PBE Magazine

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VOLUME 2 NO. 3

MARCH 2014

www.PBEMag.com

8

Do You Feel Safe

in the Permian Basin

Faith In The Field: The Roots of The Oil Patch Bible 12

“Little Texas”

Sweetwater Prepares

in the Mountains Lives up to its Name Angel Fire Resort - New Mexico 28 • U.S. RIG COUNT • TOP 35 Drillers & Operators

Industry Data

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News

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Events

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for the Cline Shale Impact growth

42 |

Auctions

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RESTAURANT BITES Riko’s Grill Calendar

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Travel

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Tips

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Energy

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Tech

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MARCH 2014

contents 8

Pbe Features 8

Do You Feel Safe in the Permian Basin

12 Faith In The Field: The Roots of The Oil Patch Bible 16 Sweetwater Prepares for the Cline Shale Impact 28 “Little Texas” in the Mountains Lives up to its Name

Angel Fire Resort - New Mexico

Other Editorials

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15 Calendar of Events 22 Conferences in March - April 23 Upcoming Auctions 24 Advice for Mineral Owners from Permian Basin Land Girl 27 Safety Tips - Fatigue and Work Don’t Mix 31 Gas-to-Liquids Plants Face Challenges in the U.S. Market 32 Festivals and Events in Texas 34 PBE Cares - Restoration Farms 36 Tech Bites - From Smartphone to Superphone

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38 PBE News Briefs:

Basin, Offshore, State, Nation, World, Shale & Government 42 Restaurant Bites - Riko’s Grill 44 PBE Inspires - Spiritual Mutt 46 By The Numbers: Texas Rig Count, Top Drillers, Top Operators 49 This Month in Petroleum

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

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LETTER FROM

THE EDITOR “Anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young.

The greatest thing in life is to keep your mind young.”

- Henry Ford

Spring is said to be a time of rebirth and inspiration. It’s a season that inspires growth and reminds us of all the beauty that surrounds us as it begins to sprout out from beneath the thawing soil. As we enter the Spring season this month, we hope this issue of PBE magazine reminds our readers of all the promise and excitement that lies ahead in each new season we face.

For many West Texas towns right now, that promise seems to be endless, as you’ll hear about in a discussion with a leader in Sweetwater, as they prepare for what’s to come. A couple brothers in Midland are also facing an exciting season in their lives as they embark on a new venture together in owning and operating their own restaurant. You’ll also read about how the increase in business has led to an increase in population, which is now being tied to an increase in crime, but some new perspective on this issue will hopefully shed some light on a positive side to this story. This issue will also shed light on a couple new outreach initiatives sprouting up around the Basin, both meant to bring hope and healing to a town and people who need a little encouragement and a reminder that people really do care.

As we reflect on this new season of hope and promise ahead, let’s also be aware of how fleeting this life can be and the importance of showing a little extra love, encouragement and support to those around us, realizing that we may never know how much they really need it.

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

/PBENERGYMAG @PBENERGY

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

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EDITORIAL CONTRIBUTORS PBE MAGAZINE CONTACTS VOLUME 2 NO. 3

EDITOR IN CHIEF/PUBLISHER Carlos Madrid sales@pbemag.com 432. 559. 5886

AUDRIE PALMER PBE MAGAZINE WRITER Midland, TX

ART DIRECTOR/LAYOUT & GRAPHICS Luke Pawliszyn Lukasz Design Studio West Hollywood, CA luke@lukaszdesign.com

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

Taryn SnideR FREELANCE WRITER

SUBMISSIONS Submit story ideas & other news to haley@pbemag.com PUBLISHED BY: PBE Magazine, LLC. Permian Basin Energy Magazine 4500 Erie Drive Midland, TX 79703 Main Phone: 432. 559. 5886

DANIEL STEPHENS SENIOR PASTOR Mid-Cities Community Church Midland, TX

www.PBEMag.com

/PBENERGYMAG

@PBENERGY

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.

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

daniel.stephens@midcities.org

Kimberly Harless - Smith CEO Development Resources, Inc.

Shawn Todd American Safety Services, Inc.

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

7

Do you feel

safe

in the

Permian Basin?

by Kimberly Harless-Smith

As the Permian Basin expands in population, individuals have varied impressions about their own personal safety. The same question is posed in various coffee shops in Howard, Martin, Winker and Ward Counties: do we feel safe and how do we handle the growth? Although a recent Time Magazine article reported a Permian Basin city as being top on the list of U.S. Cities where violent crime is rising, there are many statistical studies that confirm that “the volume of crime within a jurisdiction was highly correlated with the population size and density or it’s demographics and socioeconomic makeup.” Sociological conditions including economic conditions, climate, and urbanization contribute to an increase in criminal activity.

Certainly growth hurts and we all feel the impact of the multiple challenges in our region. One could blame the influx of young male oil field workers. Some can blame the lack of government funding to increase the police department. Some can blame increased drug activity.

However, rather than place the blame, I wanted to provide some words of encouragement, then challenge you to become involved.

The local county governments are working tirelessly to plan for the increase in population. The Permian Basin Coalition meets monthly in various counties with local county leaders to work together on common issues. Each month over 100 county leaders convene to discuss infrastructure changes. Public leaders and police officers share your concern.

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Now, I want to challenge PBE readers to become proactive! It is time to become crime stoppers everywhere you go... take time to report suspected criminal activity.

Like most government agencies, the need far exceeds the current budget and staff.

Interestingly enough, violent crimes within the City of Midland have decreased over the last 11 years, and property crimes have increased, according to CityRating.com.

•

Based on the trend, the crime rate in Midland for2014 is expected to be higher than 2010.

•

The city violent crime rate for Midland in 2010 was lower than the national average by 8.16% and

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

the property crime in Midland was higher than the national property crime rate average by 11.43%.

•

•

In 2010 the city violent crime rate in Midland was lower than the crime rate in Texas by 17.68% and the city property crime rate in Midland was lower than the property crime rate in Texas by 13.35%.

Property crimes include arson, motor vehicle theft, burglary, larceny and theft.

Odessa crime statistics report almost the opposite with an overall downward trend in crime based on data from 12 years with violent crime increasing and property crime decreasing.

Based on this trend, the crime rate in Odessa for 2014 is expected to be lower than in 2010. (cityrating.com) •

The City violent crime rate for Odessa in 2010 was higher than the national violent crime rate average by 77.06% and the city property crime was higher than the national property crime rate average by 17.89%.

•

In 2010, the city violent crime rate in Odessa was higher than the violent crime rate in Texas by 58.72%.

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The city property crime rate in Odessa was lower than the property crime rate in Texas by 8.32%

2013 CRIME STATISTICS FROM THE CITY OF MIDLAND The Midland Police Department has compiled crime statistics for the year of 2013. The following numbers refer to Part I Crimes, crimes that are most likely to be reported and are also serious in nature and/or volume.

Midland’s crime rate has fallen in eight of the last ten years, and despite the increase between 2012 and 2013, Part I crimes have decreased 22 percent over the last decade. The number of reported Part I crime reached 4,547 in 2003, and has decreased each year since that time with the exception of 2009 and 2013.

Forcible rape was down slightly, while aggravated assaults showed the largest decrease of all Part I

Crime

2012 2013

Percent increase/ decrease

Murder& Manslaughter

by Negligence

4

5

25%

Forcible Rape

23

22

-4.35%

Robbery

52

63

+21%

Aggravated Assault

321

260

-19%

Burglary

559

568

-1.6%

Theft

2,313

2,459

+6%

Auto Theft

136

164

+21%

Total Part I

3,408

3,541

+3.90%

offenses. The department continued their burglary reduction strategy, implemented in June 2009, which helped reduce reported burglaries a total of 38% since that time. That year there were a total of 909 reported burglaries. Burglary increased by only 9 reported offenses during 2013.

MPD also uses crime data and statistics to identify possible crime trends or spikes in crimes in a specific part of the city. They also have open forum meetings in various regions of the city. Check the City of Midland Website for more information on those.

Sarah Higgins, Public Information Officer for the City of Midland says, “the Midland Police Department attributes the decrease in crime to their partnership with the community and the hard work done by officers and detectives.” The Midland Police Department, and surrounding police departments rely on citizens to be PROACTIVE! The City of Midland Police Department provides four ways to be involved and assist police officers without carrying guns, although this IS TEXAS where we LIKE to protect our right to bears ARMS, so a few conceal carry volunteers may exist. Mainly, programs like Citizens Police Academy, National Night Out and Citizens on Patrol engage volunteers to become partners to local law enforcement.

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

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•

The Citizens Police Academy is a six-week program that meets every Tuesday and Thursday evening.

Individuals can ride along with police officers and see the inside of a police department.

•

Your presence can help keep school teachers and children safe. Think of yourself as an undercover agent, keeping an eye on crime! (Note: Trained Conceal Carry cannot pack heat on a school campus)

•

The RAD School Women’s Self Defense, R.A.D. (Rape Aggression Defense) allows individuals to develop and enhance the options of self-defense, so they may become viable considerations to the woman who is attacked. Churches, local non-profit groups or neighborhoods can arrange for the police department to come out and train women on selfdefense tactics.

•

City government websites provide phone numbers and digital response engines to report a crime and help local law enforcement officials. www. midlandtexas.gov and www.odessa-tx.gov

•

•

The Police Department also provides a home inspection service where a police officers will evaluate the security, alarm systems and other protective measure within your home. After a home inspection, some insurance companies may offer a 10-15% discount.

Be involved in your child’s school, engage in your local PTA or volunteer on the campus. Your involvement is another set of eyes and ears to help reduce the sale of drugs, bullying or theft.

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Whatever your preference, become involved and contact your local police department.

Keep Calm and Volunteer!

Sources cited: Journal of Criminal Science “Establishing the statistical relationship between population size and UCR crime rate: Its impact and Implications.” By James J. Nolan III, www.sciencedirect.com www.cityrating.com/crime-statistics/texas/midland.html www.midlandtexas.gov , Sara Higgins, Public Information Officer www.oaoa.com/news/crime_justice

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

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Faith In The Field: the roots of

the Oil Patch Bible

In this industry some men and women wake up in the morning and head to the office while others head to the field but whether it’s a briefcase or a duffle bag they’re carrying, it’s what’s inside that may come as a surprise: a Bible. It may be surprising because it’s no secret that the people who work in the oilfield have a reputation for their excessive lifestyles. On the other hand, what better place to spread God’s Word? Such was the idea in 1991 when John Bird and Jim Teague held their first prayer breakfast at First Baptist Church in Houston.

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By: Taryn Snider

The Bible of the NLT translation titled, “God’s Word for the Oil Patch: Fuel for the Soul,” began circulating in 2004 due to the efforts of Oilfield Christian Fellowship founders John Bird and Jim Teague. After years of meeting for prayer breakfasts the two men expanded their ministry to passing out Bibles crafted specifically for the audience they were trying to reach. Like the prayer breakfasts, the Bibles provide testimonies of roughnecks and executives of the oil industry for the benefit of showing Christians in this line of work that they’re not alone in their faith. Furthermore, the Bibles have also been a successful path towards reaching the lost.

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

Oilfield Christian Fellowship eventually found its way to the Permian Basin but later fizzled out. In the spring of 2013 the Midland-Odessa Chapter was revived. A handful of Oilfield Christians formed a board and began to meet in April. Chris Snider learned of the organization while in a waiting room at New Tech Global where they had the Bibles sitting out instead of magazines. Snider was impressed by a ministry that gifts custom Bibles to people because, “People who become Christians through reading the Bible usually stay Christians.” He attended a board meeting and learned that OCF was in need of a building to hold breakfast meetings in the area.

Not long after, at a drilling location, he happened to run into Doug Tull, board member of Rock the Desert. Snider informed Tull of the building need and in God’s perfect timing the location dilemma was solved and OCF began meeting at Rock the Desert’s Field House on 1788.

By August OCF was ready to have their first meeting open to the Public. Horizon Mud Company provided the breakfast and the guest speaker was Greg Moore; an estimated 50 people attended. In September OCF held their second breakfast and welcomed guest speaker Michael Franzese, former mob boss of the Colombo mafia family in New York. Every month a new speaker is presented. Some are local and others come from afar but they all have a great story to tell.

Their next meeting on March 28, OCF is excited about their guest speaker Jeff Struecker who was involved in the 1993 Battle of Mogadishu portrayed in the film Black Hawk Down. OCF is currently working on a plan to provide a free meal and free Bibles at the Permian Basin Oil Show in October. This event depends on available space but Damian Barrett, Director of the MidlandOdessa Chapter, is confident things will fall into place.

Barrett said, “Our goal is to hand out Bibles, reach the lost and make disciples. God has been with us from day one in our efforts to plan the lunch.”

Oilfield Christian Fellowship has over 200,000 custom Bibles in print in English, Spanish, Chinese and Portuguese. There are 21 chapters who meet each month, while some meet weekly. This year Houston will have its 16th annual prayer breakfast with 800 men and women expected in attendance.

The Midland-Odessa Chapter meets on the third Friday of each month at 6:30 am at Rock the Desert field house on FM 1788 north of the Midland International airport.

Like & Share our Facebook page www.facebook.com/ocfpb

Local Chapter Website: www.ocf-pb.org International Website: www.oilfieldchristianfellowship.com

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

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

OBSERVANCES AND CELEBRATIONS

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MARCH 2014

MARDI GRAS

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Birthstone: Aquamarine Flower: Jonquil National: Red Cross Month National Frozen Food Month National Peanut Month National Craft Month National Women’s History Month

Ash Wednesday

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NETWORKING PROVIDERS OF SERVICES IN THE PERMIAN BASIN

11:30am-1pm. Mia Piaci Italian Restaurant. (432) 638-1243 lindajmelson@aol.com. A networking group connecting people to improve the quality of life in the Permian Basin. State agencies and individual owned businesses providing services to the Permian Basin area. First Visit Free. Annual dues $12.00 (prorated). Bring your business cards, brochures and name tag.

Purchase lunch, if you desire. Speakers during lunch.

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Permian Basin Gun Show

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Ector County Coliseum. 4201 Andrews Hwy. Odessa, Texas 79762. (432)-550-4835

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St. Patrick’s Day International Earth Day

SPRING EQUINOX

26-27

Shepperd Distinguished Lecture Series

7-9pm. Wagner Noel Performing Arts Center. (432) 552-2850 JBS@ utpb.edu. The Shepperd Distinguished Lecture Series has a dynamic history of hosting nationally and internationally known speakers. The program highlights significant political, educational and business issues with one goal in mind: to bring genuinely thoughtful people together – and thereby, facilitate understanding through the observations and ideas of our guests. Free and open to the public.

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6th Annual Southwest Energy Summit

Sweetwater, Texas www.southwest-energy.info

2014 State of Education

Midland Center. 105 N. Main St. Midland, Texas. 11:00 AM-1:00 PM. Featuring: Senator Kel Seliger & Representative Tom Craddick Moderated by: Rick Davis, President of MISD School Board. The Midland Chamber of Commerce recognizes the value of an educated workforce. The Chamber’s State of Education luncheon is designed to facilitate meaningful discourse on the topic and inform the business community about pressing issues faced by today’s educators. www.midlandtxchamber.com

APRIL 2014

4 Cline Shale Alliance quarterly luncheon

West Texas Training Center 3501 North U. S. Highway 67 (277) San Angelo, Texas 76905 11:30 a.m. to 1:30 p.m.

Birthstone: Diamond Flower: Sweet Pea, Daisy

14 PASSOVER

20

EASTER

22

EARTH DAY

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

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Sweetwater Prepares

for

the

Cline Shale Impact Source: The Texas Economy

The Texas Economy (TE) talks with Ken Becker, executive director of Sweetwater Enterprise for Economic Development TE recently spoke with Ken Becker about the Cline Shale oil play and its potential as energy companies utilize new extraction techniques. Some estimates suggest the Cline may hold as much as 30 billion barrels. The Odessa American noted that this would make it “roughly the equivalent of all the oil sucked from the Permian Basin since the first well was completed in 1921.”

TE: What are you doing in Sweetwater to prepare the community for development of the Cline Shale?

TE: What was the biggest takeaway from your visit to the Bakkens?

Ken Becker: As economic development directors, one of our primary roles is to help educate. So we’ve visited other areas of the country and the state where shale plays have been or are being developed, such as in the Bakkens in North Dakota and Eagle Ford here in Texas, to learn what those communities have gone through.

We’re sharing what we’re seeing and hearing with the city and the county, and then they’re going to make their decisions on how to best prepare for the potential Cline has for this area.

Ken Becker: I think it was the importance of proper zoning within your community – affecting everything from man camps and storage buildings to housing and industrial parks. There are often people looking to make a quick buck and push the limits of zoning. In North Dakota, we saw how housing was created from those storage containers you often see going back and forth on railroads. They did a big complex with those in Dickinson, ND and it was impressive. Then you see other ones where they didn’t do them right.

When I visited the Bakkens, it was five years after their boom period, and they’d been through a lot of interesting times. That gave us good context. One of the things we learned was that it was difficult for others in the public and other private sectors to pay their employees enough compared to the oil companies. So newer employees coming in were being given financial incentives and housing allowances.

City planning is the other big factor that is very important. Several towns told us to get a handle on it as soon as we could and strategically plan for where the growth will occur. Otherwise, for example, you may have similar growth-related infrastructure needs in opposite ends of the community, and then you’re suddenly scrambling to figure out how to do it all with limited financial resources. So we’re trying to do that

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

in Sweetwater, and we’re purchasing land and making business parks in an area that’s already prepared. That way, when somebody says they want to come in, we can direct them to a certain location.

TE: What types of businesses have been moving to or expanding in Sweetwater?

Ken Becker: BNSF Railway, which already had their mainline coming through Sweetwater, is developing a new Logistics Center to serve both the West Texas oil boom that is happening as well as the agricultural shipping needs of the region. They’re also upgrading the Sweetwater Yard and adding over 40,000 square feet of new track.

Buzzi Unicem USA is modernizing and expanding their local cement production plant. This new $230 million commitment is in addition to their $40 million Phase One investment. This facility provides manufacturing cement that gets used in everyday-type construction, but the expansion is also tied to the increasing oil activity because a lot of the cement they’ll produce will go into downhole wells and highways and such.

TE: How has Sweetwater laid the groundwork for growth?

Ken Becker: More than 10 years ago, our organization bought about an 88-acre piece of land to build an industrial park and it pretty much sat dormant. When I got here, I tried to convince the board that a piece of land is nothing more than a pile of dirt if you don’t have any infrastructure there, so we worked hard in the past few years to get it shovel-ready for companies that were interested in coming to Sweetwater. Sure enough, less than 12 months from the time we put the road in and had all the infrastructure it was sold out. And just this week, our city council gave its approval to a plan to buy another 77 acres. We’re just trying to be as proactive as we possibly can while being very good stewards of the community’s money.

A few months ago, a local news report predicted that Sweetwater, Snyder and Big Spring will all double in size in the next five to 10 years. And those kinds of projections tend to distort what’s actually happening, because with lofty numbers, people may say, well, it must not have hit us yet because we haven’t doubled

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

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in size. Well, the reality is, it’s already hitting us. We’ve got more than 15 new businesses in the Sweetwater/ Nolan County region with hundreds of new employees.

Our unemployment rate now is down to under 5 percent.

We’re starting to hear employers say things like ‘I can’t find anybody to go to work.’ For economic development, as a whole, we like to hear things like that, but at some point in time, if you get to where you have 3 percent or under, that isn’t a good thing, because then nobody will come in because there’s nobody to hire.

TE: In addition to wage pressures and the question of the quantity of available workers, there’s also the matter of the quality of the workforce and if there are potential employees with the skills these new energy jobs require, right?

Ken Becker: That’s right. We’re extremely fortunate that we have the Texas State Technical College West Texas Campus. Their headquarters is in Sweetwater.

They’ve created a Downhole Tool Technician program for those interested in oil and gas industry careers. The college also has a commercial driving license program.

TE: How do long-time residents of Sweetwater feel about the possibility of tremendous growth bringing change to the community?

Ken Becker: It’s interesting that you ask that because that was one thing I asked when we visited Bakken.

Part of the reason we went to North Dakota was that they’re two to three years ahead of Eagle Ford and Eagle Ford’s two to three years ahead of us. We asked several communities we visited that very question. You have those who truly enjoy the change, and others not so much. When you ask a roomful of people, ‘If you had it do over again, to have growth like you did or for the community to stay just as it was?’ it breaks about 50-50.

And then they’re losing a piece of their history because of an age group that maybe finds it not desirable to live with that type of growth and someone has offered them twice what they ever thought they’d get for their house and they sell and move away, they’re taking some of the history of the region with them. It’s important to capture that information before all that knowledge leaves a community.

“... they’re finding they can raise their families in a smaller community and get paid very well ...”

The area’s colleges are kind of working together, and, because some programs are expensive to start, they may let one school offer a certain program and another school another rather than take on the costs of both schools creating similar programs.

Another thing that West Texas and especially Sweetwater has and will serve us well long-term is that we have a rather diverse economic base. We have a great deal of manufacturing. We’re an agricultural center. We have tourism. Our coliseum here in Sweetwater hosts equine events more than 45 weeks of the year.

A dozen years ago, our employment at one of our sheetrock or cement manufacturing plants were the best blue-collar jobs you could get in our region. Now they’re number 3, as far as pay goes. Wind came in and took number one, taking employees who had worked there for decades. Now, oil and gas is doing that to both wind and manufacturing.

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But what I really think is great is that you have all these West Texas communities – the smaller towns – where maybe the kids didn’t think they had the chance to stay.

One of the things this area has long done best is export our students. They grow up, graduate and then they go off to big cities. Now, though, there’s a reason for them to come home because they’re finding they can raise their families in a smaller community and get paid very well for doing many different types of jobs.

I think one of the problems communities of every size and type have is when they try to be something they’re not. My job is to help make Sweetwater the best Sweetwater it can be and provide the community and its people new opportunities. If that means some growth, well, I think that’s a wonderful thing. Because as they say, ‘If you’re not growing, you’re dying.’

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

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To Advertise call (432) 559 - 5886 or email

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www.PBEMag.com 20

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Conferences in MARCH - APRIL 2014 PowerTest 2014 03/03/2014 - 03/06/2014 Denver CO, USA http://www.powertest.org/ World Heavy Oil Congress 03/03/2014 - 03/06/2014 New Orleans LA, USA www.digitalrefining.com/57,events,World_Heavy_Oil_Congress.html IHS CERAWEEK Energy Conference 03/03/2014 - 03/07/2014 Houston TX, USA www.ceraweek.com/2014/ Subsea Tieback Forum & Exhibition 03/04/2014 - 03/06/2014 San Antonio TX, USA www.subseatiebackforum.com/index.html IADC/SPE Drilling Conference and Exhibition 03/04/2014 - 03/06/2014 Fort Worth TX, USA www.iadc.org/events Exploration and Production Technology Summit 03/10/2014 - 03/11/2014 Houston TX, USA www.exproevent.com/ AIChE Annual Midwest Regional Conference 03/10/2014 - 03/11/2014 Chicago IL, USA www.aiche.org/conferences/midwest-regional-conference/2014 ACS Chemistry and Materials for Energy 03/16/2014 - 03/20/2014 Dallas TX, USA www.acs.org/content/acs/en.html SPE International Conference on Health, Safety and the Environment 03/17/2014 - 03/19/2014 Long Beach CA, USA www.spe.org/events

API Spring Committee on Petroleum Measurement Standards Meeting 03/17/2014 - 03/21/2014 Dallas TX, USA www.api.org/events-and-training/calendar-of-events/2014/springcopm SPE Worst Case Discharge Summit 03/17/2014 - 03/18/2014 New Orleans LA, USA http://www.spe.org/events/wcds/ AFPM Annual Meeting 03/23/2014 - 03/25/2014 San Antonio TX, USA http://www2.afpm.org/forms/meeting/Microsite/AM14 AFS Oil and Gas and Chemical Processing Filtration and Separations Conference 03/25/2014 - 03/26/2014 Houston TX, USA http://spring.afssociety.org/ SPE Coiled Tubing and Well Intervention 03/25/2014 - 03/26/2014 The Woodlands TX, USA www.spe.org/events SPE International Symposium and Exhibition on Formation Damage Control 03/26/2014 - 03/28/2014 Lafayette LA, USA 1 972 952 9393 - 1 972 952 9435 spedal@spe.org www.spe.org/events AFPM International Petrochemical Conference 03/30/2014 - 04/01/2014 San Antonio TX, USA 1 202 457 0480 - 1 202 457 0486 meetings@afpm.org www.afpm.org/Conferences AIChE Spring and Global Congress on Process Safety 03/30/2014 - 04/03/2014 New Orleans LA, USA http://www.aiche.org/resources/conferences SPE Unconventional Resource Conference 04/01/2014 - 04/03/2014 The Woodlands TX, USA www.spe.org/events/13fme2/ PESA Annual Meeting 04/02/2014 - 04/05/2014 Tucson AZ, USA http://www.pesa.org/index.php/page/c/upcoming-events/P4 AAPG Annual Convention and Exhibition 04/06/2014 - 04/09/2014 Houston TX, USA 1 918 584 2555 - 1 918 560 2665 www.aapg.org

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PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | MARCH 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

HUGE OILFIELD EQUIPMENT AUCTION

Machinery Auctioneers of Texas

March 03, 2014

Odessa, TX

OILFIELD EQUIPMENT TRUCKS & TRAILERS

Kruse Energy & Equipment LLC

March 04, 2014 March 05, 2014

Oklahoma City, OK

PIPE & EQUIPMENT AUCTION

Network International Inc

March 12, 2014

Internet SOUTHCENTRAL USA

OILFIELD EQUIPMENT TRUCKS & TRAILERS

Kruse Energy & Equipment LLC

April 02, 2014 April 03, 2014

Odessa, TX

Oilfield & Construction Equipment Auction

CAT Auction Services

April 24, 2014

Midland, TX

FISHING & RENTAL TOOLS - WELL SERVICE RIGS RELATED EQUIPMENT

Kruse Energy & Equipment LLC

April 30, 2014

Fairfield, TX

INVENTORY

INTERNET AUCTIONS

COMPANY

DATES

LOCATION

PIPE & EQUIPMENT AUCTION

Network International Inc

March 06, 2014

Internet

PIPE & EQUIPMENT AUCTION

Network International Inc

March 26, 2014

Internet

INVENTORY

No Lots are Currently Posted for this Auction

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

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ADVICE for Mineral Owners from a Permian Basin Land Girl Quick tip to have a “Better Mineral Experience ™ ” Did you know that the 500+ Permian Basin Landmen and Landgirls have to find mineral owners BEFORE they offer them an oil and gas lease? We have been known to visit with county judges, drive out to the ranch, find county historians and sit at local coffee shop, all in an effort to find mineral owners and their heirs.

A few years ago, as I struggled to find mineral owners in rural Scurry County, someone said, “just go to the John Deere house!” BING! A light bulb came on and I remembered my grandfather, Travis Savage! During his retirement years from farming and ranching in Scurry County, he would get up, put on his overalls, kiss my sweet granny, Dorothy goodbye and then head to the cotton gin or John Deere house, which he called his “office” and play dominoes with local farmers. At the “office”, this group of farmers and ranchers knew everyone in town.

Landmen are like pumpers who have to engage in the fabric of their community, so we can accomplish our tasks. Daily, we get to hear stories about the cousin who left the family and headed out to California and then began to raise their family way out West. We get to hear about who had the best apple pie recipe, which family member started a fight and which one broke their granny’s heart. Along the way, we sometimes get a bag of pecans, fresh cucumbers or a winning pie recipe. It is a fun and interesting quest of information from amazing West Texas families.

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Did you know that you can help a landmen find you? This month, I urge mineral owners to allow Development Resources, Inc. to help a landman find you!

To help mineral owners, Development Resources, Inc. will host the local radio show “Ask the Permian land girl” to help mineral owners in the Permian Basin have a “better mineral experience™” on KWEL AM 1070, AM 107.1 or livestream at KWEL.com. The show will air at 1:00 p.m. each Saturday! Each week we will provide advice and experts who will help you manage your oil and gas minerals and royalties.

Look forward to meeting you on the air! Call in and say that you are a PBE reader, then email me @permianlandgirl.org and get a treat from one of our favorite local diners!

Truly yours, Kimberly Smith, CEO Development Resources, Inc. Development Resources, Inc. likes to provide solid advice about mineral management.

Visit us at www.permianlandgirl.org for answers to your questions, mineral inventory or on twitter @permianlandgirl Stay tuned for more tips in upcoming issues of PBE Magazine!

Refer to the PBE magazine and we will answer your questions without a fee.

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

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

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

SAFETY TIPS Fatigue and Work DON’T Mix They say “the oil field never sleeps” and unfortunately more often than not our employees aren’t sleeping enough. They say “time is money” and if you get paid by the hour then you probably take that statement literally and you want to work as many hours as possible to make as much money as possible. The more time you put in at work the more money you will make, but how much is too much? For employers the same can be asked…how much is too much? Let’s face it, most employers believe the more time they can squeeze out of an employee the more profitable their company should be.

On the contrary, having well rested employees will actually increase productivity due to the fact that your employees will have the energy they need to work not only quickly but also safely. This will cause a spike in profits and a jump in overall moral within all aspects of the work place. A rested employee is crucial to a safe and productive operation because after all Safety Pays.

So what is fatigue? According to Merriam-Webster, fatigue is the state of being very tired: extreme weariness.

Fatigue has many causes such as overexertion, stress, and lack of rest. There are also different types of fatigue such as physical fatigue and mental fatigue. Fatigue is such a serious hazard that the Department of Transportation has rules in place for commercial drivers to prevent fatigued driving. The DOT rules are great for commercial drivers but what about employees that don’t fall under these rules who are responsible for them? It is up to the employer to ensure that their employees are getting enough rest.

The question all employers must ask themselves is; how do we gauge whether or not an employee is fatigued?

Employee observations will show signs of fatigue such as confusion, inability to concentrate on a task, and lack of focus. Appearance will also suffer in a fatigued employee. Behavioral issues may arise like employees not showing up on time and a higher rate of absenteeism. These are minor effects of fatigue. On the other side of the scale fatigue can be the cause of major incidents like wrecking a vehicle. A fatigued individual puts everyone around them in danger especially while operating a motor vehicle. Having a fatigued worker is like having a time bomb waiting to blow. So employers must take into consideration their employees physical and mental condition every day and how much rest the employee has had within the past 24 hours. Give your employees enough time to recuperate before sending them back out or expecting them to come back to work.

By observing employees and giving them ample time to recuperate employers will not only experience a rise in productivity and moral but also they will create a safer work environment.

Shawn Todd American Safety Services, Inc.

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

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by Audrie Palmer

Four Seasons Resort in Angel Fire, New Mexico ANGEL FIRE, N.M. - Nestled in the southern Rocky Mountains in northern New Mexico, the quiet, serene community of Angel Fire is a relaxing escape for those looking to get away from the hustle and bustle of life and work and enjoy nature at its best. For some, it’s become “Little Texas” in the mountains, for others, like Chuck Maretzky, he describes it as one of the last frontiers, where you have to protect your food and belongings from the curious bears or be mindful when driving of the giant herds of elk walking down the roads. It’s a place of wonder and beauty and a destination getaway unfamiliar to many new to West Texas and the Permian Basin. And for those in the oil and gas industry, a new program is making the resort a rewarding experience.

The Program

Maretzky first dreamed up the the Pipeline Perks Membership program last year when the program was instilled at Angel Fire Resort. The membership program is offered free to anyone with a current membership in an oil and gas association and Pipeline Perks Members receive a 10 percent discount on purchases as well as a free lift ticket and free round of golf. For those individuals involved in the Young Professionals in Energy, those members also qualify for the Pipeline Perks.

“The oil and gas industry always seems to get hammered by the media and nobody caters to them,” Maretzky said.

“We wanted to reach a hand out to them, an olive branch so to speak, as a way to say thank you. And Angel Fire has a Texas friendly vibe.”

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

The program rolled out last year but this year included the free ski lift and round of golf passes. As more people participate in the program, Maretzky said future ideas of expansion for members include having a business center and special room at the lodge that offers a TV and complimentary refreshments.

The owner of Eland Energy out of Dallas is one of the owners of Angel Fire Resort so the center has an oil and gas business tie-in. Since the program started, Maretzky said the initial increase happened right away and by offering the new add ons for this year, they expect to see more participating in the program.

Those interested can sign up online at www. angelfireresort.com and then pick up their laminated membership card once they get to Angel Fire.

“Angel Fire is such a great place. It’s one of the last frontiers. You see bears walking and giant herds of elk.

There’s not a stop light; it’s just so relaxing,” he said.

The Resort

I got to spend the weekend out at Angel Fire Resort earlier this month on a media marketing trip. We came in on a Thursday after a long morning of traveling and relaxed in our rooms before acquiring our ski rentals (boots, poles and skis) at the ski shop and meeting up with everyone for dinner.

I was a little nervous about the whole weekend because in all my 31 years, I’ve never been skiing before and have a slight fear of speeding down a hill on long skinny boards. I dreamt for weeks that I would be unable to stop and instead turn into one of those snowballs in the cartoon that would grow as it came barreling down the mountain.

of the bunny hill with kids about one-third of my age flying by me, that I realized I hadn’t fallen (that time) and survived.

The second day, though, when I decided to go out for a solo run, was a different story. And if skiing is not your thing, there’s always snowboarding, snowshoeing and the Polar Coaster, a 1,000 feet of snow tubing hills. We tried out the Polar Coaster on the second day we were there and the thrill of riding down on a giant rubber snow tube on your stomach was memorable. At one point, I flew down the hill so fast I forgot to put my feet down and drag my tennis shoes to help me stop, but luckily, there were giant padding at the bottom to help me brake.

For those interested in the alpine skiing though, there are more than 75 trails with beginner, intermediate and advanced levels and chair lifts that take you to the summit of the mountain. The longest line I saw for the

The marketing team, though, assured me that that wouldn’t be the case. In fact, everyone was so nice and loaned me ski gear that a West Texan doesn’t own – like gloves, goggles and ski pants. I signed up for a private ski lesson with a retiree known as “Big Mike,” who had tremendous patience and taught me with the same grace as I’m sure he gives every first-time skier. There are some people who are born to be teachers and Big Mike is one of them. As he helped me overcome my fear and teach me the proper ways to stop in terms that I could understand and remember when I would start to panic (make a pizza wedge with your feet!), we shared laughs and stories and it wasn’t until I made it to the bottom MARCH 2014 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE

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chairlift was on a Saturday afternoon and there still were only about 15 people in the line then. One of our fellow media participants called it one of skiing’s best kept secret and said he chooses to bring his family to Angel Fire rather than a ski resort in Colorado.

◊ SKI FACTS ◊ Average snowfall: 210” Closing day: March 23 Number of days open last year: 101 Number of years open: 48 Number of ski lifts: 7 Number of terrain parks: 3 Number of trails: 75 Beginner: 26 % Intermediate Runs: 50 % Advanced runs: 22 % Expert runs: 2 % Longest run: 3 miles

For food, try the local eateries including a fine-dining restaurant at the Angel Fire Resort Golf and Country Club (shuttle service available from the Lodge), H2 Uptown (a short walk), the Sunset Grille for lunch (a few hundred feet from the chairlifts), or Legends Grill or Chiantis Italian Restaurant and Pizzeria (inside the Lodge). Try the superb prime rib for a more elegant dinner or the chicken tortilla soup at Sunset Grille to warm you up when you come down from skiing. For dessert, Legends Grill took the cake with a giant chocolate chip cookie smothered in ice cream and H2 Uptown created a special lemon cake with berry sauce the evening we were there.

For lodging, we stayed at the Angel Fire Lodge for the weekend, the hotel located at the base of the mountain.

The Lodge offers free Wi-Fi, a fitness center, indoor pool and hot tub, which we took full advantage of after our first day on the slopes. If you’re staying at the Lodge, try Annie’s downstairs in the lobby for breakfast (quiche, pastries, burritos and omelets) or a snack after you come down the mountain. I treated myself to a Salted Caramel Hot Chocolate and not only did it warm me up, it hit the spot for sure.

◊ MOUNTAIN FACTS ◊ Elevation Summit: 10,677 ft.

Base: 8,600 ft.

Vertical drop: 2,077 ft.

◊ TRAVEL INFO ◊

The Summer

While the resort closes March 23 for the winter, the fun doesn’t end there. This is definitely a four-season vacation destination. The $16 million country club was built in 2009 and boasts a golf course and disc golf along with outdoor movies. After the snow melts, the mountain offers zip-lining, scenic chairlift rides and a mountain bike course. Around town, you’ll find fishing, boating, tennis and hiking.

Over the past few years, the staff at Angel Fire have undergone expansions and improvements with the mountain bike park. New for 2014, the park will offer more than 60 new and improved trails with the season starting mid-May to October to help accommodate riders of all abilities.

With a public airport less than two miles from the Lodge, the runaway is jet capable and the resort offers many packages and deals for those companies looking to hold their next retreat, conference or business meeting.

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How to get there?

By Land - Estimated driving time from Midland to Angel Fire is about 7 hours, 24 minutes or 447 miles.

By Air - Fly into Santa Fe or Albuquerque airport and rent a car or take a shuttle to drive the 3 hours north to the resort. We took Twin Hearts Shuttle Service for $65 one way/ $125 round trip and got picked up as soon as we walked out the airport and dropped off at the door of the Lodge.

- Fly into the Colfax County Angel Fire Airport in a private plane. The runway can accommodate jets carrying up to 45 passengers and the airport is less than 2 miles to the resort.

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

Gas-to-liquids plants face challenges in the U.S. market Gas-to-liquids (GTL) is a process that converts natural gas to liquid fuels such as gasoline, jet fuel, and diesel.

GTL can also make waxes. The most common technique used at GTL facilities is Fischer-Tropsch (F-T) synthesis.

Although F-T synthesis has been around for nearly a century, it has gained recent interest because of the growing spread between the value of petroleum products and the cost of natural gas.

petroleum product prices. The Annual Energy Outlook 2014 (AEO2014) Reference case projection does not include any large-scale GTL facilities in the United States through 2040. Other uses for available natural gas in industry, electric power generation, and exports of pipeline and liquefied natural gas are more economically attractive than GTL under AEO2014 Reference case facility cost assumptions and energy prices.

The first step in the F-T GTL process is converting the natural gas, which is mostly methane, to a mixture of hydrogen, carbon dioxide, and carbon monoxide.

This mixture is called syngas. The syngas is cleaned to remove sulfur, water, and carbon dioxide, in order to prevent catalyst contamination. The F-T reaction combines hydrogen with carbon monoxide to form different liquid hydrocarbons. These liquid products are then further processed using different refining technologies into liquid fuels.

To improve the long-term profitability of GTL plants, developers have reconfigured their designs to include the production of waxes and lubricating products, which are another primary product of the F-T process. Because of the smaller size of the chemical market, smaller-scale GTL plants similar to those proposed in the Midwest are economically viable. U.S. imports of waxes similar to those produced out of the F-T process have experienced steady growth over the past decade because of increased demand in the chemicals market. F-T waxes are used in industries producing candles, paints and coatings, resins, plastic, synthetic rubber, tires, and other products.

The F-T reaction typically happens at high pressure (40 atmospheres) and temperature (500o-840oF) in the presence of an iron catalyst. The cost of building a reaction vessel to produce the required volume of fuel or products and to withstand these temperatures and pressures can be considerable. Several companies are pursuing an alternative method that uses a different reactor design (called a micro-channel reactor) and proprietary catalysts that allow GTL production at much smaller scales.

There are currently five GTL plants operating globally, with capacities ranging from 2,700 barrels per day (bbl/d) to 140,000 bbl/d. Shell operates two in Malaysia and one in Qatar, Sasol operates one in South Africa, and the fifth is a joint venture between Sasol and Chevron in Qatar. One plant in Nigeria is currently under construction. Three plants in the United States— in St. Charles, Louisiana; Karns City, Pennsylvania; and Ashtabula, Ohio—are proposed. Of these, only the St. Charles facility is a large-scale GTL plant. In December 2013, Shell cancelled plans to build a large-scale GTL facility in Louisiana because of high estimated capital costs and market uncertainty regarding natural gas and

Using projected natural gas and product prices in the AEO2014 Reference case and assuming a GTL plant can produce 2,800 barrels per day of products, a GTL plant is projected to be profitable only when it is configured to maximize wax production. As such, most GTL developers are looking to configure their plants to maximize wax production for the chemicals market instead of production of liquid fuels with minimum or no wax

Source: U.S. Energy Information Administration, Annual Energy Outlook 2014

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

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MARCH & APRIL

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.

PARADE OF QUILTS March 1-31 Flatonia - Czech us out! Shop owners display a profusion of heirloom & contemporary quilts throughout downtown stores during March. Flatonia is located at Exit 661on I-10, between San Antonio & Houston. (361) 865-3920 flatoniacofc@sbcglobal.com www.flatoniachamber.com TEXAS INDEPENDENCE DAY CELEBRATION March 1-2 Washington - A free two-day historic celebration! Come celebrate the 177th anniversary of Texas Independence!

Experience life in the Republic of Texas. Costumed re-enactors, period craft demonstrations, military encampments and Texas tunes, 10 AM-5 PM. Washington-on-the-Brazos State Historic Site. (936) 878-2214 www.birthplaceoftexas.com March Story Time March 5 10am-2pm Ellen Noël Art Museum 4909 E. University - Odessa, TX 79762 Preschoolers and their adults enjoy a story and an art activity in the ArtHaus. An adult must accompany children. Free Admission. (432) 550-9696 info@noelartmuseum.org

Star Party At The Museum Of The Southwest March 7 1705 W. Missouri Ave., Midland Texas Join the West Texas Astronomers behind the Blakemore Planetarium, for an up-close view of the stars in the night sky.

Free of charge. 8:30 PM-10 PM 42nd ANNUAL REDBUD FESTIVAL March 7-8 Buna - Anticipated to be the most spectacular Redbud Fest since its inception 42 years ago! Salute spring-time at Buna’s annual celebration with a parade, arts & crafts booths, musical entertainment, carnival rides & great food. Carnival opens March 6 & runs March 7-8. (409) 994-5586 MARKET DAY March 8 Marble Falls - Over 100 food and craft vendors with a variety of items from the Hill Country will be on Main Street from 9 AM-4 PM. Bring the entire family, and enjoy the day!

(830) 693-4449 www.marblefalls.org

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

Wrights Amusement Carnival March 10-30 Ector County Coliseum 4201 Andrews Hwy - Odessa, Texas 79762

The Country Duo March 22 The Ector Theatre 500 N. Texas - Odessa, Texas 79761 Doug Brewin and Larry Turner as Alan Jackson and George Strait. They will also pay tribute to Brooks and Dunn. This is a dynamic duo that will keep you entertained through out the night. Tickets are $28.00 and may be purchased online.

8-10 PM. For more information call (432) 580-0898 ectortheatre@yahoo.com www.ectortheatre.com

Wagner Noel Presents Back On Broadway Mar 13 1310 N. FM 1788 - Midland, Texas 7:00 PM-9:00 PM Come and enjoy Live On Stage: Back On Broadway www.wagnernoel.com Wagner Noel Welcomes Country Gold March 15 5 Country Legends-1 Huge Show 1310 N FM 1788 - Midland, Texas 7:30 PM-9:30 PM. They have graced the iconic stages of the world: Jim Ed Brown, Helen Cornelius, Leroy Van Dyke, TG Sheppard and Jimmy Fortune of the Statler Brothers. www.wagnernoel.com Opree March 15 Globe Theatre 2308 Shakespeare Road - Odessa, Texas 79760 Odessa Brand New Opree was founded on the bases of bringing new talent, artists and music to Odessa. All music that is performed is live with no music pre-recorded on cd or tapes. All band members play there own instruments and sing live as well. 7-9 PM. (432) 335-6731 amancha@globesw.org www.globetheatre.org Bring It On The Musical March 18 1310 N. FM 1788 - Midland, Texas 7:30 PM-9:30 PM www.wagnernoel.com Odessa College Rodeo March 20-22 Ector County Coliseum 4201 Andrews Hwy - Odessa, Texas 79762

19th Annual Colors of Hope Style Show and Luncheon March 25 Midland Country Club Note Joins us for the 19th Annual Colors of Hope Style Show and Luncheon, benefiting Safe Place of the Permian Basin.

This event features the latest styles from Julian Gold on the Runway, a delectable lunch and a fabulous silent auction. We hope to see you there!

11 AM-1 PM. (432) 522-7202 abyrom@safeplacenow.com www.safeplacenow.com Wagner Noel Presents Trisha Yearwood March 29 1310 N. FM 1788 - Midland, Texas 8 PM-10 PM www.wagnernoel.com 51st ANNUAL FORT WORTH SHOW OF ANTIQUES & ART March 7-8 Fort Worth - See over 100 exhibitors from across the U.S. with a gutsy mix of all styles, eras, and price ranges of antiques, art & vintage. Fri 9 AM-7 PM; Sat 9 AM-5 PM. Will Rogers Memorial Center. $7 admission; kids free. (817) 291-3952 Discount coupon at www.fortworthshow.com Show news: www.go2antiques.blogspot.com or www.facebook. com/fortworthshow ST. PATRICK’S CELEBRATION March 15 Dublin - “The Irish Capital of Texas” presents arts & crafts and food vendors, pageants, parade, Shamrock Shuffle Run, dog show, costume contest, gun show, roller derby, carnival, familyfriendly entertainment & more! (254) 445-3422 dublintxchamber@embarqmail.com www.dublintxchamber.com 55th AZALEA & SPRING FLOWER TRAIL March 21-April 6 Tyler - Enjoy over ten miles of flowering gardens and beautiful historic homes in the Azalea & Brick Street Districts. Other events include historic home tours, art & flower shows, living history tours, ‘Spirits of Oakwood’ tours, flower market, arts and crafts fair and more!

For more information (800) 235-5712 www.TylerAzaleaTrail.com

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

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Cares

Restoration Farms

Some of you will rebuild the deserted ruins of your cities. Then you will be known as a rebuilder of walls and a restorer of homes. (Isaiah 58:12 NLT) For Jami and Camron Stotts, life was good. The perfect house, a great job and healthy family all added up to one happy life. The Stotts’ were also really involved with their church and routinely volunteered in various ministries. It was through their volunteer and outreach efforts that the groundwork began to be laid for something that would challenge their comfortable life yet bring them to a whole new kind of happiness.

Through one of their weekly group ministry meetings, a woman from a local outreach organization came and shared her testimony.

She was lost, broken and an addict before entering a local women’s rehab program, which she had since graduated from, giving her family a second chance. It was in that moment that Jami remembers a fire being sparked within her and her husband. As time passed, the stories of more single mothers who needed hope and a helping hand began to emerge and Jami and Camron started to think more and more that someone should start something to help these women get 34

back on their feet. Little did they know, they were slowly being prepped to be that someone.

Jami and Camron had routinely opened their home to families, single women, even college students who needed a place to stay as they recovered from or got ready for big life moments.

Unknowingly, they had already started their own outreach ministry on a small scale with their extra bedroom and big hearts.

At the same time, the Stotts’ church decided to sell a large ranch house that had been used for church offices so they could put a down payment on a new construction project. Visiting the facility weekly to meet with his Men’s group, Camron remembers thinking to himself; someone should do something with this place to help people.

Once again, Camron had no idea, that someone could be him.

As Jami and Camron continued on this road of seemingly random circumstances, this desire to help someone else do something great began

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

to grow. Camron was thinking more about those old church offices, and at the same time, the opportunity presented itself for the Stotts’ to purchase a house that was everything they’ve dreamed of in a house. That’s when they felt God telling them to get ready to sell their house, thus bringing them to a fork in the road. One path led to a bigger, nicer, quieter, more serene house, further away from people and problems; the other required a giant step of faith: buy a ranch house/ office that needed a lot of renovation and use it to help women and single mothers who needed a second chance at life. In the end, the path of faith, won.

Jami and Camron closed on the sprawling church ranch in November of 2011 and before renovations could even be complete, in February of 2012, they had their first tenant move in. Restoration Farm was officially open for business. Now after its two year anniversary, the safe haven for single women just accepted its fifth resident with apartment number three being completed in March making room for resident number 6.

The dreams of someone else buying that church property for ministry and someone else reaching out to help the many single mothers in the Permian Basin has come to pass and Jami and Camron have become that someone else. Jami admits that this was definitely not the comfortable road she had imagined herself on, but the journey has been so much more rewarding than she could

have ever dreamed. Mentoring and loving on women who were in desperate need of hope, love and a second chance and seeing not only their lives changed but their children’s lives changed, has given the Stotts’ a feeling of accomplishment and joy that their great job and perfect home, could never have touched.

The mission of Restoration Farm is to provide Christcentered transitional housing to women and children and restore hope by meeting their spiritual, emotional, and physical needs while equipping them for a self-sufficient future.

• The program women go through at Restoration Farm is customized based on each women’s unique needs but always includes, financial planning, personal accountability, spiritual mentoring and a health and physical fitness component.

• Tenants are expected to either: maintain a full time job, be in school full time or have a combination of both.

To find out more or donate, visit www.rfarmmidland.org or contact us at cstotts@rfarmmidland.org Find us on Facebook: Restoration Farm

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

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Tech

Bites

Source: www.texaseconomy.org

From Smartphone

to

Superp hone

UT Dallas researcher harnesses the power of the terahertz band to develop X-ray vision.

In an age when smartphones can help find nearby friends or pay for your morning latte, it’s difficult to be surprised at any new functionality in the mobile device space. But one Texas researcher may be on the verge of introducing a technology that changes not just the way we communicate, but the way we see.

A research team at the University of Texas at Dallas has designed an imager chip that allows cell phones to see through walls, wood, plastic and other materials.

The technology could be used in applications ranging from detection of counterfeit currency to examining and detecting cancerous tumors and measuring environmental toxicity. By focusing on the elusive terahertz band of the electromagnetic spectrum, Dr. Kenneth O and his team have found a way to create images with signals in the terahertz band without the traditional lens system. Manufacturing the chip operating in this range is known as CMOS technology, which allows it to be mass produced at prices inline with most consumer electronic devices.

Due to privacy concerns, Dr. O and his team are focused on uses in the distance range of less than four inches – what Dr. O calls within “slapping distance.” This new type of imaging, which operated in the elusive terahertz band, has been mostly been out of reach for anything beyond government applications –– it’s far too high for today’s electronics, but too low for light-based applications. The “sweet spot” lies between those two points, which O and his team have harnessed.

“The impact of this technology might one day be felt by everyone,” Dr. O said. “All the possible applications are just beginning to be explored.” Dr. O, one of the world’s top authorities in analog electronics, is director of UT Dallas’ Texas Analog Center of Excellence (TxACE) and a professor of electrical engineering in the Erik Jonsson School of Engineering and Computer Science.

He also holds numerous degrees from the Massachusetts Institute of Technology.

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

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PBE NEWS BRIEFS Watching the basin

West Texas looses two influential men The Permian Basin took a big hit in February as an area business leader and local icon both lost their lives.

On February 21st, Clarence Scharbauer,Jr., also died at the age of 88 after battling a brief illness.

On February 18th, 38-year-old Peak Completions CEO, Ray Hofman died after a plane crash in Breckenridge while flying a newly purchased aircraft, according to the Texas Department of Public Safety.

Mr.Scharbauer and his family had been great philanthropists and supporters of many community development projects and non profits including Midland Memorial Hospital, and they even began the Scharbauer Family Foundation to further support the city’s continued growth.

Hofman was a vintage plane collector and car enthusiast, and was said to be flying a restored WWII fighter plane when it crashed. According to DPS, Hofman was killed on impact and no other passengers were on the plane.

Watching Offshore

ENI’s new oil discovery in the Congo Italy’s ENI has made a new wet gas and light oil find in the Marine XII Block offshore Congo.

The well, which flowed more than 5000 barrels of oil per day during the production test, is expected to contain 1.2 billion barrels of oil and 30 billion cubic meters of gas in place. First oil production is forecasted to start from 2016.

ENI is a leading producer in Congo, where it has been operating since 1968. It currently produces 105,000 barrels of oil per day. ENI is also analyzing Congo’s oil sands deposits through a feasibility study. If the project shows positive outcomes, it may be the first tar sands project in Africa.

The EIA reports that Congo is among the top five oil producers in Sub-Saharan Africa but it has recently suffered from declining output at most of its fields.

Source: World Oil and Gas 38

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

Watching the STATE

TXDOT talks teens and long term planning The Texas Department of Transportation is launching its annual “Teen Click It or Ticket” campaign to address the leading cause of death among teens: motor vehicle crashes. Aimed at Texans ages 15-20, this year’s campaign will use Vine videos, and a wrecked truck exhibit to highlight the consequences of not wearing a seat belt, such as costly tickets, lost driving privileges, injuries or even death.

videos, a growing, new-technology trend among teens.

Additionally, the characters will be included in free, educational toolkits available to campus classrooms.

The kits include campaign posters, banners, parking lot signage, morning announcements, a school newspaper article and a parent brochure, among other items designed to remind students of the consequences of not wearing a seat belt.

“Every year, thousands of new teen drivers get behind the wheel in Texas, and they need to be in the habit of buckling up the moment they get in their vehicles,” said John Barton, TxDOT deputy executive director.

TXDOT has also announced the release of an online survey to obtain stakeholder and public input on the development of Texas Transportation Plan 2040. TxDOT plans to host both public meetings and public hearings in late spring and early summer 2014; the target date for the final plan is fall 2014. You can find additional information about the Texas Transportation Plan 2040 at txdot.gov.

Source: txdot.gov

This year’s “Teen Click It or Ticket” campaign features animated characters designed to resonate with teens. All of the characters and their scenarios are featured in Vine

Watching the Nation

FUTURE FOR Coal-fired power plants in the USA Coal-fired power plants in the United States have been under significant economic pressure in recent years because of low natural gas prices and slow electricity demand growth. The Annual Energy Outlook 2014 (AEO2014) Reference Case projects that a total of 60 gigawatts (GW) of capacity will retire by 2020, which includes the retirements that have already been reported to the U.S. Energy Information Administration.

Coal-fired power plants are subject to the Mercury and Air Toxics Standards (MATS), which require significant reductions in emissions of mercury, acid gases, and toxic metals. The standards are scheduled to take effect in April 2015, a deadline that is conditionally allowed to be extended by up to one year by state environmental permitting agencies. Projected retirements of coal-fired generating capacity in the AEO2014 include retirements above and beyond those reported to EIA as planned by power plant owners and operators. In these projections, 90% of the coal-fired capacity retirements occur by 2016, coinciding with the first year of enforcement for the Mercury and Air Toxics Standards.

To comply with MATS, it is assumed that all coalfired plants have flue gas desulfurization equipment (scrubbers) or dry sorbent injection systems installed by 2016.

Retirement decisions are based on the relative economics and regulatory environment of the electricity markets. A plant may retire if higher coal prices, lower wholesale electricity prices (often tied to natural gas prices), or reduced utilization make investment in equipment like scrubbers uneconomical. The full Annual Energy Outlook 2014 including all sensitivity cases will be released in the spring.

At the end of 2012 there were 1,308 coal-fired generating units in the United States, totalling 310 GW of capacity.

In 2012 alone, 10.2 GW of coal-fired capacity was retired, representing 3.2% of the 2011 total. In contrast, units scheduled for retirement over the next 10 years are larger and more efficient: at 145 MW, the average size is 50% larger than recent retirements, with an average tested heat rate of 10,398 Btu/kWh.

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

39

Watching the WORLD

PetroChina makes huge gas find in Sichuan basin - CNPC PetroChina, Asia’s largest oil and gas producer, has found 308.2 billion cubic metres of technically recoverable gas in southwest China’s Sichuan basin, according to parent CNPC, one of China’s largest gas discoveries in more than a decade.

is to be followed by another 6 bcm/year in a second phase, CNPC said.

China, the top energy user and fourth-largest consumer of gas, is racing to increase supply of the cleaner-burning fuel by boosting domestic exploration and raising imports, as demand is forecast to nearly quadruple between 2011 and 2030.

The find is “set to provide abundant gas resources to the national gas grids,” said the report.

Source: Reuters

CNPC gave no timeline for the development and did not say how much it would cost.

The Moxi block of An’yue field was officially certified to hold 440.4 bcm of proven geological reserves, China National Petroleum Corporation (CNPC) said in a late February report on its website (news.cnpc.com.cn), citing PetroChina’s Exploration and Development department.

PetroChina is now building a production facility able to pump 4 bcm a year under phase-1 development, which

40

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

Watching THE SHALE

Eagle Ford production update Most wells now being drilled for hydrocarbons produce a mixture of oil and natural gas. Relatively high oil prices and low natural gas prices make the oil-rich portions of reservoirs more desirable for production, and therefore increasing the targets for the drilling of new wells.

While initial GORs (gas-to-oil ratio’s) in the Eagle Ford have indicated a greater focus on oil production, production of both oil and natural gas from new and existing wells has increased over time. Monthly oil production from Eagle Ford wells increased from 340 barrels per day (bbl/d) in January 2009 to nearly 1 million bbl/d in June 2013. Natural gas production has increased at a similar rate over the same period, from 5.8 million cubic feet per day (MMcf/d) to nearly 4,000 MMcf/d. Oil and natural gas production volumes from the Eagle Ford reported here are slightly less than

production reported in EIA’s Drilling Productivity Report (DPR). The DPR reports production from all wells in all counties overlaying the Eagle Ford Play. In this report, only production from wells with production reported as being from the Eagle Ford formation is included.

Source: EIA

Watching the GOVERNMENT

Biden: “We may not get to 7 million”

by Obamacare deadline Vice President Joe Biden acknowledged in late February that it will be hard to reach the target on the number of people signing up for health insurance by a looming March 31 deadline for Obamacare enrollment.

The Congressional Budget Office had originally forecast that 7 million people would sign up for insurance, many

obama CARE

with help from subsidies provided under the Affordable Care Act, commonly called Obamacare.

But the program got off to a rough start in October when a website used to shop for insurance plans failed to work for almost two months. The nonpartisan CBO recently trimmed its enrollment forecast for 2014 to 6 million.

“We may not get to seven million, we may get to five or six, but that’s a hell of a start,” Biden said, according to a pool report of his meeting.

The Obama administration also said in February that 3.3 million people have enrolled in private Obamacare health plans between Oct. 1 and Feb 1.

The deadline for 2014 coverage is March 31, and the administration and allied groups are pushing to convince more uninsured people in big cities to sign up.

Source: Reuters

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

41

RESTAURANT

BITES Riko’s Grill

by Marcy Madrid

Of the several Restaurant Bites stories I’ve written so far, many of them start the same way; with a dream, a vision and a lot of hard work. This one is a little different.

While there was no doubt an incredible amount of hard work involved in getting this new south side offering up and running, opening their own restaurant was never a dream for Raul and Robert Ochoa; rather, their story grew out of a once in a lifetime opportunity that they refused to pass up. Raul has been a long time sales rep for Ben E Keith, the popular food provider for restaurants across the region. It was in one of his routine deliveries that he noticed one of his customers ordering less and less food. He soon learned that business wasn’t going well for this customer and in a difficult moment during one of his deliverers, the then restaurant owner broke down to Raul expressing her grief over her failing business. That’s when Raul was faced with the moment of truth.

With no preparation or warning, Raul was given the opportunity to buy the restaurant. Raul never thought about having his own restaurant but he knew this was an incredible opportunity he couldn’t pass up. After a discussion with his brother about being his partner, the Ochoa brothers made an offer and within minutes, the former restaurant owner put a closed sign on the door. That’s when the hard work part of the story began. It didn’t take long for the Ochoa brothers to realize that they had their work cut out for them if they wanted to make this restaurant something special. They gutted the building from floor to ceiling and did a complete renovation with their own hands.

42

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

Raul and Robert both maintained their existing full time jobs while they worked tirelessly on weekends and late nights to get the restaurant up and running again. 4 months later, Riko’s Grill was open for business. Raul said they did a lot of research about the restaurants in the area before choosing the theme for their new venture and they decided they wanted to do something different.

They wanted to take the popular sports bar and grill style and cuisine that can be found all over the north side, and give people on the south side the same options at an affordable price. After getting some tips, menu ideas and training from long time friend and fellow restaurant owner Daniel Paredes of Johnny’s BBQ, the Ochoa brothers had created a menu with unique offerings like chicken stuffed jalapeno poppers and fried green tomatoes.

Riko’s Grill

200 E Florida Midland, TX 79701 (432) 687-7025

In addition to several of these creative creations, patrons can also enjoy the more traditional steak and potatoes or popular pasta dishes, while enjoying a fun, sports themed atmosphere. Riko’s has only been open for a few weeks now but Raul said business just keeps getting better and he sees new faces in the restaurant every day.

The Ochoa brothers say aside from offering a different yet delicious menu, their desire to bring great customer service back to Midland has been another reason for their growing customer base. Raul says despite the hiring crunch many are experiencing right now, they’ve had great luck with people wanting to join their new venture and it’s enabled them to be more selective about the people they’ve brought on board.

They all know great customer service will be the key to their success, Raul says, and that’s exactly what they plan to serve up.

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

43

by Daniel Stephens

Daniel Stephens is the Senior Pastor of Mid-Cities Community Church, since 2006. He is the honored husband to Kayla Stephens, a proud father of twin sons Jonah & Jude, daughter Kampbell, and a precious adopted daughter.

I read a blog recently by a well-known Christian author who stated that he hadn’t worshipped in a local church in several years. Having been raised in the local Church it made me begin to think about my spiritual upbringing.

I kind of grew up a spiritual mutt. My mom and dad grew up Southern Baptist in West Texas, but when my dad’s job relocated them to Nebraska, they found themselves scooping up a neapolitan of church flavors. Evangelical Free, Assembly of God, and a Bible Church (that eventually split) to name a few. We finally landed at a large nondenominational church when we moved back to Lubbock, TX in the late 80’s. I remember some beautiful things about each of the churches we were part of. One church was so small that you could shout out requests to the worship leader during worship. Let’s just say, when you’re meeting in the basement of a bar trying to finish the service before the lunch crowd arrives, having a sevenyear-old ask for “As the deer pants for water” for the third time complicates things. I loved the worship in that place. The smell of what I would later recognize as beer, the sound of the music, and the sincerity of the people were palpable. That bar became a real refuge for us on Sunday mornings, a rest stop on the highway of life.

to be constant construction on the building. They were constantly knocking down walls, adding additions to accommodate the kids and youth. This is the place where I saw my mom and dad’s head knowledge about Jesus become heart knowledge. They knew lots about Him because of some solid Bible teaching and one-on-one discipleship, but this was the place they seemed to really get to “know” him. Bob Goff, the author of an amazing book entitle “Love Does”, states it well: “I used to think I could learn about Jesus by studying Him, but now I know Jesus doesn’t want stalkers.” This Church was a place where it wasn’t just about memorizing the words or

A few years later we moved to a new city where we worshipped in a place that was alive and filled with young families and teenagers. There always seemed 44

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

learning the stories; it was about engaging with God in prayer, worship, and a daily relationship.

The next place we landed, once back in Texas, was a church that not only talked about reaching the world, but they actually sent people there. I remember the hot summer day when we gathered around the brown Oldsmobile Cutlass to see my sixteen-year-old brother off to Guatemala. He was loaded with toys and supplies to take to an orphanage where he and his friends were going to serve for an entire week. He came back telling me about the kids and how they didn’t have the clothes, food, or toys that we had. He gave them toys (McDonalds had given them hundreds of pairs of Ronald McDonald sunglasses) and told them about the love of Jesus. It was in listening to his stories, I realized that being a Christian wasn’t just about singing songs, studying scripture, and having amazing experiences with God. It was about doing stuff that matters with Jesus.

To avoid conflict, whenever my grandparents came into town, my parents took us to a small South Baptist Church as opposed to the Assembly of God Church where we were members. I guess they weren’t ready to admit to their parents that they had jumped steeples. Still sneaking

around at thirty -five years old! On those awkward visits as we sang hymns with fifty to sixty folk north of seventy -five years and I learned to respect tradition and to love those with whom I don’t share anything in common.

I’m grateful, even proud of being a raised a spiritual mutt. I learned some amazing lessons about God and His people. There was an authenticity about all these places, a genuine pursuit of Jesus and his teaching, as they understood it from scripture.

The author of the blog I referenced earlier stated that he didn’t feel involvement in a local church was necessary or helpful for him as a follower of Jesus. It made me wonder, what would have happened to me, and my relationship with God, if my parents had held that view? Would I worship in the way I do today? Would I value God’s Word in the same way? Would I have a heart to make a difference in the world with Jesus?

Would I know how to navigate disappointments that come from spiritual leaders had my parents carried that author’s view? Possibly so, maybe not, but either way I am grateful they found a group of believers in a local church to pursue the mission of Jesus with, even if it did make me a spiritual mutt.

Follow Daniel on Twitter: @DanielBstephens

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

45

U.S. RIG COUNT - TEXAS

States &

through February 28, 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

141

132

131

136

130

130

129

135

11

Texas RRC District 2

84

78

81

73

78

79

76

82

6

Texas RRC District 3

35

58

57

58

40

68

60

63

3

Texas RRC District 4

35

32

30

33

34

30

28

32

1

Texas RRC District 5

17

7

7

8

18

9

10

8

0

Texas RRC District 6

29

30

30

31

27

32

31

34

0

Texas RRC District 7B

12

13

12

12

19

15

12

14

2

Texas RRC District 7C

72

81

82

84

73

87

88

87

4

Texas RRC District 8

278

287

286

289

261

294

292

310

8

Texas RRC District 8A

45

35

35

33

41

39

38

35

1

Texas RRC District 9

24

21

21

21

32

34

33

37

1

Texas RRC District 10

63

67

66

65

68

69

68

66

2

Texas Total

835

841

838

843

821

880

865

903

39

U.S. Totals

1,769

1,777

1,887

1,999

1,982

2,004

96

Districts

1,764 1,771

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 46

PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | MARCH 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 February 28, 2014 Company

Footage Drilled

% of Total

Average Footage

Well Starts

% of Total

Directional Wells

1

Helmerich & Payne, Inc.

4,216,020

16.6%

10,308

409

12.8%

356

2

Patterson-UTI Drilling Company, LLC

2,510,299

9.9%

10,246

245

7.7%

218

3

Nabors Industries, Ltd.

2,043,960

8.0%

7,379

277

8.7%

253

4

Precision Drilling Trust

1,139,216

4.5%

9,262

123

3.9%

112

5

Ensign Energy Services, Inc.

1,071,333

4.2%

5,919

181

5.7%

103

6

Nomac Drilling, LLC

1,038,235

4.1%

9,525

109

3.4%

109

7

Trinidad Drilling, Ltd.

750,389

2.9%

10,422

72

2.3%

62

8

Cactus Drilling Company, LLC

681,032

2.7%

10,984

62

1.9%

60

9

Unit Drilling Company

658,125

2.6%

8,660

76

2.4%

73

10

Pioneer Energy Services Corp.

633,692

2.5%

10,059

63

2.0%

51

11

Capstar Drilling, LP

553,829

2.2%

6,593

84

2.6%

23

12

Savanna Energy Services Corp.

386,402

1.5%

8,986

43

1.3%

10

13

Xtreme Drilling and Coil Services Corp.

361,230

1.4%

10,321

35

1.1%

32

14

Sidewinder Drilling, Inc.

349,650

1.4%

8,741

40

1.3%

37

15

Complete Production Services, Inc.

293,115

1.2%

10,468

28

0.9%

12

16

Desoto Drilling, Inc.

293,051

1.2%

4,374

67

2.1%

67

17

Pinnergy, Ltd.

262,200

1.0%

9,364

28

0.9%

28

18

CanElson Drilling, Inc.

252,600

1.0%

9,356

27

0.8%

9

19

Scandrill, Inc.

244,597

1.0%

11,647

21

0.7%

19

20

Sendero Drilling Company, LLC

228,850

0.9%

11,443

20

0.6%

0

21

Frontier Drilling, LLC

226,900

0.9%

8,404

27

0.8%

25

22

Robinson Drilling of Texas, Ltd.

225,325

0.9%

11,266

20

0.6%

0

23

Lariat Services, Inc.

223,597

0.9%

6,576

34

1.1%

16

24

Pro Oilfield Services, LLC

206,590

0.8%

9,838

21

0.7%

16

25

Latshaw Drilling & Exploration Company

191,079

0.8%

8,685

22

0.7%

22

26

Big Dog Drilling Company

167,100

0.7%

11,936

14

0.4%

1

27

SST Energy Corporation

159,187

0.6%

9,949

16

0.5%

15

28

Orion Drilling Company, LLC

152,950

0.6%

11,765

13

0.4%

13

29

Silver Oak Drilling, LLC

151,063

0.6%

10,071

15

0.5%

11

30

Key Energy Services, Inc.

147,095

0.6%

7,005

21

0.7%

3

31

Basic Energy Services, Inc.

141,535

0.6%

7,077

20

0.6%

5

32

Murfin Drilling Company, Inc.

140,800

0.6%

4,542

31

1.0%

0

33

Lewis Petro Properties, Inc.

140,500

0.6%

10,036

14

0.4%

14

34

Cyclone Drilling, Inc.

139,944

0.5%

4,373

32

1.0%

30

35

Cade Drilling, LLC

138,181

0.5%

11,515

12

0.4%

12

Total Top 100 for year 2014

25,464,422

100.0%

---

3,194

100.0%

---

RANK

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

47

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 February 28, 2014

RANK

Company

Footage Drilled

% of Total

Average Footage

Well Starts

% of Total

Directional Wells

1

Anadarko Petroleum Corporation

1,510,324

5.9%

10,712

141

4.4%

141

2

Chesapeake Energy Corporation

1,001,393

3.9%

10,115

99

3.1%

99

3

EOG Resources, Inc.

916,519

3.6%

10,072

91

2.8%

87

4

Occidental Petroleum Corporation

881,078

3.5%

6,625

133

4.2%

57

5

Apache Corporation

842,768

3.3%

8,779

96

3.0%

56

6

Pioneer Natural Resources Company

785,790

3.1%

13,097

60

1.9%

40

7

Devon Energy Corporation

729,169

2.9%

9,230

79

2.5%

70

8

Chevron Corporation

561,601

2.2%

4,926

114

3.6%

49

9

Marathon Oil Corporation

553,195

2.2%

14,184

39

1.2%

39

10

BHP Billiton Limited

492,541

1.9%

13,682

36

1.1%

36

11

ConocoPhillips Company

433,472

1.7%

8,179

53

1.7%

42

12

Encana Corporation

364,809

1.4%

12,580

29

0.9%

29

13

Oasis Petroleum North America, LLC

351,555

1.4%

9,765

36

1.1%

36

14

Whiting Petroleum Corporation

342,295

1.3%

10,068

34

1.1%

31

15

QEP Resources, Inc.

339,620

1.3%

10,955

31

1.0%

31

16

Linn Energy, LLC

339,079

1.3%

6,165

55

1.7%

24

17

Noble Energy, Inc.

330,092

1.3%

9,169

36

1.1%

36

18

Concho Resources, Inc.

318,501

1.3%

11,375

28

0.9%

22

19

Murphy Oil Corporation

317,446

1.2%

10,946

29

0.9%

29

20

Exxon Mobil Corporation

300,880

1.2%

5,188

58

1.8%

21

21

EP Energy E&P Company, LP

265,464

1.0%

10,210

26

0.8%

23

22

Newfield Exploration Company

247,953

1.0%

7,084

35

1.1%

34

23

Rosetta Resources, Inc.

247,050

1.0%

9,882

25

0.8%

22

24

CrownQuest Operating, LLC

240,000

0.9%

12,000

20

0.6%

0

25

Southwestern Energy Company

238,755

0.9%

4,116

58

1.8%

57

26

SandRidge Energy, Inc.

236,290

0.9%

5,370

44

1.4%

32

27

Laredo Petroleum Holdings, Inc.

200,500

0.8%

11,139

18

0.6%

6

28

WPX Energy, Inc.

190,685

0.7%

6,810

28

0.9%

28

29

Antero Resources Corporation

190,046

0.7%

11,878

16

0.5%

16

30

Continental Resources, Inc.

186,277

0.7%

3,652

51

1.6%

51

31

Cimarex Energy Co.

184,601

0.7%

10,859

17

0.5%

17

32

Athlon Energy Operating, LLC

168,650

0.7%

10,541

16

0.5%

1

33

Penn Virginia Corporation

159,500

0.6%

14,500

11

0.3%

11

34

EQT Corporation

157,204

0.6%

6,550

24

0.8%

24

35

Parsley Energy Operations, LLC

154,450

0.6%

11,881

13

0.4%

1

Total Top 100 for year 2014

25,464,422

100.0%

---

3,194

100.0%

---

48

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

Source: www.eia.gov

Gasoline Inventories Generally High as Refinery Turnarounds Approach Since it became the prompt contract at the close of trading on January 31, the Nymex futures contract for March delivery of RBOB (the petroleum component of gasoline) in New York Harbor has increased 19 cents per gallon (cpg), reaching $2.82/gal on February 19 (Figure 1). Despite the recent price rise, the gasoline market remains well-supplied as the spring refinery maintenance season approaches.

Inventory trends are a handy measure to roughly gauge supply/demand dynamics in a given market. One explanation for the recent price rise is that gasoline inventories have fallen in recent weeks at a time when they typically build. After reaching 235.3 million barrels (bbl) on January 17, total U.S. gasoline inventories fell 2.2 million bbl to 233.1 million bbl on February 7; typically over this period, inventories build 3.8 million bbl (Figure 2).

typically build gradually from early November and peak in early February. This year, inventories rose over a shorter period, but the builds were very pronounced. A period of particularly strong builds occurred from midDecember to mid-January when gasoline inventories increased 15.4 million bbl, 4.6 million bbl (43%) more than typical over this period. At their January 17 peak, total U.S. gasoline inventories were 8.2 million bbl above the five-year average, so even after recent draws inventories still stood 2.7 million bbl above the fiveyear average on February 14. Inventories can provide a key source of supply during refinery turnaround season, which typically runs from roughly January to April, but can vary regionally.

High refinery runs have helped keep inventories above their five-year average for every week since March 2013.

For the four weeks ending February 14, gross inputs into U.S. refineries averaged 15.5 million bbl/d, 1.0 million bbl/d more than the five-year average, and about 0.9 million bbl/d more than last year at this time. With refinery runs high, gasoline production has been rising.

During the first 11 months of 2013, gasoline production averaged 7.8 million bbl/d, 230,000 bbl/d more than the

However, inventories increased slightly the during the week ending February 14, and even considering the recent draws, inventories remain above five-year average levels and modestly above levels at this time of year during the past two years. Gasoline inventories MARCH 2014 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE

49

five-year average. Most of this incremental production has been on the Gulf Coast, where strong margins and a modestly lighter crude slate, which includes increasing amounts of Eagle Ford and Permian Basin crude, have helped increase gasoline supplies. With refinery inputs continuing to exceed typical historical levels in EIA’s recent weekly data, it is likely gasoline production has remained high in the first months of 2014.

However, not all regions have seen gasoline production grow. Production at East Coast refineries was 100,000 bbl/d below the five-year average through November 2013, because of reduced refining capacity. As of January 1, 2013 (the most recent date for which refinery capacity is available), operating refinery capacity on the East Coast was 400,000 bbl/d lower than it was at the start of 2008.

Gasoline inventory levels are high in all Petroleum Administration for Defense Districts (PADDs), with the exception of PADD 2 (Midwest). In the Midwest, gasoline inventories are below five-year average levels. Midwest gasoline inventories were 0.7 million bbl above the fiveyear average level on January 10, dropped to 1.8 million below on January 31, and built during past two weeks but are still 1.3 million bbl below the average level.

Trade press reports indicate that Midwest refiners were hit hard by cold weather in mid-January, leading to brief periods of reduced refinery runs. PADD 2 gross refinery inputs fell from 3.6 million bbl/d during the final full week of December to 3.3 million bbl/d for the week ending January 17, before rebounding above lateDecember levels in recent weeks.

With refinery turnaround season approaching, EIA projects that reduced gasoline production will lead to additional inventory draws. However, inventories are expected to remain above five-year average levels. In the February Short-Term Energy Outlook (STEO), EIA projects total U.S. gasoline inventories to fall from current levels of 233.1 million bbl to 215.2 million bbl in May, which would still be about 3.7 million bbl above typical levels.

As a result of tightening supplies, STEO projects the U.S. average retail price for regular gasoline to increase to an average of $3.59/gal in June, up from $3.38/gal on February 17. EIA projects significant regional variation in peak retail prices, with the highest prices expected on the West Coast at a June average of $3.88 /gal, and the lowest prices expected on the Gulf Coast at $3.42/gal.

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Gasoline and diesel fuel prices increase again

The U.S. average retail price of regular gasoline increased seven cents to $3.38 per gallon as of February 17, 2014, 37 cents lower than last year at this time. Prices increased in all regions of the nation, with the Rocky Mountain price increasing the most to $3.24 per gallon, 10 cents higher than last week. The Gulf Coast price gained nine cents to $3.18 per gallon and the Midwest price was up eight cents to $3.36 per gallon. The East and West Coast prices increased six cents, to $3.41 per gallon and $3.57 per gallon, respectively.

The national average diesel fuel price was up one cent to $3.99 per gallon, 17 cents lower than last year at this time. Prices increased in all regions of the nation except the Gulf Coast, where the price dropped a penny to $3.78 per gallon. The largest increase was in the Rocky Mountains, where the price gained four cents to $3.91 per gallon. The Midwest price was $3.99 per gallon, up two cents from last week, and the East Coast price increased a penny to $4.13 per gallon. The West Coast price was up less than one cent to remain at $4.00 per gallon.

Propane inventories fall

U.S. propane stocks fell by 1.2 million barrels to end at 26.7 million barrels last week, 24.4 million barrels (47.7%) lower than a year ago. Gulf Coast inventories decreased by 0.5 million barrels, and East Coast inventories dropped by 0.4 million barrels. Rocky Mountain/West Coast inventories decreased by 0.2 million barrels, and Midwest inventories fell by 0.1 million barrels. Propylene nonfuel-use inventories represented 13.1% of total propane inventories

Residential heating oil and propane price decrease

Residential heating oil prices decreased almost 2 cents per gallon to nearly $4.23 per gallon during the period ending February 17, 2014. This is 5 cents per gallon higher than last year’s price at this time. Wholesale heating oil prices fell by over 4 cents per gallon last week to almost $3.40 per gallon.

The average residential propane price decreased by less than 13 cents per gallon last week to nearly $3.64 per gallon, $1.32 per gallon higher than the same period last year. Wholesale propane prices decreased 43 cents per gallon to a price just shy of $2.18 per gallon as of February 17, 2014.

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

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

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