4 BASIN RESOURCES
Spring 2014
contents
Year-End Closure, Purchase APS shuts down units 1, 2 and 3 to reduce emissions
Hard work opened doors
26
Service, dedication made business grow
On the move Henry Production and Pumps & Services now in same location
Good News Travels Fast
Encana plans to add 45 to 50 wells in 2014
36
Connectivity
Construction nears completion
Tribes, communities benefit from federally funded electric upgrades
Udall backs LNG exports
18
All for exports
Conference to be held May 7 and 8
More than $300 million
Farmington Museum Energy Hall
8
School of Energy expanding program
Four Corners Oil and Gas Conference set
10
14
40
32
Senator: This is an important industry to New Mexico
35
Gessing: There is global opportunity for San Juan Basin
22
Energy News
42
Across the Nation www.basinresourcesusa.com • SPRING 2014
www.basinresourcesusa.com •SPRING 2014
6 BASIN RESOURCES
Editor’s note
A spark of hope on the horizon in 2014 Don Vaughan puBliSHER
Cindy Cowan Thiele EDiTOR
Debra Mayeux Dorothy Nobis Bill papich CONTRiBuTiNG WRiTERS
Josh Bishop CONTRiBuTiNG pHOTOGRApHER
Suzanne Thurman DESiGNER
Shelly Acosta DeYan Valdez Aimee Velasquez SAlES STAFF For advertising information Call 505.516.1230
Still stuck in the recession with dry natural gas output at a 20-year low, there hasn’t been a lot of good things to talk about in the San Juan Basin over the last couple of years. But lately, talk in the oil patch has begun to turn from the stagnant almost nonexistent natural gas production to real hope for the Mancos Shale. That talk has begun to turn into some real proof as companies are beginning to invest and see solid opportunities in the Basin again. Encana announced its future plans and the San Juan Basin is one of the company’s five core liquid-rich plays the company will focus in 2014. To date, Encana has spent approximately $200 million to explore the Mancos Play and in 2014 they plan to invest between $300 million and $350 million in the San Juan Basin while running a two-to-four drilling rig program to drill 45 to 50 net wells in 2014. The company said this will optimize its completion process by continuing to advance its pace of development and will work further to reduce well costs. Also, in 2013 WPX Energy had 15 wells in the Mancos and the company has announced plans to budget $200 million to drill 37 more wells, according to its third-quarter earnings report. This has area industry leaders encouraged and many believe these investments will spur other companies to follow their lead. Of course, we’ve been through these mountains and valleys many times and businesses are still cautious about declaring economic victory just yet. However, when companies start putting money where their mouth is, the area starts to take notice.
Cindy Cowan Thiele
www.basinresourcesusa.com
Majestic Media 100 W. Apache Street 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 ommissions. © 2014 Basin Resources magazine.
www.basinresourcesusa.com •SPRING 2014
www.basinresourcesusa.com •SPRING 2014
8 BASIN RESOURCES
good news travels fast Word has gotten out about the quality of the training offered by the San Juan College School of Energy. Because of the ever-increasing demand from the industry and the community, the School of Energy is expanding its Well Control program to other community colleges throughout the country. We have created an interactive television, or ITT, Well Control course that provides the training needed to be proficient as a supervisor for drilling, workover and completion, and to receive an International Association of Drilling Contractors, or IADC, certification and accreditation from San Juan College. The ITT classes will give students at Panola College in Carthage, Texas, through Workforce Training, the same opportunity to be accredited and certified as our students in the Four Corners. Panola’s first class was scheduled for the end of January. The School of Energy will provide students with simulators so they can complete the course requirements. Those at the School of Energy and San Juan College appreciate the opportunity to share these programs with those
throughout our country who are experiencing a high boom in oil and gas production. The Well Control program is also being extended to community colleges in Wyoming and Ohio. Our focus will continue to be on providing a curriculum to those working in the oil and gas industry to help them obtain the education and training they need to be successful in their chosen career. The School of Energy is also working with the industry to provide a series of short courses for those who can’t attend college on a full-time basis. The 18-month program will give students an associate degree in Petroleum Production Operation at a cost of under $4,000 for the degree. These new ventures of providing classes online and through ITT will help San Juan College and the School of Energy meet the high demand from the industry for professionally certified and educated field technicians. If you’d like more information about the Well Control program, call 505.566.3880, or for any other training offered by the School of Energy, please call 505.326.5705.
ranDy Pacheco Dean of School of energy San Juan college www.basinresourcesusa.com • SPRING 2014
10 BASIN RESOURCES
“Our plan for the plant moving forward saves APS customers nearly a half-billion dollars over other energy sources and maintains a highly reliable, cost-effective source of electricity generation for APS and other users in the Southwest.” — Mark Schiavoni ExEcutivE vicE PrESidEnt aPS oPErationS
www.basinresourcesusa.com •SPRING 2014
BASIN RESOURCES 11
Year-end closure, purchase APS shuts down units 1,2, and 3 to reduce emissions DebrA MAyeux Basin Resources In an effort to reduce carbon emissions in the Four Corners region, Arizona Public Service, or APS, closed units 1, 2, and 3 of the Four Corners Power Plant and purchased the Southern California edison interests in units 4 and 5. The move
SPRING 2014 • www.basinresourcesusa.com
came Dec. 30, 2013, and had been planned since November 2010. It included a plan to install emission controls on units 4 and 5, which are considered by the company to be “more efficient units,” according to a press release from APS. APS CeO Don brandt referred to the closure and purchase as “bittersweet,” but also as a “milestone” for the plant, which is one of the oldest coal-fired plants in the region. The plant opened in 1963 with units 1 and 2, and then added unit 3 in 1964. “We have completed a transaction that will benefit the environment, allow us to continue to support the economy of the Navajo Nation and surrounding community, and help electric users in
the Southwest with an important, low-cost generating resource,” brandt said. “Generations of Four Corners employees have dedicated their careers to running those three units to keep lights on for our customers.” APS plans to install selective catalytic reduction equipment on units 4 and 5 by July 31, 2018, to meet the best Available retrofit Technology, or bArT, requirements set forth in August 2012 by the environmental Protection Agency. “Our plan for the plant moving forward saves APS customers nearly a half-billion dollars over other energy sources and maintains a highly reliable, cost-effective source of electricity generation for APS and other users in the Southwest,” said Mark Schiavoni, executive vice president for
12 BASIN RESOURCES operations at APS. “Along with natural gas, nuclear, renewable and energy efficiency, coal has an important place in our company’s balanced energy portfolio.” APS purchased Unit 4 from Southern California Edison for approximately $182 million, and then filed an application Dec. 30, 2013, with the Arizona Corporation Commission to recover costs associated with the purchase of Southern California Edison’s interest in the plant. This came about because the
"
%
#
-3) 95-0+6-4,)34; -345 -( &*)5: ; &.)4 )37-') $) *-.. 3)&5,-0+ -3 :.-0()34 -345 -(
-7) -3) !3&-0-0+ %163 &'-.-5: 13 634 )45&63&05 :45)/4 ; #),-'.) :45)/4 .)&0 +)05 :45)/4 ; 3&+)3 &) &4 10-5134 )35-*-)( !)',0-'-&04
&7-0+ -7)4 "
"$
312)35: 4-0') #
%
$
!" "
&-0 ; &3/-0+510 ; 888 * *-3) '1/ ; )/&-. 4&.)4 * *-3) '1/
-'
company’s 2012 rate settlement case included provisions that allowed APS to seek rate relief for those expenses prior to its next rate case. The filing amounts are expected to have a rate increase of about 2 percent for the APS residential customer. The next step of this plan is for APS to proceed with decommissioning work on Units 1, 2, and 3. This includes dismantling and removal of the older units and any associated structures. This will be handled by employees who were responsible for operating the units, and should last for the next three years. The decommissioning work allowed APS to keep its promise of “no layoffs” at the plant, which employs 434 workers, 82 percent of whom are American Indian, according to Schiavoni. The workforce will be reduced through attrition. APS historically has been one of the largest employers in the region. Along with its support of Navajo Mine, it is believed that the Four Corners Power Plant has an estimated $225 million annual economic impact on the Navajo Nation and Four Corners economies. The company has estimated that during the next 30 years the continued operations at Four Corners Power Plant could generate more than $6.3 billion in economic value for the region. Also, APS filed an application with the Arizona Corporation Commission to recover costs associated with the purchase of SCE’s interest in the plant. The company’s 2012 rate case settlement includes a provision that allows APS to seek rate relief for those expenses prior to its next rate case. The filing amounts to a bill impact of about 2 percent. For a typical APS residential customer, monthly bills would increase from $140.12 to $142.89. APS, Arizona’s largest and longest-serving electricity utility, serves more than 1.1 million customers in 11 of the state’s 15 counties. With headquarters in Phoenix, APS is the principal subsidiary of Pinnacle West Capital Corp. (NYSE: PNW).
www.basinresourcesusa.com • SPRING 2014
14 BASIN RESOURCES
Bill Papich photo
Farmington Museum Energy Hall Construction near completion; exhibit review committee forming Bill papich Basin Resources construction of Farmington Museum’s new energy exhibit building is nearing completion. Next comes the process of making detailed decisions on the exhibits that will fill the building. Museum staff is planning to form an exhibit review committee to address exhibit
details and to provide advice to museum curators on how to prepare for placement of museum exhibits and their details. “We would want the committee to review our current plans and provide input on what we may be missing and what more we need to include to make sure that what we have is accurate,” said Bart Wilsey, museum director. planning for the Farmington Museum
Energy hall began 10 years ago. area oil and natural gas production companies and power plants have contributed approximately $1 million for exhibits. Wilsey said the funding goal for museum exhibits is $2 million. construction of the building is funded by the city of Farmington through a $2.5 million city bond renewal. The Farmington Museum Energy hall
www.basinresourcesusa.com • SPRING 2014
BASIN RESOURCES 15 will be 7,500 square feet of exhibits that explore the entire process of energy development. The Energy Hall is intended to tell the story of how natural gas, oil and coal are formed, how these minerals are discovered, and the process of producing energy from these minerals, and how the energy produced is transported and utilized. Technological innovations in energy exploration, production and transportation are to be included. “In the words of T. Greg Merrion – he put it best when he donated $100,000 for the Energy Hall exhibit,” said Wilsey. “He said, ‘I want a world class exhibit.’” T. Greg Merrion is CEO of independent oil and natural gas producer Merrion Oil and Gas Corp. of Farmington. Wilsey said Merrion’s words sum up what everybody involved in planning for the Energy Hall wants: A state of the art energy exhibit that becomes nationally known and puts Farmington on the map as a destination for visitors from throughout the United States. The Energy Hall also is intended to become a regional destination for students who attend schools with energy exploration, development, production and transportation on their school curricula. Wilsey said the Energy Hall would include exhibits on renewable energy such as wind, solar, geothermal, hydrogen fuel cells and algae that can be converted into energy. “If you go from the dinosaurs to the renewables, that’s a big stretch,” Wilsey said. “So we’re grappling with the story of energy, how to tell that story, and the story is huge.” That’s where the review committee comes in, Wilsey said, to assist in the process of deciding what exactly to include in the exhibit − with the resources available to the museum and the
SPRING 2014 • www.basinresourcesusa.com
+
"
+
%! " '#"
))) &#(' ) &' #" % ' &($$ * #!
16 BASIN RESOURCES
Farmington Museum Energy Exibit Floor Plan
space available − and what not to put in the Farmington Museum Energy Hall. Exhibits are planned to include a ride into an underground coal mine, a moving pump jack and other natural gas and oil
production equipment exhibits. A “longwall” coal mining machine with an interactive control panel for visitors also is planned. Of the 7,500 square feet of space
#
available in the Energy Hall, approximately 5,000 square feet will focus on the oil and natural gas industry. Approximately 2,500 square feet will be exhibits on the coal mining industry and electricity production
#
!!!
!
!"
www.basinresourcesusa.com • SPRING 2014
BASIN RESOURCES 17 by power plants. On the drawing boards are exhibits on natural gas pipeline transportation and scale models of a power plant and an open pit coal mine. A major part of the planned geology exhibits will include an exhibit of the inland sea that covered the San Juan Basin approximately 100 million years ago when Farmington was a tropical area. When the inland sea receded, layers of sedimentation covered the organic materials – the
Investing resources to save resources. Over the past five years, Encana has substantially invested in projects to improve our industry’s environmental performance and safety standards through developing innovative technology.
Learn more Learn more about Encana’ Encana’ss oper operations ations in San Juan: encana.com/sanjuan
SPRING 2014 • www.basinresourcesusa.com
tropical forests, marine life, dinosaurs – that today have become natural gas, oil and coal. The inland sea exhibit is planned to include a simulated underwater experience of 100 million years ago so visitors can observe the prehistoric life that became the fossils on display in the museum’s fossil collection. Farmington Museum’s existing oil and natural gas exhibit of 1,500 square feet will be incorporated into the new exhibits. The existing museum includes much of the Alan Hawkinson Collection of oil and gas memorabilia dating back to the beginning of the 1900s. The collection relates to the history of the oil and gas industry consumer markets. There are thousands of memorabilia items from the earliest gas stations and from the early oil and natural gas production and transportation companies that operated in the San Juan Basin. The new Energy Hall will provide space for a full-sized replica of a 1940s gas station that showcases items from the Alan Hawkinson Collection. Museum planners anticipate that the approximately $1 million that still is needed for the new Energy Hall’s exhibits would come from donations by the energy industry, science and museum foundations, the state legislature and the city of Farmington.
18 BASIN RESOURCES
Industry professionals, businesses come together Four Corners Oil and Gas Conference set for May 7 and 8 DOROTHY NOBIS Basin Resources In 1994, visionaries in the oil and gas industry decided to host an oil and gas conference to bring together professionals in the business to learn about new rules and regulations that affected the oil patch. That first conference was held at the Farmington Civic Center and was organized by six organizations – chapters from the American Petroleum Institute, or API, the Society of Petroleum Engineers, or SPE, the National Association of Corrosion Engineers, or NACE, and the Ameri-
can Society of Safety Engineers, or ASE, along with the Desk and Derrick Club of Farmington and the Farmington Chamber of Commerce. Each partner had – and still has – a vested interest in the oil and gas industry in the San Juan Basin and the Four Corners and had volunteers serve on the conference’s Executive Board. Today, 20 years later, the Four Corners Oil and Gas Conference has grown, taking its “home” from the Civic Center to San Juan College to McGee Park as attendance demanded more growth and more room. This year, the conference will be held May 7-8. The conference is not open to the
public, due to safety concerns, and there is no charge to attendees, who must pre-register. Jan Tomko is the conference coordinator for the conference, which is held every other year. In spite of challenges the industry has faced, the conference continues to be successful, she said. “The conference brings together professionals in the industry, who share knowledge and information and (a chance) to network with their peers. It’s a great opportunity for businesses to promote themselves.” Karen Ortega has been involved in the conference for many years and has served
www.basinresourcesusa.com • SPRING 2014
as the conference chair for the past two conferences. “Since its inception, the goal of the Four Corners Oil and Gas Conference has been to provide information on new types of technologies, plus new and changing regulations that affect the oil and gas industry,” she said. The conference offers a trade show, which is a big draw for those who attend as well as the vendors who hope to get one of the 399 booth spaces available. The booths are awarded first to previous vendors, then on a first-come, first-served basis, Tomko said. “In 2012 we had 305 exhibitors,” she said. “Not all are local – many of the vendors come from outside the region. Some are trying to move into the area and find the conference a great opportunity to showcase their goods and services.” Gavin Tweedie is the chair of the Program Committee, which strives to bring in speakers who share their knowledge of the industry. “We are very excited to have Encana and WXP Energy coming to discuss their production and future plans for the Mancos Shale development,” Tweedie said of this year’s speakers. “We will have Water Management Solutions, New Mexico Tech and LT Environmental all coming to talk about ground water usage and issues around that.” Environmental experts from WXP and Exterran will discuss
SPRING 2014 • www.basinresourcesusa.com
20 BASIN RESOURCES Ozone and New Source Performance Standards, or NSPS, JJJJ (an alphabet numbering system) regulations and the effects on the industry, Tweedie added. In addition, safety presentations and regulatory updates are also on the speaker list. “We always want to make sure that we have a good quality program with speakers who are relevant to what’s going on in the industry,” added conference chair Karen Ortega. “We always have a great list of speakers and it’s hard to have to choose among so many great speakers when we only have so many slots available.” Putting on a conference that attracts people from throughout the Southwest takes the time and effort of many, Ortega said. “We have representatives from the six sponsoring organizations, plus our conference coordinator, who sit on the Executive Committee, which is a total of 16 people. However, it takes many more volunteers
“We are very excited to have Encana and WXP Energy coming to discuss their production and future plans for the Mancos Shale development.” — Gavin Tweedie ProGram CommiTTee Chairman behind the scenes and countless hours to make sure our conference is a success. We couldn’t do it without the help of the sponsoring organizations.” After conference expenses are paid, the committee divides the proceeds among the six partners. “Many of them use it (proceeds)
to offer scholarships for students to attend college or for members to receive training and certifications,” Tomko explained. In spite of the hours spent planning and hosting the conference, Karen Ortega said the conference is an event she and the others enjoy. “I, like many others in the Four Corners region, rely on the oil and gas industry in several ways,” she said. “I find the friendships made and the familiar faces we see year after year very rewarding.” “I want to do anything I can to help make the conference a success and have people wanting to come back,” Ortega added. For additional information on the conference, visit the website at www.fourcornersoilandgas.com or call Jan Tomko at 505.258.1748 or the Farmington Chamber of Commerce at 505.325.0279.
www.basinresourcesusa.com • SPRING 2014
)0 + (()/ -$)(,
+" ,+-, & -$)( $( -# )+( +,
.'*$(" ($-, ("$( , & ,2
+-,
! "
!
!
!
! !
!
/ + +, 1* +$ (
+ ( 0)+% 2 .'*$(" --$(" * $+
,- - "( 000
($-
( 23 &))'!$ & 2 ., 2 000 *)0 +$(()/ -$)(, ( -
22 BASIN RESOURCES
Jeff Balmer, asset manager of the San Juan Basin for Encana, speaks March 18, 2013, at San Juan College during the San Juan Basin Energy Conference. – Debra Mayeux photo
More than $300 million
Encana plans to add 45 to 50 wells in 2014 DEbra MayEux Basin Resources The San Juan basin is one of five core liquids-rich plays on which Encana Corporation will focus in 2014 to generate profitable growth, according to a company statement issued Dec. 11, 2013. “In November, we announced a clear vision and strategy to lay the foundation for Encana’s future,” President and CEO Doug Suttles said. “Going forward through to 2017 we will measure success by our performance on three key indicators: our transition to a balanced commodity portfolio, operational ex-
cellence and the integrity of our balance sheet.” Encana plans to transition to a more balanced commodity portfolio and achieve a goal of deriving approximately 75 percent of its cash flow from oil and natural gas liquids by 2017, by focusing on three quarters of its planned $2.4 billion to $2.5 billion capital investment on five oil and liquids-rich assets: the San Juan basin, Montney, Duvernay, DJ basin and the Tuscaloosa Marine Shale. Encana plans to invest between $300 and $350 million in the San Juan basin while running a two-to-four drilling rig program to drill 45 to 50 net wells in 2014. The
company said this will optimize its completion process by continuing to advance its pace of development and work further to reduce well costs. Work will also continue to delineate further the company’s acreage, with Encana intending to work with the bureau of Land Management to find ways to streamline the permitting process. Encana plans to accelerate its development of the oil and liquids-rich areas of the Montney play, specifically the Gordondale, Pipestone and Tower areas, while continuing to improve capital efficiency across the play. With an investment of nearly $900 million, Encana plans to run a six-to-eight drilling rig program to drill 80 to 85 net wells in 2014.
www.basinresourcesusa.com • SPRING 2014
Fifteen to 20 wells are expected to be drilled in Duvernay with Encana moving into a full resource play hub development mode with pad drilling in the northern Kaybob area of the Duvernay. The company also plans to complete its evaluation of the southern Willesden Green while finalizing a midstream infrastructure solution to support future development. This will be an investment of nearly $300 million. Encana’s focus in the oil and liquids-rich DJ Basin play will be continuously to improve capital efficiency with a goal to reach approximately 70 percent year-over-year growth in production in the play. The company plans to invest $250 to $300 million and run a four-tosix drilling rig program to drill 40 to 50 net wells in 2014. In 2014, Encana also will complete its assessment of the Tuscaloosa Marine Shale with plans to invest upwards of $150 million to operate one-to-three drilling rigs and complete nine-to-12 net wells. These five assets are expected to make up about 25 percent of total production in 2014 while generating approximately 45 percent of total upstream operating cash flow before the impact of commodity price hedging. This reflects a 10 percent reduction in planned capital investment from its 2013 levels, but the company’s forecasted production is expected to remain the same. Total liquids production is expected to
SPRING 2014 • www.basinresourcesusa.com
24 BASIN RESOURCES grow by 30 percent year-over-year, which is expected to offset a small decline in expected gas production for 2014. “With growth in higher margin liquids, the company is estimating it will achieve an approximate 10 percent increase in netbacks in 2014,” the prepared statement said. Encana said it will maintain its balance sheet integrity by “aligning its capital expenditures with cash flow and unlocking value from its asset base through an initial public offering of its
0
*&/ (*'$'# $!%-)+
0
"&$."*$"+
0
$'" '
0
**/
0
,"*$'#
-,
0
3625>,,8 *,790-0,+ 04
0,2+ #,7;0*,8
(4+-(73 #,7;0*,8 @ 08658(2 5- 54 (?(7+5:8 " " 02-0,2+ '(89, 04*2:+04. @ 702204. 2:0+8 3:+ *:9904.8 @ >+75*(7)54 89(04,+ 8502 @ !09 9(41 )599538 @ '(8/5:9 8,+03,49 @ $(41 $7:*1 '(8/5:9
# (4+
Clearwater Royalty business. The company also plans to repay from cash a US$1 billion, 5.8 percent note maturity due May 1, 2014.” The goal would be to create a “sustainable shareholder value” into the future, Suttles said. “The work we completed in 2013 has positioned us very well for a strong start in 2014, a start well aligned with our new strategy.” As a result of Encana’s “focused strategy and capital investment plan,” the company projects its 2014 upstream operating cash flow, including hedging, to nearly $3.2 billion. Total cash flow is expected to range between $2.4 and $2.5 billion. Natural gas production is expected to average between 2.6 billion cubic feet per day and 2.8 billion cubic feet per day with total liquids production reaching75 thousand barrels per day. These plans came after the company went through a 20 percent workforce reduction to restructure in November 2013. “We have completed the most difficult part of our transition and I want to thank all of our staff for their professionalism and continued dedication to the company through what was a tough time for everyone at Encana,” Suttles said. “With the announcement of our 2014 plans, we are solely focused on building an exciting and successful future for Encana.
#
=,369
7:.
@ ',9 7> 04. &(*::3 $7:*18 @ >+75 =*(;(9054 @ '(9,7 $7:*18 @ :36 $7:*18 >(7+ @ 5)02, ,4970-:.,8 258,+ 556 702204. 2:0+ (4(.,3,49 @ %297( 0297(9054 %4098 @ 2(70-0,78 @ 029,7 !598
@ @ @ @ @ @
!" 0789 0+ (?3(9 # 54-04,+ #6(*, 75:4+ 089:7)(4*, # /5:78
08 ( #(-,9> 0789 536(4> ,3),7 (4+ 04 .55+ 89(4+04. <09/ 2*5/52 53620(4*, @ # ,9<572+ (4+ ! !7,30,7 #(-,9> 53620(4*, 5485790:3
(4+-(73
!,73099,+ #:7-(*, '(89, (4(.,3,49 (*0209>
!/54,
"
75:*/ ,8( ?9,* @ (= 57 <<< 04+:8970(2,*58>89,38 *53 www.basinresourcesusa.com • SPRING 2014
# %" (! *!&% &' ! # # !% !# ! # &+)* +* !* $ ! *!&% !' #!% &%)*(+ *!&% (* &,!% ##. +$') ,. +# ( " & " & & ( &/ ( !##
!# .
-% (
( )!
%*
( $ !% * & %
!! $ !# SPRING 2014 • www.basinresourcesusa.com
" -)!
& ( !% ) * & ( $ % *
26 BASIN RESOURCES
Hard work opened doors Bill Bailey’s consistent service and dedication made the business grow DeBRa Mayeux Basin Resources Bill Bailey graduated in the spring of 1982, and by summer of the same year he had a business. Bailey purchased a welding rig and began seeking clients for Bailey’s Welding. He learned his skill at Farmington High School, where he completed two years and 1,080 hours of vocational training.
With his welding truck and knowledge, Bailey began taking any odd job that came his way. “I needed to have experience, and I was young and nobody knew who I was,” he said. Thirty-two years later, Bailey and his wife Vanessa have an office, welding shop and more than 30 acres of land at 505 County Road 350 in Farmington.
SPRING 2014 • www.basinresourcesusa.com
BASIN RESOURCES 27
SPRING 2014 • www.basinresourcesusa.com
www.basinresourcesusa.com â&#x20AC;˘ SPRING 2014
BASIN RESOURCES 29
The company expanded on Nov. 4, 2013, when it moved from its old location on U.S. 64 to the new building. “We purchased the place and remodeled the offices,” Bill said. It was a necessity. The business outgrew its old space that consisted of a shop on three acres and an offsite office. Now, it is a one-stop shop for all of Bailey’s services. The growth came from his soughtafter services. Bill proved he could provide the jobs that were needed, but it
took a lot of work and dedication to the craft. In the early days, he would take his welding truck out to well sites for well hookups and rig maintenance. He also did some ornamental work – “Whatever I could.” Some of Bill’s first jobs included building compressor shields for Meridian. “That got us in the door,” Vanessa said. Bill started Bailey’s Welding as a sole
SPRING 2014 • www.basinresourcesusa.com
proprietorship. When he received contracting jobs, he had to hire a few employees. “We wanted to keep it small, but as time went on there were opportunities for growth,” he said. “We went from a small shop to a bigger shop, to a bigger shop.” At one point the Baileys were operating the shop, but doing all of the office work from their home. Then in 2001, the business grew big enough to become incorporated.
30 BASIN RESOURCES “Bill has worked really hard and we’ve been totally blessed,” Vanessa said. Today Bailey’s Welding employs 23 people and has contracts with such companies as ConocoPhillips, Enterprise and XTO. “We build tanks at the shop. We do field work, pipeline maintenance,” Bill said. “We haul materials to locations with our semis.” They work with heavy equipment provide dirt work and remediation work, while still providing the service that founded the business – welding. Bill is surprised when he thinks about how big his business has become. “I just thought I would keep it small,” he said. “We are thankful for the people who gave us the opportunity to show them what we could do.” He has built a business that can be passed down to the Baileys’ only son,
“We are thankful for the people who gave us the opportunity to show them what we could do.” — Bill Bailey
Timothy, who is studying business at New Mexico State University. “He, hopefully, will be able to help his dad someday,” Vanessa said. And with all of the extra space at their
new location, “We have a lot more room to grow and work and meet our customers’ needs,” Bill said. For more information about Bailey’s Welding call, 505.632.3739.
I N - H O M E S O LU T I O N S F O R S E N I O R S A N D FA M I L I E S
Missing work to care for your loved one? Injured on the job?
PALS can help! Companionship Home cooked meals Light housekeeping Errands/Transportation - Grocery Shopping - Doctor Appointments - Hair Appointments & more Philips Lifeline Medical Alert Service Philips Medication Dispensing Service
PA LS
2-24 hour Care Live-in Service Respite Care or Family Relief Dementia/Alzheimers Care Individualized Care Personal Care - Toileting - Bathing - Transferring End of Life Care
P artners A ssisted L iving S ervices 505-325-9600
313 N. Locke Ave. • Farmington • www.partnersassistedliving.com www.basinresourcesusa.com • SPRING 2014
SPRING 2014 • www.basinresourcesusa.com
32 BASIN RESOURCES
Udall backs LNG exports Senator: This is a tremendously important industry to New Mexico Debra Mayeux Basin Resources u.S. Senator Tom udall, D-N.M., has joined other state officials to push for the export of liquid natural gas, in order to support natural gas exploration in the state. “This is a tremendously important industry to New Mexico,” udall said during an October meeting with industry officials. “Most New Mexicans know this industry contributes a lot to the state.” The oil and gas industry employs 68,000 New Mexicans and historically has provided 50 percent of the state’s budget through royalties and taxes. udall wants to see the oil and gas industry continue to operate and provide jobs and tax base to the state, he said. The industry, however, has been stag-
“We want to urge the Energy Department applications and move them along.” — U.S. Senator tom Udall d-n.m.
nant, with oil production down and natural gas exploration on hold. There are many reasons for the decline, including the low cost for natural gas, which slowed the market for the product, as well as dif-
ficulty placed on the industry by federal agency that has slowed down the permitting process. The San Juan basin has a potential to develop “tens of trillions” of cubic feet of
The Benefit of LNG Exports
www.basinresourcesusa.com • SPRING 2014
BASIN RESOURCES 33
Estimates of U.S. Total Natural Gas Resources Base vs. Total U.S. LNG Exports and Consumption
Planned and Proposed LNG Liquifaction Capacity
That's My Bank!
natural gas to be marketed inside and outside of the United States. The reason this hasn’t happened is the price of natural gas, New Mexico Oil and Gas Association President Steve Henke said “There hasn’t been drilling in the San Juan Basin because of decreased natural gas prices,” Henke said. Oil exploration also has slowed here because of regulations that limit companies’ access to public lands, according to Henke, who pointed out the BLM has a hydraulic fracturing rule and limited access to public lands for production. “There’s a lot of natural gas that can be developed, but we need the support of the BLM for that to happen,” Henke said. Udall, however, said there has been Congressional legislation to streamline the process for permitting. Congress developed a pilot program to streamline permitting in both the Permian and San Juan Basins. “That pilot of this area was to make sure there is better permitting and better enforcing,” Udall said. The law has expired and the senator is receiving requests to reauthorize it. “I think it’s a good law” Udall said, adding he would like to see it continued. Udall also joined with 33 U.S. Senators in sending a July 9 letter to Energy Secretary Earnest Moniz asking the Energy Department to speed up the process to allow for the exportation of liquified natural gas, or LNG, to other countries.
GROWTH & STRENGTH Larry McGee, Colorado Market President Shelia Mathews,, CEO & President
SPRING 2014 • www.basinresourcesusa.com
34 BASIN RESOURCES “The world is hungry for U.S. natural gas, and the geopolitical implications of LNG exports are tremendous. To bolster their own energy and national security profiles, nations around the world are seeking opportunities to diversify their energy supplies,” the senators wrote. “For the first time, the United States is being recognized as one of their options. Responsible development of natural gas can benefit the environment and our international priorities.” The letter asked the Energy Department to consider exporting LNG to Europe and Japan; both nations are in need of natural gas to “fuel their economies.” The Energy Department has received 20 applications for LNG export projects, but set a timeline of considering one every six to eight weeks, according to the letter. “We want to urge the Energy Department applications and move them along,”
Is the Industry Ready?
Udall said. This could drive up the price of natural gas and encourage increased production. Secretary Moniz responded on Sept. 12 saying the energy department must “con-
duct a public interest review of LNG export applications to non-Free Trade Agreement countries and to grant the
* Natural Gas 48
,%''" / ,!- 0 " ! $" &- 0 /(+", "+' %," $ %)- (*," -.
%) 0
"(").-
,(%)#.*) 01 www.basinresourcesusa.com •SPRING 2014
BASIN RESOURCES 35
All for exports
Gessing: There is global opportunity for San Juan Basin DeBra Mayeux Basin Resources There is great economic opportunity for the San Juan Basin, if natural gas becomes a key export from this country and the Federal Governments open up public lands for production. This was the message from Paul Gessing, executive director of the rio Grande Foundation during the October 2013 Desk and Derrick Club banquet at the San Juan Country Club. Gessing has been pushing for the u.S. to start exporting natural gas to countries such as Japan, India and europe. “Japan really wants our natural gas,” Gessing said. “We could be a major producer and exporter of natural gas.” There is a global “opportunity” for natural gas exportation and, as far as oil production goes, the u.S. is topping the global market, with an opportunity to overtake russia as the world’s leading oil producer. “No one thought that would happen,” Gessing said. “We are on an upward trend heading north in terms of production.” This could help in Gessing’s quest to make New Mexico into an “economically free state.” He focused on ways to do that during his presentation. It includes seeking support from the public for a campaign to encourage the Federal Government to return control of the public lands to the Western States for a local management. “Wouldn’t it be great if the state of New Mexico controlled Carlsbad Caverns,” Gessing said. Instead there are “nameless, faceless bureaucrats” who make it difficult for states to access public lands and the minerals found below the land. “The federal government is moving all too slowly on oil and natural gas develop-
“Japan really wants our natural gas. We could be a major producer and exporter of natural gas.” — Paul GessinG executive director
rio Grande Foundation ments, with declines of 33 percent for natural gas production,” Gessing said. “With all of the energy out there, the states that have private land holdings are doing well.” North Dakota is having a boom at this time, much like Pennsylvania. Thirty percent of the nation’s coal reserves are found in states west of the Mississippi and 20 percent of the nation’s oil and gas reserves are in those same states – one of which is New Mexico. The problem is that the bureaucracy in Washington does not allow these reserves to be developed without a lot of red tape and expenses through the permitting process, according to Gessing. With 41 percent of New Mexico’s land being federally owned, oil and gas companies have to wade through lengthy and costly permitting processes to access the reserves. Gessing argues that if the states were allowed to manage the land, “incredible wealth could be generated.” “New Mexico would be transformed, if it controlled its own resources,” Gessing said, adding that 68,000 jobs could be added to the state, along with $8 billion to the economy.
SPRING 2014 • www.basinresourcesusa.com
Without the ability to access those natural resources, New Mexico has an estimated two-tenths of a percentage point for economic growth. Gessing pointed out that he is not suggesting the federal government open up the forest or national parks for the purpose of oil and gas production. He did, however, say that he believes the land is not being “managed effectively for the economic benefit of our nation.” National forests are burning down each year from fires that burn uncontrollably because the land is not appropriately managed. There also are questions about the way the national parks are being managed – specifically after the recent government shutdown. “It’s embarrassing for a First World country not to be able to open its major tourist attractions,” Gessing said. The rio Grande Foundation is supporting a version of House Bill 292, which was introduced during the 2013 Legislative Session in Santa Fe. It is the Transfer of Public Lands act, which encourages the Federal Government to give New Mexico back its
* Gessing 48
36 BASIN RESOURCES
“We decided to expand ourselves a bit. We’re preparing for more growth in the basin.” — Sam Henry, Henry Production PreSident
www.basinresourcesusa.com • SPRING 2014
On the move Henry Production, Pumps and Services now in same location Debra Mayeux Basin Resources Henry Production opened its doors in 1962 in the San Juan basin when Harvey Henry made the decision to live in Farmington rather than be transferred by ConocoPhillips to North Dakota. Harvey believed there was opportunity in the region, so he purchased a small production business from Jim Gould for
SPRING 2014 • www.basinresourcesusa.com
$2,300. “There were a bunch of contract pumpers at the time, and I thought I could do better than they did,” he said. The family-owned business has persevered through the industry’s booms and busts, and in preparation for the next possible boom, the business changed locations to provide it with more space.
Henry Production and secondary company Pumps & Service recently moved from 603 and 603 S. Carlton ave., to 3430 Morningstar Drive. “We’ve actually owned the building for about five years,” said Sam Henry, president of the company. The move allowed Henry Production
In the new office is the typewriter that Virginia Henry began using in 1962 to type invoices at the kitchen table. Three months after the company started, after picking up several leases to operate, Harvey Henry hired his first employee. For the first seven years, he worked every day of the week. – Josh Bishop photo
and Pumps & Service to work out of the same location. “We decided to expand ourselves a bit,” Sam said. “We’re preparing for more growth in the basin.” Pumps & Service opened in 1978 as a service organization. “Pumps & Service sells, services and fabricates durable equipment systems — pumps, compressors, generators, controls and more — that ensure smooth, around-the-clock production at agricultural sites, construction sites, energy production plants, food manufacturing plants, landfills, national laboratories, oil and gas sites, semi-conductor plants and wastewater treatment plants,”
according to the website, pumpsandservice.com. “Our 36-year record of successful turnkey engineering projects is driven by our trusted industry and equipment experts,” the website stated. “We know what it takes to keep systems working seamlessly to ensure uninterrupted processes, greater production and larger profits for our customers.” Henry Production is a “compressor rental, maintenance and fabrication company,” Sam said. The company provides rental and sales on a flexible schedule including 30-, 90-, and 120day contracts. The two companies employee 90 people.
www.basinresourcesusa.com • SPRING 2014
40 BASIN RESOURCES
Connectivity Tribes, communities benefit from federally funded electric upgrades Debra Mayeux Basin Resources The Navajo Tribal utility authority has been included in a more than $1.8 billion plan to improve electric service to 37,000 rural customers in 25 states. The u.S. Department of agriculture will award the Navajo Tribal utility authority $168 million to build 1,215
miles of line, will invest in smart grid technologies, and has made other system improvements to help 3,800 rural electric consumers in the arizona, New Mexico and utah portions of tribal land. “rural electric cooperatives have provided reliable, affordable power to rural communities for more than 75 years. Today’s investments will help ensure our electric infrastructure continues to deliver
reliable and affordable electricity for years to come,” agriculture Secretary Tom Vilsack said. The funding will include $45 million for smart grid technology and $73 million for renewable energy projects, and more than $213 million will benefit american Indian tribes. It is slated to build or improve 6,500 miles of electric line throughout the u.S.
www.basinresourcesusa.com • SPRING 2014
“This funding is part of the Obama Administration’s vision for a new rural energy economy and USDA’s commitment to creating economic opportunity in rural America,” Vilsack said. “Investments in smart grid technologies will continue to modernize our nation’s electric system and improve operational efficiencies.” Other entities receiving funds include Tri-State Generation in Colorado, which supplies electric power to La Plata County. This electric cooperative will receive three loans of more than $318 million to finance upgrades and modification to existing generation facilities in various parts of New Mexico, and it also will allow for upgrades to infrastructure in Colorado, Nebraska and Wyoming. Kit Carson Electric Cooperative in Taos will receive a $33 million loan to build 284 miles of distribution line and make other system improvements. The loan also will fund more than $2.2 million in smart grid projects and nearly $1.1 million for service to American Indians. It will benefit 1,346 electric consumers. “The modernization of the electric grid in New Mexico is extremely important if our economy is going to grow, because if we don’t have good electric service we can’t create new jobs,” USDA Rural Development State Director Terry Brunner said.
"(!
! '% "' !" " & ! & % && ! ' &&( " * ' % "!& %) ' "! "! * ' ' +# %' & ! %( " "& ""# " & "!'%" ,&' ' "(% ' !" " , ,"( * & & ! !' "&' & ) ! & & * & &(# % "% !) %"! !' ! !' #% ' & (& " '%( , "& ""# &,&' "*& ,"( '" #% & %) * ' % ! % (& ' ' ' % ! " ' "! ( ! "&'& * &" % ( , ' #%" && '
" # ",
(% ' & "
SPRING 2014 • www.basinresourcesusa.com
#%" && * % '" $( , '" ' % & ' ! #%") "(% "*! #"* % &"(%
' '% "' !" " & ! '' '" $( ', & %) "" "%* % '" & %) ! !, ! & ' ' ,"( , )
42 BASIN RESOURCES
.E. . N . . .E. . R. . G . . . Y. . . . N . . . E. . W . .
Across the Nation
. S.
Budget announced Permian play included in North American 2014 ConocoPhillips production
U.S. Energy Information Administration | Drilling Productivity Report
ConocoPhillips announced Dec. 6 a 2014 capital expenditures budget of $16.7 billion for continuing operations globally. The budget includes the company’s allocation of 55 percent of funds toward operations in North American and 45 percent toward Europe, Asia Pacific and other international businesses. There will be an increased investment in the Permian Basin, with the company promising to spend approximately two-thirds of development drilling program funds in the Lower 48. This would target development in “liquids-rich, unconventional plays in the Eagle Ford, Bakken and Niobrara, as well as conventional and unconventional plays in the Permian,” a press release from ConocoPhillips stated. Exploration and appraisal activity will focus on the Niobrara and Permian in the Lower 48, and the Canol, Duvernay and Montney plays in Canada. Internationally, unconventional exploration spending will be directed toward Colombia, Poland and China. There will be a higher allocation of capital to Alaska compared to 2013, reflecting increased spending on the CD-5 develop-
ment and higher activity resulting from improved fiscal terms from the passage of the More Alaska Production Act, the release said. There also are plans to “ramp up in operated conventional exploration drilling programs in the deepwater Gulf of Mexico and Angola.” ConocoPhillips CEO Ryan Lance said 2014 will be an important year for the company. “Since becoming an independent E&P company, we have set out to deliver a unique value proposition of 3 to 5 percent volume and margin growth with a compelling dividend. To position the company for these goals, we generated proceeds of more than $12 billion from the disposition of nonstrategic assets since the start of 2012, while investing in programs to drive future profitable growth,” he said. “Today, we have an unparalleled inventory of opportunities that will enable us to deliver organic growth from continuing operations in 2014 and beyond. In addition, our planned conventional and unconventional exploration activity should provide opportunities that can keep us on track for sustained growth and returns.”
* ConocoPhillips 44
www.basinresourcesusa.com • SPRING 2014
#"/1 1 %+& " +/ 1 % * "
#:,,2 $5, 55:9 A 089: 0+ 0:9 #;6620,9 #(-,:? 2(99,9 A 5*15;: $(.5;: 0:9 25<,9 A #/56 "(.9 /,30*(2 " "(04 #;0:9 A $?<,1
$A
$A
# A
#$
$
$/, 542? #*5:: (;:/580@,+ (4+ :8(04,+ 9,8<0*, *,4:,8 04 :/, -5;8 *584,89 -58 ,7;063,4: 9(2,9 8,4:(29 (4+ 9,8<0*, 8(+, )8,(:/04. (08 *,8:0-0,+ :5 -022 (22 3(1,9 35+,29 (4+ 90@,9 5- (08 *?204+,89 ",9608(:58 !;(4:0:(:0<, $ $,9:04.
#(2,9 A ,8954(2 540:589 ;2:0.(9 A 0>,+ &08,+ &08,-8,, 540:589 ,8:0-0,+ -58 # & $ # ,7;063,4:
#
#;8-(*, 542? A # A #(-,2(4+ ,+0* 089: 0+ A (:054(2 #(-,:? 5;4*02 #A
%
"
!
$8(0404. A #(2,9 A 54:/2? 496,*:0549 ",*/(8.,9 A 44;(2 496,*:0549 5= 8,99;8, ?+85 %) -* * * !( () ##) ! (*! !
3 $
54-04,+ #6(*, ",9*;, A 0./ 4.2, ",9*;, # #;6,8<09054 A $ #,8<0*, 509, #;8<,? A #/5=,8 $8(02,89
4 1!-+$"* 0(#&!" #"/1 '$ . , (- * ( % ) $ . , (- * ( 2 -! $)/ $ . , (- * ( &-./ &! $ '$ . )* *+( &-./ &! $ '$ ./ ( + ) -
(! +-'.%+, (! , (-
&%*
, (-
&%*
(( /+ "-&#1 - &*&*$ !$ ) %
%"!0(" -) ( )+ "
3 #
-
'
* *&
%
44 BASIN RESOURCES
PermIAn BAsIn shAle PlAy
Capstone Turbine gets multiple orders for customers CHATSWORTH, Calif. – Capstone Turbine Corporation, the world’s leading clean technology manufacturer of microturbine energy systems, announced today that it has received orders for two Capstone C1000s and an order for 25 Capstone C65 microturbines to be used for oil and gas production in the Permian Basin located beneath west Texas and southeastern New Mexico. According to an October 2013 article in Investors Daily, the Permian Basin receives a fraction of the press coverage accorded the Bakken and Eagle Ford, but it has more production potential than these two shale formations combined. The Permian is not just a shale oil play, nor is it a recently developed
basin. The Permian currently produces some 900,000 barrels per day of crude, about 12 percent of U.S. oil production. Some analysts expect Permian production to more than double by 2018 to 2 million barrels per day – a level last reached during the 1970s. The Permian Basin is projected still to contain recoverable oil and natural gas resources exceeding what has already been produced. Industry experts estimate that, at current prices, more than $3 trillion worth of oil and more than $300 billion of natural gas are yet to be extracted. These projections dwarf the combined estimated reserves for the Bakken and Eagle Ford. Horizon Power Systems secured the order
* Capstone 47
business venture. This obligation would otherwise have been paid with interest over the 2014 to 2017 time period,” the release stated. The capital budget also includes funding for base maintenance, development of drilling programs, major projects, and exploration and appraisal spending, as well as corporate expenditures. Approximately 13 percent of the capital budget is allocated for maintenance of the company’s highquality legacy base portfolio, including 2014 planned turnarounds.
Approximately 39 percent of the capital budget is allocated to the company’s highmargin development drilling programs, with approximately 90 percent targeted toward North America. Growth from these development drilling programs should account for 600 barrels per day of production by 2017 and offsets normal field decline from the company’s producing assets. The remaining one-third is targeted toward other conventional and unconventional opportunities, mainly in Alaska, Canada, Norway and Western Australia.
for the two Capstone C1000 microturbines to be used by an independent oil and gas producer in the area. This marks Capstone’s first multiple megawatt project in the Permian Basin after previously installing multiple C30s and C65s at project sites in the region. The C1000s will replace unreliable grid service from the local utility and be used to power the client-owned electric grid. This small local grid will supply power to various well locations in addition to the field operations office. The site is expected to be commissioned in March. Horizon Power Systems also ordered 25
ConocoPhillips continued from 42 In addition to ramping up exploration and drilling, ConocoPhillips announced it is on track to achieve its targeted production of 1,600 thousand barrels of oil per day, including 50 from Libya. The company expects to achieve this through growth in the Lower 48, Canada, Europe and Asia Pacific regions, it announced in a prepared release. The company also “anticipates utilizing a portion of its cash balance to fully prepay the $2.8 billion joint venture acquisition obligation to its 50 percent owned FCCL
www.basinresourcesusa.com • SPRING 2014
BASIN RESOURCES 45
Lighter than air mineral
BLM begins implementing Helium Stewardship Act As part of President Obama’s plan to ensure a fair return to American taxpayers for federally-managed natural resources, the Bureau of Land Management has sold 400 million cubic feet of crude helium from the Federal Helium Reserve, generating $38 million in revenue. The Jan. 17 sale implements the initial phase of the Helium Stewardship Act of 2013. Two firms received the bulk of the helium: Air Products was awarded the largest amount at 129,600 million cubic feet (Mcf ) while Praxair, Inc. was awarded 122,400 Mcf. The full results of the sale are available at the BLM Amarillo Field Office website at www.blm.gov/nm/amarillo. “W’'re pleased with the results of this helium sale," BLM Principal Deputy Director Neil Kornze said. "It's critical that we get a fair return on this national resource that is so important for health care innovation and technology development. We are also proud to have cleared the debt on this program in 2013, two years ahead of schedule.” The helium was offered at a price of $95 per Mcf, which is up from $84 per Mcf in 2013, reflecting a change in methodology designed to match market forces more closely, encourage industry conservation and provide a higher return for American taxpayers. In September 2013, Congress passed the HSA to continue the Federal helium program. The HSA succeeds the Helium Privatization Act and allows for continued operation of the federally managed helium reservoir and pipeline near Amarillo, Texas, which supplies about 42 percent of domestic demand for crude helium and about 35 percent of the world’s demand. The intent of the HSA is to allow for a smooth
SPRING 2014 • www.basinresourcesusa.com
transition to private means of helium sourcing as the reserve is steadily drawn down. The passage of the legislation allowed the BLM to continue funding the helium operations. The BLM had spent an initial $272 million to buy helium and then stockpile it in federal storage. The BLM has now paid off this debt, which totaled about $1.4 billion of principal and interest, to the U.S. Treasury two years in advance of the 2015 deadline. Helium is an essential resource for the aerospace industry, optical fiber manufacturing and medical use, including lung tissue visualization, heart catheterization methods and medical lasers. The lighter-than-air gas is also used in aluminum helium arc welding, scuba diving mixtures and national defense applications such as rocket engine testing, scientific balloons and blimps. Surveillance devices and air-to-air missiles are additional military uses for helium.
%RE *HQVRQ
46 BASIN RESOURCES
Another energy venture
New Mexico joins the geothermal power ranks You can add New Mexico to the short list of U.S. states that are utility-scale geothermal energy producers. The new plant in the Animas Valley, way down in the southwestern part of the state, is operating at a modest 4 megawatts right now. But a second phase is expected to kick the power production up to more than double that figure within the next year. And New Mexico officials said they’re hopeful more geothermal sites can be developed in the state. “This project opens the door for an amazing future for geothermal power in our state,” Sec-
retary of Economic Development Jon Barela said in a statement. “This major project has been a tremendous economic development driver for southwestern New Mexico, and other
projects, we hope, are on the way to continue our development of this resource.” As the map immediately below indicates, the state has at least a handful of other locations that
are identified hydrothermal sites. As enthusiastic as Barela was, the Albuquerque Journal reported that local residents had some concerns about the plant. Unlikely as it sounds, right around the corner from the new geothermal plant in this high dry, ranching country is a company called AmeriCulture, which bills itself as “one of America’s largest tilapia hatcheries.” They take advantage of the area’s naturally hot waters to heat the pools where they raises tilapia fingerlings, so water quality is understandably a chief concern. State environmental officials said they’ll be watching the
www.basinresourcesusa.com • SPRING 2014
BASIN RESOURCES 47
Capstone continued from 44 Capstone C65 microturbines to expand operations for multiple existing clients in the Permian Basin. This repeat business demonstrates a high level of customer satisfaction with Capstone microturbines, helping to cement microturbine technology as a preferred option in the U.S. oil and gas industry. Capstone microturbines were chosen based on their reduced maintenance costs, low exhaust emissions, and higher reliability than traditional engine-based generation. The microturbines easily meet Tier 4 emission standards without requiring after-treatment. “The Permian Basin currently contributes about 14 percent of the nation’s overall oil and gas production,” said Sam Henry, Horizon Power Systems President. “Horizon is pleased to continue to expand our presence in this dynamic area. This sale – the first multiple megawatt Capstone microturbine installation in the Permian Basin – follows several other C65s and C30s already in place there. Lowemission, low-noise, and low-maintenance Capstone microturbines are the go-to solution for running onsite equipment and meeting customers’ power requirements in the Permian Basin.” About Capstone Turbine Corporation Capstone Turbine Corporation is the world’s leading producer of low-emission mi-
SPRING 2014 • www.basinresourcesusa.com
croturbine systems and was the first to market commercially viable microturbine energy products. Capstone Turbine has shipped approximately 7,000 Capstone Microturbine systems to customers worldwide. These award-winning systems have logged millions of documented runtime operating hours. Capstone Turbine is a member of the U.S. Environmental Protection Agency’s Combined Heat and Power Partnership, which is committed to improving the efficiency of the nation’s energy infrastructure and reducing emissions of pollutants and greenhouse gases.
48 BASIN RESOURCES plant closely, but developer Cyrq Energy is promising that a closed-loop system poses no threat. In this closed-loop system, the hot geothermal fluid is pumped from the deep reservoir to a heat exchanger, where heat from the geothermal fluid is transferred to a working fluid, with a lower boiling point, contained in a separate closed-loop system. This working fluid then flashes and powers the turbines, generating electricity. The geothermal fluid is then re-injected into the same deep reservoir to be naturally reheated without ever coming in contact with the secondary working fluid or exposed to air. According to the state, the first phase of Cyrq’s Dale Burgett Geothermal Power Plant
)!! * # * '" # ($#
% # )( ! )&) '&)
# ( '" # ($#
cost $43 million to build. “The second phase is scheduled to be completed in 2014, for an additional $67 million,” the state said. Cyrq on its website said the plant ultimately would be “capable of generating up to 20 megawatts (MW) of electricity,” although power purchaser PNM said it would be a 10-MW plant and, as the map shows, the NREL map at that forecasts 15 MW for New Mexico. If prices remain high and developers continue drilling through June, officials said the state would be on track to break the earnings of last fiscal year by as much as $100 million. Petroleum and natural gas production make New Mexico the third largest net energy supplier to the nation, according to the federal Energy Information Administration.
# ( ( '" # ($#
-( -(
!*
Natural Gas continued from 34 applications unless DOE finds that the proposed exports will not be consistent with the public interest.” The review includes a number of factors including the “impact on domestic natural gas supplies and prices and the full range of macroeconomic impacts of the proposed export,” Moniz wrote. Environmental reviews also must be conducted. While the exportation process is in its infancy, Udall said at least three applications for exports have been approved, and now the U.S. is just awaiting the infrastructure, such as ships and ports of entry and export, to be completed. In the meantime, Moniz stated that the Energy Department will continue to review export applications “on a case by case basis as expeditiously as possible.”
Gessing
continued from 35
land. This push is being made in other western states with Utah leading the way, Gessing said. This is based on a movement in 1828, when Indiana, Illinois, Missouri, Louisiana, Alabama and Florida persuaded the Federal Government to return the lands to the states. It worked then. It is Gessing’s hope that it will work again in the not too distant future.
(
CUT COST. NOT COVERAGE
'$ + , ( '" # ($#
( ( '" # ($#
www.basinresourcesusa.com • SPRING 2014
Safe & Comfy
1-800-554-5111
www.FlyGreatLakes.com
Four Corners Regional Airport
1300 W. Navajo St. Farmington, NM â&#x20AC;˘ 505-599-1395 www.IflyFarmington.com
50 BasiN resoUrces
Allstate ..............................................48 Viviana Aguirre 900 Sullivan Ave., 505-327-4888 B J Brown 3030 E Main St., Ste X9, 505-324-0480 Kelly J. Berhost 1415 W. Aztec Blvd, Ste. 9, Aztec, NM 505-334-6177 Harold Chacon 8205 Spain Rd. NE, Suite 209 C Albuquerque, NM 505-296-2752 Dennis McDaniel, 505-328-0486 Matt Lamoreux 4100 E. Main St., 505-599-9047 Johnnie Pete 817 W. Broadway, Ste. B, 505-325-0297 Silvia Ramos 2400 E. 30th St., 505-327-9667
Animas Valley Insurance .......................7 2890 Pinon Frontage Rd. Farmington, NM 505-327-4441 www.aviagency.com Antelope Sales & Service Inc...............23 5637 US Hwy 64 Farmington, NM 505-327-0918 www.NMASSI.com Bailey’s Welding .................................25 6175 Hwy 64 Bloomfield, NM 505-632-3739 Basin Occupational and Urgent Care ....44 1308 E 20th St. Farmington, NM 505-324-0149 www.basinhealth.com Big Red Tool, Inc. ...............................38 2010 San Juan Blvd. Farmington, NM 505-325-5045 Brady Trucking, Inc.............................52 5130 S. 5400 E Vernal, UT 84078 435-781-1569 Farmington, NM Division 505-598-5580 Grand Junction, CO Division 970-263-8791 Williston, ND Division 701-572-1522 Calder Services...................................19 #7 RD 5859 Farmington, NM 505-325-8771
advertisers directory
Cascade Bottled Water & Coffee Service.........................28 & 48 214 S. Fairview Farmington, NM 505-325-1859 • 800-416-1859
IEI Industrial Ecosystems ....................24 49 CR 3150 Aztec, NM 505-632-1782 www.industrialecosystems.com
City of Farmington..............................49 1300 W. Navajo St. Farmington, NM 505-599-1395 www.IflyFarmington.com
Kelco, Inc. ..........................................13 515 E. Animas St. Farmington, NM 505-325-6372
ConocoPhillips......................................3 www.conocophillips.com DXP Safety Services............................43 1678 Bloomfield Blvd. Farmington, NM 505-325-SAFE(7233) www.dxpsafetyservices.com Edward Jones/Dennis Gross ................41 2713 E. 20th Farmington, NM 505-325-5938 www.edwardjones.com Elite Promotional & Embroidery ..........28 1013 Schofield Farmington, NM 505-326-1710 www.elitepromonm.com Encana...............................................17 www.encana.com/sanjuan Farmington Fire Equipment.................12 6007 E. Main Farmington, NM 505-327-1933 www.f-fire.com Four Corners Community Bank.............33 505-327-3222 New Mexico 970-565-2779 Colorado www.TheBankForMe.com Foutz Hanon.......................................12 2401 San Juan Blvd. Farmington, NM 505-326-6644 Hands on Safety Service .....................15 1901 E. 20th St. Farmington, NM 505-325-4218 Highlands University...........................25 505-454-3004 nmhu.edu/energy
Kozi Homes ..........................................5 505-327-9008 Largo Tank .........................................29 505-327-6281 www.largotank.com Mechanical Solutions, Inc......................2 1910 Rustic Place Farmington, NM 505-327-1132 Mesa West Directional.........................45 505-402-8944 www.mesawestdirectional.com Metal Depot........................................19 2001 San Juan Blvd. Farmington, NM 505-564-8077 www.metaldepots.com Miller & Sons Trucking ........................21 1110 W. Sategna Ln. Bloomfield NM 87413 505-632-8041 www.powerinnovations.com Partners Assisted Living .....................30 313 N. Locke Ave. Farmington, NM 505-325-9600 www.partnersassistedliving.com Patriot Technologies ...........................41 3920 Monroe Road, Suite A Farmington, NM 505-325-4747 Premier NDT Services .........................37 505-325-1407 www.premierndt.com
Reliance Medical Group.......................47 3751 N. Butler Ave. Farmington, NM 505-324-1255 Occupation Medicine 505-324-1255 Urgent Care 1409 Aztec Blvd. Aztec, NM 505-334-1772 www.reliancemedicalgroup.com Rush Truck Centers of New Mexico .............................9 & 46 6521 Hanover Road N.W. Albuquerque, NM 87121 505-875-3410 www.rushtruckcenters.com San Juan College School of Energy......23 800 S. Hutton Farmington, NM 505-327-5705 www.sanjuancollege.edu San Juan United Way ...........................17 505-326-1195 www.sjunitedway.org Southwest Concrete Supply .................15 2420 E. Main Farmington, NM 505-325-2333 www.southwestconcretesupply.com The Spare Rib.....................................24 1700 E. Main Farmington, NM 505-325-4800 www.spareribbbq.com Spotless Solutions..............................39 505-326-4755 www.spotlesssolutions.com TJs Diner ............................................47 119 E. Main St. Farmington, NM Treadworks ........................................16 4227 E. Main St. Farmington, NM 505-327-0286 4215 Hwy. 64 Kirtland, NM 505-598-1055 www.treadworks.com Twin Stars, LTD...................................51 100 Iowa Ave. Bloomfield, NM 505-632-9202 7169 Roswell Hwy. 575-746-6690
Pumps and Service .............................31 505-327-6128 www.pumpsandservice.com
Uncle Bob’s Auto & Truck....................45 3995 Cliffside Dr. Farmington, NM 505-436-2994
QuickLane Tire & Auto Center..............20 5700 East Main St. Farmington, NM 505-566-4729
Ziems Ford Corners ............................34 5700 East Main Farmington, NM 505-325-8826
www.basinresourcesusa.com • sPriNG 2014
VAPOR RECOVERY
FULL WELLSITE MAINTENANCE • Pump jack servicing • Water transfer pumps and engines • Hydraulic pumps and engines • Compressor and engine maintenance SAFETY • Member of ISNetworld and DISA
ENCLOSED UNIT
EMISSIONS • Emission Compliance upfits • ECOM and Testo analyzers utilized for proper emissions tuning AT YOUR SERVICE Methods such as oil analysis, failure analysis and our comprehensive preventative maintenance program put us a step ahead of competitors in the industry.
QUALIFIED PERSONNEL AND QUALITY EQUIPMENT Twin Stars personnel are experienced maintenance technicians capable of not only maintaining your field equipment, but also performing many major repairs. Our vehicles are fully equipped with cranes, tools, parts and pressure washers to perform many repairs on site.
Maintenance Repairs Fieldwork Parts & Service Sales
SSI ARTIFICIAL LIFT
PARTS AND SALES Dealer for: • Cummins Natural Gas Engine Parts • Cummins Filters and Exhaust Components Distributor for: • Gardner Denver - Compressors, Parts and Repair Center • LeRoi - Compressors, Parts and Repair Center • Crow Manufacturing - Oil Field Engine Parts • Boss Industries - Compressors & Parts • Amsoil - Synthetic Fluids • Tundra Solutions Ltd. - SSI - Sure Stroke Intelligent Lift Systems Parts and Supplies: • Most parts in stock • Belts, hoses, governors, gaskets and more • Over-the-counter sales
www.twinstars.com BLOOMFIELD ARTESIA 100 Iowa Ave • 505-632-9202 7169 Roswell Hwy • 575-746-6690 FAX 505-632-2723