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VOLUME 2 NO. 7

JULY 2014

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The Wolfberry

Play 12

From the Battlefield

to the Oilfield

Local Businesses Redefine

8

Work Environment

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PBE PROFILES:

BOB WilliamsON • U.S. RIG COUNT • TOP 35 Drillers & Operators

Industry Data

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News

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Events

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Auctions

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Calendar

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RESTAURANT BITES

Travel

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Tips

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Energy

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Tech

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JULY 2014

contents

Pbe Features 8

From The Battlefield to The Oilfield

12 The Wolfberry Play 18 Local Businesses Redefine Work Environment

8

Other Editorials

15 Calendar of Events

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22 PBE Profiles: Bob Williamson 26 Conferences in July - August 27 Upcoming Auctions 31 Safety Tips - It's Hot! 32 Advice for Mineral Owners from Permian Basin Land Girl 36 Festivals and Events in Texas 38 PBE Cares - Clay Shoot Supporting the

Freedom Isn’t Free Veteran’s Hunt 40 Tech Bites - 'Kill Switch' Coming to Google, Microsoft Phones 42 PBE News Briefs:

Basin, Shale, State, Government, Nation, Offshore & World

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46 Restaurant Bites - KD’s BBQ 48 PBE Inspires - Fight for Your Marriage 50 By The Numbers: Texas Rig Count, Top Drillers, Top Operators 53 This Month in Petroleum

On The cover: From Left: Sgt. Derek Smith • Army Infantry 11 Bravo • Multi-Skilled Operator for ConocoPhillips Specialist Henry Bernard • 133rd Field Artillery Bravo Battery 3rd • Multi-Skilled Operator for ConocoPhillips

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LETTER FROM

THE EDITOR “This nation will remain the land of the free only so long as it is the home of the brave."

- Elmer Davis July is a special month for our family for many reasons. The significance behind the 4th of July holiday and the celebration of our nations heritage has always been something we’ve cherished as we have not only had several family members serve our country to help maintain the freedom our founding fathers fought for in 1776 but we've also experienced the loss that comes with a loved one paying the ultimate price for that freedom.

In this month’s issue of PBE, we wanted to take the time to highlight those in our area who have been 'the brave', fighting for the freedoms we enjoy today. The interesting twist you'll also read about in our cover story this month is that many of those service men and women come back to the Basin after serving our country and choose to join the oil and gas industry because of the striking similarities to military life.

As we think about the American spirit of independence and desire to be great, you'll read about 2 examples of how that spirit lives on in many West Texans through the establishment of a great new charity event to help local vets and a popular BBQ restaurant with a history that epitomizes the pursuit of happiness and free commerce our forefathers demanded.

Speaking of the rights we have to freely do business, this issue will also give you an in-depth look into the Wolfberry play and the measures some of our local companies are taking to attract and retain their employees in this highly competitive market.

July is also special for us, particularly this year, as my wife and I welcome new twin baby girls into our family. Although we realize the road ahead will be a bumpy one, the excitement and blessing of our growing family overshadows all the challenges we know we may face. That's the great part about being a product of this West Texas culture. Much like our founding fathers fought for something better despite known challenges ahead, the West Texas spirit so many of us grew up learning tells us that nothing great ever comes from comfortable, challenge-free living. Happy Fourth of July and

thank you to all of those reading this who have either fought for our country's freedoms or lost someone who has.

- R.I.P Army Spc. Robert R. Arsiaga Died April 4, 2004 Serving During Operation Iraqi Freedom Excerpts from the declaration of independence: WE hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness— We, therefore, the Representatives of the UNITED STATES OF AMERICA, in General Congress, Assembled, appealing to the Supreme Judge of the World for the Rectitude of our Intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly Publish and Declare, That these United Colonies are, and of Right ought to be, FREE AND INDEPENDENT STATES, that they are absolved from all Allegiance to the British Crown, and that all political Connection between them and the State of Great-Britain, is and ought to be totally dissolved; and that as FREE AND INDEPENDENT STATES, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which INDEPENDENT STATES may of right do. And for the support of this Declaration, with a firm Reliance on the Protection of divine Providence, we mutually pledge to each other our Lives, our fortunes, and our sacred Honor.

- Action of Second Continental Congress, July 4, 1776.

The unanimous Declaration of the thirteen united States of America,

Carlos Madrid Editor in Chief/Publisher sales@pbemag.com

/PBENERGYMAG @PBENERGY

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EDITORIAL CONTRIBUTORS

PBE MAGAZINE CONTACTS VOLUME 2 NO. 7

Taryn SnideR

FREELANCE WRITER tarynsnider@gmail.com

EDITOR IN CHIEF/PUBLISHER Carlos Madrid sales@pbemag.com 432. 559. 5886 ART DIRECTOR/LAYOUT & GRAPHICS Luke Pawliszyn Lukasz Design Studio West Hollywood, CA luke@lukaszdesign.com

AUDRIE PALMER

FREELANCE WRITER audrierpalmer@gmail.com

ADVERTISING For advertising info call 432. 559. 5886 or email sales@pbemag.com ACCOUNT EXECUTIVE Tiffany Clemons tiffany@pbemag.com 432. 978. 2393 SUBMISSIONS Submit story ideas & other news to haley@pbemag.com

MORRIS BURNS

FREELANCE WRITER morrisburns@sbcglobal.net

PUBLISHED BY: PBE Magazine, LLC. Permian Basin Energy Magazine 4500 Erie Drive Midland, TX 79703 Main Phone: 432. 559. 5886

www.PBEMag.com

/PBENERGYMAG

@PBENERGY

MICKEY ECKLES

Copyright © 2014 Permian Basin Energy, Inc. • Mad Ads Media All rights reserved.

Reproduction in whole or in part without the written permission of PBE MAGAZINE, LLC is strictly forbidden. The greatest care has been taken to ensure the accuracy of information in this magazine at time of going to press, but we accept no responsibility for omissions or errors. PBE Magazine welcomes any comments, feedback, suggestions, and/or submissions for consideration for publication. These may be submitted to: sales@pbemag.com.

SENIOR ASSOCIATE PASTOR mickey.eckles@midcities.org

Kimberly Smith

CEO Development Resources, Inc.

Shawn Todd

American Safety Services, Inc. 6

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From the Battlefield to the Oilfield

by Audrie Palmer

Oil patch work attracting veterans

Workers say some conditions remind them of the military.

Derek Smith was following in his family’s footsteps. His grandfather and uncles had all joined the Army. Growing up in San Angelo, he knew that that was where he was headed. So he enlisted as well, went through basic training and was deployed to Iraq.

It was in Iraq though that he was wounded – shot in the stomach – and his military dream came to an end. Being discharged was not something he wanted, but knowing that he needed to make a living, he was soon provided with leads for jobs in the oilfield.

And before he retired from the military in December 2012, Smith had secured one of those jobs.

A 2014 federal Bureau of Labor Statistics report found that the unemployment rate for veterans who served on active duty in the U.S. Armed Forces at any time since September 2001 edged down to 9 percent last year and the jobless rate for all veterans fell to 6.6 percent.

It’s the skill sets, leadership traits, personal disciple and loyalty – all character traits reared while serving – that transition into the business world and make veterans a target for recruiters.

While the work can be dangerous and the hours can be long, those with a military background are sought after for their work ethics instilled by their service time.

“It’s not hard here to find work because of the economy,” he said. “The qualifications everyone is looking for a veteran has.”

Cronenworth left the Marines in 1979 and made the move to Halliburton and the oil business his next career.

That’s what he said the oilfield and West Texas offers to veterans, a chance to start a career and not just another job.

It’s places like West Texas and the booming Permian Basin that are giving some out of the military, hope for a new career and ways to take care of their families.

And he’s been able to keep up with his military interests also. Joining the National Guard, Cronenworth’s unit was called up and deployed to Iraq in 2005 where he went with another West Texas oilfield worker, Henry Bernard of ConocoPhillips.

Ken Cronenworth was a Marine before moving home to West Texas and taking a job with Halliburton some 35 years ago. Companies like his, he said, have initiatives to hire veterans and recruit at bases such as Fort Bliss looking specifically for those with military backgrounds.

Bernard has been in the Army guard for eight years now and never thought he would be deployed. He had always wanted to be in military since he was out of high school and joined at the age of 23 when he decided it would be a good opportunity.

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Four months after graduation, he was given his orders to go.

Having lived in the Permian Basin already, he took a job in the oil business to be able to support his family and to find something that paid well to live in this booming market.

For those getting out of the service, he said oil business jobs provide a secure and stable environment for many to work in.

Both Cronenworth and Bernard have stories of the year they spent overseas serving together and there are still small triggers and similarities out in the oilfield that they said take them back to Iraq.

Whether it’s the big booms, the sandy desert-like terrain or the portable bathrooms, “everybody’s got their triggers if you will,” Cronenworth says.

Those portable bathrooms, the men agreed, use the same chemicals and put off the same stinky smell that suddenly takes them back to their time serving. They’d rather wait to get off a rig than to use them or be around that odor.

And their families don’t have to worry for them every day, like Cronenworth’s wife said she had to while he was stationed overseas. Their son, Charles, is also a veteran, having followed the family’s footsteps as a third generation veteran, and has also come home to work in the oil business.

“We always served our country. It was just the thing to do,” Cronenworth said.

And the oil companies help as much as they can. They’re supportive, Bernard said, of those who are deployed and provided care packages for them while they were gone as well as kept their jobs for the men and gave them any pay raises they accumulated.

“You don’t have to worry about your job or question where you would go or do after you come. And your family is taken care of while you’re gone,” he said.

But the guys miss the strong relationships they built with their units while serving. Those friends, they both said, you see them more than anyone else – even your family.

“I never had to worry about someone not having my back. I miss that comradry,” Bernard said.

That’s something Smith said he misses as well. While working in Andrews and the desert terrain is similar to what he remembers from Iraq, he misses his time in the Army where he was able to make a lot of close friends.

But Smith said, he know that the Permian Basin is a good opportunity for those looking for work and he’s told several veterans to take advantage of the business and job market when they get out of the military.

“This is a good opportunity with the economy the way that it is,” he said. “This is one of the best places and the companies offer opportunities to help better you.”

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The Wolfberry

PLAY

by Morris Burns

The Wolfberry play is a West Texas oil play that derives its name from a contraction of two formations, the Sprayberry which is located on top and the Wolfcamp below. Until the 1990’s the Texas Railroad Commission would not allow oil from multiple formations to be comingled underground. If you wanted to drill what is now a Wolfberry well you drilled one well to the Sprayberry and another well to the Wolfcamp.

The current Wolfberry play has been responsible for increasing Permian Basin oil production to levels not seen since the 1970’s. The Permian Basin reached its maximum production in 1973 at 2.2 million barrels per day. Since that time production had declined to about 900,000 barrels per day in 2008. Since 2008 we have seen production increase to the current level of about 1.4 million barrels a day and continuing to increase, many are predicting to over 2 million barrels by the end of this decade.

For over fifty years drilling companies have been drilling the Sprayberry field which was discovered in 1943 by a Dawson County farmer named Abner Sprayberry. The discovery well was drilled by Seaboard Oil Company.

Production didn’t really start until 1953 in Midland where companies drilled the Sprayberry formation as well as the Dean formation. Due to advances in technology, recently companies have been going back into the Wolfcamp with great success.

The Wolfcamp successes began with operators reworking old Wolfcamp wells now that horizontal drilling has caught fire. There are four intervals currently being explored, the Wolfcamp A, B, C and D. Some are calling the Wolfcamp D the Cline Shale. The Cline Shale is just 12

PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | JULY 2014

beginning to be developed between Garden City and Sweetwater and from San Angelo to Snyder east of the current Wolfberry play.

and permeability. Fracturing the formation creates small cracks in the rock which allows oil and/or gas and water to move through the formation into the well bore.

In the western part of the Wolfcamp in Loving County the Bone Spring Formation is just above the Wolfcamp and dual completions in that area are called the Wolfbone and east of Midland in the Wolfcamp and Clear Fork called the Wolffork.

In multistage fracturing, a 5,000 foot lateral is fractured a few hundred feet at a time rather than trying to frac (no K in fracture!) the entire length at one time. Many of these new fractures are performed in over 30 individual stages before they are completed.

Companies currently active in the Wolfberry are: Chesapeake, EOG Resources, ConocoPhillips, PertoHawk, Pioneer, Devon, Linn, SandRidge, Cimarex and Whiting.

99 to 99 ½ percent of everything going into the frac fluid is water and sand. The other ½ to 1 percent consists of surfactant (soap), gel (guar-same as used in Blue Bell Ice Cream), anti- bacterial to keep algae and other bacteria from clogging up the cracks in the formation, and a gel breaker to allow the frac fluid to be withdrawn, reconditioned and used in a another frac job. One representative of API drank some frac fluid from a clear beaker in a Congressional hearing to illustrate the fluid was not toxic.

New technology in both horizontal drilling and hydraulic fracturing have fueled the recent increase in Permian Basin production as well as other shale plays like the Eagle Ford in south Texas, the Bakken Shale in North Dakota and Montana and the Marcellus Shale in New York and Pennsylvania.

In the early days of horizontal drilling the drill pipe continued to rotate after turning horizontal the same way it does vertically. Now with the use of down hole motors the drill bit rotates but the drill pipe does not reducing friction and power loss. With the down hole motor the drilling mud rotates the bit but the drill pipe slides through the well bore. This requires very powerful mud pumps to make the down hole motor rotate the bit. This requires triplex motors generating 1,600 horse power or more. Laterals now are able to extend out to 10,000 feet, two miles, using this technology. Another advantage of the down hole motor is that the bit can be rotated a few degrees to change the direction the bit drills, up, down, left or right and the exact location and depth of the bit are measured by MWD, measurement while drilling.

Some companies are now using “stacked pad” drilling where several laterals are drilled into different formations from the same vertical well bore.

Multistage hydraulic fracturing technology is another new technology being used in the Wolfberry and other shale formations. Geologists have known for years that there was oil and gas in shale formations, but the formations were too “tight” to produce. The two things geologists are looking for in reservoir rock are porosity

The anti-fracturing folks would have you believe that it causes earthquakes and contaminates ground water. If fracturing caused earthquakes the Permian Basin would have a “Whole Lota Shakin’ Goin’ On,” in the words of an old country-western song. San Francisco, on the other hand, does not have any oil and gas activity within two or three hundred miles but have several quakes a year.

Last fall EPA was allowed by a company doing a frac job to put chemical markers in their frac fluid. The frac job was done 10,000 feet from the surface and an instrument was inserted to 5,000 feet and found no trace of the markers. No trace within a mile of the surface.

To get a visual of the Wolfberry activity drive from Midland to Odessa at night and look for the rig lights and flares burning. The Wolfberry extends north to around Seminole south to around Big Lake. The large majority of wells drilling in this area are in the Wolfberry.

According to industry data service Rigdata, the Wolfberry has 330 plus drilling rigs operating there right now.

So, while driving around the area, look at all the rigs drilling and inhale deeply…….. smells just like money.

JULY 2014 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE

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OBSERVANCES AND CELEBRATIONS

1

CANADA DAY

JULY 2014 Birthstone: Ruby Flower: Larkspur, Water Lily National: Parks Month, Cell Phone Courtesy Month, Blueberry Month,

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Hot Dog Month,

UNITED STATES INDEPENDENCE DAY

The Independence Day referred to here is the U.S. Independence Day also known as the “4th of July” that commemorates the adoption of the Declaration of Independence.

It is a Legal U.S. Holiday that is celebrated with picnics and fireworks.

Ice Cream Month

11 WORLD POPULATION DAY

World Population Day focuses upon people under 25, reproductive issues, and health.

This day is sponsored by the United Nations World Population Fund (UNFPA).

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BASTILLE DAY

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Bastille Day is celebrated on July 14th each year to commemorate the anniversary of the storming of the Bastille starting the French Revolution 1789 and the uprising of the modern French nation.

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COW APPRECIATION DAY

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HAMMOCK DAY NATIONAL PARENTS DAY

Parents’ Day is an American Holiday celebrating parents who provide for strong families to make a strong America.

29 NATIONAL LASAGNA DAY

AUGUST 2014 Birthstone: Ruby Flower: Larkspur, Water Lily

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FRIENDSHIP DAY

19 NATIONAL AVIATION DAY

WOMEN’S EQUALITY DAY

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t-shirts

koozies

pens

business cards

caps

flashlights knives

misc.

Promotional Products • TV/Video Production • Graphic Design • Photography

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promoitems@mad-ads-media.com

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Local Businesses Redefine

Work Environment

by Taryn Snider

Local oil companies have proven that Midland’s future is an investment worth making. Last month, Permian Basin Energy Magazine reported that several companies collaborated and gave $6.25 million to fund a teacher incentive program for MISD to aide in its efforts of teacher retention and recruitment.

You don’t have to look too far to see how this kind of joint effort benefits everyone in the long run. So if companies are willing to spend millions on programs out in the community, just think of what some of these companies are spending on investing in their own future.

Aside from a hot job market and booming economy, the Permian Basin doesn’t have a reputation for having a lot to offer people. Bobby Burns, president and CEO of the Midland Chamber of Commerce describes Midland as “one of the best kept secrets in America.” He defined Midland’s quality of life by highlighting our Community Theater, performing arts center, football stadium and we have the “best business environment on the planet.” Yet oil companies have still faced challenges attracting top notch professionals to the area. Oil and gas companies have had to step up their game to attract and retain a workforce that keeps up with our fast paced economy.

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Meanwhile, as businesses try to grow they are still faced with the impeding problem of where to house the incoming workforce. Such challenges in our business environment resulted in “companies reaching out to solve their own problems,” Burns explained. It’s becoming the norm here for companies to buy and rent houses and apartments for their employees. Fasken’s The Vineyard project faces the housing challenge head on. Fasken Oil & Ranch recently built a 60,000 square foot office building but it didn’t stop there. Plans are in place to add a community of residential houses and apartments with parks, trails and even a school.

Oil companies like Pioneer Natural Resources and Chevron are raising the bar on workplace accommodations.

Pioneer is currently constructing a $50 million six story office building where they expect to move in to before the end of the year. Located at ClayDesta Center the

PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | JULY 2014

facility will include a day care, cafeteria and fitness center for their employees. Elana Marion, Community Engagement Specialist at Chevron expressed excitement about their new facility. “Designed for Chevron’s Permian Basin workforce, the purpose-built campus will feature an on-site fitness center, cafeteria, wellness initiatives, energyefficient design, learning and development resources, and space to collaborate and interact.”

As our town bursts with economic development many more companies are in hot pursuit of more space.

Concho Resources wanted to stay downtown and the only practical way was to renovate old office space. But Concho also looks out for their employees in other ways.

Concho Resources and Endeavor Energy Resources have both gone above and beyond for their employees by providing a private medical clinic open only to employees and dependents. Endeavor’s private clinic boasts access to a doctor or nurse, free or reduced cost prescription drugs and a newly added x-ray.

during the technology age. With a tech savvy workforce comes office buildings equipped with flat screen TVs and webcams for interactive conference rooms. More and more companies are opting to set their employees up in their own offices in lieu of cubicle farms. Even break time is state of the art right down to the coffee bars and espresso machines.

Midland has a history of always being a pro business community. Despite all the dirt, wind and lack of trees we are the epicenter of the oil and gas world.

We may not be able to entice people to move here for our landscaping and weather but we can afford the necessary luxuries to lure the young talent away from other cities and so far it seems to be working.

Next month we will take an exclusive look at a Midland based company that has capitalized on an innovative way to collaborate with employees and customers alike.

One commodity that all companies can agree to accommodate their employees with is up to date, state of the art technology. Today’s young professional grew up

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PR O FILES BOB Williamson

by Morris Burns

SIZE 14 SHOE EARNS BIG FOOT MONIKER Ask any oil and gas operator in the Permian Basin if they have seen “Big Foot” and they know you are not talking about Sasquatch, but about Bob Williamson. Most have sampled his barbeque, sausage or steaks at a golf tournament on other event where food is served.

T.B. O’Brien hung the Big Foot nickname on Bob. When he asked how he came up with that name for Bob T.B. replied, “Have you ever looked at his feet?”

Bob was raised at Magnolia, Arkansas. He was introduced to the oil patch working as a roustabout when he was 16 years old. He started cutting cement sacks for the cementing of casing and tubing in oil and gas wells.

Following high school he attended Southern Arkansas State University. From 1952 to 1954 he served in the First Cavalry during the Korean Conflict. The First Cavalry was to serve as reinforcements for U.S. soldiers on the front lines Christmas of 1951 when hundreds of thousands of Communist Chinese soldiers swarmed across the Yalu River from Manchuria and drove the U.S. troops back to the current border between North and South Korea.

After his return from Korea Bob went to work for E. G. Braham, an independent oil and gas operator. He worked in both drilling and production as an assistant superintendent. He went to work for Magobar, the drilling mud division of Dresser Industries, in 1957.

Following his training as a mud engineer, he started work 22

in Pampa, Texas. He was then transferred to Jacksboro, Texas on July 4, 1957 and eventually went to Wichita Falls where he spent 15 years. In 1957 Wise County had 60 rigs drilling in the Bend Conglomerate play where the Barnett Shale is now the “hot play.” Bob says, “You could always find oil in the Bend Conglomerate.”

In 1961 he took a leave of absence from Magobar to work for A.R. Dillard, a drilling contractor in Wichita Falls which is now Cobra Oil & Gas. Following his two years stint with Dillard he returned to Magobar and after he completed a 13 week school in Houston it was off to Oklahoma City as an assistant sales manager. From there he was promoted to Regional Sales Manager.

In 1978 Bob moved to Midland as the Area Sales Manager over the Permian Basin. In 1982, right at the end of the “Boom” Magobar had 192 employees in the field and 60 mud engineers. As the bust of the early to mid 80’s came the number of mud engineers dropped

PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | JULY 2014

to about 15 and eventually to 8. The Area Manager in Denver proceeded to shut down all the mud operations in the Rocky Mountains, which left a lot of folks who depended on them mad. Bob was then assigned the unenviable task or reopening mud operations in the Rockies. Magobar purchased an independent mud company, the Don Aycock Mud Company of Riverton, Wyoming and once again got their foot in the door to the Rocky Mountains.

In 1986 Magobar merged with Halliburton. Halliburton then bought Baroid, another drilling mud company.

Since the Security and Exchange Commission would not let a single company own more than one mud company, Halliburton sold Magobar, by then known as M-I, to Smith International.

While he lived in Wichita Falls Bob became part of the Mavericks, a group about 100 businessmen who did cooking and barbeques for people much like the Chuck Wagon Gang in Odessa. After he moved to Midland, he continued to cook for various functions for the next several years. He helped organize and took part in the Blowout that the Permian Basin Petroleum Association put on to help keep peoples spirits up during the “Bust.”

During the “Boom” most service companies had cookers they would use for public relations. They were decorated with banners and company logos and there was fierce competition between the companies to see who had the best tasting food and the best presentation.

One year he and some other Mavericks cooked for Indianapolis 500 driver Lloyd Ruby and his crew from Wichita Falls, along all the drivers and crews. Ruby raced at Indy for several years and at one time was said to have lead more laps of the Indy 500 than any driver who never won the race. One year while in Oklahoma Bob and his crew cooked for a Golf Tournament in Elk City on Friday, then on to a lake near Amarillo to cook for 85 Desk & Derrick girls at Leonard Hudson’s cabin on Saturday.

Since they were tired from cooking all day Friday and Saturday morning they got everything ready Bob lay down in his car to rest when the D&D girls came to look at the cook trailer. They asked John Walterhour who was in charge. John said that the guy asleep in the car thinks he is in charge but that he was mentally retarded but they let him think he was in charge. About this time a can of de-greaser in the cook trailer exploded from all the heat and they said, “I can just see the headline now.

‘Mentally retarded cook from Dresser poisons Desk and Derrick girls.’ ” His cooking brought him several other adventures like the time in Wichita, Kansas when Bob was going to cook

for the Kansas Independent Oil & Gas Association. About 2:00am he was awakened by a United States Marshall knocking on his door. Seems the hotel was on fire and to get out as quickly as possible. M-I used to have a big dove hunt at Possum Kingdom Lake the second weekend of dove season. One year there was a gentleman there named J.J. Murphy hunting with the group. Murphy kept shooting and missing doves and Bill Kinder and Jack Sallee would yell, “Good shot,” every time he missed.

They were admiring his shotgun which was an ivory engraved Ithaca. They were told that Murphy was given the gun as a gift from the Russian government. About that time Robyn Fulton, President of Magobar came over and asked Jack Sallee if he knew who J. J. Murphy was.

Jack said no and Robyn said, “The next time you get a check, if you ever get another one, look at the signature in the right hand corner. It will be J.J. Murphy, Chairman of the Board of Dresser Industries.” Bob still has a letter of commendation for a time when he cooked for Rosewood Oil Company of Dallas. The company is owned by one of the Hunt daughters.

Bob continued to cook for many functions until he finally retired for good from M-I in 2003. He continues to work every day as a contact man for J-W Drilling, Inc. a drilling contractor headquartered in Artesia, NM. Big Foot always has a twinkle in his eye, a smile on his face, and a quick wit that make him popular with everyone who has ever come in contact with him. He is another of the many colorful characters who dot the oil patch in the Permian Basin and make it a fun place to be. He says he has no regrets about his life in the oil fields, “It has been a real good trip.”

Bob retired from M-I in 1995, but made an agreement to continue working for them. He stayed for another nine years. He can’t stop working so he is currently a regional salesman for Pinnergy in Midland.

About the Author Morris Burns: From December 1997-October 2006, Morris served as the Executive Vice President for the Permian Basin Petroleum Association. Since retiring from the PBPA in 2006, Morris opened a public relations and safety consulting firm doing safety classes and public relations for many firms both in and out of the petroleum industry. Morris is also a frequent contributor to local TV news concerning the oil and gas industry in the Permian Basin, as well as a weekly radio show participant since 1998 on KWEL 1070 AM from 8:00 am to 9:00 am Tuesdays talking about oil and gas issues. morrisburns@sbcglobal.net

JULY 2014 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE

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Surveillance. Security. Support.

That’s the Dividia difference.

432.614.8000 l www.dividia.net/swd tx Lic #B16555

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JULY 2014 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE

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Conferences in JULY - AUGUST 2014 South Texas Oilfield Expo 07/09/2014 - 07/10/2014 San Antonio TX, USA www.southtexasoilfieldexpo.com/?gclid=COr78Mypi7 0CFY3m7AodewEAvA SPE Well Construction Efficiency NPT Reliability and Process Improvement Forum 07/13/2014 - 07/18/2014 Santa Fe NM, USA www.spe.org/events/14fus4 EIA Energy Conference 07/14/2014 - 07/15/2014 Washington DC, USA www.fbcinc.com/e/eia North American Custody Transfer Measurement Conference 07/15/2014 - 07/17/2014 Denver CO, USA www.ceesi.com/Training/ CustodyTransferMeasurementConference.aspx SPE Low Carbon Intensity Process for Low-Mobility Oil Recovery Forum 07/27/2014 - 08/01/2014 Newport Beach CA, USA www.spe.org/events/14fus3

Oil & Gas Asset Integrity & Inspection Conference 07/28/2014 - 07/30/2014 Houston TX, USA www.assetintegrityandinspectionoilgas.com EnerCom's Oil & Gas Conference 08/17/2014 - 08/21/2014 Denver CO, USA www.enercominc.com/the-oil-and-gas-conference AFPM Cat Cracker Seminar 08/19/2014 - 08/20/2014 Houston TX, USA www.afpm.org/conferences Surviving the Flood of Light Crude Oil Conference 08/19/2014 - 08/20/2014 Houston TX, USA www.rbnenergy.com/events/surviving-the-flood IADC Asset Integrity Reliability Conference 08/20/2014 - 08/20/2014 Houston TX, USA www.iadc.org/event/asset-integrity-2014 NAPE South - North American Prospect Expo 08/20/2014 - 08/22/2014 Houston TX, USA www.member.seg.org/Calendar/tabid/319/ ModuleID/944/ItemID/354/mctl/EventDetails/ Default.aspx NAPE South Summer Expo 08/20/2014 - 08/22/2014 Houston TX, USA www.spe-uk.org/default.aspx.LocID-0a4008003.LangEN.emID-965.rss-cal.EventID-13676.htm

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PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | JULY 2014

Leading Auctions in the Oilfield Industry.

Upcoming Auctions and Auction Equipment listings from Tradequip International’s online and site-held auction companies.

Saurce: Tradequip International

Drilling Rigs

Prod.

Equip.

Drilling Equip.

Tubular Goods

Oilfield Trucks

Oilfield Trailers

Parts & Tools

www.tradequip.com

Support Equip.

SOUTHCENTRAL AUCTIONS

COMPANY

DATES

LOCATION

Oilfield Equipment Trucks & Trailers

Kruse Energy & Equipment LLC

July 23 & 24, 2014

Odessa , TX

CANNON ANNUAL SUMMER AUCTION

Cannon Sales, Inc.

July 30 & 31, 2014

Odessa, TX

OILFIELD EQUIPMENT TRUCKS & TRAILERS

Kruse Energy & Equipment LLC

August 6 & 7, 2014

Shreveport, LA

OILFIELD EQUIPMENT TRUCKS & TRAILERS

Kruse Energy & Equipment LLC

August 20 & 21, 2014

Odessa, TX

INVENTORY

No Lots are Currently Posted for this Auction

INTERNET AUCTIONS

COMPANY

DATES

LOCATION

Webcast Auction Drilling Rigs, Support & Rig Transportation

Tiger Group

July 1, 2014

Internet - Midland, TX

Pipe & Equipment Auction

Network International Inc

July 9-16, 2014

Internet

INVENTORY

No Lots are Currently Posted for this Auction

JULY 2014 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE

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AUCTIONS • PRIVATE SALES • APPRAISALS

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ADVICE for Mineral Owners from a Permian Basin Land Girl Last month we discussed the rights of mineral owners. In this article, I want to discuss how mineral owners balance their rights with development & production risk.

First, let me summarize some key issues we have highlighted on Ask the Permianlandgirl. Our listeners were able to hear ◆ Mark Stansberry who wrote, America needs America’s Energy Plan ◆ Victor Morales, Chairman of the West Texas Energy Consortium. ◆ Stephen Coffman from TIPPRO, Texas Independent Producers and Royalty Owners The three guests, Mark, Victor, and Stephen are all advocates with individual agencies that mobilize partners to achieve common goals in energy.

Hearing these national leaders reminded me that mineral owners want to achieve a common goal. All parties are working together to drill a successful oil and gas well.

However, mineral owners are not the only party. The investment of the operators and the working interest owners is substantial. The risk to develop a well relies 80-90% on a highly skilled team of professionals. The risk factor from the investors is substantial. If the well does not produce, then the investors and operators have lost their entire investment which can easily be $500,000 to $1,000,000 or more. While the mineral owners, still own the minerals, the investors could lose their entire investment!

Each oil well developed poses a risk. The operators must carefully manage the well development and maintenance.

Within this large scale operation, that is often glamorized, there is a great deal of safety risk as well. The heavy steel tongs, and pipes flying through the air on harnesses with drilling mud shooting out through the pipes pose danger to the hard working team on the rig floor. If you are wondering what kind of companies join mineral owners as partners, PBE magazine highlights various teams which work on the development and production of wells throughout the Permian.

This article is to remind mineral owners that they are a part of the equation, but not the entire equation. So when you get your lease offer, be realistic about what is being offered. I have worked with many companies that have walked away from a region because the mineral owners wanted three times the 30

current leasing price, or what was affordable in the economics of development.

We encourage mineral owners to work with their landmen to find a suitable price for a lease bonus. Before the lease bonus offer is made, extensive consideration of risk has occurred from all angles. The landman’s goal is to help the mineral owners make money while balancing the risks of the company.

Within the negotiation process, there is a suitable price.

Working together with a landman can help all parties profit.

As my friend Larry Ashlock, Founder of the Baptist Center for Global Concerns, addressed land managers at the Petroleum Club, he noted, “we are all in community together.” Mineral owners are a part of the community working toward a common goal – TO FIND OIL! To learn more about speakers on Ask the Permianlandgirl, visit these sites. The show brings relevant and solid information to mineral owners for a “better mineral experience.”

• http://www.peoplesenergyplan.com

Follow Mark Stansberry • http://www.wtxec.org

Follow this consortium • http://www.TIPRO.org

Join this to keep up with statewide advocacy for

mineral & royalty owners.

• http:///www.permianlandgirl.org

Services for mineral owners • http://www.bc4gc.org

Follow Dr. Larry Ashlock, ethicist Truly yours, Kimberly Smith, CEO Development Resources, Inc. can also help retrieve and inventory your mineral estate. @permianlandgirl on twitter or landmaam.com The July Schedule for Ask the Permianlandgirl AM 1070 FM 107.1 or kwel.com Every Saturday at 1:00 p.m ◆ July 5: On location in Scurry County, Texas. Looking at Scurry’s new drilling activity & Borden County development. ◆ July 12: Chicks Dig Fracking, Susan Fakharzadeh, VP of Western Energy Alliance ◆ July 19: Raymond Jones, Business Development for Purestream Services . The positive impact of recycling water for drillsites. ◆ July 26: Kimberly Smith, Development Resources, Inc. Another lesson in mineral management.

PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | JULY 2014

JULY 2014 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE

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SAFETY TIPS It’s Hot! Summer is upon us and the Permian Basin has already experienced several days of Triple Digit Temperatures.

With the heat comes a larger possibility of workers experiencing Heat Related Illnesses such as Heat Cramps, Heat Rash, Heat Exhaustion, and worst of all Heat Stroke. We can’t stop the heat but there are some things that we can do to keep ourselves and our employee’s safe while working in it.

First of all we have to give our bodies a fighting chance against the heat and that starts with hydration.

Your body can lose up to 30% of its water before you become thirsty. So, if you wait to start hydrating until after you become thirsty, then you may already dehydrated. You should drink a cup of water (8oz) every 30 minutes to maintain the recommended hydration level. Begin hydrating before you start any kind of outdoor strenuous activity. When it’s hot and you are working hard; your body can lose up to 8 quarts of water in a day. So it’s very important to drink a lot of water.

Secondly, steer clear of alcoholic and caffeinated beverages. They only dehydrate the body more.

Also don’t drink large amounts of sports drinks such as Gatorade and PowerAde. They are designed for restoring electrolytes which will help with cramping but they also have a significant amount of sodium which can facilitate dehydration if you drink too much of it. A good water to sports drink ratio is 4 to

1. Four cups of water to every one cup of a sports drink. As far as alcoholic beverages are concerned, there is no place for alcohol in the workplace which includes coming to work hung-over. If you come to work and you are already dehydrated from the night before and you expect your body to work outside all day in 105 degree temperatures then you can expect dehydration and poor overall wellbeing. Prepare your body adequately to work the night before you have to work. Do not arrive to work hung-over and dehydrated which pre-disposes you to poor physical and mental acuity.

Lastly, take frequent breaks. Your body can only do so much to keep itself cool before a break is required. If you don’t take breaks and work through the heat then your chances of succumbing to a heat related illness is increased greatly. Move into the shade and rest for a few minutes. Just ten minutes will allow your core temperature to come down and will give you the chance to re-hydrate.

We work and play in the desert. We cannot control the heat. However, with proper education and planning, we can adapt to the heat by drinking plenty of water, staying away from alcohol and caffeine, and by taking frequent breaks.

Shawn Todd Safety Manager, American Safety Services, Inc.

JULY 2014 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE

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JULY & AUGUST

TOP

FESTIVALS AND EVENTS IN TEXAS All across Texas, a variety of festivals, events and attractions are a great way to have fun and to spend time with your family.

The Legacy of Lady Bird Johnson Wilderness and Wildflowers Exhibition June 21 thru September 12 Repeats Every Monday, Tuesday, Wednesday, Thursday, Friday until Sep 12, 2014 Midland County Library - Downtown Branch. 301 W. Missouri 9AM-6PM. This exhibition was created to honor the former first lady and wife of the 36th President, Lyndon Baines Johnson, during the centennial year celebrating her birth in 1912. Featuring photographs, video and excerpts from her speeches and writings, this exhibition shows us a strong, highly intelligent, and committed woman who cloaked her enterprising spirit in civility and a warm, gracious manner.

ROUND TOP MUSIC AT FESTIVAL HILL 2014 Until July 12 100 young musicians from around the world study & perform in a series of orchestra & chamber music concerts with renowned international faculty, conductors & soloists. The Festival & Chamber Orchestras perform several times during June. Individual & season tickets available. Round Top Festival Institute, Hwy 237 at Jaster Road.

(979) 249-3129 www.festivalhill.org

For more info: (325) 773-3614 www.tcrrodeo.com Firecracker Fandango July 4 Hosted by Main Street Odessa, the city’s July 4 celebration includes a parade by the Odessa Jaycees, followed by a festival with food booths, live entertainment, exhibits and activities for all ages. A spectacular fireworks display, hosted by the Odessa Jaycees, is the highlight of the evening. Downtown Odessa Summer Mummers - Desert of the Dead July 4 and running through August Every Friday and Saturday night. 8PM-11PM. Celebrating 66 Delectable Seasons. Yucca Theatre, 208 N. Colorado, Midland, TX

TEXAS COWBOY REUNION AND RODEO July 1-5 Stamford - “The Largest Amateur Rodeo in the World” will host 700 contestants in its 84th year, plus evening dances by prominent country/western bands. Also western art, BBQ & chuckwagon cook-offs/meals, Old Settlers reunion, downtown parade, fiddlers’ contest, trade show, poetry and cowboy symposium.

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PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | JULY 2014

Hot Summer Nights IN ODESSA WITH COOL MUSIC July 11 - Jumping Giants – jazz July 18 - Quebe Sisters Band – Texas Swing & Bluegrass July 25 - Insufficient Funds – Classic Country & Rock August 1 - Los Texmaniacs -- Tejano 10th Anniversary season featuring favorite musical groups playing jazz to polka, Texas swing to big band classics, Tejano to country—a different musical journey every Friday night. Downtown Odessa’s Noel Heritage Park (5th & Sam Houston St.) Free admission. Sponsor: Odessa Council for Arts & Humanities and Main Street Odessa.

(432) 337-1492 www.odessaarts.org

West Texas Treasure Hunters Expo July 12, 2014 Midland County Horseshoe. 9am-6pm. With Special Guest Allen Haff from Spike TV Auction Hunters. Display, Sell, Browse, Pick, Trade, Haggle, Value, and Shop all the booths at the West Texas Treasure Hunters Expo! One person’s trash is another's treasure. Picker/yard sale/ home business event in one location! Anyone can host a booth! Find your treasure or create an exhibit with items old and new for attendees to browse. Bid on a storage unit to benefit a local charity. Midland County Horseshoe, Midland, TX (806) 340-6128 abby.harold@townsquaremedia.com Summer Art Camp July 14, 10am - July 18, 5PM Ellen Noel Art Museum, 4909 E University Blvd. Odessa, TX 79762 432-550-9696 www.noelartmuseum.org 9th ANNUAL CHEESEBURGER COOK- OFF & FESTIVAL July 19 Friona - Start perfecting your cheeseburger recipes, and join in the fun at Friona City Park in Friona on Main Street downtown to compete for a first place prize of $1000 & second place $300.

For more information, contact Friona Chamber of Commerce: (806) 250-3491 fedc@wtrt.net. www.frionachamber.com

2nd Annual TallTownes Backyard BBQ uly 12 KD’s BBQ, 3109 Garden City Hwy, Midland, TX 79701 5PM-8PM. THE GREENCARDS and DOUG MORELAND. More bands and our headliner to be announced over the next few weeks on our website. THE GREENCARDS From the first down-beat in 2002, through tours with Bob Dylan and Willie Nelson, The Greencards have won hearts and acclaim for their multi-dimensional Americana vision. They are TallTownes' first multipleGRAMMY nominated act, having received GRAMMY nominations in 2008, 2010 and 2014. They were the 2006 Americana Honors & Awards winner as New/ Emerging Artist Of The Year, and have occupied the number one position on the Billboard Bluegrass Chart.

TallTownes is extremely excited to bring The Greencards to Midland for our Backyard BBQ. Early Bird General Admission $15.00. For Sponsorship Opportunities, contact us at infotalltownes.com

NIGHT IN OLD PECOS AND CANTALOUPE FESTIVAL July 26 Pecos - This one-day event starts is 6pm until midnight.

The downtown streets are blocked off with a variety of vendors, activities and live music. Free Admission.

For more information call (432) 445-2406 pcoc@cebridge.net, www.pecostx.com

JULY 2014 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE

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Cares Clay Shoot Supporting the Freedom Isn’t Free Veteran’s Hunt

by Marcy Madrid If you want a good example of dedication and passion, spend some time chatting with the Board members and volunteers that help produce the Freedom Isn’t

Free Veterans Hunt.

Founding member Mark Ballard was so dedicated to this cause, he supported the first year’s hunt solely on his army retirement funds. Seeing the impact this project had on vets and their families, others bought

into the cause quickly and jumped on board to help.

A fundraising event was formed to help support the hunts in 2013 and now the event and cause is gaining attention across the Basin. Now in its 2nd year, the Freedom Isn’t Free Clay Shoot was held in June and dozens of supporters showed up to help raise funds to take even more vets and family members on a hunt this year.

The veterans who benefit from this event go as far back as the Vietnam and Korean wars and Gold Family Members, who have lost a member to war, are also welcomed on these hunts.

The clay shoot took pace at the Midland Shooters Association Shotgun Range, on South FM 1788. Board Member Louis Dunnam says they had 50 shooters at this years’ shoot and raised 13 thousand dollars.

That will be enough to take 20 veterans and family members on a hunt with all expenses paid, including mounting.

Louis says he thinks he gets more out of helping fund these hunts than the actual hunters do because it’s so rewarding to bring joy and excitement to such a deserving group of men and women.

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PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | JULY 2014

Mark Ballard • Board of Directors Louis Dunnam • Board of Directors Earl Sebring • Volunteer Wendell Creech • Volunteer

If you’re interested in learning more about this event or organization or if you’d like to donate, contact Louis Dunnam at (432) 213-3997 This is a completely volunteer run organization and all funds raised go directly to the hunts.

David Schmidt Kinder Morgan

www.freedomisntfreeveteranhunt.com

JULY 2014 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE

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Tech

Bites

Source: CNN Money

'Ki ll S w i tch'

co m in g to G o og l e , M icr o s o f t ph on e s Google and Microsoft will include a so-called kill switch in the next version of their smartphone operating systems, authorities announced In June.

The technology allows for a stolen Google (GOOG) Android and Microsoft (MSFT, Tech30) Windows Phonepowered Nokia (NOK) device to be disabled, making it useless to the thief.

With Google and Microsoft on board, kill switches will be available for 97% of the smartphone market, said New York Attorney General Eric Schneiderman, who made the announcement.

Newer versions of Apple's iOS currently include a kill switch called Activation Lock and tracking software that requires a password before the iPhone or iPad is reset. In May, Samsung launched a similar system it calls Reactivation Lock.

Schneiderman issued a report citing data that showed the number of smartphone thefts were on the rise, but that thefts of devices with kill switches were decreasing.

Although the technology is spreading, some older phones can't or likely won't be updated.

"With the majority of phones still without a kill switch, smartphone-related thefts and violence remain a tragic 40

reality," Schneiderman's office said. "Criminals now target devices not likely to be equipped with a kill switch, increasing the importance of immediately implementing the life-saving technology across all manufacturers."

PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | JULY 2014

JULY 2014 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE

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PBE NEWS BRIEFS Watching the basin

McClendon firm to buy leases in Permian Basin for $2.5 bln Aubrey McClendon's American Energy Partners LLP said an affiliate would acquire about 63,000 net acres of production leases in Texas's Permian Basin from Enduring Resources LLC for $2.5 billion.

where the firms are operating, including the Marcellus and Utica shales in Pennsylvania and Ohio, the Permian Basin in West Texas and the Woodford in Oklahoma, the companies said in June.

McClendon started American Energy about a year ago after he was pushed out as chief executive of Chesapeake Energy Corp .

American Energy Partners said it planned to buy shale assets for $4.25 billion.

American Energy Partners LP and private equity firm Energy & Minerals Group, have formed a company to invest in oil and gas pipeline and processing assets.

American Energy Midstream will invest in shale formations

The Oklahoma City, Oklahoma-based company has secured $10 billion in financing commitments.

Energy and Minerals Group, based in Houston, is run by John Raymond, son of former Exxon Mobil Corp CEO Lee Raymond.

Source: Reuters

Watching THE SHALE

Crude-by-rail transportation provides Bakken Shale production access to major markets As onshore crude oil production in the United States increased over the past few years, producers have increasingly moved crude oil out of production areas by rail. Producers in North Dakota, in particular, have used rail to ship crude oil to refineries and midstream companies at newly built unloading terminals on the East Coast and West Coast.

The number of rail carloads of crude oil began rising in 2012, as production in the Bakken Shale and other shale plays grew.

According to the North Dakota Pipeline Authority, Bakken rail outflow capacity totaled 965,000 barrels per day (bbl/d) at the end of 2013, compared to 515,000 bbl/d of pipeline capacity. While some refineries are being built or planned for the area, most Bakken crude oil will continue to be moved out of the region to be processed at refineries in other parts of the country.

Domestic crude oil supply to East Coast (PADD 1) refineries has increased with rising U.S. crude oil production in the Bakken area and expansion of crude-by-rail infrastructure.

Imports from foreign countries into the East Coast of light sweet crude oil, which is of a quality similar to Bakken crude, 42

have declined as a result of increased receipts of Bakken crude from PADD 2.

In addition to crude-by-rail loading facilities in the Bakken, new rail terminals have been built to transport crude oil production from the Niobrara Shale formation in Colorado and Wyoming, and the Permian Basin in West Texas and southeastern New Mexico. Several crude-by-rail loading terminals are already operating in the Niobrara, which has access to a vast rail network to transport abundant coal production from Wyoming's Powder River Basin.

While the Permian Basin has much greater oil production than the Niobrara Shale, it also relies more on pipelines to transport crude oil production. However, in response to significant production growth there, particularly from tight oil formations, Rangeland Energy last month began construction on its RIO Hub rail loading terminal in Loving, New Mexico.

This terminal is scheduled to begin operating later this year, with the project's developers expecting to eventually raise its capacity to 100,000 bbl/d.

PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | JULY 2014

Watching the STATE

Driving Development Up and Down I-45: A New Regional Alliance Brings Communities Together Community economic development professionals crunch data every day, so they know there is strength in numbers when it comes to the business of attracting new business and creating jobs. That's why cities and counties in East Texas are banding together to create the new Central East Texas Alliance (CETA) as a regional resource to help them strategically manage growth and bring more opportunities to their communities.

Stacey Osborne, owner/principal at the Economic Vitality Corporation and former economic developer with the city of La Porte, Texas, has long been an advocate of regional partnerships. Together with like-minded peers and affiliates from the Center for Rural Studies at Sam Houston State University, Osborne brought together economic development professionals, elected officials, and community leaders last fall in Huntsville to discuss what an alliance could mean for the region's future.

With the construction of Exxon-Mobil's new campus in The Woodlands – which is expected to be completed in 2015 – cities and towns north along the I-45 corridor are primed for growth. "Growth is coming," says Osborne. "It's inevitable. So it's

best to have a voice in support of shared interests." She also pointed out that more distant communities are often left out of the conversations about economic development strategies that are implemented in Houston and Dallas, yet affect them.

Cheryl Hudec, associate director of SHSU's Center for Rural Studies, discussed the need for economic development support geared toward rural areas and relayed how communities in the region want to both take advantage of the growth headed their way as well as preserve their unique community character and identity.

CETA's founding members include Grimes County; the Madison County Economic Development Corporation; the city of Willis; the city of Navasota; the city of Onalaska; the Coldspring/ San Jacinto County Chamber of Commerce; and the Buffalo Economic Development Corporation. The alliance also has a founding sponsor, Entergy Texas, Inc., the integrated energy company serving 27 counties in the Texas, including many of the counties in the CETA service area.

Source: www.thetexaseconomy.com

Watching the GOVERNMENT

Officials probe possible insider trading over U.S. Medicare changes Federal authorities and the U.S. Securities and Exchange Commission are seeking evidence for a grand jury investigation into whether congressional staff provided tips to Wall Street traders about a change in healthcare policy, the Wall Street Journal reported in late June.

The SEC sent subpoenas to the House Ways and Means Committee and Brian Sutter, staff director of the committee's healthcare subcommittee, the Journal said.

The Justice Department also has subpoenaed Sutter to testify to before a grand jury in New York.

The investigation was started after a Journal report last year about a jump in health insurance stocks just before the U.S. government announced news about a change in Medicare payments that was favorable to those companies.

The newspaper said the stock surge was set off by an email from Height Securities, a Washington policy-research firm, predicting the change in Medicare payments. The email was partly based on information from Mark Hayes, a lobbyist who had formerly been a healthcare aide in the Senate and who said his information came from "very credible sources," the Journal said.

Investigators want to determine if the "credible sources" broke insider trading regulations by passing on nonpublic information.

Hayes has told congressional investigators his tip did not come from one specific person and that his prediction was based on talks with a Senate aide and his own analysis.

Source: Reuters

JULY 2014 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE

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Watching the Nation

U.S. crude exports in April rise to highest level in 15 years The United States exported 268,000 barrels per day (b/d) of crude oil in April (the latest data available from the U.S. Census Bureau), the highest level of exports in 15 years.

Exports have increased sharply since the start of 2013 and have exceeded 200,000 b/d in five of the past six months. The increase in crude exports is largely the result of rising U.S. crude production, which was 8.2 million b/d in March.

To export crude oil from the United States, a company must obtain a license from the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce.

Almost all of the crude oil exported from the United States has been delivered to Canada, and most of the recent increase in crude oil exports has been from the U.S. Gulf Coast (PADD 3).

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Gulf Coast crude exports averaged 134,000 b/d in the first quarter of 2014, a 283% increase over 2013's record high of 35,000 b/d.

In the first quarter of 2014, nearly 75% of Gulf Coast exports have left the region from the Houston-Galveston district, in Texas. The remaining barrels were loaded in Port Arthur, Texas and New Orleans, Louisiana.

Exports from the East Coast (PADD 1) averaged 30,000 b/d in the first quarter of 2014, down slightly from 2013 levels, but up from 9,000 b/d in 2012.

First-quarter exports from PADD 1 were evenly distributed between the Port of New York and Portland, Maine, which is the starting point of a pipeline that delivers crude to refineries in the Montreal area. Exports of crude from the Midwest (PADD 2) have long been a source of crude for refineries in Sarnia, Ontario.

Source:???

PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | JULY 2014

Watching Offshore

Gulf of Mexico 2014 production shut in by storms seen higher than last year The National Oceanic and Atmospheric Administration (NOAA) is predicting a relatively mild hurricane season, but even a quiet season like last year can lead to disruptions to offshore crude oil and natural gas production in the Gulf of Mexico. EIA recently analyzed the potential for Gulf shut-in production during the upcoming months, given NOAA's outlook for hurricane activity. EIA's mean estimate of offshore production outages during the current hurricane season totals 12 million barrels (bbls) of crude oil and 30 billion cubic feet (Bcf) of natural gas, more than three and four times higher than last year, respectively.

These estimates are highly uncertain as it is difficult to predict the location and intensity of individual storms. If the actual storm activity in the Atlantic Basin falls within NOAA's predicted range, EIA estimates (within a 70% confidence interval) that Gulf of Mexico outages could total anywhere from 1 to 24 million bbls of crude oil and 2 to 65 Bcf of natural gas. Other possibilities fall outside of this 70% interval. For instance, the likelihood of zero disruptions this season is only about 8%. Conversely, EIA estimates the probability of seasonal outages exceeding 40 million barrels of crude oil or 100 Bcf of natural gas is less than 10%. Even if this were to happen, outages

of this size would still be considerably less than those seen in 2005 and 2008, when strong hurricane seasons severely impacted Gulf of Mexico production.

Last season, only one tropical storm—Tropical Storm Karen—had any effect on production in the federallyadministered Gulf of Mexico, shutting in 3.1 million bbls of crude oil and 6.7 Bcf of natural gas. EIA's analysis expects that even with a mild hurricane season, there is a 69% probability of production outages exceeding those of last year.

EIA's U.S. Energy Mapping System and Energy Disruptions web pages make it possible to track storm effects on power plants, oil refineries, major electric transmission lines, and other critical energy infrastructure that are in the path of storms. EIA recently upgraded its mapping systems to be accessible from all mobile devices and tablets. This ability to access EIA information from different devices and locations will assist both emergency response officials and the public to plan for and respond to severe weather events that can threaten energy infrastructure in the United States.

Source: www.eia.gov

Watching the WORLD

ExxonMobil in talks with Turkey over shale gas exploration U.S. oil firm ExxonMobil is in talks with state-run Turkish Petroleum Corporation over a venture to explore for shale gas in the country's southeast and northwest regions, a Turkish energy official said.

Exxon held talks with TPAO in 2012 over a partnership in shale, but the negotiations were inconclusive. Turkish officials say talks have since advanced and are likely to result in an agreement. "ExxonMobil is coming to Turkey to partner up with TPAO," Selami Incedalci, the head of the energy ministry's General Directorate of Petroleum Affairs, said late June.

He said ExxonMobil was interested in onshore

opportunities in the southeast and Thrace, in northwestern Turkey.

Investors from the United States, Europe and Canada are also interested in Turkey's shale gas and oil, Incedalci said, adding that the Ministry was planning to hold talks with potential investors in October.

Estimates of how big Turkey's shale gas reserves are vary wildly; however, one energy official said data from some international bodies suggested Turkey could have a massive 20 trillion cubic metres (cbm) of total reserves.

Another industry expert said proven reserves so far stood at just 6-7 billion cbm.

Source: Reuters

JULY 2014 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE

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RESTAURANT

BITES

KD’s BBQ Have you ever wanted a sign from above in order to make a major life decision? I guess you can say that for Kathy and Dwight Freeman, their sign wasn't quite ready. You see, as Kathy's dads health was deteriorating, the couple decided to close down their hill country restaurant, pack up and head west to be closer to her father in Midland, Texas.

Wanting to continue their love of running a restaurant, they immediately began looking for a good, countryside location in Midland Texas that would allow them to offer a simple BBQ menu in the old country fashion they knew and loved. That's where their not-quite-ready sign from above comes in. As they're driving into town in the summer of 1997, Kathy recalls driving down a then, very empty and isolated part of Garden City highway when her and Dwight saw the perfect building in a perfect, country location. On a ladder outside was a man painting the letters, F-O-R S-A. Dwight got out of the car and asked the man if that building was for sale. Kathy says the man told him to hold on, as he completed his work

by Marcy Madrid

with the letters L-E. When finished, the man turned back around to the couple and said, "It is now." That was their sign sending Kathy and Dwight straight to the bank to become the proud new owners of a side-by-side welders shop and fireplace store. With fresh paint on the sign and the ink just dry on the contract, Dwight and his friend began working non-stop that August to make the two old industrial buildings into one great BBQ joint.

Opening on November 7th, 1997, the legend of KD's BBQ began. Kathy says they love old antiques and collectables so as soon as they opened up, her and Dwight began hanging a bunch of their own collectables on the walls and traveled far and wide to every garage sale and antique auction to buy more stuff to hang. Customers quickly caught on and began asking if they could hang their signs and so those infamous walls began to fill up. Kathy says that even some of the deer heads and old beer cans they've collected were the result of wives telling their husbands to get it out of the house so they'd bring it to KD’s to allow the nostalgia to live on.

Aside from the unique atmosphere and family friendly service, its no secret that KD's has definitely mastered the art of making great plate of BBQ. As you enter the restaurant through what seems to be a side door, you walk straight up to the pit filled with an array of BBQ staples like brisket, sausage, chicken and turkey. Instead of a plate, you pick up a cafeteria tray and a sheet of butcher paper and begin loading up on whatever combination of meats and side items your heart desires, with of course some cobbler for dessert. Business has gradually grown more and more over the years making KD's BBQ one of the most popular lunchtime spots in Midland. Kevin Stephens with Signal Well Service out of Killgore said he moved away for work a few years ago

46

PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | JULY 2014

but always makes a point to eat at KD's when he's back in town on business because he says it's one of the best restaurants in the Texas. Kathy says their laid back feel attracts both big time company executives to field workers alike and everyone receives the same friendly service whether they show up in a suit and tie or mud covered overalls.

"We pride ourselves on being a country-style, family owned restaurant, and we have no plans to change that," said Kathy. Despite their popularity, they aren't interested in adding anymore stores because they'd rather just focus on their pride and joy on Garden City Highway. It's no doubt timing played an important role in this couples success as they were in the right place at the right time when they saw their almost finished 'sign'.

FUN FACTS

KD's used to have an outside patio but decided to closed it in because of the unpredictable West Texas weather. Now it can hold about 80 people and is regularly rented out for private parties and events. They also built an outdoor stage out of 2 cotton trailers and it has frequently been used to host out of town bands and specials shows.

The butcher paper used to place your food on has taken on a whole new purpose over the years. Kathy says multimillion dollar deals have been written out and agreed to on their butcher paper and a couple customers have even given her the final deals to keep as memorabilia.

KD’s BBQ 3109 Garden City Highway Midland TX 79701 Phone (432) 683-5013 Kdsbbq01@gmail.com JULY 2014 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE

47

Fight For Your Marriage

by Mickey Eckles

Mickey Eckles is the Lead Pastor of Adults at Mid-Cities Community Church where he oversees Marriage Preparation classes.

Mickey & Bonnie are currently enjoying a healthy season of marriage.

For the last 22 years, I’ve had the privilege of being a pastor - a role I never imagined. As a college student, I wanted to be a Secret Service agent. I dreamed of protecting the President, working the motorcade, going to Camp David, and fighting off potential threats and assassins. Then one day while serving as a youth intern at my local church, I was offered a full-time youth pastor position. Talk about a career shift!

We have a strong marriage today, but lest I kid you, we have gone through some dark seasons where we did not like each other too much. On two specific occasions, I can remember thinking, “This is where people decide to walk out.”

Two decades later, I now know what pastors do with some of their time. They help people protect their marriages. In the same way that terrorists plot to take out the President, we have an enemy who plots ways to take out families.

“Your enemy the devil prowls around like a roaring lion looking for someone to devour (1 Peter 5:8). Oftentimes, the devil doesn’t have to do much because husbands and wives are capable of destroying each other on their own with things like selfishness, unrealistic expectations, cutting words, lack of forgiveness, unfaithfulness, neglect, etc.

After 21 years of marriage, I get it. Our marriage has gone through a range of seasons. In fact, that’s what has helped us most– thinking in terms of seasons. The honeymoon was great, but after a week it was back to the real world.

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PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | JULY 2014

If you’ve had some of these same thoughts, you are fairly normal. The apostle Paul said, “those who marry will face many troubles in this life” (1 Cor 7:28). So how can we stand up and fight? Here are a few quick thoughts.

Is your marriage struggling?

Fight for your marriage now.

If you need help, contact your local church today.

1. Your marriage has a chance to get better after you get your heart right with God. (Jam 4:7)

If you are not connected to a local church, contact Mid-Cities at www.midcities.org.

2. Recognize that you and your spouse are on the same team. Your battles are often more spiritual than physical. (Jam 4:7, Eph 6:12)

We would be happy to fight with you for your family.

3. Forgiveness is a key part of healing from past hurts. (Eph 4:31-32) 4. Marriage is a covenant, not a contract of convenience. When divorce is ruled out as an option, you get motivated to find resolution quicker.

(Mal 2:13-16)

Mickey Eckles can be reached by mickey.eckles@midcities.org

JULY 2014 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE

49

U.S. RIG COUNT - TEXAS

States &

through July 4, 2014

BAKER HUGHES RIG COUNT

RIGDATA RIG COUNT

Four Week Average 2012

Four Week Average 2013

Last Week

This Week

Four Week Average 2012

Four Week Average 2013

Last Week

This Week

Waiting to Spud

Texas RRC District 1

138

117

119

117

143

124

118

127

11

Texas RRC District 2

85

90

89

922

79

92

94

94

9

Texas RRC District 3

48

56

52

54

52

63

62

64

14

Texas RRC District 4

32

35

34

33

30

28

29

27

2

Texas RRC District 5

13

10

10

10

13

12

12

10

0

Texas RRC District 6

26

32

35

33

25

35

34

37

0

Texas RRC District 7B

13

13

15

13

16

24

20

29

3

Texas RRC District 7C

81

101

101

103

78

103

104

105

3

Texas RRC District 8

283

324

319

320

265

318

317

319

14

Texas RRC District 8A

35

38

40

38

36

40

41

43

5

Texas RRC District 9

22

15

15

15

31

26

28

25

2

Texas RRC District 10

61

59

58

58

67

64

63

62

0

Texas Total

837

890

885

886

835

929

922

942

63

U.S. Totals

1,772

1,861

1,935

2,129

2,117

2,147

113

Districts

1,854 1,858

COPYRIGHT Š 2014 RIGDATA P.O. Box 820547 Fort Worth Texas 76182-0547 1-800-627-9785 | www.rigdata.com This report is protected under United States and international copyright laws and is intended for the exclusive use of the subscriber. Any unauthorized reproduction, retransmission, distribution, publication, broadcast or circulation of this report to anyone, directly or indirectly, without the express prior written consent of RIGDATA is prohibited. To order additional report copies at a reduced rate or for a corporate site license, please contact: 1-800-627-9785 50

PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | JULY 2014

Top 35 Drillers Rankings Each month we track the activity of all the drillers and compile the results into a report that identifies the top 35 out of 100 drillers based on their footage drilled. Updated monthly, these reports also detail the number of well starts and the number of directional wells drilled by each of the top 35 out of 100. through July 25, 2014 Company

Footage Drilled

% of Total

Average Footage

Well Starts

% of Total

Directional Wells

1

Helmerich & Payne, Inc.

24,293,548

17.2%

10,400

2,336

13.2%

2,073

2

Patterson-UTI Drilling Company, LLC

14,430,501

10.2%

10,541

1,369

7.7%

1,227

3

Nabors Industries, Ltd.

12,111,396

8.6%

7,490

1,617

9.2%

1,482

4

Precision Drilling Trust

6,548,770

4.6%

8,617

760

4.3%

684

5

Nomac Drilling, LLC

6,003,645

4.3%

9,826

611

3.5%

610

6

Ensign Energy Services, Inc.

5,704,001

4.0%

6,373

895

5.1%

525

7

Unit Drilling Company

4,524,263

3.2%

10,121

447

2.5%

421

8

Pioneer Energy Services Corp.

3,804,851

2.7%

10,173

374

2.1%

279

9

Trinidad Energy Services Income Trust

3,470,499

2.5%

9,916

350

2.0%

281

10

Cactus Drilling Company, LLC

3,227,287

2.3%

10,478

308

1.7%

301

11

Capstar Drilling, LP

2,985,256

2.1%

6,490

460

2.6%

130

12

Savanna Energy Services Corp.

2,061,695

1.5%

9,082

227

1.3%

73

13

Xtreme Drilling and Coil Services Corp.

2,000,316

1.4%

10,584

189

1.1%

182

14

Sidewinder Drilling, Inc.

1,950,760

1.4%

8,519

229

1.3%

211

15

Complete Production Services, Inc.

1,536,376

1.1%

10,175

151

0.9%

79

16

Desoto Drilling, Inc.

1,460,310

1.0%

4,507

324

1.8%

324

17

Latshaw Drilling & Exploration Company

1,304,753

0.9%

8,418

155

0.9%

155

18

Pinnergy, Ltd.

1,290,700

0.9%

9,154

141

0.8%

141

19

Sendero Drilling Company, LLC

1,227,861

0.9%

11,265

109

0.6%

0

20

Lariat Services, Inc.

1,218,217

0.9%

6,694

182

1.0%

64

21

Robinson Drilling of Texas, Ltd.

1,194,714

0.8%

11,166

107

0.6%

2

22

Orion Drilling Company, LLC

1,135,444

0.8%

11,469

99

0.6%

94

23

CanElson Drilling, Inc.

1,098,600

0.8%

9,005

122

0.7%

55

24

Frontier Drilling, LLC

1,075,033

0.8%

8,083

133

0.8%

119

25

Scandrill, Inc.

1,055,329

0.7%

12,130

87

0.5%

80

26

Cyclone Drilling, Inc.

1,027,578

0.7%

4,264

241

1.4%

230

27

Bison Drilling and Field Services, LLC

874,858

0.6%

11,822

74

0.4%

25

28

SST Energy Corporation

868,543

0.6%

9,983

87

0.5%

86

29

Cade Drilling, LLC

826,364

0.6%

11,477

72

0.4%

72

30

Basic Energy Services, Inc.

822,649

0.6%

7,345

112

0.6%

28

31

ProPetro Services Incorporated

762,000

0.5%

11,545

66

0.4%

0

32

Big Dog Drilling Company

726,900

0.5%

11,916

61

0.3%

5

33

Lewis Petro Properties, Inc.

713,000

0.5%

10,186

70

0.4%

69

34

Murfin Drilling Company, Inc.

671,985

0.5%

4,667

144

0.8%

0

35

Aztec Well Servicing Co.

661,652

0.5%

6,126

108

0.6%

64

Total Top 100 for year 2014

140,968,762

100.0%

---

17,671

100.0%

---

RANK

JULY 2014 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE

51

Top 35 Operators Rankings Updated every month, we track and rank the top

35 out of 100 operators based on their footage drilled.

Keep track of the most active operators with details on their number of well starts.

through June 30, 2014

RANK

Company

Footage Drilled

% of Total

Average Footage

Well Starts

% of Total

Directional Wells

1

Anadarko Petroleum Corporation

7,716,181

5.5%

10,385

743

4.2%

735

2

Chesapeake Energy Corporation

5,889,632

4.2%

10,225

576

3.3%

576

3

Pioneer Natural Resources Company

4,893,061

3.5%

13,048

375

2.1%

261

4

EOG Resources, Inc.

4,767,832

3.4%

10,433

457

2.6%

437

5

Occidental Petroleum Corporation

4,719,588

3.3%

6,082

776

4.4%

391

6

Apache Corporation

4,132,639

2.9%

8,830

468

2.6%

315

7

Marathon Oil Corporation

3,087,934

2.2%

14,566

212

1.2%

212

8

Devon Energy Corporation

2,951,487

2.1%

9,311

317

1.8%

287

9

BHP Billiton Limited

2,821,109

2.0%

13,762

205

1.2%

205

10

Chevron Corporation

2,532,398

1.8%

5,137

493

2.8%

224

11

ConocoPhillips Company

2,320,900

1.6%

7,894

294

1.7%

235

12

QEP Resources, Inc.

2,219,695

1.6%

11,870

187

1.1%

175

13

Noble Energy, Inc.

2,040,684

1.4%

9,906

206

1.2%

206

14

Oasis Petroleum North America, LLC

2,035,662

1.4%

10,128

201

1.1%

201

15

Exxon Mobil Corporation

1,893,104

1.3%

5,303

357

2.0%

164

16

Concho Resources, Inc.

1,842,922

1.3%

11,306

163

0.9%

126

17

Whiting Petroleum Corporation

1,714,372

1.2%

9,741

176

1.0%

158

18

Encana Corporation

1,692,075

1.2%

12,534

135

0.8%

128

19

Linn Energy, LLC

1,563,996

1.1%

5,646

277

1.6%

131

20

Southwestern Energy Company

1,555,721

1.1%

4,483

347

2.0%

346

21

EP Energy E&P Company, LP

1,435,554

1.0%

9,766

147

0.8%

130

22

SandRidge Energy, Inc.

1,418,030

1.0%

5,351

265

1.5%

185

23

Laredo Petroleum, Inc.

1,388,800

1.0%

11,200

124

0.7%

44

24

CrownQuest Operating, LLC

1,219,600

0.9%

11,957

102

0.6%

0

25

WPX Energy, Inc.

1,211,455

0.9%

6,693

181

1.0%

179

26

Newfield Exploration Company

1,196,721

0.8%

6,332

189

1.1%

178

27

Murphy Oil Corporation

1,183,826

0.8%

10,570

112

0.6%

112

28

Ultra Petroleum Corp.

1,111,177

0.8%

12,627

88

0.5%

88

29

Antero Resources Corporation

1,095,502

0.8%

11,411

96

0.5%

96

30

Penn Virginia Corporation

1,028,000

0.7%

14,479

71

0.4%

71

31

Cimarex Energy Co.

992,870

0.7%

10,451

95

0.5%

93

32

SM Energy Company

931,659

0.7%

9,507

98

0.6%

98

33

Windsor Energy, Inc.

919,000

0.7%

10,940

84

0.5%

64

34

Energen Resources Corporation

872,171

0.6%

10,025

87

0.5%

55

35

Parsley Energy Operations, LLC

863,450

0.6%

11,828

73

0.4%

5

Total Top 100 for year 2014

140,968,762

100.0%

---

17,671

100.0%

---

52

PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | JULY 2014

Source: www.eia.gov

Alternative metrics for Gulf Coast crude oil inventories provide differing perspectives On May 9, Gulf Coast (PADD 3) crude oil inventories reached a record level of 215.7 million barrels (Figure 1), and since then have remained near historically high levels. These higher inventories have been attributed to the logistical changes that have enabled crude to flow more freely from the Cushing, Oklahoma, storage hub and crude oil production centers to refining centers on the Gulf Coast.

However, when stated as days supply of regional refinery throughputs, inventories are much closer to historically typical levels (Figure 2), consistent with the operating requirement of increased crude processing at PADD 3 refineries. also supported higher crude runs. All other factors equal, increased refinery crude runs increase crude inventories required for operations.

Based on the most recent EIA weekly data, Gulf Coast crude oil inventories were 205.8 million barrels on June 13, and average crude inputs at Gulf Coast refineries for the previous four weeks were 7.9 million b/d. Thus, PADD 3 inventories were sufficient to supply 26.1 days of regional crude demands. This is only slightly above the PADD 3 fiveyear average of 24.3 days supply for this time of year.

Gulf Coast refineries have been running at near record levels for much of 2014. Through May, crude inputs at Gulf Coast refineries averaged 8.1 million barrels per day (b/d), an increase of 0.5 million b/d compared with the same period in 2013. Price-advantaged crude oil and natural gas feedstocks have encouraged high utilization rates at PADD 3 refineries. Crude oil distillation capacity additions have

While absolute levels of crude inventories on the Gulf Coast have been 11.2 million barrels higher on average year-todate in 2014 than over the same period in 2013, on an average days-supply basis, the 2014 year-to-date average of 23.8 days is unchanged from the 2013 level. Even when Gulf Coast crude oil inventories reached an absolute record of 215.7 million barrels on May 9, supply of 25.7 days was only 0.6 days more than the five-year average.

JULY 2014 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE

53

To accommodate the increased inventories, market participants have been adding crude oil storage capacity. As of March 31, total working crude oil storage capacity on the Gulf Coast was 275.4 million barrels, up 2.1 million barrels (0.8%) from six months earlier, and up 5.1 million barrels (2.1%) from March 2013. Of the total working storage capacity on March 31, 202.3 million barrels was at crude oil tank farms and 73.1 million barrels at refineries. EIA reports Working and Net Available Shell Storage Capacity twice a year.

The storage reports are released at the end of May and November, reporting storage as of March 31 and September 30, respectively. On March 31, Gulf Coast crude inventories were 199.3 million barrels, or 72% of available capacity.

Propane inventories continue to rise U.S. propane stocks increased by 2.0 million barrels last week to 51.2 million barrels as of June 13, 2014, 1.9 million barrels (3.5%) lower than a year ago. Gulf Coast inventories increased by 1.6 million barrels and East Coast inventories increased by 0.4 million barrels. Rocky Mountain/ West Coast inventories increased by 0.1 million barrels while Midwest inventories remained unchanged. Propylene nonfuel-use inventories represented 8.0% of total propane inventories.

This utilization rate was up compared with 68% (186.2 million barrels) in the last survey and 69% (186.4 million barrels) a year earlier. However, actual utilization was likely lower than that, because EIA inventory data include volumes in pipelines, while storage capacity does not include pipeline capacity.

Gasoline prices increase, diesel fuel prices mostly lower The average U.S. price for regular gasoline increased by one cent this week to $3.69 per gallon as of June 16, 2014, six cents more than the same time last year. All regions of the country experienced price increases. The Rocky Mountain and Midwest prices each increased two cents, to $3.53 and $3.71 per gallon respectively.

The Gulf Coast and East Coast prices both rose by a penny, to $3.43 and $3.64 per gallon respectively. The West Coast price increased by less than a cent, to remain at $4.00 per gallon.

The average U.S. diesel fuel price decreased by one cent to $3.88 per gallon, four cents more than the same time last year. The Gulf Coast price saw the only increase, by less than a penny, to remain at $3.77 per gallon.

The East Coast and Rocky Mountain prices each fell by two cents, to $3.96 and $3.89 per gallon respectively. The Midwest price decreased by one cent to $3.84 per gallon, while the West Coast decreased by less than a penny to $3.99 per gallon.

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PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | JULY 2014

JULY 2014 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE

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