive look at the opportunities present in the Williston Basin.
CREATE MULTIPLE FACE-TO-FACE MEETINGS, BECOME AN EXHIBITOR
BUILDING BUSINESS IN THE BAKKEN
WHO SHOULD ATTEND? • Operators • Drilling Companies • Completions Service Providers • Hydraulic Fracturing Technology Providers • Directional Drilling Companies • Academia and R&D Professionals • Well-Site Service Providers
• Rail Providers • Supply Chain Services Companies • Trucking and Logistics Companies • Technology Providers • Consultants and Engineers • Transloading Services Companies • Infrastructure Investors and Lenders • And others!
EXHIBIT SPACE NOW Attendees of the The Bakken-Three Forks Shale Oil Innovation Conference & Expo 2014 seek solutions to the everyday challenges they face. When you purchase a booth, you're not just buying real estate in the expo hall, you're becoming part of the most comprehensive and dynamic event available in this dynamic industry. In addition to booth space, all exhibitors receive complimentary marketing through promotional e-mails and brochures, onsite program guide, conference Web site and online exhibitor list. Each 10'x10' exhibit space comes with two free full conference passes. Be a part of the event defining the industry for years to come. Reserve your booth space today!
THEBAKKEN.COM LEARN MORE @ WWW.BAKKENOILCONFERENCE.COM
21
INFRASTRUCTURE AND CONSTRUCTION
BUILT TO LAST: To ensure tenant satisfaction, M SPACE has provided extra insulation and other amenities included with the price of rent in many of its temporary housing options. PHOTO: M SPACE
22
The BAKKEN MAGAZINE OCTOBER 2013
INFRASTRUCTURE AND CONSTRUCTION
BECOMING A HOUSEHOLD NAME How housing providers are making their mark on the Bakken By Luke Geiver
When M SPACE Holdings LLC formed in 2001, the company built modular housing and provided emergency response solutions to customers recovering from disasters like hurricanes, earthquakes and tornadoes. That experience has helped the company create a
presence in the Williston Basin’s massive oil and gas development and its need for housing. “We have dealt with everything,” says Nora McGrath, chief administrative officer. Armed with the experiences formed from bringing housing to non-ideal situations, McGrath and the team entered the Bakken knowing they would be facing challenges not typical of other housing providers in traditional markets. Initially, providing upscale modular housing in the Bakken was only a small portion of the company’s overall revenue portfolio. “Due to our success in the region,” McGrath says, “it has become a larger piece of our overall business and we expect that it will continue to develop in the years to come.” The ability of McGrath to speak about the future of M SPACE in the Williston Basin with a long-term view is based on a number of abilities the company’s been able to display during its time there. Although the story of a workforce housing supplier finding success in the Bakken
THEBAKKEN.COM
23
INFRASTRUCTURE AND CONSTRUCTION
COMFORTS Of HOME: The housing units come fully-furnished with beds and linens. PHOTO: M SPACE
is not unique, what M SPACE has been able to do after first entering the market is. Once focused on providing quality short-term housing options, M Space now acquires and develops land and is building an energy park, following a plan that others who want to turn temporary housing management into a permanent business can emulate. The company currently has seven housing parks or developments spread across six different locations. In Watford City, N.D., the company is branching away from temporary housing and constructing over 200 townhomes and over 200 single family homes. In addition to permanent housing, the company has also played a major part in updating the region’s schools. M SPACE is currently working on a 5,500-plus square foot modular classroom complex for early childhood education in Williams County. To date, a classroom space, four-story hotel and a set of faculty housing has already been completed. In Alexander, N.D., M SPACE is in the process of completing an energy park that includes commercial and light industrial buildings. The structures are located close to one of the company’s housing developments, offering companies the opportunity to house employees nearby, McGrath says. “It is important for people to realize that we are supporting the community in various ways,” she says. If the company’s presence in the region wasn’t well understood before, McGrath and other members of the team believe it should be today. More than 20 new employees have been added to serve the growth in the Bakken and to execute the problem-solving capabilities learned from disaster-stricken regions and nonideal situations.
24
The BAKKEN MAGAZINE OCTOBER 2013
INFRASTRUCTURE AND CONSTRUCTION
MORE THAN A ROOF: The M SPACE team prides itself on providing upscale housing options that offer more than just a place to stay. PHOTOS: M SPACE
Driving the Country Leif Olson, site manager for the company, has probably spent as much time driving through the Williston Basin as a water truck operator. Rather than moving product, however, he is in search of the next great property to develop. As the point man for M SPACE in the region, he is tasked with finding land and finding the landowner. According to Olson, a majority of the time, potential land partners or clients are open to hearing his pitch on why a piece of ground could or should be altered to accommodate a housing location. In most cases, he does more listening than talking. Although heâ&#x20AC;&#x2122;s typically received well, Olson does say some landowners present him with concerns about land development that are both easy to understand and hard to deal with. Farm families in high traffic areas present a particular challenge, he says. During one site visit, Olson was on location at what he considered to be a very high traffic corner close to heavy oilfield development. The land was owned by a family whoâ&#x20AC;&#x2122;d farmed the land for multiple generations, and after chatting with the
THEBAKKEN.COM
25
INFRASTRUCTURE AND CONSTRUCTION
A Case for Workforce Housing There are two main benefits to workforce housing, according to Richard Rothaus, president of Trefoil Cultural and Environmental, a resource management consulting firm. In his recently released white paper, “Return on Sustainability: Workforce Housing for People, Planet and Profit,” Rothuas explains that workforce housing provides safe, affordable living conditions for the skilled workers essential to business, and, “it minimizes the impact of booms on existing communities.” To prove his theories on work-
force housing, Rothaus examined the role of major Williston Basin workforce housing provider, Target Logistics, an Algeco Scotsman Company. According to Rothaus, workforce housing helps reduce the impacts on towns experiencing massive and rapid growth, by reducing the impact on current infrastructure. Target Logistics currently operates a 180,000-gallons-per-day wastewater treatment facility that is adjacent to a workforce housing complex and other company-owned housing. Because of the facility, infrastructure
family about the possibility of purchasing the land for development, he was faced with a challenge that money couldn’t fix. “There is sentimental value in the land you can’t put a value on,” he says. “The dirt was part of them. I totally understand that.” According to Olson, M SPACE is often able to accommodate specific wants
26
currently infused within the region prior to the presence of oilfield–related workers does not have to service the needs of the Target Logistics complex. Complexes run like Target Logistic’s also help to corral some of the resource management issues created by a large influx of people to a sparsely populated area. Low-flow faucets, showers and toilets, along with energyefficient washers and dryers, thermostat controls and energy-efficient lighting, all featured in Target Logistic facilities, help to reduce the use of re-
and needs of the landowner and works with them to come up with a mutually beneficial arrangement. Olson emphasizes a listening approach to any potential land partner, and says in some instances, M SPACE will work to situate a housing facility around the wants and needs of a landowner.
The BAKKEN MAGAZINE OCTOBER 2013
sources in a given region. Workforce housing set-ups also create a better atmosphere for resource handling and disposal when compared to unorganized housing developments, the white paper explains. “Centralized food services reduce packing and shipping needs and also provides an opportunity for a greater collection of cardboard, glass and plastics for recycling, “something shift workers in makeshift housing are not inclined to do.”
Bringing In Housing Olson’s efforts have resulted in several housing developments. The company currently has unit parks in the N.D. communities of Alexander, Dore, Stanley, Williston and Watford City. The modular units are made in Georgia and take roughly 4 days to deliver to North Dakota. The units are built
INFRASTRUCTURE AND CONSTRUCTION
specifically to withstand the region’s harsh winter and feature added insulation. Like many housing developers who’ve been entrenched in the region the past five years, one of the biggest challenges that the M SPACE team has encountered is the changing atmosphere for zoning and regulations. Infrastructure is still lagging behind. “We’ve found that the length of time to get something done here is much longer. You better bring more money and understand it will take longer,” Olson says. “We are familiar with infrastructure challenges,” McGrath says, “but that doesn’t make the situation any easier. Although some regions are in need of housing, certain infrastructure restrictions related to sewer or electric simply won’t allow for further development. Near Fairview, Mont., Olson and the team had hoped to build, but the extreme cost of electricity was prohibitive. To build an 80-unit motel and a truck stop, he says, it would have cost
the company $750,000 just for the privilege of having power, not including the cost to hook that power up. The high costs were directly related to an understaffed, overworked Yellowstone Electric Company team in the area and the simple fact that the appropriate amount of power did not exist. The infrastructure for water is beginning to increase and access is improving. Rock, such as scoria and gravel, is still in demand as modular units or other buildings need a firm base for build-out. The company is taking an incubation approach to housing, by providing upscale modular units to tenants the company hopes will move into permanent housing. “We have clients that are living in these [modular units], and are ready to bring their spouse and move up to the next thing,” Olson says. M SPACE offers quality and comfort, says McGrath. Its homes are available fully furnished with everything from housewares
and linens to HDTV with cable and premium channels. ‘Providing people with more space and all the comforts of home has led to our success” says McGrath, “People want more than just a roof over their head, and M SPACE provides that.” An early commitment to stay in the region long-term was also crucial to making the company a major presence in the region, as McGrath explains, and with each tenant, that early commitment is showing how M SPACE has become anything but temporary. Author: Luke Geiver Managing Editor, The Bakken magazine lgeiver@bbiinternational.com 701-738-4944
AmeriPride® is your source for Flame
AmeriPride FR & Safety Gear COMING IN OCTOBER
Resistant (FR) apparel made specifically for the hazards of working in the oil, gas and petrochemical industries. With AmeriPride, you can rent or purchase FR apparel and know you have local experts with over 20 years experience to keep your workers safe, compliant with regulations — and on the job. Contact us about your FR Apparel needs: CALL: ONLINE:
701-258-6505 AmeriPride.com
Visit our New Retail Location 5211 22ND AVE WEST WILLISTON ND 55801
Bulwark® Supplier
WE KNOW FR APPAREL THEBAKKEN.COM
27
MAKING IT
INTERLOCKING ANSWER: The wooden mat systems are locked together to form a solid platform capable of major truck traffic. PHOTO: QUALITY MAT
Drilling on Stable Ground By Chris Hanson
When the ground or base of a rig site is prepared using gravel and rocks, some site managers have discovered that the ground they intended to stablize is susceptible to the natural elements of North Dakota. Driving rain and the spring thaw soften the ground, causing heavy machinery to sink, delaying operations and sometimes creating precarious working conditions. Montana RigMat and Quality 28
Mat Company are helping keep Bakken drilling sites stable and safe by providing their expertise and rig mats. Born out of the Great Recession, Montana RigMats has been in production since January 2012 and Quality Mat Company has been in operation since 1974. Both Travis Jordan, president of Montana RigMat, and Joe Penland, owner of Quality Mat Company, say mats prior to the '70s, were used sparingly and the current sites were still using techniques from the early
The BAKKEN MAGAZINE OCTOBER 2013
1900s where smaller-sized rigs were built upon loose lumber and rocks. “Eighty years later, it was still loose lumber under a brand new diesel-electric rig,” Penland says. The mats are an updated foundation technology that supports the new, larger equipment used in today’s operations and assembles quickly to make site roads accessible. Using the loose lumber technology, board road crews would only be able to set roughly 500 feet in a day, he says. “That’s just inching down the road,” he says. “We lay 2,500 feet in a day, with four men instead of 12 men. And on a location that would require 30 men 90 days, we’ll lay that loca-
tion in two days with about four people.” “We’ve seen a huge increase in rig size in North Dakota,” Jordan says. “As you put a bigger rig on wetter soil, you need more support.” Larger rigs and the implementation of walking rigs have driven the need for more secure matting solutions.
Saving Time and Equipment In addition to being quick to assemble, rig matting allows for smaller, permanent drilling pads and easily allows site traffic to move around the drilling operation. With the implementation of rig matting, oil crews are able to avoid using acreage to construct permanent drilling pads with
MAKING IT
rocks. The rocks are sufficient when the ground is frozen and dry, Penland says, but once rain sets in or thawing begins, crews might find themselves dealing with ruts, stuck equipment and inability to access drilling sites. Heavier rains earlier this year led the Quality Mat Company to implement 25,000 mats in a four-week period to rescue stuck vehicles and equipment. “They were rigged up on these locations and they couldn’t get a pickup in and out, let alone 18-wheeler traffic,” he says. “We had to literally go in there and back drag the location to get the ruts out of it and just lay mats all around where they were sitting.” Jordan adds he is also aware of instances where large machinery became immobilized when trying to navigate or turn around in areas of freshly laid rock. “Fresh rock is not stable,” he says. “Rock needs a year to compact and become stable, and I’ve heard of cranes pulling onto a freshly graded location, ready for the rig to come in and looks as pretty as can be, they pull in there and bury the thing all the way to the axles in rock.” He says by having a robust matting solution in the Bakken area can prevent incorrect assumptions that an area is solid and avoid a “rude awakening waiting beneath the surface," Jordan says. In addition to saving time rescuing equipment, rig mats can ensure expensive equipment stays clean and useable. Jordan recalls an instance where a company was setting a refurbished bit that had picked up a rock in front of the company manager’s shack. “They grabbed it, threw it on the end and ran it all the way down the hole,” he says. “They ran the thing down
STACKED FOR SUPPORT: Montana RigMat's product's are providing greater support for walking rigs. PHOTO: MONTANA RIGMAT
there two or three miles down hole and had to turn around and trip all that pipe out of there, just to change that bit because it had been sitting on a rock. That company was immediately concerned about making sure they got some mats to put in front of the company man’s shack so they had a place to set tooling so that it wouldn’t get plugged.”
Environmental Along with stabilizing the work environment for machinery and crew, another major benefit of using matting for rigging operations is a smaller environmental impact than the traditional rocking operations. For a traditional rig site, operators would need to cover an area of roughly five acres. Furthermore, when the rig moves, the rocks will have to be removed before to any land reclamation efforts can be completed. “If you fly over North Dakota 15 years from now, it’ll glow red instead of green because you got 8,000 wells now that’s got all those red, permanent pads out there. And when you put another 50,000 wells there, that’s
THE STAGE: The mat products allow operators to work without the fear of getting stuck in the mud, and there is nearly no location too large for the mat products to cover. PHOTO: MONTANA RIGMAT
going to consume millions of acres of land that you don’t need to consume," Penland says. With the use of matting technology, drilling sites are able to work on a 1-acre pad while allowing grasslands to grow adjacent to the pad and sometimes even underneath it. If a location is fully matted without rock, land reclamation is much easier to accomplish. “That’s turned into a big environmental issue,” Jordan says, adding that an increasing number
of North Dakota producers are choosing to use wooden access mats for the fringe area of rigging to lower the environmental impact. The mats even allow the grass to grow up through them and usually within 30 days, there is noticeable growth after the mats are removed, Penland says. Author: Chris Hanson
Staff Writer chanson@bbiinternational.com 701-738-4970
THEBAKKEN.COM
29
Demanding Conditions...
Demand SIOUX #1 Name in All-Electric Pressure Washers & Steam Cleaners ศ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วฆย ย ย ย ย ย ย ย ฦฌ ย ย ย ย ย ย ย ย ย วฆ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย อถอฒ ย ย ย ย ย วค
ศ ย ย ย ย วฆย ย ย ย ย ย ย ย ย ย ฯ ย ย ย ย ย ฦฌ วค ศ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ฦฌ ย ย ย ย ย ย วค ศ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ฯ ย ย ย ย ย ย ย ย วก อทอฒ ฦฌ อธอฒ ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ฦฌ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค
Steam-Floยฎ Steam Generators for Heating & Thawing ศ ย ย ย ย ย ย ย ย ย วฆย ย ย ย ย ย ย ย ย ย ย ย ฦฌ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย วก ย ย ย ย ย ย วก ฦฌ ย ย ย ย ย ย ย ย วค
ศ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย วฆย ย ย วฆย ย ย ย ย ย ย ย ย ย ย ศ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ฯ ย ย ย ย ย วค
Buy Reliable Equipment From a Company You Can Trust. SIOUX CORPORATION One Sioux Plaza, Beresford, South Dakota 57004 USA Tel: 605-763-3333 Toll-free: 888-763-4028 ย www.sioux.com ย mwiebers@sioux.com
FREE
IN PLAY
Small Team Models Big Results By The Bakken Magazine Staff
The idea that bigger is better in the oilfield doesn’t apply to a small engineering and manufacturing crew operating out of Kenmare, N.D. Al-
SKY IS THE LIMIT: For clients looking to add or replace a workover or service rig, the MW Industries team has several stock models that can be customized for each client.
though MW Industries runs a team of 50 or fewer people, the workover and service rig builder is able to produce massive rigs that are highly customizable. To date, the company has sent rigs throughout North America from Texas to Canada. After Tom Mau, operations manager and company co-founder, recruited Wyatt Goettle, an engineer and Kenmare native, who grew up 17 miles south of the town, to help design new rigs and tweak current rigs from in-house, in 2009, MW Industries truly learned the power of running a small, focused team. “We are small enough so that
PHOTO: MW INDUSTRIES
FOUNDING MANAGER: Tom Mau helped found the company in the early 2000s. He credits the help of his team for the success of MW Industries. PHOTO: MW INDUSTRIES
32
The BAKKEN MAGAZINE OCTOBER 2013
we can make the quick changes,” Goettle says. “If we were too big, those changes become harder to do.” The changes Goettle is referring to are the client requests for rig alterations, or the industry’s constantly evolving regulations that require a change to meet new onroad weight restrictions. Because Goettle, Mau and the rest of the crew can meet quickly in an office to discuss a rig alteration, Kelvin Faul, mechanical supervisor is often able to integrate those changes on the fly. “We can get our team leaders together and figure out how to incorporate a change from a customer and figure out how it will affect everyone. If it is feasible, we can do it,” Mau says. Prior to Goettle's arrival, and the practice of in-house engineering, the company outsourced much of its design needs. In some cases, Faul says, a client or mechanics team would request a change to a rig and before Faul could get the new design specs back from the out-of-house engineering firm, another round of changes would have already been requested for it. Engineering isn’t the only aspect of the company that Mau has moved in-house. When the company first started building rigs in 2005, the team used freestand-
IN PLAY
ing jib cranes and large front-end loaders to lift certain equipment into place for build-out. Now, the team has installed overhead cranes built into the ceiling of its facility along with other shop improvements. Faul, who started with the company seven years ago, is now in charge of overseeing much of the manufacturing process and many of the bolts on each rig are usually tightened by Faul or his team. The small-team atmosphere and operations model hasn’t stopped MW Industries from providing a quality product that many users prefer, Mau says. And, because the process of building a workover or service rig at MW Industries is such a collaborative, team-based procedure, Mau, Goettle and Faul all believe their rigs will only get better with each new model. “That whole team aspect in
building each piece of equipment and then saying, ‘hey, we did that,’ is what I like,” Mau says, “and, knowing that tomorrow we are going to build and design another one and it is going to be better.” Building a better rig in today’s industry means staying ahead of new safety requirements and keeping up with weight specifications. Because MW Industries is the only service and workover rig manufacturer in the northern half of the U.S., Goettle says that when new weight restrictions come out, “it is like they are pointing the finger at us.” Each state and country requires different safety features as well, but for the most part Mau says, the base model of each rig starts out the same before a client requests its customized portions. For Goettle the best part of his job is seeing the designs made in the
RIG PROUD: Wyatt Goettle (left) and Kelvin Faul (right) have mastered the art of working in a small-team setting to build several rigs for the Williston Basin and beyond. PHOTO: MW INDUSTRIES
office come to life on the manufacturing floor. “The guys are on the floor using my designs and it works, that is great,” he says. “With the outsourced product and design model, that hasn’t always been the way it works.” For Faul, his best moment is when a rig comes out of the paint booth. After two to three days of building the rig, the team moves
it to a pad modeled after real-field work conditions. The team will stand the rig up and test it. “I test the rig to make sure everything is working,” Faul says. “That is my moment, when I’m standing on the pad and I’m at the point where I can say this thing is ready to go to the customer.”
MADE IN MONTANA
THEBAKKEN.COM
33
MARKETPLACE
The BAKKEN Magazine Marketplace
– Light, Medium, & Heavy Duty Towing and Recovery – Local Home Town business with our local home town rates – No inflated Oil Boom Rates here! – Set up an account or call us for all your needs.
17,000 Monthly Impressions
.com
ONLINE O NLINE A ADVERTISING DVERTISING
Advertise Today & Track Your Results For more information, contact: Bob Brown | 701-738-4918 | bbrown@bbiinternational.com
34
The BAKKEN MAGAZINE OCTOBER 2013
BRAND NEW FRAC, SALES, AND PRODUCTION
TANKS.
IN STOCK & READY TO SHIP. BUY, RENT OR LEASE. 750bbl & 1000bbl
To learn more, visit calroc.ca or call:
1-855-5CALROC
1-855-522-5762 | 4501 62 Avenue Lloydminster, AB T9V 2G3
ALL-WEATHER LOCATION 24/7
Don’t be a stick-in-the-mud. Quality Mat is the standard in the mat business. Manufacturing and installing mats worldwide for 40 years! World’s largest mat supplier. Over 60,000 mats in stock in Bismarck, Dickinson, Tioga and Killdeer locations. Minimize: · Environmental Impact · Road Congestion · Reclamation Cost · Accidents · Rock Cost · Dust
1 - 8 0 0 - 2 2 7- 8 1 5 9
\\
Q M A T. C O M