FREE
VOLUME 1 NO. 12
NOVEMBER 2013
www.PBEMag.com
Oil Companies, Service Businesses Flock to
Permian Basin
Affordable
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16
Care Act
How Bad are
RESTAURANT BITES
Us Debt Levels?
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Jorge’s Mexican Cafe 34
E x pa n d i n g the Electric Grid 20
• U.S. RIG COUNT • TOP 35 Drillers & Operators
Industry Data
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News
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Events
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Auctions
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Calendar
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Travel
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Tips
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Energy
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Tech
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NOVEMBER 2013
contents 8
Pbe Features 8
Oil Companies, Service Businesses Flock to Permian Basin
12 How Bad are Us Debt Levels? 16 Affordable Care Act
Other Editorials
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15 Calendar of Events 18 Conferences in November - December 19 Upcoming Auctions 20 Expanding the Electric Grid 23 Safety Tips 24 Festivals and Events in Texas 26 Tech Bites - Titan Arm: Bionic bicep gives you the strength of Herculess 28 PBE News Briefs: Basin, State, Government, World, Nation & Shale 32 PBE Cares - Pink the Basin, Inc. 34 Restaurant Bites - Jorge’s Mexican Cafe 36 PBE Inspires 38 By The Numbers: Texas Rig Count, Top Drillers, Top Operators 41 This Month in Petroleum
On The cover: Photography by Al Escamilla
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LETTER FROM
THE EDITOR “The thankful receiver bears a plentiful harvest.” - William Blake
As many companies begin planning for their annual holiday parties, there may be more people coming to the table. A steady and constant increase in workforce has become commonplace for many local businesses as more people move into town to capitalize on the booming economy and increased need for employees. Not only are we seeing existing businesses expand, but also an influx of new companies popping up, especially in the industrial districts. With all the new options, it opens up a new world of questions surrounding which companies you can trust and how to tell they’re following the same rules as everyone else. In this issue of PBE you’ll learn about some of the great new companies who have already proven their reputation in town. You’ll also learn some tips from a respected safety company about how they’ve deciphered the good from the not-so-good newcomers over the years. Also in this issue you’ll get an insiders perspective of a current challenge faced by companies both young and old: healthcare. Many changes are on the horizon for business of all sizes and two of the local hospitals chime in on how you can be better prepared. Finally, read about how one local restaurant has proven the test of time and managed to cook up the perfect recipe for success. As you begin pulling out your own family recipes and prepare for all the upcoming get-togethers this holiday season, take a moment to remember all that we have to be thankful for, living in an area of such abundant blessings.
Carlos Madrid Editor in Chief/Publisher sales@pbemag.com /PBENERGYMAG @PBENERGY
NOVEMBER 2013 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE
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PBE MAGAZINE CONTACTS
EDITORIAL CONTRIBUTORS
EDITOR IN CHIEF/PUBLISHER
Carlos Madrid sales@pbemag.com 432. 559. 5886 ART DIRECTOR/LAYOUT & GRAPHICS
Luke Pawliszyn Lukasz Design Studio West Hollywood, CA luke@lukaszdesign.com
AUDRIE PALMER FREELANCE WRITER Midland, TX audrierpalmer@gmail.com
SUBMISSIONS Submit story ideas & other news to haley@pbemag.com ADVERTISING For advertising info call 432. 559. 5886 or email sales@pbemag.com
IRIS FOSTER WRITER
PUBLISHED BY: PBE Magazine, LLC. Permian Basin Energy Magazine 4500 Erie Drive Midland, TX 79703 Main Phone: 432. 559. 5886
www.PBEMag.com
DANIEL STEPHENS SENIOR PASTOR Mid-Cities Community Church
Copyright © 2013 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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Midland, TX daniel.stephens@midcities.org
NOVEMBER 2013 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE
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Oil companies, service businesses
flock to Permian Basin
by Audrie Palmer
“We have the largest oil field in North America and the second largest in the world. They’re wanting to move to the area because it’s more stable” - Guy Andrews When you ask Guy Andrews, Odessa Economic Development Director, how many phone calls he receives each week from businesses inquiring about the area and looking to re-locate to West Texas, a humble and naïve guess might be a few, five or six at the most.
An exploration and production research group at Simmons and Company International in Houston stated in October that the consensus is that the Permian Basin oil production will reach two million barrels of oil per day within the next five years.
“No,” he says. “It’s more like 30 a week. It’s increased a lot because the area has become better know and everyone knows about the Permian Basin… We have the largest oil field in North America and the second largest in the world. They’re wanting to move to the area because it’s more stable.”
It’s growth like they’ve never seen before.
In the past year, Midland Chamber of Commerce executive vice president of chamber relations Nellwyn Barnett said the Chamber has gained 128 new members with 15 of those being oilfield-related businesses. And while some of those businesses are ones that have been in the area for a while and are just now joining the organization, others are the return of major companies like Shell Oil that are moving back into the Permian Basin.
Last month, Yahoo Finance estimated that the region has the potential for more than 100 years of production and well over a billion barrels of oil. That draw has brought in many of the major exploration and production companies here as well as several new faces.
Barnett said Midland is also seeing the expansion of existing businesses that have already been here – Concho, Pioneer Resources, Fasken and Chevron – that are leaving their footprints in the area with the growth of bigger buildings and facilities for their businesses.
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“The trend is more expansion of existing companies and not an influx, really, of new businesses,” she said. “There are tremendous opportunities and a lot of the companies already own land. They’re really invested in the community.”
with 30 businesses and a growth of almost two million square feet of structures by 2014. The draw to the lot for some is the rail access, like Kirby-Smith Machinery has access too.
For those companies that have stayed in the area since the last boom in the 80s, she added, many now are enjoying the fruits of their labor.
Some companies moving to the region are international with Trican, a Canadian-based service company setting up shop in Odessa, Andrews said. Others that are beginning construction include Precision Drilling, Sanjel Services and GE Oil and Gas.
Still, Barnett said, it’s exciting to see larger corporations moving into the area. Companies like Shell Oil that don’t make the decision lightly, she said, have shown confidence in the area and know there is sustainable growth here and are willing to invest in the Permian Basin.
Riley Industrial Services has started construction on a 8.4-acre tract on OIDC Drive in the OIDC Industrial Park along with Logan Oil Tools and Kline Oil Tools. There are currently 13 businesses building or established there.
Andrews said the same is true for Odessa. Many of their businesses are expanding their footprint as well with some new key players also moving companies here. With predictions being that the oil boom is supposed to last another 20 to 70 years, “depending on who you talk to,” he’s quick to add, many companies are expecting to be here for quite a while and are expanding and growing their facilities and buildings. Among some of the larger oil companies in Ector County are Halliburton and Baker-Hughes that have planned large expansions. Both companies are expanding along Interstate 20-West with Halliburton planning a $5 million expansion and Baker-Hughes a $31.5 million expansion. The Baker-Hughes frac sand construction site in the Leeco Industrial Park is reported to be the largest in North America, according to Odessa Economic Development reports.
Cudd Energy Services has a proposed $18.3 million development on a 50-acre tract on JBS Parkway. Rising Star Services is building a new facility at a construction site on East Murphy that consists of 50 acres. Saulsbury Industries, the largest private business in Odessa, once employed 800 individuals and has grown to now over 1,900 employees, Andrews said. Texas Clean Energy, a $3 billion project, is expected to break ground in December. With thousands of businesses expanding or establishing new facilities, Andrews added the area is growing and it’s so hard to keep up with it all.
The Odessa Economic Development has 204 new commercial projects in the works valued at $237 million. Oil production is expected to grow 60 percent by 2016, according to OED reports, and projects continue to expand at sites around Ector County. The Leeco Industrial Park has doubled in size from 700 to 1,500 acres in the last few years with 18 businesses currently established and contracts NOVEMBER 2013 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE
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How bad are
US debt level$? Taken out of context, the numbers are staggering. The US has a total debt pile of almost $17 trillion (£10.6 trillion), which is expected to rise to almost $23 trillion in the next five years. But how does that compare with other major economies? Japan is not far behind, with current debts totaling $11.5tn. By any standards, these are big, big numbers.
But context is needed - after all, debt is not necessarily a problem if you have the income to cover it.
And these countries are not alone - almost every major global economy has debts of more than a trillion dollars, according to the International Monetary Fund (IMF).
That is why the two most common measures used to gauge a nation’s indebtedness are: • total debt, as expressed as a percentage of total economic output (GDP) • budget deficit, the amount by which a government’s expenses exceed its income, expressed as a percentage of GDP Some governments actually run a surplus - in other words their income exceeds their expenses. Running a surplus is one of the best ways to reduce overall levels of debt. Looking at debt-to-GDP tells us that total US debt is roughly equivalent to its annual economic output. It is by far the largest economy in the world, and has the largest debt pile. Japan is the world’s third largest economy, but its huge pile of debt is more than double its GDP. The only other country whose debts outstrip economic output is Italy, although a number of others come close - namely the UK, France and Canada.
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Even Germany, traditionally seen as fiscally responsible, has a debt-to-GDP ratio of more than 80%.
For example, in 2007, the UK’s debt pile was just 44% of GDP compared with 88% last year. This reflects in part the country’s large financial sector relative to its overall economy. The US’s debt-to-GDP ratio in 2007 was 64%, the same as France and Germany. By contrast, the debt-to-GDP ratio in China and India, which have seen economic slowdowns but no recession, has not moved significantly over the past five years, nor is it set to deteriorate in the next five. Indeed in the case of China, it is set to fall significantly. The picture elsewhere is less encouraging. The IMF estimates that Germany aside, those countries with high levels of indebtedness will struggle to reduce debt levels in the coming years. The UK, where the government has made much of reducing debt levels, will actually see the debt ratio edge towards 100% of GDP. One reason for this is governments’ inability to move from an annual deficit to a surplus. In other words, an inability to live within their means.
Much of this debt has been accumulated over the long term, but the numbers have rocketed in recent years as governments have struggled to cope with the 2008 financial crisis and the subsequent recessions that have ravaged almost all major economies. Banking bailouts, economic stimulus measures and falling tax revenues have all forced governments to borrow more.
The IMF estimates that only Australia and China of the world’s 12 largest economies will move into surplus by 2018, while Germany will increase its surplus further. Russia, it thinks, will move from a surplus to a deficit. However, most major economies are expected to make good progress in reducing their deficits. Source: bbc.co.uk
NOVEMBER 2013 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE
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OBSERVANCES AND CELEBRATIONS
NOVEMBER 2013 Birthstone: Topaz, Citrine Flower: Chrysanthemum
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National: Aviation History Month,
DAYLIGHT SAVINGS TIME ENDSGAIN 1 HOUR OF SLEEP
7-10
Child Safety Protection Month, Adoption Awareness Month, American Heritage Month,
MERRY MARKETPLACE
Peanut Butter Lovers Month
Ector County Coliseum - 6pm, 432-332-0095, www.jlodessa.org
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VETERAN’S DAY
13 STATE OF THE ECONOMY PRESENTED BY THE MIDLAND CHAMBER OF COMMERCE
Midland Center - 11-1pm, 105 North Main, (432) 683-3381, midlandtxchamber.com
KEEP MIDLAND BEAUTIFUL TEXAS RECYCLES DAY
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Texas Recycles Day gives the pubic an opportunity to recycle items like TV’s, electronics and tires. Document shredding will also be available on site.
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Midland College Chap Center, 3600 North Garfield, Midland, 9am-1pm
HUNT FOR HERO’S 10TH ANNIVERSARY BANQUET PRESENTED BY SHOW OF SUPPORT Midland County Horseshoe Arena, 6-9pm 2514 Arena Trail, Midland TX, (432) 687-2167
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CHILDREN’S DAY
28 27
CHANUKAH
THANKSGIVING DAY MEAL
This is a come and go community dinner. We invite any and all who would like to serve or be served to come out . We will be prepping on the 27th and will be prepping early a.m. as well. 11am – 1pm, 810 East 11th Odessa, 432-332-0738 joe_contreras@uss.salvationarmy.org
DECEMBER 2013 Birthstone: Turquoise Flower: Narcissus
PEARL HARBOR DAY
7
21 CHRISTMAS DAY
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WINTER SOLSTICE NOVEMBER 2013 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE
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by Iris Foster
The October 1, 2013 rollout of the Affordable Care Act (ACA) has come and gone. Problems occurred with websites crashing from excessive use, and unease abounds. Is it just the fear of the unknown or will this new law really impact us significantly in the Permian Basin? Bill Webster, CEO of Medical Center Hospital, believes it’s too early to tell. Between the large number of uninsured residents (U.S. Census Bureau shows Texas has the highest rate in the nation) and the fact that this state chose not to expand Medicaid, he doesn’t believe many uninsured folks will seek out health insurance. Undocumented residents will not be eligible for exchanges, and the area hospital districts will still be obligated to care for indigent patients, whether insured or not. Russell Meyers, President and CEO of Midland Memorial Hospital, agreed, saying, “The ACA has already cut hospital reimbursement in several ways, and there are 16
more cuts coming in the next few years. With our state declining the opportunity to expand Medicaid, we don’t really expect to see much reduction in the uninsured population, which would have somewhat offset those cuts if it had happened.” During the summer, insurance companies and chambers of commerce held local forums to help educate agents and employers alike. Large employers were given a year’s reprieve to get health coverage in place, and self-insured institutions like Medical Center Hospital underwent a small restructuring of their plan. Recently, individuals were given a six-week extension (to March 31, 2014) to obtain coverage through the online marketplaces, and
PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | NOVEMBER 2013
they will not pay a penalty, even if their insurances does not actually take effect by March 31. This is just another indication that the ACA is a “moving target.” A self-insured, large energy industry employer, Warren Equipment, is not expecting its employees to see much difference. Currently, all new hires are offered one of three different levels of health plans, and Marketing Director Gail Heathington believes 90 percent sign up for one of them. At Midland Memorial Hospital, a projected 14% increase in health insurance costs drove meaningful plan design changes, according to Meyers. “One of the major components of that increase is a jump in the cost of stop-loss insurance due to the ACA’s requirement that plans no longer impose annual spending limits per beneficiary. In light of this expected increase, we will be replacing our traditional two-level PPO plan with
a High Deductible Health Plan (HDHP), paired with a Health Savings Account (HSA). The biggest change is the increase in individual responsibility for more out of pocket costs until the new deductible is reached. We hope that this will help make our employees more discerning healthcare consumers, potentially saving money for both the employees and the hospital. And we have taken steps to reduce risk for our lower-paid staff members, including providing initial funding in their HSAs to help with those out of pocket costs.” A year from now, Webster suggests, more may be known about the effects of the Affordable Care Act. In the meantime, he recommends that uninsured individuals talk to a tax advisor and if it makes sense, sign up. If not, the penalties are not stiff early on. “I think we’ll be in a better position next year to see how this shakes out,” Webster says.
NOVEMBER 2013 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE
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Conferences in NOV. - DEC. 2013 Annual World Shale Oil and Gas Conference and Exhibition 11/04/2013 - 11/07/2013 Houston, TX, USA www.worldshalegas.com
AFPM International Lubricants and Waxes Meeting 11/14/2013 - 11/15/2013 Houston, TX, USA www.afpm.org/conferences
Deepwater Operations Conference & Exhibition 11/05/2013 - 11/07/2013 Galveston, TX, USA www.deepwateroperations.com/index.html
Small-Mid Scale North America LNG Summit 11/18/2013 - 11/20/2013 Houston, TX, USA www.lngnorthamerica.com
SPE Canada Unconventional Resources Conference 11/05/2013 - 11/07/2013 Calgary, AB, CANADA www.spe.org/events/calendar
Deloitte Oil and Gas Conference 2013 11/19/2013 - 11/19/2013 Houston, TX, USA OilandGasConference@deloitte.com www.deloitte.com/energysolutions
IADC Annual General Meeting 11/06/2013 - 11/08/2013 San Antonio, TX, USA 1 713 292 1945 • 1 713 292 1946 info@iadc.org www.iadc.org/events GPA North Texas Annual Meeting 11/07/2013 - 11/07/2013 Dallas, TX, USA www.gpaeurope.com API Fall Refining and Equipment Standards Meeting 11/11/2013 - 11/15/2013 New Orleans, LA, USA www.api.org/events-and-training/calendar-of-events/2013/ fall-refining Fall API/AFPM Operating Practices Symposium 11/12/2013 - 11/12/2013 New Orleans, LA, USA www.api.org/events-and-training/calendar-of-events/2013/ fall-ops Annual API Cybersecurity Conference and Expo 11/12/2013 - 11/13/2013 Houston, TX, USA www.api.org/events-and-training/calendar-of-events/2013/cybersecurity
IOGCC Annual Meeting 11/19/2013 - 11/21/2013 Long Beach, CA, USA www.iogcc.state.ok.us/events PIRA Natural Gas Markets Conference 12/02/2013 - 12/03/2013 New York City, NY, USA www.pira.com Tuscaloosa Marine Shale Summit 12/03/2013 - 12/04/2013 Baton Route, LA, USA www.infocastinc.com/events/tuscaloosadev13 Annual World Refining Technology Summit 12/04/2013 - 12/05/2013 Houston, TX, USA www.cerebralbusiness.com/wts PIRA Understanding Global Oil Markets Conference 12/04/2013 - 12/05/2013 New York City, NY, USA www.pira.com CHEM SHOW 2013 12/10/2013 - 12/12/2013 New York City, NY, USA www.chemshow.com Minimizing Risks in Upstream Oil and Gas Contract Management 12/10/2013 - 12/11/2013 Houston, TX, USA www.oilgas.americanleaders.com/upstream-contract-riskmanagement-conference
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PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | NOVEMBER 2013
Leading Auctions in the Oilfield Industry. Upcoming Auctions and Auction Equipment listings from Tradequip International’s online and site-held auction companies. Saurce: Tradequip International
Drilling Rigs
Prod. Equip.
Drilling Equip.
Tubular Goods
Oilfield Trucks
Oilfield Trailers
Parts & Tools
www.tradequip.com
Support Equip.
SOUTHCENTRAL AUCTIONS
COMPANY
DATES
LOCATION
OILFIELD EQUIPMENT TRUCKS & TRAILERS
Kruse Energy & Equipment LLC
Nov 06, 2013 Nov 07, 2013
Odessa, TX
MAJOR AGGREGATE MINING/SUPPLY COMPANY JOB COMPLETION
Myron Bowling Auctioneers
Nov 13, 2013
Sulphur Springs, TX
HOUSTON, TX
Ritchie Bros Auctioneers (America)
Nov 20, 2013 Nov 21, 2013
Houston, TX
LARGE 1500 HP DRILLING RIG AUCTION
Hilpipre Auction Co
Dec 03, 2013
Greeley, CO
INVENTORY
INTERNET AUCTIONS
COMPANY
DATES
LOCATION
INVENTORY
PIPE & EQUIPMENT AUCTION
Network International Inc
Oct 30, 2013 Nov 06, 2013
Internet
No Lots are Currently Posted for this Auction
PIPE & EQUIPMENT SEALED BID
Network International Inc
Nov 06, 2013 Nov 13, 2013
Internet
PIPE & EQUIPMENT AUCTION
Network International Inc
Nov 06, 2013 Nov 07, 2013
Internet
PIPE & EQUIPMENT AUCTION
Network International Inc
Nov 13, 2013 Nov 20, 2013
Internet
PIPE & EQUIPMENT AUCTION
Network International Inc
Dec 04, 2013 Dec 11, 2013
Internet
No Lots are Currently Posted for this Auction
No Lots are Currently Posted for this Auction
NOVEMBER 2013 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE
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E X P A N D I N G
the
ELECTRIC GRID Midcontinent Independent System Operator adding four new electric territories in December The Midcontinent Independent System Operator (MISO) plans to integrate the operations of the transmission systems owned by four electric companies in the Gulf Coast region starting this December. The four operators joining MISO are: the Entergy Corporation, which owns several transmission companies throughout Arkansas, Mississippi, and Louisiana; the South Mississippi Electric Power Association (SMEPA) in Mississippi; the Cleco Corporation in Louisiana; and the Lafayette City-Parish Consolidated Government, also in Louisiana. Regional transmission organizations (RTO) like MISO already deliver about 60% of the total U.S. electric supply. The addition of these four electric systems to MISO will raise that number to 68%.
Source: U.S. Energy Information Administration, based on ISO/RTO Council 20
Larger geographic footprints allow grid operators to take advantage of economies of scope and scale by increasing the diversity of electric capacity and demand resources, which helps to increase the overall flexibility of their electric system. MISO is the second largest electric system in the United States after the PJM Interconnection system, in terms of electric demand served. It will cover the largest geographic area—stretching from Canada to the Gulf Coast. MISO and Entergy both operate electric systems with high reserve margins, 19% and 45% for summer 2013, respectively. The electric capacity in MISO is made up primarily of coal-fired units, with significant capacity from nuclear, natural gas, hydroelectric, and, increasingly, wind. Entergy and SMEPA own electric capacity that is predominantly natural-gas fired, with significant nuclear capacity as well. MISO began operation in 2002 and was the only RTO to not grow out of an existing power pool organization. Changing footprints of RTOs is fairly common. MISO has lost member systems to PJM, such as American Electric Power (2004), Commonwealth Edison (2004), Cinergy (2011), and FirstEnergy Corporation’s operating companies (2011). MISO has also added systems, such as MidAmerican Energy (2010), Muscatine (2010), Big Rivers Electric Coop (2011), and Dairyland Coop (2011). Entergy is by far the largest electric system joining MISO since its inception.
PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | NOVEMBER 2013
coordinator of transmission to ensure open access to the company’s transmission system and to avoid “unjust or preferential” transmission rates. Entergy initially appointed the SPP to serve as the coordinator but transferred this task to MISO last December.
Entergy considered other options in recent years, such as joining the Southwest Power Pool (SPP) or continuing to operate as an independent transmission owner. In 2006 the Federal Energy Regulatory Commission (FERC) required that Entergy appoint an independent
This past summer, FERC approved plans for Entergy to spin off its transmission assets owned by its companies in Texas, Louisiana, Mississippi, and Arkansas and merge them with another company, ITC Global Holdings, which owns transmission assets in the MISO territory. The new company will continue as the transmission owner once the operation of these assets is fully integrated into MISO. Principal contributor: M. Tyson Brown Source: www.eia.gov
King’s Point Cove, the newest addition to a 1,400 acre, master-planned gated community nestled on the south west shores of Lake Brownwood, in the gateway to the Texas Hill Country. Full ownership home sites with sensible restrictions, an array of resort-style amenities, and outdoor activities to enjoy with family and friends are currently available for preview.
Call Now To Schedule Your Visit: 1-855-KPC-LOTS KingsPointCove.com Facebook.com/KingsPointCove
OR OR
Golfer’s Delight Gift Option: A Complete Set of Wilson Irons Or Taylor Made R-1 Driver, Plus 2 Rounds of Golf (Cart Included) 1 Night at The Hampton Inn
Stay & Play Gift Option: 2 Nights at The Hampton Inn 2 Rounds of Golf (Cart Included) $150 $50 Chili’s Gift Card
His & Her Gift Option: Taylor Made Corza Ghost Putter Or RBZ Stage 2 Driver, Plus Android Internet Tablet 2 Rounds of Golf (Cart Included) 1 Night at The Hampton Inn
Obtain the Property Report required by Federal law and read it before signing anything. No Federal agency has judged the merits or value, if any, of this property. There is no obligation to purchase anything. Must meet qualifications to receive gifts.
Good For: One Free Round Of Golf (Cart Included) at The Hideout Golf Club 6680 FM 2632 Brownwood, TX 76801 325.784.4653 www.thehideoutgolfclub.com exp. 06/15/14
NOVEMBER 2013 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE
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SAFETY TIPS In recent years, the boom has created an influx of people who are trying to capitalize on the growth of the industry. In order to beat out the competition, new companies are driving the price of products and services down through methods that may not be considered ethical, legitimate or SAFE. These new companies promote the same level of services, safety and knowledge of the industry and area, but through considerably lower prices, they undercut the experienced companies who have been in the area for years. So the question is: how can the newcomers offer the same services at drastically reduced prices while maintaining all of the safety, insurance and federal regulations required to do business? In my experience, historically I’ve found that one of the first “luxuries” that are eliminated when a price war begins is safety. Safety should be the top priority for any business and should be the last area to be considered for any reductions. When safety and training are “cut” from the budget in order to minimize costs and maximize profits, a trickle-down effect occurs and the area begins to experience more near misses, incidents and even major accidents which may result in death. Some of the examples I see when inexperienced laborers enter this industry are a reduced or non-existent knowledge of safety consciousness and awareness. Specifically, I witness workers not wearing required H2S gas detection monitors and working in environments that are well above a safe limit of exposure as set by OSHA standards. Driving is another major area in which newcomers who are unfamiliar with the roads, environment and area hazards, create major safety concerns not only for themselves but other drivers. SAFETY is what I do not only for a living but as a lifestyle. I have been raised in the area and industry for more than 30 years. I’m trained to see deficiencies in safety awareness and safeguards everywhere I go and I know what the financial costs are to maintain a higher than average level of safety. The shortcuts in safety by many of the new companies are disguised behind layers of cheaper prices. This business model usually results in accidents, injuries and eventually a much higher cost to the customer. It’s imperative of the end user to be vigilant in researching and selecting the most qualified safety company or personnel in the industry to be the enforcing agent of the policies and procedures in which they have already adapted. Kevin Hokett AMERICAN SAFETY SERVICES INC.
NOVEMBER 2013 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE
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NOVEMBER & DECEMBER
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. WURSTFEST November 1 - 10 New Braunfels, TX - 120 Landa Street During the 10-day German festival, you’ll find a variety of entertainment, food and fun on the Wurstfest Grounds in Landa Park. 830-625-9167 30th ANNUAL TOUR DE GRUENE BICYCLE CLASSIC November 2 - 3 Gruene Historic District/New Braunfels Participants enjoy a leisurely ride through the Texas Hill Country or competitive time trials with prizes for the best course records. Also free live music at Gruene Hall in Gruene Historic District. Call (210) 862-3524 to register. www.tourdegruene.com
Petroleum Museum hosts National Geographic speaker Fred Hiebert November 7 7 pm - 9 pm A National Geographic Archeology fellow since 2003, he has searched for human history in some of the world’s most remote and romantic places for more than 20 years. 1500 I-20 West (432) 683-4403 www.Petroleummuseum.org 2013 Merry Marketpace November 7 - 10 6 pm Ector County Coliseum VETERAN’S DAY CELEBRATION November 9 San Marcos The community of San Marcos pays tribute to military war heroes with a parade & celebration through the streets of downtown. Admission is free and the parade starts at 10:00 am. For more info call (512) 393-5930 www.toursanmarcos.com 47th ANNUAL SUT TON COUNTY GAME DINNER November 10 Sonora Come to the “Trail Head to West Texas”, and enjoy exotic game at this annual game dinner spectacular with over $50,000 in door prizes! Held at Sutton County Civic Center at 6pm. (888) 387-2880 www.sonoratexas.org
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PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | NOVEMBER 2013
17th ANNUAL HILL COUNTRY ARTS & CRAFT FAIR November 10 - 11 Georgetown #2 Texas Drive, Georgetown TX (5 miles west of I-35 on Williams Drive/FM 2338) Sat: 9 am - 4 pm & Sun: 11 am - 4 pm. Over 100 booths of juried artists that hand craft and home make all their art, perfect for holiday giving. For fifteen years, the crowds have come to enjoy some of the finest shopping in Central Texas. For inquiries call: (512) 948-7734 Veteran’s Day Memorial Service and Freedom Flame Rededication November 11 11 - 11:55 am At the Freedom Flame in front of American Legion Post 430, 2701 East 8th Street, Odessa. 432-332-5582 After 4:00 pm americanlegion430@cableone.net Harry Connick, Jr. November 13 8 - 9 pm Wagner Noel Performing Arts Center 1310 N. FM 1788, Midland, TX 800-514-3849 www.wagnernoel.com
11 am-5 pm; home tours 1pm-4pm both days. 1-888-BRENHAM, (979) 836-1690 www.giddingsstonemansion.com PB String Quartet November 24 3 - 4 pm Wagner Noel Performing Arts Center 1310 N. FM 1788, Midland, TX 800-514-3849 www.wagnernoel.com TWILIGHT FIRELIGHT AT FANTHORP November 30 Anderson Fanthorp Inn State Historic Site Celebrate the holiday season with a journey back to the 1850s! Enjoy the ambiance of the candlelit inn, period music, living history, poetry, stagecoach rides, and holiday fare. 4:30-7:30pm. Tickets sold in front of Courthouse 4:30 - 7:30 pm. For more info: (936) 878-2214 www.birthplaceoftexas.com
Willie Nelson November 16 8 - 9 pm Wagner Noel Performing Arts Center 1310 N. FM 1788, Midland, TX 800-514-3849 www.wagnernoel.com CELEBRATE THE WORLD AT BRAZOS VALLEY WORLDFEST November 16 College Station Wolf Pen Creek Park. 10 am - 5 pm Enjoy culture displays, salsa judging contest, storytelling, international cuisine, demonstrations, live performances, arts and crafts, vendors and more. www.brazosvalleyworldfest.org HOLIDAY HOME TOUR & TRUNK SHOW November 23 - 24 Giddings Stone Mansion, 2203 Century Circle, Brenham Tour historic homes and shop for holiday gifts. Shopping
27th ANNUAL SIGHTS & SOUNDS OF CHRISTMAS December 4 - 7 San Marcos Get the entire family into the Christmas spirit by joining in on the fun-filled activities at Sights & Sounds. Start your Christmas shopping early at the arts & crafts marketplace, visit Santa’s village, ride the carousel, view a live nativity scene and enjoy holiday foods. Admission is free for kids 12 & under; adults $5 nightly. (512) 393-8400 www.toursanmarcos.com
NOVEMBER 2013 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE
25
Tech
Bites
Source: CNN.com
Titan Arm: Bionic bicep gives you the strength of Hercules
The Titan Arm straps directly to a user’s right arm to help lift heavy objects that the user wouldn’t normally be able to lift. Its inventors believe that it will be useful in aiding physical rehabilitation, both for people who have suffered upper body injuries and for those with pre-existing muscular-skeletal disorders. The Titan Arm’s inventors say the exoskeleton can also be used by people whose jobs require heavy lifting such as warehouse workers, removalists and couriers. “With the Titan Arm, we wanted to create something that could both augment a user’s natural strength as well as help someone perform physical therapy in their own home,” says Elizabeth Beattie, one of the Titan Arm’s inventors. “We wanted to create something that was low-cost and easy for a user to put on and strap to themselves.” According to the United States Department of Labour, back disorders are one of the leading causes of disability for people during their working years. The American National Institute for Occupational Safety and Health says that back problems afflict over 600,000 employees each year with a cost of around $50 billion annually to the U.S. economy. The problem is significant in other countries: the World Health Organisation says that worldwide, 37% of lower back pain is due to injuries sustained in the workplace. Beattie says that addressing this problem while being attentive to user comfort was one of the primary motivating principles in designing the device: “We wanted something that was comfortable for the user, something that mimics the body’s natural mobility and range, so we definitely went through a lot of testing in order to get to where the design is right now.” We want to use our engineering tool kits to better the quality 26
Photos courtesy of www.krdo.com
In the past, if you wanted to be able to be able to lift more weight you would have to spend months bulking up at the gym. Now, with a new invention from a group of engineering students at the University of Pennsylvania, you can just strap on an external bicep and you are ready to go. The bionic device, called the Titan Arm, is the brainchild of four mechanical engineering students who, in their final undergraduate year, built an upper-body exoskeleton that can be used in physical therapy and manual labor. The invention won its inventors $10,000 in the Cornell Cup for Innovation and has recently been shortlisted for the 2013 Dyson award.
of life of those around us Elizabeth Beattie, co-inventor of the Titan Arm. The Titan Arm attaches to a user’s right arm with a power motor at its elbow joint. The bionic limb can lift approximately 40 pounds of weight, augmenting a user’s natural strength. The arm is predominantly made of aluminium and steel components, and is powered by a DC battery. As well as helping lift weight, the arm can also be locked into any position with a ratchet brake to hold an object steady without any exertion from the user. JD Albert, an engineer and co-founder of E-Ink, calls the Titan Arm “exciting,” but adds: “I would caveat that with the fact that it’s a very tough product to launch for a lot of reasons ... it needs to feel right (and) I think there’s also some pretty significant safety concerns ... We are taking a piece of machinery and integrating it with a person and so naturally you need to make sure that there’s no way to injure someone.” Still, Albert says that for young engineers, the Titan Arm represents an impressive achievement: “They’ve managed to combine a pretty wide variety of disciplines both dealing the mechanical side of things -- the design and the electrical -and the software side of things as well.” Beattie says that the Titan Arm team intends to keep working on the exoskeleton with a view to one day bringing it to market: “The four of us definitely want to use our engineering tool kits to better the quality of life of those around us. I think that’s one of the things that technology really has the power to do.”
PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | NOVEMBER 2013
NOVEMBER 2013 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE
27
PBE NEWS BRIEFS Watching the basin
new Odessa Railport IS NOW OPEN Union Pacific Distribution Services’ (UPDS) held the grand opening of its new Odessa Railport at 2900 E Business 20, in late October. The UPDS lets nonrail customers benefit from the economies of shipping by rail. The Railport is directly served by Union Pacific Railroad, and its location allows customers access to the Permian Basin Oil and Natural Gas exploration area. As a dedicated pipe and bulk transloading facility, Odessa Railport gives drilling and service companies the opportunity to service the expanding drilling market in the area, access Union Pacific’s rail network and take advantage of low-cost transportation solutions. The rail system is ideally suited for OCTG, sand and other oil field products and an expert transload operator is available on site with extensive experience loading and unloading pipe and proppant. A local inventory system for management of short-term storage needs is available as well as transloading, storage, rail and logistics services. There is no up-front investment costs for leasing or maintaining track infrastructure and this system offers a cost-competitive alternative to long-haul truck shipments. To learn more about the facilities, visit www.upds.com.
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PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | NOVEMBER 2013
Watching the STATE
TEXAS IS TOP STATE FOR FISCAL TRANSPARENCY Texas ranks first in the country for transparency in government spending. For the third consecutive year, the U.S. Public Interest Research Group (U.S. PIRG) gives Texas an A grade, in its latest scorecard Following the Money 2013: How the 50 States Rank on Providing Online Access to Government Spending Data. Texas - the only state that earned a straight A - scored 96 out of a possible 100 points. Six other states garnered scores in the 90s, which gave them grades of A minus. The ability to see how government uses the public purse is fundamental to democracy. Transparency in government spending checks corruption, bolsters public confidence, and promotes fiscal responsibility. State governments across the country have been moving toward making their checkbooks transparent by creating online transparency portals - government-operated websites that allow visitors to see who receives state money and for what purposes. “Our office is proud to be at the forefront of transparency efforts throughout the nation,” says Comptroller Susan Combs, who has pushed for greater online access to government spending data since taking office in 2007. “We constantly look for ways to put more government information online, using new tools to make data accessible and understandable to taxpayers.”
Watching the GOVERNMENT
U.S. CANCELS OCTOBER CROP REPORT, FIRST MISS IN 147 YEARS The U.S. government canceled its monthly report on grain and cotton production in late October for the first time since reporting began in 1866 and said it will not estimate U.S. or world crop production until early November. Cancellation of the October report means the first harvest-time estimate of U.S. crops will be November 8. The production report and companion data on crops worldwide are the U.S. Agriculture Department’s premiere reports. They attract a worldwide audience and frequently move commodity prices - and with the gap of an additional month, potentially more so than usual. The widely followed USDA reports were the biggest immediate casualties of the 17-day government shutdown. Officials were also deciding late October whether to issue an overdue report on the U.S. inflation rate. “It’s a great shame. We lose the continuity of the series, the course correction that it provides,” said Bill Nelson,
analyst with Doane Advisory Services in St. Louis. With the cancellation, the November report will be USDA’s first harvest-time estimate of U.S. crops. By November, the corn and soybean harvests are usually in the final stretch and cotton is half harvested. Users of corn and soybeans - from food companies to exporters - will be counting every bushel to determine if supplies recover after three years of declining production. As a result, markets have been highly sensitive to the USDA estimates. “There is always the potential for a shock in each monthly report so I’d suggest there are twice the chances that we’ll get a shock this time, or that the shock will be twice what it ordinarily would be,” said a futures broker. USDA’s previous crop estimate was issued on Sept 12. It also on Thursday canceled or postponed a range of reports because it could not gather data during the shutdown due to lack of funding. Source: Reuters
NOVEMBER 2013 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE
29
Watching the WORLD
Mexico’ s oil production drops The company said that average oil production reached 2.506 million barrels per day for the quarter. Crude oil production has fallen by a quarter from a 3.4 million barrel per day peak in 2004. In August, President Enrique Pena Nieto proposed a broad energy reform that would overhaul the domestic industry under state control since 1938 by luring more private investment and creating a new profit-sharing contract regime. Last month, Pena Nieto separately pitched a new, lower tax structure for Pemex. Mexican state oil monopoly Pemex posted a sharp loss for the third quarter, the company said late October in a filing with the Mexican stock exchange, on lower export volumes, weaker crude prices and foreign exchange losses. Pemex said it lost 39.2 billion pesos ($2.98 billion) during the July to September period, compared with a year earlier profit of 24.54 billion pesos ($1.87 billion). The company reported third-quarter revenues of 409.3 billion pesos for the quarter, up 0.09 percent compared with same period last year. Third-quarter revenues were 408.9 billion pesos during the year-earlier period.
The controversial proposals are expected to be voted on by the Congress later this year. Source: Reuters
FISHING & RENTALS
FISHING & RENTAL TOOLS REVERSE UNITS FOAM/AIR UNITS
Pemex’s crude export sales fell to 173.8 billion pesos ($13.4 billion), the company said. Mexico’s government relies heavily on oil revenues to fund about a third of the federal budget. For the quarter, Pemex said its tax burden was 226.1 billion pesos ($17.4 billion), compared to 223.4 billion pesos previously reported for the same period last year. Mexico is the world’s No. 10 oil producer and a major exporter to the United States but has to import nearly half of its gasoline due to a lack of domestic refining capacity. 30
PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | NOVEMBER 2013
1511 Garden City Hwy • PO Box 150
MIDLAND TEXAS
432.684.3898
Watching the Nation
PAY MORE FOR HEATING YOUR HOUSE THIS WINTER More than 90% of the 116 million homes in the United States are expected to have higher heating expenditures this winter (October 1, 2013-March 31, 2014) compared with last winter, mainly because of higher projected prices for residential natural gas, propane, and electricity, according to the U.S. Energy Information Administration’s Short-Term Energy and Winter Fuels Outlook.
winter. Forecast temperatures are close to those recorded last winter nationally, but average temperatures and heating requirements vary in different areas of the country, with the Northeast expected to be about 3% colder and the West expected to be about 3% warmer than last winter. Additionally, the type of fuel used varies considerably by region, resulting in regional differences in total expenditures.
EIA projects that average household expenditures for homes heating with natural gas will total $679 this winter, a 13% increase over last winter’s average but 4% below the average of the five previous winters (October 2007-March 2012). Homes heating primarily with propane are expected to spend an average of $1,666 (9% more than last winter), while homes with electric heat are expected to spend $909 (2% more), and homes using heating oil are expected to spend $2,046 (2% less). Changes in energy prices explain most of the differences in expected heating expenditures compared to last
Watching THE SHALE
WORLDWIDE NATURAL GAS PRODUCTIN FROM SHALE The United States and Canada are the only major producers of commercially viable natural gas from shale formations in the world, even though about a dozen other countries have conducted exploratory test wells, according to a joint U.S. Energy Information Administration (EIA)/Advanced Resources International (ARI) study released in June. China is the only nation outside of North America that has registered commercially viable production of shale gas, although the volumes contribute less than 1% of the total natural gas production in that country. In comparison, shale gas as a share of total natural gas production in 2012 was 39% in the United States and 15% in Canada. Shale gas dry production in the United States averaged 25.7 billion cubic feet per day (Bcf/d) in 2012, while total dry production averaged 65.7 Bcf/d. In Canada, total dry natural gas production from the two major
shale plays—the Muskwa-Otter Park shale formation in the Horn River Basin of northern British Columbia and the adjacent Montney Basin that spreads over British Columbia and Alberta—averaged 2.0 Bcf/d in 2012, while total Canadian production averaged 14.0 Bcf/d. Gross withdrawals from Horn River and Montney averaged 2.5 Bcf/d in 2012, and reached 2.8 Bcf/d by May 2013. The potential for higher production from these two plays is currently constrained by limited pipeline infrastructure. China was ranked as the largest holder of shale gas resources among the 41 countries assessed for technically recoverable shale resources in the study released by EIA/ ARI this past June. The Chinese government has not officially reported on shale gas production, but some independent Chinese energy analysts have claimed commercial production of at least 0.003 Bcf/d of shale gas, mainly from the Sichuan Basin. Source: www.eia.gov.com
NOVEMBER 2013 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE
31
Cares There is no doubt we are all bound together by the threads of loss, struggle and pain faced at one time or another in our lives. The beautiful alternative to this reality is that we are also drawn together by the threads of hope, encouragement and triumph. One local organization has realized both of these truths and created an experience that allows all of these emotions and personal connections with each other to flourish.
Pink the Basin, Inc. was formalized as a 501c3 in early 2012 after spinning off of a long time partnership with the Texas Tech’s Laura W. Bush Institute for Women’s Health. Originally created to fill the void of breast cancer awareness and support in the Permian Basin, the luncheon has now had 7 successful years of raising awareness, raising funds for free mammogram vouchers and raising a glass to the women and men who have fought this disease with strength and courage. This year’s event hosted a sold out crowd
Pink The Basin - Board members from left to right, Roxy Brown, Mary Carlson, Debbie Bergen, Marcy Madrid and Tami Gillean
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PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | NOVEMBER 2013
Shooters representing Onyx Contractors
Charles Terry, winner fo the Mule raffle
Timber Floyd, winner of the gun raffle at the MCM FunDome in Odessa. Guest speaker, Geralyn Lucas, author of Why I Wore Lipstick To My Mastectomy, danced with survivors before taking the stage and entertaining the crowd with her inspiring story and undeniable wit. The hope and encouragement in the room was tangible as dozens of survivors were brought up on stage to be recognized and honored for their determination to find joy and normality again in their lives. Adding to the luncheon’s success this year was a breath-taking presentation from representatives of Jakes Clay’s who presented the Board with a check totaling over 100,000 for the free mammogram program. The generous donation was a result of the highly successful Saving True Pairs Clay shoot, held on October 18th.
In its second year, this event has become not only an incredible fundraising vehicle for the free mammogram program, it has also taken its place as one of the most unique and spirited clay shoots of the year. With pink clays, pink shotgun shells and pink decorations everywhere you turned, the lively fundraiser brought in local oil and gas companies from all over the Basin for a day of fun, food and lots of PINK. Because of the event’s success, a date for next year’s clay shoot has already been set for Friday, October 17th, 2014. Peggy Floyd and survivor, Debbie Bergen work together to put on the event and say they are honored to be able to serve their communities through this event by raising funds to support those who need it the most.
Contributions may be mailed to: Pink the Basin, Inc. P.O. Box 62122 Midland, Texas 79711 432-940-7465 (PINK)
Please contact us for sponsorship information at info@pinkthebasin.com NOVEMBER 2013 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE
33
RESTAURANT
BITES by Marcy Madrid
For those who have lived in Midland since the days of the first 2-story county library and museum, you may remember one of the only mexican restaurants to eat at used to be the Monterrey Cocina Mexicana on Illinois drive. Now known as Jorge’s, this little mexican restaurant has become a staple for authentic mexican food in the Permian Basin and practically a household name for families and even travelers looking for a home-cooked mexican dish. Started in 1953 by George Veloz, the Midland drive location has stayed in the family for the past 60 years, now owned by cousin Jesse Lopez and wife Missy. 5 other locations, also ran by the Veloz family, can be found in Midland, Odessa, Amarillo, Austin and Dallas. Jesse says the unique thing about his location is that it is truly family owned and operated. From his oldest kids who manage the store, to his wife who keeps up with the books and even his 16 year old who works the cash register and hosts, the family atmosphere in this restaurant is apparent the moment you step through the door. Cassandra Salazar, an employee of 8 years, says she’s never experienced a work environment like this in all her history of working at restaurants. “You can see us all after a shift, gathered together over here eating like a family”, Cassandra says. “And when it comes to birthdays, anniversaries and baby showers, we are all there for each other”. The family atmosphere overflows onto the customers as Cassandra describes that many of those who walk through the door are known by name, by what dish they order and the waitresses will often already have 34
PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | NOVEMBER 2013
their drinks waiting for them when they sit down. Jesse adds that about 90 percent of their diners are repeat customers.
get, every time they order”, he says. When asked what the most important lesson he teaches his employees was, Jesse said, “I always tell them to give 100 percent.
The family theme even carries over into their menu with all the dishes originating from family recipes. Cassandra says even after 8 years, she still craves their food with her favorite dishes being the beef fajita tacos, beef fajita burritos and basically anything with the beef fajita meat in it. Jesse says he credits their consistency for much of the foods popularity. “We never changed those original recipes and people know exactly what they’re going to
Treat the customers like you would if you were taking your mother out for Mother’s Day. Roll out the red carpet because you never know when you’ll be making a first impression.” By the way, Jorge’s isn’t only know for their popular food recipes, their homemade margarita’s have made a name for themselves too.
Jorge’s new homemade skinny margarita - made from scratch with Splenda - has gained so much attention it even won an award for its recipe at the Dallas location. Jorge’s also offers a variety of catering options from small meetings to large parties, to on-location deliveries. Call (432) 689-0033 for more information.
Jorge’s Mexican Cafe 3323 North Midland Dr., Ste. 100 Midland, TX 79707 Phone: (432) 689-0033 NOVEMBER 2013 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE
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Inspires The following is a prophetic word spoken by Pastor Jim Laffoon during a recent Wednesday night church service at MidCities Church, in between Midland and Odessa.
The Courthouse
by Daniel Stephens
It was an old courthouse. Not “old” in a decrepit sort of way, but “old” in newly renovated and restored sort of way. Wood floors, wood banisters, and wood stairs that would make Pottery Barn feel like a cheap imitation of the genuine article. The only thing out of place seemed to be the elevator that could take you to the second floor. Surrounded by freshly watered green grass the courthouse stood in the center of the town square. All was quiet on a weekday morning in this sleepy town where old timers gather at the local breakfast spots to sip coffee and discuss politics. This is where it happened; her life would be forever changed, and so would ours. It had been three years ago that Kayla and I had decided to open our home to foster children, with the intent to eventually adopt. We had prayed and felt like God was leading us in that direction. We knew we had a promise from Him. The Bible says that Abraham was “fully convinced that God was able to do what he said he would do”. There were definitely moments over the past three years that the phrase “fully convinced” did 36
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 foster daughter. not describe my faith. She was the fourth child to enter our home, the previous three stayed long enough to love and then were placed back with family members. But this was different. Here we stood, on the second floor of this nineteenth century courthouse, officially about to bring this precious girl who had been with us for six months into our family. Just moments before the final adoption hearing, our attorney arrived at the courthouse. He hurriedly ushered us to a back corner room with windows on two sides overlooking the green grass below. This room seemed like the place where lots of deals had been cut. You could tell dreams had been birthed and shattered in this room. As we listened and signed paper work, she began to climb chairs, yank on window blinds, and evade the strong arm of the law. During one of the chair climbing escapades, her diaper came undone and fell on
PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | NOVEMBER 2013
the wood floor of the courthouse. My soon to be adopted daughter was bare bottomed running around like she owned the place. Kayla and I glanced at one another with fear and amusement. Bare bottom + opportunity = messy floor. In a moment I scooped her up, strapped on the diaper and the crisis was averted. So there we were, the entire family standing before the judge. Grand parents, aunts, and uncles sat in the chairs behind the banister. I was supposed to answer the questions asked by the attorney and the judge. I was prepared. I speak in front of people all the time, and rarely do I get nervous, and yet before the attorney could finish the first question about how long she had been with us, I began to tear up and cry. It was a mix of emotions. Disappointments and divine opportunities had marked us over the past three years. The spiritual parallel flooded my mind; I have been adopted into my heavenly
father’s family just as today she will be adopted into our family. The joy of one season closing and another starting fresh. Needless to say the water works began and did not end until we walked that green grass to leave the courthouse. For some reason the question about us giving her, her new name was one of the most emotional for me. Thoughts of Biblical characters being given a new name came to mind. Abram God renamed Abraham after establishing a covenant with him. Jacob, which means deceiver, was given the name Israel after he wrestled with God. Saul, a notorious persecutor of Christians was given the name Paul after he was confronted and converted by Jesus on the road to Damascus. A new name indicates a new beginning. We had prayed about her name, it is filled with meaning and family origins. Karis is a form of the Greek word charis that means grace or gift. She is both. Today, Karis Anna Stephens became a part of our family forever. In truth, she’s always been part of our family in the mind and heart of God, but today she received my name. Follow Daniel on Twitter: @DanielBstephens
NOVEMBER 2013 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE
37
U.S. RIG COUNT - TEXAS States &
through November 1, 2013
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
136
130
128
127
147
124
124
128
4
Texas RRC District 2
79
84
84
83
78
82
82
81
7
Texas RRC District 3
47
50
50
52
47
49
52
52
3
Texas RRC District 4
45
34
34
34
33
28
24
32
3
Texas RRC District 5
20
12
12
11
19
10
9
9
0
Texas RRC District 6
26
28
27
27
26
27
26
27
0
Texas RRC District 7B
15
14
14
14
26
20
16
19
1
Texas RRC District 7C
77
69
67
65
72
72
69
72
5
Texas RRC District 8
292
267
265
268
265
266
265
267
11
Texas RRC District 8A
41
37
39
34
40
38
38
40
1
Texas RRC District 9
25
22
22
22
33
39
38
39
5
Texas RRC District 10
67
70
70
70
71
77
76
78
2
Texas Total
870
817
812
807
857
832
819
844
42
U.S. Totals
1,837
1,751
1,978
1,945
1,923
1,956
92
Districts
1,739 1,738
COPYRIGHT Š 2013 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 38
PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | NOVEMBER 2013
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 November 2, 2013 Company
Footage Drilled
% of Total
Average Footage
Well Starts
% of Total
Directional Wells
1
Helmerich & Payne, Inc.
39,328,468
16.80%
10,277
3,827
12.90%
3,358
2
Patterson-UTI Drilling Company, LLC
23,210,056
9.90%
10,065
2,306
7.80%
1,954
3
Nabors Industries, Ltd.
20,626,552
8.80%
8,102
2,546
8.60%
2,272
4
Precision Drilling Trust
10,372,787
4.40%
9,328
1,112
3.70%
989
5
Ensign Energy Services, Inc.
9,910,445
4.20%
6,280
1,578
5.30%
869
6
Nomac Drilling, LLC
8,872,468
3.80%
9,389
945
3.20%
942
7
Trinidad Drilling, Ltd.
6,812,600
2.90%
10,729
635
2.10%
527
8
Pioneer Energy Services Corp.
6,484,197
2.80%
9,606
675
2.30%
485
9
Unit Drilling Company
6,330,372
2.70%
8,792
720
2.40%
702
10
Cactus Drilling Company, LLC
5,315,399
2.30%
10,526
505
1.70%
466
11
Capstar Drilling, LP
4,957,979
2.10%
6,456
768
2.60%
143
12
Savanna Energy Services Corp.
4,483,299
1.90%
10,075
445
1.50%
156
13
Xtreme Drilling and Coil Services Corp.
3,350,345
1.40%
10,001
335
1.10%
324
14
Sidewinder Drilling, Inc.
3,263,944
1.40%
8,000
408
1.40%
300
15
Desoto Drilling, Inc.
3,227,067
1.40%
4,397
734
2.50%
732
16
Complete Production Services, Inc.
2,573,112
1.10%
9,973
258
0.90%
89
17
Sendero Drilling Company, LLC
2,453,889
1.00%
11,575
212
0.70%
0
18
CanElson Drilling, Inc.
2,354,468
1.00%
10,237
230
0.80%
37
19
Cyclone Drilling, Inc.
2,272,071
1.00%
6,059
375
1.30%
358
20
Orion Drilling Company, LLC
1,979,841
0.80%
11,444
173
0.60%
164
21
Robinson Drilling of Texas, Ltd.
1,971,595
0.80%
11,139
177
0.60%
1
22
Lariat Services, Inc.
1,958,790
0.80%
6,508
301
1.00%
148
23
Latshaw Drilling & Exploration Company
1,877,934
0.80%
7,634
246
0.80%
242
24
Scandrill, Inc.
1,876,178
0.80%
12,104
155
0.50%
127
25
SST Energy Corporation
1,514,531
0.60%
9,349
162
0.50%
135
26
Big Dog Drilling Company
1,389,417
0.60%
11,775
118
0.40%
10
27
Basic Energy Services, Inc.
1,376,128
0.60%
6,746
204
0.70%
51
28
Lewis Petro Properties, Inc.
1,350,000
0.60%
11,638
116
0.40%
114
29
Silver Oak Drilling, LLC
1,213,476
0.50%
8,144
149
0.50%
65
30
Bison Drilling and Field Services, LLC
1,175,816
0.50%
10,314
114
0.40%
7
31
ProPetro Services Incorporated
1,140,350
0.50%
11,519
99
0.30%
0
32
Murfin Drilling Company, Inc.
1,093,720
0.50%
4,714
232
0.80%
0
33
Cade Drilling, LLC
1,083,403
0.50%
10,032
108
0.40%
102
34
Aztec Well Servicing Co.
1,059,104
0.50%
6,458
164
0.60%
78
35
Duke Drilling Co., Inc.
1,023,581
0.40%
4,921
208
0.70%
11
Total Top 100 for year 2013
234,677,260
100.0%
---
29,709
100.0%
---
RANK
NOVEMBER 2013 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE
39
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 November 2, 2013
RANK
Company
Footage Drilled
% of Total
Average Footage
Well Starts
% of Total
Directional Wells
1
Anadarko Petroleum Corporation
12,690,293
5.40%
10,064
1,261
4.20%
1,206
2
Chesapeake Energy Corporation
9,537,301
4.10%
10,288
927
3.10%
927
3
EOG Resources, Inc.
8,173,655
3.50%
10,588
772
2.60%
728
4
Apache Corporation
7,689,968
3.30%
8,768
877
3.00%
405
5
Devon Energy Corporation
7,309,000
3.10%
9,113
802
2.70%
743
6
Pioneer Natural Resources Company
7,060,707
3.00%
13,027
542
1.80%
305
7
Occidental Petroleum Corporation
6,962,416
3.00%
6,044
1,152
3.90%
543
8
BHP Billiton Limited
6,698,192
2.90%
13,238
506
1.70%
497
9
Marathon Oil Corporation
4,792,856
2.00%
14,480
331
1.10%
331
10
Encana Corporation
4,615,022
2.00%
10,634
434
1.50%
416
11
Exxon Mobil Corporation
4,494,198
1.90%
6,872
654
2.20%
409
12
Chevron Corporation
4,152,478
1.80%
4,624
898
3.00%
333
13
Southwestern Energy Company
3,958,194
1.70%
4,679
846
2.80%
844
14
Concho Resources, Inc.
3,863,736
1.60%
10,386
372
1.30%
155
15
ConocoPhillips Company
3,822,947
1.60%
8,257
463
1.60%
361
16
QEP Resources, Inc.
3,263,537
1.40%
10,393
314
1.10%
300
17
Whiting Petroleum Corporation
3,088,999
1.30%
9,505
325
1.10%
262
18
Noble Energy, Inc.
2,987,164
1.30%
9,544
313
1.10%
308
19
Royal Dutch Shell, plc
2,913,289
1.20%
12,834
227
0.80%
225
20
Continental Resources, Inc.
2,725,181
1.20%
5,494
496
1.70%
495
21
SandRidge Energy, Inc.
2,545,813
1.10%
5,260
484
1.60%
354
22
Newfield Exploration Company
2,274,432
1.00%
6,690
340
1.10%
321
23
CrownQuest Operating, LLC
2,146,900
0.90%
12,061
178
0.60%
0
24
Energen Resources Corporation
2,101,800
0.90%
9,021
233
0.80%
38
25
EP Energy E&P Company, LP
2,031,945
0.90%
10,262
198
0.70%
177
26
Oasis Petroleum North America, LLC
2,025,379
0.90%
10,027
202
0.70%
201
27
Murphy Oil Corporation
2,012,136
0.90%
10,061
200
0.70%
198
28
Linn Energy, LLC
1,887,657
0.80%
8,739
216
0.70%
80
29
SM Energy Company
1,683,333
0.70%
9,099
185
0.60%
177
30
Parsley Energy Operations, LLC
1,658,600
0.70%
12,758
130
0.40%
0
31
WPX Energy, Inc.
1,653,733
0.70%
7,449
222
0.70%
220
32
BP, plc
1,550,174
0.70%
10,334
150
0.50%
144
33
Hess Corporation
1,533,809
0.70%
4,932
311
1.00%
311
34
Cimarex Energy Co.
1,465,225
0.60%
10,541
139
0.50%
126
35
Plains Exploration & Production Company
1,403,256
0.60%
6,879
204
0.70%
99
Total Top 100 for year 2013
234,677,260
100.0%
---
29,709
100.0%
---
40
PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | NOVEMBER 2013
Source: www.eia.gov
GROWTH IN JET FUEL NET EXPORTS REFLECTS HIGHER PRODUCTION, STAGNANT CONSUMPTION The United States exported an average of 146,000 barrels per day (bbl/d) of jet fuel during the first seven months of 2013 (Figure 1). If this pace of exports continues through year-end, it will set a record annual jet fuel export level. Following a script now familiar in petroleum markets, jet fuel exports have increased in recent years, reflecting decreasing domestic consumption, relatively stable refinery production (Figure 2), and growing demand from abroad in the non-OECD economies.
U.S. jet fuel product supplied (a proxy for consumption) has been in decline for more than a decade. After peaking at more than 1.7 million bbl/d in 2000, jet fuel consumption fell to near 1.4 million bbl/d in 2009, and has remained near that level since then. Jet fuel consumption has declined as airlines have replaced older planes with newer, more fuel-efficient models and as they continue to consider fuel costs in optimizing flight plans and routes. Through July 2013, consumption declined 6,000 bbl/d (-0.4%) compared with the same period in 2012. Domestic refinery production of jet fuel also declined over 2000-2012. Production in 2012 was just under 1.5 million bbl/d, 135,000 bbl/d (8.4%) below its 2000 level despite a 75,000-bbl/d increase in production since 2009. From 2009 to 2012, crude oil inputs to refineries increased 663,000 bbl/d (4.6%). Increasing yields of jet fuel at refineries have provided only a modest boost to production, with 2012 jet fuel yields averaging 9.5%, compared to 9.3% in 2009. Because of robust global demand, refiners have cut jet fuel production by less than declines in domestic consumption. In 2007, jet fuel exports averaged 41,000 bbl/d, 71% of which was delivered to Canada. Imports of jet fuel in 2007 were 217,000 bbl/d, primarily into the East Coast (PADD 1) and West Coast (PADD 5). However, through July of this year, exports had climbed to an average of 146,000 bbl/d and imports had declined to 62,000 bbl/d. Since late 2010, the United States has generally been a net exporter of jet fuel, and in 2013 net exports averaged 84,000 bbl/d through July. Additionally, export destinations have become more diversified, with only 36% of jet fuel exports going to Canada in 2013 through July, while exports to Central and South America now represent 28% of the U.S. total and shipments to Western Europe another 17%.
NOVEMBER 2013 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE
41
Of the 62,000 bbl/d of jet fuel that has been imported into the United States in 2013, one-third has been delivered to the East Coast and two-thirds to the West Coast. Most East Coast jet fuel imports come into Florida. Before 2013, most jet fuel imports into the West Coast were delivered to California. However, in 2013 the bulk of PADD 5 imports have been to Hawaii, following the closure of Tesoro’s 94,000-bbl/d Kapolei refinery in April.
barrels. East Coast stocks gained 0.8 million barrels and the Rocky Mountain/West Coast stocks were up slightly. Propylene non-fuel-use inventories represented 4.5% of total propane inventories.
In June, Hawaii imported 45,000 bbl/d of jet fuel, almost 60% of total imports into the United States for that month. The increase in Hawaii’s jet fuel imports is likely transitory. In September, the Kapolei refinery, which is now owned by Par Petroleum, was restarted. EIA weekly data indicate that PADD 5 jet fuel imports for the week ending October 18 were 18,000 bbl/d, well below the average of 46,000 bbl/d reported in EIA’s weekly data for May through September.
Residential heating oil prices increased during the period ending October 21, 2013. The average residential heating oil price rose by 1 cent per gallon last week to reach $3.85 per gallon, a decrease of 19 cents per gallon from the same time last year. Wholesale heating oil prices remained flat, holding at just under $3.11 per gallon.
Gasoline prices rise while diesel fuel is flat The U.S. average retail price of regular gasoline increased one cent to $3.36 per gallon as of October 21, 2013, 33 cents lower than last year at this time. Both the Midwest and Gulf Coast prices increased two cents, to $3.31 per gallon and $3.13 per gallon, respectively, while the East Coast price was up less than a penny to remain at $3.35 per gallon. Rocky Mountain and West Coast prices both decreased three cents, to $3.43 per gallon and $3.66 per gallon, respectively.
Residential heating fuel prices increase
The average residential propane price increased by nearly 4 cents per gallon last week to reach $2.37 per gallon. This is an increase of 16 cents per gallon compared with the same period last year. Wholesale propane prices increased by 2 cents per gallon to reach $1.27 per gallon for the week ending October 21, 2013.
The national average diesel fuel price was unchanged from last week at $3.89 per gallon, and is now 26 cents lower than a year ago. Prices on the East Coast, Gulf Coast, and West Coast all increased less than one cent, to $3.91 per gallon, $3.80 per gallon, and $4.05 per gallon, respectively. The Midwest price declined less than a penny to remain at $3.85 per gallon, and the Rocky Mountain price is $3.88 per gallon, one cent lower than last week.
Propane stocks fall from prior week Total U.S. inventories of propane decreased by 0.5 million barrels last week to end at 66.0 million barrels, about 8.5 million barrels (11.5%) lower than the same week last year. Midwest inventories led the draw, falling 0.8 million barrels, while the Gulf Coast drew 0.6 million 42
PERMIAN BASIN ENERGY MAGAZINE | www.PBEMag.com | NOVEMBER 2013
NOVEMBER 2013 | www.PBEMag.com | PERMIAN BASIN ENERGY MAGAZINE
43