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ChacoConcrete.com ChacoConcrete.com 505.325.9332 105 East Elm Street Farmington, NM 87401
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FALL 2016
content Looking beyond the bust
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Don Vaughan puBliSHER
Cindy Cowan Thiele EDiTOR
Dorothy Nobis Debra Mayeux CONTRiBuTiNG WRiTERS
Josh Bishop Curtis Ray Benally CONTRiBuTiNG pHOTOGRApHERS
Suzanne Thurman
nAVAJo Mine PuRChAse PAid
nteC, ChAPteR house PRoJeCt
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12
DESiGNER
Clint Alexander Tonya Daniell SAlES STAFF
lacey Waite ADMiNiSTRATiON
For advertising information Call 505.516.1230
www.basinresourcesusa.com 6 Records earning
Column We’re not the bad guys
We’re all feeling the pain
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oil and gas revenue decline
navajo Mine Cleanup Project 11 FCed initiative encourages community
Column
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Volunteers and mentors
Column small businesses need reasonable regulation
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Roswell celebrates as record-breaking bLM leases come to community
san Juan County 22 has 592 homes for sale new nMogA executive director 25 Area communities implement 26 alternative energy projects bLM moves to e-filing
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national news
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Majestic Media 100 W. Apache St. Farmington, NM 87401 505-516-1230 www.majesticmediausa.com Basin Resources magazine is published four times a year by Majestic Media. Material herein may not be reprinted without expressed written consent of the publisher. Opinions expressed by the contributing writers are not necessarily those of the publisher, editor or Basin Resources magazine. Every effort has been made to ensure the accuracy of this publication. However the publisher cannot assume responsibility for errors or omissions. © 2016 Basin Resources magazine.
www.basinresourcesusa.com •FALL 2016
6 BASIN RESOURCES
We’re not the bad guys Low gas prices an indication industry is in trouble People who live and work in San Juan County know that lower prices at the gas pump, while appreciated for a short time, ultimately will result in lost wages, lost jobs and lost revenue from the oil and gas industry. Those who live in parts of our country where oil and gas don’t have an economic impact on the local economy when the price of oil plummets, celebrate, as it costs less and less for them to fill up their gas tanks. Those same people – especially elected officials – will chastise the oil and gas industry when it costs twice as much at the gas pump. They don’t “get” the fact that lower gas prices are an indication of an industry in trouble – and that trouble will affect our country like no other. An article published in a May 2008 issue of the New York Times quoted Debbie Wasserman Schultz, a member of the House Judiciary Committee, as saying, “I’m a mom of three young children who filled up her minivan the other day for $68 – 68 dollars – that’s real money. Maybe that’s not real money to the five people (five representatives of the nation’s biggest oil companies) here, because $68 is like a nickel to you, based on the income you all earn.” Ms. Wasserman Schultz isn’t alone in her depiction of the oilfield as con artists, padding their own wallets while taking dollars out of other people’s wal-
lets at the gas pumps. The term “big oil” is absent from the bag of tricks most politicians carry in most political seasons. As a matter of fact, most Americans don’t care or understand what has happened to the oil and gas industry over the past two years. Most Americans care only about the price at the pump. Case in point – when the price of gas is over $4 a gallon, Americans will demand hearings in Washington, D.C., to try to convict oil and gas producers of collusion and price fixing. And then, if it’s a political season, politicians are campaigning on promises to bring oil and gas companies – “Big Oil” – to the gallows and promise to make oil and gas pay dearly for gouging the American public. So, where is Big Oil today? In 2015 and 2016, the oil and gas industry has been suffering because they clearly operate in a market where supply and demand is king. Oil and gas has laid thousands of people off in an effort to save its industry. And “big oil” is now “recession oil.” Where are the hearings? The big auto companies got a bailout, except for Ford. Oil and gas workers are in trouble – where is the help, Mr. and Mrs. Politician? Next in line for the gallows? My friends working in the power gen-
eration industry. You see, soon – because we are closing coal fired power plants and displacing coal miners left and right – some power generation companies will record profits (again, supply vs. demand) and my fellow Americans will demand hearings because their light bill is up 30 percent. And where will the blame be placed? Good luck, my friends. The moral of this story is that the energy industry is not the bad guy – never has been and never will be. Editor’s notE: randy Pacheco is the general manager of A-Plus Well service in Farmington and is a former dean of the san Juan College school of Energy.
Randy Pacheco www.basinresourcesusa.com •FALL 2016
8 BASIN RESOURCES
We’re all feeling the pain San Juan County’s oil and gas revenue decline by almost 60 percent Dorothy Nobis Basin Resources the bust of the oil and gas industry in san Juan County continues to plague city and county officials. the lack of revenue in the form of gross receipts taxes has had a tremendous impact on local government, with everyone feeling the pain and making difficult decision with budgets.
Job loss hits Aztec’s GRT “the oil and gas industry is the backbone of New Mexico,” said Aztec City Manager Josh ray. “the revenue streams created by oil and gas are what drive the state’s economy, day in and day out. this recent downturn has been a challenge for people throughout the state, especially those individuals who have either been displaced to other areas or have lost their jobs.” “the decline has definitely hurt Aztec, just as it has the other municipalities in the state,” ray said. “Along with the lost mining revenues, the loss of jobs has had a direct hit to our revenue streams. Every lost job results in a direct loss to the community. When someone loses his or her job, they no longer buy food, gas and other services within the community. Mass job loss in an area results in a mass decline in Grt (gross receipts taxes).”
Mayor wonders when decline will stop Kirtland Mayor Mark Duncan said he has concerns about when – or if – the decline in revenues from the oil and gas industry will stop.
“We have wonderful renewable energy sources, but they are not reliable or cheap enough yet,” Duncan said. “if we continue in the direction we are headed, without the use of coal our electricity costs will skyrocket. if our state continues to make it difficult, expensive and laborious to get a permit to drill, the companies will continue to move their business operations to other states.” Duncan the loss of businesses and revenue directly affects the residents of san Juan County and New Mexico, Duncan added. “When we can’t drill anymore, and our electricity is too expensive to buy, our revenues follow
suit,” Duncan said. “Local governments use the Grt from local businesses, which depend on local people spending their money to buy their products. When that Grt isn’t there anymore, or those revenues from drilling are going to a neighboring state, we lose out. When those good paying jobs are taken out of our community, and families don’t have the spending power they once had, everyone loses.”
Downturn hurts the entire state “the extractive industry is not only vital to the success of san Juan County and local governments,” said bloomfield Mayor scott Eckstein, “but it is also extremely important to the state of New Mexico as a whole. Many people across the state don’t realize just how much money is spent on programs and returned www.basinresourcesusa.com •FALL 2016
BASIN RESOURCES 9 to communities through capital outlay funds each year. Without that funding, communities throughout the state have – and will continue to suffer greatly.” Eckstein said Bloomfield has suffered a huge blow with the decline in revenue from the oil and gas industry. “So much so,” Eckstein said, “that the city really struggled to prepare a budget for the 2016/2017 fiscal year. Many options Eckstein were weighed by the city council before ultimately deciding to cut employees’ pay by 3.46 percent, reducing various expenditures, scaling back on internal spending, and making adjustments to services offered.” The residents of San Juan County, Eckstein added, understand the importance of the oil and gas industry and continue to work together to support it, to diversify the county’s economy and make it less dependent on the industry and to “do what we can to help bring back those jobs and those people.”
County job loss estimated at 10,000 San Juan County Chief Executive Officer Kim Carpenter said the loss of an estimated 10,000 jobs in San Juan County, and oil and gas companies closing their doors and/or selling their assets, along with the loss of revenue from those who have lost their jobs in the Carpenter oilfield, is no longer the exception in San Juan County, but the norm. “San Juan County’s oil and gas revenue has declined by almost 60 percent,” CarFALL 2016 • www.basinresourcesusa.com
penter said. “Since 2009, the county has reduced its budget by as much as $53.8 million. With the exception of an 18month bump in slight revenue increases due to the (Mancos) shale play, San Juan
County has projected steep declines in gross receipts tax and industry revenues.” “Just as local business has been adversely affected, so too has San Juan County,” Carpenter added.
10 BASIN RESOURCES
County has cut 50 jobs
Develop more tourism
“More than 50 jobs at San Juan County have been lost due to attrition. Fortunately, the county has been able to make significant reduction in the budget without a cut in services to the citizens. Preliminary forecasting indicates a subtle turnaround, and one can only hope that we see improvements sooner than later.” The lack of revenue that has been driven by the oil and gas industry makes budgeting – and meeting the state’s requirements of operating with a balanced budget – remain challenging and frustrating. “As this decline continues, how do local governments meet the demand of operating their cities,” Duncan asked. “What do we cut – police, fire, parks and rec, the library, (help for) the homeless? When those dollars that were there last year aren’t here this year or in the future, cuts must be made to the budget.”
The beauty of our state and our county must be translated into revenue from tourists, Ray said. “We all appreciate the beauty of New Mexico, and thus we focus on tourism as an industry that helps us grow. Tourism is a multi-faceted industry that includes accommodations and amenities,” said Ray. “If we can develop our Ray tourism industry, then we can grow our hotels, restaurants and attractions.” Ray shared his frustration with the state’s administration. “Oil and gas revenues are generated in the Northwest and Southeast regions of New Mexico,” he said, “and although these
revenues are generated in those regions, the state does not allocate our capital outlay dollars back to those areas. Instead, it seems the state primarily focuses its efforts and dollars to the Albuquerque and Santa Fe communities.”
Return to the basics “We really need the state to locate an economic development office in our regions to assist our local leaders in redeveloping our local economies,” Ray continued. “This team effort could lead to a statewide joint effort of redefining who we are and how we operate.” The cities and the county must return to the fundamentals of basic math, Mark Duncan said. “It all boils down to simple math. What you don’t have, you can’t spend. So the next time a service is cut, follow the money – or the lack of it – and you’ll find the cause.”
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BASIN RESOURCES 11
Navajo MiNe cleaN up project
Navajo Transitional Energy Company, BHP win reclamation award Debra Mayeux Basin Resources Navajo Transitional energy Company and bHP billiton, its contracted partner, were selected to receive the 2016 Western regional excellence in Surface Coal Mining reclamation award after a clean project at Navajo Mine. The u.S. Office of Surface Mining and reclamation enforcement honored the companies for the Chinde reclamation Project, which is located in the northern half of Navajo Mine. This area was reclaimed in the 1970s, but with signs of erosion and degradation to the ground, the companies decided it was time to update and redesign the area. “Federal regulations and standards man-
FALL 2016 • www.basinresourcesusa.com
date that we put the disturbed land back in a way that can sustain grazing, but we have taken it a step further,” bHP billiton acting asset President Shawn Goeckner said. The project redesign used fluvial geomorphic principles developed locally by mine environmental engineers and replaced an inefficient diversion channel with a naturally functioning stream channel and stable landform. “What our engineers, technicians and workforce have accomplished has, in many ways, restored the landscape better than it was before the mine was here. We take land stewardship very seriously and the Chinde Project is a prime example of that,” Goeckner said. using this method the reclamation crews at Navajo Mine created a self-sustaining landscape, which will withstand erosion and provide wildlife habitat in the area.
Navajo Transitional energy Company, or NTeC, received the award at MINexpo® the National Mining association’s annual conference in Las Vegas, Nevada. “We are very excited and pleased to be recognized for the work that our mining contractor has performed these past years,” said Clark Moseley, CeO of NTeC. “Congratulations to the team members who worked tirelessly to ensure Navajo land is reclaimed not only according to the standards set by the Office of Surface Mining and reclamation enforcement, but ensuring that future generations of Navajo people can enjoy the land much like their ancestors have.” Nearly 75 percent of the employees at the mine are american Indian and members of the Navajo Nation.
12 BASIN RESOURCES
Navajo MiNe purchase paid NTEC gets loan from bank group led by KeyBank International Debra Mayeux Basin Resources The money has been paid, and Navajo Transitional energy Company, or NTeC, no longer owes bHP billiton for the 2013 purchase of Navajo Mine. This after the company entered into a $115 million loan from Senior Secured Credit Facility, a group of banks led by Keybank National association as the administrative and colloateral agent and Keybanc Capital Markets, Inc. as coordinating lead and mandated lead arranger, according to a press release from NTeC. The funds consisted of a term loan for $95 million and $20 million in revolving credit. “This is a milestone day for NTeC,” the company’s CeO, Clark Moseley said. “NTeC has secured the Credit Facility on our company’s merit without having to seek the financial backing of the Navajo Nation. The term loan allows NTeC to continue executing its business plan and the revolving credit commitment will provide financial flexibility in the future.” This loan also allows the company to move forward with its plans for Navajo Mine and the transitioning to bisti Fuels, a subsidiary of North american Coal Corporation, as the new contract mine manager by the end of 2016. “We want to thank our partners at Keybank for leading this transaction and Sumitomo Mitsui banking Corporation and Caterpillar Financial Services Corporation in supporting NTeC and the
Navajo Nation,” Moseley said. “This transaction positions Keybank as one of the leading financial institutions on the Navajo Nation” said Moseley. NTeC Management Committee Chairman Steve Gundersen added the closing of this financing without financial backing from the Navajo Nation shows that
NTeC is a viable business in the region. “NTeC has become financially stronger in an industry that has experienced turbulence in recent years. This financing will allow the company to continue to provide the Navajo Nation and its people a sustainable revenue stream for many years,” he said. www.basinresourcesusa.com •FALL 2016
BASIN RESOURCES 13
NTEC to continue fund tradition set up by BHP Billiton Debra Mayeux Basin Resources Keeping up the tradition started by bHP billiton when it owned and operated Navajo Mine, the Navajo Transitional energy Company, or NTeC, announced it would continue the Community benefit Fund and about $200,000 in grants to area non-profit organizations and schools. a committee will meet in October to review applications to the grant and award monetary prizes in four categories including education/youth development, environment, economic development and energy, sustainable, renewable. The education/youth development category should be awarded to those organiza-
tions that will provide “scholastic and skillbuilding opportunities and resources through youth development programs that enhance communities and society,” according to the NTeC website. The environment category is to promote and protect natural resources, while the energy, sustainable, renewable category looks to promote renewable and sustainable energy projects throughout the region and on the Navajo Nation. This would include solar, geothermal, wind, biomass and water projects that “support and promote energy saving home techniques.” The economic development category should promote job creation and growth by promoting entrepreneurship while looking for “unique techniques and inno-
vative solutions,” while improving social services in the community. It also should help develop a skilled workforce. “We want to place a strong emphasis that NTeC is a part of the Navajo Nation and Four Corners Community and we believe these funding categories are a reflection of the pillars of NTeC,” said Steve Grey, external and governmental affairs director for NTeC. Grant application will be accepted until 4 p.m. Sept. 30. a committee will review the applications and then decisions will be made and grants will be awarded. “We are excited to start this phase of NTeC’s development and add value to our organization in the communities,” Grey said. For more information visit www.ntec.org.
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14 BASIN RESOURCES
Looking beyond the bust Area businesses see opportunity, plan for the future Dorothy Nobis Basin Resources Photos By CuRtis RAy BenAlly While companies that service the oil and gas industry are downsizing and some even closing their doors, a bloomfield couple is optimistic about a rebound and are investing their savings and their lives into it. Lisa and Danny roberts have worked in the oil and gas industry for a combined total of 59 years. the ups and downs of the oil field are not lost on this experi-
enced team, but the couple knows that what goes down in the industry always comes back up. “because of the decline in the industry, an affordable opportunity presented us the chance to start up,” Lisa roberts said. “the industry will recover, as it has in the past.”
Experience matters the roberts have started a swabbing service, which is the extraction of fluids from existing wells to enhance production. “this means working on wells that have already been drilled, so we are performing
maintenance operations,” Lisa explained. “Also, we’ll be doing sand line repairs (splicing lines), which will save expenses for well servicing companies in the area that utilize that type of cable.” While Danny has extensive experience on many types of oilfield equipment, Lisa’s skills are primarily in the area of swabbing. she started as a helper on a swab unit and did some roustabout work before becoming a pipeline crew supervisor. it was swabbing that Lisa enjoyed, so she took the necessary training to become a swab operator. After 11 years as an operator, she www.basinresourcesusa.com • FALL 2016
BASIN RESOURCES 15 was given the opportunity to become a field supervisor, overseeing the day-to-day operations of several crews, while training new swab unit supervisors.
“They’ll work for all the producers — large and small — like ConocoPhillips, BP, Chevron, Dugan Production. They need natural gas to Moving from employee to owner Falcon Swabbing & Service, LLC will stabilize at the current price and go work on wells that have already been up. If the price of natural gas goes up drilled and need maintenance. The new business will also do sand line repairs (slic- by $1, they will be very busy and very ing lines), which is Danny’s area of expertsuccessful.” ise. “We’ve been encouraged on many occasions to start our own business,” Danny said, “from our family, friends and many of our past customers. Ultimately, we made the decision to stop working for the benefit of others and start working for our own.”
Perfect timing Randy Pacheco, general manager of A-
— Randy Pacheco A-Plus Well service general manager Plus Well Service in Farmington, said the timing of the Roberts to start their new business is perfect. “They’ll work for all the producers – large and small – like ConocoPhillips, BP, Chevron, Dugan Production,” Pacheco said. “They need natural gas to stabilize at
the current price and go up. If the price of natural gas goes up by $1, they will be very busy and very successful.”
Knowledge and determination The Roberts were fortunate in getting the equipment they need for their new business through a friend in Colorado. “He, like everyone else in the industry, has experienced a downturn in his area,” Danny said. “He gave us the opportunity to utilize some of his equipment in our area.” “Every startup business faces challenges getting started,” Lisa said. “Our biggest challenge will be if the decline in the industry continues, the whole area will become (more) depressed.” “Our combined years of experience in management and the oil field service industry will give us an advantage over some
* Beyond the Bust 33
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16 BASIN RESOURCES
NTEC, ChapTEr housE projECT:
Geothermal energy project in the works for Tohatchi Debra Mayeux Basin Resources a natural hot springs near Tohatchi could soon be the site of a geothermal energy project developed between the chapter house and the Navajo Transitional energy Company, or NTeC. The two entities entered into an agreement after the Tohatchi Chapter passed a resolution, allowing for a feasibility study on the hot springs. The resolution passed with 34-0 vote, allowing for resource exploration, a feasibility study and the possible allocation of funds from outside sources. “This step marks another step to our commitment toward diversifying our energy portfolio and looking ahead to cleaner energy projects. Our charter includes investing into clean energy projects for the Navajo Nation,” NTeC CeO Clark Moseley said, adding the company’s char-
ter mandates it must invest 10 percent of its net profits into clean energy development. In 2015, NTeC formed a partnership with the Colorado School of Mines to develop a project exploring potential geothermal projects, including geothermal greenhouses to grow local plants and trees. a long-term goal, however, would be to create “a geo-park for renewable and alternative energy research and production,” according to a press release from NTeC. “We are interested in projects that will empower communities with economic growth,” said Dr. Masami Nakagawa, associate professor at the Colorado School of Mines. a team from Colorado School of Mines visited Tohatchi and other communities earlier this year to test the hot springs for heat production and viability as an energy source. Students also looked at various ways the Tohatchi residents could use nat-
ural resources to develop a sustainable economy. “a greenhouse has the potential to create economic growth in a community like Tohatchi,” said Sam Woods, NTeC’s business development manager. “We can build a small scale project using geothermal technology.” While the project could have a positive economic effect on the community it also could provide research opportunities to students at Navajo Technical university, according to a press release from NTeC. “We are honored that this project fits NTeC’s goals to diversify its energy portfolio. I know a great deal of time has gone into identifying the type of project we should proceed with, and this project has a great deal of potential,” said Steve Gundersen, management committee chairman at NTeC. “We believe strongly in our goal to find sound and solid investments into clean energy.” www.basinresourcesusa.com • FALL 2016
BASIN RESOURCES 17
Volunteers and mentors: We’re not just losing revenue; we’re losing friends, neighbors “Hi ho, hi ho, it’s off to work we go,” may have been the musical work tune for the Seven Dwarfs in Walt Disney’s movie, Snow White and the Seven Dwarfs, as they marched to work at a diamond and ruby mine, but there’s little singing and dancing for those in San Juan County as they attempt to find work. With the continuing downturn in the oil and gas industry – and the layoffs and jobs leaving the area – San Juan County’s unemployment rate is at 9.5 percent, according to a New Mexico Labor Force news release in July, the fourth highest in the state. Only Lea County at 9.9 percent, McKinley County at 10.4 percent, and Luna County at 10.9 percent have higher unemployment rates than San Juan County. The layoffs by ConocoPhillips this month will have an additional adverse effect on the county’s unemployment. ConocoPhillips is the largest producer of natural gas in New Mexico and operates about 9,000 wells in San Juan County that represents almost 9 percent
FALL 2016 • www.basinresourcesusa.com
SCott eCKSteiN Mayor City of BlooMfield
of its worldwide assets. The downturn in the oil and gas industry, caused by record low prices for crude oil and natural gas on the commodities market, is the reason for the layoffs, according to a ConocoPhillips spokesperson. The New Mexico Workforce Connection website, on September 1 of this year, showed only one job opening for a roustabout in San Juan County in August and only one opening for a wellhead pumper – jobs that were plentiful several years ago. With no jobs available locally, much of our workforce is moving out of the area, leaving San Juan County with a plethora of vacant homes and an increasing loss of gross receipts tax revenue.
While the loss of gross receipts taxes has a huge impact, the loss of the families has been felt as well. When people move out of the area, we not only lose revenue, we lose people who have volunteered at schools, with youth sports, as firefighters and reserve police officers, and who have contributed to countless organizations and charities. The loss of people can have as devastating effect as the loss of jobs. We lose community leaders, monetary contributions that non-profits depend on to provide the services and support they need to continue. We lose voices on issues that impact our lives. We lose mentors, friends and neighbors. The lack of revenues will seriously derail many projects our county and communities need to maintain and improve the quality of life we all enjoy. And while we will weather this oil field “bust” and will rebound from it, the way we always have, the void left by good, caring and dedicated volunteers will be felt for years to come.
18 BASIN RESOURCES
small businesses need reasonable regulation Greater regulation, civil penalty change impacts operators Most of New Mexico’s oil and gas independent operators are struggling under distressed commodity prices. Crude oil prices garner daily attention in world financial markets and local gasoline service stations trumpet the resultant minor price fluctuations, but natural gas (methane) prices are the real diagnostic to monitor. Recent San Juan Basin natural gas prices have finally improved from 20year lows ($1.52) into the $2.70 range. Recall that a 10-cent change in the price of natural gas corresponds to a $6.5 million change in annual tax revenues to New Mexico. Natural gas midstream transportation providers have also proposed new transportation contracts with low-flow meter fees and increased costs immediately impacting profitability. Low prices and increased costs are not the only concern for independent producers.
Dire consequences for operators on federal lands In October 2015, Congress passed one of their last-minute omnibus budget deals, with potentially dire consequences for operators on federal lands. While true that the oil export ban was officially lifted, a paragraph in the bill – affectionately titled, Federal Civil Penalty Inflation Adjustment Act Improvements Act of 2015 – mandated all executive branch agencies increase monetary penalties. The Bureau of Land Management has
tom mullIns Independent petroleum AssocIAtIon of nm
complied with a recent rule (RIN 1004AE46) making raising civil monetary penalties to as much as $51,570 per day per occurrence for filing an inaccurate report, among other penalties which were all doubled. Combined with recent administration efforts curbing due process protections, creation of a “misconduct” penalty, combined with interpretive changes on permissible midstream gas transportation deductions, will place operators on Federal lands at risk for redetermination and repayment of royalty amounts, retroactively for seven (7) years through the Office of Natural Resource Revenue (ONRR). ONRR is the IRS type regulatory authority applicable to oil and natural gas producers for royalty reporting and payments. Needless to say, New Mexico’s approximate 20,000 marginal natural gas wells (< 60 MCFD) and 17,000 marginal oil wells (< 10 BOPD) may have their economic life shortened further. These 37,000 marginal wells individually produce on average 1.56 BOPD and 22 MCFD. Premature abandonment elimi-
nates needed severance and ad valorem tax receipts, in addition to ending royalties, while simultaneously making our nation more dependent upon foreign suppliers.
Cumulative impacts The environmental community frequently discusses cumulative impacts when opposing minerals development. The same negative cumulative economic impacts are being felt by everyday New Mexicans and our state legislators, not only by producers, who will have to balance a nearly billion dollar deficit with few good solutions. The cumulative impact of this under-the-radar civil penalty increase, combined with recently updated governmental regulations Onshore Order No. 3 (Site Security), Onshore Order No. 4 (Measurement of Oil), Onshore Order No. 5 (Measurement of Gas) and Onshore Order No. 9 (Waste Prevention and Use of Oil and Gas for Beneficial Purposes) could result in the premature elimination of these marginal producing wells which produce over 59,000 BOPD and 831 MMCFD from New Mexico. These cumulative regulatory impacts, be they intended or not, can make once profitable operations immediately unprofitable, and arguably could be considered, from the legal perspective, a taking. New Mexico government officials should exercise their authority to push back against these regulations. www.basinresourcesusa.com •FALL 2016
Small businesses need reasonable regulation Large oil and gas operators have international operations and can move their investment capital to foreign lands. Small businesses need reasonable regulation, not smothering regulation. New Mexico’s independent oil and gas operators are a resilient group that has weathered financial and regulatory hurricanes before. New Mexico’s independent operators frequently acquire these legacy oil and gas wells from larger producers. We live in New Mexico, raise our children in New Mexico and support our local communities. In the coming years, the names of the producers may change, but their commitment to fuel New Mexico and our nation will continue. Independent operators will weather this perfect storm of regulatory and commodity price difficulties, although another last minute omnibus budget deal in this election year may stimulate unknown and unforeseen effect. The Independent Petroleum Association of New Mexico (IPANM) is the voice of independent producers. Find out more at www.ipanm.org Tom Mullins is a partner in Synergy Operating LLC and is President of the Independent Petroleum Association of New Mexico.
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20 BASIN RESOURCES
A records eArning $145.6 million in receipts
Roswell celebrates as record-breaking BLM leases come to community Debra Mayeux Basin Resources an oil and gas celebration Sept. 8 in roswell came on the heels of a recordbreaking oil and gas lease sale by the bureau of Land Management. The Sept. 1 competitive auction shattered previous records earning $145.6 million in receipts, which set a new high for a single parcel, bid per acre and average bid per acre price, according to the bLM. The agency sold 36 Federal leases for nearly 14,000 acres in southeastern New Mexico’s Lea and eddy County’s. This netted the bLM an average of $10,489 per acre, when rental and administrative fees are included in the sale price. roswell had a Celebrating Oil and Gas event on Sept. 8 to highlight the benefits the oil and gas industry brings to the community. rain couldn’t keep away the 200 attendees, who heard from a wide range of speakers talking about the positive effecrt of oil and gas on the entire state. even the federal government was celebrating with its record-breaking sales of leases. The bLM stated that energen Corporation, of birmingham, ala., bid $35,500 an acre for a total of $77.2 million on parcel number 15, which encompasses 2,160 acres in Lea County. This tops the previous high bid of $34,000 set in 2014 at a bLM-Montana auction. The previous high bid in New Mexico
was $27.9 million set in 2004. The record-breaking revenues and a 12.5 percent royalty collected for future production on those leases, will be shared between the federal government and the State of New Mexico with 52 percent going to the Feds and 48 percent to the state. The bLM estimated New Mexico will receive $69.9 million from the Sept. 1 auction. The bLM awards oil and gas leases for 10-year periods and for as long thereafter as there is production in paying quantities. “all leases are issued with conditions on
oil and gas activities to protect the environment; these can include limits on when drilling can occur or restrictions on surface occupancy,” the bLM stated in a prepared release. “Once an operator proposes exploration or development on a bLM-issued lease, further environmental analysis under the National environmental Policy act is conducted to determine the site-specific need for various types of impact-limiting or mitigation measures. In addition, many operators routinely use practices, such as remotely monitoring producing wells, to minimize surface impact.” For more information about oil and gas lease sales visit, blm.gov/nm/oilandgas. www.basinresourcesusa.com •FALL 2016
22 BASIN RESOURCES
San Juan County has 592 homes for sale Investors buying low-price property in “buyers market” Debra Mayeux Basin Resources There’s no question about it, San Juan County is experiencing an economic downturn as a result of the lull in the area’s oil and gas industry. Only a few years ago, investors believed the area would boom from production in the Mancos Shale, instead there was a bust, crashing local economies and depressing the cost of homes in the region. The gross receipts tax revenues significantly dropped in bloomfield. “They are down 34 percent,” said bloomfield Mayor Scott eckstein. aztec and Farmington also experienced reduction in tax revenues, but not as deep as bloomfield. That is because aztec has some retail establishments, and Farmington is a retail hub.
Retail industry keeping real estate afloat It is the retail industry that has kept the real estate market alive in the region, according to Lela Holmes, who has been selling properties in San Juan County for 40 years. Holmes, owner of San Juan realty, will be named a realtor emeritus, this year, by the National association of realtors. www.basinresourcesusa.com • FALL 2016
BASIN RESOURCES 23
New Mexico Housing Summit Holmes recently attended the New Mexico State Housing Summit, where she learned that Farmington, Gallup, Clovis and Hobbs have suffered from the oil and gas downturn, but none so greatly as Hobbs. “Hobbs is really in some trouble,” Holmes said. “There’s nobody to buy, because of the oilfield environment, and they don’t have the retail market that Farmington does.”
Investors buying low-priced property The retail market kept San Juan County’s real estate market afloat, because investors are coming in and buying lowpriced houses and office buildings. “This is the best quarter I’ve had in five years with investors buying multifamily listings,” Holmes said. Still there are 596 active residential home listings in San Juan County with 82 pending sales, according to Chuck Holmes, a realtor at San Juan Realty.
Short sales and foreclosures There are not as many foreclosures as there have been in the past, but there are short sales, which happen when people owe more than they are able sell their property for, and they make arrangements with the mortgage company to get out from under the property.
FALL 2016 • www.basinresourcesusa.com
“I really can’t say I’m too concerned about the market. Look at all the new businesses opening up. Houses were selling way too high before. The prices were inflated before the bust.”
— Lela Holmes This has driven the prices of some homes down, but it is difficult to find a house in Farmington for less than $175,000, Lela Holmes said. “There is not
near the supply we had in the past.”
Most homes above $250,000 Most of the homes are priced above $250,000, and with these properties many of the sellers are opting to rent instead of sell, according to Stephanie Buffington, a property manager with San Juan Realty. She said the owners are waiting for the market to recover, before selling the home.
Rental market hit hard The rental market has been hard hit, according to both Holmes and Buffington,
who said rental prices have been driven down. “Many owners are eating $100-$200 a month in rent,” Buffington said. “The rental price range varies depending on the location and size. Many are listed lower, because the economy has crashed so much.” Holmes said, “The rental market hurt a little bit, but people are still renting.”
People would rather rent than sell There are more rental properties than houses on the market, because as families leave the area to look for work elsewhere they choose not to sell. “It’s a buyer’s market. … People are holding on to their houses,” Buffington said. This is when investors buy up local properties, and Holmes said she has been selling fourplexes to a buyer in France. An investor from Gallup also has expressed interest in the area. “As long as the rental market stays good, investors will stay in Farmington,” Holmes said.
Business properties selling Business properties also are selling with the new owners putting money into them to make them more appealing, according to Buffington. This is a trend Holmes has been familiar with, as she lived here through the big bust of the 1980s. She said this is very similar to then. “I really can’t say I’m too concerned about the market. Look at all the new businesses opening up,” Holmes said. “Houses were selling way too high before. The prices were inflated before the bust.” Holmes definitely believes the economy will come back. “I believe over the next three or four years we will see things change.” www.basinresourcesusa.com • FALL 2016
BASIN RESOURCES 25
New NMOGA executive directOr
Former NM Environment Secretary Ryan Flynn takes the helm Debra Mayeux Basin Resources Former New Mexico environment Secretary ryan Flynn has moved to on to head the New Mexico Oil and Gas association, so on Sept. 12, Gov. Susana Martinez appointed the department’s Deputy Secretary butch Tongate to take over the helms. Flynn stepped down aug. 12, after he was named executive director for the New Mexico Oil and Gas association, or NMOGa, where he will lead the association’s legislative, Ryan Flynn legal and regulatory work to continue to promote and build the oil and the gas industry in New Mexico. NMOGa’s Chairman Cliff brunson stated in a copyrighted report from the albuquerque business Journal “Flynn’s background and experience in legal and regulatory affairs combined with his straightforward leadership and clear
communication style are a great fit for our industry in these challenging times.” Flynn was with appointed to the state department in 2013, and leaves as the New Mexico budget is in a more than $500 million deficit and the state’s oil and gas industry is facing a major downturn. Tongate, who takes over for Flynn, has served the environment Department for 23 years and was named deputy secretary in 2011. Prior to that he served as the solid waste bureau chief and the director of the environmental protection division. “I’m proud to have butch take over the helm of the environment Department,” Martinez said. “He’s been an integral part of our team since the beginning of the administration, and the depth and breadth of his experience will be a strong asset as we continue protecting New Mexico’s environment in a balanced and responsible way.” Tongate’s appointment comes on the heels of the administration negotiating the largest settlement in history as New
Mexico and Colorado look for reimbursement from the energy Department in holding the ePa accountable for the Gold King Mine spill, and taking action on the Kirtland air Force base spill. “I’m grateful for Governor Martinez’s leadership, and I look forward to continuing to work with her to protect New Mexico’s environment,” Tongate said. “We serve New Mexicans best when we take a sound and balanced approach to environmental policy – one that protects our air, water, and land, while at the same time allowing businesses to grow. I am honored to lead the Department in continuing these efforts.” earlier in his career, Tongate served as a legislative consultant in Washington D.C. and as director of marketing for army programs at Hughes aircraft Company. Tongate is also a veteran of the u.S. Marine Corps. He has a bachelor’s of science in mathematics from the u.S. Naval academy in annapolis, Ma., and a master’s of science degree in systems management from the university of Southern California in Los angeles.
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26 BASIN RESOURCES
Area communities implement cost-saving alternative energy projects DebrA MAyeux Basin Resources Alternative energy sources are helping area municipalities and San Juan County cut fuel and power costs. The cities of Aztec and bloomfield recently went through conversions to solar power on municipal facilities, while San Juan County has invested in high-efficiency lighting projects and compressed natural gas vehicles, County Chief executive Officer Kim Carpenter said.
“The solar was completed this spring, and we worked with the city of Farmington Electric Utility to work out agreements for solar.
— Teresa Brevik City of Bloomfield Farmington looks at solar farm The city of Farmington has been investigating the use of alternative fuel and is “deep in a feasibility study” for a commu-
nity solar farm, according to City Manager rob Mayes. The community solar farm would allow residents, who might not have the ability to put solar panels on their home, to purchase a section of the farm. “This would give them the opportunity to have solar credits on their utility bill,” Mayes said. The city has a significant source of hydroelectric power from both Navajo and Glen Canyon dams. “We remain very open and biased in favor of alternative fuels, where it makes www.basinresourcesusa.com •FALL 2016
BASIN RESOURCES 27 one or two compressed natural gas vehicles,” Carpenter said, adding that the county has a pricing agreement with Bubble City, which provides the community with a CNG fueling station. “We are looking at the potential of solar,” Carpenter said. “In know that Aztec Schools and the city of Aztec have done solar projects.”
“We are looking at purchasing another one or two compressed natural gas vehicles.”
— Kim Carpenter San Juan County sense,” Mayes said. Farmington seriously considered “pulling the trigger on alternative fuels a few years back.”
Cost, infrastructure tables Farmington CNG conversion A lack of infrastructure, such as Compressed Natural Gas, or CNG fueling stations, led the city to hold off on the conversion. Then, the cost of gasoline dropped, and Mayes said the city had to ask whether a conversion to CNG was cost-effective and made sense. “The math doesn’t add up right now,” he said. “The
day that it does add up mathematically, we would be very excited about it.”
County changes lighting
County first to invest in CNG conversion San Juan County was one of the first local government entities to invest in a single compressed natural gas vehicle. The county also has several hybrid vehicles in its fleet. “We are looking at purchasing another
In the meantime, San Juan County opted to change the lighting in some of its 24-hour facilities, such as the jail, fire department and the juvenile detention center, where high-efficiency lights have been installed, Carpenter said.
Bloomfield lighting and solar savings The city of Bloomfield also changed out its lights, opting for high-efficiency
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“We remain very open and biased in favor of alternative fuels, where it makes sense.”
Blooomfield buildings producing power
— Rob Mayes Farmington City Manager LED lighting in all of its municipal buildings. This project, which was completed in August, was part of a cost-savings initiative through a partnership with the Albuquerque-based Yearout Energy Services, or YESCO, which has a mission to “improve learning and business environments for out customers by reducing energy and operating costs through technical expertise and comprehensive knowledge of energy conservation measures,” according to the company’s Website, yearout.com.
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for the city of Bloomfield and found that it would be feasible for the community to install solar panels and high-efficiency lighting in its buildings, according to Teresa Brevik, former special projects manager for Bloomfield. “They deemed the project feasible based on our electric rates, gas rates and financing,” she said, adding YESCO guaranteed the project through the cost
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The city council decided to move forward and installed solar panels on five of its municipal buildings and changed out the lights in all of the city’s buildings. “The solar was completed this spring, and we worked with the city of Farmington Electric Utility to work out agreements for solar,” Brevik said. “Bloomfield’s buildings are producing power, offsetting the electric bills.” The light project was completed in August. “We didn’t change the fixtures, just the lights,” Brevik said, and the lighting output was measured and verified by the state’s Energy, Minerals and Natural Resources Department. “Everybody likes the lights,” Brevik said.
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BASIN RESOURCES 29
BLM moves to 100 Percent e-filing of drilling permit applications Upgrades will make permit process more efficient, transparent, and cost effective The Bureau of Land Management (BLM) recently completed a multi-year effort to upgrade its online drilling permit processing system. The new internetbased module will help the BLM reduce permit processing timeframes by 50 percent, while also increasing the efficiency and transparency of the drilling permit review and approval process. The rollout of this new system was completed in phases, starting in October 2015. By year’s end, the BLM intends to shift to 100 percent electronic filing (or “e-filing”) of oil and gas drilling permits. To facilitate this shift, the BLM is also proposing a minor regulatory change today – an update to Onshore Order 1 – that would make e-filing the default method for submitting drilling permit applications. “This modern, online system will result in a better and more efficient experience for both industry and the BLM,” said BLM Director Neil Kornze. “The new system is a big improvement over the current, hard copy based application system." The new e-filing system automatically flags missing or incomplete information in an application, reducing one of the primary sources of delay in the current process. It also allows operators to track their permits through the entire review process, and by standardizing workflows it will enable the BLM to shift work among offices in response to demands. The new drilling permit application module was developed as part of the BLM’s broader update to its Automated Fluid Minerals Support System, and was the first FALL 2016• www.basinresourcesusa.com
BLM increases drilling permit fee component to be deployed. The average permit processing time is currently 220 days. Once fully functional, the BLM anticipates that 90 percent of permit decisions will occur within 115 days of submission in cases where the BLM is the sole surface management agency. The new system is already in use in BLM Field Offices. To date, 101 applications have been processed using the new system. The experience with these applications suggests that the new system will achieve the anticipated processing time reductions. The default method of submission under the BLM’s existing regulations is via hard copy. In order to realize the advantages that come from e-filing, the proposed update to Onshore Order 1, released today, would make e-filing the default. However, recognizing that extenuating circumstances may exist, the proposed update to Onshore Order 1 includes a waiver process that would allow operators to file via hard copy in certain circumstances, such as when online access may be limited or nonexistent. The proposed rule would also apply to Notices of Staking, which serve as a request by oil and gas operators to schedule an on-site inspection of a prospective well location.
As directed by Congress, the Bureau of Land Management (BLM) will be adjusting the fee it charges to process oil and gas drilling permits on public and Indian lands for inflation effective October 1. That adjustment will increase the fee charged for such permits by $110 to $9,610. The non-refundable processing fee will be collected when an oil and gas operator submits a drilling permit (called an Application for Permit to Drill), and is required whether or not a particular permit is subsequently approved. Congress directed the BLM to adjust the APD fee annually for inflation over 10 years as part of the National Defense Authorization Act for Fiscal Year 2015. To carry out this statutory requirement, the BLM has issued guidance to its field offices regarding the collection and handling of APD fees in the current fiscal year. The new guidance largely tracks prior guidance with respect to collection and handling policies such as when the fee is required; when the BLM will begin processing the APD; and acceptable forms of payment.
30 BASIN RESOURCES
Low natural gas prices, environmental regulatory compliance Operating coal-fired generating capacity has declined 15 percent since 2011 EIA recently released preliminary data from its annual survey of electric generators (EIA-860), which provides the electric generating capacity of all units with a capacity of 1 megawatt (MW) or greater. The most important trends over the past few years have been large increases in natural gas, solar and wind generating capacities along with a significant decline in coal generating capacity. Coal-fired generating capacity in the United States has fallen 15 percent over the past six years, dropping from 317 gigawatts (GW) at the end of 2010 to 276 GW in April 2016. This decrease is primarily attributable to the competitive pressure from low natural gas prices, which lowers the marginal cost of natural gas-fired generation, and the costs and technical challenges of environmental compliance measures. Because the EIA-860 data also provide information on pollution control equipment at electric power plants, investments in these technologies can be assessed. For example, a significant amount of pollution control equipment was recently installed in response to the U.S. Environmental Protection Agency's (EPA) Mercury and Air Toxics Standards (MATS). MATS establishes emissions limits for toxic air pollutants associated with coal combustion such as mercury, arsenic, and heavy metals. Between January 2015 and April 2016, about 87 GW of coal-fired power plants installed pollution control equipment, nearly 20 GW of coal capacity retired, and about 5.6 GW of coal capacity switched to natural gas as the main fuel source.
Coal consumption by U.S. educational institutions has declined by 64 percent since 2008 Coal consumption by educational institutions in the United States, such as colleges and universities, fell from 2 million short tons in 2008 to 700,000 short tons Of the 87 GW of coal capacity that installed pollution control equipment to comply with MATS, activated carbon injection (ACI) was the dominant compliance strategy. More than 73 GW of coal-fired capacity installed ACI systems in 2015 and 2016, effectively doubling the amount of coal capacity with ACI. According to EIA data, the average capital cost of an ACI system was $5.8 million over 2015 and 2016. Other compliance strategies reported on the 2015 EIA-860 include the modification of existing emissions control equipment, the addition of new equipment or capabilities, or some combination of operational changes and new investments to improve mercury capture or to achieve other
in 2015. Consumption declined in each of the 57 institutions that used coal in 2008, with 20 of these institutions no longer using coal at all. Many of these environmental control objectives, such as reducing emissions of particulate matter or nitrogen oxide. Overall, the preliminary EIA-860 data indicate that operators of coal-fired power plants invested at least $6.1 billion between 2015 and April 2016 to comply with MATS or other environmental regulations. Preliminary 2015 EIA-860 data can be useful in assessing changes to electric generating capacity such as growth in renewable and natural gas capacity along with decreases in coal capacity. These data can also indicate how power plants responded to market and regulatory pressures, which can be useful when looking at the causes behind the capacity changes. www.basinresourcesusa.com â&#x20AC;˘FALL 2016
BASIN RESOURCES 31 institutions participate in the American College and University Presidents Climate Commitment, a program aimed at reducing greenhouse gas emissions. Coal consumption has decreased as institutions switch from coal to natural gas or other fuels. Coal use at educational institutions is small, making up less than 0.1 percent of total coal consumption in 2015. But coal use at educational institutions has a long history. Many educational institutions used coal to produce their own electricity and heat as early as the 19th century, when access to the electric grid was limited. The Public Utility Regulatory Policies Act of 1978 allowed many independent power producers, including institutions, to sell their surplus electricity back to public utilities, further encouraging educational institutions to generate their own electricity. Educational institutions in New York, South Carolina, Idaho, and South Dakota ceased to use coal between 2008 and 2015. These institutions either built new or expanded their natural gas capacity, aided by state funding, or increased their electricity purchases from public utilities. The largest reductions in coal consumption by educational institutions between 2008 and 2015 occurred in Indiana, Michigan, Missouri, and Tennessee. Educational institutions in Indiana collectively reduced coal consumption by 260,000 tons (81 percent) from 2008 to 2015. Coal was replaced mostly by natural gas and
FALL 2016 â&#x20AC;˘ www.basinresourcesusa.com
geothermal heat to meet sustainability initiatives set by each university. Educational institutions in Michigan reduced their coal use by more than 80 percent over this period, adopting natural gas as the major fuel. Some institutions in Missouri added more renewable sources of power, replacing coal with biomass. Three institutions in Tennessee stopped using coal between 2008 and 2015, resulting in a 94 percent drop in coal consumption by institutions in the state. Many of their cogeneration plants were converted to burn only natural gas.
32 BASIN RESOURCES
Narrowing crude oil price differences contribute to global convergence of refining profits Earnings per barrel of crude oil and other inputs processed by refiners that operate mainly in North America were lower in the second quarter of 2016 compared with the same time last year and are now close to perbarrel earnings by refiners operating elsewhere. North American refiners, for years consistently more profitable than other refiners, were less profitable than European refiners and the global average, based on the four-quarter moving average of profits. Changes in the difference between North American and European crude oil prices are likely contributing to the converging profits. As discussed in This Week in Petroleum, recently released second-quarter statements from 27 companies show that 21 of them experienced a year-over-year decline in refining profits, as measured by earnings per barrel processed. The decline in earnings was driven largely by the decline in crack spreads (the price difference between crude oil and petroleum products) in the second quarter. In addition to changes in crack spreads, which serve as an indicator of refinery profits, earnings per barrel reflect transportation costs and other operating expenses. Also, refiners use different crude oil blends and produce different yields of refined products, which changes per barrel
earnings among refiners. The narrowing gap between refiner crude oil acquisition costs for U.S. and global refiners is a key factor driving the convergence in refinery profits. Because crude oil and petroleum product prices are the two largest factors that affect a refiner's profits, changes in the cost of crude oil can have a significant effect on profitability. North American refiners enjoyed a large discount to global crude oil prices for several years, measured by the difference between North Sea Brent crude oil prices and the U.S. composite refiner acquisition cost. Since the third quarter of 2015, the discount has not widened beyond $4.50 per barrel, reducing the cost advantage of some U.S. refiners. In 2012 and 2013, rapid increases in U.S. and Canadian crude oil production and insufficient infrastructure to move this oil to refining centers inexpensively has contributed to the wide spread between the Brent price and average U.S. refiner acquisition costs. These factors began to reverse in 2014 and 2015, as new pipeline infrastructure increased takeaway capacity from producing areas to refining areas, such as the BridgeTex and Cactus pipelines in West Texas and Flanagan South in the Midwest. U.S. crude oil production declines, which
began on a year-over-year basis in December 2015, also contributed to a comparatively tighter crude oil market in North America. In the European market, refiners may be achieving increased refining efficiency by consolidating operations. The European companies included in this analysis reduced distillation capacity by 248,000 barrels per day in 2015, the fourth consecutive year of reductions. In addition, as Russian, Iranian, and Iraqi crude oil production has increased, some European refiners may be receiving lower-priced crude oil. For example, the price of Mediterranean Urals â&#x20AC;&#x201C; a Russian crude oil many inland European refiners process â&#x20AC;&#x201C; has on average been more than $2 per barrel less than the price of Brent for most of 2016, the largest sustained price difference since at least 2012. This may also be contributing to higher European refiner profits in recent quarters. Global crack spreads have remained low in the third quarter of 2016, suggesting continued downward pressure on refinery profits. Absent meaningful changes in crude oil and petroleum product price differentials, however, refinery profits will likely display smaller variability across different locations than occurred between 2012 and 2014.
www.basinresourcesusa.com â&#x20AC;˘ FALL 2016
BASIN RESOURCES 33
Beyond the Bust
continued from 15
startup businesses,” Lisa added. “Knowledge and determination go a long way.” With the downturn in the oil and gas industry hitting San Juan County – and much of New Mexico – and creating financial challenges for everyone affected by the industry, local and state officials are concerned about the decrease in revenues the industry brings to the area. New Mexico’s Governor Susana Martinez has called for a special legislative session to address a budget crunch that continues to build. A recent story by the Associated Press stated that from $300 million to $500 million in previously anticipated state revenue could fail to materialize during the current budget year. San Juan County and New Mexico are used to the booms and busts of the oil and gas industry. While this “bust” has hit our area especially hard, there is little doubt that the industry will rebound and re-energize our work force and our communities.
Logos Resources also looking past the downturn The Roberts, however, aren’t the only ones who see a brighter future for the industry. LOGOS Resources LLC, a Farmington oil and gas company, recently purchased the San Juan Basin assets of Energen Corp., which equated to 30 percent of Energen’s assets. LOGOS, which was founded in 2011, received $50 million in FALL 2016 • www.basinresourcesusa.com
34 BasiN resoUrces LOGOS, which was founded in 2011, received $50 million in startup funding from a Bostonbased private investment company, ArcLight Capital Partners LLC. In February of 2014, ArcLight committed another $50 million, but Jay Paul McWilliams much of those assets were sold in the fall of 2014, capitalizing on the higher price the assets brought.
LOGOS currently employs 28 people. The company’s offices are on Afton Place in Farmington. In a recent news article, LOGOS president, Jay Paul McWilliams, was quoted as saying, “This is a great time to acquire assets.”
Livin’ the dream Lisa and Danny Roberts have also made a commitment to themselves and to the oil and gas industry by taking the steps to live their dream of owning their own business and remaining part of the industry that has served them well. “We’ve gone through the process of acquiring permits, licenses, contracts, and equipment for our business,” Danny said.
“With God’s grace – and a little luck – we’ll work for all of the oil and gas producers in the area.” Operating the business from their home for now, the Roberts have the faith, the experience, the determination and the equipment to be successful. And Randy Pacheco believes they’ll succeed. “I think it’s a great time to start a business because equipment is cheap,” Pacheco added. “If you can hold on during this time, your business will be successful.” EDITOR’S NOTE: Falcon Swabbing & Service may be reached by calling 505-3337101.
advertisers directory Antelope Sales & Service Inc. .24 5637 US Hwy 64 Farmington, NM 505-327-0918 www.NMASSI.com BM Technology & Supply ........13 2303 Bloomfield Hwy. Farmington, NM 505-326-9144 Calder Services ......................17 #7 RD 5859 Farmington, NM 505-325-8771 Courtyard by Marriott .............10 560 Scott Ave. Farmington, NM 505-325-5111 Elite Promotional & Embroidery ... .............................................19 1013 Schofield Farmington, NM 505-326-1710
Farmington Fire Equipment ....10 6007 E. Main Farmington, NM 505-327-1933 160 Rock Point Dr., Suite C Durango, CO 970-247-2141 www.f-fire.com
Mechanical Solutions, Inc..........2 1910 Rustic Place Farmington, NM 505-327-1132
Four Corners Community Bank .... .............................................32 505-327-3222 New Mexico 970-565-2779 Colorado www.TheBankForMe.com
Partners Assisted Living.........31 313 N. Locke Ave. Farmington, NM 505-325-9600 www.partnersassistedliving.com
Halo Services.........................35 70 CR 4980 Bloomfield, NM 505-632-7007
PMS.......................................23 1001 West Broadway Ave. Farmington, NM 505-327-4796 www.pmsnm.org
US Eagle Federal Credit Union 11 3024 E. Main St. Farmington, NM 888-342-8766 useaglefcu.org
QuickLane Tire & Auto Center .27 5700 East Main St. Farmington, NM 505-566-4729
Vernon Aviation .......................5 Farmington, NM 505-564-9464 www.vernonaviation.com
Reliance Medical Group ..........25 3451 N. Butler Ave. Farmington, NM 505-324-1255 www.reliancemedicalgroup.com
Ziems Ford Corners................28 5700 East Main Farmington, NM 505-325-8826
Highlands University ..............15 505-454-3004 nmhu.edu/energy Kelley Oilfield Services ...........36 3601 N. 1st Suite M 505-632-2423 Bloomfield, NM www.kosinm.com
Navajo Transitional Energy Company ....................21 www.navajo-tec.com
Rush Truck Centers .................3 6521 Hanover Road N.W. Albuquerque, NM 505-839-3600 800-357-6643 www.rushtruckcenters.com Sanchez and Sanchez...............7 Farmington, NM 505-327-9039 SunRay Casino .......................19 Farmington, NM 505-566-1200
www.basinresourcesusa.com • FaLL 2016
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