Bakken Oil Report - Spring 2014

2014

Spring

Busting media myths on fracking Industry proposes solutions to reduce flaring Western Energy Alliance: Educating the public on oil and gas practices Giving hope today: Williston Salvation Army helps those in need in the Bakken Don’t get caught on the wrong side of the track: Safety alerts and other recommendations in the wake of rail accidents State, private entities compete for industrial water customers

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Our operational expertise extends from hydraulic fracturing innovations, to state-of-the-art natural gas plants, solving transportation bottlenecks to maximizing recovery at our CO2 floods and relentless striving for improvement. Whiting’s asset portfolio provides a singular growth platform in the Bakken for years to come.

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Our legacy of Building a Strong America® began in 1924, bringing energy to farm communities on the Montana-North Dakota border. Headquartered in Bismarck, N.D., today we operate in 44 states, providing natural resource products and related services that are essential to energy and transportation infrastructure. We power homes, businesses and industry through natural gas, oil and electricity. We keep our economy moving by building and maintaining the country’s transportation network of roads, highways and airports. We connect homes, factories, offices and stores with pipelines and wiring. We are your resources for today and tomorrow.

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Since 1977, family owned and operated QMC Hydraulic Cranes of Fountain Valley California has been custom building cranes for well servicing applications worldwide.

Halliburton, Schlumberger and Weatherford are just some of the customers that have reaped the benefits of getting to have a voice in how they wanted their QMC cranes designed. Of special note is one of QMC’s own innovation, the fully integral trailercrane. Now a popular component in coiled tubing equipment “spreads”, this trailer not only supports a 100’ 4-piece boom, but enough deck space to carry the BOP, control cabin, lubricators, and hose reels.

Another innovation driven by a customer’s unique requirements is the 7060R boom truck designed specifically for pump-jack servicing. The boom is of custom design used for lifting gear boxes, concrete pads and other heavy job-site pieces. With its rear mount design, the crane can be positioned closer to the well than the competitor’s center-mount units. Of special note is its 9000 pound payload capacity that is often used for carrying options like custom built tool boxes, a hydraulic powered aircompressor, welder-generator, oxygen/acetylene bottles etc. Previously a separate service truck would be required to take this equipment to the job site.

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SPRING 2014 CONTENTS

Published by: DEL Communications Inc. Suite 300, 6 Roslyn Road Winnipeg, Manitoba Canada R3L 0G5

Message from the Honorable Steve Bullock, Governor of Montana 10

Shortage of affordable housing a challenge facing homebuyers and realtors 132

Montana Chamber of Commerce: Montanans want action 12

Best practices for trailer maintenance 134

Western Energy Alliance: Educating the public on oil & gas practices 16 Busting media myths on fracking 22

Custom rod strings for maximum protection 136 Focused on growth: Compass Compression opens new service branches in the Bakken 140

Industry proposes solutions to reduce flaring 28

ATEX-certified power tools = Safety in explosive atmospheres 142

Correct application of technology enables continuous monitoring, reduced downtime 34

Wanzek builds new depot to house equipment in the Bakken 146

Expansion projects improve Bakken takeaway capacity 40

Drake Water Technologies produces solutions for issues facing the oil and gas industry 150

Giving hope today: Williston Salvation Army helps those in need in the Bakken 44

Bismarck-Mandan: Gateway to the North Dakota oilpatch 154

Growing with the Bakken: Enerplus and the community 48

When it comes to heavy-duty toolboxes, it’s better to ‘Swivel’ than slide! 158

From the battlefield to the oilfield: Military veterans transition to new jobs 52

Mountainview Energy grows production in the Williston Basin 160

How North Dakota got it right (and how other states can, too!) 56

Rapid City, Rushmore region plays major supporting role in energy boom 162

MDU Resources Group plays integral role in the Bakken 60

Valin: Your precision measurement experts for LACT 164

U.S. energy independence: Bakken helping pave the way 64

Flameless heat: BTUs or temperature rise 166

Montana Energy event brings opportunity to Montana 74 Sliding-vane pumps in crude oil operations 76 State, private entities compete for industrial water customers 80 NOMADICTM offers innovative, readily transportable solution for wastewater management 84 Study address why sleep is integral to productivity, safety, health and well-being 86 Impacts of oil exploration and development on roadways in North Dakota 90 Controlling dust, stabilizing gravel roads key to combating high truck traffic 92 Bakken vehicles: Pickups rule 94 Overcoming remote-access, soft-soil challenges with lightweight mat systems 98 Obama signs bipartisan bill to expedite Bakken fracking 102 Super-sized containment: huge industrial liners vital to keeping worksites stable 106 22nd Williston Basin Petroleum Conference & Expo 108 Powerful mine dewatering: Electric and diesel centrifugal pump options 110 Improve winter productivity with the right air system 114 Bakken answers the naysayers with double and triple recoverable estimates 116 Don’t get caught on the wrong side of the track: Safety alerts and other recommendations in the wake of rail accidents involving Bakken formation crude oil 122 Crestmark helps you keep your money rolling 130

Veit: Providing innovative site-preparation solutions for 86 years 168 Inland Tarp & Liner serves the Bakken, Rockies and U.S. oilfield shale gas plays 170 Performance under pressure: Mi-T-M 172 Summit ESP – the Bakken supplier of choice 174 Bilfinger Westcon gets the job done, on time and on budget 176 CanElson Drilling (US), Inc. – a leading provider of oilfield services 180 Central Dakota Water Works LLC provides hot and cold water in the Bakken 182 A great partnership: Mid-Plains Distributing and TECO-Westinghouse 184

President David Langstaff Publisher Jason Stefanik Managing Editor Katrina A.T. Senyk katrina@delcommunications.com Sales Manager Dayna Oulion Advertising Account Executives Corey Frazer Gladwyn Nickel Mic Paterson Anthony Romeo Colin James Trakalo Production services provided by: S.G. Bennett Marketing Services www.sgbennett.com Art Director Kathy Cable Layout / Design Dana Jensen Advertising Art Caitlyn Hawrysh Haier Joel Gunter © Copyright 2014 DEL Communications Inc. All rights reserved.The contents of this pub­lica­tion may not be reproduced by any means, in whole or in part, without prior written consent of the publisher­.

Millennium Direction service sees new opportunities 186 Riley Bros. Construction – serving the Midwest since 1974 188 Rossco Crane & Rigging: ‘Three Men and a Crane’ 192 Lay-flat hose offers value to the industry 194 ACL Combustion provides modern combustion solutions 196 Bakken fueling unprecedented growth for Sintex Minerals & Services 198 Unit Liner introduces Enviro-Guard Temporary Containment System 200 Custom Stud’s Small Building Systems work smarter, not harder 202 Arrow Truck Sales the leading source of pre-owned heavy and medium-duty trucks 206 Restaurant biz booms in the Bakken 208

While every effort has been made to ensure the accuracy of the information contained in and the reliability of the source, the publisher­in no way guarantees nor warrants the information and is not responsible for errors, omissions or statements made by advertisers.

Opinions and recommendations made by contributors or advertisers are not necessarily those of the publisher, its directors, officers­or employees.

DEL

Communications Inc.

Index to Advertisers 209 PRINTED IN CANADA | 03/2014

8

BAKKEN OIL REPORT – SPRING 2014

MESSAGE

A message from the Honorable Steve Bullock, Governor of Montana

As 2014 unfolds, I’m proud to say that Montana’s vast energy resources continue to help create and maintain good-paying jobs while growing and diversifying our economy across all regions of the state. Affordable energy is – and will continue to be – important in driving our economy and powering our communities.

One industry that has seen significant growth because of energy development is metal fabrication and assembly. Companies that provide vital equipment and ancillary services to energy production – especially oil and gas production – are recognizing that Montana is a great place in which for them to do business.

New metal fabrication and assembly plants have been opening across Montana to provide machinery and hardware to the province of Alberta to further support development of the Bakken. At least five different companies have recently chosen Montana as a great place in which to conduct their business.

Lauren Engineers and Contractors opened a modular assembly plant in Bynum and an office in Choteau in January of 2012. Bay Limited opened up in Billings, while ADF has found a large and qualified workforce in Great Falls, and is nearing completion of their facility there. Yates Construction is operating near Bynum, and Greenberry Industrial is manufacturing near Cut Bank. Together, these companies will provide more than 1,000 new jobs in Montana.

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BAKKEN OIL REPORT – SPRING 2014

It should be no surprise that these companies are coming here. Montana is attractive to these businesses for several reasons; we’re ranked seventh in the nation for best business tax climate according to the Tax Foundation. The close proximity to Alberta and the Bakken also attracts this industry, as moving high and wide loads across the state for energy development is easily accomplished.

Additionally, training facilities and curricula developed by private industry and Montana’s university system have supplied a workforce certified to both U.S. and Canadian standards.

Just a few months ago, an industry trade publication, Oil Sands Review, noted a 2013 market study comparing the costs to fabricate structural steel prototypes common to oilsands projects in four regions (see chart), and findings show steel fabrication in Montana is promising.

Montana’s Total Installed Cost (TIC) is the lowest in the region.

While overseas options have the lowest supply cost, Montana boasts

lower installation and transportation costs. Additionally, projects manufactured and fabricated in Montana and Alberta were found to have less risk for large-cost overruns.

This is because more sophisticated tracking methods are used in Montana than overseas, which allows companies to better follow progress on the projects and avoid large-cost overruns. Montana, so it seems, is in the sweet spot.

It’s clear Montana’s industrial economy has experienced significant growth in recent years by supporting the development in Alberta. The direct and indirect jobs created by energy development in and around Montana are significant, and as Governor, I will work to ensure that these good-paying jobs are fostered and supported while safeguarding our quality of life. I am optimistic about Montana’s economic future and look forward to another great year of manufacturing and energy development. w

REPORT

By Webb Brown, President & CEO, Montana Chamber of Commerce

Montanans want action So many times we hear that resource development is “controversial” or folks are “split” on the issue. Well, once again, polling of Montana voters proves just the opposite.

Last October, the Montana Chamber of Commerce conducted its annual business attitudes poll, known as the Power-Base or P-Base poll. P-Base is a statistically-valid survey of 800 Montana voters on a variety of business and political issues with a margin of error of plus or minus 3.5 percent.

Voters Pick Development In the poll, Montana voters maintain solid support for many of our major industries, including oil and natural gas, coal, mining, and timber. For each of these industries, when asked whether they would encourage and promote them because of jobs and economic benefits or discourage because of potential environmental impacts, they overwhelmingly chose the former – 78 percent for oil and natural gas; 71 percent for coal; 73 percent for mining; and 82 percent for timber.

And this is not a new phenomenon. The last four years these numbers have been very similar. What politician or ballot issue advocate wouldn’t like to see those kinds of solid numbers?

Specific Practices Also Favored We also know folks can support a general concept and change their mind on specifics. So, the 2013 P-Base asked a series of questions of Montana voters to gauge support for business issues and concerns: • For this survey and last year’s, voters were asked whether they favor or oppose proposed EPA regulations that have caused

Sixty-seven percent of voters also feel that business will do the right thing when it comes to protecting the environment.

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THE RAPID CITY ADVANTAGE • Great Air Service – Direct flights to 8 cities, including Houston, Dallas, Denver.

• Education – Top-ranked schools like South Dakota School of Mines & Technology.

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BAKKEN OIL REPORT – SPRING 2014

• Economic Diversity – Agriculture, tourism, medical, financial, manufacturing.

• Black Hills are a million-acre playground for fishing, hunting, skiing, snowmobiling.

FIND OUT MORE BENJAMIN SNOW, President bsnow@rapiddevelopment.com www.RapidDevelopment.com Rapid City Area Economic Development Partnership 525 University Loop Suite 101 Rapid City, SD 57701 605-343-1880

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REPORT

The P-Base asked voters whether they think fracking should or should not be used in Montana. Despite efforts by environmentalists and Hollywood to sway public opinion against fracking, 59 percent of Montana voters support fracking while only 27 percent oppose – 14 percent were uncertain. coal-fired electric generation plants to close, while also making it more difficult to develop new ones. Voter opposition to these regulations actually increased from 52 percent in 2012 to 56 percent in the 2013 poll. Voter support decreased from 36 percent to 32 percent, with 12 percent uncertain.

• The P-Base survey has asked Montana voters over the past

The right place, right from the start It all started in the Williston Basin. When we launched Legacy Oil + Gas in 2009, this was our land of opportunity. The area has delivered on its promise ever since, helping Legacy evolve from an upstart junior to a premier intermediate producer.

Today, we are a company of over 100 people, with a development drilling inventory in excess of 2,000 net locations and 2014 exit production of 23,650 Boe per day. Technology-driven light oil resource plays continue to steer our success, with the Williston Basin as a core operations region.

Our Bakken, Three Forks and conventional assets have driven our strong growth and plays like the Spearfish ensure this pace continues into the future. And with our dedicated people, high quality light oil assets and extensive development inventory, we know we are in the right place for a story that is just beginning.

www.legacyoilandgas.com 14

BAKKEN OIL REPORT – SPRING 2014

couple years their opinion on developing the Otter Creek coal tracts and developing the railroad infrastructure to transport coal to markets. Voter support remained at 60 percent.

Opposition also remained at 20 percent, with that same number of people unaware or uncertain.

• This year’s P-Base asked a new question to measure voter support for policies that would open up Asian markets to Montana coal. A good majority of voters (53 percent) are in support, 33 percent oppose, and 13 percent are uncertain.

• With states and some localities around the country banning hydraulic fracturing, the P-Base asked voters whether they think fracking should or should not be used in Montana. Despite efforts by environmentalists and Hollywood to sway public opinion against fracking, 59 percent of Montana voters support fracking while only 27 percent oppose – 14 percent were uncertain.

• P-Base has been assessing voter opinion of constructing the Keystone XL oil pipeline across northeastern Montana to transport both Canadian and Montana oil to Gulf Coast refineries. Voter support remains strong at 63 percent, but decreased from last year’s high of 67 percent. Opposition increased from 24 percent to 26 percent, with 10 percent uncertain.

We Like Business Montanans also have a favorable opinion of business. Like past P-Base surveys, the 2013 poll asks a series of questions to gauge voter opinion and trust of the business community. When asked whether business can be expected to provide benefits to workers, 61 percent said yes, a decrease of nine percentage points from last year but right on par with previous years. Could this be related to the furor over Obamacare and the potential for business to lay-off workers and/or cut hours?

Sixty-seven percent of voters also feel that business will do the right thing when it comes to protecting the environment. Again, two-thirds trust business in this important area. We’re going to work hard to keep and build that trust.

Do Right, and Just Do It Overall, the 2013 P-Base survey of 800 Montana voters clearly demonstrates that they have a positive opinion of business and industry in the Treasure State of Montana. They support the creation of good-paying jobs through more natural resource development and they feel that prosperity does not come at the price of the environment and worker rights or benefits.

We at the Montana Chamber will continue to pursue the development of the riches we’ve been given. And it’s obvious that Montanans in big majorities support us in doing that. w

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MESSAGE

Educating the public on oil and natural gas practices

By Kathleen Sgamma, Vice-president of Government and Public Affairs, Western Energy Alliance

While the oil and natural gas industry provides abundant, affordable, clean energy with the associated job creation and economic prosperity, it has been proven that our good work can be threatened if the public does not believe we are developing in a safe and environmentally responsible way.

For that reason, Western Energy Alliance conducted a public

relations campaign highlighting the environmental stewardship of the western exploration and production industry. Our Common Ground1 campaign delivered over 44 million radio and online messages to targeted audiences across the West and in Washington, D.C. Our campaign centered on four short videos featuring a variety of western

voices, helping to inform the public that producers are good stewards of the environment by protecting the land2, air3, water4 and wildlife5 in our daily operations.

Western Energy Alliance represents over 480 companies engaged in all aspects of exploration and production of oil and natural gas in North Dakota, Montana, and across the West. Over the past 30 years, we’ve been advocating for policies that help to improve the business climate, but are focusing increasingly on public outreach as it becomes clear that we need to ensure we have a social license to operate.

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We take the word “Alliance” very seriously, and have cultivated deep relationships with stakeholders – landowners, ranchers, sportsmen’s groups, state officials, county commissioners, civic and business groups, and many others – who understand there’s common ground we share developing abundant, affordable energy while protecting the places in which we live, work, and raise our families.

The following are highlights of our Common Ground campaign. These are voices from within the industry and our partners – not paid actors.

These individuals represent the focus to preserve vital resources in the environment where they work.

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BAKKEN OIL REPORT – SPRING 2014

North Dakota is open for business, and one industry is investing conďŹ dently in our energy future. In communities across the state, oil & gas companies are investing in jobs, worker training, plants, equipment and advanced technology.

Mainstream Investors is a North Dakota-based private investment group with a focus on energy production in the Williston Basin. Through our investments, we are supporting oil & gas businesses throughout the state.

Investing in

North Dakota’s Energy Future

For more information, contact us today!

Mainstream Investors, LLC P.O. Box 4448 Minot, ND 58702

(701) 852-9444 Info@MainstreamND.com www.MainstreamND.com

MESSAGE

LAND Besides complying with hundreds of regulatory requirements in laws such as the Clean Air Act, the Clean Water Act, Safe Drinking Water Act, National Environmental Policy Act, National Historic Preservation Act, and the Endangered Species Act, oil and natural gas companies go beyond what’s required by law to ensure the environment is protected.

It is important for the public to understand the lengths our industry goes to comply with regulations and the coordination that exists with other stakeholders on the land.

For example, Stephanie Tomkinson, a senior biologist with QEP Resources, describes a land reclamation project on ranch property where QEP operates. “We have a location that was reclaimed 14 years ago. We came in and we re-contoured. We planted native vegetation. You’ll never know we were here. In my line of work, a success is when you get a location reclaimed properly to blend in with the surrounding landscape. We work together to make sure it’s done right.”

“The oil industry is relatively new as far as history. They’ve had to evolve faster than possibly ranching did, but we’ve learned, through communication, how to pat each other on the back and to help each other,” explains rancher Scott Chew. “Sometimes when energy companies go in and build locations, there’s an opportunity to damn-off a drainage and create a water hole. There are areas that are actually better now because of the reclamation work that was done, than they were before.”

AIR In our campaign, we highlight how energy companies are committed to maintaining quality air in the regions where they work. We show the work they are doing on and around well sites to protect the air.

“Green completions has been our commitment to the general public that we want to operate cleaner, safer, and faster,” explains Susan Alvillar of WPX Energy. “We capture the gas and that’s good for the environment, but it’s also good for the company.”

Operations manager Kevin Williams

Kathleen neset Geologist

PO Box 730 | 117 North Welo Street | Tioga, ND 58852 Office: (701) 664-1492 | Fax: (701) 664-1491 | Email: ncsoffice@nesetconsulting.com

www.nesetconsulting.com 18

BAKKEN OIL REPORT – SPRING 2014

highlights QEP Resources’ focus to reducing emissions from vehicles.

“People do need to understand that industry has put a lot of time, effort and money into trying to improve air quality. We’ve looked in detail at every aspect of every operation to find ways to reduce and mitigate emissions. Early in our development we identified trucks were a big source of our emissions. Thus we implemented liquid gather systems to help eliminate trucking fluids from a well site and eliminate emissions from a truck, the exhaust and the dust they create. I think we’ve done a good job of collaborating, working together trying to find common ground.”

WATER Water quality is a primary concern for citizens living near oil and natural gas operations, a concern shared by industry. Wells are constructed specifically with multiple layers of steel pipe and cement to ensure nothing inside the well can come into contact with underground drinking water aquifers. Spill prevention control and containment plans are in place at every site in the event of an accidental spill of produced water, drilling or hydraulic fracturing fluids, or hydrocarbons. These procedures ensure the vast majority of spills are contained and remediated on site.

Companies constantly work to reduce the amount of water used and to achieve higher rates of recycling and reuse. They clean up and re-use produced water and return it to the hydrologic cycle. For this reason, our Common Ground campaign features the work of an environmental consultant whose work is dedicated to improving practices and technology in order to achieve high rates of water re-use.

“My charge is to make sure that we as an industry responsibly use

MESSAGE

water,” explains Tekla Taylor, environmental consultant with Golder Associates. “Companies have to have water to do the exploration that they do. As you look into the future with increasing needs for water, there may be potential to treat that and then put it back into the hydrologic cycle for other uses, and you’re actually seeing that happening now.”

WILDLIFE Oil and natural gas development can co-exist with wildlife, and companies work hard to ensure that wildlife thrive in our operational areas. Besides complying with the Endangered Species Act and state wildlife regulations, oil and natural gas companies often further mitigate impacts by working with sportsmen and conservation groups for on-the-ground improvements to habitat and forage.

The industry, sportsmen and conservation groups are close partners when it comes to using natural resources. Denny Behrens of the Colorado Mule Deer Association highlights the lengths industry partners have gone to preserve wildlife.

“Hunting and fishing is a huge industry in this state. When the oil and gas companies moved in here and started doing exploration, we sat down and talked with them,” explains

Behrens. “They’ve helped us out with water projects, they’ve helped us out to do vegetation projects for mule deer. Not only mule deer but elk, grouse, small game and non-game species all benefit from what we’re doing here. We’ve seen a constant decrease in funding by the federal government, the U.S. Forest Service and the Bureau of Land Management, when it comes to habitat restoration. The only ones that have really stepped up to the plate to do anything have been oil and gas [companies].”

The oil and natural gas industry is part of the communities where we operate. We share the same values when it comes to protecting air, water, wildlife and the land. We do our part to deliver energy that people need to heat their homes, get safely to work and school, power their computers, produce their food, and generally support a high quality of life, while protecting the environment.

There’s truly common ground we share, and Western Energy Alliance will continue to promote safe and environmentally responsible oil and natural gas development. We’re expanding our campaign to focus on health and safety within our industry and the communities in which we operate. Stay tuned for more information.

REFERENCES: 1

http://www.westernenergyalliance.org/why-westernoil-natural-gas/protecting-environment/environmentalstewardship-video-series

2

http://www.youtube.com/watch?v=JDCLgcd-qZs&feature=s

3

http://www.youtube.com/watch?v=uhMIUK_IV-s&list=UUsbk

4

http://www.youtube.com/watch?v=wEQDGWjH5pc&list=UU

5

http://www.youtube.com/watch?v=uN_8opDchBA&feature=

hare&list=UUsbktdkBYBPedFnyAuw81Tg&index=4 tdkBYBPedFnyAuw81Tg&feature=share&index=3 sbktdkBYBPedFnyAuw81Tg&feature=share&index=2

NEED SOLUTIONS ACROSS THE BAKKEN? JUST ASK GOLDER.

share&list=UUsbktdkBYBPedFnyAuw81Tg&index=1 w

Oil and gas operators in the Bakken gain greater access to Golder Associates’ technical solutions with offices in Bismarck and Estevan. By providing independent engineering, construction, environmental and archaeological services for exploration, development, and production activities, we help clients reach their sustainability goals. From permitting to reclamation, upstream to downstream, contact Golder to find the right people and solutions for every stage of your project.

Engineering Earth’s Development, Preserving Earth’s Integrity.

Bismarck + 701 258-5905 Estevan + 306 634-2814 bakken@golder.com www.golder.com

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Busting media myths

on fracking

By Michael Sandoval

Sensationalism.

There is, perhaps, no more apt a way to describe the media’s treatment of the fracking industry. From headlines of articles to the manner in which the media portrays the evidence contained in them, the myths of a destructive extraction process are presented to an audience built on hype and speculation, not facts and results.

Sometimes aided by anti-fracking activists stocked with a slick grab-bag of platitudes, many in the media appear willing to readily accept the accusations and assertions offered, often with limited context. Corrections and context often come much later, if at all.

But even when so-called “fractivists” are not offering up the latest “flaming faucet” talking point, the media’s portrayal of fracking tends toward the “inflammatory,” as one critic, Energy In Depth’s Katie Brown, noted.

‘Cancer, Birth Defects and Infertility’ Take the recent study, published in the journal Endocrinology by researchers at the University of Missouri School of Medicine, focusing on drilling sites in Garfield County, Colorado.

“University of Missouri researchers have found greater hormone-disrupting properties in water located near hydraulic fracturing drilling sites than in areas without drilling. The researchers also found that 11 chemicals commonly used in the controversial ‘fracking’ method of drilling for oil and natural gas are endocrine disruptors,” the study’s release began.

Dr. Susan Nagel, an associate professor of obstetrics, gynecology, and women’s health at MU, outlined what the potential – not the conclusion – of the study should be.

“More than 700 chemicals are used in the fracking process, and many of them disturb hormone function,” she said. “With fracking on the rise, populations may face greater health risks from increased endocrine-disrupting chemical exposure.”

Cue the headlines.

“Drilling-area water found to contain hormone-disrupting chemicals” – Denver Post.

“Hormone-disrupting chemicals found in water at fracking sites” – Los Angeles Times.

Other outlets took a more direct approach, such as Denver’s Channel 7 News. “Fracking chemicals could cause infertility, cancer and birth defects, study finds,” the editors wrote.

In the Twitter era, headlines may matter more than ever. Social media outlets are flooded with “Upworthy”-esque headlines that go more or less like this.

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BAKKEN OIL REPORT – SPRING 2014

More than seven days passed before the Post issued a correction to that front-page photo, noting that it was not the remnant of an oil spill, but was merely leftover floodwater.

“You won’t believe what this new fracking study shows!” exhort the anti-fracking pied pipers.

Most readers will not receive the necessary contextual evidence that the samples collected in Colorado had been from drilled areas where spills had occurred and compared to samples taken hundreds of miles away in Missouri. That was the case with the story from Channel 7 News, which also neglected to mention the sample sites were spill locations, and not normal drilling sites.

Mark Jaffe, the Denver Post’s energy reporter, noted the spills and offered input from the state’s Water Quality Control Division, Steve Gunderson.

Gunderson offered criticism of the study’s methodology.

“The geology, annual precipitation and overall environment of Boone County is extremely different than Garfield County,” Gunderson told the Post.

“I’m not an alarmist about this, but it is something the country should take seriously,” Nagel told the Times in response to criticism of the study.

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Nagel’s comments in the study’s press release, quite often the only portion of the study that is written up by journalists on deadline, appear more alarmist than not.

But EID’s Brown pushed back against Nagel’s top line statements, noting that the study itself contradicted those conclusions.

“Interestingly, the authors of the report not only agree, but actually state that the EDCs [endocrine-disrupting chemicals] they examined could be coming from sources other than fracking,” Brown wrote.

She pointed to this passage in the MU study.

“Both naturally occurring chemicals and synthetic chemicals from other sources could contribute to the activity observed in the water samples collected in this study,” the researchers wrote.

Those and other mitigating, contextual qualifications went missing from most media outlets’ reports.

‘Media Blackout’ or Not? In the days following September 2013’s catastrophic floods in Colorado, anti-fracking activists leveled a new attack at the media – with thousands of people displaced and trillions of gallons of water inundating the state – where was the concern about oil and gas spills that must have taken place during the aftermath of the storm?

No less that Rep. Jared Polis (D-CO) added his voice to the concerns raised about “toxic spills.”

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“The total reported amount of reported [oil] spills is small compared to the solid waste that has spilled from damaged sewer lines and household chemicals from destroyed homes,” Matthew Allen, EPA Region 8 spokesman, told Energywire. “It wasn’t user error or improper operations; it all falls in the act-of-God category.”

“Not only have my constituents been dealing with damage to their homes, schools, and roads, they are increasingly concerned about the toxic spills that have occurred from the flooding of nearly 1,900 fracking wells in Colorado,” Polis wrote.

The Denver Post’s September 20 front page seemed to bear out those concerns as an overhead photo showed what appeared to be oil runoff, possibly from a damaged tank.

The above-the-fold headline blared: “Oil spilling into mix.”

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The only problem: it wasn’t.

Doug Flanders, director of policy and external affairs at the Colorado Oil and Gas Association, told The Colorado Observer that simply wasn’t true.

“There were no hydraulic fracturing operations functioning when the floods hit the region, no fracking equipment at the well sites, no fracking chemicals on any site,” Flanders told TCO.

“The 12 notable oil spills that did occur could fill five percent of an Olympic-size swimming pool and were the result of cracks in flowlines that connected to equipment,” Flanders continued.

“So, the fact people were saying we were having this fracking disaster is just completely and utterly false,” Flanders said.

City of Evans mayor Lyle Achziger, whose town was devastated by floodwaters, told a side of the story not mentioned in the media. Achziger noted that oil and gas companies like Noble Energy and Anadarko were among the first responders in the aftermath of September’s floods.

“In the opinion of all of us here, we could have no better neighbors and business members of our community than oil and gas,” Achziger said.

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BAKKEN OIL REPORT – SPRING 2014

TCO’s Audrey Hudson pointed to the media bandwagon, as CNN, Salon, and Rolling Stone – among others – rushed to share dramatic photos like the one headlined by the Post.

More than seven days passed before the Post issued a correction to that frontpage photo, noting that it was not the remnant of an oil spill, but was merely leftover floodwater.

But when evidence of massive spills, contamination, and public health concerns touted by anti-fracking activists and eagerly gobbled up by a sympathetic media failed to materialize, media outlets went back to reporting the facts.

“Although much attention was focused on spills from oil and gas operations, it is reassuring the sampling shows no evidence of oil and gas pollutants,” Dr. Larry Wolk said. The Colorado Department of Public Health and Environment chief medical officer found no evidence of contamination from oil and gas operations, including fracking.

“There were elevated E. coli levels, as we expected, in some locations.”

“By comparison, the oil spills represent about four percent of the 660,000 gallons it takes to fill an Olympic-sized swimming pool. The waste contained in the Evans plant alone would fill nearly two swimming pools,” the Denver Business Journal’s Cathy Proctor wrote.

The Associated Press added, “The river [South Platte] is a major source of drinking water and agricultural water but the state health department says the millions of gallons of sewage dumped into the river from broken sewer pipes and waste treatment plants pose a bigger problem.”

“Floodwaters quickly became a toxic soup of wastewater, raw sewage, industrial and household chemicals, agricultural waste and chemicals rushing downstream. Oil and gas releases, officials said, have been so small, it’s almost immaterial,” Mark Salley, spokesman for the state department of Public Health and Environment, told the Greeley Tribune.

The Environmental Protection Agency also came to the same conclusion.

“The total reported amount of reported [oil] spills is small compared to the solid waste that has spilled from damaged sewer lines and household chemicals from destroyed homes,” Matthew Allen, EPA Region 8 spokesman, told Energywire.

“It wasn’t user error or improper operations; it all falls in the act-of-God category,” Allen said.

City of Evans mayor Lyle Achziger, whose town was devastated by floodwaters, told a side of the story not mentioned in the media.

“In the opinion of all of us here, we could have no better neighbors and business members of our community than oil and gas,” Achziger said.

Achziger noted that oil and gas companies like Noble Energy and Anadarko were among the first responders in the aftermath of September’s floods. According to Achziger, the companies handed out gift cards for food and provided more than 200 port-a-potties due to a “no-flush” order in the city. Equipment for hauling,

digging, and cleaning were also made available to the city, providing critical infrastructural support in a time of crisis.

‘Media Myths and Fracktivists’ Resource developers should be under no illusion about the intent of those opposed to hydraulic fracturing.

With the media’s willing or unwitting assistance, their goal is not merely to study the effects of the process of hydraulic fracturing on health, geology, or local economies, but to ban the extraction method, and eventually the entire oil and gas industry, outright.

In November 2013, National Journal interviewed “fractivists” in Colorado pushing temporary moratoriums and local bans through ballot measures in four Colorado communities. They admitted their end game went far beyond mere concern.

“Davis, a self-described ‘fractivist’ whose full-time job is to mobilize people against fracking – and oil and gas drilling writ large – focuses mainly on the public-health and environmental

concerns. Ultimately, though, he is fighting to end fossil-fuel production altogether,” NJ wrote.

About the Author: Michael Sandoval is energy policy analyst and investigative reporter for the Independence Institute in Denver, Colorado. Michael was most recently an investigative reporter for the nation’s leading conservative think tank, The Heritage Foundation, where he specialized in coverage of green energy issues, government waste, and social media strategies. Michael’s work has been featured by the Drudge Report, The New York Times, Washington Post, Politico, Fox News, Fox Business News, Townhall and dozens of radio outlets around the country, as well as blogs like MichelleMalkin.com, HotAir.com, and Instapundit.com. w

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27

Industry proposes solutions

to reduce flaring

By Dan Larson

Photos by Dan Larson.

According to a study released by the non-profit research firm Ceres in July 2013, flaring natural gas resulted in the loss of approximately $1 billion in value if the gas had sold instead.

28

BAKKEN OIL REPORT – SPRING 2014

Responding to growing public and political pressure, the oil and gas industry presented the state of North Dakota with a proposal that would reduce flaring of associated gas to 10 percent of production within six years.

“Companies have come together to present a comprehensive plan that will help reduce flaring from current levels even as oil and gas production significantly increases,” states Ron Ness, president of the North Dakota Petroleum Council.

The proposal includes a series of recommendations developed by the NDPC Flaring Task Force and was presented to the North Dakota Industrial Commission (NDIC) on January 29th.

According to the NDPC, the task force represented the 500 member companies of the trade association and included 35 industry experts from the gas gathering, processing and transport segments of the oil and gas business. The group is reported to have met more than 20 times in less than five months to develop the proposal.

Normally “fierce competitors,” the fact that companies of all stripes were able to “work holistically” and remain “very focused” is unusual, according to the task force presentation at the NDIC. Last autumn, the task force was directed by the state to produce a plan to: • Reduce the volume of gas flared; • Reduce the number of wells where gas is flared; and • Reduce the time from first production gas to marketing gas sale.

As defined by the task force, “flaring of natural gas occurs when it is burned on location due to a lack of gathering

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pipeline infrastructure or economic alternatives. Flaring of gas is a much safer and environmentally friendly method of handling the gas than simply venting [it] to the atmosphere.”

According to a study released by the non-profit research firm Ceres in July 2013, flaring natural gas resulted in the loss of approximately $1 billion in value if the gas had sold instead.

Figures released by the N.D. Department of Mineral Resources (DMR) place percentage of gas flared at an average 30 percent for the past year, down from a high of 36 percent in 2011.

Based on data provided by the North Dakota Pipeline Authority (NDPA), the flaring task force said 296 million cubic feet per day (mmcfd), or 29 percent of gas produced statewide in Nov. 2013, was flared. About 60 percent of that was from 216 new well sites.

A higher portion of gas produced on the Fort Berthold Indian Reservation is flared, the task force said. Flaring on state and private lands outside the reservation totals 27 percent of gas produced, while 40 percent of gas produced on Fort Berthold is flared, it said.

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BAKKEN OIL REPORT – SPRING 2014

Unsurprisingly, such large volumes of gas being flared have not gone unnoticed. Several news articles and photo essays have noted that nighttime pictures of North America taken from outer space clearly show western North Dakota lit up like a large city.

Lynn Helms, director of the DMR’s Oil & Gas Division, said gas flaring has become the most controversial issue facing the NDIC, which manages 12 state regulatory agencies, simply because it is so visible. “The general public has honed in on this as a problem people want fixed,” he states.

The N.D. Industrial Commission is made up of the governor, state attorney general and the agricultural commissioner. Included in the 12 state agencies it oversees are the Department of Mineral Resources, the Oil & Gas Division and the Pipeline Authority.

All three commissioners have stated they remain very interested in viable solutions to the flaring issue.

On a tour of a new gas processing facility near Williston in January, Sen. Heidi Heitkamp recognized the effort and the tremendous investment industry has made to date in gas capture

and sale, yet noted “the challenges are many, but they’re going to be even more severe if we don’t get ahead of it.”

And if pressure from political leaders wasn’t enough, a batch of class-action lawsuits was filed across the state in October seeking millions of dollars in lost royalties and damages from operators as a result of the “wasteful practice of flaring,” according to one of the firms that filed the suits.

Filed in four western North Dakota counties, the lawsuits seek to represent as a class of plaintiffs those “North Dakota mineral rights owners who potentially have lost millions of dollars in royalties.” Bakken-produced gas is “some of the most valuable in the country,” the lawsuits state, because of its high levels of natural gas liquids, so they seek millions in damages to “create a compelling economic incentive for producers to reduce and eliminate” flaring.

The lawsuits name 10 companies as defendants. Lawyers involved in the litigation have opened a page on Facebook, but since filing the suits they have taken no further legal action.

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Factors in Flaring

exports more than 2.0 bcfd of gas and

Currently, the operator may flare for

Several factors that are distinctive to

between 120,000 and 150,000 barrels

one year, after which the operator must

production in the Bakken contribute

per day (b/d) of natural gas liquids. That

begin to pay royalties and taxes or cap

to levels of gas flaring that are higher

represents an industry investment of $6

the well, connect it to a sales line, on-site

than in other fields. According to the

billion over eight years.

electric generator or other value-added

NDPC task force: Bakken oil production

At its January meeting, the NDIC

usage.

includes a unique liquids-rich gas that

heard from members of the task force

The task force also recommended the

must be processed before it can be

on a proposal to significantly reduce

state provide assistance in developing

marketed; initial production rates are

flaring in all three areas of concern. Key

new technologies and infrastructure

high and then quickly fall off; rapid

to the plan’s success is a requirement

with tax credits, low-interest loans and

for the operator to file a Gas Capture

incentives for value-added ventures

Plan (GCP) with its regular Application

such as LNG and CNG, petrochemical or

for Permit to Drill (APD). Currently, the

fertilizer plants.

operator can file a GCP up to a year after

Members of the task force agreed

first production. Included in the GCP will

that the most difficult yet crucial part of

be the well location, nearest pipeline

their proposal was a recommendation

and processing plant, the capacity

that laws be passed to assist in speeding

expansion means infrastructure must be built faster but construction windows are limited due to bad weather; even as new infrastructure is built, it can’t fill connection gaps due to the tremendous geographic size of the Bakken; and delays are common in obtaining rightof-way agreements from landowners or tribal entities.

Flaring is a waste of a valuable resource and the industry is committed to work with the state to address the flaring issue, said a task force news release. “This is a very complex issue and

of gathering and transport lines, the volume of gas anticipated to flow from multi-well pads and an estimate of time needed to connect the well to gas sales.

The proposal adds that failure to file a GCP could result in the state delaying or

there is no silver-bullet solution,” the

denying the drilling permit. For existing

group stated.

wells, failure to file a GCP could see

Significant progress in capturing and

the operator being required to restrict

marketing more natural gas has been

production until a GCP is submitted

made, the task force said. Since 2006,

and approved. The state could grant the

nearly 10,000 miles of pipe has been

operator an extension for unforeseen

laid and 1.26 billion cubic feet per day

circumstances, such as bad weather

(bcfd) of new gas processing capacity

or disputed right-of-way (ROW)

has come online. North Dakota now

agreements.

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up right-of-way agreements. N.D. law is more restrictive than other states when it comes to surface condemnation or granting eminent domain when companies are unable to reach a ROW agreement with a landowner.

It was recommended that a ROW task force be formed to develop and review potential legislation to improve the easement process. The task force would include representatives of state regulatory agencies, county political leaders, landowner groups, and the oil and gas industry. The group would be led by the attorney general.

Obtaining right-of-way agreements can take up to 180 days, said one flaring task force member. And that is the single biggest delay in connecting wells to gathering systems. “We recognize that landowners can suffer from ‘easement fatigue’ when one company after another asks for permission to lay pipe across their land,” he said. “But we have to find some way for reasonable arbitration.”

“The industry recognizes the importance of capturing this valuable resource,” says NDPC president Ness.

Providing clearing, site work and full roustabout services to the oil and gas industry.

The task force recommendations “allow the industry to continue oil production, while capturing more natural gas for the

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BAKKEN OIL REPORT – SPRING 2014

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REPORT

By Lanny Harris, KLJ Director of Telecommunications, and Mark Luther, KLJ Government Relations

Correct application of technology enables continuous monitoring, reduced downtime While there has been oil production from both the Bakken and directly underlying Three Forks formations for many years, previous production exploited spatially limited zones where mobile oil – oil that had migrated from its zone of generation – was trapped. Early exploited traps were generally conventional structural, stratigraphic or permeability traps that collected oil which had migrated from source rocks some distance away.

Conventional traps generally have fairly sharp production boundaries, limited areal extent, and since the oil is mobile it can generally be tapped using simple vertical wells. In the most recent “Bakken Boom”, though horizontal drilling was used, it was used in an attempt to extract mobile oil that was contained in as many natural fractures as a horizontal well could intersect.

Oilfields tapping conventional

Figure 1

34

BAKKEN OIL REPORT – SPRING 2014

traps tend to have well-defined production boundaries, and are generally small in size when compared to the present extensive Bakken/Three Forks unconventional oil play which is extracting previously immobile oil that has moved little if any distance from its point of generation. The level and extent of production, storage and transportation infrastructure required for conventional versus unconventional oil plays is also vastly different, with unconventional production requiring extensive, widespread infrastructure unlike anything that has previously been seen in the Williston Basin.

While the Bakken formation covers approximately 55,000 square miles in the U.S., only approximately 10,000 square miles (about 90 percent is in North Dakota) or less than 20 percent of the Bakken can be considered to be within the

core production region. Still, compared to traditional conventional fields of a few up to thousands of square miles, the unconventional Bakken/Three Forks play is a large field. It has in fact either just become (production data is lagging), or in the near future will become, one of only 10 super-giant oilfields in the world.

Figure 1 shows the impact of horizontal drilling and hydraulic-fracturing on the oil production of just two states in the U.S., both of which now have super-giant oilfields (fields capable of producing >1 million barrels of oil per day). Texas, which has two super-giants (the Eagle Ford, and Permian Basin), has basically double the production of North Dakota, but in each case this is due to the extraction of previously immobile oil through the use of modern drilling and completion techniques.

As with all rapid growth – and

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REPORT

Figure 2 especially with resource extraction – there are numerous environmental hazards that must be addressed, avoided and/or mitigated. The actual process of using hydraulic-fracturing (fracking) is one environmental concern that has had enormous media and public scrutiny in recent years with regard to a variety of perceived hazards including groundwater contamination, earthquake initiation, and other perceived problems.

Fortunately the unique geologic system found in the Williston Basin makes the potential for fracking-related subsurface contamination to be a near impossibility.

However, environmental problems are occurring with some frequency.

While these specific problems are being addressed and mitigated, is there more that can be done to avoid these types of problems from occurring? The most frequent environmental concern needing further effort is the crude oil and produced water (generally saline water) spills.

Figure 2 illustrates spills of 20 barrels (42 gallons/barrel) or greater that have occurred within the Bakken/Three Forks super-giant “field” within the last 12 months (as of February 2014).

Can new technology help minimize hazardous spills from pipelines, tanks and well sites?

The challenges for wells, storage and transport management of oil and gas are unique. Their value, risk, length, and access conditions require monitoring as well as good maintenance routines. The main concern for owners and operators comes from possible leaks that can have an adverse impact on the environment and put the facilities out-of-service for repair. Leaks can have different causes, including excessive deformations caused by weather, wear, landslides, collisions, corrosion, faulty material, or intrusion.

Technology has already made a 36

BAKKEN OIL REPORT – SPRING 2014

positive impact on minimizing spills and leaks in the oilfield; however, in some cases, additional technology and its application may further help minimize spills and leaks. The level of monitoring for many pipelines and storage facilities has room for improvement. This is especially true for remote locations or long-distance pipelines.

Detection and localization of leaks can be accomplished using numerous applications of instrumentation, communications, data-processing software and good maintenance routines.

What are a number of solutions to consider for pipelines? First, some basic understanding of a pipeline leak. Gas pipelines generate a cold spot due to relaxation of gas pressure and a hot

spot at the location of a leak in the case of fluid pipelines. Both also have reductions in pressure and flow in the pipeline if the leak is significant enough.

Detection of these anomalies can be accomplished by the application of a distributed measurement system with good spatial, time, flow, pressure and possibly temperature resolution.

In addition, it is sometimes possible to detect a leak before it happens.

By measuring distributed strain, it is possible to determine the increased stresses due to external actions such as unstable soil, settlement, or the internal causes that reduce the cross-section of the pipe, such as corrosion and wear.

Pipeline monitoring system options could be in the combination of sensing cables, measurement instruments,

REPORT

and data-processing software. Different options are available for temperature sensing; strain sensing and combined strain and temperature sensing. The different distributed sensing solutions can cover pipeline lengths from hundreds of feet to hundreds of miles. There is also the application of flow and pressure measurements distributed along the length of the pipeline to measure and compare the differential in these parameters along the segments of the pipeline. Couple these instruments with software to detect differentials, intrusions, leaks and deformations, and then in turn display and publish the measurement results and warnings when abnormalities are detected.

What are some of the solutions to consider for well sites or storage facilities? Storage facilities, although just as high-risk for leaks, are a little simpler to manage. Instrumentation to measure tank levels, fluids in spill containment, and gas in the air are just a few things that are being used in the field today.

Since the site is more localized, there is also the option of cameras at key points on the site to remotely view and listen to activities or abnormalities on the site.

38

BAKKEN OIL REPORT – SPRING 2014

Remote control of these facilities may also be important, especially in the Bakken with its remote areas and winter weather that can impede access to these remote areas for days.

The ability to turn off/on pumps and motors, open and close valves and other functions based on information gathered from a site or a pipeline can not only minimize potential impacts to the environment and life, but can also save companies time and resources and reduce social and image liabilities.

Different solutions need to be applied based on location, weather, risk, cost, environment, and other considerations that may be unique to the facility. Acceptance of new projects can be aided by investing in the prevention of accidents. In addition, these investments can reduce insurance costs and promote the environmental consciousness of owners and operators.

One of the key components to facilitate the monitoring and control is communications from the site of measurement to a location where the information can be processed and acted on. Depending on the type of communications, and more importantly its availability, there can be many challenges in the Bakken. Some of the options to consider for communications in the Bakken are as follows:

REPORT

• Wireless – Fixed or mobile wireless solutions are a viable option. These have their challenges due to terrain, spectrum availability, interference, bandwidth, reliability, and operations (if owned). Portions of the Bakken are not conducive to wireless due to the hills and valleys of western N.D. The more rugged the terrain, the more radio towers are required to provide coverage where needed. Mesh wireless systems may have an application in some cases rather than a point-to-point network. A mesh network is a group of radios that can connect to each other, providing more than one path from a given radio back to an upstream connection point. This provides higher reliability and possibly more bandwidth from a given site. There are options available from commercial companies to buy the service or own your own network.

• Wireline – Wireline facilities are the most reliable type of connection. If available, fiber is the solution that can provide the most options for bandwidth, IP data, voice, video cameras and other services at a site. Copper facilities can provide various solutions but for data services, is distancesensitive. If cable facilities are not near the site, they can

take a considerable amount of time to get into place due to landowner easements, permits, and construction periods.

In the end, it may be worth the investment considering the life of the facility, the capabilities of the technology behind the fiber and the options that brings to the owner/operator.

There are facilities-based communication companies that are willing to work with operators to place these facilities, or you can place the facilities on your own.

The communications solution is determined by the information or control required for a site, how critical it is, and the amount of bandwidth needed. In addition to the type of facility, another consideration is ownership, and whether or not you want to own and operate a communications network or have someone else provide the service for you.

Technology, and the correct application, can provide the ability for continuous monitoring, reduction of downtime, and a higher potential for proactive response to situations. KLJ has the resources in communications, instrumentation and controls, and has the relationships in the Bakken to assist with your optimal solution. w

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Expansion projects improve

Bakken takeaway capacity

By Lisa Fattori

Map of the ambitious Sandpiper Project, which will start construction at the end of 2014 and is expected to be in service in 2016. Image courtesy: Enbridge North Dakota.

As Bakken oil production reaches one million barrels per day (bpd), sufficient takeaway capacity and access to preferred markets continues to be a priority among shippers. Expanded crude-by-rail services, combined with new pipeline infrastructure, are together working to meet the current demand and will ramp-up to accommodate what some analysts predict will be 1.3 million bpd by the end of 2015. Other influences, including a decision about the proposed Keystone XL project and new safety guidelines for the delivery of crude by rail, will help oil producers to adopt transportation strategies that are available today and in the future.

According to the North Dakota Pipeline Authority, 71 percent of oil transported out of the Williston Basin in November 2013, was by rail, which is an increase of seven percent from the year before.

Transportation by pipeline fell from 27 percent in 2012 to 22 percent in 2013. By the end of October 2013, North Dakota rail export volumes reached 800,000 bpd.

BNSF Railway Company reported an increase of 12 percent in the shipment of industrial products in the first three quarters of 2013, over the same period in 2012. This is primarily due to increased 40

BAKKEN OIL REPORT – SPRING 2014

shipments of petroleum products, driven mainly by increased crude unit-train loadings. Canadian National (CN) has also seen significant increases. In 2012, the railway moved more than 30,000 carloads of crude oil to various North American markets, and more than doubled that business in 2013. In 2012, Canadian Pacific (CP) shipped 53,500 carloads of crude oil and moved 90,000 carloads across the railway’s network in Canada and the U.S. in 2013.

During CP’s fourth quarter results announcement on January 29th, 2014, CP executive VP and chief marketing officer Jane O’Hagan commented on the railway’s increased volumes. “Our Q4 RTMs (Revenue Tonne Miles) were up 20 percent due to gains in crude oil and increases of frac sand originating from mines that continue to ramp-up their volume,” she said. “As I look to the outlook, our crude oil customers have confirmed they continue to value rail service and facility development, and the expansion is evidence of their commitment.”

Unlike the rollout of new rail infrastructure, pipeline expansion must undergo a more lengthy process of securing approvals and permits. Pipeline

capacity is expanding, however, and has already made an impact in the Bakken. In March 2013, Enbridge Energy Partners L.P. completed its Bakken Pipeline Expansion Project, which provides 145,000 bpd of capacity for oil produced in the Bakken and Three Forks formations. The scope of work included reversing and expanding an existing pipeline from Berthold, N.D. to Steelman, Sask. and constructing a new 16-inch pipeline from a terminal near Steelman to the Enbridge mainline terminal near Cromer, Manitoba.

Another milestone in Enbridge’s Bakken Expansion Program was the completion of the company’s Berthold Rail Facility, also in March. The facility includes a looped rail track capable of holding three unit trains, offering an export capacity of 80,000 bpd by rail. In August, Enbridge announced its plans to build a new 610-mile pipeline from the company’s Beaver Lodge Station, south of Tioga, N.D., to an existing terminal in Superior, Wisconsin. The ambitious Sandpiper Project will start construction at the end of 2014 and is expected to be in service in 2016.

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Pipeline construction west of Beaver Lodge Pump Station. Photo courtesy: Enbridge North Dakota.

for Enbridge North Dakota. “It’s the largest project that we’ve undertaken to move oil out of the Bakken to coastal markets. Enbridge is excited to invest these funds in North Dakota and Minnesota, and Wisconsin will benefit as well.”

A green light to the proposed Keystone XL project would give Bakken oil producers another option in transporting crude to the Gulf Coast.

In 2010, TransCanada announced plans to construct the Bakken Marketlink Project, which would provide an on-ramp for Bakken crude at Baker, Montana. The receipt facility could transport up to 100,000 bpd of crude oil from the Williston Basin to Cushing, Oklahoma, where it would then travel to Nederland or Houston refineries via the Gulf Coast Pipeline. Construction of the facility would cost $140 million and would coincide with the construction of Keystone XL from Hardisty, Alberta to Steel City, Nebraska. Preliminary work on the project, including acquiring land and engineering work, has started and TransCanada has already secured contracts for 65,000 bpd from the Baker facility.

Photo courtesy: BNSF Railway.

“When we envisioned the original Keystone XL, Bakken shale oil production was just in its infancy,” says Corey Goulet, VP of Keystone Operations for TransCanada. “The Baker terminal is set up to accept up to 100,000 bpd of Keystone’s total capacity of 830,000 bpd.

Bakken producers have shown a lot of interest and, if the opportunity arises, we’ll work with shippers to see if there is a need for future expansion.”

TransCanada’s recent completion of its Gulf Coast Pipeline is alleviating bottlenecking at Cushing, and the addition of the lateral pipeline to Houston next year will offer Bakken shippers even more markets for their crude. The Cushing to Nederland pipeline went into service in January and will transport, on average, 520,000 bpd in 2014. Crude oil delivery is expected to ramp-up to over 800,000 bpd as the demand for capacity increases.

“There has been a lack of takeaway capacity from Cushing, so producers should see better pricing now that we no longer have this constraint,” Goulet says. “Construction of the Houston lateral leg started last year and should be complete by the second quarter of 2015.

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gives shippers a lot more options in the refineries to which they can ship.”

The tremendous growth of pipeline and rail services in the transportation of crude oil has also given rise to new concerns about environmental stewardship and rail safety. In the last nine months, four train derailments and explosions – in Lac-Mégantic, Quebec; Alabama; North Dakota; and New Brunswick – has prompted regulators to examine current safety standards to see if new measures need to be taken to handle highly flammable Bakken crude.

In January, the Transportation Board of Canada (TSB) and the U.S. National Safety Board (NTSB) made recommendations that include better route planning, away from populated areas, for trains carrying dangerous goods; enhanced standards for all Class III tank cars; and the requirement that shippers of hazardous materials have an Emergency Response Assistance Plan in place.

In 2011, the rail industry voluntarily implemented new tank car standards, with improved designs including the installation of high-flow capacity values and more robust bottom outlets that won’t open in the event of an accident. Regulators have not ruled out

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Valve-turning celebration event at the Berthold Rail Facility in March 2013. The facility includes a looped rail track capable of holding three unit trains, offering an export capacity of 80,000 bpd by rail. Photo courtesy: Enbridge North Dakota. retrofitting older tank cars, as well as

a significant impact on the timeliness of

yet delivered. It takes industry time to

those manufactured since 2011, with

getting Bakken crude to market.

spec and build these cars and, if there’s

new safety features, including outer steel

“In 2011, railroads and tank car makers

a new design, it will take even longer.

jackets and thermal protection for tanks

toughened standards for stronger cars

We’ve adopted more stringent standards,

cars, head shields and high-flow-capacity

and, by the end of 2015, we expect over

but are prepared to go further, including

pressure valves. Retrofits would be a huge

50,000 of those cars will be in the fleet,”

making modifications to the existing

undertaking for the 100,000 rail cars in

says Thomas Simpson, president of the

fleet. We’re waiting for the government to

circulation that ship flammable liquids and

Railway Supply Institute. “There is already

report on the composition of Bakken oil,

the roll-out of new designs would have

a backlog of 55,386 cars on order, but not

which will give us some direction.” w

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Giving hope today

Williston Salvation Army helps those in need in the Bakken Story and photos by Craig Dirkes/The Salvation Army

Business is booming at The Salvation Army of Williston, N.D. But it’s not the same kind of boom that Bakken oil companies are enjoying.

The Williston Salvation Army’s “business” is helping people in need. And the number of people asking for help is skyrocketing. The charity has been providing food, gas vouchers and other critical social services to 250 percent more people since the Bakken boom first started – jumping from nearly 700 people in 2008 to almost 1,800 in 2013.

Brent Siu is one of those people. Like hundreds of others, he came to Williston from another state and wound up needing help from The Salvation Army.

The truck driver from Chattanooga, Tenn., arrived last March and got a job hauling side-dump trailers. Six weeks later, he quit to open a painting business – and then ran out of cash during the transition.

“That’s when I started coming to The Salvation Army,” Siu said. “I got free bread, a food voucher and another voucher for $40 in gas. It’s the only time I’ve ever needed that kind of help.”

Stories like Siu’s are common at the Williston Salvation Army, while other cases are more extreme: Many people arrive having spent their last dime on a one-way ticket to the oil boomtown.

When they don’t find work, they become stranded and homeless. Others do find work, but can’t find a place to live other than their car.

“That’s where The Salvation Army comes in,” says Captain Joshua Stansbury, who’s led the Williston Salvation Army 44

BAKKEN OIL REPORT – SPRING 2014

Captains Joshua and Rhegan Stansbury.

Captain Rhegan Stansbury helps children and youth use computers at the Williston Salvation Army’s after-school program.

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with his wife, Captain Rhegan Stansbury, since 2011. “We are a church that provides critical services to people in need. We believe in the value of human life.”

Volunteers organize boxes of food and Captain Joshua Stansbury gives the food to people in need.

Here’s how to contribute: ∙ Mail a check to The Salvation Army, P.O. Box 420, Williston, N.D. 58802 or give online at SalvationArmyNorth.org/williston. Your gift is tax-deductible. ∙ Larger gifts to the Williston Salvation Army may be eligible for a 40 percent tax credit. Learn more at NDTaxCredit.com. ∙ Learn more about volunteering by visiting SalvationArmyNorth.org/Williston, or call Kristin at 701-572-2921.

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BAKKEN OIL REPORT – SPRING 2014

Critical Services The Williston Salvation Army’s social services budget has quadrupled in recent years, going from $50,000 in 2010 to about $200,000 last year.

One of the biggest local needs is fuel.

“We spend an average of $3,500 per month on gas vouchers for people living in their cars – they can’t afford to keep their vehicle running all night when it’s cold outside,” Joshua states. “That money also pays for propane for people living in trailers.”

The charity spends thousands more on bus tickets to help people in crisis return to their home states.

Another popular service: computer access. The Williston Salvation Army features a 10-computer lab that allows people to search for jobs online, create résumés and connect with their loved ones back home.

Of all the Williston Salvation Army’s services, food is tops.

“I can put an ad in the paper saying we need food, and the next week our pantry will be full – but it’s never enough,” Joshua says. “We spent $45,000 on food last year.

That’s an amazing number when you consider most of our food is donated.”

Grassroots Support Local residents, businesses and fellow churches have eased the Williston Salvation Army’s growing pains by giving extra amounts of time and money.

The 2013 holiday season is a perfect example. Locals gave $300,000 worth of kettle donat ions and other financial gifts – well above the charity’s $250,000 holiday fundraising goal.

Help came in other forms as well: Williston Middle School students gave 500 stuffed animals for children in need. First National Bank and Trust Co. donated a coincounting machine that saved kettle officials hours of time.

Williston-based construction company JMAC Resources donated 16,000 pounds of food.

“That’s only the start,” Rhegan Stansbury states. “We are blessed by the outpouring of support we’ve received in Williston not only during the holidays, but also year-round.”

Willistonians also recognize that their time is just as valuable as their money. More and more volunteers have come knocking, asking to help do things like organize the food shelf or sort donations at the Williston Salvation Army Store, where locals can donate or buy clothes, furniture, household goods and other items.

The store is located a few blocks away from the Williston Salvation Army’s main facility at 15 Main St. One day last November, a group of volunteers from global

The Williston Salvation Army. energy company Statoil walked into the store and cleaned its basement, which was piled high with unsorted merchandise.

“They came out 30 strong and ripped through a whole room of donations in two hours,” says John Hulteen, a Salvation Army Store administrator from St. Paul, Minn., in town that day to help overhaul the store and make it more customer-friendly.

Get Involved The Williston Salvation Army’s need for volunteers and financial support is growing at the same exponential rate the Bakken is exploding.

“It seems ironic, but the richer this region becomes, the more our services are needed,” Rhegan says. “We are humbly asking Like hundreds of others, Brent Siu came to Williston from another state and wound up needing help from The Salvation Army.

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enerplus

Growing with the Bakken: Enerplus and the community

Drilling the Enerplus Horses well pad.

Sunset at one of Enerplus’s locations.

Enerplus is coming off a landmark 2013 in the Williston Basin. The company’s record production last year sets the stage for more growth in 2014.

Crude oil production from Enerplus’s North Dakota and Montana Bakken assets accounted for more than half of the oil production for the company. Third-quarter reports reveal that these fields were producing 25,000 barrel oil equivalent (BOE) per day last fall, with over 18,000 BOE/day coming from our North Dakota play alone.

Primarily operating on the Fort Berthold Indian Reservation (FBIR) in North Dakota, Enerplus has drilled 103 wells since acquiring the assets in 2010. Currently operating two rigs, the company has identified over 130 future drill sites for the development of the 86.1 million barrels (bbl) 2P reserves.

The goal for 2014 is a 33-percent increase in production in North Dakota while decreasing drilling costs, setting Enerplus up for another year of impressive production. Continued evaluation of downspacing of the Bakken and Three Forks plays and testing the lower benches of the Three Forks play will also help boost growth.

48

BAKKEN OIL REPORT – SPRING 2014

In addition to company growth, Enerplus hasn’t missed that the communities near its operations are growing, as well. As a top operator on the FBIR, the company has taken the lead on a couple initiatives focused on the population’s priority issues.

Supporting Roads and Infrastructure A recent North Dakota Petroleum Council survey showed that in the oil-producing counties, some of North Dakotans’ primary concerns about oil and gas development are roads and infrastructure (18 percent) and traffic (16 percent). Combined, nearly 10 percent said that they’d grade the

oil and gas industry poorly because they’re “growing too fast” and they “need to consider infrastructure.”

Working with two other operators (WPX and EOG), Enerplus proposed a bypass road just south of Mandaree, on the FBIR, to alleviate traffic on BIA 14. This two-lane alternate route will also allow trucks to shorten their trips on the reservation. As oilfield traffic is not allowed on BIA 12 northwest of Mandaree to the McKenzie/Dunn county line, trucks currently have to adjust their routes approximately an hour down to BIA 14. The new bypass road will cut that time down, and allow for a much shorter trip to avoid the prohibited BIA 12.

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Enerplus expects construction on the new parts of the road, and the widening of other existing segments, to begin in April 2014. Completion of the project is projected for May or June, in time for traffic to be routed around the planned paving of BIA 14. The Environmental Assessment and the Finding of No Significant Impact for the project have been completed and approved by the Bureau of Indian Affairs.

In conjunction with the new road, nearly eight miles of buried pipeline and utility lines would also be developed along the route. Underground oil, gas, and produced water pipelines, as well as electric and fiber optic lines, will be installed at the time of construction.

The eighth-grade class at Mandaree School participates in the Enerplus Adopt a Well program.

Expanding Electric Power Distribution Access Concerns about infrastructure aren’t just limited to roadways and traffic problems.

The need for expanded electric power distribution is apparent to the community and operators in the area alike. Enerplus has been a leader of the project that brings together a team of nine operators and the McKenzie Electric Cooperative to bring expanded access onto the FBIR. The proposed project consists of 37.5 miles of 115 kV transmission lines. Three new substations will be added to the loops system that will bring power and increase the reliability of the power grid to approximately 200,000 acres of the FBIR. This project is expected to begin this year. While the goal is to provide these services to the FBIR as soon as possible, the timeline for the project anticipates completion by 2017.

Enerplus employees serving lunch and participating at the annual Mandaree Pow Wow in 2013.

50

BAKKEN OIL REPORT – SPRING 2014

Understanding the Power of Local Initiatives Enerplus also continues to be involved in local community programs. The company renewed its support of the New Town Volunteer Fire Department in 2014, as well as provided a contribution to the newly formed Mandaree Volunteer Fire Department.

enerplus

In addition, the second year of the Adopt a Well program with the eighth-graders at Mandaree School is underway. Due to increased enthusiasm with Enerplus employees, more sections were added to the program, giving an even more in-depth look into how a well develops from planning to production.

Just as production is set to escalate in 2014, Enerplus hopes to grow its community endeavors too. With a brand-new field office opening in Sidney, Montana, the company hopes to make an impact with its neighbors across the Bakken area.

The boom across northeastern Montana and northwestern North Dakota will only continue to develop, impacting the communities in the middle of America’s path to energy independence. Enerplus, as an operator in the center of it all, not only sees its job to grow production, but also to grow with, and add energy for, its neighbors. w

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51

From battlefield to the oilfield:

Military veterans transition to new jobs The Bakken oil boom is well-known for providing high-paying jobs for those willing to work in some harsh conditions with long hours. America’s military veterans are used to such challenges, and many have been finding work in North Dakota.

Ken Harris, originally from Kansas City, has done three tours of duty in the military: two in Iraq and one in Afghanistan. He served as an Army medic.

“I retired from the service in 2008, and had a few years where I continued to work for the government,” Harris explains. “I came to the Bakken in 2011 because it seemed like a good place to start with good opportunities. I was fortunate that my wife’s

family was from the Williston area, so I had a place to stay while I was looking for work.”

Harris appreciates that Job Service North Dakota specializes in helping veterans and they certainly helped him. “When I went into that job office, they treated me like I was gold. The lady working there put down the list of 200 jobs and told me to pick anything I wanted. They really do cater to vets.”

Harris found a job driving an oil truck, a job he enjoys. He said there aren’t a lot of similarities between the Bakken area and Afghanistan except the bitter cold weather.

“Of course, nobody is shooting at you,” he chuckles. He agrees that like time in the

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military, Bakken work schedules often keep families apart longer than many domestic jobs. “Some of these guys from out of town will work for four weeks and then go home for a week. Your spouse often has to take up all those responsibilities at home. Even though I go home every night, I work 84 hours a week. When I have a day off, it doesn’t give me much time to get anything done at home. My wife, even though she works as well, has a lot of responsibilities managing the household.”

“In both the military and working here, you wake up super early, putting in 14 to 16 hours each day,” he says. “I don’t think people realize how much of a military

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mindset is here. A lot of people working here haven’t been in the service, but it’s a run like the military. There is a strong work ethic, you have a job to do and you do it. When you’re on the job, it’s safety first. All these companies have a goal for no one to be injured.”

He’s happy he hasn’t needed his Army medic experience in the Bakken. “Co-workers have had a few bumps and bruises, but fortunately no major injuries I’ve had to assist with.”

Harris says, just as in the military, everything you do is about “risk assessment” before you do it. “In the military you look at a job, examine the pros and cons and see how you can mitigate any risks. It’s the same thing in the Bakken with safety.”

He finds his current job rewarding. “I feel that by doing what I do, I’m helping the country with energy independence. We are not relying on [foreign] oil so much. There is a sense of accomplishment that we’re doing something for the greater good of America.”

Susan Ogurek works for Job Service North Dakota, based out of Minot, with her territory including Williston and surrounding towns. “Most of the vets find us on our website, www.jobsnd. com. We have a veterans tab to click on that allows you to create a résumé, search for jobs

Know before you go Jobs abound in the Bakken oilfield area, but so do rumors about jobs. Susan Ogurek, veterans employment representative with Job Service North Dakota, says although there are a few companies that will hire someone who walks in the door, those are few and far between. She offers a few tips to successfully land a job in the Bakken.

• Before you show up, do your research from home. What jobs are available? Do you have the skills necessary that match that job?

• Work on a résumé that highlights your skills. If you have several skills, have a different résumé for each set of skills. For instance, title one “Truck Driver”, another “Maintenance Technician” and so forth. If the job requires a CDL, let them know up-front you’ve got one. Make your résumé have impact.

• Get that résumé posted on www.jobsnd.com/individuals and on other job websites that are related to the field in which you’re looking for work.

• Realize most companies have a hiring process that includes interviews and background checks, so don’t expect instant employment.

• Make sure to find out about housing. Some companies provide it, some don’t.

This isn’t a place to just show up and try to find a place to live. Do your research and find a place before showing up. Don’t come up with $20 in your pocket.

• If you’re not from this part of the world, know that winters are cold, snowy and long and that summers are hot.

• Use your network. Reach out to friends or family members. Some of these companies have “military recruiting folks” who are veterans themselves and are more than happy to assist fellow vets.

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Looking for employees?

Gordon Gates of www.hireveterans.com says his online company has a job board where job seekers can review what’s available.

“There are a half-million visitors who come through our site for jobs all over the country. That’s now we connect employers with veterans.”

If any company in the Bakken is looking to hire a veteran, Gates encourages them to post the job. “They can send me a press release about a job they have and we’ll post it.” Hireveterans.com has buttons to find and post jobs as well as search and post résumés, so those so those hiring and those searching can see which jobs are present and whom is available. and more. They can click on an area they might be interested in and contact us that way. Some other veterans will simply pick up the phone and call, and we get referrals from other vet friends.

We’re on Twitter, too.”

Ogurek explains her is job matching each veteran with the right job. “We need to see what their skills are. If they’ve been working on equipment and driving trucks, we can show them some good career-direction choices. We try to get them the best information we can give them so they have a good search. They need to understand where their skills fit. We have companies who will hire without oilfield experience, but having the maintenance background and clean driving record helps. There is a wide range of jobs from driving trucks to working on the rigs to all kinds of technician positions and even administrative and computer work.

Whether it’s email or calls or face-to-face, we first get an idea of their background.”

The job skills expert explains that you need to have a résumé that will resonate. “If you’re at a job fair, you have about 10 to 20 seconds for them make a decision based on your résumé. Your résumé needs to show the kinds of work you are looking for.

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Keep in mind that although companies are veteran-friendly, it’s still important to have skills to match the job.”

Job fairs provide an excellent way to investigate possibilities and meet with different companies. In October and mid-March, Job Service North Dakota puts together a multi-industry job fair with 100 employers. “We had 132 veterans for the October Job Fair. The first hour was veterans’ preference. That meant you had to be a veteran or transitioning military member to enter the fair [during] the first hour.

This gives them a great opportunity to meet with employers before the general public show up. We have received a great response from employers and the candidates about this feature.”

Ogurek acknowledges that companies want to hire veterans.

“They know veterans are reliable, on time, have a good work ethic and that safety-mindedness has been ingrained in them. Team work and communications skills are necessary, and our veterans have that,” Ogurek says. “I have not met an employer who is not willing and ready to hire veterans if they meet the job requirements. I have the greatest job as I get the honor of helping our veterans connect and start their next career.” w

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BAKKEN OIL REPORT – SPRING 2014

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MESSAGE

By Mark Anderson, CEO, Mainstream Investors, LLC

How North Dakota got it right (and how other states can, too!)

As North Dakota entered the last decade of the 20th century, it found itself near the bottom of nearly every economic metric measured, save agriculture. Each year, it was a net exporter of people, and with a total population of just 638,800 statewide, it could little afford to export the intellectual capital that would be required to build the state into an economic powerhouse.

Fast-forward to today. According to the U.S. Chamber of Commerce, North Dakota now ranks first in the nation in overall performance; long-term job growth; short-term job growth; gross state product growth; per capita income growth; and STEM (science, technology, engineering, and mathematics) job growth. It ranks second in productivity growth and college affordability, and third in educational attainment. And, it has the lowest workforce safety and insurance rates of all 50 states.

Did I mention that North Dakota is also the second-largest oil-producing state in the nation?

How was all this made possible? Well, it goes without saying that the state has been richly blessed with many natural resources, both on the surface of the land and beneath it. But that is just a part of the story. Many states are blessed with abundant resources but lack the vision and regulatory and tax climate to exploit them for the benefit of their citizens and the nation. No, it goes beyond that.

It Starts at the Top North Dakota’s pro-business culture originated over 20 years ago with thengovernor Ed Schafer. Elected in 1992, Schafer committed himself to growing 56

BAKKEN OIL REPORT – SPRING 2014

and improving North Dakota’s business climate early on through his “Schafer Means Business” campaign focus. He was twice elected governor and made improving the state’s tax and regulatory climates and encouraging investment in North Dakota his top priorities. He also implemented strict fiscal management and cutting-edge technology designed to improve the effectiveness of state government and support business growth across the state.

In 2000, Schafer was succeeded as governor by John Hoeven. Hoeven, who had served since 1993 as the president and CEO of the nation’s only stateowned bank, The Bank of North Dakota, continued Schafer’s work to stimulate growth in North Dakota by directing the development of EmPower North Dakota, a comprehensive energy program created to encourage growth in all energy sectors.

After Hoeven was elected to the United States Senate in November 2010, Lieutenant Governor Jack Dalrymple was appointed to serve as North Dakota’s 32nd governor. Through his North Dakota 2020 & Beyond project, Dalrymple has continued the pro-business focus started, and then advanced, by Schafer and Hoeven.

“North Dakota wants business to happen in our state,” says Andy Peterson, president of the Greater North Dakota Chamber. “Where some states see business as something to tax and regulate, North Dakota sees it as something to help.”

Building a Supportive Structure When building a diversified state economy, it is important to create

a structure that both promotes and regulates industry. North Dakota’s energy program is a fine example of this. From the very beginning, the state’s oil and gas regulatory structure was designed to facilitate the development of energy production across the state.

North Dakota’s oil and gas industry operates under the oversight of the North Dakota Industrial Commission (NDIC), which manages (among other state agencies) the North Dakota Geological Survey, the Department of Mineral Resources Oil and Gas Division, and the North Dakota Pipeline Authority.

The NDIC was established by the North Dakota Legislature in 1919 to “conduct and manage, on behalf of the state, certain utilities, industries, enterprises and business projects established by state law.” The members of the NDIC include the governor, the attorney general, and the agriculture commissioner.

The North Dakota Geological Survey (NDGS) is the primary source of geological information in the state.

Created by the Legislature in 1895, it publishes maps and reports to support industry and the regulatory programs of the NDIC. NDGS also has over 375,000 feet of core samples and 30,000 boxes of drill cuttings from wells across the state in its Wilson M. Laird Core and Sample Library housed at the University of North Dakota.

The Department of Mineral Resources Oil and Gas Division (DMR) is responsible for regulating the drilling and production of oil and gas in North Dakota. In addition, it promotes the responsible development of oil and gas throughout the state and is charged with protecting

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Mark Anderson, CEO of Mainstream Investors, LLC.

Andy Peterson, president of the Greater North Dakota Chamber.

Ron Ness, president of the North Dakota Petroleum Council.

landowner, mineral owner and royalty interest owner rights. One important change enacted by the DMR was moving from 640-acre to 1,280-acre spacing units, which reduced the industry’s environmental footprint and allowed for a more efficiently structured drilling layout.

In 2003, the North Dakota Legislature created the Oil and Gas Research Program (OGRP) to promote the growth of the oil and gas industry in North Dakota through research and education. The program is funded through a portion of the state’s oil and gas production and extraction taxes.

Each year, up to $5 million is re-invested in the industry through the OGRP. The North Dakota Pipeline Authority (NDPA) was created by the Legislature in 2007. The NDPA operates under the NDIC and was created for the purpose of diversifying and expanding the North Dakota economy by facilitating development of pipeline facilities to support the production, transportation and utilization of North Dakota energyrelated commodities.

Finally, the member-supported North Dakota Petroleum Council (NDPC) has been representing the oil and gas industry since oil was first discovered in North Dakota back in the early 1950s.

It serves as the voice of the industry for

all matters relating to governmental relations. With over 500 members, the NDPC provides its members with regulatory and legislative support on issues affecting the industry. Through its Oil Can! Program, NDPC helps to improve communications and foster understanding between the North Dakota oil and gas industry and various stakeholders, including property owners, community leaders, and legislators.

Dakota Department of Commerce. “We view our role as being here to assist the people of North Dakota and the companies that do business here – or want to.”

58

BAKKEN OIL REPORT – SPRING 2014

Government of the People North Dakota is unique from many states in its legislative structure, which is only in session every other year. That means that there are no professional politicians. Each citizen legislator holds down a “regular job” in his or her home community, putting them more in touch with the issues facing their constituents.

Legislators travel to Bismarck every two years to introduce legislation and establish a budget for the next biennium.

Not surprisingly, North Dakotans have unprecedented access to their government officials.

“The ease of access and cooperativeness of state agencies is what makes North Dakota different,” states Mike Fladeland, manager of Energy Business Development for the North

Growth Comes with Challenges But even with an estimated $1.6-billion budget surplus and unprecedented growth in nearly every economic sector, the state still faces challenges. Among them is the need to address insufficient infrastructure, pipelines, housing and workforce to accommodate a burgeoning economy. The state also continues to struggle with ways to improve the capture and transport of natural gas, allowing for a reduction in flaring from 30 percent today to state targets of less than five percent.

“Growth comes with challenges,” says Ron Ness, president of the NDPC. “The Bakken has become the world model for shale oil development. There will be bumps and bruises along the way, but we are headed in the right direction. There is wide public support for oil and gas development in North Dakota. Our job is to tackle the challenges before us and be part of the solution.”

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MDU Resources Group plays integral role in Bakken growth MDU Resources Group Inc. got its start as a utility company in 1924 in the shadows of the Bakken region. Within a couple of years, it was providing electric and natural gas service to communities that today are in the heart of the oil and natural gas production boom in western North Dakota and eastern Montana.

MDU Resources knows the Bakken, having been successful in the region for nearly 90 years. The full-service energy, construction and utility company provides a single storefront for a wide variety of Bakken-area needs. The company produces oil and natural gas, builds pipelines, ships natural gas, constructs roads, oil pads and subdivisions, as well as sells construction materials and electrical supplies. And with its legacy company, it heats buildings and provides electricity.

Here’s a brief look at each company and its impact on the Bakken region: Montana-Dakota Utilities MDU Resources’ utility company has seen tremendous customer growth over the past few years. The company has made large infrastructure investments – nearly $75 million in both 2012 and 2013 – and has seen customer growth in the seven-percent range for electric and the nine-percent range for natural gas over the past couple of years.

As part of meeting the demand growth, Montana-Dakota has grown as well. Along with adding employees, the company has two construction projects underway – a new office and warehouse in Williston and Watford City.

Construction began in April 2013 in Williston on a new 5,000-square-foot 60

BAKKEN OIL REPORT – SPRING 2014

Construction at the Dakota Prairie Refining facility southwest of Dickinson, N.D. is proceeding on schedule. A critical pre-winter deadline was met when much of the ground work and foundations were completed, allowing ground work to continue through the winter months. office building and 20,000-square-foot

Knife River Corp.

warehouse, both at the same location.

Knife River has been a part of a number

Construction in Watford City began

of projects throughout the Bakken region,

in October 2013 for a 2,500-square-

but a nine-mile, four-lane bypass project

foot office and 10,000-square-foot

is the largest single road construction

warehouse, also both in the same

contract the aggregate-based company

location.

has been awarded in North Dakota.

“The pace of the growth in the area

The $55-million project includes

has been tremendous and we are happy

moving about two million cubic yards

to have responded by growing our

of dirt during the ground work, putting

infrastructure, staff, office buildings

down about 500,000 tons of gravel road

and warehouses to best serve our

base and laying about 200,000 tons of

customers,” says Frank Morehouse,

asphalt. The bypass project will move

president and CEO of Montana-Dakota.

traffic on U.S. Highway 85 around Watford

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MDU CSG also features Energy Electrical Distribution Co. based in Williston. It’s a full-service sales office and warehouse that offers a wide array of industrial, commercial and residential electrical supplies.

Construction is underway on the new Montana-Dakota Utilities office and warehouse in Williston. The project brings the office and warehouse to the same location and provides much-needed additional space for the growing staff to meet the needs of customers in the region.

City rather than through town on Main Street. The North Dakota Department of Transportation estimates the bypass will take about 3,700 trucks per day out of Watford City, thereby improving safety and congestion.

“We are excited to be involved in this project for a very important reason – this is a significant step forward for safety on the Highway 85 corridor,” states John Quade, president of Knife River’s northcentral region. “It’s great to be on the team that is making Highway 85 – and Watford City’s Main Street – safer.”

Work began on Sept. 30, 2013, and is expected to conclude by the end of October 2014.

MDU Construction Services Group MDU Construction Services Group (CSG) provides services essential to 62

BAKKEN OIL REPORT – SPRING 2014

energy infrastructure networks, including electrical and mechanical services and connectivity. One of its subsidiary companies, Rocky Mountain Contractors, is playing a major role in building up the electric transmission and distribution lines and natural gas distribution infrastructure throughout the region for local utility companies.

“We are committed to quality work and top-notch customer service,” says CSG’s Bakken operations manager Greg Darkenwald. “With our skilled employees, our companies can handle projects of varying sizes throughout the Bakken.”

Rocky Mountain Contractors has completed distribution work that includes upgrading existing facilities and the construction of new electric substations. The company has also installed new transmission facilities to serve the expanding loads in the oilfield.

Dakota Prairie Refining One of most exciting projects underway within MDU Resources is the construction of the nation’s first greenfield refinery since the late 1970s.

The company, in conjunction with Calumet Specialty Products Partners, is in the process of building a 20,000-barrelper-day diesel topping plant in southwestern North Dakota near the town of Dickinson.

“Construction is proceeding on schedule. We completed much of the groundwork and foundations before winter arrived, allowing us to continue above-ground work,” says Steve Bietz, president and CEO of WBI Energy, the corporate subsidiary that will manage the refinery assets. “Building the tankage is proceeding along well and truckloads of materials are arriving daily. The project is in full construction mode.”

Construction began on the facility in late March 2013 and, when complete, it will process Bakken crude oil into diesel, which will be marketed within the Bakken region. Total project costs are estimated to be approximately $350 million with a projected in-service date in late 2014.

WBI Energy The pipeline company has been actively planning the largest pipeline construction project in its history. Current discussions point to a new pipeline in the neighborhood of 375 miles long with a project cost running upward of $650 million.

“We are excited about what this project offers for producers and downstream

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markets, as well as our company,” Bietz says.

In simple terms, the pipeline – proposed to stretch from western North Dakota to northwestern Minnesota – would transport Bakken-produced natural gas to interconnects with other transmission pipelines with access to markets in the mid-continent region of the U.S. and eastern Canada. The proposed project offers an incremental takeaway option out of the Bakken for existing and new production being gathered, as well as natural gas currently being flared. For the company, the potential new capacity boosts deliverability by just about one-third from a little more than 1.2 billion cubic feet of gas per day (bcfd) once current projects are completed to 1.6 bcfd. And, depending on user commitments, the new pipeline could be expanded to increase total system capacity to more than 1.7 bcfd.

Fidelity Oil and Exploration The corporation’s exploration and production business continues to outperform its year-over-year production target. Fidelity increased third-quarter oil production by 37 percent from the same period last year, and is well-positioned to deliver on its annual growth target of 30 to 35 percent.

“The Bakken is key to our Rocky Mountain production activity and integral to our growth plan,” states Kent Wells, president and CEO of Fidelity. “It’s one of the hottest spots on the planet for oil and gas production and we are in the heart of it.”

Fidelity’s success with improved completion techniques in the Bakken helped increase oil production in that play by 41 percent in the third quarter, the most recent data available. The company owns a total of approximately 127,000 net acres of leaseholds in the

Mountrail, Stark and Richland counties.

Fidelity has two rigs operating in the Bakken and net oil production for the third quarter of 2013 was approximately 8,300 barrels per day.

“The Bakken is our backyard,” says MDU Resources Group president and CEO Dave Goodin. “We’ve been successful here for nearly 90 years and have developed

the resources and relationships to help other businesses and communities be successful here, too.”

For more information about MDU Resources Group, go to www.mdu.com. For more information about what services and products the corporation provides in the Bakken, go to www.mdubakken.com. w

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BAKKEN OIL REPORT – SPRING 2014

63

REPORT

By Heather Siegel, © DTC Energy Group, Inc.

U.S. energy independence: Bakken helping pave the way Major technological advancements in drilling and completing oil and gas wells over the past five years helped make North Dakota’s Bakken shale one of the most successful oilfields in U.S. history. Boasting an estimated mean resource of 3.65 billion barrels of oil, according to the U.S. Geological Survey, the Bakken stands to be a significant contributor to U.S. energy independence. Without the changes in technology that have taken place, recovery of reserves in this unconventional play would not be feasible.

In just five years, advancements in tools, techniques and petroleum technology have revolutionized Bakken drilling operations by improving overall well performance, reducing drilling time, cutting costs and minimizing the environmental footprint. The primary keys to improving well performance have been increasing lateral lengths and fracture stages, as well as changes to well completion techniques.

Serving on the front lines of drilling and completion operations for a variety of operators in the Bakken, on-site supervisors for DTC Energy Group, Inc., a Denver-based petroleum operations consulting firm, have been significant contributors to these trends.

Drilling STATISTICS A combination of advanced drilling technology and the eco-friendly concept of pad drilling has significantly reduced drilling time, costs and environmental impacts for operators while allowing for the construction of significantly longer laterals and greater production potential.

64

BAKKEN OIL REPORT – SPRING 2014

BAKKEN DRILLING AVERAGES

2008

2013

Well Lateral Length*

5,000 feet

10,000 feet

Well Total Depth (TD)*

16,000 feet

21,000 feet

77

130

32 days

18 days

Average Oil Production Per Well (barrels per day)** Drilling Time Per Well* * As experienced by DTC Energy Group drilling supervisors. **Source: North Dakota Department of Mineral Resources DTC Energy Group drilling supervisors

to greater horizontal depths without

have contributed to the doubling of

damaging the pipe or connecting

lateral lengths (the horizontal section

threads.

of wells) in the Bakken with increases

Longer laterals are allowing for more

from 5,000 feet in 2008 to approximately

fracture stages along the horizontal

10,000 feet in 2013. The corresponding

section of the well and thus increased

total depth (TD) of wells has increased

production. Bakken and Three Forks oil

from roughly 16,000 feet five years ago to

production figures from the North Dakota

21,000 feet today. On occasion, distances

Department of Mineral Resources show

across up to three sections have been

a significant jump since the beginning of

drilled, totaling more than 27,000 feet TD

2008, going from an average of just over

with a +/-15,000-foot pay zone.

75 barrels per day per well in early 2008 to

Advancements in drill pipe design have

130 barrels per day per well in 2013.

enabled the drilling of longer laterals.

In addition to drilling an extra 5,000 feet

Newer style drill pipe allows for increased

or more, the time to drill a well to TD has

maximum torque, enabling drilling

decreased significantly. Five years ago,

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16,000-foot wells were taking an average of 32 days to drill. Now, the average drill time for 21,000-foot wells is 18 days or less. Sometimes these wells can be drilled in as few as 12 days. With drilling operations now costing up to $70,000 per day, the reduced drilling time equals big savings for operators and investors.

Such a significant reduction of drilling time is due in large part to several major factors, including the replacement of old rigs with fleets of newly designed rigs that utilize top drives. Additional factors include increased performance of directional down-hole tools and the concept of pad drilling.

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RIG UPGRADES The Bakken has experienced extensive rig upgrades in the past decade, replacing many 30-year-old rigs and adding top drives, devices used to better manipulate the drill string during the drilling process. These upgrades are the primary reasons operators are able to drill longer laterals in such a shorter period of time.

“Top drives can drill 95 feet without making a drill pipe connection. Before top drives, we could only drill 30 feet at a time,” explains DTC Energy Group drilling supervisor Milo Brown. “Top drives have been in use for many years but didn’t start making an appearance in the Bakken until roughly five years ago, mainly because of their high cost. Due to their time-saving ability and versatility, top drives are now being used on the overwhelming majority of rigs in the Bakken today.”

DIRECTIONAL DOWNHOLE TOOLS In addition to newer-style rigs and the extensive use of top drives, increased performance of directional down-hole tools has also contributed to shorter drilling time and the ability to drill longer laterals. Measurement While Drilling

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(MWD) tools are now able to drill without battery or electronic failures that were common with older designs, saving more time. MWDs, along with mud motors, can now also withstand higher temperatures and amounts of shock and vibration that occur in vertical and horizontal holes.

“Besides new rigs and top drives, new mud-motor technology and drillbit technology have led to enormous advances in the speed at which you can drill,” says Luke Clausen, DTC Energy Group chief operations officer and coowner. “Five years ago, if you were able to drill 3,000 feet in the first 24 hours after drill-out, you were doing great,” Clausen continues. “Now that number is 5,500 feet. You have mud motors being built better with much lower failure rates. Drill bits are being made much better. The whole drilling package has improved.”

PAD DRILLING Pad drilling, which involves drilling multiple wells from one drill site, has also been a major contributor to reduce drilling times and environmental impacts, as well as improving well economics, in the Bakken.

“During pad drilling, we complete the well into the projected formation, run the casing and cement and then walk or skid the rig 40 feet to the next well to do the same,” explains Brown.

Once the last well on the multi pad is cemented, drilling and pipe changes are conducted before the horizontal sections are drilled.

“This process eliminates the need for laying down drill pipe, cleaning mud tanks and picking up the horizontal pipe on every well,” Brown says. “It also eliminates rig moves between each well.”

Moving a rig from one drill site to another can take days, while “skidding” a rig over to the next well on a pad only takes a few hours. Pad drilling is also helping to reduce the environmental 68

BAKKEN OIL REPORT – SPRING 2014

Bakken Completion Averages Number of frac stages* Spacing between frac stages*

2008

2013

10

32

800 feet

350 feet

*As experienced by DTC Energy Group completion supervisors. footprint left behind by the drilling process. With multiple wells now being drilled at one site, fewer drill sites are needed, and thus less surface area at ground level is being affected by the drilling process.

COSTS While the cost of new rigs, top drives, advanced tools and skilled personnel to drill wells in the Bakken have increased in the last five years, the time spent to drill a well to TD has decreased. Drilling costs have gone from roughly $40,000 per day in 2008 to up to $70,000 per day in 2013, but the drastic increase in estimated ultimate recoveries (EURs) and the impact of shorter drilling times has reduced overall drilling costs and improved internal rates of return (IRRs) for oil and gas companies.

The average total drilling cost in 2008 was roughly $2.5 to $3 million for a 15,000-foot well, while a 20,000-foot well often cost as much as $3.5 to $4 million.

In 2013, the average total drilling cost for a 21,000-foot well is approximately $3 to $3.5 million.

Oil and gas operators in the Bakken have seen EURs for dual laterals increase from an average of approximately 375,000 barrels of oil in 2008 to more than 600,000 barrels of oil equivalent in 2013.

Completion STATISTICS The combination of longer lateral lengths and advancements in completion technology has allowed operators to increase the number of frac stages during completions and space them closer together. The result has been a

higher completion cost per well, but with increased production and more emphasis on profitability.

In the past five years, DTC Energy Group completion supervisors in the Bakken have helped oversee a dramatic increase from an average of 10 stages in 2008 to 32 stages in 2013. Even 40-stage fracs have been achieved. One of the main reasons for this is the longer lateral lengths – operators now have twice as much space to work with (10,000 versus 5,000 feet along the lateral). Frac stages are also being spaced closer together, roughly 300 feet apart as compared to spacing up to 800 feet in 2008, as experienced by DTC supervisors. By placing more fracture stages closer together, over a longer lateral length, operators have successfully been able to improve initial production (IP) rates, as well as increase EURs over the life of the well.

SLIDING SLEEVE versus PLUG AND PERF Sliding sleeve and plug-and-perf methods are two primary fracturing and stimulation techniques now used for zonal isolation in complex multi-stage fracs in the Bakken. Before sliding-sleeve technology was more recently introduced in the Bakken, plug-and-perf stimulation was the primary completion method being used. Today, it varies greatly from operator to operator whether sliding sleeve, plug-and-perf, or a combination of the two techniques is used.

The principal factors in deciding between the two techniques are cost savings and the ease and quality of the frac. Sliding sleeves take less time, roughly a day and a half, to complete a well, while the plug-and-perf method can take several

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days. The time saved with the sliding sleeves generally results in lower costs for the operator. However, some operators swear by the plug-and-perf method and hold that it results in a better frac due to its ability to provide better certainty in frac delivery and allowing subsequent access to the horizontal wellbore.

Some operators use a combination of the two techniques on the same well – a practice that is called a hybrid frac. In a hybrid frac, sliding sleeves are often used in the first 10 to 20 stages at the toe (far end) of the well, where it is more difficult to use the plug-and-perf method.

After that, plug-and-perf is performed on the remainder of the well. Using a combination of the two techniques can also help ensure a successful frac. If one method experiences failures, the other can help mitigate the impacts on the well.

Regardless of which technique is used, the increased number of frac stages being used in the Bakken is resulting in better production and recovery of oil and gas.

PROPPANTS Apart from the higher number of frac stages, changes in proppants used during fracking have also enhanced production in the Bakken. Proppants are small particles, such as sand or ceramic grains, that are injected with fluid into fractured rock and remain there to hold fractures open while allowing reservoir fluids to flow into the well. Ceramic, or man-made, proppants are very strong 70

BAKKEN OIL REPORT – SPRING 2014

and have had the greatest impact after being introduced in the Bakken roughly five years ago. “When I was a kid, it was the equivalent of beach sand that was being used for fracking,” says James Bentley, DTC Energy Group completion supervisor. “Now it’s ceramic proppant that can’t be crushed. That allows for much better production. Ceramic proppants cost more, but it’s worth the longer production life of the well.”

The types of proppants used during fracking in the Bakken vary from operator to operator, but many choose to use a mix of white sand, resin-coated sand, and ceramic proppants for different stages of the completion process.

COSTS In terms of cost, completion operations are more expensive now than five years ago. Simple 10-stage frac jobs on a 5,000foot lateral cost an average of $500,000 five years ago with the total cost of completion being $1 to $1.5 million.

Today, on the high end, complex 30-stage frac jobs on 10,000-foot laterals are costing as much as $3 million ($100,000 per stage) with a total completion cost of $5 to $5.5 million. Overall, the average cost per frac stage now is roughly $70,000. However, completions costs vary greatly depending on a variety of factors, including lateral length, the number of frac stages and types of tools, proppants, fluid additives and pumping unit used.

In addition to a high level of variation

from operator to operator, the rapidly changing technology and advancements are also causing costs to constantly fluctuate, making it more difficult to accurately chart a trend in the industry.

There are indications that the increased overall cost of completions may be reaching a plateau and that costs may be starting to decrease, if they haven’t already. What is certain is that better tools and technology are allowing for much more successful fracs with productivity improving at a higher rate. These advancements are also providing a more environmentally-friendly approach.

ENVIRONMENTAL IMPACTS “Fracking is a water-sensitive issue, and some of the biggest changes we’ve seen over the last few years are the reuse of water and the potential for treating water,” explains Robert Sylar, chief executive officer and co-owner of DTC Energy Group. “We’re also minimizing the fluid additives involved in the fracking process.”

The oil and gas industry is making great progress in total water management solutions with new innovations allowing for more effective and cost-efficient recycling and reuse of water used during fracking. In other shale formations, it is not unusual for as much as 90 percent of flowback and produced water to now be recycled when formerly, this water was trucked to disposal wells or other disposal facilities.

REPORT

Summary Overall, the significant advancements that have taken place in drilling and completion operations in the Bakken over the past five years are helping lead the U.S. on a path toward energy independence. Wells in the Bakken and all other major shale areas of the U.S. are being drilled and completed faster and are producing more oil and gas than ever before. In addition, these advancements are helping to significantly reduce impacts on the environment, while the overall success of the Bakken continues to generate jobs and improve our economy. More innovation and faster application of even newer techniques are coming in the very near future.

American companies and universities, along with our government’s national energy laboratories, are all working to

propel the rapid rate of change and ensure that our economy has the energy advantages it needs. The U.S. Department of Energy’s National Energy Technology Laboratory in Tulsa, Okla., is devoted to fossil energy research and enabling domestic fossil fuels to economically power America in an environmentally sound manner. Many universities have programs focused on developing cleaner, more efficient energy while protecting the environment. The University of North Dakota is one example with its Energy & Environmental Research Center. American companies are also taking part in the effort. Brine Chemistry Solutions, for example, created The Shale Water Research Center, aimed at making hydraulic fracturing more efficient while “maintaining a zero or net positive environmental footprint”, according to their website. Changes are taking

place across the industry and our nation to create a brighter energy future for America.

About the Author: Heather Siegel, assistant director of marketing at DTC Energy Group, Inc., is also a meteorologist with a degree from the University of Oklahoma and member of the Society of Petroleum Engineers. Prior to joining DTC Energy Group, she worked as a meteorologist and online journalist for AccuWeather. Some of her previous articles and research include long-range seasonal forecasts for the United States and Europe, as well as outlooks on the effects of hurricanes on oil and gas prices.

In her position at DTC Energy Group, Ms. Siegel is continuing her passion for forecasting and trends by writing about the oil and gas industry. Reach her at hsiegel@dtcenergygroup.com. w

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Energy event brings opportunity to Montana

By Cary Hegreberg

The Montana Contractors’ Association is pleased to host

What separates this event from others is the involvement

Montana Energy 2014, April 2-3rd at the Metra Park in

of prominent business organizations that collectively

Billings, Montana along with our partners, the Montana

represent the “movers and shakers” of Montana’s economy.

Petroleum Association, Montana Coal Council and KLJ. The

The Montana Petroleum Association, Montana Coal Council

two-day comprehensive conference and tradeshow features

and Montana Contractors’ Association are coordinating the

energy industry representatives, suppliers of goods and

program, and we are joined by the Montana Chamber of

services, contractors and industry professionals.

Commerce, Montana Bankers’ Association, Motor Carriers

People often inquire as to why the Montana Contractors’

of Montana, and the Treasure State Resource Industry

Association decided to host and fund a major conference

Association. No other energy-related event in Montana brings

and tradeshow featuring energy development. The answer

that level of credibility and influence.

is quite simple: what’s good for energy industries is good

The petroleum industry should also appreciate the political

for construction. New oil wells result in new pipelines, new

coalitions that are forged through cooperative efforts like

railroad facilities, new office buildings and improved public infrastructure. Indeed, many Montana construction firms, and their employees, have benefited immensely from the recent oil development in North Dakota and eastern Montana.

The goal of Montana Energy 2014 is to involve the business community in supporting development of our abundant energy resources. Too often, we’ve watched our neighboring states prosper as they embrace oil, natural gas, coal, and other natural resource development, while we in Montana conduct environmental reviews, hold public meetings, and wring our hands with indecision. By bringing industry leaders together from throughout the region, we intend to build understanding of the potential and more political support for energy development.

Montana Energy 2014. When bills are introduced in the Legislature to repeal or shorten Montana’s oil tax incentives, groups like the Montana Contractors’ Association stand shoulder-to-shoulder with you in opposing those bills. We know who our friends are, and we know these efforts are aimed at discouraging development – not raising more tax revenue.

Slated speakers include industry leaders David Goodin, MDU Resources, Inc.; Colin Marshall, Cloud Peak Energy; Tad True, Belle Fourche/Bridger Pipelines; Thomas Nusz, Oasis Petroleum; James Volker, Whiting Petroleum; and Robert Bryce, author and journalist. Montana Energy 2014 will help businesses throughout the region understand the phenomenal economic opportunity energy development represents. We hope the event will lead to profitable ventures for attendees and will generate enthusiasm and political

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74

BAKKEN OIL REPORT – SPRING 2014

M o n t a n a’s L e a d i n g E n e r g y Co n f e r e n ce a n d Tra d e S h ow

R e g i s t r a t i o n i s n o w o p e n f o r attendees, exhibitors and sponsors.

Register online at:

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Sliding-vane pumps in crude oil operations Sliding-vane pump technology provides the safety, reliability and cost-effectiveness necessary to meet wide-ranging fluid-handling demands within the crude oil supply chain.

By Thomas L. Stone

Around a century ago, the United States stood at the epicenter of the global oil and gas industry. The discovery of large amounts of recoverable crude oil in Texas, as well as the burgeoning automobile industry, put the U.S. at the forefront in the development of the petroleum-based economy around the world. Over the years, the U.S.’s status in the global oil and gas universe changed.

Vast deposits of crude oil in such far-flung locales as the Middle East, Nigeria, Norway and Venezuela (and one much closer locale – Canada) turned the U.S. into a net importer of petroleum-based fuels. This made the country reliant on the vagaries of the global market, with its wild price fluctuations and threats of oftentimes politically motivated embargoes and production slowdowns.

However, in what may soon be termed a classic case of “what’s old is new again,” the U.S. – and North America as a whole – suddenly finds itself poised to resume its former role as the world’s leading provider of petroleum-based fuels and ancillary products.

This stunning turnaround is being driven by advanced technologies, such as Enhanced Oil Recovery (EOR) for traditional oil deposits, and newly discovered sources of “unconventional” oil and gas (i.e., the shale plays and oilsands) that point to the 76

BAKKEN OIL REPORT – SPRING 2014

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There are many entry points within the crude oil supply chain where Blackmer® Sliding Vane Pump technology can help optimize operations. eventual recovery of billions of barrels of oil and trillions of cubic feet of natural gas.

So, while the race to discover and develop forms of alternative energy continues apace, it appears that oil and gas will remain the go-to energy commodities around the globe for decades to come, with the latest research and actual in-the-field activity pointing to an everexpanding level of importance for the industry in North America.

Within crude oil exploration, recovery and production of refined fuels and other end-products there is the need for safe, reliable, efficient and costeffective pumping systems. This white paper will illustrate how one type of pump technology – specifically the positive-displacement sliding-vane pump style – can help optimize fluidtransfer operations along the oil and gas production and supply chain.

The Challenge The oil and gas production and supply process is a complicated one with many entry points, all of which can benefit from the incorporation of the proper pumping technology. The challenge, then, for producers, handlers and suppliers along the supply chain – from crude oil extraction to the delivery of gasoline to a retail-fueling site – is to keep the flow of any raw or refined liquids, whether corrosive or non-corrosive, moving smoothly. This requires a versatile pumping technology since the pumps may be tasked to handle highly viscous crude oil at the recovery end of the process, as well as thin, shear-sensitive liquids during the manufacture and transfer of a wide array of refined fuels and petrochemicals.

The Solution For more than 100 years, sliding-vane 78

BAKKEN OIL REPORT – SPRING 2014

pump technology has proven to be a standard-setter in reliable performance in a myriad of oil and refined-fuels transfer operations. The secret to the sliding-vane pump’s repeated success is found in its unique design and method of operation.

Sliding-vane pumps have a number of vanes that are free to slide into or out of slots in the pump rotor. When the pump driver turns the rotor, a combination of forces (centrifugal, mechanical – push rods and liquid), causes the vanes to move outward in their slots and around the inner bore of the pump casing. This forms internal pumping chambers and, as the rotor revolves, the fluid flows through the suction port and into the pumping chambers that are created by the vanes.

The fluid is then transported around the pump casing until the discharge port is reached, at which point the fluid is moved into the discharge piping.

This simple, yet ingenious, design enables the sliding-vane pump to deliver the operational characteristics that are necessary for effective fluid-transfer within oil and refined-fuel production and supply.

Specifically, those characteristics are: • High suction capability • Line-stripping • Dry-run capability • Self-priming • Volumetric consistency • Non-slip operation • Non-galling • Handling shear sensitive materials • Superior product sealing • High-temperature compatible • High- or low-flow rates • Easy maintenance • Reduced energy consumption • Stationary, skid or truck mounting • Stainless steel, ductile-iron or cast-iron construction All of these characteristics help make sliding-vane pumps the technology

of choice in critical oil and refined-fuel applications, from the wellhead where the oil and gas exit the ground to the transport truck that makes a retail fuel delivery.

Conclusion It’s a fact: petroleum products derived from crude will continue to heat our homes, fuel our vehicles and contribute to the manufacture of many of our most necessary products for decades to come. It’s also a fact that the efficient handling of petroleum-based fluids will remain a major component in the oil and gas supply chain. That’s why, in the search for a reliable pumping technology, many producers and suppliers of petroleum products have chosen to incorporate sliding-vane pumps into their most critical fluidhandling operations. With more than 100 years of proven success in these applications, sliding-vane pumps remain the wise choice in safe, efficient, cost-effective and optimized operations from the oilfield to the fueling site.

About the Author: Thomas L. Stone is the PSG® director of marketing for Blackmer®, based in Grand Rapids, MI, U.S.A. He can be reached at tom.stone@psgdover.com or (616) 248-9252. For more information on Blackmer’s full line of pumps and compressors, please go to www.blackmer. com or call (616) 241-1611. Blackmer is a member of Dover Corporation’s Pump Solutions Group (PSG®), Oakbrook Terrace, IL, U.S.A., which is comprised of leading pump companies – Abaque™, Almatec®, Blackmer®, EnviroGear®, Griswold™, Maag®, Mouvex®, Neptune™, Quattroflow™, RedScrew® and Wilden®.

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State, private entities compete for industrial water customers

By Rebecca Colnar Photo courtesy of Nuverra.

In 2011, the North Dakota Legislature created the Western Area Water Supply Project (WAWSP) in order to meet the anticipated municipal, rural, and industrial water needs for all or parts of Burke, Divide, McKenzie, Mountrail, and Williams counties. The service area includes the cities of Williston, Watford City, Ray, Tioga, Stanley, Wildrose, and Crosby. WAWSP has an estimated project cost of $350 million with approximately 90 percent of the project’s cost slated to meet the drinking water needs of the estimated 100,000 people who are expected to live in the service area by 2035.

Following its creation, construction began on the project to build transmission lines and distribution lines for potable water.

The state of North Dakota loaned the Western Area Water Supply Authority (WAWSA) money, with the benefit being that WAWSA can utilize its unused capacity during the population growth period to sell water to the oil industry, which is projected to pay for the majority of the project’s cost.

“Water in northwest North Dakota is not always plentiful, especially in McKenzie County,” notes Jaret Wirtz with WAWSA. “Now we can distribute water to areas that might not have been able to receive as much water before our service went in.

The water lines are designed to serve demand at peak times, so we have a lot of extra capacity during non-peak times. The 80

BAKKEN OIL REPORT – SPRING 2014

peak for water demand is typically June through August, which means there are other times when we can sell that extra water for industrial uses. Most plants will run at 100 percent at various times during the summer, but usually at one-third capacity the rest of the year. This then allows those plants to run at an increased capacity to sell water to the oil industry.”

Currently there are 10 regional depots in the WAWSP service area. Wirtz indicates that water sold at their depots has been already been treated at water treatment plants. “Companies are beginning to build their own infrastructure and connecting to our pipelines. Other companies are paying to transfer water through temporary above-ground pipelines to fracking locations instead of trucking the water.”

That said, at present, only about a third is being delivered through pipelines; however, as more pipelines are developed it is estimated the ratio will change to 50/50 trucking/pipeline usage.

Just how much water is trading hands? “It goes up and down, but it’s around three to four million gallons per day for industrial use, on average. In July and August when it’s hot, we can only

Currently there are 10 regional depots in the WAWSP service area.

Photos on page 81 courtesy: Steve Mortenson.

Sand pots in the IWP depot.

IWP truck loads water at the side of the depot.

sell one to two million gallons each day. We have a lot of storage, so we can continue to serve the water needs for the both the public and for industrial use. If, say, we have a drought and it’s really hot, we might need to shut-off our supply to our industrial customers, but we can generally keep it running because of our storage facilities.”

Wirtz explains the WAWSP water is pulled from the Missouri River where it is delivered to a water treatment plant in Williston that is operated through the WAWSP. “It’s run through the treatment plant to achieve potable standards and is then sent out through our transmission lines. The same water at the depot and the water we provide that is used for fracking in most cases is the same water you get from your tap.”

WAWSA has a few more options in their system that other providers might not have. They have a small water treatment plant near Ray, N.D., that produces two to three million gallons of water and can help supplement the WAWSP system.

Water is worth serious money. For instance, in the month of January, WAWSA sold $2.5 million dollars in industrial water.

Conveniently, the WAWSP line runs through the heart of the oilfield in McKenzie and Williams counties. Currently there are 10 regional depots in the WAWSP service area. Not all water is controlled by WAWSA, however; oil companies continue to have the option of buying their industrial water from local 1400 North Broadway Minot, North Dakota

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farmers and ranchers. In these instances, the water does not need to be treated to meet drinking water standards.

Wirtz points out that although $2.5 million in a month sounds impressive, WAWSA need to pay back their loans. “The state had given us numerous loans with different interest rates and terms. We keep a small portion for administrative and operational uses, but the majority of the money pays off the existing loans. The industrial water sales allow oil companies to indirectly pay for the majority of the construction costs to build the public drinking water system. The money will be used for infrastructure to supply water to thousands of users still waiting to receive water from the Western Area Water Supply Project.”

Independent Water Producers Speak Out The Independent Water Producers (IWP) is an organization that was established in February 8, 2011. The group was formed to protect citizens’ rights to provide industrial water to the oil industry. The group consists of private farmers, ranchers and businessman who have used their own finances and were the first to take the risk to provide water to enable the oil industry to expand the Bakken shale oil play happening in northwest North Dakota.

“We were made aware in January 2011 of a state-funded

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Water services, new technologies

By Rebecca Colnar

While concerns from water providers continue in the oilfield, Nuverra Environmental Solutions serves a unique niche in the world of Bakken water. Their purpose is to offer surface logistics around well fluids and solids as part of drilling, completion and production. Companies use this water throughout the hydraulic-fracturing process as well as to lubricate the pit and cool equipment.

“Nuverra provides logistics around the delivery, collection, treatment, recycling and disposal of what comes back up out of a well including the well-water stream and solids,” says Liz Merritt, vice-president of communications.

“We provide a total solution approach. That means we provide fresh water delivery to the site for hydraulic fracturing and we collect the liquid waste from the ongoing production process. We are a one-stop-shop able to handle materials in a responsible and environmentally compliant manner.”

Merritt explains a new technology used in Nuverra’s business is their ability to recycle the flowback and produced water from the drilling and hydraulic fracturing process, which allows operators to re-use the water for another hydraulic fracturing job. Nuverra is offering the service, known as “H20 Forward”, jointly with Halliburton. “We work directly with Halliburton for treatment and recycling; that way operators can re-use the water, reduce fresh water usage and help reduce the environmental footprint of the overall process.”

Nuverra, a company with about 1,200 employees in the Bakken, has acquired a landfill in the area to contain the entire life-cycle of solids, including drill cuttings.

The water Nuverra handles comes from a variety of sources including fresh-water wells often leased or owned, which is another asset on ranches, farm land or other areas within the shale plate. The company delivers water via trucks to a well site and stores and collects flowback and produced water. The company’s Bakken service offerings also include a significant number of rentals, including the tanks used to store flowback and produced water.

82

BAKKEN OIL REPORT – SPRING 2014

The typical water use for a standard vertical well (vertical and horizontal wells differ in water use) is approximately two million gallons per well, while a horizontal well can use upwards of three to five million gallons of water, depending on the number of stages.

Merritt explains the flowback water has high salinity and must be handled properly because it is a regulated fluid. “This water is not only high in saline, but may also have residual chemicals in it used for cooling and lubricating drill bits; therefore it does have a chemical content, although that content is a controlled, regulated substance.

“When water comes back up from the drilled well, we collect that water and store it in large, square tanks, then transport it to a salt-water disposal well. Salt water disposal wells are permanent,” Merritt explains. “Each disposal well is different and has a different life span but once they are filled, they are capped off. As mentioned earlier, the H20 Forward process in conjunction with Halliburton allows us to put the water through a recycling process that brings it to a standard where it can be used to re-frack a well.

One benefit of this innovative process is that it allows frack water to be recycled, which in turn minimizes use of fresh water.” That’s a laudable goal for an area that uses millions of gallons of water per day for industrial use.

“There are a number of providers in the Bakken providing fluid services, but we’re the only one that provides end-to-end solutions,” explains Merritt. “Larger operators prefer a onestop-shop approach in terms of management and ensured environmental responsibility, making Nuverra the largest provider of such services. Being environmentally responsible is the primary tenet of our company. The industry recognizes their responsibility to be compliant, and Nuverra supports that. It’s critical that we operate our services in an environmental fashion and not only do we comply with, but surpass regulations.”

For more information on Nuverra visit www. nuverra.com.

project called Western Area Water Supply (WAWS) that was being presented to the 2011 North Dakota legislation to compete with the IWP,” explains Steve Mortenson, chairman of the IWP. “This project was guaranteed by the state of North Dakota to bring potable water to the rural areas being affected by the oil boom. The WAWS projections was to sell 20 percent of the industrial market to help pay for the project, but its main focus was supposed to be drinking water.”

Mortenson indicates that doesn’t seem to be the case. “Four years ago when this project started, the developers of this project projected there would be so many oil wells drilled we could not meet the demand for water, it was told to the North Dakota Legislature there would be plenty of sales for everyone,” says Mortenson. “In 2011, the IWP had 85 percent of the market and the municipal cities were selling 15 percent of the market. The numbers by the state water commission for the first nine months of 2013 showed WAWS with 40 percent of the industrial market in Williams and McKenzie County.

The statics for 2012 were [that] WAWS supplied water to 90 percent industrial and 10 percent municipal [customers]. This was supposed to be a water project to bring drinking water to the people of northwest North Dakota who were affected by tremendous growth due to the oil boom. However, there are still people who have not been served water,” he says.

“Our group would feel entirely different if the IWP were not providing enough water for the oil industry or our state was not receiving the millions of dollars of severance tax it is collecting

from the oil industry. The Legacy Fund 2017 will contain $3 billion dollars,” Mortenson explains. “The North Dakota State Water Commission has allocated ten times the amount of water being used by the oil industry for industrial use by the private sector – more than 10,000 acre feet or 77,580,000,000 barrels.

We feel government should not spend taxpayer dollars to come into areas and compete with private business. The quote I always remember is, ‘Government should only do what the private sector cannot and will not do’.”

Mortenson says it’s important that industry does business with the IWP to support private business, along with the fact that the oilfield does not need treated water. “The cost of the state water is 20- to 25-cents per barrel more than IWP’s water.

The reason some companies use state water is convenience and location. “Oil companies should not use treated water but allow that water be available to the public to address the water needs of this growing area,” the small businessman states.

“In addition, the IWP provides more locations in truck depots than WAWSA and some IWP members have invested the money to have pipelines running to oil wells,” says Mortenson. However, private companies have to buy easements from landowners to put their pipe in the ground, but the WAWS project is allowed to use condemnation to achieve their easements if a landowner does not want to allow them to cross – an option the IWP does not currently have. w

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83

environmental technology

NOMADIC™ offers innovative, readily transportable solution for wastewater management in the Bakken

The previous issue of this publication outlined several companies that are building solutions for the new challenge of increased sewage wastewater in the Bakken. Another Bakken newcomer bringing a successfully tested solution to the area is NOMADIC™ Systems Inc. For the past 14 years, NOMADIC™ has been providing their unique solution internationally from Siberia, Saudi Arabia and across Canada to Newfoundland, the Yukon and Alberta’s oilsands. While most sewage treatment plants require the sewage to be brought to the plant, NOMADIC™ brings the treatment plant to the source of the sewage. The concept is simple: outfit a standard cargo container with top-of-the-line sewage treatment processing technology that offers high performance with minimal maintenance. The result: a sewage treatment plant that can be moved into any environment, and requires minimal skill to set up and operate, making it ideal for remote work camps.

“What we’ve found,” says Frank Hay, NOMADIC™’s president and CEO, “is that a mobile application is often desired in many cases. Not every work site is accessible by sewage-hauling trucks, and many that are don’t want to incur the ongoing cost.” The NOMADIC™ system can move 84

BAKKEN OIL REPORT – SPRING 2014

with a site if it’s relocated and can even be manufactured to be safely transported by helicopter. The plants are built to accommodate a wide range of sizes, portability and modularization; from a pull-type trailer for 10 to 20 people to a system for 6,000 people. “We custom design each NOMADIC™ to match the requirements of the project. Every detail – from where you’re located to the number of workers you have, to how you’ll be feeding those worker – is all taken into account.” The result is customized variations on a consistent standard design, delivering solutions for unique situations.

“Many of our customers are at worksites where the only way in or out is by helicopter. It’s important to them that they have a dependable treatment system that they can run and maintain themselves,” Hay explains. Simplicity is an essential characteristic of the NOMADIC™ system. The skill-set required

environmental technology

to operate and maintain the plant is minimal and NOMADIC™ offers training to ensure a worry-free operation. In many cases, the existing skill set of the camp operators is adequate and further training isn’t required or is minimal. There are no submersible pumps, no filters, and no moving parts inside the sewage to be serviced, replaced, or cleaned. “In plain English, this means your maintenance people won’t have to put their hands into sewage for any reason, even if something does require attention. When it comes to maintenance on these systems, there’s nothing to it.”

With the increased use of hydraulic fracturing as an extraction method in the Williston Basin, water is fast becoming an even more vital resource than it already is. The effluent water of a NOMADIC ™ treatment system can be clean enough that it meets the requirements of the North Dakota Department of Health for surface-water discharge, or even re-use. “Even though the amount of water produced is only a small portion of the amount needed for fracking, it’s a small portion that you no longer need to purchase.”

In October of 2012 NOMADIC™ built a system designed for 350 workers for a remote project in the Canadian province of Newfoundland. Then the call came in May of 2013 that the project was shifting into its next phase and the camp was being increased to accommodate an additional 1,500 workers. In many situations this would mean building a whole new treatment plant, but NOMADIC™ doesn’t have this problem. Each plant is built into a cargo container so the systems are modular by nature. This meant it was simply a matter of adding new modules to the existing one in order to increase the capacity to 1,850. “We completed the final module and it left our factory in November. The combined system is up and running smoothly as we speak,” Hay states.

The other advantage this brings is when camps wind down.

It’s easy to remove modules to ensure the plant continues to run at peak performance. Some owners have even sold off modules when they know they won’t need them again.

The NOMADIC™ system has a solid reputation among those who’ve used them and finding buyers is rarely a concern.

One challenge that is universal with sewage treatment is sludge. Sludge is the non-organic, organic and residual ash that is a by-product of the treatment process. “Every kind of treatment plant produces sludge,” says Hay. “The nice thing about a NOMADIC™ is this type of treatment process produces the least amount of it.” The most common solutions for sludge are having a sewage-hauling truck remove it to a landfill, composting, or pressing it into “sludge cakes” and incinerating it. All of these require downtime and manpower.

“It’s a challenge that every system faces and plants set up in

remote areas will usually have a tougher time dealing with it. That’s why it’s important that they have to deal with it as infrequently as possible. Also the less often you have to go through the process of handling your sludge the lower your operating costs.”

From their experience with a wide variety of projects in different industries, NOMADIC™ management knows that they need to be flexible when it comes to providing their product to clients. “Some companies like to buy the system outright and have their own maintenance people take care of it. Other project managers prefer to rent for the duration of the project and have the maintenance included with the rental,” he explains. NOMADIC™ offers both options. “Basically any way you can think of, we can accommodate. If you want to buy it, lease it, rent it, we do it. We know you have a whole project to coordinate so we make it easy for you – just one less thing to worry about.”

NOMADIC™ management recently attended the Bakken Three Forks Shale Oil Innovation Conference and Expo in Grand Forks and says the reception they received was positive. “Many providers said they weren’t aware there was a solution like ours available. We know from experience that what we offer has been successful helping other areas deal with similar population booms, and we’re excited to be bringing this technology to the Bakken,” Hay says. One thing’s for certain: if production in the Bakken and Williston Basin continues to grow at the rate it has been, the region will need all the help it can get. w BAKKEN OIL REPORT – SPRING 2014

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Study addresses why sleep is integral to productivity, safety, health, well-being Photos courtesy: Target Logistics.

In the often-challenging environments of remote worksites in the oil, gas and mining industries, providing workers with first-rate living and sleeping accommodations is essential to optimize job performance, enhance mental acuity and prevent injuries, Nancy H. Rothstein states in a white paper titled “Optimizing Sleep for an Optimal Workforce in the Oil, Gas and Mining Industries.” Sleep is as essential as oxygen or food to live.

Known as “The Sleep Ambassador®,” Rothstein lectures, consults and educates about sleep wellness to Fortune 500 corporations, institutions, organizations, universities, schools and the public. She can be reached at nancy@thesleepambassador.com.

BEST PRACTICES FOR HEALTHY SLEEP In addition to providing workers with a comfortable mattress, bedding, privacy, and noise and light management, oil, gas and mining companies must also think “beyond the mattress” when it comes to ensuring that their workers are getting the sleep they require to perform their jobs safely and productively. Research has shown that there are many influences outside the bedroom that can greatly affect the amount and quality of workers’ sleep.

For oil, gas and mining companies, making the investment with a premier lodging company is an essential step on the road to good sleep for your workforce. In addition, empowering 86

BAKKEN OIL REPORT – SPRING 2014

workers with a basic understanding of how to optimize sleep quality and quantity offers a strategy to ensure a vibrant, productive and motivated workforce. These best practices for healthy sleep can be incorporated in their workforce training. Lodge sites may consider adding sleep tips in the literature they provide their guests.

Light-related Strategies Put technology to bed or block the blue light – Exposure to a television, computer, tablet or smartphone in the hour before bedtime can impair sleep due to exposure to blue-spectrum light emitted from these devices. Just when the brain is getting ready for sleep, it receives a confusing signal to be alert. Blue-spectrum light suppresses the release of melatonin, the sleep hormone, potentially decreasing the quality of sleep. Additionally, the brain stimulation from these activities further confuses the brain about transitioning to sleep. If the content is stressful, relaxation for sleep is further compromised.

Away from home in a remote location, workers can’t be expected to tune out from technology in the hour before going to sleep. Wearing blue-light-blocking glasses can block 99 percent of the blue-spectrum light, thereby allowing melatonin to be released and the body to transition to sleep naturally.

Light exposure – Additionally, bluelight-blocking glasses can be useful

to wear when returning to the lodge after a night shift if it is light outside on the drive home. The morning light tells the body to stay awake, just when the person is intending to go to sleep; wearing the glasses en route to the lodge preserves the melatonin for your sleep when arriving home.

Furthermore, after a good night’s sleep, getting daily exposure to bright light, especially in the first hour of waking, is optimal. However, for most of us, getting exposure to 30 minutes of direct sunlight on a daily basis is not practical and sometimes not available.

Light therapy offers an alternative, especially on dark winter mornings to which many oil, gas and mining workers awaken. Such devices (see www.litebook.com) can also serve as a tool to increase alertness in the middle of a night shift when the circadian rhythm, the body clock, is “set” for sleep and the worker is struggling to stay awake. However, it is not recommended to use the light therapy too close to going to sleep.

Sleep-promoting Habits and Strategies Sleep quantity and quality – Though sleep needs vary across ages and are impacted by lifestyle, health and other factors, the National Sleep Foundation and most experts recommend from seven to nine hours for adults. Sleep quality is also paramount to good sleep and dependent on many factors, a number of which are addressed in this

REPORT

white paper. Often, the quantity of sleep one requires is challenged, putting all the more focus on optimizing the quality of sleep you do get.

Exercise – Exercise is critical to wellness and helps to support healthy sleep.

However, exercise should be avoided in the three hours before going to sleep, as the stimulation inherent in exercise can make falling asleep a challenge.

Relaxation and stress-reduction techniques – Stress during the day, or during the night if on a night shift, can impact the ability to fall asleep and stay asleep. Hence, providing opportunities and facilities for relaxation and stress reduction are important components of a sleep-supportive environment.

Nutrition – Good, healthy foods and beverages are essential to health, day and night. However, in the hours before bed, eating too large a meal can tax the digestive system and compromise sleep. Yet sleep-friendly snacks can help with sleep. Foods containing melatonin and/or tryptophan are good choices, including bananas, oatmeal and almonds. Sleep elixirs such as chamomile tea and almond milk can help the body surrender to slumber.

Tioga Lodge in North Dakota.

Judson Lodge in North Dakota.

Caffeine and Alcohol – Limiting

ACTION PLAN

caffeine and alcohol several hours

“Ensuring that oil, gas and mining

before bedtime is important. Caffeine

workers have the environment,

acts as a stimulant and can interfere

knowledge and strategies required

with the quality of your sleep. Alcohol

for good sleep requires collaboration,”

may initially act as a sedative but can

says Target Logistics founder and

disrupt normal sleep patterns.

CEO Brian Lash. Target Logistics is

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a global provider of workforce housing and the largest turnkey operator in the United States. It currently operates 16 properties in the United States and Canada with more than 5,300 total beds.

are conducive to a great night’s sleep, each person makes behavior and habit choices that impact the outcome of sleep quality and quantity. As with any behavior modifications, sleep habits do not change overnight. Guidance, accountability and experience can support lasting, positive

The Employer Providing lodging that offers an optimal sleep environment is a primary step for the success of your workforce and of your company. Research supports a call-to-action to take sleep seriously as a vital component to maximize productivity, minimize health-care costs and ensure safety. Integrating sleep wellness into your employee wellness program and workforce training may be one of the most effective business investments you can make.

Metrics are integral to prudent decision-making and strategic planning. Combining sleep-related initiatives and sound research data offers an opportunity to gauge results and ROI to ensure that future program design, training and results best serve your goals.

The Employee While the sleep amenities provided in quality lodging

changes in habits. Empowered with basic sleep knowledge, as well as strategies to “own” their sleep, workers can take full advantage of the state-of-the-art sleep environment provided, awakening refreshed, rejuvenated and ready to do optimal work.

The Lodging Provider Providing a well-organized, professional lodging experience for oil, gas and mining workers includes an optimal sleeping environment, superior nutrition, fitness facilities, entertainment and relaxation amenities, strict security and excellent service. Combined, these attributes foster the balance of sleep-work-life, a requirement for optimal performance and well-being.

Hence, collaboration of employers, employees and the companies that serve them is key to achieving the best interests, safety and success for all stakeholders. Looking forward, it is essential for both employers and the lodging

NortherN techNologies, iNc.

companies they entrust to house their workforce to explore and implement research-proven policies to ensure that workers have every opportunity to get the sleep (as well as

GEOTECHNICAL • CONSTRUCTION & FORENSIC ENGINEERING SOIL BORINGS • CONSTRUCTION MATERIALS TESTING

the nourishment, relaxation and fitness) they need to support peak performance.

CONCLUSION While getting the proper amount of sleep is important for any individual, the stakes are higher for oil, gas and mining workers whose health and safety is directly tied to the quality and quantity of the sleep they get. Furthermore, the companies that invest in a high-quality sleep environment for their workers realize benefits that include greater productivity and safety and less attrition and sick days.

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of their workforce. It starts with the provision of lodging

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excellence and a quality sleep environment, along with a

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commitment to train and empower employees with the tools

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they need to get a great night’s sleep.

❱ Quality Assurance / Quality Control

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Oil, gas and mining companies have an opportunity to

❱ Geotechnical (Soil & Bedrock)

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published by Target Logistics, can be downloaded for free at http://www.targetlogistics.net/white_papers.php. w

REPORT

Impacts of oil exploration and development on roadways in North Dakota Oil development and exploration in

increase in truck traffic on roads originally

the Bakken have presented numerous

designed for low-volume traffic has resulted

challenges for state, municipal, county

in increased deterioration of pavements

and township-planning officials. The large

and reduced pavement service lives.

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When transportation officials design pavements, a critical variable known as the equivalent single-axle load (ESAL) over the design life of the pavement is estimated.

An ESAL is a reference measurement of the effective roadway damage of an 18,000-pound single axle vehicle with dual tires. Different truck weights and configurations are then converted into ESALs for the purpose of estimating the type and thickness of pavement that is required. The design life of paved roads is typically 20 to 30 years, depending on whether it has a concrete or asphalt surface and on its functional classification (arterial, collector, local road, etc.).

Pavement designers estimate the lifetime ESALs on a roadway and design the pavement accordingly. If the actual ESALs are higher than the estimate, the resulting pavement is “overbuilt,” which is to say that it exceeds the design required to handle the estimated traffic. The end result is a pavement which would last longer than the 20- or 30-year design life.

An observer may see this as a positive, but when considering the government agencies’ budgets, overbuilt roads may be seen as an over-allocation of funding that could be more beneficially applied to other existing roadway needs. The opposite situation occurs when actual ESALs are higher than estimated ESALs. This scenario results in a pavement which does not meet the 20- to 30-year design life, and would require an improvement before that time period is complete.

Over the past five years, the Upper Great Plains Transportation Institute (UGPTI) at North Dakota State University has been estimating the roadway needs for county and township governments in order to improve the accuracy of

REPORT

road-planning efforts. The work has been undertaken at the request of the North Dakota Department of Commerce, North Dakota Oil and Gas Producing Counties Association, and the North Dakota Legislature. Currently, UGPTI is updating the county and local road needs study for the North Dakota Legislature.

Each of these studies is based upon a traffic-forecasting model which estimates not only traffic volumes, but also the lifetime ESAL estimates described above. Using these forecasted volumes, a pavement deterioration simulation is performed to determine when pavements would require rehabilitation or reconstruction given the timing and scale of the traffic volumes and existing pavement conditions. A similar approach is used to estimate gravel road improvement and maintenance costs.

Modeled improvements include gravel application, blading, snow removal, asphalt overlays, sliver widening, pavement reconstruction and complete reconstruction. Each of these improvement types are implemented based upon a number of structural and traffic-related measures. The result of these studies is an estimated funding need by county and jurisdiction throughout North Dakota, with results aggregated by biennium in the nearterm. In addition to the needs estimates, this vast data collection effort will provide information to help decision-makers and county and local planners make budget allocations and road-planning decisions.

UGPTI’s traffic-forecasting model is among the most advanced and extensive in the nation. It relies on the latest modelling software, tools like geographic information systems, and an information library that includes detailed data on the state’s road infrastructure, existing and projected oil wells, transload facilities, and other energy development infrastructure along with agricultural

processing and manufacturing facilities and agricultural production.

The UGPTI at North Dakota State University provides innovative transportation research, education and outreach that promote the safe and efficient movement of people and goods. It was established at NDSU in 1967 to study movement and shipping

costs of agricultural commodities. Today the UGPTI includes efforts focused on agriculture, energy, industrial freight, transportation planning and operations, personal mobility, transportation safety and security, traffic analysis. The UGPTI’s extensive research portfolio complements its comprehensive education and outreach efforts. w

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dustgard

Controlling dust, stabilizing gravel roads keys to combating high Bakken truck traffic Where there’s oil, there’s dust – especially during a steady boom like the one in western North Dakota, where every year brings more trucks to construct more wells. These big rigs kick up a lot of dust along the rural roads they travel, which are largely unpaved and take a daily beating.

Of the state’s more than 97,500 miles of local roads, 93 percent are made of gravel. They’re no match for the up to 1,000 heavy-haul vehicles some roads see in a single day, according to a state study.

The number of heavy trucks traversing the North Dakota plains on any given day has increased by almost 1,100 percent over the past decade, from 17 in 2004 to 185 at the end of 2013. The fruits of their labor have multiplied proportionately, from 3,330 oil-producing wells in the Bakken shale oilfields to more than 10,000 at the end of 2013.

The North Dakota Department of Mineral Resources expects shale drilling to continue for the next 20 years, during which time crews will build upwards of 50,000 new wells. About 95 percent of the activity, and thus the truck traffic, target the Bakken and Three Forks formations located in the five highest-producing counties – McKenzie, Williams, Mountrail, Dunn and Divide.

According to an Upper Great Plains Transportation Institute study, a typical shale well in North Dakota requires 2,230 truckloads – 1,150 truck trips to bring in the equipment, sand and water 92

BAKKEN OIL REPORT – SPRING 2014

for drilling and hydraulic fracturing and the same number of return trips.

Controlling Dust Stretches Road Budgets All of the counties that have experienced such a crushing influx of trucks struggle to maintain roads never intended to carry such heavy loads. In fact, most of the roadways that lead to the remote oil-well sites are twolane gravel roads originally built to accommodate pickup trucks and other farming vehicles.

Big-rig traffic can cause as much damage to these roads in a single day as the lighter trucks might have in an entire year or longer. So, dust control has become increasingly important as a way for road departments in the region to stretch their budgets while improving driver safety and road quality. Many of them rely on DustGard, a safe and effective liquid magnesium dust control

and road stabilization product.

McKenzie County, the largest county in North Dakota, is one example.

Operations engineer Mike Dollinger estimates that 7,000 heavy vehicles “tear up” the county’s 600 miles of nonpaved roads every week. Dollinger’s department has used DustGard to stretch its budget for the past five years.

“DustGard from Z&S Dust Control saves us $1 million every year in labor and materials costs we would otherwise incur to regrade and rebuild gravel roads,” states Dollinger. “It keeps the gravel on roads and the dust down, so it makes driving safer and life more bearable.”

It costs less than $10,000 to treat a mile of gravel road with DustGard magnesium chloride and as much as $200,000 to replace a mile of gravel, a significant savings that is multiplied many times over in a place like rural North Dakota during an oil boom.

Dustgard

Dust is the Enemy Dollinger and his colleagues across the state understand that dust isn’t just an inconvenience; it’s a safety hazard that also degrades roads. When gravel breaks down – for example, under the weight of semi-trucks – it turns to dust that blows away, disintegrating road surfaces.

Studies show that gravel roads lose as much as one ton of aggregate per mile each year for every vehicle that passes over them daily. So, if a road carries 250 vehicles daily every year, it will lose 250 tons of aggregate.

DustGard bonds with a gravel road’s surface, making it almost as hard as asphalt. The process prevents fines and larger aggregate from loosening, so a road’s integrity remains intact longer.

Combating dust on gravel roads has many other tangible benefits. The preferred product for dust control, soil stabilization and preventing wind erosion, magnesium chloride: • Provides cleaner air, which leads to better health. Fugitive dust can cause illnesses in children, the elderly and people who have respiratory conditions; • Improves road conditions and safety by increasing driver visibility and decreasing risks associated with loose gravel, soft spots, road roughness and flying rocks; • Compacts soil, thereby preventing destructive wind erosion.

It reduces foreign sediment in nearby surface waters (e.g., dust that settles in creeks and streams), helps prevent stunted crop growth caused by clogged pores in plants, and keeps vehicles and property cleaner.

These advantages are especially important in an environment that experiences unusually high truck traffic that

would otherwise cause economic, health and safety hazards – not to mention general inconveniences to the people who call the area home. Unlike the unpredictable price of oil, North Dakota drivers can consistently count on a solid, safe and smooth drive from DustGard-treated unpaved roads. w

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93

Bakken vehicles: Pickups rule

By Rebecca Colnar

Drive past any dealership in any town near the Bakken oilfield and you’ll see pickup trucks. Rows of trucks. Pickup trucks seem to be the hands-down choice for workers in that sprawling land of oil rigs.

“What we’re mainly seeing are the bigger vehicles, namely diesel pickups,” notes Brice Enger, general sales manager of Lithia Ford Lincoln of Grand Forks. “What I’ve heard is many companies will let their employees use business diesel in their own pickup trucks as a kind of job perk, so the guys buying the big trucks don’t have to worry about paying high fuel bills.”

Guys are looking for trucks that not only are powerful – four-wheel drive monsters, like the Ford F-350, or even the F-250 – they also want them loaded. “They want a sunroof, navigational systems, power everything, heated seats (it gets cold in northern North Dakota), all of those options. We have a lot of business owners

General sales manager Brice Enger and general manager Roger Johnson of Lithia Ford Lincoln in Grand Forks show off one of the popular big trucks. buying trucks from us, as well. They will put 60,000 miles per year on a truck, so they tend to repurchase from us when their trucks’ mileage gets too high.” (Which apparently is often due to the expanse of the territory.)

What’s interesting is that the dealership Enger works for is more than four hours

east of the Bakken. It’s apparent that even though Bakken workers have money to spend, some are still looking for a good deal, a good price and excellent customer service.

“We try to accommodate everyone and, of course, give them the best price,” Enger notes. “We’ve been selling more Ford Super

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Duties than ever before. Even people who don’t have a lot of fourwheel-drive experience, like guys from Georgia, are buying trucks.

It’s been busy for the past three or four years, tying in with when the Bakken started booming.”

Dealerships close to the Bakken, such as those in Williston, agree that trucks are the vehicle of choice. “Shoppers are buying threequarter-ton trucks, some one-ton trucks, a lot of half-tons and even the occasional SUV,” says Mike Rosland with Ryan Motors. He says color doesn’t seem to be important; however, crew-cabs and megacabs are popular, as are lifted trucks.

The sales person says used trucks on their lot last less than a

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week. “We sell a couple hundred trucks a month. They go quickly.”

Business is also booming at Select Ford in Williston. Over the past five years, sales have been up 30 to 50 percent.

“This area has always been a truck market because of agriculture and oil even before the Bakken started booming. Pickup trucks are popular in small towns because of the work the people do and the weather they contend with,” notes Kevin Kvamme, sales manager.

Kvamme believes safety is one of the reasons for the popularity of trucks in an area with roads busy with large equipment and semis. “I think people feel safer in a pickup than a car, especially when you’re side by side with a big semi. In addition, pickup trucks now have better fuel efficiency, ride better than ever before, and have great visibility.”

He explains that new employees coming into the Bakken often do so in a car with “about a week of life left, so they come in with a real need for a good vehicle and we match them up with a pickup.”

High-end pickups rule. “There is plenty of disposable income in the area; therefore we have seen an increased demand for the higher-end trucks, such as the Lariat, and they want all of the luxury that comes with it. We are unique in this part of the country because we have a strong economy and people are enjoying it,” Kvamme says. “We sell a lot of inventory on the higher-end SUVs, as well.”

He believes the popularity of cars may be on the rise as people moving to the city of Williston will opt for a car instead of a large truck. Fuel efficiency is a real issue. “Ford has some great small cars that are very economical to drive, yet still sporty,” the salesman says.

“We find most people at this time buying the higher-end cars are the people who are benefitting from having an oil well on their land. Now they are playing a little more and treating themselves to a luxury car.”

Sports cars like the venerable Ford Mustang are popular and Kvamme says they are out in most types of weather – of course, probably not with the convertible top down in January. Rumor has it Corvettes are a hot commodity, but whether that is rumor or fact has yet to be found. The bottom line, however, despite extra income being spent on “toys” like fun sports cars, is that the pickup truck, the loaded, high-end pickup truck, is still king in the Bakken. w

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Overcoming remote-access, soft-soil challenges with lightweight mat systems

By B. Handlos and K. Hanson

Construction access over soft soils present a common challenge that project managers face while attempting to complete projects on time and within budget. Soft soil sites located in remote, difficult-to-access areas make access road or pad construction even more challenging. Legacy construction mat systems are manufactured from materials including timber, laminate, steel and composite mats. They can be effective, but are also costly and can put laborers at risk as they require heavy equipment to install. The ideal mat system for access road construction would be designed to have a high utility-toweight ratio and would deliver an eco-friendly alternative to current technology.

Proven Mat System is Strong, yet Light-weight GeoTerra® lightweight portable mats, made from polyethylene blends, were created by Presto Geosystems in 2003 to meet the needs of major oil and gas companies working in remote areas of the Amazon jungle. Transporting materials to these sites by helicopter precipitated the need for light, yet strong mats for work platforms and roadways.

As the first of its kind, the mats capitalize on the sustainable characteristics of recycled polyethylene and offer an efficient,

GeoTerra mats are connected to form a strong working construction platform in a remote oilfield location.

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BAKKEN OIL REPORT – SPRING 2014

strong design for a variety of remote-access applications. The mat system maintains ample structural integrity with a crush strength of 420 psi (2,900 kPa), which is well above typical H-20 loading pressures of 110 psi (760 kPa).

A next-generation GeoTerra mat, GeoTerra GTO, was developed to handle difficult applications with a faster connection mechanism. The GeoTerra GTO mats are made from virgin high-density polyethylene (HDPE) and have a lower percentage bottom open area, offering higher load distribution and making them even stronger than the GeoTerra mats. The GeoTerra GTO mats’ crush strength of 550 psi (3,790 kPa) is more than five times H-20 loading pressures. Their large tabular connections are fastened with a bolt and nut system for quick assembly and disassembly.

Safest, Fastest Access to Energy Resources Typical construction mat applications include working platforms for oil and gas exploration, maintenance and access roads to transmission lines, pipelines, and wind-power generation facilities in various aspects of mining operations, creating walkways over soft soils, material storage pads and even in the construction of helipads. GeoTerra® mats are also

The size and shape of the completed mat system can be configured to a site’s unique layout needs.

presto geosystems

employed as tracking pads to remove excess soil from vehicle treads.

HDPE mats are installed without heavy equipment. This decreases the risk of injury and minimizes equipment needs for constructing the mats. Two GeoTerra styles offer the same high strength and performance, but differ in structure, connectivity and economics. Both mats, when interconnected, deliver high load transfer between sections and may be pre-assembled into larger mats for quick installation in remote site locations.

Low Environmental Disturbance These HDPE mat systems do not degrade, weather, or leach into the subsurface as polyethylene is chemically inert, eliminating any potential concerns from environmental agencies. A carbonblack component is also added to minimize UV effects. The portable mat system is designed with thick, open-cell walls to allow drainage over the entire surface via percolation to the base or using an optional drainage composite layer. Crews can quickly access the site while minimizing disturbance to the native soils.

This leads to easier clean-up and increases the vegetation growth following the completion of the project.

Installed over a high-strength geotextile, GeoTerra mats effectively bridge extremely soft soil areas for access to oil and gas, transmission and other energy sources.

The ability to dissipate pore water pressure within the existing soil is another benefit of a porous, active mat system.

Trapped saturated soil moisture under loading leads to increased pore pressure which can create a decrease in the soil load-bearing characteristics. A one- or two-sided geocomposite may be used in conjunction with the mat system to effectively direct the precipitation off of the working surface if the subgrade has low permissivity. Systems designed to provide

GEOTERRA® Mats

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AP-7474

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presto geosystems

drainage decrease the likelihood of project setbacks associated with tracking, rutting, erosion and soil transport and help aid compliance with environmental governing bodies.

GeoTerra GTO mats support heavy equipment and vehicles – more than five times H-20 pressures – and reduce mud tracking.

Construction Components Various geotextiles (woven or nonwoven) and anchoring components may be required as part of the solution depending upon the site goals.

• Nonwoven geotextiles are used for separation purposes only, while woven geotextiles provide

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added reinforcement. Nonwoven geotextiles are not recommended for use in conjunction with soft soils but are ideal for turf or clay subgrades.

• High-strength woven geotextiles provide base reinforcement and add tensile strength to the mat system at the geotextile/base interface. Designs may call for different types of high-strength woven geotextiles depending on site conditions such as vehicle loading, traffic frequency, expected rainfall and base and sub-base permeability.

Design flexibility allows for customized solutions to meet the site needs and to reduce overall cost of the system.

The Lowest-cost, Fastest Mat to Mobilize GeoTerra mats represent a low life-cycle-cost solution as they are reusable. Even the most difficult site challenges can be overcome by combining portable mat systems with the correct underlayer and anchoring system. The cost advantages of GeoTerra mats over legacy mat systems can be as high as 70 percent. They allow fast-in, fast-out access to even the most challenging sites. w

Farmers Union Oil

We now offer the Carhart Brand of work apparel including their FR line at our new Tioga Travel Plaza.

We are now a Carhart (FR) retailer along with Under Armor, you can find all your work clothing needs

at our Stanley & Tioga locations, which offers a full line of Flame Resistant

(FR) work apparel, including Bulwark & Key, also Georgia, John Deere, Baffin and Muck work boots. In our electronics section you can find GPS units, cell

phone accessories and headsets, antennas, small flat screen TVs with DVDs, computer notebooks and much more.

We are truly your one-stop shop.

Obama signs bipartisan bill

to expedite Bakken fracking

By Kenneth Artz

Photo courtesy: MBI Energy Services.

President Barack Obama signed legislation expediting the permitting process for hydraulic fracturing on federal lands in the Bakken shale basin in western North Dakota. The legislation sailed through the House and Senate with only one dissenting vote.

Reducing Long Delays The Bureau of Land Management (BLM) Streamlining Act authorizes the Miles City, Montana BLM office to process oil and natural gas production permits on federal lands in western North Dakota, which the legislation’s sponsors say will help address the backlog and delays. Currently, it takes federal officials up to nine months to process permits in North Dakota.

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The Senate passed the bill unanimously, and the House passed the bill by vote of 415-1, with Obama signing it on December 26.

“For far too long, the permitting process has been delayed because of a lack of federal resources and coordination in western North Dakota. It has led to excessive waits for drilling permits that unnecessarily slow down projects while also putting the brakes on jobs that would come from those projects,” said the law’s coauthor, U.S. Sen. Heidi Heitkamp (D-ND), in a press statement. “Working with colleagues on both sides of the aisle, we were able to get this bill through both the Senate and the House so it can soon be signed into law. We must continue

to make common-sense fixes like this to help North Dakota reach its full energy potential.”

“This legislation is about helping to cut red tape and making the federal permitting process more timely and efficient,” added U.S. Sen. John Hoeven (R-ND) in a press statement. “Right now, it takes about 180 to 270 days to permit an oil well on BLM land in North Dakota, compared to about ten days on private lands. There are currently about 525 permits awaiting approval. This will help us to alleviate the backlog and other delays that are costing us jobs and economic growth. The BLM Streamlining Act will help us to achieve our goal of true energy independence.”

Online: http://news.heartland.org/newspaper-article/2014/01/13/obama-signs-bipartisan-bill-expedite-bakken-fracking.

Previously published by The Heartland Institute in Environment & Climate News; reprinted with permission.

GAO Report Criticizes Process An August 2013 Government Accountability Office report criticized BLM for not processing oil and natural gas production permits in a timely manner. The report, “Oil and Gas Development: BLM Needs Better Data to Track Permit Processing Times and Prioritize Inspections,” noted BLM has failed to meet expectations to improve the permitting process despite asking for and receiving more money and staff to launch a pilot project for that purpose.

“BLM has neither completed an assessment of the project in the past five years, nor reported to Congress, as required by the Energy Policy Act of 2005, on the results of the project along with a recommendation about implementing the project throughout the United States,” the GAO report stated. “Further, in a 2013 internal memorandum, BLM reported that it has been unable to consistently process completed APDs within the 30-day deadline required by the act. GAO found that BLM’s central oil and gas database was missing certain data needed to assess compliance with this deadline and contained other inaccurate APD processing data.”

“Increasing oil and natural gas production is lowering energy prices, creating wealth, and generating jobs in a manner that is desperately needed right now,” stated Jay Lehr, science director for The Heartland Institute, which publishes Environment & Climate News. “The hydraulic fracturing revolution is bailing out our national economy just when the economy is most imperiled.

“Legislation to streamline oil and

natural gas production on federal lands is a rare instance of government facilitating economic growth rather than impeding it,” Lehr added. “Congress should be applauded for passing the bill, especially in near-unanimous fashion.”

About the Author: Kenneth Artz (iamkenartz@hotmail.com) is a freelance reporter for The Heartland Institute based in Dallas, Texas. w

Oil Production Boosting Economy Congress hopes the BLM Streamlining Act will provide a partial solution to these obstacles and streamline energy production in one of the most active energy production areas in the nation.

North Dakota oil production has increased tenfold since 2005, and energy experts say even more production is possible with a more effective permitting process on federal lands.

Most of the growth in North Dakota oil production has occurred on privately owned lands.

Buoyed by oil and natural gas production, North Dakota’s unemployment rate is just 2.6 percent.

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brawler industries

Super-sized containment Huge industrial liners and fabrics are vital to keeping worksites stable and containment areas secure in the Bakken Above-ground containments are big. Rig sites are bigger. And even bigger yet are the liners utilized to contain any potential rig site spill. Keeping these areas safe and secure is a sizable task – and one that is now being managed by a new generation of industrial fabrics and liners referred to as geomembranes and geotextiles.

Often reaching sizes in excess of 100,000 square feet, these progressive materials are advancing the level of environmental safety on many rig sites throughout North America, and around the world.

“Oil and gas companies – and the industry as a whole – has always dealt with a certain level of scrutiny about their drilling practices and its impact on surrounding land,” says Kent Metzger, executive vice-president of Brawler Industries, LLC, North America’s largest manufacturer and distributor of engineered plastic products used for environmental and fluid management applications. “But with the advent of horizontal drilling and fracking, that scrutiny has intensified significantly.”

According to Metzger, although fracking has revolutionized the ability of companies to tap previously inaccessible energy sources, it has also led to more questions about the process of oil and gas extraction. Environmental groups and, in turn, politicians are focused on the amount of water the process uses, but also the storage of the frac fluids and flow-back water.

Contamination of both soil and ground water has also become hotly debated.

“I doubt there’s been any other time when the need to demonstrate that the industry is aware of public concern and, more importantly, that they’re taking proactive steps to address them has been greater,” he notes. “The use of liners and similar products – including those we produce, fabricate, and our customers install – have become a significant part of that effort.”

Although there are many types of industrial textiles currently in use in the Bakken, some of the most common applications for these liners revolve around fluid containment in aboveground storage tanks, under rig locations, in cutting pits and as secondary containment for tank batteries. Like similar liners deployed in holding tanks, these are constructed of multiple layers of fused materials engineered to form a protective 106

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membrane between the fluids they hold and the ground beneath them. It is critical that they be rugged enough to withstand not only the sometimes caustic chemicals they may be required to hold, but also vast changes in temperature and often extreme environments, because even a small hole could cause devastating seepage into soil and, eventually, ground water.

It’s probably not surprising to most that there are few – if any – “one-size-fits-all” solutions when it comes to liners. Size, shape and the type of fluids needing containment are just a few of the factors that must be taken into consideration when it comes to selecting the best fit.

“Our technical team receives multiple calls every day from people who need to find the right solution for their particular situation,” says Brawlers’ general manager, Jennifer Simonsen.

“They’ll say they are designing an above-ground containment tank system, for instance, and they’re looking at utilizing our 30-mil Brawler product. We take the time to ask the right questions, which (depending on the application) may lead us to recommending the Brawler 40-mil textured liner or, if it will work better, our liner made with Brawler Mat. We’ve been doing this for over 35 years and we apply that experience to every customer’s situation – even if it means creating a custom solution to meet their unique needs.”

The Brawler manufacturing process, including its ability to create those customized solutions, has been gaining significant attention from companies throughout the Bakken. The company utilizes a proprietary welding process to join individual sections and create stronger, leak-proof seams. This means that for those companies requiring it, Brawler has the capacity to create a single liner over 100,000 square feet engineered for longterm use. Regardless of size or anticipated application, every component also undergoes a strict quality-control process that exceeds industry standards.

“No product goes out the door until it has been thoroughly inspected,” Simonsen says. “We know that every item we create and customers install has to be able to withstand the rigorous conditions of an oilfield. Our client’s business – and our reputation – depends on getting it right.”

brawler industries

Although the Brawler Industries’ name is relatively new, having been introduced following the acquisition by Tailwind Capital of Miles City, Mont.-based Western Industries and West Texas Plastics of Midland, Tex., the company’s roots run deep in the Williston Basin. Western Industries began in 1978 as a company fabricating, delivering and installing containment membranes for oil and mining companies in the Western U.S. “I think it’s safe to say that we’ve had a front-row seat to oil and gas development in the Bakken,” Simonsen says. “Nearly four decades of experience means that we understand what our customers need.

We’ve manufactured more than 3,000 above-ground tank liners alone, since the recent demand for these liners surfaced just three years ago.

To our knowledge that is more than anyone in our industry.”

That “front-row seat” has come into play on more than one occasion for Brawler. They maintain a vast inventory of materials on hand at all times, ensuring they can fill even the largest orders if needed. The company also has a full fleet of trucks at each of their facilities so that when a call comes in they can load and transport the products directly to the site, sometimes within hours, to begin the installation process.

While liners continue to be one of the most common applications of geosynthetic products, they are far from the only use of this type of technology. Floating covers retain heat in winter months and control evaporation during hot summer months, reducing the amounts of fresh water that is required to be transported to locations. These covers can also be used in conjunction with UV-resistant bird netting to protect wildlife and birds away from these containment areas.

Non-woven geotextile, aka “felt”, is also being utilized on many drilling sites. It is frequently used as a cushioning layer between liners and any sharp or rocky area. A felt cushion is a must when laying a liner on a pad built from scoria, the sharp orange rock indigenous to North Dakota. Brawler Industries also offers a variety of woven geotextiles for soil stabilization. These materials are used to extend the life and serviceability of location roads and pad sites.

“We’re also seeing a growing trend among our clientele to use multiple products directly under their rigs,” Metzger says. “We’ve manufactured and installed geotextiles that go underneath rig mats to provide an additional layer of stability, as well as placed liners directly around the rigs to improve traction in muddy conditions. In many ways, I think we are probably just seeing the beginning of how these products can and ultimately will be used. It will be interesting to see what we – and our customers – come up with next.”

Brawler Industries now has manufacturing and distributions centers in three key locations to service the oil and gas fields. The Bakken and Niobrara are serviced from their Miles City, Montana center, the Permian Basin is serviced by their Midland, Texas center, and the Eagle Ford Shale is serviced by Brawler’s recently opened center in Pleasanton, Texas. w

Brawler liner.

Brawler pit liner.

Brawler tank liner.

Brawler tractor.

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MESSAGE

22nd Williston Basin Petroleum Conference & Expo

By Ron Ness, President, North Dakota Petroleum Council

It’s an exciting time for North Dakota, particularly in the Williston Basin, as the Bakken and Three Forks continue to produce great results and capture the attention of the region and the country.

The Williston Basin continues to enjoy worldwide attention, having a significant impact in the United States and Canada.

As our theme says, we are “Bakken Strong” – with strong economies, technology and business and job opportunities driving our states, provinces and nations forward into an energy renaissance and new era of North American energy security. For those interested in learning more about this valuable resource, the 22nd annual Williston Basin Petroleum Conference & Expo to be held May 20th to 22nd, 2014 will provide the perfect opportunity.

The Conference will be held at the Civic Center in Bismarck, North Dakota. The North Dakota Petroleum Council will host the event along with the North Dakota Department of Mineral Resources and the Saskatchewan Ministry of the Economy.

Attendance for this international conference is anticipated to exceed 4,000 individuals.

The Williston Basin Petroleum 108

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Conference & Expo was created in 1992.

The conference goal has been to provide an outstanding line-up of presenters at a great venue for local, regional, national and international industry leaders to gather and exchange new ideas and technology. In recent years, information exchanges have led to more efficient oil drilling and completion methods being implemented in the Bakken and Three Forks formations.

The Williston Basin Petroleum Conference & Expo is held annually, with the location alternating between Saskatchewan and North Dakota. Every year, this conference brings together a wide array of industry representatives, regulators and political leaders from across the United States and Canada, all with a vested interest in the Williston Basin. As always, the technical presentations will be a highlight of the conference, as industry experts from across North America will share information on all the hot topics surrounding the shale play in the Basin.

The conference will include more than 75 presenters covering a wide array of topics including the latest technology, engineering, geology,

drilling, well-completion techniques, pipelines and marketing. A Bakken/ Three Forks core workshop will also be offered on Tuesday, May 20th. In years past, these presentations have been of interest to many conference attendees and have sold-out quickly. New to this year’s conference will be Bakken Basics education sessions for the public on Tuesday, May 20th at the Ramkota Hotel.

Delivering the keynote speech at the 2014 conference will be Lee Tillman, Marathon president and CEO. The conference will also feature a CEO panel with participants Harold Hamm, Continental Resources chairman and CEO; Tommy Nusz, Oasis Petroleum director and CEO; and Jim Volker, Whiting Petroleum chairman and CEO. The conference will feature an expo comprised of more than 450 indoor and outdoor exhibitors.

Registration information is available online at www.wbpcnd.org. Contact the North Dakota Petroleum Council with questions at 701-223-6380 or via email at ndpc@ndoil.org. w

xylem

Powerful mine dewatering

Electric and diesel centrifugal pump options

By Kristen Gurick, Godwin – a Xylem Brand

Mining applications are as diverse as construction or water and wastewater applications. Each jobsite has specific requirements and needs. Underground and open-pit mines have several layout and design obstacles. Regardless of the mine and its set-up, water is a mine’s biggest enemy.

Getting water out – and keeping it out – is the primary focus of any mine plan.

The deeper the mine, the more water that will be encountered and need to be removed. Once dewatering begins, mine planners can get back to what they do best.

Mine Dewatering A pump company or dewatering solutions provider can partner with mine planners and mine engineers in the planning stages. A system analysis should be performed first; then pump selection can begin. Factors to consider in mine planning include portability, ease of maintenance and solidshandling.

Another consideration is pH. Pumps can be customized with durable materials of construction specifically designed for low pH and other corrosive liquids.

Pump systems are completely customizable, and the right one can only be selected after the operator or mine engineer understands the mine plan. Pump design, piping design and pump control can all be tailored to the mine plan. In addition to length of flow, elevation and discharge, consider layout drawings, hydraulic grade lines and pipe wall thickness. Perform friction-loss calculations.

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Great Pumps. Great People.® Xylem’s dewatering pumps can help you manage your well site, from water supply and management to long water transfer.

Our industry-leading rental fleet of single stage, high pressure and high volume Godwin pumps and accessories is available to you whenever you call.

Our 24/7 service and world-class engineering support will help keep your operation running smoothly.

For more information, call the location nearest you: Helena, MT – 406.495.1335 Billings, MT – 406.373.3700

godwinpumps.com

xylem

Also, consider present and future requirements. Mine design can change based on weather conditions, landscape vulnerability and market demands. A dewatering pump company can help design the mine plan, so that mine planners and engineers can focus on mining. A reliable dewatering system allows them to continue working.

The power source is one component to consider for mine dewatering pump selection. When selecting a centrifugal pump to fit their needs, many mine operators select diesel-driven centrifugal pumps. As with any other application, operators have options. The initial set-up costs should be measured against the lifetime costs of pumping for the project.

For a temporary job in a mine or quarry, diesel-driven pumps will typically be the most logical choice. Set-up costs are virtually zero. The pumps run on diesel fuel for the short duration of the project.

If available near the mine, natural gas is also an option for these centrifugal pumps.

Hydraulic submersible pumps are another option for mine planning.

These pumps feature a power pack fitted to a submerged pump. The pump ends usually sit at varying levels of submergence, and their power packs sit above-ground. They are ideal for abrasive fine sand, high specific gravity (like that found in slurries) and can offer a total dynamic head up to 600 feet. These hydraulic submersible pumps can be diesel-driven or electric, depending on system requirements.

Electric-Driven Pumps If a project is more long-running, consider electric-driven pumps. Electric submersible pumps have a solid history in mining applications. These pumps can handle moderately large flows (up to 2,500 gallons per minute) or extreme high heads (up to 750 feet).

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In addition to these submersible pumps, electric-driven centrifugal pumps are ideal for both prolonged temporary pumping and permanent installations.

Designed for long-lasting durability, these pumps were initially used in industrial and municipal applications.

However, their benefits span many more applications. A permanently installed electric-driven centrifugal pump will provide reliable, continuous pumping and reduced operating and maintenance costs.

While not frequently used in mining applications, electric-driven centrifugal pumps are a viable option for a permanent installation or lengthy temporary pumping job. If the site location is not extremely remote, an electricity source can be found and power lines run to the jobsite. Accessing electricity can outweigh the lifetime costs of a diesel-driven pumping system if the time-frame is long enough. Costs for running electric-driven pumps will eventually be the more economical choice, even factoring in all initial set-up costs.

For temporary jobs in which refueling is difficult, an electric pump is the ideal solution. Once power lines are established, pump accessibility is almost a nonissue. Lines can be run into

underground mines and bolted to the ceiling. Mine planners may not consider this option, but once designed and implemented, electric-driven pumps require less access. They do not need refueling, and their motors require less servicing. These centrifugal pumps also reduce the carbon footprint of any job.

Case Study: Electric-driven Pumps A gold mine had an environmental restriction that would no longer allow diesel-driven pumps, which had been operating at their site, provided by a rental company. The mine requested a solution for a portable pumping system that could use the voltage that was available at the tailings dam. The pumps needed to supply 7,500 gallons per minute (GPM) to the roaster facility (the location used to heat the ore and extract the gold) and 4,000 GPM to the autoclave system (similar to the roaster facility, but using pressure along with heat) at the mine.

A pump provider designed a system that used the electricity available onsite. The electro center – the house containing the switchgear, variable frequency drive (VFD) and all the pump controls – was on a portable, structural skid and housed within an enclosure.

This unit was placed on the crest of the

xylem

mining application, one of these highhead pumps can be sufficient to meet the pumping needs, or great heights can be achieved with just a few pumps staged together.

Safety should always be a consideration. When running dieseldriven centrifugal pumps in an underground mine, air should be vented in to balance the diesel exhaust. This safety condition is eliminated with electric-driven pumps.

Case Study: Diesel-driven Pumps A coal mine needed to dewater its mine floor after a 100-year rain event. All mine operations were stalled. The mine operators needed to get the process back online as quickly as possible. Given the amount of water, the pumps needed to supply 1,100 GPM with 760 feet of total dynamic head.

A solution was designed that required a six-man crew; 15,000 feet of highdensity polyethylene (HDPE) pipe; two diesel-driven, eight-inch high-head centrifugal pumps; and on-site fusion machines. All equipment was onsite within 10 days of the flood event. The pipe was fused on location, and the mine was quickly operational again. tailings dam. Using this solution, the company provided three electric-driven, 12-inch centrifugal pumps, each capable of heads up to 390 feet and solidshandling capabilities up to three inches.

These pumps provided the necessary flow rates and allowed the system to be moved up-gradient as the tailings levels rose.

Diesel-driven Pumps Considering all the benefits of electricdriven pumps, diesel is still the right fit for many mining applications. If no on-site power can be made available, a permanent diesel- or natural gas-driven pump is a great option. Diesel-powered

centrifugal pumps come equipped with a diesel engine for stand-alone operation.

These pumps will work on any site, no matter how remote. Engines should meet the latest emissions regulations and tier compliance standards.

Standard models of centrifugal pumps are often used for high-volume flow (which can reach 15,000 GPM or more), average total dynamic heads and solidshandling capabilities. Advanced lines of centrifugal pumps are better suited to applications with high or extreme high heads, or those that are used as jetting pumps. The total dynamic head of these pumps, single-staged, can reach or exceed 600 feet. This means that, in a

Conclusion When water creeps into a mine, it becomes the most important aspect of mine planning. It needs to be dewatered as quickly as possible, but a design also needs to be developed that makes the most sense for the mine. Operators must consider available power sources for the most economical mine plan and reliable mine dewatering system.

About the Author: Kristen Gurick is a marketing communications specialist for Godwin, a Xylem brand. She can be reached at kristen.gurick@xyleminc.com or 856-467-3636. www.godwinpumps.com w BAKKEN OIL REPORT – SPRING 2014

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vmac

Improve winter productivity with the right air system

By Alyson Winks, VMAC Communications

As a rule, air compressors do not like the cold. The colder it is gets, the more likely it is that these vital systems will stop working – or worse, break down.

It’s a frustration for end-users and a conundrum for manufacturers whose products are used for oil extraction in the winter. It’s a never-ending challenge for companies to develop air systems that warm up faster, stay warm longer, produce less moisture, increase productivity and are resistant to failure.

Reciprocating compressors have a myriad of problems in extreme conditions. They have many moving parts that are prone to freezing and breakdown. Regardless of how they are powered, they require a lot of time to warm up enough to use, and the low temperatures have a negative effect on duty cycle because air is so much denser in the cold – filling up an air tank simply takes longer. When air does finally come out of the air end, it is full of water vapor, which blows into a tool or onto an application, freezing immediately. By the time the air is used, the unit has to be warmed up again to run properly.

The biggest issue with rotary screw compressors in cold weather is the viscosity of the oil in the system. Keeping the oil warm enough to move properly between the screws is challenging, and if the oil becomes too solid, the machine will fail. Almost-frozen water shoots out of the lines, causing no end of issues for your application.

Hydraulic fluid requirements can cause major problems. As almost any heavyduty mechanic will tell you, they have a tendency to freeze solid. If a compressor 114

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is turned on while the oil is solid, it can quickly block up the entire unit, causing it to break-down and fail so it must be replaced.

However, there are a few things mobile mechanics and fleet managers can do to mitigate these challenges.

Invest in Cold-climate Accessories Although it is an added cost, investing in cold-climate accessories is much less expensive than investing in an entire air system, which could be the alternative when water vapor builds up and causes the system to fail. Companies that manufacture air compressors have air after-cooler specific to their systems that can extract as much as 80 percent of the moisture from the air. A system de-icer should become an essential part of any mobile mechanic’s toolbox, as well. This 12-volt insulated rope heater will prevent pressure lines and

regulators from freezing. Some of the better-made systems out there come with extreme-weather protections built right into them. These systems prevent the air compressor from running, or will emergency-stop to protect the system, as well as the hydraulics or fueldriven engine to which it is connected.

For hydraulic-drive compressors, an automated heater block specifically for the compressor can divide heat-up waittimes by 10.

Keep up with System Maintenance Training workers to make sure they take proper care of equipment is an uphill battle at many organizations.

However, it is something that can be instilled right from day one, and pays off dividends in the long run. If a system is not suffering from general malaise caused from dirty FRLs (filter regulator lubricator), it is more likely to perform.

vmac

FRLs are particularly important in extreme conditions because they remove dirt, lubricants and moisture. If they are past-due for a change, the system has reduced protection. Another important component of maintenance is the use of air-break anti-freeze or methyl hydrate because these chemicals can be used to defrost air lines.

Buy the Right Compressor to Begin With There are loads of air compressors on the market that make promises about product performance in cold weather.

However, few actually deliver on these claims, and even fewer provide service to end-users who have experienced trouble in cold weather.

When purchasing equipment, budget is always an issue, but when you

have people working in temperatures reaching 14oF (-10oC) and lower for much of the year, an ounce of prevention is definitely worth a pound of cure. In other words, higher-quality systems with the appropriate cold-weather accessories will save money in the long run.

When specifying an air compressor for cold weather, consider what systems are already running the vehicle; balance this with air requirements. Many workers in oilfields need steady access to air, which makes reciprocating compressors undesirable. Low-duty cycles become lower in cold temperatures; that is, if the units will start. Breakdowns and refusals to start are the norm.

Rotary screw compressors fare better. Choice of drive is important for performance. Hydraulics often freeze solid and standalone units lack protection

to stay warm enough to run. These are issues that can be addressed with proper accessories such as a block heater. Beltdriven, under-hood compressors, like the ones made by VMAC, have high success rates in the cold.

Devon Mac Col, a heavy-duty mechanic in the Alberta oilsands, has had the most success with these units.

“Because they are mounted against the engine block, they stay warm longer.

Other units just get cold too fast. We work for maybe 15 minutes before we have to heat up for as much as an hour.

The UNDERHOODs run much longer, so we can get work done in -22oF (-30oC),” he says.

Following these simple rules will protect your investment while improving the productivity and happiness of your workers during the cold winter months. w

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MESSAGE

By Chris Faulkner, CEO & Chairman, Breitling Energy Corporation

Bakken answers the naysayers with double and triple recoverable estimates To paraphrase Mark Twain, reports of the Bakken formation’s demise have been greatly exaggerated.

Earlier, naysayers were wringing hands and sounding the death knell for the Bakken based on falling rig counts and wrong assumptions. As noted in the Spring 2013 Bakken Oil Report, well counts were actually on the rise, and the ever-evolving science of oil exploration and production was already showing that the Bakken had more surprises in store for us.

Yet, industry focus shifted away from the Bakken and Eagle Ford plays with the astonishing new estimates of 30 BBO in the Cline. Remember, though, that the Cline was quiet until recently, when higher oil prices paved the way to serious investment in developing the region.

Then, sure enough, the United States Geological Survey (USGS) issued its latest assessment of the Bakken, and the Bakken’s future is looking brighter. According to the USGS April 2013 news release, the Bakken and Three Forks formations contain twice the recoverable oil as the last USGS estimate in 2008 (a total of 7.38 BBO), and three times more natural gas and natural gas liquids than the previous estimate (6.7 trillion cubic feet of natural gas and 0.53 billion barrels of natural gas liquids).

This isn’t the first time the Bakken has outperformed the estimates and projections. In 1995, the USGS estimated 151 million barrels of recoverable oil, but adjusted its estimate in 2008, putting the figure at 3.65 billion barrels of oil.

The USGS estimates are on the conservative side, of course. Continental has put the number as high as 30 to 35 BBO for Bakken and Three Forks combined.

Who knows what the next USGS assessment might reveal?

116

BAKKEN OIL REPORT – SPRING 2014

Breitling’s Pumpkin Ridge drill site in the Bakken/Three Forks play in Mountrail County, North Dakota.

Fully Accessing the Bakken Will Take Money, New Technology Certainly it depends on advancements in drilling technologies and techniques.

The April USGS assessment was enabled by increased drilling in the Williston Basin, providing much more data than was previously available to the USGS. With both WTI and Brent prices on the rise, and America’s refining and transportation infrastructure starting to come up to capacity to handle the oil and gas boom, the industry is well-positioned to make the necessary investments in exploration and drilling to develop promising formations like the Bakken and Three Forks.

Higher oil and gas prices will be critical.

The shale oil and gas boom that began in 2008 was possible because oil and gas prices were high enough to make the investments necessary for increased production profitable.

Take the western edge of the Bakken, for example. Situated under the Fort Peck Indian Reservation in Montana, where the

Bakken is a few thousand feet shallower and is interrupted by the Brockton-Froid Fault, its existing wells have brought up more briny water than oil. Though the Fort Peck tribes are courting oil companies for lucrative leases and hoping that their piece of the Bakken will prove a valuable producer, that region will require considerable investment, and perhaps more advanced technologies, if Fort Peck’s dreams of prosperity and sovereignty are ever to come to fruition.

With Fort Peck’s existing wells producing more water than oil, its prospects for serious investment may seem poor, but keep in mind the fact that the Three Forks formation was once thought to be unproductive. The new Three Forks estimates are a direct result of commercial development made possible by advances in fracking, horizontal drilling and micro-seismic imaging.

Economics Favorable for Investments, Advancements Technologies in development and

MESSAGE

early stages of use now may well hold the keys to further unlocking the treasures within the Bakken. For example, Baker Hughes and Schlumberger have begun using new “super fracking” techniques to create longer, deeper cracks for increased well production. Baker Hughes is also trying to cut the fracking timeline with disintegrating balls in place of the standard plastic balls that can get stuck and cause delays.

New and improving C02 and hydrocarbon techniques are also expected to help address some of the peculiarities of the Bakken. One such oddity about the Bakken that can cause headaches for operators is the Bakken’s oil-wet rocks, which react differently to conventional fracking techniques.

Instead of drawing oil to the well, water injected into oil-wet rock formations can drive the oil away. The EIA is so

Technologies in development and early stages of use now may well hold the keys to further unlocking the treasures within the Bakken. optimistic about the prospects for C02 in solving this issue that it expects a growing trend toward C02 over the next few decades.

Technical and geological uncertainties may be casting a shadow over the potential of the Bakken in the minds of some of the more pessimistic, but the economics are looking good and history, especially recent history, has shown that where the economics are good, the technological advances will follow.

is in the oil and natural gas exploration and production business. Faulkner’s diverse and extensive background in the oil and gas industry in North America, Europe and the Middle East covers all aspects of oil and gas operations, including project management, production, facilities, drilling and business development.

Faulkner serves as an advisor to the ECF Asia Shale Committee and sits

About the Author: Chris Faulkner is the founder and CEO of Dallas-based Breitling Energy Corporation (OTCBB:BECC), which

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117

INTERVIEW

By Glen Herrig

Cash-flow stress hits the Bakken

Herrig: Good afternoon, Mr. Schoch. Cash flow is important to any business, but seems to be even more vital in the Bakken. Can you tell us why?

Schoch: Well, I think it’s a combination of things. First, the Bakken is still growing, so you have a lot of companies moving their operations into the area from out-of-state. The costs associated with moving, finding housing, and adding staff are expensive. Second, the rapid growth that we see with so many Bakken oilfield service companies inevitably puts them into a working capital deficit or a cash crunch soon after they rampup. As companies grow, the need for cash obviously grows.

Herrig: In your opinion, what leads to cash-flow issues for companies working in the Bakken?

Whenever people get together and talk about the opportunities in the Bakken, more often than not the discussion turns to cash flow, and the problems caused by the industry’s lengthy pay terms.

Schoch: Typically, there are three different reasons why it happens. In many cases, all three are involved.

The first issue is working capital. The fact is, it is difficult to make accurate cash-flow projections to determine working capital needs – and especially difficult when your business doubles in size in less than 30 days. In the Bakken, we see this every day.

Companies that have been well-capitalized for years look to expand; they win large bids, and the next thing you know, they have doubled in size and are suffering from cash-flow problems.

These companies literally become cash-poor overnight.

The second issue, which is severely overlooked, is billing and invoicing. Billing and invoicing errors are all too common in the oil industry. Sadly, we find that most companies just don’t understand how to dot all the i’s and cross all the t’s on their billing. When an invoice is submitted improperly, their payments get delayed, naturally causing cash-flow stress.

The third issue is the accounts receivable turn in the oil industry. It’s slow. The industry average is around 60 days. If you add the additional time it takes to get field tickets signed, the number goes up from there. Let’s face it: if a growing company has to pay for fuel every day, make payroll every two weeks and make equipment payments every 30 days, waiting 60 days to get paid won’t work. The math just doesn’t add up.

Herrig: Cash flow is obviously a big issue in the Bakken. How does TCI Business Capital help oilfield service companies with these issues?

I recently had the opportunity to sit down and interview Eric Schoch, executive vice-president of TCI Oilfield Factoring.

Schoch is an 18-year veteran in the factoring industry, and has spent much of his career studying the cash flows needs of small to mid-sized oilfield service companies.

118

BAKKEN OIL REPORT – SPRING 2014

Schoch: Our approach is designed to quickly end the cashflow concerns of our customers. First, we find out what’s going on with the company so we can address their cash-flow deficiencies. Once we have a clear understanding of their

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Herrig: How do businesses get started with TCI?

addresses their specific needs.

For working capital, our factoring lines allow our customers to access the cash that is tied up in their accounts receivables.

As a result, they have the funds they need to get caught up on bills, meet payroll, and make necessary purchases to take advantage of this exciting boom.

Finally, we take great care to address billing and invoicing issues. To do so, we take the time to train their staff on the best billing practices for each of their customers. We’ve spent the last 20 years in the factoring business, and have learned a great deal about the invoicing requirements of the industry. We have worked hard to build solid relationships within the industry, and are on a first-name basis with the accounts payable departments of oil and gas companies nationwide. These close relationships have allowed us to fully understand the complex and often cumbersome billing requirements that are common in this industry. By sharing our knowledge, we help our customers greatly reduce the likelihood of any payment delays.

Schoch: Getting started with TCI is easy. All a business owner has to do is contact one of our oilfield factoring experts to discuss their specific needs. From there, our staff will create a program that meets those needs. If the business owner agrees, our staff will walk them through the rest of the process, and provide training on the best ways to maximize their benefit from our services. Getting set-up is simple: most customers are approved for a factoring line with us in 30 minutes or less.

Herrig: Any final thoughts?

Schoch: One of our customers once told me, “If you don’t take the bull by the horns, someone else will – and you may never get the chance again.” The present boom in the Bakken is an exciting, once-in-a-lifetime economic opportunity. At TCI Oilfield Factoring, we pride ourselves on helping customers take advantage of this incredible chance in the oilfield industry.

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Don’t get caught on the wrong side of the track: Safety alerts and other recommendations in the wake of rail accidents involving Bakken formation crude oil

By Anne C. Foster and Martin Booher, Baker Hostetler

Recent accidents involving rail cars transporting crude oil

The PHMSA safety alert and NTSB’s safety recommendations

from the Bakken shale region have resulted in the heightened

arrived on the heels of (i) FRA’s August 2, 2013 Emergency

interest of rail industry regulators and other federal agencies,

Order 28, which addresses safety issues related to unattended

including the Pipeline and Hazardous Material Safety

rail cars carrying Bakken crude oil; 2 (ii) FRA and PHMSA’s

Administration (PHMSA), the Federal Railroad Administration

August 2, 2013 joint safety advisory 2013-06, which contains

(FRA), and the National Transportation Safety Board (NTSB). In

additional recommendations for railroads and shippers to

January 2014 alone, PHMSA issued a safety alert addressing

implement improved safety measures for the transport of

the flammability characteristics of crude oil originating from

Bakken crude oil;3 and (iii) FRA and PHSMA’s second joint safety

the Bakken shale formations and the NTSB issued two letters containing safety recommendations to both FRA and PHMSA. 122

BAKKEN OIL REPORT – SPRING 2014

advisory, published on November 20, 2013, which discusses 1

the importance of proper characterization, classification and

Anne C. Foster. selection of a packing group for Class 3 materials and the corresponding requirements in the federal hazardous materials regulations for safety and security planning.4 In the meantime, while agencies have been scrambling to compile their safety recommendations and other notices, rail accidents have continued to occur. For example, as recently as December 30, 2013, a BNSF Railway Company train carrying fracked oil from Bakken shale deposits derailed outside of Casselton, North Dakota, resulting in the rupture of several DOT-111 train cars and the spilling of 400,000 gallons of crude oil.5 Local residents were also evacuated. A week later, a Canadian National Railway train, also carrying crude oil, derailed and caught fire. Again, local residents were evacuated from their homes. These incidents, along with others like them, have led to headlines like “Another Day, Another Crude by Rail Accident” and “Accidents Surge as Oil Industry Takes the Train.”

The purpose of this article is thus threefold: (i) first, to examine the impetus underlying industry regulator’s piqued interest in the transport of Bakken crude oil and describe the factual background surrounding recent rail incidents (for the purpose of placing NTSB, FRA, and PHMSA’s safety-related communications in context); (ii) second, to summarize the NTSB’s recent, though non-binding, recommendations to the FRA and PHMSA; and (iii) third and finally, to summarize the recent safety alert issued by the PHMSA in January 2014 as well as similar safety alerts that pre-date it.

I. Lac-Mégantic and Other Accidents Involving Bakken Formation Crude Oil On July 6, 2013, an unattended 74-car freight train weighing more than 10,000 tons and carrying Bakken formation crude oil ran away and derailed, resulting in fireworks of exploding train cars, clouds of billowing diesel smoke, and fires whose heat could be felt more than a mile away.6 This accident also caused the deaths of 47 people (some of whose remains were never recovered), making it the deadliest Canadian rail catastrophe since 1864.

In addition to human casualties, the accident contaminated the Chaudière River with arsenic, polycyclic aromatic hydrocarbons, and roughly 100,000 liters of oil, and also resulted in the spillage of benzene, a natural constituent of crude oil, on and around the accident site. This spillage rendered buildings

Martin Booher. and other structures temporarily uninhabitable, and authorities estimate that homes situated in the most heavily contaminated areas may never again be livable.

While thus far the incident at Lac-Mégantic is unique in that no other accident involving the transport of Bakken formation crude oil has claimed human lives, other incidents involving Bakken oil transport have “exhibited the potential for severe catastrophic outcomes had they occurred in such critical areas.” 7 For example, post-Lac Mégantic, accidents involving the derailment and/or explosion of train cars transporting Bakken crude oil have occurred in Aliceville, Alabama;8 Casselton, North Dakota;9 and New Brunswick, Canada.10 Not surprisingly, Thomas Simpson, the president of the Railway Supply Institute, has indicated in comments to the press following these derailments that, “[t]here is an increased interest . . . to look at tank cars and whether we can do more to remove the risk.”11 II. NTSB Recommendations As rail accidents involving the transport of Bakken crude oil have increased in an industry already facing broad regulatory oversight, the multitude of safety-related responses by various federal agencies have not surprised rail industry stakeholders, many of whom prioritize both safety and compliance with industry regulations. As of the date of this article, the most recent safety-related recommendations issued by a federal agency arising from accidents involving Bakken crude oil come from the NTSB, which sent letters to both the PHMSA and FRA on January 21, 2014 and 23, 2014, respectively.12 As the NTSB indicated in each letter,

Thomas Simpson, the president of the Railway Supply Institute, has indicated in comments to the press following these derailments that, “[t]here is an increased interest ... to look at tank cars and whether we can do more to remove the risk.”

BAKKEN OIL REPORT – SPRING 2014

123

NTSB’s recommendations “address hazardous materials route analysis and selection, oil spill prevention and response plans, and identification and classification of hazardous materials in railroad freight transportation,” and call for industry regulators to strengthen safety measures surrounding the transport of Bakken formation crude oil.

it derived its recommendations from its participation in the Transportation Safety Board of Canada’s (TSB) investigation of the Lac-Mégantic accident. The TSB made similar recommendations with respect to Transport Canada as well as the U.S. PHMSA, which may be accessed at the following address: http://www.tsb.gc.ca/eng/medias-media/ communiques/rail/2014/r13d0054-20140123.asp.

Among other things, NTSB’s recommendations “address hazardous materials route analysis and selection, oil spill prevention and response plans, and identification and classification of hazardous materials in railroad freight transportation,” and call for industry regulators to strengthen safety measures surrounding the transport of Bakken formation crude oil.13 Each letter contains three separate recommendations, with the first recommendation being the same in each letter, and the latter two recommendations being tailored specifically to FRA and PHMSA’s regulatory relationship with the rail industry.

To illustrate, the first recommendation NTSB makes in its January 2014 letters is that FRA and PHMSA work together to expand hazardous materials route planning and selection requirements for railroads under Title 49 Code of Federal Regulations 172.820 to include key trains transporting 124

BAKKEN OIL REPORT – SPRING 2014

flammable liquids as defined by the Association of American Railroads Circular No. OT-55-N, and, where technically feasible, require rerouting to avoid transportation of such hazardous materials through populated and other sensitive areas. (R-14-1).14 In support of this recommendation, the NTSB notes that “rail shipments of crude oil have sharply increased in recent years as the United States experiences unprecedented growth in oil production.”15 While the FRA acknowledged in its Emergency Order No. 28 that “better security is needed for unattended trains” and “route planning and route selections protections currently required for explosive, toxic by inhalation, or radioactive materials are not required for trains transporting large bulk quantities of volatile flammable liquids through populated communities,” the NTSB counters that these assessments and other protections “should be extended to key trains transporting large volumes of flammable liquid” to mitigate the risk of another tragic rail incident.16 Other Safety Recommendations to FRA In addition to the foregoing, the NTSB also makes the following two recommendations to FRA:

1. Develop a program to audit response plans for rail carriers of petroleum products to ensure that adequate provisions are in place to respond to and remove a worstcase discharge to the maximum extent practicable and to mitigate or prevent a substantial threat of a worst-case discharge. (R-14-2).

2. Audit shippers and rail carriers of crude oil to ensure they are using appropriate hazardous materials shipping classifications, have developed transportation safety and security plans, and have made adequate provision for safety and security. (R-14-3).17 In support of these recommendations, the NTSB notes that while rail industry stakeholders must submit comprehensive spill response plans to the FRA, no provision exists for FRA to review and approve such plans. The NTSB argues that “the FRA would be better prepared to identify deficient response plans if it had a program to thoroughly review and approve each plan before carriers are permitted to transport petroleum oil products.”18 The NTSB also notes that “the practice of mischaracterizing the packing group of crude oil shipments may allow shippers to avoid the security requirements necessary for transporting large quantities of volatile crude oil.”19 Thus, the NTSB believes that implementing these measures would lessen the likelihood of another explosive incident involving the transport of Bakken formation crude oil.

Other Safety Recommendations to PHMSA In its January 21, 2014 letter to the PHMSA, the NTSB also makes the following additional recommendations: 1. Revise the spill response planning thresholds contained in Title 49 Code of Federal Regulations Part 130 to require comprehensive response plans to effectively provide for the carriers’ ability to respond to worst-case discharges resulting from accidents involving unit trains or blocks of tank cars transporting oil and petroleum products. (R-14-5).

2. Require shippers to sufficiently test and document physical and chemical characteristics of hazardous materials to ensure the proper classification, packaging, and recordkeeping of products offered in transportation. (R-14-6).20 In support of these measures, the NTSB asserts that existing regulations governing spill responses are inadequate to mitigate the risk of petroleum product releases in accidents, as conditions have significantly changed with the recent massive growth in crude oil transportation.21 NTSB also notes that while regulations “prescribe test methods to assign the appropriate classification, there is an assumption that shippers have exercised the necessary due diligence and testing to ensure their shipments are properly described,” even though this is not necessarily the case.22 Moreover, the record-keeping requirements of applicable law do not mandate that shippers maintain any evidence showing that hazardous materials have been adequately evaluated and that their classification and description is justified. Because the NTSB argues that “properly classified shipments are

The NTSB notes that “rail shipments of crude oil have sharply increased in recent years as the United States experiences unprecedented growth in oil production.” paramount for appropriate package selection, for assessment of risks to develop meaningful safety and security plans, and for the safety of emergency responders and other individuals who may come into contact with hazardous materials in transportation,” the NTSB submits that “PHMSA should require shippers to sufficiently test and document the physical and chemical characteristics of hazardous materials to ensure the proper classification, packaging, and record-keeping of products offered in transportation.”23 Again, the NTSB argues that implementing both measures would reduce the likelihood of another train accident involving the transport of Bakken formation crude oil.

III. PHSMA Safety Alert and its Predecessors A few weeks prior to the NTSB’s issuance of its Safety Recommendation Letters, the PHMSA issued a safety alert24 notifying the general public, emergency responders, and

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125

Industry regulators have demonstrated already this year that they are serious about compliance and willing to take whatever enforcement actions they deem necessary. shippers and carriers that recent train derailments and resulting fires associated with the transport of crude oil from the Bakken region indicate that this kind of crude oil may be more flammable than traditional heavy crude oil. In its alert, the PHMSA reminded crude oil transporters “to properly test, characterize, classify and where appropriate sufficiently degasify hazardous material” before and during transport. The PHMSA also reminded industry stakeholders of its “Operation Classification” (also known as the “Bakken Blitz”), which is an ongoing compliance initiative with the Federal Railroad Administration (FRA) involving “unannounced inspections and testing of crude oil samples to verify that offerors of the materials have been properly classified and describe the hazardous materials.”25 126

BAKKEN OIL REPORT – SPRING 2014

This safety alert follows PHMSA’s and FRA’s November 2013 Joint Safety Advisory26 similarly urging members of the rail industry to ensure they (i) properly characterize, classify, and select an appropriate packing group for Class 3 materials, (ii) comply with all Federal hazardous materials regulations for safety and security planning; and (iii) revise existing safety and security plans, including risk assessments, in light of FRA guidance issued in August 2013.27 Consequences and Conclusion Recent rail accidents involving Bakken formation crude oil, as well as guidance issued by federal agencies, serve as well-timed reminders of the risks associated with transporting highly flammable substances and the importance of mitigating these risks consistent with law and acceptable industry practice. Moreover, industry regulators have demonstrated already this year that they are serious about compliance and willing to take whatever enforcement actions they deem necessary. An example of this occurred in February 2014 when the U.S. Department of Transportation issued notices of proposed violations with .fines totaling $93,000 to three major oil and gas companies,28, 29, 30 all for allegedly misclassifying crude oil from North Dakota’s Bakken region, in violation of 49 U.S.C. § 5101 and 49 C.F.R. Parts 171-180.

The coming months will likely bring increased regulatory oversight, promulgation of new regulations, and additional fines levied against those who fail to comply with applicable law.

The coming months will likely bring increased regulatory oversight, promulgation of new regulations, and additional fines levied against those who fail to comply with applicable law. Thus, members of the rail industry who intend to transport Bakken formation crude oil or who may already be doing so should revisit existing practices, policies, and procedures to ensure they comply with industry standards and appropriately mitigate risk.

Post, January 8, 2014, a copy of which may be found: http:// www.huffingtonpost.com/2014/01/08/canada-trainderailment-freighter-oil_n_4560761.html.

David Shaffer and Kelly Smith, Oil-Train Accidents Prod

11

Regulators to Look at Tank-Car Safety, The Seattle Times, January 8, 2014, a copy of which may be found: http:// seattletimes.com/html/nationworld/2022626180_ railsafetycarsxml.html.

References: 1 Copies of these safety-related items may be found: http://www.phmsa.dot.gov/staticfiles/PHMSA/ DownloadableFiles/1_2_14%20Rail_Safety_Alert.pdf, http://www.ntsb.gov/doclib/recletters/2014/R-14-004-006. pdf, and http://www.ntsb.gov/doclib/ recletters/2014/R-14-001-003.pdf.

2 A copy of which may be found: http://www.fra.dot.gov/ eLib/details/L04722.

3 A copy of which may be found: http://phmsa.dot.gov/ staticfiles/PHMSA/DownloadableFiles/Files/FRA%20 PHMSA%20Joint%20DOT%20Safety%20Advisory%20201306.pdf 4 A copy of which may be found: https://www.federalregister. gov/articles/2013/11/20/2013-27785/safety-and-securityplans-for-class-3-hazardous-materials-transported-by-rail 5 David Shaffer and Evan Ramstad, NTSB: 400,000 Gallons of Crude Spilled in N.D. Train Wreck, Star Tribune, January 13, 2013, a copy of which may be found: http://www. startribune.com/business/239948631.html 6 http://www.thestar.com/news/canada/2013/07/07/train_ explodes_in_lacmgantic_quebec_forcing_residents_to_ flee.html.

7 Safety Recommendation Letter from National Transportation Safety Board to The Honorable Joseph C. Szabo, Administrator, Federal Railroad Administration, at 6 (Jan. 23, 2014).

8 Edward McAllister, Train Carrying Crude Oil Derails, Cars Ablaze in Alabama, Reuters, November 8, 2013, a copy of which may be found: http://news.yahoo.com/traincarrying-crude-oil-derails-explodes-alabama-154303871. html.

9 Alicia Underlee Nelson, Residents Allowed to Return Home After Smoky North Dakota Rail Crash, Reuters, December 31, 2013, a copy of which may be found: http://www. reuters.com/article/2013/12/31/us-northdakota-collisionidUSBRE9BT0OV20131231.

10 Author Unlisted, Canada Train Derailment: Freighter Carrying Oil Derails, Burns in New Brunswick, The Huffington

Safety Recommendation Letter from National

12

Transportation Safety Board to The Honorable Cynthia L. Quarterman, Administrator, Pipeline and Hazardous Material Safety Administration (Jan. 21, 2014); Safety Recommendation Letter (Jan. 23, 2014).

Safety Recommendation Letter, at 1 (Jan. 21, 2014).

13

Safety Recommendation Letter, at 14 (Jan. 21, 2014); Safety

14

Recommendation Letter, at 12 (Jan. 23, 2014).

15

Safety Recommendation Letter, at 4 (Jan. 21, 2014).

16

Safety Recommendation Letter, at 7 (Jan. 21, 2014).

17

Safety Recommendation Letter, at 12 (Jan. 23, 2014).

18

Safety Recommendation Letter, at 9 (Jan. 23, 2014).

19

Safety Recommendation Letter, at 11 (Jan. 23, 2014).

20

Safety Recommendation Letter, at 14 (Jan. 21, 2014).

21

Safety Recommendation Letter, at 9 (Jan. 21, 2014).

22

Safety Recommendation Letter, at 13 (Jan. 21, 2014).

23

Safety Recommendation Letter, at 14 (Jan. 21, 2014).

24

A copy of which may be found: http://www.phmsa.dot. gov/staticfiles/PHMSA/DownloadableFiles/1_2_14%20 Rail_Safety_Alert.pdf.

25

Id.

26

A copy of which may be found: https://www.federalregister. gov/articles/2013/11/20/2013-27785/safety-and-securityplans-for-class-3-hazardous-materials-transported-by-rail.

27

A copy of which may be found: http://www.fra.dot.gov/ eLib/details/L04719.

28

http://www.phmsa.dot.gov/staticfiles/PHMSA/ DownloadableFiles/Enforcement%20Notices/NOPV%20 14-0001-SH-CE%20Hess%20Corporation.pdf

29

http://www.phmsa.dot.gov/staticfiles/PHMSA/ DownloadableFiles/Enforcement%20Notices/NOPV%20 14-0002-SH-CE%20Marathon%20Oil%20Company.pdf

30

http://www.phmsa.dot.gov/staticfiles/PHMSA/ DownloadableFiles/Enforcement%20Notices/NOPV%20 14-0003-SH-CE%20Whiting%20Oil%20and%20Gas.pdf w BAKKEN OIL REPORT – SPRING 2014

127

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& DEWATERING (701) 742-3223 | www.generalirrigation.com 130

BAKKEN OIL REPORT – SPRING 2014

aaAn accredited Michigan-chartered FDIC bank since 1996, Crestmark was founded on the principles set forth by founder and former banker, W. David Tull. In Tull’s vision, relationships would form the basis of his new culture-driven company. From the chairman on down the line, it’s a very entrepreneurial environment, says Hansen.

Additionally, community involvement is highly promoted within the Crestmark culture. The company maintains a regular presence at tradeshows, hosts high school finance management sessions and is involved in numerous community initiatives such as food banks, blood drives and walks for charity.

Crestmark today operates regional office locations in six states – Michigan, California, Florida, Louisiana, New York and Tennessee – and provides working capital, equipment solutions by customized financial services to smalland medium-sized businesses.

Assisting an array of industries, including oil and gas service companies, Crestmark provides funding opportunities to include expansion, acquisition and growth; restructuring and refinancing; turnarounds; recapitalization; and supplier discounts.

In the Bakken area, the business-tobusiness lender primarily deals with service-guide companies, to which Hansen confirms, “It doesn’t matter to us if it’s upstream, downstream or midstream as long as it’s service-related.”

Expertise in the oil and gas industry is a must for Crestmark employees working with these clients, he adds, in order to best assist business growth in all aspects.

Crestmark’s clients say it best “Crestmark provides excellent customer service, and you don’t find that everywhere.”

crestmark

“All Crestmark employees I have been in contact with were very helpful, professional, kind and knowledgeable about the business. Two thumbs up.”

“We were partners with Crestmark, not just a customer.”

“We appreciated the flexibility and efforts of Crestmark to make this arrangement work for us.”

“In these tough times, Crestmark stepped up to the plate to help us out.”

Crestmark Business Development team with a focus on the oil and gas industry: Steve Hansen, Melinda Fricke, and Shannon Stetson.

With relationships in Bakken and other

with their business transaction. We

“Business owners really appreciate that

national plays, including the Marcellus,

help them by understanding what they

we can speak their language, understand

Utica Shale, Austin Chalk, Permian

do and then provide capital to really

their customers and what their payment

Basin and Eagle Ford, Crestmark stays

grow.”

terms are,” says Melinda Fricke, regional

active in the industry.

Whether it’s project management,

first vice-president.

“We really understand the services

rig movers, chemical blending, or well

To show commitment to this industry,

our clients are providing or the product

testing, Crestmark has worked with

Fricke continues, “I’ve invested in a pair of

they’re delivering to their customers,”

many different service providers to the

steel-toe shoes so I’m ready to go to a rig

Hansen says. “We get very comfortable

industry.

site when needed!” w

Strong.

And flexible.

We can help.

Like your business, we know your financing options need to offer strength, and at the same time offer flexibility. Our asset-based finance programs can provide the capital you need to keep your business productive.

We’ve been financing oil and gas service providers for over 20 years, and we understand your unique needs.

Contact us today for more information.

Melinda Fricke Steve Hansen Shannon Stetson

214.722.6446 mfricke@crestmark.com 713.868.1350 shansen@crestmark.com 214.676.4524 sstetson@crestmark.com

BAKKEN OIL REPORT – SPRING 2014

131

MESSAGE

By Jill Beck, Chief Executive Officer, North Dakota Association of Realtors®

Shortage of affordable housing a challenge facing Bakken homebuyers and realtors In the past when I was traveling and would be asked where I was from, upon my response of North Dakota, I would get either a dumbfounded look, be asked how we can live in such a cold climate, or they would jump to the next topic. In today’s world, everyone has heard about what is happening in North Dakota and has plenty of questions besides what the weather is like. They have a true interest in our tale, from questions about sales activity and prices to the availability of housing. The oil boom, along with other energy sectors in North Dakota, has impacted many industries and businesses in the state, and real estate certainly has been one of them. Consumers, along with their Realtors®, have had to work harder and harder to find the property they want to call home. Areas that once were open fields on the outskirts of many towns and cities now hold commercial and housing developments that expand far into city limits.

2013 North Dakota Housing Stats

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BAKKEN OIL REPORT – SPRING 2014

As other parts of the nation were facing housing slumps a few years ago, North Dakota was going against the grain. Sales of new homes, existing homes, condominiums and commercial space are all doing well. The Midwest, especially the two Dakotas, have always seemed to buck national trends in housing (both lows and highs) and have remained stable. This trend was a known fact prior to the latest activity.

One of the biggest challenges currently facing North Dakota Realtors® is the lack of housing inventory, especially in the affordable and low income arena. Sales of new and existing homes are big business and they are facing many challenges.

As our state’s population continues to grow, so too do housing needs. New developments are being established and infrastructure is a big factor in getting these completed.

The increase in demand for housing and commercial properties is not only in oilfield communities as many think,

MESSAGE

but also statewide. The population is increasing in all parts of the state and some workers are moving their families into the eastern and central parts of the state and commuting to the oilfield for work; this may require traveling quite a distance but is better than other states’ commute time.

The shortage of inventory is most evident in the first-time homebuyers’ market, which falls into the affordable housing market. There was a time last summer where a home would be listed in a desirable price range, and be on the market for as little as 24 to 48 hours generating multiple offers, sometimes more than 10 within hours. One member told me of a small waiting line of interested buyers in the driveway with their Realtors® waiting to see the property. The market was, and continues to be, a new type of market that most of our members have not experienced before; they are learning to deal with multiple offers, keeping a closer eye on the MLS for new listings and getting clients to react quickly. Clients (consumers) are having to make decisions on one of their biggest purchases quickly and don’t have time “to sleep on it”

A few years ago our office was receiving calls from outof-state developers, builders and Realtors® who wanted in on the action. Our advice was: “bring your own housing and work crews because there is a shortage of both.” Coming from states where they were experiencing a real slow-down or nonexistent business, they thought we were crazy and trying to keep them out, instead of trying to help them understand what the reality was in North Dakota.

Several of our state’s local boards are partnering with other like groups (chambers of commerce, builder associations, and development associations) to explore the housing needs of the communities to stay in touch with what is happening and to find or offer solutions. Though member Realtors® are reporting that the markets are stabilizing with a bit more inventory, and that appraisals and financing are timelier, only time and consumers’ needs will tell what is in store for housing in North Dakota. The market dictates where housing will go – consumers determine the supply and demand. Overall it is a good market for both buyers and sellers as interest rates remain low and sellers are able to set good prices for existing homes.

or “think about it”. While the markets are good, Realtors® have to work harder and harder for their clients.

For more information, visit www.ndrealtors.com. w

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BAKKEN OIL REPORT – SPRING 2014

133

lite-check

Best practices for trailer maintenance

By Dennis Zerbst

My job takes me into trailer repair shops of every type, size and variety. Some of the maintenance programs that I have seen deserve to be buried and forgotten; but there are some worth sharing so we can all learn and improve.

After all, in the age of the FMCSA’s Compliance, Safety and Accountability (CSA) program (www.csa.fmcsa.dot.gov), everyone needs all the help they can get just to maintain, let alone try to improve, their CSA score. I also informally interview CMV inspectors every chance I get so I have a pretty good idea what they see and what they are looking for during roadside inspections. Read on to find out some of the best practices to help you improve performance, save money and pass roadside inspections.

The key to fewer roadside inspections Check your lights! The overwhelming majority of CMV inspections occur because an officer sees a light out and pulls a CMV over – such a simple thing, but one that starts a process that can lead to expensive roadside repairs and/or fines. A conservative estimate is that the time spent on the side of the road costs $500 per hour.

To avoid this as much as possible, your trailer maintenance program needs an advanced diagnostic tester that lets one technician use a remote control to activate each electrical circuit as he walks around the trailer once. The best testers monitor the electrical circuits for faults and sound alarms and display the cause of the faults.

The number one reason trailers are placed OOS is due to brakes and/ or brake adjustment. This is followed closely by tires being unfit for service, 134

BAKKEN OIL REPORT – SPRING 2014

Measuring brake stroke is easy with an advanced diagnostic tester and a remote control. Image credit: Lite-Check LLC. and next after that are air leaks. The CMV inspector is going to get under the trailer to perform a thorough visual inspection of the brake system components, and measure the brake strokes with a 90 to 100-psi brake application per TMC recommended practices. Including this test as part of your company’s inspection and maintenance program on a regular basis will help you be in the best possible position to pass roadside inspections.

There is help available to make this job fast and accurate. Advanced testers let you apply and release the brakes via remote control while you are under the trailer, watching the brake components move and measuring/adjusting brake stroke length. The best testers are regulated to provide the same air pressure for a brake application as the inspector will use. Remember to do a leak-down test on both air lines at the same time. Since you are already there, conduct a quick visual inspection of the tires and listen for air leaks. With the right tester, you can check all the hot items – lights, brakes, tires and air

leaks with one technician and less than 10 minutes of shop time. That is a good investment, trading 10 minutes of shop time for all of the expense and hassle of roadside inspections and/or repairs.

When the wheels are turning, everybody is happy!

Another best practice is to pay for performance. Reward drivers and shop technicians for passing roadside inspections. Do this and your drivers will perform pre- and post-trip inspections without fail, and will insist the items be fixed before they head down the road.

Take a chance! I am willing to bet that your reward payout will be a smaller investment than the money saved on road repairs and/or fines. Everybody wins – you are making money and as an added bonus, morale goes up too.

Want to save $$$?

The key to fast inspections and accurate fault isolation is technology.

Advanced diagnostic testers help every shop tech do the job faster and help you save considerable money on parts.

Consider ABS troubleshooting; many

lite- check

The key to fewer roadside inspections: check your lights!

Remember to do a leak-down test on both air lines at the same time. shops consider this a “black art” and so only one to two technicians or the shop supervisor take on the challenge of working on ABS faults – but with what kind of results? ABS ECU manufacturers report that 75 percent of all units returned to them under warranty are in fact good. That is a terrible percentage and makes my point that advanced diagnostic testers are needed to help analyze electrical circuits and ABS faults. The best testers use TMC Recommended Practices to make sure that the primary and secondary power to the ABS ECU are within tolerance before the ECU can be communicated with. If the ECU does not have proper power, it will only give erroneous results, so fixing the power issues is the first step.

It is my opinion that most technicians just change the ECU when presented with this scenario; when in fact, just cleaning up the corrosion and wiring issues to fix the ECU power issues would fix the problem. This is a crucial concern when you consider that the typical ECU costs between $500 and $900 and it takes on average three to four hours of shop time to change one out. Refraining from needless replacement of good ECUs could add up to some serious money-savings very quickly. Want some icing on the cake?

Not spending four hours replacing a good part gives your technician the

Checking lights with an advanced diagnostic tester. Image credit: Lite-Check LLC. opportunity to work on other, needed jobs and the savings or increased revenue just keep adding up.

Improve performance of lower-level technicians and employee morale Provide technicians with a rugged, all-in-one, advanced diagnostic tester, with troubleshooting diagnostic software built-in to the tester, and the performance level of your shop will go way up. The best testers are extremely intuitive and so easy-to-use that even entry-level technicians can test and diagnose air leaks, brake issues, electrical circuits and PLC ABS faults. Testers should test to TMC Recommended Practice standards to ensure that the testing is done correctly and that you are getting the expected results.

Every time I see a shop invest in an advanced diagnostic tester, it is amazing to watch how the technician morale goes way up. After a few short weeks, you will not be able to separate the technicians from their beloved tester. Testers do require an investment, but one that has a definite payback in terms of labor savings, parts savings and fewer roadside repairs. And as an added bonus, your CSA

score probably improved, as well.

In Conclusion You have probably surmised that an advanced diagnostic tester is the key to improving your trailer maintenance performance level while saving money and passing more roadside inspections.

I gave you the big hitters; if you want to do even better, just inspect those things regularly and thoroughly using advanced testers (probably not as difficult as you were thinking at the beginning of this article). Yet, some of you will say “We never needed tools like that before. We will get along just fine without them.”

CSA will eventually put the “nails in the coffin” of shops run with that mentality. If you travel as much as I do, you will notice that there are fewer repair shops and fewer fleets than there used to be. These were the technology laggards that failed to adapt, improve and invest in the tools required for today’s trailers. I sincerely hope that you will instead embrace change and invest in your future. After all, CSA is here to stay.

For further information, please visit www.lite-check.com. w BAKKEN OIL REPORT – SPRING 2014

135

penta completions

Custom rod strings for maximum production Penta Completions Supply and Services Ltd. provides complete rod-pumping optimization, design, supply and services to companies in the U.S., Canada and worldwide, specializing in sucker rod pumping for difficult oil wells.

From its very beginnings in 1987, Canadian-based Penta Completions had the good fortune to work with Texasbased rod-pumping design and analysis pioneers Dr. Sam Gibbs and Mr. Ken Nolen, co-founders of West Texas-based Nabla Corporation, And their expertise has stood Penta in good stead over the ensuing years.

“We’ve earned an international reputation for helping producers design and install anything from a conventional pumping configuration, to a highly specialized rod string,” says Penta Completions president Tom Dennehy.

Penta provides analysis and optimization recommendations based on fluid level, POC data and dynamometer testing, together with a complete line of steel and fiberglass sucker rods, sinker bars and related accessories to support those recommendations. Its services also include long-term monitoring and optimization through cellular-accessed pump-off controllers. Penta specialists will supervise installs to ensure optimal performance and life cycles in rodpumped oil wells.

“The things we do will increase the life of the downhole pumping system, limit pumping unit repairs, and increase the average time to failure from months to years,” says Penta’s consulting engineer Fred Morrow, who 136

BAKKEN OIL REPORT – SPRING 2014

The Bakken play in the U.S. – trending deeper than in Canada – lends itself to take full advantage of all of the benefits achieved when utilizing SUPEROD fiberglass rod technology. With the addition of Hi-Temp SUPEROD fiberglass rods, there are no longer wells that should not be considered fiberglass candidates. has been involved in the design and manufacture of fiberglass sucker rods since their inception. “We’ve optimized rod pumping to where the mean time to failure has been increased by magnitudes.”

While Penta Completions is based in Canada, the company has always supplied U.S.-manufactured products.

Penta’s two main suppliers, SUPEROD and UPCO, are U.S.-based and manufactured.

SUPEROD, Penta’s supplier of fiberglass sucker rods, has installed more than 3,900 rod strings with zero operational failures since coming on the market.

“Everything we’re doing now is based on years of analysis and evaluation,” says Penta sales manager Jeff Wanner, noting that the company’s 10 front-line staff have an average of 25 years experience,

with some having close to 50 years in rod pumping.

As Penta’s business development specialist Bob Wanner puts it: “With our experience, and having worked so closely with customers over the years, we are able to utilize the available software to more accurately predict end results. All we’ve ever done since the company was incorporated 27 years ago is exactly what we do today.”

Jeff Wanner adds: “We’re not guessing at anything – our methods rely on making decisions based on experience and actual well data. There is no trial and error involved in what Penta does. Our past experience allows us to be proactive. We can typically spot potential problems before the well is equipped, as opposed to waiting for a problem to arise and then fixing it afterward.”

Different applications = different rod strings

1914

|

2014

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penta completions

Penta was one of the first companies to become involved with dynamometer analysis and automation.

The principals behind SUPEROD – the same people who worked on the development of the original fiberglass rod – have spent the past 25 years improving their product, to a point where SUPEROD is the most technologically advanced fiberglass rod on the market today.

Fiberglass rods, which have increased corrosion resistance, are a tool that saves surface equipment costs, cuts power consumption and lowers energy bills.

“Fiberglass rods reduce operating costs overall as well as capital costs,” Bob says.

The Bakken play in the U.S. – trending deeper than in Canada – lends itself to take full advantage of all of the benefits achieved when utilizing SUPEROD fiberglass rod technology. With the addition of Hi-Temp SUPEROD fiberglass rods, there are no longer wells that should not be considered fiberglass candidates. As end-users look for ways to reduce capital and operating costs, fiberglass can go a long way to achieving that goal.

From the very beginning, Penta has worked with software developers and assisted them in the development of today’s industry-wide premier rodpumping predictive software.

Penta was one of the first companies to become involved with dynamometer analysis and automation, helping advance the principles related to the proper design and optimization of rod-pumped oil-well pumping systems.

“Our automation services focus on an understanding of the application,” Bob says, explaining that Penta believes a successful fibreglass rod installation is usually related to a successful automation program.

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BAKKEN OIL REPORT – SPRING 2014

penta completions

“It’s like having a field operator on the well site 24 hours per day, seven days per week, watching that you don’t have equipment failures, and indicating trends in the data coming back.”

These are just some of the reasons why customers are choosing Penta, for the long term.

“Their knowledge is outstanding, and their support and finding solutions to your problems is excellent,” says TAQA senior production engineer Doug Torr, who has used Penta products in Montana and North Dakota for the past several years. “Their support for our artificial lift (rod pumping) is just outstanding, and they really back up their product. They are one of the best companies that support their products that I’ve been associated with.”

Rod Mumby, Western Canada production manager for ConocoPhillips Canada, also speaks very highly of Penta.

“They are competitive on pricing, but they aren’t just trying to sell us a product – they really want us to get the right product for our wellbores and ensure we make money with the product they are selling us,” Mumby says. “They are fullservice – that is what they are really, really good at.” w

48

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NOSHOK Corporate Headquarters I 1010 West Bagley Road I Berea, Ohio 44017 I P: 440.243.0888 I F: 440.243.3472 I www.noshok.com BAKKEN OIL REPORT – SPRING 2014

139

compass compression

Focused on growth: Compass Compression opens new service branches in the Bakken

By Lisa Fattori

1380 HP Xtreme North Reciprocating Compressor package.

3550 HP Xtreme North Reciprocating Compressor package.

Established in 2001, Compass Compression has been in business for more than a decade and has grown from providing lowhorsepower screw compressor packages to having one of the most comprehensive offerings in the industry. The company provides everything from sales, engineering and design to fabrication, installations and field services, offering a wide range of compression, process and refrigeration products to oil and gas producers and midstreamers around the world. Large enough to handle the most sophisticated project, yet small enough to deliver personal, one-on-one customer service, Compass has the experience and expertise to deliver solutions.

“We have standard product lines, as well as custom products, to meet all of our customers’ needs,” says Kirk Dunn, director of service for Compass. “We also have retrofit capabilities, offering customers flexibility to change applications and meet new or changing conditions in markets or locations.”

In the last few years, Compass has expanded operations to ramp up its product supply and has extended services for a wider geographical reach. Compass has several facilities located throughout North America, including fabrication plants, parts warehouses and offices, as well as field service branches. In 2013, the company’s assembly space increased by 67 percent, for a total of 68,000 square feet between three facilities.

“Our approach to growth has been to keep it controlled and steady, so our customers receive the same excellent service,” Dunn says. “By having facilities and staff in place to meet 140

BAKKEN OIL REPORT – SPRING 2014

demand, we can be sure that our high standards, both in quality products and service, won’t be compromised.”

Compass Compression’s service area extends throughout the entire Bakken region to northeastern British Columbia. Recently, Compass opened service branches in Casper, Wyoming, and Regina, Saskatchewan, with another in Dickinson, North Dakota opening soon. The new service branches provide customers with local support and faster on-site repairs and service. Original equipment manufacturer-trained local field service technicians work out of strategic locations to ensure that customers receive prompt service, and can perform on-site overhauls.

“Customers can depend on us 24/7 for parts and service, so downtime is minimized and there is limited interruption to operations,” Dunn says.

Producers also have the option of renting equipment from Compass Compression’s rental fleet. Rental options range from three months to five years and include rent-topurchase opportunities. The option to rent, rather than own, makes good economic sense in certain scenarios, particularly when conditions change over a well’s lifetime, giving clients greater flexibility in financing their operations. A preventative maintenance program includes preventative and corrective maintenance, field service calls, equipment overhauls and the cost of returning rented compressor packages, so that there are no surprises and clients know the total cost of their equipment.

“Sometimes it’s in a customer’s best interest to rent and, when

compass compression

the term is up, a different unit can be provided to meet new needs,” Dunn says. “This works well for companies with a set budget, so they can put more money into infrastructure.”

Compass carries the leading product lines, including Ariel, Frick, RoFlo, Caterpillar and Waukesha, with all packages assembled from components manufactured by leading OEMs. Compass builds packages to their own Xtreme North specifications for cold weather applications. This includes fully enclosed, insulated and heated packages that are designed to increase production and extend the economic life and recoverable costs of equipment, by avoiding cold-weatherrelated problems.

“Our Xtreme North packages are designed for operation in colder temperatures and withstand minus 40 degree weather,” Dunn says. “This is what sets Compass apart from other packagers and is why we’ve been so successful in North Dakota and Wyoming. We’re experienced in supplying products to northern British Columbia and it’s what’s needed in the northern U.S. Warm weather packages simply don’t offer the Compass Compressions field service map, North America.

same reliability.” w

Local Field Service on Demand Compass Compression has extensively experienced field technicians and parts available 24/7. ● Compression commissioning ● Start-up assistance ● Complete package tune-ups ● Preventative maintenance ● Field revamps ● On-site major equipment overhauls ● Operator support and training ● Refrigeration and compression optimization

Parts & Service

+1 701 509 1777

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Package Sales

(USA)

+1 972 233 0500

www.compasscompression.com BAKKEN OIL REPORT – SPRING 2014

141

cs unitec

ATEX-certified power tools = Safety in explosive atmospheres Working in explosive atmospheres

must be complied to the satisfaction of

users worldwide that the product was

carries many challenges, the most

a third-party certification association.

manufactured to high levels of safety.

important of which is the safety of the

This directive is addressed to those

CS Unitec Inc., a company specializing

workers. An explosive atmosphere

who design, manufacture or sell

in pneumatic, hydraulic and electric

is defined as one in which enough

any equipment intended for use in

power tools, offers a line of power tools

flammable gas, mist, vapor or dust is

potentially explosive atmospheres.

for the oil, gas and energy industries.

mixed with air to cause an explosion

Once the objectives have been met, the

ATEX-certified air and hydraulic power

if ignition (electrical or mechanical)

approved product is marked with the

tools from the company include

occurs. The requirements for controlling

appropriate ATEX classification label and

reciprocating saws, hacksaws, rotary

explosive atmospheres, as well as the

Ex symbol.

hammer drills, impact wrenches,

standards for equipment and protective

Compliance with the ATEX directive

portable band saws, nut runners,

systems used in them, are outlined in

has been a legal requirement in all

magnetic drills, axial fans, ventilators

the ATEX directive.

European Union member states

and more.

ATEX is a directive outlining a number

since July 2003. The ATEX symbol is

“Naturally, it is important to follow

of technical and quality objectives that

recognized internationally, assuring

the operating instructions for each

Ex classification chart.

142

BAKKEN OIL REPORT – SPRING 2014

Tools for Hot Work Areas

CS Unitec has special tools for use in hazardous areas and Ex Zones, ideal for Oil, Gas and Process Industries Non-Sparking, Non-Magnetic Hand Tools for Ex Zones Wrenches • Pliers • Screwdrivers Hammers • Sockets and more!

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tool. In addition, it is critical to use the correct safety equipment required when working in hazardous areas and Ex zones,” says CS Unitec president Tom Carroll. “The ATEX directive, while not a requirement in the United States, is a practical, detailed guide for working safely in high-risk areas.

When choosing the right tool for an explosive zone, each user is responsible for following all safety regulations, including knowing the correct tools for use.”

Ex zones are defined for gas, mists or vapors as an atmosphere where a mixture of air and flammable

substances in the form of gas, vapor or mist is: • Present frequently, continuously or for long periods (Zone 0).

• Likely to occur in normal operation occasionally (Zone 1).

• Not likely to occur in normal operation but, if it does occur, will persist for only a short period (Zone 2).

Ex zones are defined for dusts as an atmosphere where a cloud of combustible dust in the air is: • Present frequently, continuously or for long periods (Zone 20).

• Likely to occur in normal operation occasionally (Zone 21).

• Not likely to occur in normal operation but, if it does occur, will persist for only a short period (Zone 22).

Four ATEX classification elements are used to ensure that a specific piece of equipment is appropriate for its intended purpose and can be safely used in a particular application.

These four elements are: 1.) Industrial or mining application; 2.) Equipment category; 3.) Atmosphere; and 4.)

Temperature (see ATEX Classification Chart for more information).

For example, CS Unitec’s Pneumatic Reciprocating Saw, model number 5 1217 0020, is approved for Ex II 2 GcT5, making it appropriate for industrial Ex zones 1, 2 and 21, 22.

For more information and product specifications on CS Unitec’s ATEX-approved industrial power tools or for a free poster explaining Ex zones, please visit www.csunitec.com, call (800) 700-5919, (203) 853-9522 internationally, or email info@csunitec.com. w

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BAKKEN OIL REPORT – SPRING 2014

THE OILFIELD IS UNFORGIVING

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wanzek

Wanzek builds new depot to house equipment and team members in the Bakken Featured cranes from Wanzek’s fleet.

Photos courtesy: Tara Kessler.

146

As a direct-hire, heavy industrial contractor, Wanzek

storage and maintenance. This six-acre site features an

Construction, Inc., a MasTec company, serves the industries of

8,000-square-foot shop and office building and will provide

power, renewable energy, oil and gas, heavy/civil and industrial

living quarters for up to 24 crane services team members

agriculture. Wanzek has had a presence in western North

working in the Bakken. The project will be completed in May.

Dakota since 2007, and has completed hundreds of projects in

“This new, central location for crane services will result

the Bakken. Crane operations manager Kevin McCrory credits

in a more efficient team member deployment process and

Wanzek’s success in the area to the company’s highly skilled

strengthen Wanzek’s ability to service our customers,” says

teams, and says that the firm continues to expand its fleet and

McCrory.

resources as demand in the region grows.

Wanzek’s fleet of all-terrain, rough terrain lattice-boom

Wanzek is currently constructing a new facility in Alexander,

crawlers and hydraulic truck cranes has earned recognition on

N.D., that will serve as a depot for the firm’s crane equipment

American Cranes & Transport Magazine’s list of North America’s

BAKKEN OIL REPORT – SPRING 2014

BUILDINGSTRONG wanzek.com

wanzek

Largest Crane Owning companies.

Wanzek’s cranes services include engineering and project management for crane rental projects, crane and lift training, engineered crane lifts, crane rentals and services, rigging services, transportation services and heavy lifts/ heavy transportation services.

Wanzek’s demand for crane services in oil-rich western North Dakota has expanded significantly, with opportunities in a wide range of services to the oil and gas industry. In addition to a fleet of company-owned cranes and equipment, Wanzek’s experienced direct-hire crews and knowledgeable project managers enable consistent delivery of the highest quality work. A dedication to performing efficient management services using leading-edge technology,

whether software, equipment or training, allows Wanzek to complete jobs at a high standard of excellence.

Wanzek oil and gas services comprises facilities construction, including pump and compressor stations; crude oil and gas plant expansions; skid and module fabrications; bulk terminals and storage, and LNG/GNL storage as well as reliability and maintenance services, including pipeline maintenance; facilities maintenance; capital modifications; hydrostatic testing support and drilling support including crane services support; well-pad development; and equipment settings and roustabout services.

Scope of work for oil and gas projects includes storm sewer system for site and earthwork, demolition of

existing system, excavation of ditches, installation of new systems, installation of grouted rip-rap to systems, concrete, foundations for pipe rack and sphere tanks, installation of pile caps, deep foundations, supply and installation of driven pipe piles and structural steel and piping.

Wanzek is continuously elevating project management through planning, resource utilization, project execution, sound procedures, controls and effective communication. A proven history of performing complete construction and maintenance services to major compressor stations, pump stations, meter stations, LNG facilities, tank farms, liquid handling facilities and NGL stations has resulted in a strong foundation for future projects.

Wanzek follows an operator

HAVE YOUR BUILDING PROFESSIONALLY INSULATED BY

qualification plan designed to ensure all team members are OQ-certified to perform tasks safely. Team member qualifications include ASME: U, S and PP Certificates and R Stamp, NCCO Certified Craftsmen and Operators, OQ Qualified Personnel, Turnkey EPC Capabilities and P6 Planning and Scheduling.

McCrory credits Wanzek’s success to

OIL FIELD • INDUSTRIAL • COMMERCIAL • RESIDENTIAL

its highly skilled teams and believes the company is positioned to expand as the

Contact Don Ell, Williston Branch General Manager

701-572-2718 STOP BY AND VISIT US AT 5208 2nd Ave West Williston, ND

Bakken grows.

Wanzek’s featured cranes include Rough Terrain 28-75 ton, Crawler 100660 ton, Mobile 38-275 ton, CC 2800 660-ton superlift, CC 2500 550-ton superlift/luffer, and ACT 3275 275-ton.

For more information, please visit www.wanzek.com. For rental rates,

www.MillerInsulation.com

call 701-282-6171 or email craneservices@wanzek.com. w

148

BAKKEN OIL REPORT – SPRING 2014

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drake water technologies

Montana research and development company produces solutions for issues facing the oil and gas industry

By Vivian Drake, COO, Drake Water Technologies, Inc.

Over the past 15 years, Drake Water Technologies, Inc. (DWT), in Helena, Montana, has been researching and developing technologies that address environmental issues facing the oil and gas industry. Drake’s team is comprised of five talented individuals having engineering expertise combined with construction and field experience that allows the team to take initial solution concepts all the way to commercialization. DWT specializes in solving difficult oilfield issues by using “in the box” expertise with “outside the box” innovation.

DWT’s flagship technology, dubbed IonFlo, is a novel water treatment technology that employs commercially available ion exchange resin (IXR) to economically remove salts or low total dissolved solids (TDS) from large quantities of produced water, such as coal bed methane (CBM) or coal seam gas (CSG) produced waters. The IonFlo process is a truly continuous process and utilizes the IXR to “dial in” the amount of salt to be removed from wastewater. This innovative use of IXR allows removal of a specified amount of ionic species, as opposed to total ion removal utilized in other ion exchange processes, which reduces the cost of treatment operations and eliminates the need for water “blend back” or addition of chemicals to meet regulatory standards. IonFlo has three issued patents, with a fourth pending.

IonFlo is mobile, modular, and scaleable, 150

BAKKEN OIL REPORT – SPRING 2014

allowing deployment in remote

development of fossil resources. DWT

locations, and easily accommodates

has developed a novel and proprietary

changing water throughput. IonFlo’s

technology, named SolFlo, to address

first commercial application was in

these high TDS waters and render them

Wyoming in 2008, treating CBM waters for a large oil and gas producer.

The inability to economically manage or dispose of the high TDS frac-return waters produced during shale play development is a costly impediment to resource extraction due to both transportation and disposal costs. Additionally, ever-increasing regulation of these produced and fracwater discharges threaten economic The Drake team stands next to the IonFlo pilot.

Ron Drake stands inside an IonFlo unit located at a jobsite in Ricketts Flat, Wyoming.

Drake Water Technologies Inc. www.DrakeWater.com Drake Water Technologies, Inc., offers engineered solutions to solve difficult water treatment problems faced by the oil and gas industry. With its team of engineers and water plant operators, Drake Water’s Team provides unique water treatment solutions that go beyond standard and costly treatment methods.

IonFlo IonFlo was designed to solve a unique and difficult water challenge – partial clean up of large amounts of low TDS waters, such as coal bed methane (CBM) produced water. IonFlo is a patented next-generation truly continuous ion exchange system.

SolFlo SolFlo is being developed for industrial and commercial use to affordably treat high TDS waters, such as frac flowback produced water.

GenFlo GenFlo is a proprietary and economical technology that recovers pure (>99%) elemental iodine from produced waters that are otherwise re-injected.

Telephone: 406-449-2440 CuttFlo is the “Cradle to Grave” solution for treatment of drill cuttings, contaminated soils, spent emulsion/invert fluids, slop oils, and “rag” layer produced during oil and gas exploration and refining, at the same time recovering valuable organic products.

Email: Vivian@DrakeWater.com C & E Reclamation, Inc. ®

featuring CuttFlo and ThermFlo technology!

SilFlo SilFlo comprises a suite of process technologies to selectively remove silica and other scaling components from waters in industrial and OTSG feed water, boiler feed makeup water, and RO water.

ThermFlo ThermFlo is a complete thermal solution for reclamation of drill cuttings and organically contaminated soils. Post treatment the solids can be returned to the landscape, eliminating longterm liabilities.

www.cereclamation.com C&E Reclamation has developed novel and revolutionary thermal technologies, CuttFlo and ThermFlo, for the remediation of oilfield wastes, recovery of valuable organic products (CuttFlo), and elimination of costly and time consuming waste transport and disposal.

Please stop by our booth at the TRAC Energy Expo 2014 Winter Base Camp in Sidney, MT, March 18-20 and the Montana Energy 2014 Trade Show in Billings, MT, April 2-3

drake water technologies

The Drake team welding the CuttFlo pilot project.

suitable for unrestricted discharge to surface waters and for other beneficial uses, such as irrigation, aquaculture, and land application.

A third technology, GenFlo, is in development for the recovery of pure elemental iodine from produced waters associated with oil and gas E&P operations. With its wide use in medical and industrial applications, often with no comparable substitute, iodine is a commodity in high demand.

Produced waters from formations of marine origin often contain iodine; the waters are generally considered a waste product and are simply re-injected after separation from the organic product.

GenFlo is the solution that can take a valuable commodity from waters that are now considered waste product.

SilFlo was recently developed by DWT to address scaling issues in oncethrough steam generators (OTSG), industrial boilers, cooling towers, and reverse-osmosis systems. Scaling is a costly problem faced by the oil and gas industry, caused by the build-up of silica and alkaline earth species. SilFlo is a continuous process that selectively removes scaling components from 152

BAKKEN OIL REPORT – SPRING 2014

these waters as well as brackish and saline waters having TDS greater than 15,000 ppm.

In 2012, DWT was approached with a problem facing well drillers in the Bakken play, namely treatment of drill cuttings for unrestricted disposal. Based on a technology developed by Drake Engineering Incorporated (a company owned by Ron and Vivian Drake) in the 1990s, DWT began development of CuttFlo technology. In February 2013, DWT spun off a partner firm, called C & E Reclamation, Inc. (C&E), to commercialize and market CuttFlo and ThermFlo technologies for remediation of a wide variety of E&P waste solids, sludges, and waters exhibiting organic contamination.

The CuttFlo process recovers and utilizes energy values from the organic contaminants to drive the patentpending thermal process, which produces clean soil, salt cake, and clean water. In addition, the CuttFlo process recovers valuable organic product from the hydrocarbon contaminated cuttings, soils, and other waste materials from oil and gas operations. Decontaminated solids are free from organics and

water leachable salts. Product water is a clean distillate suitable for recycle, beneficial use in energy production, or unrestricted discharge. A full-scale CuttFlo unit has been constructed and is expected to be deployed in early spring 2014.

A second thermal process offered

by C&E is called ThermFlo. ThermFlo is an efficient and cost-effective thermal process developed for complete remediation of soils or drill cuttings contaminated with less than 10 percent organics and a much higher throughput than CuttFlo. ThermFlo systems can be modularized and skid-mounted for rapid and simple deployment to drilling or spill sites. Similarly, repositioning or recovery of ThermFlo systems is simple, rapid, and leaves no permanent footprint on the landscape, while at the same time producing clean solids that can be returned to the landscape, thus eliminating long-term liabilities.

About the DWT Team Ron Drake, P.Eng., is DWT’s CEO and president. Ron, a 1972 graduate in chemical engineering from Montana State University, is a licensed

drake water technologies

professional engineer in Montana and Wyoming. With over 40 years of experience in environmental process development, industrial and nuclear waste treatment, Ron continues to research, develop and demonstrate new technologies, with 12 patents and patents pending. Ron is a long-time member of the AIChE, and an avid reader and amateur chef. In 2010, Ron was appointed to the Montana Board of Professional Engineers and Land Surveyors by Montana’s governor.

Vivian Drake, COO for both companies, holds degrees in civil and hydrogeological engineering, as well as a master’s degree in land resources and environmental sciences, from Montana State University. She administered Lewis & Clark County’s Water Quality Protection District for nine years. As project manager, Vivian has expertise in ground water flow, contamination and cleanup, water rights and permitting, as well as litigation support. She and Ron Drake formed Drake Engineering Incorporated in 1987 and have successfully operated their consulting business for 27 years.

DWT’s team also includes Mike Drake, senior staff engineer. Mike is a graduate of the Navy Nuclear Power School and has experience in the fields of reactor operation, health physics, and radiological control. For over 20 years, he independently owned and operated a sole proprietorship and service business that required project and construction management for all types of properties. Mike has also worked as a private consultant with Ron Drake in the development of several new and novel environmental technologies, including CuttFlo and GenFlo technologies.

Doug Hahn is DWT’s Senior Staff Technician. Doug holds an A.S. in Water Quality Technology/Environmental Health from Northern Montana College

and has over 12 years of experience as a water and wastewater plant operator, including operation of the water plants for the cities of Havre and Helena, Montana. Doug brings a plethora of experience to DWT and is skilled in machine operation, welding, and construction.

Syris Trahan joined Drake Water in January 2012 as staff engineer. Syris is a 2007 graduate of Montana State University with a B.Sc. in physics and a minor in Spanish. He graduated from Heriot-Watt University, Edinburgh, Scotland, in 2011 with a M.Sc. in renewable energy engineering. Syris has been instrumental in researching ion exchange resin applications as well as participating in the design and construction of the first CuttFlo alpha prototype equipment. He is particularly

skilled at IT and electronics.

DWT’s team provides unique solutions for the oil and gas industry that go beyond traditional and costly methods. DWT develops, designs and constructs novel solutions to meet stringent regulatory specifications while keeping process costs as low as possible. With over 100 years combined experience in engineering, research, construction, permitting, and project management, the DWT team solves problems by thinking “outside the box”!

For further information, please contact: Vivian Drake, Chief Operations Officer, Drake Water Technologies, Inc. 7492 Commerce Ct., Ste. B, Helena, MT 59602-9677 Telephone: 406-449-2440 w

www.kelsotech.com

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153

MESSAGE

Bismarck-Mandan: Gateway to the North Dakota oilpatch Do you need an entry point into the North Dakota oilpatch? One with commercial and charter air service?

You need look no further: the Bismarck Airport offers daily service to Denver and Minneapolis-St. Paul. In addition, charter air service directly to the oilpatch, whether you need to make a short round-trip in a day, multiple trips around the oilpatch, or require service on a regular basis.

Do you need to deal with the various regulatory agencies and organizations supporting our state’s oil and gas industry? The State Capitol in Bismarck is home to the North Dakota Department of Transportation and the Department of Mineral Resources. Statewide industry organizations such as the North Dakota Petroleum Council and the Lignite Energy Council also base their operations from Bismarck-Mandan.

Have a need for professional services from attorneys, engineers, geologists, consultants or others? They’re all here,

The National Energy Center of Excellence (NECE) is located on the campus of Bismarck State College. too, along with the ability to train

oilpatch via rail and truck? Bismarck-

more at one of our four institutions

Mandan offers easy access to I-94 and

of higher education: the University of

U.S. Highway 83, taking you north and

Mary, Bismarck State College, United

west to the heart of the oilpatch. Rail

Tribes Technical College and Rasmussen

service is also readily available in and

College.

out of the community with a variety

Need a place to deliver freight to the

of carriers. And the Bismarck-Mandan

Residential housing is a priority for the community, with contractors building new homes year-round.

154

BAKKEN OIL REPORT – SPRING 2014

Bismarck-mandan, north dakota

Bismarck-Mandan, North Dakota, is growing with the state’s oil industry . . . professional services, logistics, commercial space, residential neighborhoods and family living.

Whatever your needs – business, employment, housing – consider Bismarck-Mandan and all it has to offer.

• convenient location – Bismarck-Mandan sits at the intersection of US I-94 and US Highway 83, giving it easy access to the oil industry to the west and north.

• air service – daily jet service to Minneapolis-St. Paul and Denver with charter service to western North Dakota.

• access to government – the State Capitol in Bismarck offers direct contact with regulatory agencies and elected officials, as well as the North Dakota Petroleum Council and the Lignite Energy Council.

• Well-rounded community – Whether for business or family, Bismarck-Mandan offers available workforce, quality educational institutions, stateof-the-art healthcare, recreational opportunities yearround, and a safe atmosphere to live, work, and raise a family.

Contact the Bismarck-Mandan Development Association to learn more, or visit bmda.org

bmda.org • 701-222-5530 • info@bmda.org • 400 East Broadway Ave. • Bismarck ND 58501

MESSAGE

Lincoln Elementary students attend the ribbon-cutting for their school, one of four new public schools being built in Bismarck-Mandan.

Development Association is currently planning future railserved industrial space.

Do you want to move your family to North Dakota and take advantage of the many oil and gas-related opportunities, but don’t want to live on-site? Consider this about BismarckMandan ...

• State-of-the-art health care system employing over 7,500 medical professionals who can care for your every medical need. This includes two first-class hospitals and a variety of medical clinics, along with a long list of private specialists and practices.

• An exceptional K through 12 school system, offering both public and private options. Post-secondary options range from one-year degrees to PhDs. • The Bismarck MSA represents one of the safest communities in the nation by the ranking of the U.S. Justice Department, with both property and violent crimes rates well below the national average.

• There is a continuing supply of homes in most price ranges and contractors are building new homes on a continuous basis. New single-family home and apartment construction is a community priority.

• Recreation of all types abounds with numerous golf courses, tennis courts, miles of bike paths and walking paths. If you 156

BAKKEN OIL REPORT – SPRING 2014

like fishing and hunting or you want to check out a museum, theatre production or symphony concert, we have all those things as well.

• And the community offers an excellent and ever-expanding choice of retail, restaurant and other amenities you’re used to in larger cities.

If this all sounds a little bit too good to be true, you are in for a truly great surprise. This is not a fairy tale, it is real and we invite you to call us at the Bismarck-Mandan Development Association to learn more. We want you here whether you’re looking for a place for your family or you need to find a place to expand your company in a location that will give you backdoor access to the activities in the oilpatch.

Talk to us; we do have the answers you need to hear.

Call us at 701-222-5530, visit us online at www.bmda.org, or email me at britter@bmda.org.

Best regards, Brian Ritter, CEcD President/CEO Bismarck-Mandan Development Association 400 E. Broadway Ave. Bismarck, N.D. 58501 w

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swivel storage solutions

When it comes to heavy-duty toolboxes, it’s better to ‘Swivel’ than slide!

Why didn’t anyone think of this before: Toolbox drawers that pivot out on a front corner to expose every square inch of space?

The Swivel Pro Series do just that and are built tough. The drawers virtually cannot be overloaded, as they stand up extremely well under heavy loads.

The Penner family has operated Okno Manufacturing Inc., a metal fabricating shop, since 1981 in small-town Arborg, Manitoba, Canada. During that time, they went through many toolboxes and workbenches. The problem was that they just weren’t built well-enough to survive the heavy tools and dusty shop environment.

“The Swivel Pro Series was designed by our parent company for use in our manufacturing facility,” says Norm Penner, president of Swivel Storage Solutions, a new branch of Okno Manufacturing Inc. “These cabinets are the result of years of trial and error. Years back, we tried numerous toolboxes and benches for our manufacturing shop, but to our disappointment, found that all of them failed very quickly in our shop. The sliders kept wearing out and breaking or sagging under the load of the drawers.”

After many years of research and trial, the design that proved most successful was the SwivelHinge™ system. Every drawer hinges on a solid one-inch vertical shaft in the front corner of the toolbox; this allows the drawers to easily swing out, giving full access to the drawer’s contents. Most importantly, there are no sliders anymore, meaning 158

BAKKEN OIL REPORT – SPRING 2014

no rollers, no bearings, and no failing or

hold up well to vibration and shifting

sagging drawers to worry about.

tools when used in a mobile application.

“We have had very good success in the

But now, with our new swivel design,

service truck and mobile applications with

we have eliminated the broken and

our boxes,” says Penner. “Many people told

sagging slider issue altogether. Rather,

us their traditional slider drawers don’t

each drawer hinges on a solid heavy-duty

swivel storage solutions

hinge and shaft, giving it the strength that supersedes any sliding drawer.”

The all-steel tool cabinets come in a variety of sizes and styles. All share common features like tamper-proof central locking (standard on some, but optional on others), durable powdercoated paint, one-hand operation, nobind closing, and anti-skid drawer mats.

All drawers are equipped with magnets or steel latches to hold them shut. Each pivoting drawer has its own grease nipple for lubricating as needed.

These benches and boxes are built for the toughest and roughest environments, yet look right at home in a small-car garage as well.

The Pro80 series is a modular system of stationary shop benches, which can be configured to many different designs, including corner units, to fit all kinds of shop floor spaces. The Pro80 series is built in 30-inch sections, so you can order a work bench in any length you need, as long as you can work in 30-inch increments. The units bolt together onsite, then the custom-built top is bolted on. They offer both four and six drawer sections as well as sections with doors and shelving.

“Our workbenches are truly heavyduty,” claims Penner. “With double-walled 14-gauge steel drawers and 1/4-inch steel top, the five-foot Pro60 weighs in at 660 pounds. Legs adjust for uneven floors, and a foot pedal lowers casters into place to easily move the loaded tool cabinet/ workbench to another spot.”

“It’s been truly remarkable to watch the expressions of marvel on people’s faces as they see the real strength and craftsmanship of our boxes. Everyone seems to agree that these are boxes and benches like no others on the market.”

Over the last few years, Swivel Storage Solutions has made major steps to get into the international market. The Canadian-built Swivel boxes are being

Photos courtesy of Swivel Storage Solutions.

used in Mexico, Australia, Canada, and the United States and even in the gold mines of South Africa by now. The oil industry of North America is taking note, and

N.D.: Bloomfield Enterprises at

more and more service trucks are being

701-261-9779. Ask for Ben.

outfitted with the Swivel toolboxes.

Sometime in the spring of 2014, Swivel

Large distributors like Grainger

will have a new dealer in Williston, N.D.:

are taking in the Swivel line and are

Blains Auto Body and Supply in Williston,

promoting them as the best toolboxes on

N.D. at 5495 Hwy 2 & 85 N. Call Dennis or

the market.

Jeff for more info at 701-774-3059.

Swivel Storage Solutions also has regional dealers who cover local

For further information, or to see videos

marketing areas. Customers or potential

of the Swivel boxes, check out their website

dealers in North Dakota and Montana can

at www.swivel.pro or call them at

contact the Swivel distributor in Hillsboro,

888-979-4835. w BAKKEN OIL REPORT – SPRING 2014

159

mountainview energy

Growing production in the Williston Basin

By Brent Osmond, VP Finance & CFO, Mountainview Energy Ltd.

In the past year, the Mountainview Energy Ltd. team has been hard at work. A small, family-run operation in 2012, Mountainview was producing only 150 barrels of oil equivalent per day (boepd) from operations in Montana. In just two years, the company has grown into a significant producer in the competitive Bakken/ Three Forks play with 1,393 boepd and rising. In Divide County alone, the company has taken production from zero to 1,243 boepd. The company has diligently been reviewing opportunities on acreage acquired in 2012 and 2013, and that same attentionto-detail has carried over into Mountainview’s operational activities. For a company that had not drilled a horizontal well prior to 2012, Mountainview has now safely and successfully drilled eight horizontal wells, with six producing wells and completions currently underway on wells seven and eight.

The company didn’t just show up in the Bakken and start drilling. Sound risk management dictated that the company ease its way into the capital-intensive and technically complex wells.

In order to learn the techniques and processes of horizontal drilling and multi-stage fracturing, Mountainview participated in wells at a lower working interest in 2012 and early 2013. With that experience behind them, Mountainview management took on additional risk on its next six wells, drilled through the winter and summer of 2013. The company researched and picked its consultants carefully, choosing to work with RPM Consulting Inc. from Denver, CO. Since its inception in 2005, RPM has drilled over 550 wells and completed over 400. That experience and planning was instrumental in the success of the company’s first operated horizontal drilling program. In Q4 of 2013, Mountainview announced a two-well winter drilling program and increased its working interest to 92.5 percent and 99.2 percent on the Reistad 23 and Reistad 26 wells, respectively. These wells have been drilled and are awaiting completion.

Mountainview has now operated an eight-well drilling program over the past 12 months with a 100-percent success rate. The Charlotte 1-12S-1H well is an example of how the company employed those lessons learned in the early days in the Williston Basin. The well was drilled to a total depth of almost 19,000 feet, including a 10,000-foot horizontal leg, and the well was drilled in less than 25 days. The newly hired VP operations, Justin Balkenbush, has worked closely with the CEO, Patrick Montalban, and the rest of the team to get the wells drilled safely and 160

BAKKEN OIL REPORT – SPRING 2014

efficiently. Mountainview has decreased drilling time and overall capital costs, with the most recent wells being drilled, completed and put on production for under $6.4 million. The initial seven-day production rate for the Charlotte 1-12S-1H well was 598 boepd, a new record for the company and the third consecutive well in the program to exceed initial production expectations. Another improvement in the completion technique used on the Charlotte well was the move to a 32-stage plug and perforation program, up from 26 stages used in prior wells.

As 2014 begins, the company is looking forward to results from completion operations on the Reistad wells, now underway in Divide County. As part of the ongoing operational refinements, these wells used swell packers and will use a fracturing technique called a “zipper frac.” Also, drilling these wells on the same pad has decreased mobilization costs for the rig move and completions equipment. Management is currently planning its upcoming 2014 drilling program and the evolution of the company continues.

Mountainview is studying the application of techniques such as a cemented liner and various frac techniques, always looking to evolve and increase the returns on capital investment.

The management team at Mountainview is looking forward to continuing its relationship with its partners in the service industry, leveraging their experience in the basin to safely drill and complete wells, while maintaining control over cost. The success of the company depends on the skills of the local serviceproviders. Mountainview anticipates building on this early success and is looking forward to being a part of the growth in the basin.

The Montalban family started Mountainview Energy Ltd. and those family values are a huge part of what makes the company successful. While the company has grown over the past year, the company remains committed to maintaining the family and community spirit that has been the driver of its success.

Mountainview Energy Ltd. is a public oil and gas company listed on the TSX Venture Exchange, with a primary focus on the exploration, production and development of the Bakken and Three Forks Shale in the Williston Basin and the South Alberta Bakken.

For more information, please contact: Patrick M. Montalban, president and chief executive officer (mvw@bresnan.net) or Brent Osmond, VP finance and chief financial officer (BrentO@mountainviewenergy.com). w

Wigness 5-8-1H Divide County, ND

Mountainview Energy Ltdâ&#x20AC;&#x2122;s mission is to explore, drill and develop for oil and gas in the Williston Basin Bakken/Three Forks Resource Play and the South Alberta Bakken Resource Play. By acquiring these properties we have the opportunity, through exploration and development drilling, to increase our daily production. Our strategy will allow Mountainview Energy Ltd to build an oil and gas company based on solid fundamentals. To accomplish our goals Mountainview will reply on Managementâ&#x20AC;&#x2122;s proven record of over 50-years of developing oil and gas fields, both in private and public companies.

TSXV: MVW.V 33 First Ave S.W. P.O. Box 200 Cut Bank, Montana 59427-0200

Phone: (406) 873-2235 Fax: (406) 873-2835 e-mail: mvw@bresnan.net

Mountainview Energy Ltd is a Canadian public company traded on the TSX Venture Exchange

www.mountainviewenergy.com

rapid city economic development

Rapid City, Rushmore region plays major supporting role in energy boom It’s a fact: during the Colorado Gold Rush of the 1860s, the bulk of the gold mining took place in the Rocky Mountains, not Denver. A decade earlier, San Francisco was hundreds of miles away from the California Gold Rush. Yet both cities played major supporting roles in the economic surges that followed the gold-seekers.

Today, we’re seeing a different kind of gold rush – for oil, gas and other resources – in North Dakota’s Bakken formation, the Niobrara play in Wyoming and Colorado, and the Cowboy State’s venerable Powder River Basin.

Rapid City and the Rushmore region of South Dakota – less than a day’s drive from all of these energy centers – is playing a major supporting role in the West’s ongoing rush for Black Gold.

The Rushmore region has the best airline connections, including direct flights to Denver, Dallas and Houston. The economy is diverse enough to support two-career families.

Housing prices are stable. Retail shopping is abundant.

The region is home to two universities, including the South Dakota School of Mines & Technology, whose engineering graduates are stepping directly into the energy industry.

The climate is mild, and South Dakota’s business climate is among the best in the nation.

Energy-related companies are already setting up shop in the Black Hills. Law firms, engineering companies, manufacturers and others are opening offices here. And companies that have been here a long time are expanding to meet the growing demand from the Williston Basin and other energy centers.

“We’ve been talking to a lot of people in the energy industry, and they are seeing the Black Hills’ distinct advantages,” says Benjamin Snow, president of the Rapid City Economic Development Partnership. “Rapid City is a good strategic fit for them.”

Caber Engineering Caber Engineering, a Tetra Tech company, is a textbook example of the type of industry Rapid City hopes to attract. The Calgary, 162

BAKKEN OIL REPORT – SPRING 2014

Alberta-based firm is an energy industry leader in tank terminals, rail loading, gas processing and carbon capture throughout North America.

Caber has moved its U.S. operations to Rapid City. The company opened an office in the Black Hills Development Center on the campus of the South Dakota School of Mines & Technology in the summer of 2013. One reason the company chose Rapid City is its location at the center of emerging energy centers in Colorado and Wyoming, as well as the Bakken next door in North Dakota.

WL Plastics WL Plastics, based in Fort Worth, Texas, saw the strategic value of Rapid City’s location early on. The company manufactures high-density polyethylene (HDPE) pipe and related products for the oil, gas, mining, industrial and municipal water markets. It’s one of the largest makers of polyethylene pipe in North America.

The firm began production last summer at its new 45,000-square-foot manufacturing facility in Rapid City.

WL Plastics expects to have a staff of up to 50 people. The facility can produce 60 million pounds of pipe per year in diameters ranging from one to 24 inches.

Jackson Lewis LLP A law firm that specialized in labor and employment law, Jackson Lewis LLP has 750 attorneys in 53 offices nationwide – now 54 offices. The firm is opening a Rapid City office with a contingent of three attorneys and support staff. Among the firm’s client list is a growing number of energy firms that need legal help in matters such as employee benefit

rapid city economic development

programs, wage-and-hours compliance and workplace

Kadrmas, Lee Jackson

safety.

A well-established,

Attorney Kathy Barrow of Jackson Lewis had been

75-year-old engineering

vacationing in the Black Hills for 10 years. She loves the

firm, KLJ has had a

area, and as she saw the growth of the Black Hills business

presence in Rapid City

community, she begged the firm’s management committee

since 2000. The company’s

to let her “plant the flag” at a Rapid City office. In 2013, she

Rapid City office deals

worked with other local business officials on a trade mission

with airport design, municipal transportation, survey work,

to Houston to talk about the opportunities in the Rushmore region.

environmental service and archeological services.

KLJ is headquartered in Bismarck, N.D., and 10 of its 19 offices are in North Dakota. However, the Rapid City staff has been working on North Dakota projects. Survey crews

TrueNorth Steel

from Rapid City travel to North Dakota, and the engineering staff helps supplement the project work from various North Dakota offices.

Shamrock Energy Management

TrueNorth Steel manufactures tanks, corrugated pine and other steel structures, including oilfield products such as production tanks, skid tanks, containment systems and catwalks.

The company has been around since 1945, and its headquarters is in Fargo, N.D. TrueNorth acquired Dakota Steel in Rapid City, a long-time regional supplier of structural steel and fabricated products.

Adams-ISC A subsidiary of ISC Companies

Located in Rapid City, Shamrock Energy Management currently specializes in management of oil field/services and energy resource companies.

The company offers administration and financial services including accounts receivable/payable, payroll, benefits management, human resources, clerical support, and professional accounting including audit preparation, budget preparation and financial statement prep/reporting.

in Minneapolis,

To find out more about Rapid City and South Dakota’s

Adams ISC

Rushmore Region, please visit RapidDevelopment.com,

serves markets

or contact Benjamin Snow, president of the Rapid City

such as energy

Economic Development Partnership, by email at

production, forest products, mining and construction. The

bsnow@rapiddevelopment.com or phone 605-343-1880. w

company’s products and services fall into four groups: the machining and fabrication; bearings, power transmission and hydraulics; equipment and hydraulic repair; and pipe and vessel group. Adams-ISC provides its services to organizations that build or maintain industrial facilities.

The company is rapidly expanding its Rapid City workforce to meet growing demand from North Dakota’s Williston Basin. Labor shortages in western North Dakota make it hard to find skilled help there, officials said. It’s more cost-effective to build or repair equipment in Rapid City and

Please recycle this publication after you have read and shared it.

then transport it to the Williston Basin.

BAKKEN OIL REPORT – SPRING 2014

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valin corp.

Valin: Your precision measurement experts for Lease Automatic Custody Transfer (LACT)

Precision measurement expertise is one of the most important parts of transferring oil from a producing oilfield into the oil pipeline, truck or other oil transport method. Precise measurement is absolutely critical. Water or natural gas content is not allowed in the saleable oil stream. This measurement is generally done through two common methods, gauging and liquid metering. Due to a number of inconveniences and inaccuracies associated with gauging, liquid metering is regarded as the most efficient method and is utilized by almost all new applications. With the aid of additional components, the liquid meter is capable of unattended measurement at accuracy rates of 0.25 percent or better. This measurement system is known as a Lease Automatic Custody Transfer (LACT) Unit. When one of the largest independent midstream energy companies in North America was in need of these systems, they turned to the precision measurement experts at Valin.

Early in 2013, this large energy resources company, a provider of midstream services, was in need of a large number of LACT units for an oil-gathering project in North Dakota for the Myrmidon field in the Bakken shale formation. It was a large job and the Valin customer projected that at least 65 systems would be needed.

After witnessing Valin’s expertise in multiple areas (fluid handling, process control, precision measurement design engineering, pipe and skid manufacturing, program management, and in-field service of units in the field after startup), this large energy resources company made the decision to procure their systems through Valin.

The original design included only a single version of the LACT which consisted of the following: oil leg LACT, produced water metering leg, the building to house both the oil and 164

BAKKEN OIL REPORT – SPRING 2014

water legs, and the control systems for interactive management.

Valin subsequently worked with the customers’ engineers and operating personnel to refine the design and to integrate with both company’s SCADA systems (System Control and Data Acquisition). There were many customer-required changes in the design requirements midway through the program. The number of units changed, the customer added an integrated enclosed Motor Control Center (MCC) and decided that there should be four variations of the original design. Valin worked with both customers to maintain the very tight delivery schedule and even though the design changes were substantial, Valin was able to deliver ahead of the required schedule. Where the wells are operational and the pipelines are in place, the Valin LACTs have been successfully commissioned and those commissioned units are now operating at planned capacity and specifications.

About Valin Corporation Valin Corporation is an oil and gas industry leader of highquality, Coriolis-based, Custody Transfer Measurement Systems, net oil solutions, and oilfield processing. We integrate the bestin-class flow control technologies, precision measurement, and automation products coupled with full design engineering, sales, and manufacturing expertise. Before, during and after sale, Valin provides a complete customer experience that has proven trustworthy time and again.

Valin serves key energy locations throughout the Western United States including Bakersfield, Calif.; Farmington, N.M.; San Antonio, Texas; Austin, Texas; and Williston, N.D. Visit our website to learn more about our measurement systems: www.custodytransferlact.com. w

thawzall

Flameless heat: BTUs or temperature rise Rig hands, oilfield supply companies, or just people in general

batteries of hydraulic-shearing flameless heaters consuming

haven’t the foggiest idea what a BTU can do; all they want is that

tank farms of diesel just to get the job done.

the well head has enough safe heat and if there is anything left

Thawzall’s H1350 flameless electric heater (not hydraulic fluid

over, that they can use it to stay warm.

shearing) delivered 275° F of heat at 7,500 CFM and 20-inches

This winter has been exceptional if you sell flameless heaters

static pressure all winter long. This generation of flameless

to the oil and gas industry. But all is not well with those flameless

heater captures over 90 percent of the total heat byproduct of

heaters. Oil-shearing flameless heaters are fraught with mechanical issues that seem to require a reserve unit nearby when the unit quits operating. Also, their BTU claims don’t seem to jive with their heat output, and rig hands are stumped when the application calls for a certain BTU and they find that the unit does not perform as expected.

166

the diesel combustion engine and when the electric inductive heating elements are used, can deliver at maximum load, 275° F in minus 50° F climate.

This past January in Prudhoe Bay, Thawzall was told that their customer was able to replace two 700,000 BTU indirect-fired

This winter in the Bakken, where extreme temperatures

heaters with one H1350 on one jobsite. The jobsite was safer, the

approached minus 30° F and windchill factors were well below

H1350 delivered more heat and it used 60 percent less fuel.

minus 50° and 60° F, those hydraulic shearing flameless heaters

Real heat, real BTU – or does the flameless heater do what

did not quite live up to expectations. With a 180° F rise over

is advertised? When the job needs safe, reliable and real heat,

ambient temperature, 2,500 CFM and five inches of static

think about the one that can deliver significant heat, significant

pressure, those flameless heat applications needed multiple

CFM and doesn’t need a back-up unit nearby. w

BAKKEN OIL REPORT – SPRING 2014

Jasper Engineering & Equipment Co. Phone: 701-258-4070 www.jaspereng.com Natural Gas Moisture & Sulphur Analyzers

MERCER VALVE CO., INC

Safety Relief Valves with Auto Seat Technology

Wireless Radio Systems

Ruffneck Explosion Proof Unit Air Heaters Cata-Dyne Catalytic Heaters & Line Heaters

H2S, LEL, & Toxic Gas Sensors & Controls Solid State H2S Process Gas Analyzers

Hazardous Area Heat Trace Systems

Globe Body & Rotary Flow Control Valves Dump Valves, ESD Systems Level & Pneumatic Controllers

Flow, Level, Pressure & Temperature Displays, Indicators, Totalizers, Batch Controllers

Explosion Proof Pressure Transmitters, Manifold Valves, Pressure Gauges, Thermometers

Hand Pumps, Hoses, Adapters, Calibration Manifolds, Pressure Regulators & Gauges, Benchtop Manifolds, Volume Controllers

Radar Level Transmitters Magnetic, Clamp-On & Coriolis Flowmeters Pump Panels, Safety Disconnect Switches, PLC Control Systems & Components

Thermal Dispersion Gas Mass Flow Meters & Switches Sharp Eye Triple IR & IR/UV Flame Detection Solar & Wind Generator Power Systems

V-Cone Flowmeters for Gas & Liquid Applications No Straight Run Required; No Moving Parts

Magnetic Level Gauges Primary Flow Elements / Meter Runs Electronic Temperature Measurement

veit usa

Veit: Providing innovative sitepreparation solutions for 86 years Founded in 1928, Veit is one of the oldest and most diverse specialty contracting and waste management companies in the Upper Midwest. With around 600 employees, Veit routinely works on over 500 projects each year.

In 2013, Veit was cited by Engineering News Record magazine as the 102nd-largest specialty contractor in the country, the eighth-largest contractor in terms of earthwork and foundation services, the 16th-largest for demolition services, and the 18th largest for utility services.

Veit has grown into one of the top specialty contractors serving the oil/ gas and industrial sector throughout North Dakota. Our service offerings include the following: • Earthwork – Mass grading, landfill construction, contaminated soil cleanup, structural excavation, rail subgrade construction, containment liner/berm construction, hydraulic dredging.

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• Utilities – Sewer, water, HDPE pipe fusing, commercial diving.

• Demolition – Total, interior, explosive.

• Foundations – Drilled piers, driven piles, retention systems, soil solidification.

Veit sets itself apart from its competitors by offering diverse services through a single point of contact. The depth of technical expertise has earned Veit a reputation for innovative thinking and the ability to solve virtually any construction site problem. Veit works smartly and safely, always following environmentally sound practices, using the most efficient techniques and advanced technology, and utilizing the most upto-date equipment.

By approaching each project in partnership with the client, Veit is able to provide unparalleled services, resulting in the completion of projects on time and on budget. Veit conducts

detailed reviews of site conditions, client requirements, and any unique project challenges to develop sitespecific construction plans that are constantly reviewed throughout the course of project.

Safety is integral to the Veit culture.

Veit’s extensive safety department includes a senior safety director, five full-time safety directors, and administrative support that bring over 100 years of construction experience. Veit has received numerous safety awards, including the AGC of Minnesota Construction Health and Safety Excellence Award and the Meritorious Achievement Award.

Veit’s corporate headquarters are located in Minneapolis, Minnesota, with regional offices in Bismarck, N.D.; Minot, N.D.; Duluth, Minnesota; and Milwaukee, Wisconsin. w

US AGAINST THE EARTH? ODDS ARE IN OUR FAVOR. SERVING THE OIL/GAS AND INDUSTRIAL SECTORS • Earthwork – Mass grading, landfill construction, contaminated soil cleanup, structural excavation, rail subgrade construction, containment liner/berm construction, hydraulic dredging

Specialty Contracting and Waste Management

• Utilities – Sewer, water, HDPE pipe fusing, commercial diving • Demolition – Total, interior, explosive • Foundations – Drilled piers,driven piles, retention systems, soil solidification

Bismarck, ND • Duluth, MN • Minneapolis, MN • Milwaukee, WI

veitusa.com

inland tarp & liner

Inland Tarp & Liner (ITL™) Advanced Containment Solutions™ Serving the Bakken, Rockies and U.S. oilfield and shale gas plays Inland Tarp & Liner (ITLTM) supplies U.S. oilfield and shale gas plays with containment solutions that require ongoing R&D, technology transfer and pro-active service programs in order to meet the industry’s diverse specifications by regional plays.

Specifications are ever-changing and are driven by multiple factors: state regulatory agencies; producers’ best practices; individual company/man product and installation preferences; worker safety; climate and weather; and an ongoing focus for operational cost-efficiencies.

ITL™ provides service companies and producers with a comprehensive approach, “Advanced Containment Solutions™”. This program encompasses working with E&Ps and their service companies to define well-site challenges, applications and solutions.

These challenges and solutions range from well-pad containment to pit liners, impoundments to tanks liners, and from secondary containment liners to containment system products.

ITL™ offers a diverse inventory of liners to meet specific applications by geographic play: CWPE single-scrim, double-scrim and specialty liners; LLDPE-R; LLDPE; HDPE; and geotextiles.

Ongoing R&D programs are a primary focus at ITL™. ITL™ has developed a series of CWPE (coated woven polyethylene) liners. These liners are multiple-layers thick, featuring double-scrim technology 170

BAKKEN OIL REPORT – SPRING 2014

with an optional geotextile surface for worker safety. CWPE liners are stronger and lighter than traditional products and are designed for crossover applications in multiple plays. Key manufacturing technical data include very high-puncture and Mullen Burst values with reduced mass weight.

Specific CWPE liners are manufactured and fabricated for both primary and secondary containment.

Producers and service companies are continually seeking products and installation practices to increase quality, control costs and further protect the environment. For these reasons, factory-fabricated liners with rigid QA/QC procedures are increasing in demand. These liners are customfabricated, reducing costs and material waste with filed seaming. One-piece liners and larger panels also assist with

installation schedules when inclement weather hits.

As part of its technology transfer program, ITL™ works closely with service companies by providing hands-on programs for installation and welding techniques for fieldwelding larger panels. In meeting with producers, technical data comparisons are presented along with other key considerations, such as site prep and subgrade. The following photo illustrates a subgrade with ITL 40X™ liner installed. The subgrade quality required no geotextile underlayment, saving material and labor costs for installation.

Other R&D programs include identifying containment and well-site products that work in tandem with liners in supplying service companies and producers with one-call turnkey

inland tarp & liner

containment systems. These products include varying foam profiles deployed with liners for well pad, frac tanks and duck pond containments. Other product lines include engineered walls for impoundment and larger secondary containment. These walls are specifically designed for secondary containment and feature multiple heights to meet or reduce footprints requirements, quick setup and teardown, efficient liner attachment, and walls that are portable and reusable.

Custom tank liners are also designed and fabricated by ITL™. Liner specifications vary based on region, producer, service company and specific tank applications (fresh water, flow back and treated liquids). ITL™ works closely with customers in defining cost-effective project solutions for fabrication and installation. ITL™ customer resources include its AutoCAD department for tank liners and other custom project applications.

ITL™ also offers custom-fabricated insulated floating covers for customers with custom project AutoCAD renderings. These covers are used

during winter months to protect liquids from freezing and in summer months to reduce evaporation. Product applications include above-ground or in-ground impoundment and steel tanks. Covers are installed on liquid surfaces and are also wrapped on the outside of tanks as insulators.

Another unique product is ThermaPad™, a post-industrial waste product converted to foam that offers multiple well-site applications to protect liners and provides a base covering for equipment and tanks.

ITL™ takes great pride in working closely with service companies and joint collaborative R&D projects.

ITL™ U.S. capabilities include East and West Coast fabrication and distribution centers with over 220,000 square feet of manufacturing space. With annual fabrication capacity of over 300 million square feet, ITL™ has a reputation for its rapid turnaround of customfabricated liners in just a few days or the same week. Based on the industry’s tight operation schedules, this rapid turnaround is vital for service companies in responding to producers.

The next photos are of a custom containment product, ITL™ Bear Berm™.

The design incorporates encapsulated foam, 10 feet in length, with a woodboard insert in the foam for attaching liner. It also features extensions with grommets for anchoring on the perimeter of the well pad.

Recycling liners and reducing the volume of materials dumped in landfills is a common and shared goal by many

About Inland Tarp & Liner (ITL™): ITL™ has been in business for over 30 years. Its headquarters are located in Moses Lake, Washington. ITL™ offers West and East Coast fabrication centers (220,000 square feet) with annual capacity of over 300 million square feet.

ITL™ also has a new distribution center to serve the Bakken and Rockies markets, located at 2008 Highway 85 SW in Fairfield, N.D. 58627.

E&Ps across the industry. ITL™ has been a leader and very proactive in this area and identified programs and resources for producers and service companies for multiple plays.

For further information and assistance, please contact Todd Hoffer at 509-750-6767 (cell), ITL™ at 800-346-7744, or visit www.inlandtarp.com. w BAKKEN OIL REPORT – SPRING 2014

171

mi-t-m

Performance under pressure Mi-T-M recognized worldwide for its commitment to excellence

MiTM AGW-SH22-20M sits in the back of a pickup truck.

172

Mi-T-M Corporation is an example of

pressure-washers, portable generators,

major weather events. “Because of our

an American manufacturing success

air compressors, portable heaters, wet/

manufacturing process, we are able

story. A.J. Spiegel, chairman and chief

dry vacuums and other products for

to switch all production lines to the

executive officer of Mi-T-M, founded

the professional contractor.

assembly of hundreds of gasoline-

the company in 1971 to produce cold-

The small town of Peosta grew up

powered generators, literally within

water pressure-washers for the paint

around the company’s expansive

hours. Add that to our inventory

industry.

facility where Mi-T-M is a key employer

reserve for just this type of situation,

Spiegel may have started the

of over 350 dedicated workers. In the

and our reaction to our customers’

company by selling 1,000 psi

’80s, the population of this Iowa town

needs is remarkable. We shipped

pressure-washers out of his truck,

barely hit 100; today the population is

hundreds of generators in a very short

but over the years, Mi-T-M has grown

nearly 1,400 and growing.

timeframe,” says Dana Schrack, vice-

to become a company recognized

Situated at the crossroads of Iowa,

president of Mi-T-M.

worldwide for its commitment to

Illinois, and Wisconsin, Mi-T-M recently

Spiegel’s entrepreneurial drive is

excellence in engineering design,

assisted several Gulf Coast and eastern

as strong today as it was in 1971. He

manufacturing technology, quality

states, ramping-up production of

is always open to opportunities that

control, and customer care. Mi-T-M now

generators and other equipment in

will grow the company. In 2007, Mi-

manufactures both hot and cold water

response to hurricanes and other

T-M introduced the combination air

BAKKEN OIL REPORT – SPRING 2014

mi-t-m

MiTM 220-amp arc welder, two-stage air compressor and a 5,000-watt generator with a 688cc Honda OHV engine.

compress/generator series as a complement to the already-established air compressor and generator product lines. This unique tool has been popular with contractors, who appreciate the efficiency of one piece of equipment doing the work of two.

And in 2011, Mi-T-M began manufacturing the combination air compressor, generator, and welder – the perfect tool for those customers who need the support of all three machines, but may not have the floor space for all three. “This machine is also an excellent addition to the service body industry,” states Schrack, “which is vital for oil and gas businesses.”

Mi-T-M offers this unique piece of equipment in three models;

mounted on both a 20-gallon or 30-gallon air tank and a base model for those customers who already have an available air tank. An industrial-duty 404cc Subaru engine with electric-start powers both the 30-gallon model and the base-mount model. It features a twostage air compressor with 15.7 CFM, a generator rated from 2,500 to 4,500 offload watts, and a 170-amp arc welder.

The 20-gallon Mi-T-M combination unit is powered by a 688 cc Honda V-Twin engine with electric start. This larger model has more horsepower and provides 29 CFM for the air compressor, 4,500 continuous wattage for the generator and 220 amps for the arc welder. It also includes a 10-gallon auxiliary fuel tank for longer run times.

As a leading equipment manufacturer, Mi-T-M Corporation also understands the importance

of protecting the environment.

With water conservation as a key environmental issue, Mi-T-M developed a wide selection of state-of-the-art water treatment systems. One of the most prominent and well-known sources for reports on current trends, economic outlooks and world affairs, The Kiplinger Letter, named Mi-T-M Corporation among the leading manufacturers of water-recycling technology in 2007. And, today MiT-M continues to develop product in response to the recent severe droughts that affect water conservation.

In the past 43 years, Mi-T-M has worked hard to develop a reputation for the best equipment in the industry and manufacturing high-quality products is still a top priority. “The Mi-T-M tagline, ‘Performance Under Pressure,’ communicates everything we stand for,” Schrack says. “It is who we are and what we do. It goes right to the heart of what our customers want.”

Mi-T-M has set the standard when it comes to manufacturing reliable and dependable industrial equipment. But it’s their outstanding customer service for which they’ve become known. MiT-M equipment is built with pride and a part of each employee goes out the door with every product sold.

For more information on Mi-T-M’s complete line of products, please visit http://www.mitm.com or call 800-553-9053. w BAKKEN OIL REPORT – SPRING 2014

173

summit Esp

Summit ESP – the Bakken supplier of choice Summit ESP is becoming the ESP pump supplier of choice in the Bakken and other unconventional applications.

Summit ESP’s line of Tiger Shark pumps with large mixed-flow vanes and wide operating ranges are designed specifically to handle rapid declining, sandy and gassy wells typical of a Bakken completion. The Summit Bakken pump of choice is the SF 1000 Tiger Shark pump with a low-end operating range of 200 barrels per day while offering a high-end operating range of 1650 barrels per day.

For problematic wells on rod-lift systems, Summit’s newest Tiger Shark pump, the SF320, offers a pump with a low-end operating range of 50 barrels per day and a high-end operating range of 460 barrels per day. Other Tiger Shark pumps can overlap any productions needs up to 14,000 barrels per day. Tiger Shark pumps are abrasion-resistant (AR), modular-design mixed-flow pumps that were designed for and have proven themselves to be very effective in shale applications. The AR design eliminates the need for field shimming and keeps much of the thrust inside the pump, thus reducing the load expected on the seal thrust bearings.

Summit ESP’s line of proprietary gas handlers can be run in conjunction with or separate from Summit gas separators.

These gas-handler stages with patentpending hydraulic vane configurations can handle up to 60 percent free gas in fluid volumes ranging from 50 barrels per day to 14,000 barrels per day. Adding Summit ESP’s new line of motors allows the operator to expect and receive better run-times. Summit’s motors deliver improved reliability from 174

BAKKEN OIL REPORT – SPRING 2014

reduced vibration, improved sealing mechanisms, and better di-electric strength.

Summit ESP has focused on developing products and new technology for today’s oilfield while other larger integrated companies are focusing on developing technology for niche markets like through-tubing conveyed systems, wireline retrievable systems, and subsea applications for non-U.S. land markets.

The vision for Summit’s success originates with the founder, John Kenner, a former executive of one of the larger ESP companies. Kenner recognized that as the larger companies continued to move toward integration of product lines and geomarkets, the operator would no longer receive the same level of focused attention; this integration would also cause redistribution of assets for new product development, allowing the “squeaky wheel” or highest profit-line to attract

research dollars (e.g., drilling versus production). Having an affinity for electric submersible pumps and the experience to back it up, Kenner formed Summit ESP. His vision was to secure a product, improve the product with new technology, and then offer the “gold standard” in service. The initial employees hired by Summit ESP were engineers and afterward, supply-chain experts. Today, the average Summit ESP employee has over 15 years of oilfield experience and 11 years of ESP experience. Summit also has 19 new product concepts that are in various stages of development.

Summit ESP is not just a downhole equipment company; Summit also offers a complete line of VSDs (variable speed drives) including the Active Front End VSD that meets IEEE 519 and which minimizes the amount of harmonic distortion reflected to the power grid by drawing nearly sinusoidal current from the power grid. Summit’s

Summit 4C 4-625x7 Island 1-2 ad PRINT 081913.pdf

line of VSDs are all generator-friendly and are serviced by local Summit ESP drive technicians. Remote monitoring is available to all operators through Summit ESP’s proprietary well-monitoring system called Well Insight. Well Insight allows the operator and Summit ESP to monitor all Summit ESP installations at near realtime.

Summit ESP currently has three Rocky Mountain facilities – Powell and Gillette, Wyoming, as well as the newest facility, centrally located for Bakken applications just outside of Tioga, North Dakota.

Summit ESP’s Bakken facility is stocked with complete systems to meet most Bakken applications. Summit ESP is uniquely qualified to supply the operator with immediate turnaround. And, since Summit knows that time is money, Summit can have the operator pumping as fast as the operator can install the unit.

Summit area manager John Schmill (701-641-8235) is ready to meet operators’ needs with quality designs, product and service. Schmill has spent the last 13 years in North Dakota, has 35 years of experience in the ESP industry, and since 2008 has participated in over 600 Bakken ESP installations. Summit ESP can be relied on for outstanding service.

Schmill and the Summit ESP team are aware of the void that has been created by high demand for product, causing some to drop their service commitment.

Operators are recognizing that Summit ESP’s commitment to excellence includes quality service personnel with experience that are ready to handle the job today. w

1

8/19/2013

9:18:50 AM

Reach for the SUMMIT in ESP solutions — — — — —

Extreme Service Focused ESP Experience Advanced ESP Technology Remote Monitor & Control Custom Solutions

C

M

Y

CM

MY

CY

CMY

K

®

EASTERN AREA SOUTHERN AREA WESTERN AREA

918.392.7820 432.563.7040 307.764.6346

Career Opportunities @ www.Summitesp.com BAKKEN OIL REPORT – SPRING 2014

175

bilfinger westcon

Bilfinger Westcon gets the job done, on time and on budget

Bilfinger Westcon Inc. began its business in 1981 as Westcon, Inc., a pipeline contractor that primarily worked in the oil patch in western North Dakota. The values of service, safety and quality that CEO/president Mark C. Peterson established at the time he founded the company continue to guide the company today.

His philosophy has always been that while you need to make a profit, it’s most important at the end of a project to have a happy customer.

These values have resulted in repeat business from many customers.

The company has endured through many downturns in our economy.

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BAKKEN OIL REPORT – SPRING 2014

When many construction companies were forced to close-up shop, Bilfinger Westcon persevered through tough economies because of customer loyalty and the company’s willingness to venture into new markets.

Bilfinger Westcon performs as an industrial general contractor on most of its projects. The company completes civil, structural, mechanical and equipment setting. The ability to self-perform this work allows the company direct control of the project schedule. By managing our own work forces as well as subcontractors, we can ensure that projects are completed on time and within budget.

The company is headquartered in Bismarck, North Dakota along with area offices in Utah, Iowa and Ohio.

Bilfinger Westcon has completed projects throughout the United States as well as internationally.

Safety training is led by the company’s corporate SHE director.

The company’s strong commitment to safety, health and the environment have made Bilfinger Westcon a leader among all U.S. construction companies. Our safety statistics and overall program are best-in-class and recognized by the top-tier company leaders in all major U.S. industrial markets.

PRIDE THRU PERFORMANCE

SERVING THE USA

SINCE 1981

INDUSTRIES SERVED • Refining • Oil/Gas • Food • Power • Chemical/Petrochemicals • Mining/Metals • Transportation

INDUSTRIAL GENERAL CONTRACTOR

Phone: 701-222-0076 Fax: 701-224-8178

• Project Management • Planning/Scheduling • Cost Reporting • Equipment Setting • Mechanical/Piping • Structural • Civil • Specialty Subcontractors

www.westconindustries.com

When you have been in business this long, obviously you are doing some things right. We believe that our services need to make our customers’ lives easier.

Bilfinger Westcon has developed a proprietary estimating and project tracking system that can provide our customers with real-time reporting. Our focus is on critical-path schedule, costsavings and client-specific reporting.

We provide a transparency in what we are doing for our customers throughout the project – there should be no surprises relating to cost and schedule at the end of the project.

When you have been in business this long, obviously you are doing some things right. We believe that our services need to make our customers’ lives easier. Bilfinger Westcon has built a reputation for delivering successful projects under adverse conditions. Even during aggressive project schedules, our understanding of constructing in cold-weather conditions and during frost laws has saved our customers valuable money.

The company has dealt with challenges like housing shortages and manpower shortages. The company’s database includes nearly 12,000 craft personnel throughout the United States. These highly qualified craftsmen will mobilize to projects as needed. This autumn, our manpower peaked out near 1,400 craftsmen.

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bilfinger westcon

generations and to continue to be the

and open new doors for our company,

contractor of choice.

and Mark C. Peterson will continue to

The company was purchased by multi-

serve the company as CEO/president.

national civil and industrial contractor

Why Westcon?

Bilfinger Berger in 2012. This ownership

Because we get the job done… On

brings a deep bench that is strong in

time, within budget, safely and with

engineering and construction. The new

pride, each time and every time. Pride

owners will help to broaden our horizons

through performance. w

www.genequip.com

Bilfinger Westcon retains a group of experienced professional managers to cover the following areas: projects, safety, QA/QC, document control, procurement, and start-up and commissioning. When clients hire Bilfinger Westcon, they can expect an attitude of teamwork on their project.

The company recognizes that the success of the company depends on the quality of its employees; many of the employees have been with the company since the beginning.

These employees have developed and advanced their careers within the company. Our craft resources include direct-hire, highly trained, multi-skilled workers. What our customers get is 100-percent effort along with top-ofthe-line leadership and the latest in technology.

The company believes that its attention-to-detail is what sets it apart from its competitors. We make sure that our customers are happy with the service they are given. Bilfinger Westcon’s current projects include the first greenfield refinery built in the United States since 1976. Every day we strive to be a better contractor than we were yesterday. Our mission is to build a strong legacy company for future

General Equipment & Supplies locations: Fargo, ND Bismarck, ND Minot, ND Williston, ND Shakopee, MN Sioux Falls, SD General Aggregate Equipment Sales locations: Regina, SK Winnipeg, MB

The Complete Source For All Your Aggregate Needs!

We have the right equipment for the job and experienced service technicians with access to a large parts inventory.

Ask us about power generation vans

Sales  Rental  Parts  Service

800-437-2924 BAKKEN OIL REPORT – SPRING 2014

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canelson drilling

CanElson Drilling (US), Inc. â&#x20AC;&#x201C; a leading provider of oilfield services

CanElson Drilling (US), Inc. purchased Redhawk Drilling of

CanElson has, in the past, contributed to the Minot Area

Mohall, North Dakota in June of 2011. The management

Recovery Fund, Dakota College of Bottineau, in the form of

team in the Mohall operations office consists of Larry Bloms,

a scholarship and the Mohall Youth Baseball Club, to name

operations manager, Paul Bloms, drilling superintendent, Tina

a few. CanElson will continue to support various community

Zietz, office manager, Lynn Schwark, shop hand, and Brittany

endeavors in the area.

Nelson, administrative assistant.

CanElson operates contract drilling rigs in the Western

Michael Smith, one of the founders of CanElson Drilling,

Canadian Sedimentary Basin (WCSB), the U.S., and in Mexico for

has taken on the added role of vice-president of the U.S.

oil and natural gas exploration and development companies.

Rocky Mountain region in addition to his Saskatchewan

CanElson also assembles new drilling rigs at a facility in Nisku,

duties.

Alberta, operates contract oil and gas service rigs in Mexico, and

Currently, CanElson has five rigs operating in the region.

operates a CNG transportation and related services business.

CanElson is actively pursuing potential customers operating

180

in the Rocky Mountain region and hopes to add to their

More information on CanElson Drilling Inc. can be found on the

drilling fleet in this area.

website: www.canelsondrilling.com. w

BAKKEN OIL REPORT â&#x20AC;&#x201C; SPRING 2014

Right People, Right Rigs, Right Partners, Right Attitude!

CanElson Drilling Inc. Suite 700, 808 - 4th Avenue SW Calgary, AB, Canada T2P 3E8 Phone 403.266.3922 Fax 403.266.3968 www.CanElsonDrilling.com

cdww llc

Central Dakota Water Works LLC provides hot and cold water in the Bakken Central Dakota Water Works LLC (CDWW) was established in 2011 after teaming up with Otter Tail Power Company to provide a unique service to the oil and gas industry – providing hot and cold water. Our water comes from the Missouri River into Ottertail’s settling pond and is then transported to the Coyote Station Power Plant south of Beulah, N.D. Cold water is pumped directly to our truck load-outs from a one-milliongallon holding tank. Our hot water is heated utilizing the waste steam after the generation process at the Coyote Plant.

The heated water is circulated from the holding tank through a heat exchanger and is stored in four holding tanks before being delivered to the truck load-outs.

Current customers have found that under most conditions, they are able to eliminate a heat source on the fracking job, thus saving thousands of dollars.

Our water depot provides lighted, concrete surfaces throughout our entrance and exit roads, staging and load-out

areas for safety and convenience. Each loading station is fully automated, allowing the customer to choose hot or cold water.

The water depot is located two miles south and one mile west of Beulah, N.D., adjacent to the Coyote Power Station on Highway 49.

For further information, please visit www.cdwaterworks.com or contact: Leigh Tessier - Cell: (701) 290-6689 or email: leigh@cdwaterworks.com Duane Tessier - Cell: (701) 590-8415, home phone: (701) 974-3776, or email: duane@cdwaterworks.com. w

CD

WW Central Dakota Water Works LLC ✔ Eight loading stations dispensing hot and cold water to reduce costly waiting time. ✔ Water depot offers quick loading at up to 21 bbl./min. at each load out. ✔ Water is delivered up to 125 degrees F. Under most conditions a heat source on the customers location can be eliminated saving additional heating costs. ✔ Safe working environment. ✔ Some of the lowest rates in the Bakken. ✔ Excellent water quality.

www.cdwaterworks.com

Leigh Tessler - 701-290-6689 leigh@cdwaterworks.com 182

BAKKEN OIL REPORT – SPRING 2014

Duane Tessler - 701-590-8415 duane@cdwaterworks.com

CRANE SERVICE We have a full line of the latest crane equipment for lease or rent, with or without an operator. We offer hydraulic, conventional, and crawler cranes from 81/2 tons to 400 tons, plus our newest crane a 400 ton Liebherr LTM1350-6.1. We also offer heavy haul trucking, machinery moving, storage facilities, crane inspection, crane repair, engineered lift plans, and consulting.

â&#x17E;&#x201D;

INTRODUCING Our 265 ton hydraulic crane on tracks. This is a new model and is one of the first cranes introduced into the United States. It is over a 100 tons larger than any similar crane in the US and will give us unprecedented capacity in the telescopic track crane market.

AT BORSHEIM CRANE SERVICE, WE ARE HERE TO PROVIDE EXCELLENT, PROMPT, AND PROFESSIONAL SERVICE 24 HOURS A DAY.

Office- 701-572-6301 | Fax- 701-572-6270

www.borsheimcrane.com

mid-plains distributing

A great partnership that works for North Dakota:

Mid-Plains Distributing Inc. and TECO-Westinghouse electric motors and drives

• The hard work of the company’s

Mid-Plains Distributing Inc., based

their number three distributor. We have

in Fargo, N.D., became a TECO-

grown from having our main warehouse

Westinghouse distributor in 2004. After

in Fargo to also having warehouses in

• The quality of the products and

only three years, in 2006 we became

Bismarck, Dickinson and Williston. All

support we have received from

one of TECO-Westinghouse’s top 10

this growth was due to the following:

TECO-Westinghouse;

distributors in the United States. In

• The vision of the company’s founder,

2013, we attained the status of being

Randy Hahn;

employees;

• And of course, our many, many loyal customers. w

Please stop by our booth at the Williston Basin Petroleum Conference in Bismarck, N.D., May 20th to 22nd, 2014 – or better yet, visit our hospitality room at the Ramkota Hotel on Wednesday evening, where food and beverages will be served, to let us thank you in person.

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millennium directional

Millennium Directional Service Ltd. seeing new opportunities as a result of leading-edge focus on high-performance and efficiency Millennium was founded in 2005 in response to the demand for

from our competition,” says Dan Eddy, Millennium president.

quality directional drilling services in the Williston Basin area of

“Millennium is seeing new opportunities in an expanded

southeast Saskatchewan and Manitoba. In 2011, the company

geographical area. This is a result of our leading-edge focus on

expanded into North Dakota and this year, it opened a research

high performance and efficiency. We are experiencing increased

and development facility (MWD service centre) in Alberta.

demand from those operators looking to reduce drilling and

Millennium Directional Service Ltd. joined the ranks of

well-related costs. In addition to relying on state-of-the-art

Saskatchewan’s Top 100 Companies this year. “We were

equipment and technology and our field expertise, operators

very pleased to be named one of Saskatchewan’s Top 100

count on us to identify cost savings in the drilling process. This,

Companies. Our strong growth is due to our state-of-the-art

combined with our exceptional performance results, is leading

equipment and software technology, the reliability of our tools

to new opportunities for Millennium,” says Robert G. MacCuish,

and the experience of our employees. This is what sets us apart

Millennium chairman.

Protection You Need, A Name You Can Trust.

Claim Post Resources is an emerging company in the oil and gas services sector.

The company is focused on becoming a leading provider of premium white silica sand proppant to oil and gas operations in the Bakkens, Montney and Horn River basins.

Tel: 416-203-3776 | Fax: 416-203-1254 903 - 141 Adelaide Street West Toronto, ON M5H 3L5 info@claimpostresources.com

www.claimpostresources.com 186

BAKKEN OIL REPORT – SPRING 2014

INDEPENDENT AGENCY SERVING THE WILLISTON AREA SINCE 1945 • • • • •

Oilfield Auto Property Commercial General Liability

511 2nd Street West, Williston, ND 58801 701-572-3786 | mangerins.com

Millennium was formed in 2005 to meet the growing demand

Millennium has a solid reputation for quality, cost-effective

for quality directional services in the Williston Basin. The

work based on strong collaborative relationships with clients.

company’s objective was clear: become the service of choice

In short, clients can count on Millennium to get the job done.

by providing state-of-the-art equipment, advanced software

Millennium is now the provider of choice for many of the

technology, a highly efficient, safe operating environment

largest oil and gas companies in Western Canada, having drilled

and dedicated, experienced employees. It has been a winning

over 1,800 horizontal wells since its formation little more than

strategy with the company also being named New Venture of

eight years ago.

the Year in 2008 by the Saskatchewan Chamber of Commerce.

“Millennium takes full advantage of any improvements

By combining the latest advances in directional drilling

available in terms of equipment, software, safety and education

technology with the expertise of reliable proven manufacturers,

for employees. In these areas, Millennium is at the forefront

Millennium stays at the forefront of current and emerging

adapting quickly to ensure we can provide the best to our

industry trends. The company’s pulser drivers, directional sensors

clients. But our core values have remained constant. We work

and new mud motor fleet are not only state-of-the-art, but also

in a collaborative relationship that is client-focused. We deliver

some of the most reliable and proven products on the market

– safely and cost-effectively. We are in business to build long-

today, giving clients a directional system that is second-to-none

term, successful relationships with our clients while remaining

in reliability, performance, and accuracy.

true to our customer-oriented values,” Eddy concludes. w

BAKKEN OIL REPORT – SPRING 2014

187

riley bros. construction

Riley Bros. Construction – serving the Midwest since 1974 Serving the Midwest since 1974, Riley Bros. Construction,

Riley Bros. Construction employs 135 construction

Inc. has grown to become one of the area’s largest heavy civil

professionals, consisting of equipment operators, truck drivers,

contractors. Riley Bros. specializes in road construction, building-

laborers, mechanics, foremen, construction supervisors, and office

site preparation, building demolition, land clearing, bituminous

personnel. It is our people that give us the capability to complete

paving and supplying sand and gravel products.

$40-million dollars’ worth of work annually and to move four

Riley Bros. Construction currently works throughout the

million yards of earth each year.

entire states of Minnesota, North Dakota and South Dakota. As

Riley Bros. Construction specializes in serving the needs of its

of January 2014, Riley Bros. has a fleet consisting of 23 dozers,

customers. It does not matter to us if you are paving a driveway

15 scrapers, six off-road trucks, 11 loaders, three cranes, 17

or building a highway – each and every customer is important to

excavators, 10 motor-graders, 28 rollers and packers, seven service

us. We take pride in what we do. It is our goal to deliver to project

trucks, eight water trucks, and four utility trucks, as well as 44

owners a “Safe Project That is On Time, On Budget and Done

Mack semi-tractors, side-dump, belly-dump trailers and quad-axle

Right.”

dump trucks, plus numerous pieces of support equipment.

For more information, please visit www.rileybros.com. w

Riley Bros. Construction currently works throughout the entire states of Minnesota, North Dakota and South Dakota.

Also producing

400 & 500 Barrel Fiberglass Tanks

Pro Tank Products, Inc. is complete oilfield tank manufacturing company serving the Bakken in North Dakota, Montana and Canada.

Produced in the Bakken to save you thousands on shipping!

For more information, please contact Butch Hensley at (406) 239-0918 PRO TANK PRODUCTS 4400 East Burdick Expressway | Minot, ND 58701

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BAKKEN OIL REPORT – SPRING 2014

Riley Bros. Construction began in 1974 with REPORT one simple goal: “To be committed to our customers”

RILEY BROS

Your project is important to us. We will work with you to understand your vision, goals, and objectives. We will partner with you to provide a quality project on time and on budget.

CONSTRUCTION Office 320-589-2500 | Toll Free 800-568-6595 Main Fax 320-589-2545 | Parts Fax 320-589-8810 | Accounting Fax 320-589-0355

PAVING

Office 320-634-3535 | Toll Free 800-422-0378

www.RileyBros.com

BAKKEN OIL REPORT – SPRING 2014

189

COVERING THE ENTIRE BAKKEN AREA

Locations in Minot and Wattford City

Office: 701-837-0800 | Cranes: 307-231-6766 | Trucks: 701-818-0013

www.RosscoCrane.com

Full Drilling Rig Moves | Work-Over Rig Moves | Completions Heavy Equipment Hauling | 100% TERO Compliant

rossco crane & rigging

‘Three Men and a Crane’ You may recall the 1987 movie Three Men and a Baby. This is the story of “Three Men and a Crane”.

In June of 2010, Ross Kovach responded to the repeated calls of former Wyoming customers who were now working in the Bakken and wanted his quality crane service. Thus began Rossco Crane & Rigging Inc. and in July of 2010, Ross, his father Jere, Karl Porter, and a single crane started providing crane service in the Bakken.

Growth was imminent, and in December 2010 they added another crane, crane operator and rigger. 2011 started out with a bang as Rossco added a 175-ton crane followed by a

250-ton and then another 90-ton. By the end of the company’s first year, Rossco had grown significantly and established itself. By July 2012, in just two short years, Rossco Crane & Rigging had expanded, purchased property and a maintenance building in Minot, added four cranes, many operators and riggers, and began providing some heavy-haul trucking, as well.

Never content with the status quo, Rossco once again responded to the requests of customers, and in May of 2013 added an entire fleet of trucks to provide full, in-house drilling, surface, and workover rig-moving capabilities. The heavy-haul side of

the business was also gaining ground – the hauling of coil tubing reels, generators, compressors, tanks, and other various pieces of equipment.

This investment to meet the current and future needs of the Bakken resulted in an immediate doubling of the number of employees. By the end of 2013, Rossco Crane had grown from the initial “Three Men and a Crane” into a fleet of nine cranes ranging in size from 30-ton up to 250-ton, a full fleet of pole, bed, slick, and winch trucks, trailers, and a staff of 60 highly skilled employees. Another 2013 milestone was adding a second location in Watford City to meet the ever-expanding needs of the Bakken

24/7 - NITROGEN - 365 DAYS

play.

Rossco Crane & Rigging Inc. is 100 percent MHA Tero Compliant.

Most importantly, Rossco Crane & Rigging Inc. has an impeccable

www.aspenaircorp.com PLANT: 1524 Lockwood Road, Billings MT 59101 SERVICE STATIONS: Williston & Dickinson, ND

~ NOW OPEN ~ ASPEN² SERVICE STATIONS DICKINSON & WILLISTON sales@aspenaircorp.com Is your tank empty? Call us for a fill! (406) 697-1544

safety record. Since starting in the Bakken, they have had no recordable incidents. They are ISNetworld Green, and all employees have current PEC Safeland cards.

All in all, Rossco Crane could not have experienced this growth and success without the strength and determination of the great employees with whom they surround themselves.

The outlook is bright and Rossco Crane & Rigging is poised for more significant growth and another safe, efficient 2014.

For more info on Rossco Crane and Rigging Inc., you may visit www. rosscocrane.com or call 701-818-0037. w

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BAKKEN OIL REPORT – SPRING 2014

hose solutions

Lay-flat hose offers value to the industry Hose Solutions has been in the layflat hose business since 2001. It is the U.S. sales arm for their factories in South Africa and Australia that have been around since the 1960s.

“Making and selling lay-flat hose is what we do,” says Tanner Tryon, general manager of Hose Solutions.

“While other companies sell pumps, piping and other variations of products, we have remained focused on lay-flat hose and specifically, polyurethane hose.”

Lay-flat hoses have offered value to the oil and gas industry in many ways. Of the different parties involved in the fracking industry, each see the hose and its value differently. For instance, government agencies and municipalities view the hose as a means of reducing the number of trucks on the road,

Spools of Mineflex hose being delivered to site for deployment.

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BAKKEN OIL REPORT – SPRING 2014

Mineflex hose being deployed into the field using Mineflex ReelEasy deployment system.

Mineflex hose pumping water in subzero weather conditions.

hose solutions

Mineflex deployed in the snow. reducing the amount of water being wasted (as a result of reduced leaking), and happier constituents.

As fracking techniques improve, the number of stages in wells is also increasing. This means the amount of water being used in each well is increasing, as well – in some cases, requiring hundreds of truck-loads of water in order to fracture wells. Layflat hose helps preserve infrastructure, reducing traffic and pollution, all while doing it more economically and safely (since pumping the water is easier than trucking it).

Cities and governments aren’t the only ones benefiting from lay-flat hose.

Exploration, production and service companies are winning as well, since deploying hose is significantly faster than laying down rigid pipe. Reel systems and deployment equipment have made working with hoses as simple as operating a skid-loader/skidsteer. Deployment times have been reduced dramatically, both in terms of the number of employees and time spent, not to mention a safer, more efficient working environment.

“The market has embraced lay-flat hoses with open arms. As long as manufacturers focus on quality, there won’t be a need to look anywhere else,” Tryon concludes.

For more information, please visit www.hosesolutions.com. w BAKKEN OIL REPORT – SPRING 2014

195

acl combustion

Montana company provides modern combustion solutions The oil and gas industry has seen many changes over the years, from new technology in the drilling sector to new and innovative ways of oil extracting and production. The oil and gas industry has always prided itself on innovation and safety, and one area in particular is starting to get a lot of attention: the combustion side of the oil and gas industry. This area includes all of the flare stacks, incinerators and gas-fired equipment such as treaters, reboilers, and line heaters â&#x20AC;&#x201C; anything that requires control and monitoring of flame safety in the equipment.

The combustion industry has often been pushed to the back by the safety authorities as well as the environmental agencies; this is no longer the case.

Safety authorities have taken notice of the hazards involved with lighting and monitoring oilfield heating appliances and are now demanding the industry take action. Additionally, environmental authorities such as the EPA have also targeted these waste-heat and heating appliances and are also demanding action from the industry.

ACL Combustion Inc. is one of these companies striving to be at the forefront of this industry in terms of safety and environmental products to address these needs and requirements. Among some of the products ACL provides are combustion safety controls, highefficiency burners, and combustor and flare-stack systems for the oil and gas industry. ACL is unique as it carries several patents for their innovative burner designs and has been able to reduce emissions from their burners like no other company. ACL claims the best burner 196

BAKKEN OIL REPORT â&#x20AC;&#x201C; SPRING 2014

efficiency in the industry for a natural draft burner.

ACL has been designing and manufacturing combustion safety controls and burners since 1991. All of their products meet CSA international requirements and can be found in almost every oil- and gas-producing nation in

the world. Currently ACL has operations in Canada and the United States and is opening two more locations in the United States to better assist the needs of their growing client base.

For information about ACL and their product offerings, go to aclmfg.com. w

Flare Stack/Incinerator Ignition Systems

High Efficiency Burners

Burner Management System

Combustion Safety Controller

ACL Manufacturing Inc. has been involved in the burner control business and oil and gas industry for over 20 years and has been developing combustion related products.

Through years of experience, ACL Manufacturing Inc. has been an innovator in providing safe and reliable control equipment for industrial heaters, incinerators and flare ignition systems.

Certified by the Canadian Standards Association (CSA), combustion safety controllers produced by ACL Manufacturing Inc. provide a safe means of automatically lighting and monitoring the pilots and burners in gasfired equipment. Through extensive testing by CSA and proven performance in the field, ACL controllers have gained a reputation for reliance and safety. Quick flame-out response times and automatic shut-down features also guarantee that combustion safety controls systems made by ACL meet and exceed section B149.3-10 of the CSA code and the US NFPA86.

ACL Manufacturing Inc. is recognized worldwide and our products can be found globally in places such as South America, Africa, Europe, Asia and of course North America.

For more information on our company, please view our website at

www.aclmfg.com ACL Manufacturing Inc. 805 Main Avenue West Box 2002 Sundre, AB | Canada T0M 1X0 Ph: 403-638-5234 | Fax: 403-638-4973 Toll Free: 1-877-638-5234 | email: aclmfg@telus.net

ACL Combustion Inc. Unit 9A-5825 Titan Ave Billings, MT | USA 59101 Ph: 406-969-4913 Fax: 406-969-4914

ACL Combustion Inc. 5210 E. Loop 250 N. Midland, TX | USA 79705 Ph: 432-685-5016 Fax: 432-685-5065

sintex minerals

Bakken fueling unprecedented growth for Sintex Minerals & Services Sintex Minerals and Services, Inc., a fully owned subsidiary of The Curimbaba Group in Brazil, was established in Houston, Texas in 1992 as the sole distributor of Curimbaba Ceramic Proppants for North America. Our initial distribution point was set-up in Houston; we mostly served pressure-pumping service companies in the Texas, Louisiana, and Oklahoma markets. In the late ‘90s, we purchased property in Rosenberg, Texas and built our main distribution point that continues to operate there to this day. In the beginning, we imported a high-strength proppant, SinterBall, from Brazil into the Port of Houston. In the early 2000s as our product line grew, we also began to import intermediate-strength proppant, SinterLite, into the port of Houston.

As our product line grew, so did our distribution points. We now have distribution points in the Permian Basin; Stanton, N.D.; Casper, Wyoming; Grand Prairie, Alberta; and Aliquippa, Pa. We focus on distribution points along the railroad in order to be more efficient and cost-competitive and we now import into the port of New Orleans as well as the port of Houston.

In 2012 we entered the Bakken. Sintex was like a lot of companies who had previously focused on natural gas plays: once the oversupply of natural gas created the glut and gas prices plunged, we had to rethink our marketing and distribution strategies. Sintex has subsequently learned a lot of things since entering the Bakken shale play.

We found out early that warehouse space in North Dakota was at a premium. Finding Stanton, N.D.-based Dakota TransLoad in 2013 was a blessing. We now have a partnership with a first-class distribution point that has the same focus on service quality and customer service that we do. Dakota TransLoad is a facility specializing in handling proppants; they also have experience in handling rebar and assorted pipe. Their facility features 120 acres of property, a 50,000-square-foot facility, and 6,000 feet of track.

Additional proppant storage includes two 3,500-ton storage compartments and 4,500 tons of storage in silos. Their focus is on safety, customer service, and quality, and quick through-put times are also of upmost importance to them.

Sintex has sales and technical representatives located in Denver, Co., and Midland, Houston, Dallas and Tyler, Texas. We will soon be expanding our sales staff in North Dakota. Sintex will be introducing a new light-weight ceramic product called ExtraLite in May, which we expect to be a game-changer for our market in North Dakota.

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BAKKEN OIL REPORT – SPRING 2014

Aerial photo of plant.

Mining operation.

The Curimbaba Group was named after company founder Benito Curimbaba, and was formed in Brazil in 1940. The familyowned and -managed group runs some 15 different companies worldwide. The Curimbaba Group has a 65-year history of mining and processing bauxite ore. Grupo Curimbaba controls the world’s largest known high-grade bauxite ore reserves in the world; their reserves are in excess of 400,000,000 metric tons. The Curimbaba Group’s manufacturing company, Mineracao Curimbaba, is located in Pocos Da Caldos, where they maintain 10 rotary kilns to supply ceramic proppants to North America and around the world.

We at Sintex are thankful to the publishers of the Bakken Oil Report for this opportunity to introduce Sintex to the publication’s readers.

Contact information for North Dakota region: Emily Durham, Rocky Mountain Sales Engineer: Emily.durham@sintexminerals.com Jim Craig, Director of Sales and Marketing – North America: jim.craig@sintexminerals.com Chuck Bell, Director of Technology – Curimbaba Group: chuck.bell@sintexminerals.com w

unit liner

Unit Liner Co. introduces the EnviroGuard Temporary Containment System February 19, 2014 – The Enviro-Guard Temporary Containment System is heavy-duty, modular, and re-usable for various storage tank applications.

Its unique design allows for this system to be the ideal solution for both short-term and long-term containment needs. The features and benefits of the Enviro-Guard Temporary Containment System make it the superior alternative to steel or concrete secondary containment structures.

Features and Benefits: • Structurally sound • Lightweight • Durable • Drain plugs • Variety of colors • Screw-on fill caps and lids • Compatible with square bolt-on or round screw-in lights • Easily relocated • Lower labor costs • Pre-molded attachment areas for lights and flags • Impact-resistant • Allows for application flexibility • UV and long-term fade-resistant • Larger barriers accept fencing • Withstands harsh treatment during installation and relocation • Ballastable with water or sand • Long-lasting visual appeal • Composed of recyclable material • Deployable by one or two people • Quick installation and removal • No heavy equipment needed, but forklift accessible • Uniform wall thickness with thicker corners and edges 200

BAKKEN OIL REPORT – SPRING 2014

Spray-in polyurea containment liner.

Metal secondary containment system.

unit liner

Cattleguards for locations.

Unit Liner Company: Protecting you and the environment Unit Liner Company, established in 1967, provides innovative solutions for oilfield challenges. We offer the industry a leading secondary containment system with the Enviro-Guard metal containment system. The Enviro-Guard metal containment system is available either galvanized or powder-coated. We also provide oilfield pit liners, location liners, tank battery containment liners,

spray-in polyurea liners, walkovers, tank rings, load-line containment liners, foam and snap-up berms, foam interlocking tank pads, cone bottom tank pads, and cattleguards/gates/panels.

From lining pits for drilling to installing metal secondary containment for production sites, our innovative liner and containment products are only a phone-call away. Let us bring peace-ofmind to your operation with products that offer low-cost maintenance.

To learn more, visit www.enviroguardcontainment.com or call (888) 748-5463.

“Unit Liner Company is committed to meeting challenges and creating solutions. Our promise is to meet or exceed our commitments to the customers we serve, and in doing so, lead our industries in quality and innovation.” ~Unit Liner’s Mission Statement w

Enviro-Guard Containment Systems

Load Line Spill Boxes

Polyurea Spray-In Liners

Coned Tank Pads

Oilfield Liners

Heavy-Duty Walk-Overs

Flexible Spill Containment

Complete Secondary Containment Structures

WWW.UNITLINER.COM

Call For A Quote Today!

(888) 748-5463

Dennis Campbell (405) 481-8074

Jeremiah Jordan (405) 481-8076

BAKKEN OIL REPORT – SPRING 2014

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custom stud, inc.

Custom Stud’s Small Building Systems:

Working smarter, not harder

When companies need a small onsite structure, whether its intended use is for a heater-treater shack, a construction site office or even as basic as a first-aid station, the solution has been to create out of necessity and deadline. The result is a typical wood-framed shed design structure that customers have told Custom Stud takes a crew of three workers an average of three days to build to basic standards. These old, wood structures present end-users with a multitude of challenges that brought Kiehm Construction and Custom Stud to the drawing board.

The average install time for a Custom Stud Small Building System takes approximately three hours, total – a 90 percent decrease in construction time compared to the old systems, not to mention manpower!

Current challenges facing woodframed structures start even before construction begins. Ground leveling is an imperative first step to ensure your building is constructed properly and safely. Upon on-site construction, workers need to frame walls, roof, sheet the exterior, paint the exterior, insulate and sheet the interior.

In addition to investing all of the time and materials to build, current systems present end-users with future challenges due to, and definitely not limited to, wood rot, very limited reuse and added landfill costs.

Along with an intuitive design and ease of construction, every Custom Stud Small Building System is able to be shipped standard freight. Each unit is manufactured off-site and the end

product is shipped on pallets for ease Marty Kiehm established Custom Stud of transportation. The lightweight in 2001 to expand into the light gauge design also allows multiple building steel-framing industry and to service units to be shipped on a single load. commercial construction throughout No longer will end-users need to the U.S. and Canada. This was a perfect Buildingloads Solutions scheduleSmall oversized or crane complement to Kiehm Construction’s services to assist in the placement and steel building construction company, INSTRUCTIONS construction of their buildings. which was founded in 1979, evolving STEP 1 – Pallet Package, numbered 1 thru 10

STEP 2 – Layout Base

STEP 3 – Unfold Base

STEP 4 – Side Lock

STEP 5 – Base Complete

STEP 6 – Red #1 Tab

STEP 7 – Set Wall Panels 1 thru 10

STEP 8 – Pin Panels Top and Bottom, ID Green

Continued….

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BAKKEN OIL REPORT – SPRING 2014

8415 220th Street West; Lakeville MN 55044; 952-985-7000; fax 952-469-1240

May 2013

custom stud, inc.

The average install time for a Custom Stud Small Building System takes approximately three hours, total – a 90 percent decrease in construction time compared to the old systems, not to mention manpower!

Small Building Solutions

STEP 9 – Tilt Short Walls, and Line Hook

STEP 10 – Repeat Long Walls

STEP 11 – Corner Pin – all 4 corners

STEP 12 – Roof Section

STEP 13 – Unfold Roof

STEP 14 – Top Brace

STEP 15 – Install Inside Loop Hooks

STEP 16 – Connect Cable to Roof Hooks & Tighten Turn Buckle FINAL – Door Knob CONGRATULATIONS! Questions, call 952-985-7000 Ask for Small Building Tech

8415 220th Street West; Lakeville MN 55044; 952-985-7000; fax 952-469-1240

over time to a full-service design, build and construction firm. With his entrepreneurial nature, Kiehm has taken his building construction in yet another direction, merging his steel-building knowledge with the manufacturing expertise of Custom Stud Inc. to produce Small Building Systems in order to service the oil, exploration, mining and industrial markets throughout the U.S. and Canada.

Each Custom Stud Small Building System rests upon a four-piece heavy structural gauge, galvanized steel-base frame utilizing ground levelers, thus eradicating hours of ground prep. This design eliminates the need for any type of foundation. Once the fourpiece frame is set, pre-manufactured wall sections made of two-inch closedcell foam tongue-and-groove panels wrapped in galvanized steel are set and locked into place. Headers are then added as needed for structural support. The roof system and flashing are completed next, along with custom skirting for each application. Using these quality building materials enable Custom Stud Small Building Systems to achieve R17 energy-efficiency values – engineered to withstand exposure to the elements without the need for maintenance.

Advantages: • Cost-effective • Modular design • Energy-efficient • Maintenance-free • Helicopter and aircraft transportcapable • Re-usable • Portable • Efficient build process With the rapid growth of the oil industry across North Dakota, Montana, and Canada, many new challenges face local clients. As far as May 2013

BAKKEN OIL REPORT – SPRING 2014

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XNLV46431

custom stud, Inc.

what to do about an on-site structure, the answer is clear: Custom Stud Small Building Systems are easy-to-transport, simply designed, very swift to construct and made of high-quality steel products that require no ongoing maintenance.

They are ready for your worksite even before you are!

Custom Stud end-users include CSX Railroad, which uses the Custom Stud Small Building Systems across the U.S. to house compressed air installation units located at their intermodal yards; Major Drilling and Exploration, which uses a smaller modular design for outpost shelters across northern Canada; and Whiting Oil which uses custom-sized buildings for their separator/treater buildings.

Custom Stud’s modular design enables each unique end-user to cover their

DEL

Communications Inc.

immediate needs while understanding that growing their Custom Stud Small Building System to a larger size is only a quick phone call away!

Custom Stud calls them “Small Building Systems”; you can call them what you like – heater-treater shacks, safety shelters, emergency outposts, on-site storage, warming shacks, first-aid stations or construction site offices. Whatever your individual needs are, Custom Stud Small Building Systems save overhead and manhours on your small building needs.

For once, a better product that saves time and money!

Custom Stud Inc., Small Building Systems 8415 220th Street West Lakeville, MN 55044 952.985.7000 www.customstud.com w

Call: 1.866.831.4744 www.delcommunications.com

DEL Communications Inc. & You.

The key to success.

We offer outstanding personal service and quality in the areas of: 204

BAKKEN OIL REPORT – SPRING 2014

CREATIVE DESIGN ADVERTISING SALES TRADE PUBLICATIONS QUALIFIED SALES & EDITORIAL TEAM

Mountain Supply and Service - Bakken Strong since 2011!

Mountain Supply and Service - Bakken Strong since 2011!

Your Fluids YourSource Source for for Completion Completion Fluids

Mountain Supply and a better better well. well.We Weprovide providecompletion completion fluids coiled Mountain Supply andService Servicecan canhelp helpyou you complete complete a fluids forfor coiled tubing, workover behind our ourDynamo DynamoCompletion Completion Fluids help tubing, workoverand andstimulation stimulationoperations. operations. The The chemistry chemistry behind Fluids help them hydrate quicker minute they theyhead headdown-hole. down-hole.This This helps reduce them hydrate quickerand andstart startworking working effectively effectively the the minute helps to to reduce circulating pressures, strings and andallows allowsminimal minimalusage usage fluids.

You circulating pressures,add addextended extendedlife lifeto to coil coil tubing tubing strings of of fluids.

You cancan view Data Sheets Sheets ofof allall our our Completion CompletionFluids Fluidsat at viewProduct ProductData Data Sheets Sheets and and Material Material Safety Safety Data www.mountainoilfield.com. www.mountainoilfield.com.

Your Source for Drilling, Flowback and Production Supplies

Your Source for Drilling, Flowback and Production Supplies 

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Let Mountain Supply and Service be your one-stop-shop! Please visit our website at mountainoilfield.com or visit our Bakken location at:

1470 E Villard St  Dickinson, ND 58601  Ph: 701-483-3868

1470 E Villard St  Dickinson, ND 58601  Ph: 701-483-3868

M O U N TA I N O I L F I E L D . C O M

arrow truck

Arrow Truck Sales, Inc. – North America’s leading source of pre-owned heavy and medium-duty trucks

701-272-6161 • 800-334-7863 LOCATED IN THE BAKKEN REGION

➤ Separators, Launchers/Receivers, LACT Units, Treater Packages ➤ Saltwater Pump Buildings ➤ Electrical buildings on skids ➤ Certified Pipe Welders ➤ Custom Fabrication ➤ Complete Turn-Key Services

www.sundmfg.com 206

BAKKEN OIL REPORT – SPRING 2014

Arrow Truck Sales, Inc. specializes in overthe-road tractors and carries a variety of vocational and specialty trucks, as well as trailers. We specialize in late-model, low-mileage trucks in good condition. We honestly represent the unit, and then fairly price each truck.

Huge computerized, national inventory: Get access to more than 1,500 quality, pre-owned vehicles in stock and ready for immediate delivery.

Variety and selection: Unlike some of our competitors, we carry a wide selection of all makes and models so we can find the right truck to fit your needs. And since our inventory changes daily, we’re likely to have the truck you need. Plus, we are always looking to buy quality, pre-owned units – so when you have a single unit or a fleet to dispose of, call us. With branches located throughout the U.S. and Canada, we are always close by.

One-stop shopping: From financing, insurance services and extended warranties, Arrow offers a one-stopshopping experience when purchasing your quality used truck.

On-site, competitive financing: We provide financing for hundreds of truck purchases every month. Used truck financing is all we do and we fully understand the needs of owner/operators.

Our credit approval process is so simple and streamlined, financing your used truck purchase can be easier, faster and more problem-free than you ever thought possible. To ensure that your purchase remains a smart investment, we customtailor financing packages and payment

arrow truck

schedules to meet your needs and budget requirements.

Roadside assistance 24/7 for less than a dollar a day! The time to think about roadside assistance coverage is definitely not when you and your truck are stranded on some lonely stretch of highway in the middle of the night – especially if you need to get your load to its destination first thing in the morning. That’s where Arrow comes in: we’ve got you covered.

For less than a dollar a day, Arrow’s 24/7 Roadside Assistance Plan offers you peaceof-mind during times of trouble. Not only is this valuable plan designed to keep you on the road – saving you countless downtime – but also to help you preserve your on-time reputation.

Arrow Certified™ trucks: Oneyear/120,000-mile engine warranty! We offer the longest certified, pre-owned truck warranty available in the industry.

Arrow starts with newer, lower mileage trucks and puts them through a rigorous reconditioning process. These federal DOT-certified trucks are the finest units in Arrow’s inventory, and the best values in the industry. And every Arrow Certified™ pre-owned Class 8 truck comes with a one-year/120,000-mile warranty! Invest in the best: Arrow Certified™.

ConfidencePLUS 90-day/25k-mile comprehensive coverage: Arrow leads the used truck industry by offering protection to our customers against costly engine and transmission repairs for the first 90 days, with no deductible! If you have a covered failure within the first 90 days or 25,000 miles, there’s no out-of-pocket expense for you.

Arrow Action Service: If you ever have a breakdown, Arrow Action Service helps you get back on the road to deliver your load – on time. This package includes a wide variety of services in addition to basic roadside assistance, from load-forwarding or equipment rental if extensive repairs are necessary, and making hotel and return-

trip arrangements for you, to guaranteed

nationwide and fast, direct claim payment

labor rates and preferred pricing on parts.

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Our help line is staffed by real people 24

NTP will even handle the paperwork for

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Extended warranties: Arrow Truck

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Sales has teamed up with NTP to offer

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in the business. We recondition our trucks

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and stand behind the trucks we sell. You

coverage at over 3,000 repair facilities

can’t go wrong with Arrow. w

BAKKEN OIL REPORT – SPRING 2014

207

Restaurant biz booms in the Bakken

By Rebecca Colnar

Places offering a grab-and-go meal in the Bakken region are on the rise and highly successful ventures. “A Sinclair station on the west side of Williston took out all of their display cases and put in a to-go counter where you can order freshly made enchiladas and burritos for $6. Those are a meal-in-

one. They realized people are hungry, and it’s a good way to go,” notes Boe Gregson, project manager/water resource specialist for Western Land Services.

Ward Koeser, mayor of Williston, notes that in two years, the town went from having 14,000 to having 18,000

permanent residents, with 40,000 people living in the city or townships near the city in “man camps” and other temporary housing.

“All these people have to eat,” Koeser notes, explaining that one of the problems is there aren’t a bevy of teenagers to work in fast-food. “We have some restaurants that have to close for several hours each day – not because of a lack of customers but because of a lack of staff.”

New ideas rule here. “There are some caterers delivering direct to the oilfield.

There are man-camps that are their own communities complete with a chef

Bismarck (701) 221-6836 | Dickinson (701) 483-6833

WWW.LADYJSCATERING.COM

and laundry service. One company even offers a shuttle to Wal-Mart,” Gregson says. w

Welcome to the Bistro...

100 years later, what was once a carriage house is now the region’s finest eatery. The creative combination of Grecian style goddesses and art, cherry wood adornments, and gold-hued, roughly textured walls provide old-world warmth with up-town trendiness.

JOIN THE CONVERSATION

Voted

“Best Overall Restaurant”

Bismarck Tribune

1103 East Front Avenue Bismarck, ND 58504 Open 11:00 am – 1:00 am Tuesday to Sunday Call: 701.224.8800

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BAKKEN OIL REPORT – SPRING 2014

434 South 3rd Street Bismarck, ND 58504

Ph: 701-222-1018 www.applebees.com

Index to Advertisers A-1 Evans Septic Tank Service........................................42

H. & L. Rentals And Well Service.....................................16

Presto Geosystems.........................................................99

ACL Combustion Inc.....................................................197

Hampton Inn & Suites....................................................81

Pro Tank Products.........................................................188

Ae2s Water Solutions.....................................................47

Hawkins Inc....................................................................45

QMC Hydraulic Cranes......................................................6

Aire Industrial...............................................................24

Hose Solutions Inc........................................................195

Quality Mat Company..................................................193

Alliance Truck & Tank Sales.............................................94

Inland Tarp & Liner.........................................................13

Rapid City Economic Development Partnership.............12

Apegs............................................................................89

Jasper Engineering & Equipment Co.............................167

Resirkulere...................................................................128

Applebee’s...................................................................208

Kelso Technologies.......................................................153

Reynolds French & Company..........................................90

Arrow Truck Sales, Inc...................................................207

Klj.................................................................................35

Richland Pump & Supply.............................................204

Aspen Air.....................................................................192

L.j.r. Pumps & Parts......................................................96

Riley Bros. Construction...............................................189

Baranko Bros. Inc...........................................................33

Lady J’s Club & Catering Inc..........................................208

Rocky Mountain Rod......................................................51

Beaver Creek Archaeology..............................................15

Larson Electronics..........................................................66

Roller Rod Guides.........................................................125

Bismarck-Mandan Development..................................155

Legacy Oil & Gas Inc.......................................................14

Rossco Crane and Rigging Inc.......................................190

Bistro 1100...................................................................208

Lite-Check......................................................................43

Selway Corporation........................................................24

Black Gold Rush Industries Ltd.......................................91

Lithia Ford Lincoln of Grand Forks..................................95

Blackmer........................................................................77

Lower Yellowstone Rural Electric Assn. Inc.....................20

Shores Lift Solutions......................................................31

Blue Cross Blue Shield of North Dakota..........................19

Lynden...........................................................................55

Borsheim Crane Service...............................................183

M Space Housing..........................................................168

Brawler Industries, LLC...................................................11

Mainstream Investors, LLC.............................................17

Breitling Energy...........................................................104

Manger Insurance........................................................186

Canary USA..................................................................145

Mattracks, Inc.................................................................97

CanElson Drilling Inc....................................................181

MBI Energy Services.................................................5 & 79

Capital Lodge.................................................................41

MDU Resources Group, Inc................................................4

Cat-Tek Cathodic Services Ltd.........................................67

Mi-T-M Corporation..................................................... OBC

CCI Thermal Technologies Inc...........................................3

Mid-Plains Distributing................................................185

Central Dakota Water Works LLC...................................182

Millennium Directional Service Ltd..............................187

Claim Post Resource Inc................................................186

Miller Architects & Builders..............................................9

Compass Compression.................................................141

Miller Insulation Co., Inc...............................................148

Crestmark....................................................................131

Minnesota Limited, LLC..................................................87

CS Unitec, Inc...............................................................143

Minot Convention & Visitors Bureau.............................210

Custom Stud Inc.............................................................26

Montana Argo Sales & Rentals.......................................69

Dakota Gasification Company......................................121

Montana Energy............................................................75

Diamond B Oilfield Trucking, Inc....................................63

Motion Industries...........................................................59

Dickinson Theodore Roosevelt Regional Airport...........138

Mountain Supply & Service..........................................205

Drake Water Technologies Inc.......................................151

Mountainview Energy Ltd............................................161

Eight Ball Trucking.........................................................39

Nabors Completion & Production Services Co.................23

Ulterra..........................................................................144

Enbridge.......................................................................IBC

Neset Consulting Service................................................18

Unit Liner.....................................................................201

Enerplus Corporation.....................................................49

Noble Well Services Inc..................................................94

Valin Corporation.........................................................165

FB Industires Inc.............................................................65

North Dakota Petroleum Council..................................109

Value Place Williston......................................................52

Ferguson Enterprises, Inc...............................................29

Northern Technologies, Inc.............................................88

Vehicle Mounted Air Compressors................................115

FR Depot........................................................................93

Noshok......................................................................139

Veit USA.......................................................................169

Franz Construction Inc....................................................42

PEC Safety....................................................................117

Wanzek Construction...................................................147

General Equipment & Supplies, Inc..............................179

Penta Completions.......................................................137

Westcon Incorporated..................................................177

General Irrigation & Dewatering..................................130

Phillips & Jordan Oil & Gas Group...................................32

Western Engineered Solutions.......................................54

Glacier Oilfield Services..................................................53

Pinnacle Environmental Technologies Inc......................27

Whiting Petroleum Corporation....................................IFC

Golder Associaties..........................................................20

Pinnacle Ltd.................................................................101

WRS (Worldwide Rental Services).................................57

Graham Construction...................................................103

Plidco.............................................................................74

Xylem...........................................................................111

Grand International.......................................................83

Portadam, Inc..............................................................157

Z & S Dust Control............................................................7

Sintex Minerals And Services, Inc.................................199 Sioux Steel Company......................................................61 Southern Glove, Inc......................................................133 Spartan Mat...................................................................37 Summit ESP.................................................................175 Sund Manufacturing....................................................206 Swivel Storage Solutions..............................................158 T & E Pumps Ltd.............................................................25 TCI Oilfield Factoring....................................................119 Texas Test Trucks...........................................................120 Thawzall......................................................................166 The Modern Group / Dragon Products............................72 The Walrus Restaurant.................................................184 Therm Dynamics............................................................71 Tire Hotline....................................................................81 Titan Machinery...........................................................149 Torqued Heat.................................................................21 Towmaster...................................................................100 Tps Llc, Sales and Service.............................................39

BAKKEN OIL REPORT – SPRING 2014

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With several state-of-the-art meeting facilities and more flights than ever before, Minot is the perfect place for your get-together.

Youâ&#x20AC;&#x2122;ll have many options to choose from for your next convention or conference. And the recent addition of several new hotels offers more places for your guests to stay.

So, plan on Minot. Weâ&#x20AC;&#x2122;re ready for you.

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WHERE ENERGY MEETS DELIVERY Enbridge and the Bakken Pipeline are leading the way in energy delivery.

Enbridge’s Bakken Expansion Program placed into service in March 2013 will transport 145,000 barrels of Bakken crude oil every day, so it can be refined into the products we rely on. From asphalt to jet fuel, to gasoline and plastic, the oil we transport safely and reliably helps keep North America running strong.

Enbridge delivers more than the energy you count on. We deliver on our promise to help make communities better places to live. It’s part of the reason we were named one of the Global 100 Most Sustainable Corporations in the World.

FIND OUT MORE EnbridgeUS.com