Texas Oil & Gas

The Official Magazine of Texas Oil & Gas Professionals Network

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Are the Russkies Funding Fractivists?

Living with Threatened and Endangered Species...

Troy Blair...Azavachy Energy

Save the Date

12-06-14

DEVON ENERGY...

New Ideas Unlock Unconventional Resources

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TEXAS NATURAL GAS SUMMIT Good Jobs, Fueling the Texas Economy.

OCTOBER 23, 2014 Palmer Events Center 900 Barton Springs Road Austin, Texas 78704 Growing the market for natural gas vehicles in Texas helps expand and sustain good-paying jobs in the oil and gas sector and ensures the use of a clean-burning fuel. In the past year, oil and gas jobs grew nearly five percent statewide, helping Texas lead the nation in job creation. The Texas Natural Gas Summit will highlight the connection between natural gas vehicles and jobs for Texans.

✔ Job Fair and Expo ✔ Fleet Manager Workshop ✔ Natural Gas Vehicle Demonstrations For event details, please visit www.altenergy.rrc.state.tx.us/Alternative_Fuels_Events.

To reserve a booth: Cliff Baize clifford.baize@rrc.state.tx.us 512-463-9499

To register for the Fleet Manager Workshop: Art Valladares art.valladares@rrc.state.tx.us 512-463-3370

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WELCOME New Members TOGPN Welcomes the Following: SPARKMAN FOOTE LINER, LLP Allen Sparkman, Partner

HIGHGROUND

Ron E. Zimmerman, Jr., Owner

SWBC, Inc.

Norman Paul, CEO

AZAVACHY ENERGY Troy Blair, Owner Meg Blair, Owner

2014 TOGPN Calendar SEPT 9 Membership Luncheon 11:30 am Register at: www.OilGasNetworkingGroup.com

DEC 6 BLACK GOLD GALA Sponsorships Needed Tickets sold at: www.OilGasNetworkingGroup.com

For More Information about TOGPN, Contact us at 210-853-0213 or visit our website at www.OilGasNetworkingGroup.com WE WANT YOU!!!

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CONTENTS

26

32

FEATURES 18 OILFIELD SUPERHERO Troy Blair...Azavachy Energy

20 SHALE NEWS

Are the Russkies Funding Fractivists?

26 OILFIELD PROFILE Devon Energy

32 OILFIELD ENVIRONMENT Living with threatened and endangered species.

Special Section 50 TOG Marketplace Business Advertising

51 TOG Marketplace Directory

cover photo source: www.devonenergy.com 12

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COLUMNS 8 11 14 15 19 22 24 29 34 35 37 38 39 41 47 48 49

Advisory Board New Members Publisher’s Letter Shale News...CROFT The REAL Housewives of the Oilfield Oilfield Business: Human Resources Oilfield Business: Innovation Oilfield Business: Education Oilfield Business: Professional Women’s Corner Oilfield Wellness Shale News: Eagle Ford Land Notes Oilfield Life: Travel Oilfield Life: Family Oilfield Inspiration News from TCEQ RRC Case Study: Lewis Energy Reports from RRC

Submit Articles to Editor@TexasOilGasMagazine.com Subject Line: Editorial Submission (Cost $99) Please follow article submission requirements found on www.TexasOilGasMagazine or www.OilGasNetworkingGroup.com Thank you for your submissions and comments!

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A LETTER FROM THE PUBLISHER

In this issue of TOG Magazine, I am proud to have new advertisers and contributors to our team. At TOG, we truly believe in customer service and building relationships. We are happy to also announce that we have updated our website and added a new website for our Texas Oil & Gas Professionals Network. We encourage everyone to join our TOGPN because you will see the value in being a member.

Your membership will give you the benefits of connecting with other Oil & Gas Professionals through our monthly meetings, mixers, and special events. The upcoming special events we have are the TOG Executive Leadership World Class Conference and the First Annual Black Gold Gala. These special events have sponsorship opportunities that you don’t want to miss! For more information on these events, please feel free to email us at event@texasoilgasmagazine.com.

Our cover story is about an Oil & Gas company that has changed the industry in so many ways. We are proud to have Devon Energy, one of the largest and most successful operators in Texas. Devon Energy has a wide variety of experience in their leadership and have a reputation for giving back to their communities. This company is one that its employees are proud to be a part of.

We have featured Troy Blair as our Superhero in the field. Troy is a drilling consultant and owner of Azavachy Energy based in Midland/Odessa and he is available for consulting in the Eagle Ford areas as well as the Permian areas.

If you are a TOGPN member and have interesting news or case studies, please send those to us. We always want to hear from you!! ~Jennifer Larivey, Publisher & President

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Texas Oil & Gas Magazine is published bi-monthly. Subscription rates: 1 year US $75 2 years US $120. Single copies are US $15 (prepayment required). Please allow 4-6 weeks for delivery. Advertising rates furnished upon request. POSTMASTER: Send address changes to TOG Magazine 4 Dominion Drive Bldg 4 Ste 250 San Antonio, TX 78257. Telephone: 210-853-0213 Copyright Texas Oil & Gas Magazine 2014. TOG Magazine reserves the rights to editorial matter in this magazine.

No article may be reproduced or transmitted in whole or in parts by any means without permission of the publisher. Federal copyright law prohibits unauthorized reproduction by any means and imposes fines of up to $25,000 for violations. Texas Oil & Gas Magazine is a subsidiary of 4 X-STREAM MEDIA, INC. While every effort has been made to ensure the accuracy of the information contained herein and the reliability of the source, the publisher in 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, affiliates, or colleagues. Visit our website at www.TexasOilGasMagazine.com

Publisher/Editor In Chief Jennifer P. Larivey Graphic Design/Photography Jennifer P. Larivey Contributing Writers: Tom Shepstone Jennifer P. Larivey Cathy Buchanan Meg Blair Pete McKone James Carter Norman Paul Ron E. Zimmerman, Jr. Business Development & Marketing Philip Wade, VP Duke Jonietz, Lead Consultant Melissa Marion Leah Terry Lindsey Griffin Di Rogers Events Gwynn Seewald, TOGPN Member Meg Blair, TOGPN Board Member Partners: Derald & Pat Harvey For Advertising Information in Texas Oil & Gas or Membership Information for TOGPN call 210-853-0213 www.TexasOilGasMagazine.com www.OilGasNetworkingGroup.com Published by: 4 X-STREAM MEDIA, INC 4 Dominion Drive Bldg 4 Ste 250 San Antonio, TX 78257

SHALE NEWS

Gas Processing Company Revolutionizing Equipment One Well Site at A Time

by: Cameron Croft, CEO

Save The Date There are many things that CROFT, as an oil and gas company, does well- we have outstanding engineering, state of the art manufacturing, and superior customer service. We also have the ability to give you options with our equipment, since we customize and build to your specific wells and specifications.

We have recently launched a new product, Fuel Gas Conditioning System, or FCS, that has the power to cool, dehydrate, and remove gas heavies to prevent freeze-ups of fuel lines, and clean gas for fuel and instrumentation.

There are seven different types of FCS’ available to purchase-just depends on the size of the well, pressure, volume, and gas that is being produced.

The FCS is a combination of multiple Croft Systems combined into one package to condition fuel, supply, and instrument gas on location. The FCS incorporates two of our other pieces of equipment, the Ambient Cooler System and the Passive Dehydration System.

All these systems work together to utilize a pressure drop, remove the natural gas liquids from the gas stream, and then to dehydrate the gas so the dew point is reduced below pipeline specifications. The FCS removes condensates and water to provide a dehydrated and consistent BTU for utilization in high speed engines and instrumentation. The FCS is commonly utilized after initial free liquid separation and field processing of the gas, and immediately before the generator, for the final polishing of the gas.

The FCS is the only type of its kind in the oil and gas industry. Other companies sell all the components separately, which ends up being more money, materials, labor costs, and chemicals. The FCS is neatly packaged onto

a skid, with the other gas processing parts already equipped and ready to run at startup.

The way that our units are engineered mean that there is minimal downtime, reduced equipment failure, and increased output. All these features save our clients time, money, and labor costs. The FCS can be utilized for those who have natural gas powered engines, burners, pneumatic controllers and instrumentation. You won’t be able to find a equal package of this caliber in the industry.

Along with prompt, professional service support, and spare parts that are available from the regional service technicians, CROFT continuously strives to improve quality, cost, and service. We have ASME coded pressure vessels and we are ISO9001 certified. When doing business with CROFT you can be reassured that the job will be done correctly.

CROFT is located outside of Houston, TX and services nine states and has over 60 clients.

These systems are designed to be eco-friendly and with operational safety and efficiency in mind. We base our engineering on several decades of experience in natural gas processing.

To receive more information on the systems we sell please visit our website: www.Croftsystems.net, call the office at 979-793-2100, or find us on Facebook, LinkedIn, and Twitter.

12-06-14 TOGPN is proud to announce the 1st Annual Black Gold Gala Enchanted Springs Ranch Boerne, TX Tickets & Sponsorships Going Fast!! email: events@TexasOilGasMagazine.com website: www.OilGasNetworkingGroup.com Contact: 210-853-0213 Jennifer Larivey, Co-Chair Contact: 432-312-3424 Meg Blair, Co-Chair

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OILFIELD SUPERHERO

TROY BLAIR, DRILLING CONSULTANT OWNER OF AZAVACHY ENERGY

ABOUT YOU:

There is not too much to tell. I was raised on the Arledge ranch out in Robert Lee and eventually moved to Mineral Wells where I graduated HS. My dream was to be a ranch cowboy till I went to work for Parker Drilling one summer and loved the money. I decided I would do that instead and buy my own ranch someday. I told my dad back then I would sit out my first year of College at Sul Ross to put back money. A year later, I was drilling and had college educated men working for me. I would never see another poor day.

Then came 1982. The biggest BUST most people had ever seen. I ended up working as a bouncer for Herb Graham out at the StarDust in Odessa, Texas waiting for the Oilfield to turn around. Eventually, it did and I went to pushing tools for Quarles Drilling for John Long. After that I went to work for several different companies and ended up at Basin Drilling until Grace Drilling bought them out.

Eventually, Nabors came in and bought Grace. I became a District Manager for West Texas and then South Texas where I stayed until I made the move back to Midland and went to work for Patterson Drilling as the Area Manager for Midland. I started my first Consulting company (B & H) when I left there. I am married to the love of my life Meg Blair, my partner in life and in business. Together, we have four great kids and two beautiful granddaughters and 4 amazing mini Aussies! We enjoy the cowboy way of life as well as fishing, golf and traveling.

ABOUT YOUR BUSINESS: I own two Drilling Consulting Companies, one out in West Texas and one in South Texas.

WHAT INSPIRED YOU TO DO WHAT YOU ARE DOING?

We started B &H when I left Patterson. My guys needed somewhere to go and they didn’t want to work for anyone else. We started Azavachy when we made the move to South Texas last year.

How would you ENCOURAGE Others like Yourself?: Be a teacher to the young men out in the field. There is a generation gap there. These young guys need some tutoring.

What is the biggest Challenge you have?

Breaking into the new market here in South Texas where no one knows my reputation.

What do you enjoy most about what you do?

I enjoy Teaching.

What is your advice or business tip that you would like to share?

Treat your employees with respect, pay the good ones what they’re worth and be very, very selective in whom you hire.

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THE “REAL” HOUSEWIVES OF THE OILFIELD

“Babes and Backbones” by: Meg Blair

When my dear friend Jennifer first asked me to write about my life as an Oilfield Wife for her magazine, I was more than just a bit thrilled. Finally, an opportunity to shed some light on the women behind the men in the Oilfield! There are so many misconceptions about Oilfield wives and my hope is that I can share some light on some of that. Contrary to popular belief, most of us do not sit at home eating bon bons and waiting for our men to come home from their next hitch. We do not use our men as human ATMS always putting our “babe like” appearances and ourselves first. There are many of us who actually work with our husbands in our Oilfield businesses and some of us have real jobs outside the home.

Shows like “The Real Housewives” who cater to opulent lifestyles are not what most REAL Oilfield wives are experiencing. I admit, I am luckier than some as we have a pretty blessed life NOW, but it wasn’t always like this.

When my kids were young, I was going in 20 different directions raising them alone 90% of the time while my husband worked countless hours out in the field. It was my responsibility to take care of my own job, as well as 6 horses, 20 acres and countless kid activities. I did it all and I never complained. It was (and still IS) after all what I signed up for when I married an “Oilfield” man. As women, we are born with the God given ability to multi-task. That is why we take care of everything and then, when our Oilfield men get home, we take care of him too. That is not to say my adoring husband doesn’t take care of me, because he does, but that’s a whole different article!

Most Oilfield wives today are still raising kids, and playing the role of both moms AND DADS whether they get to stay home or have jobs that they go to everyday. They are still filling in where Dad left off when he went back on to his next hitch. They are still running kids to school and sports events, and taking care of everything from homes and finances, to yards, and car troubles. As our kids continue to grow, dads will still keep missing out because this is just the nature of the business. It is 24/7, 365 days a year. Our husbands are still getting to experience watching all the “firsts” in their kid’s lives from a distance. Things like driver’s permits, first dates and even going to their first prom while dad is out at the rig. The pay off for the hard work that goes into raising families sometimes gets to be experienced by the men in our lives solely through pictures and videos. Thank goodness for technology!

I saw a t-shirt a long time ago that read, “behind every successful cowboy, is a wife who works in town”. It implied that the cowboy way of life is a tough, tough industry and that money is not the reason most cowboys do it. They do it because they love it, but they need some steady income! The same applies to our Oilfield marriages. If your husband is anything like mine, he LOVES what he does. To quote him directly, “the oilfield gets in your blood and if you spend two years in it, you will never get out, you can’t, the money is just too good!” Our husbands depend on us ladies, not necessarily for added money, but for everything else that needs to be dealt with and they trust us to get it done.

I have seen a lot of changes in the Oilfield since I first married into it back in 1985, but the one thing that doesn’t change is the backbone of it all. We, the proud wives, are the backbone for our Oilfield men. We are the strong women who do it all. WE, my dear readers, are the babes our men love to come home to, because after all, that is what THEY signed up for!

Till the next hitch... ~Meg Blair

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SHALE NEWS

TOM SHEPSTONE, PRESIDENT Shepstone Management Co. www.NaturalGasNow.org

Are the RUSSKIES Funding Fractivists?

Are the Russkies funding fractivistis to protect their own natural gas market from competition? It sure looks like it!

There has been a lot of speculation over the last several months about Vladimir Putin underwriting, either directly or indirectly, fractivist campaigns around the world, but particularly in Europe, which is a big customer for Russia’s state-owned gas company, Gazprom. Our friend Nick Grealy talked about it in this post. He noted how very strange indeed it was that Gazprom paid its US public relations firm a lot of money to for things such as “correspondence with Tribeca Film Festival on future sponsorship options.” That festival, of course, is a favorite of the one and only Josh Fox, so Nick’s ears and our’s both went up at that one.

Moreover, call me cynical, but it’s not readily obvious why a gas company that sells nothing to the US market needs a PR firm here. The Russkies have a clear interest in influencing what’s happening in Europe, of course, but the only apparent reason to spend money here is to help slow down fracking advances before things migrate to Europe. It’s too late to stop it, but any delay is clearly valuable to them, especially if they’re looking for an opportunity to get their own shale gas development program going before Europe fully develops alternatives to Russian gas.

Therefore, it’s no surprise evidence of Russian involvement in fractivist causes keeps building.

NATO Head Says Russkies Funding Fractivists What caught Nick Grealy’s eye to write his post was this paragraph from a Foreign Affairs article (emphasis added): It should not be surprising that the Southern Gas Corridor has caught Moscow’s ire. Russian-run Gazprom is attempting to buy up gas transit and transmission infrastructure along the pipeline route to try to undermine the project. Even more insidious, it has paid environmental movements to try to stymie construction with environmental claims. This is not the first time that Gazprom has used bogus environmental movements to promote its interests.

It has also funded anti-fracking campaigns in Europe, including in Ukraine and Bulgaria, to slow Europe’s development of local gas supplies. If public watchdogs in Europe do not monitor and publicize Russia’s manipulation of environmental causes, distinguishing its claims from those of legitimate environmental organizations, it will find itself increasingly dependent on Russian gas imports.

It’s also worth noting Phelim McAleer was ahead of the curve on this in Fracknation, when he interviewed James Delingpole of Breitbart London and Neil Buckley of the Financial Times about this very issue. Here’s the video link: http://youtu.be/AAafjfeIsCU 20

Now, Breitbart London (a conservative blog) has come out with still more on the subject, reporting on a remarkable article in the Guardian (a center-left UK paper) that includes the following: Russia ‘secretly working with environmentalists to oppose fracking’ The head of one of the world’s leading groups of democratic nations has accused Russia of undermining projects using hydraulic fracturing technology in Europe.

Anders Fogh Rasmussen, secretary-general of the North Atlantic Treaty Organisation (Nato), and former premier of Denmark, told the Chatham House thinktank in London on Thursday that Vladimir Putin’s government was behind attempts to discredit fracking, according to reports.

Rasmussen said: “I have met allies who can report that Russia, as part of their sophisticated information and disinformation operations, engaged actively with so-called non-governmental organisations – environmental organisations working against shale gas – to maintain European dependence on imported Russian gas.”

Rasmussen made clear that fracking should be used, in his view, to increase Europe’s energy security, by providing a new source of gas and oil supply.

Nato was originally formed at the start of the cold war as an alliance of western states, including the US and many European nations, and historically has often opposed Russia. Rasmussen himself has spoken out previously against Russia’s actions in Ukraine.

A Nato official told the Guardian that Russia’s influence on energy supplies was causing problems for Europe. The official said: “We don’t go into the details of discussions among allied leaders, but Russia has been using a mix of hard and soft power in its attempt to recreate a sphere of influence, including through a campaign of disinformation on many issues, including energy. In general, the potential for Russia using energy supplies as a means of putting pressure on European nations is a matter of concern. No country should use supply and pricing terms as tools of coercion.

“As energy supplies and routes are an issue mostly for the EU, we count on the EU to take into account the new security realities in Europe and look at whether there is a need to review diversifying energy sources and expanding energy infrastructure. Clearly, it is in the interest of all Nato allies to be able to have adequate energy supplies. This is critical to our economies, our security and our prosperity. We share a concern by some allies that Russia could try to obstruct possible projects on shale gas exploration in Europe in order to maintain Europe’s reliance on Russian gas.”

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SHALE NEWS Green groups were swift to attack Rasmussen’s views, saying that they were not involved in any alleged Russian attempts to discredit the technology, and were instead opposed to it on the grounds of environmental sustainability.

“The idea we’re puppets of Putin is so preposterous that you have to wonder what they’re smoking over at Nato HQ,” said Greenpeace, which has a history of antagonism with the Russian government, which arrested several of its activists on a protest in the Arctic last year.

Andrew Pendleton, a campaigner at Friends of the Earth, added: “Perhaps the Russians are worried about our huge wind and solar potential and have infiltrated the UK government.”

This is the first statement by someone in a position of authority to the effect Russia is behind the fractivist movement (along with a small group of wealthy special interest foundations in the US). Rasmussen’s interpretation of events is not NATO policy per se, but it is the view of a leader in the position to know and there’s more. Notice, for example, the “Who, me?” reaction of both environmental groups is anything but denial.

Apparently, even Greenpeace’s occasional allies believe it has taken dark money and reading between the lines suggests some of it could have easily come from the Russian government itself when the issue was something other than drilling in the Artic. This candid observation about Greenpeace operates, though, tells us a lot about the fractivist movement here and abroad. Most of them are just “useful idiots” who haven’t the slightest idea where their funding comes from or what’s its purpose is and many don’t care as James O’Keefe recently illustrated.

Did any of the dark money make it to the US? Well, apart from the money Gazprom gave the Ketchum firm, it’s hard to know. Our foundation reporting requirements allow us a glimpse into how each spends its money although some act as as money-launderers for others. Foreign firms are generally under no such obligations, though, so we can only see the recipients and not the funders.

Greenpeace Funding A Puzzle

We do know there are two different Greenpeace USA groups. Like the NY-PIRG, they have two corporations; one, Greenpeace, Inc. is a 501(c)4 political lobbying entity and the other, Greenpeace Fund, Inc., is a charThe suggestion that Greenpeace’s recent actions make it implausible to think the Russkies may have financed them is even less convincing. ity. The political arm took in $32 million in 2012 and the charity side Why? Because, Greenpeace is, according to others who have watched had $12 million in revenues. The former spent the vast bulk of its money it carefully, essentially a shakedown outfit and when operators of that on salaries, benefits, fund-raising expenses and other overhead. This is sort want more money they get it by reminding their patsy funders of fascinating, given the relatively low profile Greenpeace has in this country compared to, say, the NRDC. It suggests an organization that isn’t doing why it’s not healthy to have them as an engaged enemy. much for the money it receives.

The charity side spent more in grants than it collected in revenue in 2012.

The Greenpeace of today, in fact, is a completely different organizaSome $13 million was granted to the political arm and/or Greenpeace tion, both mission-wise and legally, than the original. One of the original’s founders, Patrick Moore, got so disgusted with the evolution International (the Stichting Greenpeace Council) climate, forest, ocean and Arctic campaigns in Europe; all for the same purposes. Greenpeace is, of the organization he left and has written a book about the experience. Likewise for Bjørn Lomborg. They got tired of the bullying and other words, raising political money here in the US to spend abroad–tapping our useful idiots. We are simply a money trough. And, it’s the usual Greenpeace’s lack of conscience and reason. suspects giving the money. Adelaide Gomer, of Park Foundation fame, is Interestingly, the Russian newspaper Pravda, tells us this (emphasis on the board of the charity arm and gives it $50,000 per year. The Rockadded): efeller Brothers Fund is another funder.

A coordinator of the Moscow branch of the Russian anti-globalization resistance Elena Borisova believes that Greenpeace’s methods are unac- But, where does the rest of the political arm’s funding come from? It took in $33 million and only a fraction came from the charity arm. It’s hard to ceptable. believe such a low-profile group could raise that kind of money. Something called The Partnership Project, Inc. (funded by World Wildlife Fund It seems that Greenpeace is activated when Russia begins to impleInc, Wilderness Society, Environment America, The Energy Foundation ment some projects in the Arctic, Barents Sea? and the Tides Foundation among others) gave it $120,000 and the Ru“I strongly suspect that it is really the case. We did support a number dolph Steiner Foundation apparently gave it money some time in the past of campaigns by Greenpeace when we thought that the nature was in danger. The examples are Utrish reserve, game reserves of the Caucasus but there is no indication of any other groups funding Greenpeace, Inc. in recent years. in connection with the ongoing construction there. However, in many That means the money came from mail solicitations, large private incases there is some correlation. dividual donations or groups that don’t have to report. We’ll probably Of course, Greenpeace needs funding. It receives this funding. The current public relations system allows, so to speak, to create the impres- never know exactly who, but we do know useful idiots here are apparently sending big money to Greenpeace International where it is likely packaged sion of independent functioning. That is, direct requirements are not always there. There are no statements like “we’ll give money if you hurt with money from the Russkies to fight fracking and Greenpeace may well be shaking them down for more. someone,” in many ways it’s hidden, including from the protesters, and even employees of Greenpeace. We are in contact with them and know a SOURCE: lot about it… http://naturalgasnow.org/russkies-funding-fractivists/#more-4513 Fractivists Aren’t What They Used To Be

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OILFIELD BUSINESS: HUMAN RESOURCES

Important Facts about Background Checks Improper Administration May Actually Increase Your Company’s Liability

Companies conduct background checks of applicants, and at times existing employees, for a variety of reasons including, the desire to: • Avoid exposure to negligent hiring/retention lawsuits; • Increase the security of the company’s assets and employees; • Reduce liability from inconsistent hiring or screening practices; • Proactively reduce the risk of employee-related loss; and • Mitigate the likelihood of an adverse incident occurring on company property that could jeopardize customer or employee confidence.

However, many employers do not realize their background check policies and processes may actually subject them to increased liability.

Background checks are subject to close scrutiny by both the Equal Employment Opportunity Commission (EEOC) and the Federal Trade Commission (FTC). If your company uses a third party private company to perform background checks on prospective or existing employees, this is considered a consumer report governed by the Fair Credit Reporting Act (FCRA).

The FCRA provides for the recovery of statutory damages of $100 to $1,000 per violation from employers who fail to comply with the processes discussed below in conducting a background check. The FCRA also allows prevailing parties to seek punitive damages and recover their attorneys’ fees. Attorneys are increasingly bringing class action suits against employers for violations of the FCRA. Likewise, the EEOC has filed actions in federal court seeking damages for violation of Title VII of the Civil Rights Act of 1964 against employers, alleging the employer’s background check policies have a discriminatory effect on minorities and/or male applicants.

Recent EEOC and FTC Guidance

The EEOC and the FTC recently published guidance about how the laws administered by these agencies apply to employment background checks.

The EEOC believes an employer’s unfettered use of criminal background checks causes a disparate impact to minorities applying for employment. In accordance with this guidance, the EEOC urges employers not to make an inquiry about applicants’ criminal backgrounds until after the decision has been made to offer employment. Once that decision has been made, the employer may, in certain circumstances, condition an applicant’s employment on successfully passing a background check.

If your company’s employment application still requires applicants to disclose whether or not they have been convicted of a criminal offense, include disclaimer language that makes it clear that a past criminal conviction will not automatically disqualify an applicant’s employment.

If your company routinely performs criminal background checks of job applicants, it is wise to have a written policy governing those checks.

The policy should include a list of factors the company may consider in determining the applicant’s suitability for employment, such as: • Relevance of the crime to the position sought or held; • The nature of the work to be performed or being performed; • Time since the conviction; • Age of the candidate/employee at the time of the offense; • Seriousness and specific circumstances of the offense; • The number of offenses; • Whether the applicant/employee has pending charges; • Any relevant evidence of rehabilitation or lack thereof; and • Any other relevant information, including information submitted by the candidate/employee or reasonably requested by the company.

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OILFIELD BUSINESS: HUMAN RESOURCES

Employers must also make sure they are treating everyone equally. The EEOC considers background checks based on a protected class, such as race or national origin, to be illegal.

The EEOC also does not want employers to have a blanket policy of performing criminal background checks on all applicants. Instead, the employer must be able to show there is a business necessity for the check. For example, it may be difficult for an employer to prove a business necessity to perform a background check on an applicant for a position as the company’s receptionist or for someone who will only perform general labor for the company. Conversely, it is much easier to show a business necessity in the event the employee will work in a customer’s residence or will handle money for the company.

FCRA Processes

As mentioned above, the FCRA has strict processes that must be followed when employers use third party credit reporting agencies to perform background checks on applicants or existing employees. Applicants or employees must be given separate written notices concerning their rights under the FCRA and that the employer may use information in the report that could affect their employment. The employer must also obtain written consent from applicants or employees to perform the background checks.

In the event the resulting background report reveals information that may affect the employability of an applicant or existing employee, the employer must provide the applicant/employee with what is commonly referred to as the “Pre-Adverse Action” notice. This notice informs applicants and employees that their background reports contain derogatory information that may affect their employment. A copy of the background check report and also a form entitled “A Summary of Your Rights under the Fair Credit Reporting Act” must be included with the Pre-Adverse Action notice. The purpose of the Pre-Adverse Action notice is to provide an applicant or employee with the opportunity to contact the company that performed the background check to request its correction in the event the report contains information the applicant/employee believes is false.

If the employer ultimately decides to take an adverse action (not hire the applicant or terminate or take some other adverse employment action against an existing employee), the employer must provide the applicant/employee with a second notice, commonly referred to as the “Adverse Action” notice. This second notice: • Informs the employee/applicant about the adverse employment action that has been taken based on the information found in their background check; • Must provide the applicant/employee with the name, address, and phone number of the consumer reporting company that supplied the report; • Must also include a statement that the credit reporting agency providing the report did not make the decision to take the adverse employment action; and • Inform the employee/applicant that they have a right to dispute the accuracy of the report.

In summary, don’t allow a tool your company uses to reduce liability to actually increase your exposure to government or private actions for violations of the FCRA or Title VII of the Civil Rights Act of 1964. Make sure you have a properly drafted background policy in place. Also, ensure that you are familiar with the consents and notices you must provide applicants and existing employees in the event you decide to take an adverse action based on the results found in a background check.

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Bio: Norman Paul is the CEO and Corporate Counsel for SWBC PEO, an organization of HR Specialists operating in 18 states to provide benefits, payroll, discounted workers’ compenation coverage, OSHA/custom safety programs, HR compliance, and more. He can be reached at npaul@swbc.com or 877-704-0454.

Disclosure: This article is for informational purposes only and is not intended as legal advice.

23

OILFIELD BUSINESS: INNOVATION

GROWING

Your Employees for the Long Term

BY: RON E. Zimmerman, Jr.

The development and delivery of technology-leveraged training is fundamental to the growth and retention of a skilled workforce. The slow economic recovery, disappearing jobs, and a far-reaching demographic shift are affecting business sectors in United States that rely upon skilled workers. The central component of this situation is the shrinking skilled workforce. The shortage of capable workers is driving businesses— small and large—to focus training efforts on retaining their existing workforce. To do that, managers are evaluating their workplace environments and developing training and education strategies to meet the needs of their generationally diverse workforce.

In all, a skilled workforce is essential to safe, productive, and sustainable construction and sustainment activities required in the oil production industry.

Strategic Context Generations

Birthdate

Characteristics

Percent of Labor Force (2016)

1925 - 1945

• Patriotic – loyalty • Waste not- want not • Top-Down Approach

7.6%

Baby Boomers

1946 - 1960

• Idealistic • Competitive • Question Authority

27.2%

Gen Xers

1961 - 1980

• Resourceful • Self-Reliant • Highly Adaptive to Technology

33.2%

1981 - 2000

• Globally concerned • Realistic • Cyber-Savvy

32.0%

Traditionalists

Millennial (Gen Y)

Millennial (Gen Z)

• Connected to Communications 2000 - After • Thrive on small bits of information • Instant Gratification

Table 1. Trends in the U.S. Labor Force

N/A

Managers began reacting to generational disparities several years ago, as the Traditionalist generation started leaving the workforce and Millennials took their place alongside Generation Xers and Baby Boomers. This new mix poses challenges given the enormous generational differences in work ethics, attitudes, outlooks, and learning behaviors across these groups (as seen in Table 1).

Millennials (both Y and Z) are one of the more socially conscious generations and view work as a personal event involving opportunities to make new friends, learn new skills, and connect to a larger purpose. They tend to leverage collaboration tools and are intolerant of environments stuck on fixed-site or brick and mortar work and learning environments. Managers must consider the training needs for each genera24

OILFIELD BUSINESS: INNOVATION

tion comprised of their workforce. Managers should also recognize the education gap in their younger generation workforce who struggle with the ability to reason, analyze, weigh evidence and problem solve in the same manner as their predecessors. In his book, The Global Achievement Gap, Mr. Tony Wagner discusses how these struggles combined with a reduction in technical skills increases job frustration for these paraprofessionals.

Knowing and understanding the gaps produced by generational and education differences enable managers and instructional designers to identify the content of new training programs. Younger employees may need more problem-solving training, while Gen Xers may require more leadership training, and the Baby Boomers may require additional training in their areas of expertise or in the integration of new technologies.

While generational thinking has made a gradual shift, technology has evolved rapidly. The combination of generational thinking and technology has led training and education to shift from a passive teacher-centered approach to an interactive and collaborative approach. Traditional instructor centric learning strategies no longer fit the current learning environment in this new age of digital learners and mobile workforce. Advanced distributive learning (asynchronous learning) and blended instruction is now an accepted learning model that encompasses a mix of face-to-face classroom time, web-based instruction, streaming video, virtual campuses, and the use of other electronic media. Leveraging contextual variety creates effective training that responds to generational differences in learning, information technology, and social communication.

Training Approach The changing workforce and exponential advances in technology is forcing a new approach to employee skill training. Gone are the days of simply applying funds and resources to the production of training and education products. Managers must focus on outcome-based training with long-term nested strategies to avoid wasted time, resources, and funds. The key is development of a learning strategy that integrates training and feedback while leveraging technology to minimize resources and align with industry driven goals. Trainers must look for instructional relevancy by accounting for a sense of community, membership, influence, fulfilment of individual needs and shared events, and emotional connections. Training audiences must feel a sense of loyalty and belonging to the learning content. Current learning approaches must seek to go beyond the traditional methods by leveraging social approaches to achieve optimum learning experiences. Changes must occur from the topdown and include networked approaches to be effective.

The oil exploration and production industry faces additional training and education challenges when it comes to growing and retaining a skilled workforce. Because learning occurs across an extended period of study and time, training must be intentional, well designed, and coherent within the strategic context. Teaching methods should account for the current environmental and operational conditions, education gaps in the public sectors relevant to the desired skill sets and outcomes, and generational differences in learning traits. Learning strategies should leverage communities of practice where groups of people share common values and beliefs and are actively engaged in learning together from each other. Learning should occur using a combination of faceto-face instruction (teacher or instructor presence) with computer mediated (on-line learning) instruction by leveraging technology to make education more interactive where all possible. Learning environments should strive to have instructors and workers (students) working together to improve both the quality of learning and instruction, and ultimately providing realistic and practical instruction that is useful, sustainable, and ever growing. When developing new training and education programs, managers and instructors should consider the following questions: • What skills and knowledge (by skill set, employee competency models, or field technical competency) are required to maintain our desired level of product, service or process, and equipment reliability?

What are the desired outcomes per skill set or workforce echelon (such as laborer, first-line managecontinue on pg 28 ment, middle management, and executive management)?

25 • What educational or performance gaps reside in my current workforce by skill set?

THE OILFIELD PROFILE

THE DEVON WAY...New Ideas

Unlock Unconventional Resources “We usually find oil in a new place with old ideas. Sometimes, we find oil in an old place with a new idea, but we seldom find much oil in an old place with an old idea.”

“Several times in the past we have thought that we were running out of oil, when actually we were running out of ideas.”

— Parke A. Dickey, University of Tulsa Petroleum geology professor, September 1958 More than 50 years later, Professor Dickey’s statement still seems timeless. Devon’s projects are not defined by old ideas and many of our exploration endeavors attempt to unlock the resources others may have left behind. We have developed world-class natural gas fields in places long overlooked as unproductive and uneconomical.

DEVON’S MISSION: Devon is a resultsoriented oil and gas company that builds value for shareholders through our employees by creating a culture of health, safety and environmental stewardship in an atmosphere of optimism, teamwork, creativity and resourcefulness and by dealing with everyone in an open and ethical manner.

The coalbeds of northwest New Mexico’s San Juan Basin and the Barnett Shale of North Texas were ignored for decades by oilmen drilling for less complicated sandstone targets above and below. Howver, coalbed natural gas production grew throughout the first decade of the 21st century, and shale represents the future of the North American natural gas industry. Unconventional natural gas fields are among the most prolific in North America, and Devon is a leader in developing them.

26

THE OILFIELD PROFILE

In 1989, Devon became one of the first companies to produce economically viable quantities of natural gas from coalbeds.

Drilling into northwest New Mexico’s Fruitland coal formations, the company’s innovation and persistence helped unlock the secrets to producing coalbed natural gas, which has become a major energy resource in North America. Devon’s coalbed operations in the San Juan Basin are expected to ultimately produce more than 1.3 trillion cubic feet of natural gas.

Successes in the San Juan Basin have led to other coalbed reservoirs in Wyoming and to exploration projects in Montana, Oklahoma and western Canada.

The company asserted its pioneering spirit again in developing the huge Barnett Shale natural gas field in 2002 when it acquired Mitchell Energy. After charting new ground in New Mexico and Wyoming, technical challenges the Barnett offered in North Texas were a natural fit for Devon. Devon continued its path of innovation by improving fracturing techniques, using horizontal drilling as well as advanced seismic imaging technology and enhanced recovery methods. Since 2002, the company’s production has doubled to 1.3 billion cubic feet of natural gas equivalent per day, more than any other company operating in what is the largest gas field in Texas.

jOHN RICHELS, PRES. & CEO

LARRY NICHOLS, EXEC. CHAIRMAN

Thanks largely to its determination in the Barnett Shale, Devon today is the second-largest gas producer in Texas. The Barnett Shale proved so successful that today producers are developing other shale formations throughout North America.

The Fruitland coalbeds and the Barnett Shale were not new places when Devon targeted them for development. They had been passed over and drilled through many times. But, as professor Dickey said in 1958, sometimes, all it takes to reinvigorate an old place is a new idea.

SOURCE: http://www.devonenergy.com/Operations/FeatureStories/Pages/Unconventional_Resources.aspx CONTACT: Chip Minty , Manager, Media Relations, US 405.228.8647 E: chip.minty@dvn.com

27

OILFIELD BUSINESS INNOVATION

• What are the most effective methods that my company can implement to achieve an acceptable learning model that gains employee and organization input on training?

• Which learning models best suit our company that could make training more interactive, reduce classroom instruction, and/or make small group problem solving the centerpiece of facilitated instruction based on relevant industry or technical challenges?

• Which educational learning processes should our company change to better prepare our workforce for future challenges?

• How should knowledge obtained from businesses, academia, and industry domains inform research and later updates to our answers to the above listed questions? What is our feedback mechanism to capture and integrate lessons into lessons learned?

• What savings could our company expect by using a blended learning environment to grow our workforce?

Next Generation Training Managers should respond to the increasingly diverse needs of their skilled workforce by developing long-term learning strategies that include web-based collaborative tools. Instructional methods should support and encourage individuals to learn together while retaining individual control over their time, space, presence, activity, and relationships. Training and education programs should include multiple segments given the complexity of technical and management subjects, and available time. Managers should expect composite training segments consisting of prerequisite or self-development modules, instructor led portions in virtual classrooms, face-to-face instruction, and potentially self-paced exercises.

The degree and potential complexity of training, to include upfront instructional system analysis and curriculum development requires an experienced team comprised of a broad range of corporate and individual talents. Business leaders should look to information management and training companies for support in developing custom learning solutions in support of either single modules or a learning series. Web-based custom learning solutions should track participation, automatically record learning progress, and provide a reporting mechanism on individual, facility, office, administrations, or enterprise-level training accomplishments.

Development of an effective training and education program involves a combination of in-house and outsourced resources and utilizes an iterative process that consists of analysis, design, development, implementation, and evaluation (internal and external). During the analysis phase, the in-house team reviews the answers to the questions above to determine what level of complexity is required to meet the training goal. Utilizing a scale of 1 to 4, the team determines the level of interactivity required. Training for a skill requiring level 3 or moderate interactivity, for example, will typically include multiple levels of branching or pathways and dynamic participant activity to maximize retention and transferability to the work environment. Managers can identify and source their training solutions once they have identified their learning requirements. Managers always have the option of using a management and training company to aid in identifying learning requirements. The overall importance is upfront analysis to identify the situation, environmental factors, and learning requirements as compared to the skill set objectives. Figure 1 provides more detail on the training levels and their conceptual training or education effectiveness.

Continue on pg 30

28

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OILFIELD BUSINESS: EDUCATION

Hydraulic Fracturing Q&A What makes up frac fluid?

Water and sand comprise 99.5 percent of the mixture. Compounds used for specific purposes make up the remainder. For instance, guar, made from beans, makes the fluid more gel-like, which helps transport the sand deep into the shale fissures. When the fluid is ready to be removed, an enzyme or oxidizer reduces the fluid’s consistency. Other compounds act as lubricants. Most of these compounds have common household uses.

the nation’s supply of natural gas while providing no additional protection to underground water. More recently, the Ground Water Protection Council issued a What chemicals are used in hydraulic fracturing?

2009 report stating that the potential for groundwater The attached list details not only the most commonly used com- contamination from hydraulic fracturing is extremely pounds, but also their purpose in the frac job and some of their remote. Additionally, the Interstate Oil and Gas Combetter-known applications. All of the states where Devon operates pact Commission, a government agency composed of require companies to make available a list of each product used in energy-producing states, has determined that existing hydraulic fracturing. state regulations prevent groundwater contamination from hydraulic fracturing.

What protects my water supply?

In addition to the mile or more of rock formations that separate What would happen if Congress added a federal layer groundwater supplies from fracking operations, safeguards are to the regulatory framework? A study released in taken to protect against potential groundwater contamination.

2009 by IHS Global Insight concluded that additional State regulatory authorities ensure that these steps are followed restrictions on hydraulic fracturing would reduce and can impose severe penalties, including suspending a license natural gas production by at least and imposing fines, for violations. When a well is drilled, steel 10 percent within five years. This would force the casing is installed and surrounded by layers of concrete. These United States to rely more heavily on imported natural serve as additional barriers against any possible groundwater gas. contamination. This American Petroleum Institute video demSOURCE: onstrates not only how fracking works, but also the protective http://www.devonenergy.com/CorpResp/Documents/ casing and cementing process.

What happens to the frac water after it is used?

Once its purpose is fulfilled, the water is recovered and either recycled or disposed of by injecting it several thousand feet below drinking water supplies. Injection wells are highly regulated by state agencies.

What does the government say about hydraulic fracturing?

The Environmental Protection Agency studied the issue and determined in 2004 that the process poses no threat to drinking water supplies. In 2001, the U.S. Department of Energy noted that more restrictive regulation of hydraulic fracturing could inhibit

Fracking%20QA%20Graph.pdf CONTACT: Chip Minty , Manager, Media Relations, US 405.228.8647 E: chip.minty@dvn.com

29

Training and Education Effectiveness

OILFIELD BUSINESS: INNOVATION

Graphics, Images, and Simple Animations

Level-1

Passive-No Interaction

Clickable Animated Graphics, Simple Exercise

Level-2

Limited Interactivity

Animated Videos, ScenarioBased Cases

Level-3

Moderate Interactivity

Real-Time Learning, Digital “Avatars”

Level-4

Simulation and Game-Based Learning Note: Gen Xers and Millennials will expect Level-3 and Level-4 training that leverages technology.

Instructor Led Training Media-Based Training

Participant Learning Involvement

Figure 1. Participant Learning Involvement

Performance with Brooke Lerner™, a computer based role-play with feedback is an example of role-play custom learning solutions. 1 The computer based learning module integrates knowledge, practice, and feedback into a single user-driven package that managers can integrate into classroom training or as an independent learning module Business leaders should focus training and education programs on long-term training objectives aligned with their environmental context. Business leaders to search out companies that have an understanding of 21st Century learning requirements and respond to the “voice of the customer” based on continual collaborations with

When searching for companies to develop content, managers should look for companies that encourage collaborative development; understanding of the industry challenges; ability to hire talented individuals with expertise 1 Coaching for Improved Performance with Brooke Lerner™ was develin HTML5, 3D character rigging and animation, high-end oped by SIMmersion, located in Columbia, MD 21046; available at www.trainperformancecoaching.com and www.simmersion.com/training.

Flash interactivity and simulation, video compositing, and Web-based media. For example, management and training continue on pg 31 companies must be able to collaborate with industry experts to design and develop custom learning solutions. These custom solutions should leverage state-of-the art training with industry best practices to meet the training needs of individual learners across the generational workforce. In return, business leaders can use the industry-developed leaning products to train virtually anything from management, communication skills, specific types of skilled operations, and sustainment or maintenance.

Management and training companies should have a proven record of accomplishment in developing programs that combine information technology and workforce activities to train operations, management, and decision-making skills.

In addition, it is important that managers seek out technologies that reduce instructor time and increase learner autonomy. Training communication skills, such as coaching employees, typically requires classroom training to gain the knowledge. Efforts also require actions such as roleplays to gain experience and mentoring to ensure new managers are effectively motivating positive change that will help rehabilitate and retain underperforming workers. Coaching for Improved 30

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OILFIELD BUSINESS: INNOVATION

continue from pg 30 COMPLIMENTARY FINANCIAL NEEDS ANALYSIS

Are you working hard? Making a decent living? Worrying about the future? Let us help. Primerica Financial Services is proud to offer a complimentary FINANCIAL NEEDS ANALYSIS (FNA).

The FNA puts in your hands a printed analysis of all major areas of your personal household finances, based on information you have provided. It also helps you organize and prioritize your financial goals so you can explore all your options for achieving them. * Retirement savings * Education fund * Emergency fund * Debt solutions * Income Protection * Additional income We offer this valuable Financial Needs Analysis as a complimentary service.There is no cost to you.

Call office of Dora Casillas, Regional Vice President for an appointment, (210)378-9474 ask for Local Representative: Nora J Mireles Mobile (210)365-3326 Monday-Friday 12:00 to 9:00pm Saturday & Sunday by appt only

the targeted skilled-workforce. In the end, learning approaches should address specific workforce needs and respond to industry challenges; it will go a long way to helping the industry retain its skilled workforce.

Ron Zimmerman is President of HighGround Technologies, Inc. (www.highgroundtech.com) from Belton, Texas.

HighGround manages information systems comprised of any combination of information technology and workforce activities using technology to support management, training, operations, and decision-making. Their analytical approaches (such as systems approach to training) combined with connections to university level educators and specialized training companies enable fully integrated solutions.

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OILFIELD ENVIRONMENT

Living with Threatened and Endangered Species

BY: PETER MCKONE

So what is a threatened or endangered species?

These are species listed by the U.S. Fish and Wildlife Service (USFWS) or National Marine Fisheries Service (NMFS) and considered rare and/or imperiled. As a general rule, the USFWS manages land and freshwaters species while the NMFS manages marine species. States have various rules and regulations as well that apply to imperiled species. An endangered species is one that is in danger of becoming extinct throughout all or a significant portion of its range, while a threatened species is one that is likely to become endangered.

Once listed, a species is afforded protection to ensure every

effort is made to prevent it from becoming extinct. One cannot take a species without a permit from the appropriate federal agency. What constitutes a “take� under the federal Endangered Species Act? If one harasses, harms, pursues, hunts, shoots, wounds, kills, captures, or collects a listed species or attempts to engage in any of these actions, then the federal rules classify those actions as a take. Permits are required for any take and companies and individuals are subject to criminal and civil penalties if an unpermitted take has occurred.

32

So, what is one to do when confronted with working in an

area with a threatened or endangered species? First, one quick check is to see what species occur in the area in which you are working. The Texas Parks and Wildlife Department and the various USFWS offices in the state maintain a list of species listed by county and most, if not all, of this information is on-line. Each species has some key habitat characteristics or habitat definition that one can use to narrow the search. In some cases, the USFWS lists critical habitat for specific listed species. Critical habitat consists of a specific habitat type within a particular geographic area currently occupied by a species. Habitat outside the currently occupied geographical area may also be considered critical habitat if it is determined to be essential for conserving the species.

The oil and gas industry in Texas has largely been spared

major development issues associated with threatened and endangered species listings. Most listed species in Texas are localized or in regions with minimal to no oil and gas reserves. Lately, however, key parts of our state have seen

d

OILFIELD ENVIRONMENT

Management, Texas A&M University, and landowners, the species listing did not occur. Conservation agreements were established for over 650,000 acres in Texas and New Mexico. These agreements provided a template for how development would proceed but also gave the USFWS a comfort level that the species was no longer imperiled. The listing proposal was withdrawn and the USFWS will monitor compliance with the conservation agreements as well as continue to study the species’ health.

Recently, another species listing that has the potential for greater

impact to oil and gas development in Texas and other states is the lesser prairie chicken (Tympanuchus pallidicinctus). This species occurs in areas with native grasslands and prairies. Critical habitat has still not been determined for this species and looks to be a year away. Efforts to list this species are not new, starting back in 1995, but accelerated over the last couple of years. Once again, the oil and gas industry, as well as others industry groups and landowners, stepped up in an attempt to eliminate the need for listing. In addition, multiple federal and state agencies have joined in efforts to conserve the species through candidate conservation agreements.

Over 3 million acres throughout Texas, Oklahoma, New Mexico, Kansas, and Colorado have been enrolled in the Western Association of Fish and Wildlife Agencies’ (WAFWA) range-wide conservation plan by the oil and gas operators and landowners. The controversy with this species is not over as lawsuits are being generated to challenge various aspects of the listing.

As one can see, the CCAAs potentially allow development to occur

as long as certain measures are taken to conserve threatened and endangered species. They are not a cure-all but give operators a known playing field. The two species mentioned above, and the incredible efforts to provide workable options, are works in progress. listing proposals or actions that could severely impact the development of these oil and gas reserves. In addition, the Expect changes ahead with these, and other, species. explosive growth of the oil and gas industry in Texas over the last 15 years has increased the exposure to imperiled species and their habitats. One option that has gained increased fervor is called candidate conservation agreements BIO: with assurances (CCAAs). The oil and gas industry has Peter McKone, CWB, has more than 25 years of leadership, project been strongly involved in CCAAs with two species in the management, and broad experience in the environmental and natulast few years, with somewhat mixed results. resources industry. His experience includes stream and wetland The U.S. Fish and Wildlife Service (USFWS) proposed to ral restoration, wildlife biology, wetlands ecology and mitigation, agenlist the dunes sagebrush lizard (Sceloporus arenicolus) in cy coordination, and NEPA preparation. Pete has experience workDecember 2010. This species has a body length less than ing with both private and public sector clients across the country, 4 inches and also goes by the name of sand dune lizard. including extensive experience with the oil and gas industry. Pete Anywhere shinnery oak dune habitat existed was potential is a frequent speaker and author on wetlands delineation, natural habitat and, therefore, restricted from development for oil habitat issues, environmental guidelines for land development, and and gas, wind and solar, etc. The listing would have sigtree identification and has conducted numerous seminars throughnificantly impacted oil and gas development in the Permout the country on riparian/wetland restoration, wetland delineaian Basin along the New Mexico/Texas state lines. Due to tion, 404 permitting, and oil and gas issues. Pete is Vice President of some determined efforts by a number of entities such as a Environmental Services of Pape-Dawson Engineers, Inc. number of oil and gas companies, the Bureau of Land 33

OILFIELD BUSINESS: PROFESSIONAL WOMAN’S CORNER

You own a business, you have an entrepreneurial spirit, you consider yourself a leader in your field...all of these positive things that you have within yourself but what helps prepare you for the rough times in business.

All businesses have ups and downs...I have seen it and experienced it for myself. What helps businesses get through these rough spots are several things.

1. Awareness. First of all, being aware that things are not always going to be as sweet as pie. Awareness involves understanding the weaknesses of your management team and the weaknesses of your industry sector. Understand that all management team members must continue with training and educational opportunities so there is constant improvement in their abilities. Teaching your staff to embrace training and conferences that will allow them to grow professionally and change is sometimes necessary.

2. Prepare. Preparation for decrease in demand for your business. Understanding the trends of your industry and have a plan in place. Be prepared for the decrease of cash flow and have a plan to justify a lending strategy. Understanding your Strengths, Weaknesses, Opportunities, and Threats is needed. Learn how to turn those weaknesses into strengths and those threats into opportunities.

3. Take Action. Remove yourself from the negativity and do something. As an entrepreneur, one can get into a rut. One challenge I see often is that business owners do not have the experience to revamp their strategies and they make larger mistakes instead making better choices.

By getting some second opinions from others that may have been in their situation can help you make a better choice. Consider reaching out to a consultant or business associate/mentor and taking the RIGHT Action will get you where you need to be.

Success is just around the corner. How you prepare mentally and physically for the rough times will determine your agility throughout industry trends. Take appropriate actions and see through your challenges. This will definitely set you on track to being successful once again.

Rough Times in Business

Bio: Jennifer Harvey-Larivey is a successful business owner, mother, and wife in San Antonio, Texas. She has a passion for helping others through motivation and empowerment. She is the Publisher of Texas Oil & Gas Magazine, Founder of Texas Oil & Gas Professionals Network and small business owner of Fabulous & Unique You! She has had 15 years of experience in Healthcare as a Certified Wellness Coach & Holistic Practioner, covering a wide-variety of challenges from weight-loss, women’s issues, senior-living, cancer patient care, palliative & end-of-life care. Growing up in an oilfield family and in a home where her mother was the sole care-giver for her 3 grandparents, she understands the family dynamics of both entities. Her compassion for others shows clearly how much she cares for people’s well-being in all areas of life. “Life is like a wheel, if one area is out of balance then you create a flat tire and your wheel will not roll.” The Oil & Gas industry has become her second family. Being involved with many oilfield families and providing support to oilfield wives has been a clear reason why she feels the call to be a beacon of light to help when she can. She has spoken for many groups in many areas of her expertise, from women’s issues to the Prosperity of Texas Oil & Gas. Please contact her for speaking engagements, coaching, or if you need help developing your business.

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GUEST SPEAKER: LUKE LEGATE, Texas Oil & Gas Advocate Title of Speech – Texas Oil and Gas Industry Outlook & Drilling 101 DATE: SEPT. 9, 2014 SAN ANTONIO, TEXAS EMAIL: EVENTS@TEXASOILGASMAGAZINE.COM BUY YOUR TICKETS TODAY! SEATING IS LIMITED! 34

OILFIELD WELLNESS

5 steps to a Healthier, happier you!

5 Million Americans go on a diet each year and only 5 percent keep that weight off. Obesity and diabetes is

1.

2.

3.

4.

5.

a major epidemic in America and especially in Texas. Corpus Christi, Texas was labeled recently as one of the nation’s fattest cities. Oilfield workers find it difficult to eat healthy out in the field because of a lack of options. How does one overcome this obstacle? Awareness and Preparation.

Being aware of what you are putting into your body and preparing a plan. We have a 5 step plan to a healthier, happier you through a holistic approach.

Choose a Cleanse. Active weight loss facilitates the release of toxins stored in fat reserves. It is imperative to eliminate these regularly. Give your body a gentle push in the right direction one week a month.

Choose a Meal Replacement. For active weight loss, replace two meals a day with a nutritious protein shake. For weight maintenance, replace only one meal per day. Choose from several types and flavors.

Address Individual Concerns. Weight management supplements can attack weight loss from EVERY angle. Choose high-quality supplements to address your individual concerns.

Eat Essential Foods. Your body requires several key nutrients daily to maintain health, energy levels, proper function and cellular repairs. The Essential Foods Plan is simple. You don’t need to count calories because the Essential Foods Plan is focused on providing optimal nutrition. In addition to supplements and two meal replacement shakes, the only counting you have to do is 1-2-2-2-5+. This represents the number of times you need to eat key foods to supply your body with essential nutrients. It’s simple: 1 fruit, 2 dairy/alternatives, 2 proteins (meat-based or vegetarian), 2 whole grains/starchy vegetables and 5+ vegetables. Don’t forget to HYDRATE! Exercise. Regular physical activity offers a variety of health benefits, including muscle tone, joint flexibility, cardiovascular and respiratory health, burning calories and more. Find a way to move EVERY DAY. Start by walking for just 5-10 minutes. Increase that as you can to the recommended 60 minutes per day for successful weight loss.

The Best exercise plan is the one that YOU will DO! 35

SHALE NEWS

Eagle Ford Land Notes

by: James Carter

photo courtesy by: James Carter

Side effects of the Eagle Ford Shale boom—such as congested roadways, busy markets that routinely run out of goods, strain on our water resources and more noise in town and out—are sometimes frustrating to local residents. Texas law has also seen its fair share of side effects; one area that is rapidly evolving is the legal relationship between landowners and the oil companies. Here is a look at a few of the important evolutions and what may be yet to come.

In Texas, pipeline companies have the right to take property by eminent domain because pipelines are considered to be built for a public purpose. In Texas Rice Land Partners Ltd. and Mike Latta v. Denbury Green Pipeline-Texas LLC, the Texas Supreme Court created what is called a Denbury challenge—in short, if a pipeline operator comes knocking to take property, landowners now have a right to challenge whether the pipeline used by the operator is really going to be put to a public use.

Paraphrased, the Supreme Court’s test for determining whether the Denbury pipeline was public or private is: There must be a reasonable probability that the pipeline will at some point after construction serve the public by transporting products for one or more customers who will either retain ownership of their materials or sell it to parties other than the carrier.

Courts have also seen transformations in how the value of the land taken is determined. Good news for landowners here,

as Texas courts have been friendly of late with respect to assessing damages. In LaSalle Pipeline, L.P. v. Donnell Lands, L.P., the district court in McMullen County awarded a landowner damages for the devaluation to all his remaining tracts, in addition to the price of the actual property being condemned for the pipeline. The trial court’s award was affirmed by the San Antonio Court of Appeals last year, and the case is now final.

What’s on tap for 2014? The Fifth Circuit Court of Appeals case titled Potts v. Chesapeake may shed light on whether a lease may eliminate post-production charges from being taken out of the royalty payment, and therefore be paid royalties based only on the market price. Potts’ lease read that the royalty paid to Potts should not be less than his actual royalty share from the sale of oil and/or gas. The lease provided that all royalties paid to Potts would be “free of all costs and expenses related to the exploration, production and marketing of oil and gas production from the lease including, but not limited to, costs of compression, dehydration, treatment and transportation.” You might think that a lease providing that a landowner takes “free and clear” of these post-production costs would mean just that, but previous court decisions in Texas have muddied the issue. The Potts case should be followed by landowners who may be frustrated by having to pay part of the oil company’s post-production costs.

On January 7, 2014, the Texas Supreme Court heard argument in a case titled Environmental Processing Systems, L.C. v. FPL Farming Ltd. In this case out of Liberty County, the 9th Court of Appeals ruled that the migration of wastewater from one tract to another – 2 miles below the surface – was a trespass against the neighboring tract. Approximately five years after contesting the permit for the deep wastewater disposal, the owner of a neighboring tract sued the disposal company alleging that a waste plume had migrated beneath its property, and claimed that the waste plume polluted the briny water deep below the surface. The Supreme Court held that a person holding a permit issued by the TCEQ was not shielded “from civil tort liability that may result from actions governed by the permit.” If this ruling holds, a landowner might be able to assert a claim for damages due to wastewater disposal practices on an adjacent property or seek injunctive relief to prevent the trespass. It goes without saying that this ruling could have a significant impact on the wastewater disposal industry.

Texas landowners, especially over oil productive areas, should keep in mind the continuing changes to their property rights. As it is designed to do, the law will continue to evolve with the times. This quote from the Supreme Court’s Denbury opinion is telling: “[John] Locke deemed the preservation of property rights ‘[t]he continue on pg. 40 37

OILFIELD LIFE: TRAVEL

Land or Sea/Land

All Inclusive or European Plan Adventure

Water sports, activities

Family Focused or Adult Only

Tour or Independent Travel

The list is endless…choose the top 3-4.

If you want to go to an international location, obtaining a Passport as soon as possible for all travelers is critical My connections with travel suppliers across the world, allows me to offer you more selections and choices. I am here to help you find the perfect vacation that will bring you a lifetime of memory making moments.

Bio: Coach Cathy Buchanan, Certified Travel Agent Coach Cathy has a background as a Registered Nurse, Teacher and High School Volleyball Coach. In 2001, Cathy was introduced to the wonderful world of being a travel agent. As a Home Based Certified Travel Agent, Texas Oil and Gas families, outside the military, there is no other profession which separates you more from your loved ones. You or your spouse’s work is essential and critical in helping to fuel the needs of families across the nation. Thanks for your sacrifice & dedication day in and day out to keep us comfortable and moving.

When you do have those precious days together, there is nothing as special as creating memory moments. Yes, it could be a night out for the family enjoying dinner and a movie. Or, you could create those moments through a weekend getaway, extended weekends or week long trips.

At Creating Memory Moments Travel, my goal is to help you find the dream destination for you as a couple or the perfect vacation for the entire family. A cruise of 4-7 days may be just the right time away. Several fabulous family friendly cruise lines depart from nearby Galveston, TX. You will have your choice of cruises that are economical to lavish with beautiful ports to visit along the Caribbean or Mexico. Today’s cruises are not what they were 10 years ago…packed with wonderful staterooms, dining options, shows and activities for the entire family.

I just returned from a Grand Canyon Railway Tour to the Grand Canyon from Las Vegas. Most certainly an ideal vacation spot for the entire family. Many options available You may choose the ultimate in experiences at some of the finest resorts. Imagine an all-inclusive resort at Sandals or Beaches, which brings you and your spouse/family together as never before. Sandals defined the first All Inclusive resort and changed how people look at travel. You can choose from a number of amazing properties which includes Sandals/Beaches as well as other beautiful resort properties which include Starwood, Melia, AMResorts and more across Mexico and the Caribbean With so many options to choose from…here are my Travel Tips:

How many days for your vacation?

What is your maximum budget?

What the most important elements you want to experience while on your vacation?

Beach 38 Activities for kids and teens

Coach Cathy specializes in Cruises, All-Inclusive Resorts, Honeymoons as well as Everything Disney. She enjoys working with couples & families to create memory moments that lasts a lifetime.

Having been a Navy Officers Wife & mother of 2 daughters, Coach Cathy understands the challenges and complexities that come with having a parent working away from home for extended periods of time.

Coach Cathy is a member of CLIA, College of Disney Knowledge Graduate, Specialist Norwegian Cruise Lines and completing her Specialist Certification with Sandals & Beaches Resorts.

Contact Coach Cathy to discuss your travel desires and interests.

You will experience her commitment to detail and personal touch.

You can reach her @ 435-252-0559 or coachcathy@comcast.net http://CreatingMemoryMoments.com

OILFIELD LIFE: FAMILY

enchanted Springs ranch... the best family attraction by: Jennifer Larivey

What child or child in each of us doesn’t want to be a cowboy or cowgirl? Well enough of dreaming about it...

This is your opportunity to enjoy just that. Enchanted Springs Ranch is an enchanted land full of Old Towne buildings and rugged roads, along with a hilly country land filled with lush streams and animals.

What other place is there that is family-friendly and teaches young people about being a cowboy/cowgirl?

There is no other like Enchanted Springs. Enchanted Springs is an 86 acre working ranch with an Old West Towne that was originally designed for western movies. Many movies have been filmed on the ranch. It is located in Boerne, Texas and is considered by Oprah as one of the best family attractions in the United States.

business, giving companies the chance to build on the trust and teamwork of their employees in a fun and unique manner.

Those who do business in the areas of San Antonio, Austin, Boerne, Fredericksburg and Kerville will find Enchanted Springs Ranch is within extremely close proximity, while companies visiting from out of town have several options for nearby hotels with full amenities. Enchanted Springs Ranch also helps businesses with booking accommodations for the days and nights they will attend by locating the best hotel for their needs, and guests have the ability to fully customize their selection of activities according to their requirements and budget.

Businesses looking for an innovative and fun event location for their next team building exercise can contact Enchanted Springs Ranch directly or can book online at their convenience by visiting http://www.enchantedspringsranch.com.

Young girls get inspired by Pistol Packing Paula, the 6 shooter World champion. Fun activities are happening non-stop with lots of entertainment and fun wagon tours. Enjoy a chuck wagon dinner in the saloon with great bar-b-que and a fun dance hall and live band playing the best Texas country. Cash bars are open for adult beverages and entertainment.

An old western town right out of the 1800’s. The town is the perfect event location & party venue for corporate events/meetings, weddings, rehearsal dinners, reunions, team building, and birthday parties.

Enchanted Springs is offering companies a chance to try a fun, unique and innovative event location for team building exercises. Corporations of all sizes looking for a new way to help their employees improve their cooperation and ability to work together will find a set of entertaining, educational and customizable options for their next outing.

Located on 86 acres of beautifully breathtaking Texas Land, Enchanted Springs Ranch offers an extensive selection of enjoyable activities that help it stand out as an event location for team building. With games, competitons and even some educational aspects, they combine the spirit of the Old West with the basic principles of

39

Continued from pg. 37

More return More on yourreturn investment on your.

great and chief end’ of government, a view this Court echoed almost 300 years later, calling it ‘one of the most important purposes of government.’ Indeed, our Constitution and laws enshrine landownership as a keystone right, rather than one ‘relegated to the status of a poor relation.’”

Cutline: Good news for landowners—land seizure, land value, as well as waste water disposal practices are all being examined by Texas courts as oil and gas development grows in the Eagle Ford Shale region.

investment.

More return More return on your

Eagle Ford Land Notes is written by James Carter, a San Antonio attorney with Drought, Drought & Bobbitt who focuses When you need twice the protection from on land, mineral rights and estates. Email is jwc@ddb-law. one roof, you need Butler Manufacturing™. com or (210) 225-4031 The MR-24® roof system is the number one standing-seam roof system with 40+ years you need twice of in-placeWhen performance—and it'sthe proven to last up to twice as long as conventional protection from one roof, you roofs. Protect your investment the best When you needwith twice the protection from TM in the business.

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TEXAS OIL & GAS MAGAZINE 1/4 Page May/June Issue

OILFIELD INSPIRATION

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ny

m

One of the greatest quotes on leadership is from one of my favorite motivational mentors, John C. Maxwell. “A Leader is one who knows the way, goes the way, and shows the way.” Developing those leadership skills can come naturally to some but most people have to practice. I have always believed that the first thing you have to do is become a servant.

The greatest and most famous servant known is Jesus Christ. He took his disciples and showed them the way to being more than just a follower but to lead others when He left this earth. How many of us take the time to show others how to do a better job or mentor someone in becoming a better citizen? Mentoring and leadership go hand in hand. Many times we think we have to reach perfection before we even get started but we don’t. Don’t wait for the perfect moment in life to do it. Take the moment and make it Perfect. As a leader, many depend on your knowledge and wisdom but most importantly people watch you to see how you respond to different situations. As leaders, we are tested more than anyone else and we need to be aware of our actions. Being prepared as a leader is vital and you will heavily depend on your communication skills. Communication is a two way street, you can think that you are a great communicator but maybe you are just a great speaker but if no one is listening then the reality is that you may not be as great as you thought. Communication also requires a great listener. Listen to your audience. You have to know that you are reaching even the person who seems the least interested. How many times do we attend employee meetings and we look around to see maybe 5 % are truly listening and the others have been disengaged for a while? Make sure that as a leader, you keep your team engaged and interested in your lessons. Mentoring and leadership are challenging. But with the hope of wanting to show the way and being ready to step in and go the extra mile for someone will make all of the difference. Until next time… ~Jennifer Larivey, President of TOGPN

41

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TEXAS OIL & GAS PROFESSIONALS NETWORK is proud to announce The 1st Annual Black Gold Gala Enchanted Springs Ranch, Boerne, Texas

Co-Chairs: Mr. & Mrs. Troy & Meg Blair, Azavachy Energy Ms. Jennifer Larivey, Texas Oil & Gas Magazine Black Tie

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News from TCEQ TCEQ Chairman Bryan W. Shaw appointed by EPA to Border Environmental Committee

Bryan W. Shaw, Ph.D. TCEQ Chairman Bryan W. Shaw, Ph.D., P.E., has been named to the EPA’s Good Neighbor Environmental Board by EPA Administrator Gina McCarthy.

Shaw was appointed this month as the State of Texas representative, for the term ending March 9, 2015. The GNEB is an independent federal advisory committee. Its mission is to advise the President and Congress of the United States on good neighbor practices along the U.S. border with Mexico. Its recommendations are focused on environmental infrastructure needs within the U.S. states contiguous to Mexico.

Created in 1992 by the Enterprise of the Americas Act, the GNEB issues an annual report to the President and the Congress on U.S.-Mexico border environmental and infrastructure projects, with the goal of improving the quality of life of residents in U.S. border states.

“I am humbled and honored to represent the State of Texas on the GNEB as it provides advice to the federal executive and legislative branches on addressing environmental infrastructure issues along our 1,950 mile border with Mexico,” Shaw said. In addition to serving on the GNEB, he also leads the TCEQ’s Border Initiative and is the U.S. state co-chair of two Border 2020 Regional Work Groups under the La Paz Agreement for the protection of the U.S.-Mexico border environment.

Shaw serves on the Executive Committee of the Environmental Council of the States. He received a bachelor’s and master’s degree in agricultural engineering from TAMU and a doctorate degree in agricultural engineering from the University of Illinois at Urbana-Champaign. He also earned his professional engineer (P.E.) license in October 2013.

Contact:Terry Clawson Phone512-239-0046 Pager512-657-0738 47

RRC CASE STUDY

CASE STUDY:

LEWIS ENERGY GROUP Lewis Energy Group 10101 Reunion Place, Suite 100 San Antonio, Texas 78216

Phone: (210) 384-5408 Fax: (956) 948-5408 Fleet Manager: Chuck Anderson canderson@lewisenergy.com

BACKGROUND FACTS Annual miles driven: 27,360,000 Current annual usage of natural gas: 216,000 gasoline gallon equivalents Year natural gas introduced in fleet: 2012 FLEET FACTS Total vehicles: 87 CNG 597 Gasoline 150 Diesel

Total by vehicle type: 0 sedans 540 light-duty trucks 150 heavy-duty trucks

Refueling facilities onsite: Completed January 1, 2014 Type: Fast Fill Time to fill: 6 gallons/minute Years using natural gas: 6 months NATURAL GAS COST SAVINGS Natural Gas Cost: $1.50 internal cost calculated @ $5.00 MCF Diesel Cost: $3.20 Annual savings to fleet through use of natural gas: Projected savings after station is installed and all light fleet vehicles are converted (4-year plan) will exceed $10M in first five years.

ADDITIONAL COMMENTS/QUOTES Additional Comments: Our conversion plan is to do 12 vehicles a month for first four years, to convert our entire light-duty fleet of 540 pickups. Year two plans are to replace heavy trucks with CNG or LNG engines as the technology becomes available for high horsepower applications, along with current plans to supplement fuel for drilling rigs and our fracturing fleets on LNG. We completed our goal of converting two rigs to LNG by the end of the 2nd quarter 2013.We intend to convert three frac fleets by end of the 4th quarter 2014.

48

www.altenergy.rrc.state.tx.us â—? 800/64-CLEAR

Reports from Texas RRC DATE 02/14/2014

RAILROAD COMMISSION OF TEXAS TEXAS LARGEST GAS PRODUCERS (BASED ON PRODUCTION FROM JANUARY, 2013 THROUGH DECEMBER, 2013)

PAGE

1

________________________________________________________________________________________________________ TWELVE-MONTH DAILY AVERAGE RANK IN % OF STATE PRODUCTION PRODUCTION STATE NAME PRODUCTION MCF MCF ________________________________________________________________________________________________________ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

XTO ENERGY INC. DEVON ENERGY PRODUCTION CO, L.P. CHESAPEAKE OPERATING, INC. ANADARKO E&P ONSHORE LLC EOG RESOURCES, INC. ENERVEST OPERATING, L.L.C. PIONEER NATURAL RES. USA, INC. LEWIS PETRO PROPERTIES, INC. BHP BILLITON PET(TXLA OP) CO BURLINGTON RESOURCES O & G CO LP QUICKSILVER RESOURCES INC. OXY USA INC. CONOCOPHILLIPS COMPANY SM ENERGY COMPANY APACHE CORPORATION SAMSON LONE STAR, LLC ENCANA OIL & GAS(USA) INC. LINN OPERATING, INC. BP AMERICA PRODUCTION COMPANY CHEVRON U. S. A. INC. ROSETTA RESOURCES OPERATING LP SABINE OIL & GAS LLC HILCORP ENERGY COMPANY SHELL WESTERN E&P HIGHMOUNT EXPL & PROD TEXAS LLC UNIT PETROLEUM COMPANY SANDRIDGE EXPL. AND PROD., LLC PREMIER NATURAL RESOURCES II,LLC LEGEND NATURAL GAS IV, LP VALENCE OPERATING COMPANY SWIFT ENERGY OPERATING, LLC MEWBOURNE OIL COMPANY TOP

DATE 02/14/2014

32 TOTAL

11.908 10.880 9.771 5.594 4.017 2.440 2.349 1.945 1.799 1.698 1.697 1.613 1.523 1.515 1.499 1.376 1.293 1.244 1.108 1.074 0.996 0.919 0.852 0.822 0.663 0.654 0.654 0.654 0.648 0.541 0.533 0.533 ______

743,849,341 679,626,420 610,353,120 349,403,402 250,928,503 152,421,311 146,744,838 121,492,017 112,347,025 106,042,629 105,977,672 100,747,494 95,146,389 94,602,010 93,662,588 85,957,997 80,778,415 77,707,912 69,206,827 67,062,095 62,242,658 57,427,271 53,236,273 51,373,027 41,410,456 40,854,639 40,845,911 40,841,252 40,481,035 33,790,644 33,323,383 33,290,660 ______________

2,037,943 1,861,990 1,672,200 957,270 687,475 417,593 402,041 332,855 307,800 290,528 290,350 276,021 260,675 259,184 256,610 235,501 221,311 212,898 189,608 183,732 170,528 157,335 145,853 140,748 113,453 111,931 111,907 111,894 110,907 92,577 91,297 91,207 ___________

74.812

4,673,175,214

12,803,222

RAILROAD COMMISSION OF TEXAS TEXAS LARGEST OIL PRODUCERS (BASED ON PRODUCTION FROM JANUARY, 2013 THROUGH DECEMBER, 2013)

PAGE

1

________________________________________________________________________________________________________ TWELVE-MONTH DAILY AVERAGE RANK IN % OF STATE PRODUCTION PRODUCTION STATE NAME PRODUCTION BARRELS BARRELS ________________________________________________________________________________________________________ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

EOG RESOURCES, INC. OCCIDENTAL PERMIAN LTD. CHESAPEAKE OPERATING, INC. APACHE CORPORATION PIONEER NATURAL RES. USA, INC. BURLINGTON RESOURCES O & G CO LP MARATHON OIL EF LLC KINDER MORGAN PRODUCTION CO LLC XTO ENERGY INC. MURPHY EXPL. & PROD. CO. - USA GEOSOUTHERN ENERGY CORPORATION COG OPERATING LLC OXY USA WTP LP FREEPORT-MCMORAN OIL & GAS LLC ENERGEN RESOURCES CORPORATION CHEVRON U. S. A. INC. EP ENERGY E&P COMPANY, L.P. ENDEAVOR ENERGY RESOURCES L.P. SHERIDAN PRODUCTION COMPANY, LLC HESS CORPORATION DEVON ENERGY PRODUCTION CO, L.P. PENN VIRGINIA OIL & GAS, L.P. CARRIZO (EAGLE FORD) LLC FASKEN OIL AND RANCH, LTD. LAREDO PETROLEUM, INC. OXY USA INC. DENBURY ONSHORE, LLC BHP BILLITON PET(TXLA OP) CO HUNT OIL COMPANY CONOCOPHILLIPS COMPANY ANADARKO E&P ONSHORE LLC COMSTOCK OIL & GAS, LP TOP

32 TOTAL

9.017 5.886 5.594 3.908 3.858 3.396 3.201 2.870 2.598 2.276 1.880 1.807 1.713 1.669 1.634 1.585 1.519 1.245 1.089 1.022 0.852 0.828 0.809 0.801 0.797 0.781 0.768 0.752 0.751 0.681 0.669 0.628 ______

63,402,417 41,383,449 39,331,634 27,480,809 27,128,503 23,879,748 22,506,864 20,176,240 18,269,605 16,001,541 13,218,809 12,708,270 12,041,243 11,732,948 11,487,543 11,145,720 10,679,316 8,754,228 7,653,836 7,185,669 5,993,854 5,824,110 5,688,465 5,632,647 5,604,451 5,493,967 5,397,165 5,284,068 5,277,246 4,789,616 4,701,848 4,414,819 ______________

66.884

470,270,648

173,705 113,379 107,758 75,290 74,325 65,424 61,663 55,277 50,054 43,840 36,216 34,817 32,990 32,145 31,473 30,536 29,258 23,984 20,969 19,687 16,422 15,956 15,585 15,432 15,355 15,052 14,787 14,477 14,458 13,122 12,882 12,095 ___________ 1,288,413

49

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