PRSRT STD U.S. POSTAGE PAID BECKLEY, WV 25801 PERMIT NO.19
P.O. BOX 1441 • OAK HILL, WV 25901 | WWW.ONGMARKETPLACE.COM
WATER MANAGEMENT - Page 6 Using Pipelines to Manage Water
CHANGE SERVICE REQUESTED
APRIL 2015
ONG SPOTLIGHT - p 3 HEALTH & SAFETY - p 10-11 ENVIRONMENTAL MANAGEMENT - p 14-15
INDUSTRY INSIGHT - Pages 18-20 The Top Shale Oil & Gas Deals of 2015
NEW TECHNOLOGY - p 24 LEGAL & FINANCE - p 28
Page 2
The Northeast ONG Marketplace
your
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Matt Huff, Beth Powell and Bob Beck
Tired of paying multiple people to handle your secondary containment, only to have them drop the ball somewhere during the process? New Pig Energy has the know-how to manage the entire project from start to finish. Our one-source approach eliminates the finger-pointing, breakdowns and B.S. to spare you the headaches and save you money.
Been there. Lined that. As the industry leader since 2011, we know secondary containment better than anyone. We manufacture our own PIG Liner, we install it, we even remove and recycle it for you. We’ll work with you to improve yields and efficiencies through re-engineering, not by throwing more labor at the problem. Plus, you always get 24/7 access to our technical expertise, real-world experience and regulatory knowledge.
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April 2015
Page 3
THE ONG SPOTLIGHT A Partnership Formed By: Lion Industries & MPR Supply Chain As an efficiency expert after 22 years in the underground coal industry, Dave Humphreys, Sr. made a major career move in 1995 by leaving the executive role and starting a small stamping company making mine spads. In the early days it was just Dave and his wife Audrey running the stamping line, buying the inventory and delivering the product. The focus was always on creating value for their customer, which was the foundation that led to a state-of-the-art fabrication and machine shop with the largest capabilities in the area. Lion Industries started in St. Clairsville, OH, on 200+ acres that Dave purchased, which was the old Saginaw Mine property. Today, Dave and Audrey joke about the start-up pains of the business when it was just the two of them having “spirited” discussions that thankfully couldn’t be heard across the 200 acres. They quickly outgrew the St. Clairsville location and after an exhaustive regional property search, Lion purchased their current 90,000 sq ft facility in Bellaire, OH, in 2007. Customers were continually impressed with the quality and creative ideas received from Lion, as well as their cost-effective solutions to any problems presented. It was common for customers to ask Lion to provide additional services and purchase new types of equipment, such as a roll form line to produce roof mats, and later a second line to produce channel, both used in the underground coal mines. Later, a waterjet, high definition plasma cutting machines, and CNC press brakes were added. A machine shop was started by necessity to support their small business, but it quickly expanded, and Lion began doing machine work for local mills and mines. Once again, Lion provided its customers with quality products and dependable service.
MPR transloads steel, frac sand, pipe, fertilizer, and barite. In addition, MPR is permitted and sells water from the Ohio River to many of the energy companies in the region. A new company, MPR Sand Terminals, has started construction on the north 5 acres of the property to create a 20,000 ton frac sand river terminal that will open in June 2015 serving Capital Sand Proppants. With the desire to further vertically integrate the businesses, Dave started Mountaineer Industries, a flatbed and dump truck company that serves not only the oil and gas industry, but also traditional coal businesses in the region. Over the past 20 years, the region has seen its ups and downs. Dave and Rick have not only survived, they’ve grown through hard work, customer service and adapting to the needs of the times. “The arrival of the oil and gas industry to our region is the greatest event in my lifetime”, says Rick Frio. “With the steel industry being hit so hard in our area, we were in trouble, and most areas don’t get a second chance at growing a business like we have had here. We’re proud to work with the Belmont County Comissioners and the Belmont county Port Authority on the Ohio Valley Oil and Gas Expo in St. Clairsville at the end of April. The oil and gas industry has brought much needed growth to this region and, in return, the businesses in this community have much to offer to the industry.” Dave Humphreys adds, “It’s wonderful that we now have these opportunities where our children and grandchildren are able to return and prosper in the valley that we call home.”
THE EQUIPMENT YOU NEED RIGHT WHEN YOU NEED IT
In 2009, Dave was approached by his friend, Rick Frio, who was in need of inside storage for his new river transload facility. This led to their current partnership and business venture, MPR Transloading and Energy Services. MPR purchased 4 adjacent parcels, which formed a 20 acre river/rail/truck facility in Bellaire, OH. In 2010, MPR constructed a new harbor for transloading, one of the best in the region. One of the things Dave and Rick are most proud of and thankful for in their growth is the evolution of Natalie Brown who was promoted to President of MPR last year. Natalie is Dave’s daughter and was able to return to the valley as a result of the growth of MPR as it expanded to serve the oil and gas industry.
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Page 4
The Northeast ONG Marketplace
ASSOCIATION MEETINGS OGIS New York | April 20-22, 2015 New York, NY - www.ipaa.org
PESA Annual Meeting | April 22, 2015 Greensboro, GA - www.pesa.org
SOOGA Spring Membership Meeting | April 23, 2015 Marietta, OH - www.sooga.org
ADDC Region I Meeting | May 14-17, 2015 Wheeling, WV - www.addc.org
WVONGA Spring Meeting | May 11 Wheeling, WV - www.addc.org
ARTICLES
ADVERTISER INDEX
THE ONG SPOTLIGHT: A Partnership Formed: Lion Industries & MPR Supply Chain....................... 3
AIR/TAK.................................................................. 9 ALBERTA RIG MATS.............................................. 4 ALBERTS SPRAY SOLUTIONS............................ 23 ALPINE ELECTRIC............................................... 16 AQUA AMERICA.................................................... 7 BENMIT................................................................ 26 BRAD PENN LUBRICANTS................................. 16 BROUSE MCDOWELL............................................ 8 BUCK’S FABRICATING........................................ 23 CALU.................................................................... 22 CATS....................................................................... 9 CHANCELLOR INSURANCE................................ 12 CPI SERVICE.......................................................... 7 CST INDUSTRIES................................................ 15 D&S INDUSTRIAL PRODUCTS........................... 16 ECOM................................................................... 22 ELECTRO-QUIP CORP........................................... 5 ENERTECH SOLUTIONS INC.............................. 27 ERNST SEED........................................................ 11 ETC......................................................................... 9 FAIRMONT SUPPLY............................................. 23 FORTIS ENERGY.................................................. 13 HETRICK MFG, INC............................................. 12 JGX INDUSTRIES LLC......................................... 16 JH TOMBLIN FENCE CO...................................... 22 L&L BOILER MAINTENANCE ............................... 9 LEE REGER BUILDS............................................ 12 LEE SUPPLY......................................................... 11 LYDEN OIL COMPANY......................................... 25 MACHINERY STREET.......................................... 16 MAC SAFETY CONSULTING................................ 15 MARCELLUS SAFETY CONSULTING.................. 16 MID-ATLANTIC STORAGE.................................. 16 MIDSTREAMPHOTO.COM.................................. 22 MJ PAINTING CONTRACTOR................................ 4
WATER MANAGEMENT: Using Pipeline to Manage Water...................................................................... 6 HEALTH & SAFETY: Keeping Cool in the Job with Appropriate FR Attire............................................ 10 ENVIRONMENTAL MANAGEMENT: Reducing Fugitive Methane Emissions ............................ 14-15 INDUSTRY INSIGHT: The Top Shale Oil & Gas Deals of 2015................................................... 18-20 NEW TECHNOLOGY: M2M Remote Assest Monitoring............................................................. 24 LEGAL & FINANCE: Five Tips Every Risk Manager in the Energy Sector............................................. 28
CALENDARS ASSOCIATION MEETINGS.................................... 4 NETWORKING EVENTS...................................... 22 TRAINING & WORKSHOPS................................ 16 UPCOMING EVENTS........................................... 21
EVENTS DUG EAST ........................................................... 32 EGCR.................................................................... 26 NAPE.................................................................... 13 OHIO VALLEY OIL & GAS EXPO ....................... 30 SHOWCASE ONTARIO 2015 ............................. 25
NEW PIG................................................................ 2 NORTH AMERICAN FIELD SERVICES................ 12 OIL & GAS AWARDS........................................... 29 OIL CENTER RESEARCH..................................... 22 ONG ONE CALL................................................... 29 PERMA-FIX.......................................................... 11 PREMIER SAFETY & SERVICE INC...................... 3 PSB INDUSTRIES................................................ 12 RIGMAIDS............................................................ 12 RJR SAFETY INC.................................................. 16 SHALE ENERGY INSTITUTE............................... 12 SHALE MARKETS................................................ 16 SHANNON SAFETY............................................. 12 STEELNATION BUILDINGS................................. 25 STRAD OILFIELD SERVICES.............................. 11 TANK CONNECTION............................................ 13 TOTAL EQUIPMENT............................................ 12 UNIT LINER............................................................ 5 WESTERN ENVIROMENTAL LINER...................... 1 WEAVERTOWN ENVIRONMENTAL.................... 12 CONTACT US FOR ADVERTISING, INFORMATION OR MAILING LIST CHANGES:
The Northeast ONG Marketplace P. O. Box 1441 • Oak Hill, WV 25901 855-269-1188 Fax: 304-465-5065 E-mail: info@ongmarketplace.com The Northeast ONG Marketplace will not be liable for any misprint in advertising copy which is not the fault of The Northeast ONG Marketplace. If a misprint should occur, the limits of our liability will be the amount charged for the advertisement. We do not assume responsibility for the content of advertising or articles herein. Any warranties or representations made in the advertisements are those of the advertisers and not The Northeast ONG Marketplace. Any warranties, representations or opinions made in the advertisements or articles are those of the contributors and not The Northeast ONG Marketplace.
April 2015
Page 5
PROTECTING YOU AND THE ENVIRONMENT Temporary Containment Systems
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Page 6
The Northeast ONG Marketplace
WATER MANAGEMENT
USING PIPELINES TO MANAGE WATER By: Tom Rafferty, Director, Development, Aqua Infrastructure, LLC
stretches 56 miles, into Tioga County. The joint venture has secured agreements with multiple exploration companies to use the pipeline and will continue to grow as demand dictates.
Aqua Infrastructure, LLC (Aqua) is a subsidiary of Aqua America, Inc. (NYSE: WTR ) that specializes in the planning, permitting, construction and professional management of fresh water pipelines in the shale industry. Aqua’ s experience as a corporation with nearly 130 years in the environmentally sensitive regulated water utility industry has helped us establish our expertise and reputation, and become a partner in one of the most unique pipelines in the shale industry. Our professional management team provides energy companies fully funded, environmentally friendly water service solutions aimed at reducing production costs at the wellhead. Aqua provides the strength of capital investment with a focus on treatment plants, pumps and pipelines.
Steam Valley Bulk Water Station Along with the construction of the pipeline, Aqua-PVR constructed a state-ofthe-art water filling station along Route 15 in Lycoming County Pennsylvania. The station is a part of the same 3MG per day allocation as the pipeline. It includes 500K of storage and can fill 8 trucks simultaneously. The typical fill time for each truck is approximately 8 – 10 minutes which helps reduce stand-by time, further reducing the cost to the exploration companies. The efficient use of modern technology allows Aqua-PVR to efficiently manage withdrawals for this timesensitive operation.
The nexus between energy and water has always existed. With a minimal requirement of 5M gallons of water per gas well, the connection is obvious. Aqua saw a great opportunity to apply years of experience in professional water management to supply that water and meet the demands of the drilling industry. The most dependable, reliable, and cost-efficient way to move water is through pipeline. The only alternative for the natural gas industry without the benefit of a pipeline is the use of 5,000-gallon tanker trucks making the 1,000 round trips necessary to haul the 5M gallons required for a single well. Inevitably, the high cost of transportation created a demand from the natural gas industry for a more cost-efficient reliable delivery method for their water needs. In early 2012, Aqua formed a joint venture with Penn Virginia Resource Partners, L.P. (now Regency Energy Partners) to construct and manage the only buried steel pipeline supplying fresh water to natural gas producers drilling in North-Central Pennsylvania. The pipeline became fully operational in April of that year; marking the first time water was supplied directly to drill sites in the Marcellus Shale without the use of costly and unreliable tanker trucks. To date, the pipeline has eliminated thousands of water truck trips over rural roadways and local roads, which is a major benefit to local residents and the surrounding environment. The pipeline has enabled Aqua to eliminate trucking fees and deliver water directly to their customers’ impoundments, saving them 25 to 30 percent on their total water costs. The joint venture, Aqua - PVR Water Services, LLC (Aqua-PVR) constructed the 12-inch diameter steel pipeline which parallels the trunk-line of PVR’s gathering system in Lycoming County and shares PVR’s existing rights-of-way. Each company invested approximately $12 million for construction of the first phase of the project, which is 18 miles long. The pipeline is served via 3 million gallon per day water intake along the west branch of the Susquehanna River in Piatt Township. Over the past three years the project has completed two additional phases and now
Aqua has additional wholly-owned bulk water stations, specifically designed completely around the needs of the Marcellus Shale industry in northeastern and western Pennsylvania and Ohio. A map of those sites can be found in our Ad in this publication.
Aqua has been dedicated to sustainable water and wastewater resource management for over 128 years. As both a responsible user of the Pennsylvania’s pristine water resources and a recognized leader in water treatment infrastructure and expertise in the region, Aqua has been repeatedly approached over the past year to participate in the quest for solutions to the substantial water and wastewater challenges presented by the development of the Marcellus and Utica Shale. For further information about Aqua and the Aqua-PVR water pipeline project please see our Ad in this edition of ONG Marketplace or contact Tom Rafferty at 610-645-1064 (tfrafferty@ aquaamerica.com)
April 2015
Page 7
Fill ’Er Up!
5 6
4 3
1
2
Aqua has multiple bulk water truck filling stations across Pennsylvania and Ohio. Each station is fully equipped with: • Automated operation • High flow rates • Quick-fill connections • 24/7 operating hours
1 Struthers (OH)
4 Steam Valley
2 Pulaski
5
3 Emlenton
6 Red Shale
Contact:
Tom Rafferty 610.645.1064 TFRafferty@AquaAmerica.com
Sayre, Linde Railyard
Mike Convery 610.645.6347 MLConvery@AquaAmerica.com
/MyAquaAmerica
@MyAquaAmerica
AquaAmerica.com
WE ENSURE YOUR COMPRESSOR
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Connecting oil and gas companies to profitability With every component in an oil and gas operation linked to every other component, a single compressor failure can shut down the entire system. To maximize uptime, you need reliable partners who understand your unique needs, who are available at a moment’s notice and who have the expertise to diagnose and respond with solutions that keep you operational. With a global footprint, CPI delivers industry-leading compressor parts and lubrication systems as well as comprehensive engineering support and field service. From simple part replacements to complete overhauls, we take the time to get to know our customers’ needs and to make sure our solutions deliver unparalleled uptime and profitability.
an EnPro Industries company
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Page 8
The Northeast ONG Marketplace
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What’s below the surface is what really matters. Browse McDowell has counseled clients in a broad spectrum of oil & gas matters for more than 85 years. In addition to traditional transaction and litigation services, our Oil and Gas Practice Group has specific knowledge in a vast array of legal areas, providing clients with an integrated approach. ■ Business Restructuring ■ Environmental ■ Insurance Recovery
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Compressed Air and CNG Dryers – Refrig/Regen Jay K. Gault II National Sales Manager 107 W. Main St. Worthington, PA 16262 www.airtak.com jgault@airtak.com
OSHA 10, 30 & 5810
724.297.3416 Fax: 724.297.5189 Cell: 412.304.9670
Page 10
The Northeast ONG Marketplace
HEALTH & SAFETY
KEEPING COOL ON THE JOB WITH APPROPRIATE FR ATTIRE By: Cortlandt Minnich, Business Development, TECGEN Brand ®
THL combines the performance of several fabric properties, including air permeability and moisture wicking: • Air permeability is a key contributing factor to good THL performance. Certain PPE garments have a low air permeability rate, which limits evaporation and normal heat dissipation through airflow. This in turn increases body temperature and sweating5.
Regulating body temperature in extreme temperatures can be challenging under even the most normal circumstances. However, situations in the oil and gas industry requiring flame-resistant (FR) garments can create extra obstacles due to the natural insulation properties of FR clothing. When developing an FR garment program for hot environments, special considerations must be taken to keep workers as safe and comfortable as possible on the job. Challenges Associated with Extreme Heat Heat stress is commonly experienced by workers exposed to extreme heat and can result in heat stroke, heat exhaustion, heat cramps or heat rashes1 . In fact, the U.S. Bureau of Labor Statistics (BLS) reports that ‘Exposure to Environmental Heat’ caused 177 deaths and 13,580 cases of days away from work in the private sector workforce2 from 2003-2008. While heat stress can be attributed to external factors like temperature, other factors such as workplace uniforms can also contribute to the impact of these sources of heat. A worker may not consciously realize the effect of his or her garments on core body temperature. This Matching the right fabric technology and the appropriate is why choosing the insulation level to the daily tasks of a worker is critical. right clothing is a key CREDIT: TECGEN® Brand FR Garments factor in regulating temperature while working in a physical role – just like for exercising. Considering how the company uniform can affect a worker’s thermal comfort is essential when evaluating and specifying flame resistant garments. Total Heat Loss: A Key Measurement for Evaluating FR Total heat loss (THL) is a method that measures the maximum workload or metabolic activity rate a person can sustain while maintaining thermal comfort in personal protective equipment (PPE). This measure is part of the certification for garments in the fire-fighting industry. THL measures the amount of conductive (dry) and evaporative (wet) heat loss that occurs through the fabric of a PPE garment3. By placing fabric samples on specially designed plates that simulate hot, sweaty skin under controlled lab conditions, the ability of the fabric to transfer heat can be precisely measured. In hot conditions, a fabric that holds less heat is more desirable to allow excess heat to move away from the body. Selecting the Right FR Garments for Hot Environments In hot environments, choosing garments with high THL performance is important for employees as well as management. Employees in physical roles may face discomfort, physiological strain, decreased productivity and performance, and potentially increased accident rates on the job4. A uniform with better performance can have some level of impact on these challenges.
• Retaining moisture reduces a fabric’s THL rating because it decreases the evaporative cooling capability. So, the same cotton that feels comfortable around the house becomes a liability in an extremely hot work environment. For example, cotton shirts are soft and comfortable in moderate temperatures, but when exposed to increased levels of sweat, they become saturated and can cause discomfort. The natural reaction to facing a hot environment in heavy clothing is to make modifications to the prescribed equipment – affecting its intended purpose. Rolling up the sleeves or leaving a coverall unzipped are common modifications that unravel FR safety protocols, and in some cases may add the risk of entanglements. From Safety Managers to Employees By selecting FR garments with THL measures in mind, safety managers can take steps to ensure employees will remain safe and comfortable in the workplace. In addition to preventing accidents, selecting the right FR garment can help increase productivity as workers may require fewer, shorter breaks and time-off related to heat stress issues6. Lowering heat stress should be considered an important part of managing safety in a warmer workplace. By specifying garments that are lightweight, breathable and moisture-wicking, safety managers can help prevent heat-related accidents and injuries. In addition to specifying optimal garments for hot environments, safety managers should take the initiative to educate employees on selecting the right undergarments, should they provide their own. The Bigger Picture When evaluating uniform choices, specifiers should consider how each outfit will affect worker safety and comfort level, which can have an impact on overall productivity. Each garment should be assessed not only in terms of breathability, but moisture-wicking ability and weight as well. Finally, the more employees can customize their personal uniform using garment layers, the better the chances they will remain compliant. Cortlandt Minnich is the New Business Development Director for TECGEN® FR at INVISTA. TECGEN® FR garments are a lightweight and breathable alternative to legacy FR garments. Coveralls, shirts and trousers are dual-certified and designed to withstand demanding work environments while delivering a comfortable, moisture-wicking fabric solution. Visit http://industrial.tecgen.com/ for more information. Center for Disease Control Bureau of Labor Statistics 3 Fire Engineering
Extreme Physiology & Medicine Extreme Physiology & Medicine 6 Extreme Physiology & Medicine
1
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April 2015
Page 11
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Perma-Fix Environmental Services offers expertise in radiological engineering for the Marcellus Shale and Utica Shale mining industry. We have a fifteen year history and proven track record providing expertise with naturally occurring radioactive material (NORM) and technologically enhanced naturally occurring radioactive material (TENORM). With an office in the center of the Marcellus and Utica Shale mining states, Perma-Fix is uniquely and strategically located to serve the mining industry. Services Include: • Radiation protection awareness training • Management and consulting services • Equipment and tooling decontamination services • Radiation dosimetry programs • Exposure assessments • Gamma survey and sampling • Site characterization and waste characterization • Waste disposition support • Regulatory support For more information contact: Operations Business Center 2800 Solway Road Knoxville, TN 37931 Phone: (865) 690-0501 jbowers@perma-fix.com www.perma-fix.com
• Bioengineering materials
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Page 12
The Northeast ONG Marketplace
60
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THE REDUCTION IN RISK FOR AN ACUTE TRAUMATIC HAND INJURY WHILE WEARING THE RIGHT WORK GLOVES. Are you sure your current ones are right for the job? GET A FREE ON SITE GLOVE ANALYSIS to determine what is and isn’t working for you, and find the solution you need to stay safe while on the job. Reduce your risk by working with Shannon Safety and Superior Glove. Call to see what we can do for you.
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Total Equipment Company is a manufacturer’s representative to some of the top named industries equipment lines. We are a fully integrated provider of pumps, compressors, blowers, mixers and mechanical seals throughout Western Pennsylvania, Eastern Ohio and West Virginia.
Dave Bridge Vice President 101 Gosai Drive, Suite 401 Bentleyville, PA 15314 dave@shaleenergyinstitute.com www.shaleenergyinstitute.com
Whether you need a designed packaged system, expert repairs and upgrades using our inhouse machine shop, or our 24 hour field service technicians to visit your site we will have your equipment running quickly. To see a complete list of products & services including maintenance, parts, rentals and machining, please call us at 412-269-0999 or 304-755-3345 or visit us on the web at www.totalequipment.com.
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April 2015
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THERE’S A REASON WHY EVERYWHERE YOU LOOK YOU FIND BEST STORAGE TANK DESIGNS BOLTED RTP
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The Northeast ONG Marketplace
ENVIRONMENTAL MANAGEMENT
REDUCING FUGITIVE METHANE EMISSIONS By: Morgan Abele, President of Operations, PULS Recently the Environmental Protection Agency (EPA) proposed new rules aimed at reducing fugitive methane emissions. The goal is to ultimately reduce methane emissions from the oil and gas sector by 40-45% from 2012 levels by 2025. As the U.S. is now the largest natural gas producer in the world we realize that methane, the main component of natural gas, is a large contributor to greenhouse gases (GHG). Methane is considered one of the more potent greenhouse gases, and according to the EPA it’s the second most prevalent greenhouse gas emitted in the U.S., accounting for about 9% of all greenhouse gas emissions from human activities. The EPA announced that the new rules that will apply to all new oil and natural gas facilities, that they will regulate methane emissions from the oil and gas sector directly (previously the industry’s GHG monitoring was primarily on a voluntary basis). These facilities are already tightly regulated and may have a nominal effect on the reduction of fugitive methane emissions. While the proposed EPA regulations are aimed squarely at future production, transmission, compressing and other industry related facilities, they are not addressing emissions from existing sources. The new regulations place their scope of focus on new infrastructure, but there are miles of buried systems that may play a role in GHG emissions. Add to this the supporting infrastructure of tanks, valves, metering systems, and other structures and you have a significant potential for unreported and underreported sources of methane emissions. What is being overlooked by the EPA, regulators and often the communities within these areas, are the legacy systems that existed long before hydraulic fracking boom of the last decade. The Marcellus region, Pennsylvania, New York, Ohio and West Virginia represent the birth of the oil and gas industry in the United States. In Pennsylvania alone an estimated 385,000 oil and gas wells have been dug since 1859. In addition, there is an estimated 100,000 miles of gathering systems with the vast majority put in place long before the fracking boom. While it is important to ensure that unconventional drilling, “fracking”, is minimizing its impact on the environment, it is equally important to remember that there are other systems in place that are older, less documented and maintained, and largely ignored. If we are serious about minimizing fugitive methane emissions, we need to address these legacy systems as well as the infrastructure planned for the future. There are also concerns that the EPA’s efforts to cut carbon emissions may impact natural gas operations. The high costs to maintain compliance may be challenging, perhaps unachievable for some companies.
Studies on Methane Emissions Efforts to reduce methane emissions have included a variety of studies that will help the regulators understand where methane leaks occur and how the gas industry might minimize their levels of GHG released into the atmosphere. Recent studies suggest that the EPA’s Greenhouse Gas Inventories (GHGI) may be underestimating the emissions. According to the report, the natural gas industry accounts for 25% of methane emissions in the U.S., with transmission and storage accounting for 30% of this quantity. Colorado State University’s (CSU) Engines and Energy Conversion Lab did a study on methane emissions in 2013 which was sponsored by the Environmental Defense Fund, a number of pipeline operators (Dominion, Dow Chemical, Enable Gas Transmission Co., Kinder Morgan Inc., Columbia Pipeline Group, TransCanada, Williams), and the Interstate Natural Gas Association of America (INGAA). The comprehensive 2013 CSU study published by Environmental Science & Technology on February 10, 2015, involved a variety of researchers measuring methane emissions at 45 compressor stations and storage facilities across the country. This included 25 sites that are required to file reports to the EPA under their Greenhouse Gas Reporting Program (GHGRP). The findings from the study indicated that only a few sites accounted for the most emissions, two measuring more than the other 43 combined, likely due to faulty equipment. There doesn’t seem to be a concern over not regulating the older systems, the legacy systems, which are more prone to equipment failure or breakdown due to their age. The Environmental Defense Fund commissioned a technical consulting firm, ICF International, to create an Economic Analysis of Methane Emission Reduction Opportunities in the U.S. Onshore Oil and Natural Gas Industries. Their report was published in March of 2014, and according to their analysis, 90% of 2018 emissions will be coming from sources in existence in 2011. New and modified gas sources are covered by the newer regulations, but this leaves older infrastructure unregulated. Older systems and “Natural gas systems’ methane equipment, like compressors, valves emissions have decreased and distribution pipelines would be nine percent and CO2 has an beyond the scope of the new rules.
increase of less than one percent
The EPA’s Inventory of U.S. compared to the 1990 data. Greenhouse Gas Emissions and This increase is due to better Sinks (EPA’s latest draft released technology and equipment and in February of 2015), notes that natural gas systems’ methane the usage of plastic pipelines emissions have decreased nine instead of unprotected steel and percent and CO2 has an increase of cast iron.” less than one percent compared to the 1990 data. This increase is due to better technology and equipment and the usage of plastic pipelines instead of unprotected steel and cast iron. The draft states that methane emissions from crude oil production have increased by 33 percent, accountable for 0.4 percent of the oil industry’s fugitive emissions. Since the oil sector provides such a small percentage of the total emissions in the petroleum industry, it has little impact on the numbers and little interest from the advocacy groups.
April 2015
Page 15
The recent draft inventory asserts that in processing natural gas liquids, the emissions from compressors are the primary cause of fugitive emissions. In 2011, the EPA began requiring compressor stations with high levels of CO2 emissions to report their documentation to the EPA GHGRP, the largest effort in the transportation and storage sector to collect methane emissions data.
Tanks & Domes
Gathering Lines Gathering systems, lines that take natural gas from well pads to processing plants, refineries or transmission pipelines, are lightly regulated if at all. The onshore gathering pipelines are an estimated 240,000 miles of lines across the country, most of which do not need to report to the stringency of larger, high pressure pipelines and the facilities associated with them. Pipeline Safety advocacy groups have concerns over the volatility of the product in the gathering lines and the potential for levels of GHG emissions emanating from those lines.
Frac Storage
The various shale plays across the U.S. (Marcellus, Utica, Barnett and Bakken) utilize larger diameter, high pressure gathering lines. As oil and gas production continues to grow, collecting data on the gathering pipelines could contribute to enhanced safety to people and the environment. In order to achieve the most absolute data relating to methane emission quantities and causes, we need to look in all directions. Focusing only on the more easily measured infrastructure may be leaving a gap, it may be creating incomplete results. The EPA needs to review the external surveys and data while incorporating industry knowledge into their program’s methodology. Taking these extra steps will ensure a cleaner, safer environment for our future generations. For more information, please contact Morgan Abele at 610-487-4631 or morgan. abele@pulsinc.com
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Page 16
The Northeast ONG Marketplace
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Page 17
Page 18
The Northeast ONG Marketplace
INDUSTRY INSIGHT
THE TOP SHALE OIL AND GAS DEALS OF 2015 By: Rick Stouffer, Senior Energy Editor, Shale Energy Business Briefing Contribution By: Kristie Kubovic, Director of Communications, Shale Media Group Edited By: Mindy Gattner, Editor, Shale Media Group
The deal remains subject to the granting of a final order by the Court of Queen’s Bench of Alberta province, the receipt of required regulatory approvals and the satisfaction or waiver of other customary closing conditions. The buy is anticipated to occur in the second quarter of 2015.
The current downturn of the shale oil and gas industry has initiated various changes within the industry—some positive and others negative. To weather the storm many companies are adjusting accordingly. Some are pushing forward, while others are cutting back. Here is a look at some of the top transactions thus far in 2015 as they appeared in Shale Energy Business Briefing (SEBB). The mergers and acquisitions (M&A), joint ventures (JV), and pipeline projects below highlight that even in this industry downturn there are still advantageous actions occurring and companies are benefitting. Once the storm passes, many of these companies will be very favorably positioned. Mergers and Acquisitions (Top 5 M&A Deals since January 1) 1. Energy Transfer Partners Acquiring Regency Energy Partners in $18 Billion Deal Posted: 1/26/2015 Pipeline giant Energy Transfer Partners (ETP) is acquiring midstreamer Regency Energy Partners (RGP) in an $18 billion deal, including the assumption of debt and other liabilities totaling $6.8 billion. The transaction is characterized as a unit-for-unit merger, plus a one-time cash payment to Regency unit holders totaling $18 billion. The deal is expected to close in the second quarter of 2015. Energy Transfer Equity (ETE), which owns the general partner and 100% of the incentive distribution rights of both Regency and ETP, has agreed to reduce the incentive distributions it receives from ETP by $320 million over five years. The merger creates cost savings, capital efficiencies, and valuable ancillary benefits for both Regency’s and ETP’s unitholders, the companies said. The presence of ETP and Regency in the Marcellus and Utica will also be complemented by the significant activity of Sunoco Logistics Partners, another Energy Transfer unit. ETP said it intends to become a major player in the Marcellus and Utica Shales and believes pro forma this merger, it’s positioned to achieve that goal near-term. 2. Talisman Energy Shareholders Approve $13.3 Billion Acquisition by Spain’s Repsol Posted: 3/19/2015 Calgary-based Talisman Energy said Wednesday, Feb 18, the holders of its common and preferred shares approved the proposed $13.3 billion acquisition of the company by Spain’s Repsol SA.
3. Enterprise Products Partners, Oiltanking Partners Complete $5.9 Billion Merger Posted: 3/13/2015 Enterprise Products Partners and Oiltanking Partners said Friday, Feb 13, the $5.9 billion merger of Oiltanking into Enterprise has been completed. Approximately 99.87% of the Oiltanking Partners common units voted were cast in favor of the merger, including 54.8 million units (roughly 66% of the outstanding Oiltanking Partners common units) owned by Enterprise Products Operating, a wholly-owned subsidiary of Enterprise. Under the terms of the merger agreement, unitholders of Oiltanking Partners (other than Enterprise and its subsidiaries) are entitled to receive 1.3 Enterprise common units for each Oiltanking Partners common unit. Cash will be paid to Oiltanking Partners unitholders in lieu of any fractional units they otherwise would have been entitled to receive in accordance with the agreement. 4. Atlas Energy, Atlas Pipeline Unitholders OK Mergers with Targa Resources, Targa Resources Partners Posted: 2/20/2015 Atlas Energy and its midstream oil and gas subsidiary, Atlas Pipeline Partners, announced Friday, Feb 20, the companies’ unitholders approved the pending merger transactions of Atlas Energy with a subsidiary of Targa Resources and Atlas Pipeline with a subsidiary of Targa Resources Partners. Targa Resources and the partnership it controls is acquiring Atlas Energy and Atlas Pipeline for roughly $5.87 billion, including $1.8 billion in debt assumption. The deal adds to Targa’s ability to process, ship, and export US natural gas. Targa, which owns a Gulf Coast plant to export natural gas liquids including propane and ethane, gains a foothold in the Eagle Ford Shale play, as well as the Mississippi Lime and Woodford plays.
April 2015
Page 19
5. Kinder Morgan Closes $3 Billion Hiland Acquisition Posted: 3/13/2015
Pipeline Projects (Top 5 Pipeline Projects since January 1)
Houston-based Kinder Morgan on Friday, Feb 13, closed its previously announced $3 billion acquisition of billionaire Harold Hamm’s Hiland Partners, including the assumption of roughly $1 billion of debt.
1. Magellan Midstream, Plains All American to Build $800 Million-$850 Million Saddlehorn Pipeline Posted: 2/27/2015
Hiland’s assets, mostly fee based, consist of crude oil gathering and transportation pipelines and natural gas gathering and processing systems, primarily serving production from the Bakken Formation in North Dakota and Montana.
Tulsa, OK-based Magellan Midstream Partners may have been forced to extend the open season for its proposed Saddlehorn Pipeline six times, but on Friday, Feb 27, the company announced it had found a project partner: Plains All American Pipeline.
Hiland’s customers include Hamm’s Continental Resources, Oasis Petroleum, XTO Energy, Whiting Petroleum, and Hess. Joint Ventures (Top 3 JV Agreements since January 1) 1. Enterprise, Anadarko, DCP Midstream, MarkWest Form JV to Own Panola NGL Pipeline Posted: 2/24/2015 Midstreamers Enterprise Products Partners, DCP Midstream Partners, and MarkWest Energy Partners, along with independent producer Anadarko Petroleum announced Tuesday, Feb 24, the quartet has formed a joint venture, with Enterprise splitting 45% of its ownership equally among the three partners in its Panola Pipeline Co. Enterprise will continue to serve as Panola Pipeline operator and own the remaining 55% of the company. The Panola Pipeline, which transports natural gas liquids, originates in Carthage, TX, and extends 181 miles to Mont Belvieu, TX. Following a successful open season, Enterprise recently announced plans to install 60 miles of new pipeline, as well as pumps and other associated equipment as part of an expansion project designed to increase Panola capacity by 50,000 barrels per day (BPD). The incremental capacity is expected to be available in the first quarter of 2016. 2. Santa Fe Midstream Forms Partnership with PEF Energy Spectrum Capital Posted: 2/11/2015 Plano, TX-based Santa Fe Midstream on Wednesday, Feb 11, announced it’s partnering with private equity firm Energy Spectrum Capital, which will initially invest up to $150 million in equity to pursue midstream opportunities across the US. Santa Fe Midstream’s management team is led by the company’s four founding partners, including Greg Kegin, CEO; Amer Rathore, Founder; Clay Gordon, Vice President-Commercial; and Paul Dolan, Vice President-Engineering. 3. Plains All American Forms JV with Delek Logistics to Build $100 Million Caddo Pipeline Posted: 3/23/2015 Midstreamer Plains All American Pipeline on Monday, March 23, announced the formation of Caddo Pipeline, a 50/50 joint venture with Delek Logistics Partners, to develop the $100 million Caddo Pipeline. The 80-mile, 12-inch Caddo line will originate at the Plains Atlas Terminal in Longview, TX, and will have the capacity to move up to 80,000 barrels per day (BPD) of domestic crude oil to supply refineries in the Shreveport, LA, area and Delek Logistics’ pipeline system supplying Delek US Holdings’ El Dorado, AR, refinery.
The two companies announced Friday, Feb 27, they have formed Saddlehorn Pipeline Co, a 50-50 limited liability company (LLC), to construct, own, and operate the $800 million-$850 million Saddlehorn. The roughly 550-mile pipeline will transport various grades of crude oil from the Denver-Julesberg Basin, and potentially the broader Rocky Mountain area resource plays, to storage facilities in Cushing, OK, owned by the partners. A pipeline extension to Carr, CO, in north-central Colorado, is also under consideration for connection to existing crude oil assets owned by Plains in that region. 2. Tallgrass, AGL Conclude Non-Binding Open Season for Proposed Prairie State Pipeline Posted: 2/13/2015 The pipeline company, Tallgrass Development, and energy services firm, AGL Resources, said Thursday, Feb 12, they have successfully concluded the non-binding open season for their proposed Prairie State Pipeline. The line is designed to move natural gas from supply connections in central Illinois to the Chicago Market Center and points in between. The roughly 140-mile Prairie State Pipeline’s expected capacity is between 1.2 billion cubic feet per day (Bcf/d) to 1.5 Bcf/d, which will provide additional supply diversity and access to the Illinois and Midwest markets, while increasing reliability through new infrastructure construction. The project will connect interstate pipelines in Douglas County, IL, to 4 Bcf/d of delivery points, including gas distribution systems, natural gas storage fields, and interstate pipeline companies in the Chicago market. 3. EQT Selling Marcellus Pipeline System to Midstream Unit for $1 Billion Posted: 3/11/2015 Pittsburgh-based EQT said Tuesday, March 10, it plans to sell its Northern West Virginia Marcellus Gathering System, along with a preferred interest in an EQT subsidiary, for $1.05 billion, to the company’s pipeline unit, EQT Midstream Partners. EQT Midstream said it plans to invest $370 million over the next few years in system expansion projects, including the installation of 100 miles of gathering pipeline and five compressor units. Currently, the system has 70 miles of natural gas gathering pipeline and nine compressor units with 25,000 horsepower of compression in the
Page 20 Marcellus Shale play, according to the company. In addition, the system includes a 30-mile, high-pressure wet gas header pipeline that moves wet gas from the development areas to the MarkWest Mobley (WV) processing facility. EQT contracted for 10-years of firm capacity on the system. EQT holds roughly 76,000 acres in northern West Virginia that surround the acquired gathering system, including approximately 59,000 undeveloped acres. At Dec 31, there were 199 Marcellus wells and 20 Upper Devonian wells being serviced by the gathering system, with an average gathered volume of about 410 million cubic feet per day (MMcf/d). 4. Marathon Pipe, Ohio River Pipe Extend Binding Open Season for Cornerstone, Utica Projects Posted: 3/16/2015 Marathon Pipe Line and Ohio River Pipe Line, both subsidiaries of Marathon Petroleum’s MPLX, on Friday, March 13, announced an extension of the binding open season for the Cornerstone Pipeline and other associated Utica Shale buildout projects to April 13, from the original March 13, Shale Energy Business Briefing (SEBB) learns. The proposed Cornerstone Pipeline will originate in Harrison County, Ohio, and deliver crude oil to Marathon Petroleum’s Canton, Ohio, refinery and to Ohio River Pipe Line’s East Sparta, Ohio, tank farm.
The Northeast ONG Marketplace The pipeline will be a batched system with the ability to transport condensate, natural gasoline, diluent, and butane. The estimated in-service date for the Cornerstone Pipeline is anticipated to be late 2016. Marathon Pipe Line, as operator of Ohio River Pipe Line, is also moving forward with various Utica build-out projects to provide service to additional markets beyond Canton. Cornerstone will deliver product into the East Sparta tank farm for transportation to additional markets via the Utica build-out projects, which include new construction and utilization of existing pipelines. 5. Medallion Pipeline Launches Binding Open Season for Crude Oil Pipeline Posted: 2/12/2015 Medallion Pipeline, a subsidiary of Irving, TX-based midstreamer Medallion Midstream, on Wednesday, Feb 11, announced a binding open season for firm transportation capacity on the second major expansion of the company’s existing crude oil pipeline system. The proposed project will further extend and expand the geographic scope of the existing 200-mile, 95,000 barrel per day (BPD) system. The Santa Rita Lateral is a proposed 65,000 BPD, 10-inch and 8-inch crude oil line which, along with smaller diameter pipe, will extend roughly 55 miles southwest of Medallion’s existing Reagan Station in Reagan County, TX, to production areas in southwestern, central, and northeastern Reagan County. A part of the overall project is a proposed 30,000 BPD minimum expansion of Medallion’s existing 10-inch Reagan Gathering Extension, which originates at the Reagan Station and extends roughly 55 miles north to the Garden City Station in Glasscock County, TX.
Shale Media Group (SMG) is the news, information, and education resource dedicated to the shale oil and gas industries by messaging across video, Internet, publications, events, and radio. For more, check out ShaleMediaGroup.com to access all platforms. In addition, join us on April 23rd for our next Elite Energy Event in at the Holiday Inn Express in Bentleyville, PA from 5-8pm. Rick Stouffer is the Senior Energy Editor at Shale Media Group. Contact him at RStouffer@ ShaleMediaGroup.com. Kristie Kubovic is the Director of Communications at Shale Media Group. Contact her at Kristie@ShaleMediaGroup.com.
Cornerstone is being designed as a 16-inch pipeline system that will be routed to provide for connections to various Utica Shale condensate stabilization facilities, fractionator facilities, cryogenic facilities, along with potential future gathering and storage facilities.
April 2015
Page 21
UPCOMING EVENTS APRIL 8
MAY 4-7
Utica Upstream 2015
Offshore Technology Conference
Canton, OH | www.cantonchamber.org/utica-upstream
Houston, TX | www.otcnet.org
8-9 AADE National Technical Conference San Antonio, TX | www.aade.org
8-10 Showcase Ontario Windsor, ON | www.showcaseontario2015.com
13-15 SPE International Symposium on Oilfield Chemistry The Woodlands, TX | www.michiganoilandgas.org
14 Michigan Petroleum Conference Traverse City, MI | www.michiganoilandgas.org
11-12 Appalachian Regional Shale Conference Farmington, PA | www.neienergy.com
14 IADC Drilling Conference Houston, TX | www.iadc.org
19-21 Eastern Gas Compression Roundtable Pittsburgh, PA | www.egcr.org
20-21 SPE Produced Water Handling and Management Conference Galveston, TX | www.spe.org
14-15 Embracing Energy Conference for Women Wheeling, WV | www.wvonga.com
16 Upstream PA 2015 State College, PA | www.upstreampa2015.com
20-22 OGIS New Yoirk New York, NY | www.upstreampa2015.com www.ipaa.org
JUNE 22-25 A&WMA Annual Conference Raleigh, NC | www.ace2015.awma.org
23-25 DUG East Pittsburgh, PA | www.dugeast.com
28-29 Ohio Valley Oil and Gas Expo St. Clairsville, OH | www.michiganoilandgas.org
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NEW TECHNOLOGY
M2M REMOTE ASSET MONITORING By: Joe Mitchell– VP LevelCon, Sales and Support In today’s fast paced oil and gas industry, having data at the push of a button is quickly becoming an absolute necessity rather than a luxury. M2M (machine 2 machine) Equipment monitoring and tracking is essential to the speed and efficiency in which business moves, and if you are part of the exception and not the norm, opportunities for growing your business will quickly pass you by. Picture this: You are in the middle of a fracking operation, your crew has been going strong and steady for hours and suddenly your operation is interrupted due to a lack of fuel, water, lubrication or injection chemicals. You are forced to put an employee in a potentially unsafe position as they must climb on top of a tank, trucker, or rig to take a look at the asset’s level, only to find that one of your most crucial fluids have run dry. The operation stops, production stops and increased costs for idle employees take over. Now, imagine this scenario on a Sunday evening and you have no other option than to pay double or triple the amount for fluids for an emergency delivery. This situation could have easily been avoided with a LevelCon remote asset monitoring devices in place. LevelCon will provide you with remote fuel, chemical, lube or water tank levels, equipment runtime, pump status alerts, GPS coordinates, Geo fencing, camera snap shots and live streaming video. All this data can be delivered in seconds and on one web portal. LevelCon – a brand of Micro-Design Inc. has been in the remote telemetry business for over 30 years, producing countless product lines capable of monitoring any piece of equipment anywhere on the globe. The CEO and owner of MDi cut his teeth in the Oil and Gas market in south Texas and our company is one of the most reliable and experienced monitoring companies in the world. What is an M2M monitoring device? Our remote monitor is a highly intelligent, yet inexpensive piece of equipment providing individuals the ability to pull crucial, time sensitive data from any device, machine or tank in any location via a cellular or satellite connection. LevelCon produces several different and very specific product lines that allow our customers to view their entire operation from one screen, and from the comfort of their office. The levelCon system is time tested and proven to be, extremely reliable and accurate. In 30 years, we have encountered and overcome more industry challenges than a vast majority of new monitoring companies have even thought of. Implementing this equipment will cut costs, cut safety issues and increase productivity. Our technology not only delivers crucial data to your computer, but to any handheld device as well. Receive daily, weekly or monthly asset updates via email or text message, or use your mobile device to check your production. Moreover, use our industry standard and highly secure API to seamlessly pull data from our database directly into your existing system. We integrate the data with countless systems so your vital data stays in one place and on one platform. Do you need to transfer a fill transaction from a fleet truck’s pump to the cab or handheld for accounting purposes? Not a problem. Our Bluetooth module can easily push any data transaction to all your driver’s compatible equipment.
LevelCon’s equipment is cost effective, easy to install and even easier to deploy. Once a remote monitor is installed at a customer site your dispatchers can schedule all deliveries and pickups based on the trend data provided and from the email alerts for low and high tank levels. If you install a similar monitor on your delivery vehicles, you gain access to location, speed, fuel use, dispensing pump, flow rate and mobile tank levels as well. With a LevelCon remote monitor, you will know when the driver arrives at the site, exactly how much the driver can deliver or Pull, how much flows through the pump, how much mobile capacity is available. The entire transaction is verified with a few clicks of a button. Our modular approach to the equipment we produce and sell and our ability to customize this equipment to our client’s needs is what puts LevelCon in the forefront of the market. Our remote devices are compatible with a wide array of sensor technologies from well-known and trusted companies around the globe. LevelCon’s business model has never been based on an off the shelf product, but rather a paired set of technologically advanced products that deliver what no other company can- Assurance and peace of mind. The following are applications of currently LevelCon deployed monitors around the world. Pump Controls • Control pumps based on tank levels, i.e. Turn on the pump when level reaches a low set point and turn it off when level reaches a high set point. • Tank Overflow Prevention – Monitor fluid levels and disable pumps when levels reach high set points to prevent spills and EPA fines. • Remote pump start/stop. Based on any remote off site parameter such as remote tanks filled by pump stations several miles away. Backup Generators • Monitor run status, hour meter, exerciser, fuel levels, fault shutdowns and remote reset, and startup. • Theft and GPS tracking Oil & Gas • Monitor and control oil well pumps – remote start/stop/reset. • Power fail, overload trip faults, power phase failure. • Flares stack operation – gas leak detection, fire off status, ignition status, etc. • Oil and waste water tanks levels, overflows, flow rates, and leaks. • Theft monitoring – camera snap shots, video clips triggered by motion detectors and event tagged, control valves remotely. • Perimeter monitoring, gate control, etc. Cellular Towers • Monitor backup generator operation, fuel levels, copper theft, Equipment shed temperature environment controls, site security, gate control, snap shots and video clips with event tags. Compressor Skid • Monitor complete operation – temperatures, pressures, RPM, faults, remote control, noise levels, etc.. • Complete HMI/SCADA integration on LevelCon web based ScadaPoint Visit it us at www.levelcon.com today and start takin control of your valuable assets now.
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April 2015
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April 2015
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The Northeast ONG Marketplace
LEGAL & FINANCE
FIVE TIPS EVERY RISK MANAGER IN THE ENERGY SECTOR SHOULD BE DOING TO ADDRESS FALLING OIL PRICES By: John D. Collado, CEO, Southwest Regional CEO at USI Insurance Services. If the sharp drop in oil prices persists, the slowdown in economic activity could spill beyond the reeling energy industry and possibly outside affected oil-producing states. Currently, oil and gas companies, as well as steelmakers, local banks, construction firms, and the real estate markets in such oil towns as West Virginia and other oil producing regions, are taking the direct brunt of falling oil prices. The oil and gas companies and related support industries borrowed heavily on the assumption that oil would remain close to $100 per barrel – it is now more than 50% below that projection, wiping out billions of dollars in actual and projected value. These falling oil prices have been placing greater pressure on risk management in the energy sector often requiring CFOs to justify current insurance program limits and premium spending. While much has been written about these potential market changes, there hasn’t been many articles focused on solving the specific risk challenges the energy industry is facing. The following are five recommendations that risk managers in the energy space can employ to address current financial concerns. Contract Review – Risk managers working in oil and gas companies should ask their broker or insurance carrier to conduct a comprehensive evaluation of their contract including their vendor, and lease contracts. The review helps to determine if indemnification language and insurance limit or deductible requirements align with existing coverage, company’s risk appetite and its financial capacity. Through this process companies are able to avoid uncovered claims for risks they are unknowingly taking on via contract language. For example, USI evaluated the insurance program of a global manufacturer of pipes and fittings for oil and gas companies and discovered why the company was having difficulty attracting vendors to sell their products – the existing contracts did not contain the additional insured vendor endorsement to protect vendors from product liability claims. The addition of this endorsement was negotiated, which ultimately eliminated and clarified liabilities and further helped the company increase sales by 20% or $16 million. Classification Review – As risk profiles change along with business models, it is important to have the tools in place to review general liability classification codes to identify potential errors and reduce premium cost to reflect such changes. Properly classifying employees for worker’s compensation, revenues for general liability, and vehicle types for auto liability has an immediate impact on what a company pays in premium for these standard coverages. Exposure Review – Probabilistic models provide clients a clearer picture of potential risks and possible financial impact. By conducting a thorough review of
insured values for properties, business, and general liability, a company can more accurately identify potential exposures and thereby mitigate risk and reduce cost. Collateral Review – Reviewing collateral requirements and subsequent elimination of collateral can directly increase a company’s lending capacity and help improve a strained balance sheet. Loss Forecasting – By collecting and analyzing currently valued loss experience and historical exposure data, risk managers can determine the future ultimate cost of open claims and expected losses for the next three to five years. This process would allow an energy company to determine the most capital efficient deductible or retention structure for their insurance programs. As oil and gas companies experience revenue declines it is extremely important that they know the liabilities they may face in the future. Risk Management – Companies restructuring or involved in M&A will want to have access to competitive markets for D&O, errors & omissions, credit insurance, environmental coverage, employment practices liability insurance and representations, and warranties insurance. Reducing exposure to loss directly translates to current or future liabilities, and it is critically important to minimize exposure to possible successor liabilities in M&A activity. Goldman Sachs estimates that $2 trillion-worth of future investments in projects such as shale developments will be foregone as more companies announce plans to cancel or postpone drilling projects. Declining revenue, massive layoffs, consolidation and D&O litigation brought on by increase bankruptcy filings are all very real issues the oil and gas industry is facing. And, it is not only affecting the likes of Exxon and Caterpillar, both of which suffered sharp declines in fourth-quarter profits, but small and midsize firms are feeling the pinch even more. However, by integrating this five-step guideline into a company’s strategy, risk managers can take important steps toward reducing risk, saving on premium spending and ensuring the efficient use of capital is made. Partnering with a savvy broker is critically important to ensure you are properly protected in the face of falling oil prices. John D. Collado is Southwest Regional CEO at USI Insurance Services. John has more than 35 years of experience specializing in complex risk consulting across the energy and finance sectors and currently oversees operations and strategies across twelve Southwest offices and more than 500 professionals. The above recommendations are based off of a holistic, risk management approach known as USI ONE™ which uses proprietary analytics technology and local and national resources to solve business challenges. Email John at: John.Collado@usi.biz. For more information about USI or the USI ONE, visit www.usi.biz.
April 2015
Congratulations to the 3rd Annual Northeast Oil & Gas Awards Winners! celebrating success and the industry’s core values of health & Safety, environmental Stewardship and corporate Social responsibility. for full details on the northeast winners and to find out more about the oil & gas awards, please visit www.oilandgasawards.com
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Trucking company of The year – Presented by Kenworth
aWard for excellence in healTh & SafeTy - producTS
Beemac Trucking
TekSolv
engineering company of The year
induSTry Supplier of The year
ARM Group Inc.
CASCO USA
WaTer managemenT company of The year
oilfield SerViceS company of The year
Keystone Clearwater Solutions
McCutcheon Enterprises, Inc.
aWard for excellence in healTh & SafeTy - operaTional
Bilfinger WeSTcon midSTream company of The year
Bilfinger Westcon Inc.
Columbia Midstream Group
conSulTancy of The year
neW Technology deVelopmenT of The year – general/producTS
Civil & Environmental Consultants, Inc. (CEC)
U.S. Well Services, LLC manufacTurer of The year Worthington Industries
Jc fodale aWard for excellence in corporaTe Social reSponSiBiliTy
aWard for excellence in Well compleTion
Dominion Resources
Packers Plus Energy Services Inc. conSTrucTion company of The year BOND VZ enVironmenTal aWard for excellence in enVironmenTal STeWardShip Range Resources neW Technology deVelopmenT of The year - SofTWare Shalewater Solutions The oil & gaS financial Journal TranSacTion of The year Southwestern Energy Company
eclipSe reSourceS aWard for drilling excellence Baker Hughes laW firm of The year Steptoe & Johnson PLLC general induSTry SerVice aWard IPC Energy Services, LLC Themark corporaTion e&p company of The year Eclipse Resources Corporation induSTry leader
James E. Kriebel - Kriebel Companies BreiTling energy fuTure induSTry leader Lauren R. Parker - Civil & Environmental Consultants, Inc. (CEC)
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The Northeast ONG Marketplace
April 2015
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855-269-1188 P.O. Box 1441 Oak Hill, WV 25901 www.ongmarketplace.com info@ongmarketplace.com
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The Northeast ONG Marketplace
David L. Lawrence Convention Center
June 23-25, 2015
Pittsburgh, PA
Resource Resilience Engineers enhance value in a prolific gas/liquids province Producers in the Northeast have unlocked the Marcellus formation – one of the world’s largest natural gas reservoirs and the undisputed driver of the U.S. shale gas revolution. Marcellus natural gas production has surged from 2 Bcf/d in 2010 to an estimated 16.7 Bcf/d, and production from the below-lying Utica formation has increased 12-fold. In the wake of this unprecedented growth, takeaway capacity remains a key challenge. Yet midstream operators are investing $20 billion through 2018 to build infrastructure that can move 20 Bcf/d of natural gas to lucrative markets across the country. Technological innovation gave producers access to this abundant resource. And the evolution of technology is allowing the industry to defy the odds and remain profitable. Since 2008, producers have slashed breakeven costs in half by finding ways to operate more efficiently. This June, the region’s most-active players take the stage at DUG East to discuss the latest efficiency-driven drilling and completions technologies.
Presented by:
Hosted by:
PLAYS
COVERED:
Marcellus Utica
FEATURED SPEAKERS OPENING KEYNOTE: Adam Sieminski
Administrator Energy Information Administration
LUNCHEON KEYNOTE: Dr. Charles Krauthammer
Columnist, Author and Pulitzer Prize Winner
3,100+ Industry Professionals 20+ Executive-level Speakers 320+ Exhibitors
Secure your seat at DUGEast.com