SHALE Oil & Gas Business Magazine Jan/Feb 2014 by SHALE Oil & Gas Business Magazine

// MARATHON OIL’S JEFF SCHWARZ: WILDCATTER OF THE YEAR //

SHALE J A N U A R Y. F E B R U A R Y 2 0 1 4

SETTING THE STANDARD

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CONTENTS

JANUARY/FEBRUARY 2014 FEATURE

12 Building for the future 14 Corpus Christi: a city on the move 16 Jobs today and jobs tomorrow 20 Investing at stock market highs 24 Surf’s up

COVER STORY DAVID PORTER

26 Dedicated to serving the people

of Texas well, the Texas railroad commissioner continues to work to ensure that the Eagle Ford Shale has a healthy and lasting impact on the Lone Star State.

INDUSTRY

30 Let’s play! 32 The formula for safety 34 Taking a closer look 36 Air drilling reduces drilling and

servicing costs and increases oil and gas production rates 40 One to watch 42 Recognizing excellence

POLICY

46 A swift look at the SWIFT 50 Energy reform law could greatly impact Mexico’s energy industry

LIFESTYLE

54 Bringing the magic 56 The good old days are back 58 A sense of urgency 60 Dos and dont’s

DAVID PORTER

NONPROFIT

62 Answering the call 64 First time’s a charm

SCENE

66 Man of the year 68 Planning for the pipelines 70 Firsthand looks 72 The Digital Oilfields USA Summit 73 A great start

IN EVERY ISSUE 08 Advisory board 10 Publisher’s note

COVER AND TABLE OF CONTENTS PHOTOS BY: MICHAEL GIORDANO LOCATION: THE BRISCOE WESTERN ART MUSEUM

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ADVISORY BOARD

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OMAR GARCIA - SENIOR ADVISOR As president of the South Texas Energy & Economic Roundtable (STEER), Omar Garcia is an expert on business opportunities associated with the Eagle Ford Shale who works with the oil and gas industry, local officials, community members, regional stakeholders, educational institutions and economic development organizations to ensure that the natural oil and gas industry in South Texas is advancing in a positive way that is beneficial to both the community and the industry. Garcia has more than 12 years of economic development experience, and he spent two years working for Bank of America as vice president of business development for the bank’s treasury management division. He is a certified economic development finance professional through the National Development Council, and he graduated from St. Edward’s University with a major in international business and Spanish. In 2010, Gov. Rick Perry appointed Garcia to the Texas Economic Development Corporation.

DOUGLAS STERLING CAIN Douglas Sterling Cain is the president of Lake Truck Lines, which has enjoyed a 300 percent growth over the past two years. Cain links the company’s recent success to a decision to move headquarters from Houston to San Antonio, believing it all happened by “grand design.” The company arrived in San Antonio with 12 trucks, and it is now operating close to 100, quickly becoming the solution for custom oilfield equipment and tank manufacturing, as well as oilfield transportation and logistics. Cain prides himself on being innovative and “staying ahead of the curve.” Out of his desire to make oilfield jobs safer and more effective, he launched subsidiary company Lake Oilfield Services, which already manufactures six different types of oilfield equipment. As Cain sums up in his own words, “honor and integrity are incredibly expensive on Monday, but the dividends show up on Friday.”

MARK PAYNE Mark Payne is a partner at Burleson LLP, the largest law firm in the nation primarily focused on serving the oil and gas industry. As Payne is a former petroleum geologist and landman, his practice is dedicated to warranty issues, operating agreements, unitization and environmental, including water and air matters. He is on the board of the South Texas Wildcatters, and he is involved in the community with his participation in the San Antonio Chamber of Commerce, Energy and Water Sustainability Section.

JEFFREY A. WEBB Jeffrey A. Webb is a senior associate in the San Antonio office of Norton Rose Fulbright, a global legal practice providing the world’s pre-eminent corporations and financial institutions with a full business law service. Recognized for its industry focus, Norton Rose Fulbright is strong across all of the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and health care.

CONTINUED ON PAGE 11

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JANUARY/FEBRUARY 2014

KYM BOLADO CEO / PUBLISHER

CO-PUBLISHER Jimmy Perkins

VICE PRESIDENT OF OPERATIONS Joyce Venema

CHIEF FINANCIAL OFFICER Deana Acosta

ART DIRECTOR Elisa Giordano

EXECUTIVE EDITOR Rachel Hughes

VP OF SALES

Stephanie Hawley / Austin & Houston Liz Massey-Kimmel / Corpus Christi, McAllen, Laredo & Alice

ACCOUNT EXECUTIVES Julie Conaway Iliana Hinojosa Gigi Hughes Gloria Lerma-Bailey Amanda Villarreal Dina Ybanez

CONTRIBUTING WRITERS Rick Burleson Douglas S. Cain Scott Courtney Dr. Janet Cunningham Ahmed Shan Hasnat Tabitha King Dr. Todd Meredino Kathy Moorhouse Niladri Mukherjee Alex Perez Jimmy Perkins James M. Summers Joyce Venema Chris Wolfe Patton L. Zarate

PHOTOGRAPHERS

Michael Giordano Julian Ledezma Dr. Todd Meredino Emily Perdue Jose Sanchez Photography Raquel Stark

www.shalemagazinetexas.com For advertising information, please call 210.240.7188 or email kym@shalemagazinetexas.com. For editorial comments and suggestions, please call 830.377.8573 or email jimmy@shalemagazinetexas.com. TO REACH US: 5600 Broadway Ave. San Antonio, Texas 78209 Phone: 210.240.7188 Copyright © Shale Magazine. All rights reserved. Reproduction without the expressed written permission of the publisher is prohibited.

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PUBLISHER’S NOTE

GREETINGS AND HAPPY NEW YEAR TO YOU FROM EVERYONE HERE AT SHALE MAGAZINE! WE COULDN’T BE MORE EXCITED TO HAVE MADE IT TO THIS POINT. We know 2013 has brought some amazing things to fruition, and that 2014 has much more in store! During this past year, we were privileged to join forces with some of the titans of the industry, building relationships and creating partnerships that will last many years to come. When we set out to create this magazine that would promote the significance of the South Texas petroleum and energy market, one thing we agreed on right away was to connect regional businesses with the oil and gas companies that have created the economic growth and opportunity in the Eagle Ford Shale community. Working together, it has been our mission to educate the people about all of the exhilarating opportunities occurring within the Eagle Ford Shale. We are honored to share the work of so many committed and thoughtful people. We appreciate your support, and we are thankful to have you as a reader of SHALE magazine. Best wishes to you and to your continued success in the New Year!

KYM BOLADO

CEO/Publisher of Shale of South Texas Oil & Gas Business Magazine kym@shalemagazinetexas.com

SHALE OIL & GAS BUSINESS MAGAZINE MISSION STATEMENT:

SHALE Oil & Gas Business Magazine is a publication that showcases the dynamic impact of the Texas energy industry. The mission of SHALE is to promote economic growth and business opportunities and to further the general understanding of how the energy industry contributes to the economic well-being of Texas and the United States as a whole. SHALE’s distribution includes industry leaders and businesses, service workers, entrepreneurs and the public at large.

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PHOTO BY SARAH BROOKE LYONS

With warmest regards,

ADVISORY BOARD JAMES M. SUMMERS James M. Summers joined in San Antonio office of Norton Rose Fulbright in 1976 and became a partner in 1985. He received his undergrad from Southern Methodist University and his law degree from the University of Texas Law School, and he has six professional honors. Summers’ legal practice focuses on real estate and oil and gas matters, which involve the representation of an array of clients who deal with complex and sophisticated financial transactions and situations. Summers represents many financial institutions and private equity groups in the securitization, CMBS and other related loan markets. He counsels clients and is involved in major workout and reorganization matters relating to all areas of real estate. His practice focuses on energy and oil and gas transactions with matters in the Eagle Ford Shale industry, representing everything from acquisitions and dispositions to refineries and solar power facilities.

SCOTT COURTNEY Scott Courtney, P.G., is the president of Premier Hydro, and he has more than 30 years of background, education and experience in oil and gas, water resources, environmental management and business development. He was raised in West Texas, but he has made South Texas his home since 1984 while working around the country in major programs for the Department of Energy, the Department of Defense and the oil and gas industry. Over the last four years, he has focused on the Marcellus, Permian Basin and Eagle Ford Shale plays. He is the 2013 South Texas Wildcatter Committee chairman, and he has made a career of sustainable development and production of natural resources.

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KIMBERLY WEBB Kimberly Webb is the business development manager for Chemoil Energy, an oilfield service company specializing in frac fuel operations. Webb is in charge of managing and marketing the Texas region, and she is committed to improving the efficiencies of the oil and gas service industry. Chemoil Energy is a division of Chemoil Corporation that sells and markets five-plus billion gallons of commodities worldwide. It is the world’s leading integrated producer and marketer of commodities.

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FEATUR E

BUILDING FOR THE FUTURE Pleasanton, Texas: With a solid foundation firmly in place, the growing ÒBirthplace of the CowboyÓ proves it is a city with broad shoulders. BY: JIMMY PERKINS / PHOTOGRAPHY: JOSE SANCHEZ PHOTOGRAPHY

JOHN D. ROCKEFELLER JR. wrote many things regarding civic duty. Among his most memorable quotes: “We must instill a sense of duty in our children.” Another: “Every right implies a responsibility; every opportunity, an obligation; every possession, a duty.” And finally, “I believe that government is the servant of the people and not their master.” The Eagle Ford Shale boom is providing many opportunities for individuals and municipal governments alike to embrace this

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wisdom and build for their futures. The city of Pleasanton is one such municipal government putting these words into action. The boom has powered this once sleepy South Texas town of 8,200 residents to well over 13,000 in three short years. The mayor, the city council and City Manager Bruce Pearson are among those in the trenches working daily for the citizens of Pleasanton, and the fruits of their labor are evident when you drive down Main Street. Their

decisions today will have a long-lasting impact on the future, from better schools to enhanced infrastructure of roads, water systems, community developments and more. Pearson has a rich history in city management in high-growth areas. Pearson cut his teeth on the utilities side in Woodway, Texas, a bedroom community near his hometown of Waco. He then spent time at a private inspection company specializing in dams, water and wastewater management. This turned into a position with San Antonio Water System (SAWS) that lasted from 2000 to 2008, where he was instrumental in implementing the massive recycled water program that is vital to San Antonio’s infrastructure. He spent the next three years as city manager in Cibolo, a suburb of San Antonio. During his tenure, Cibolo annexed twice the area and doubled the size of the city in two-and-a-half years. When Pearson interviewed for the city manager position in Pleasanton in 2011, the city council advised him on the growth they were anticipating as a result of the oil and gas industry’s expansion. In his own words, “something in that initial meeting with council told me this was a city with broad shoulders. I found an incredible amount of institutional knowledge here – a police chief that began his career here and was in his 35th year; a public works director with 41 years on the job; a city secretary with almost 30 years at the time; and numerous city employees with over 20 years experience.” In other words, the foundation was strong, and Pearson felt confident in his ability to do the job, given the existing assets he found. The first major policy change in 2012 was to get competitive in the job market by strengthening the city employee’s benefit plan. An in-house market study was completed in 2013 under the city council’s guidance, and the resulting study justified the need to improve the pay and benefits for city employees. This bolstering of the foundation of the city government was the key component ensuring Pleasanton’s ability to handle the rapid growth. The traffic flow on Main Street has tripled in three years to 18,000 vehicles per day. The increase of vehicular activity also meant an increase in traffic issues, accidents and violations. The city and Chief of Police Ronald

Sanchez responded by immediately appointing a traffic control officer and eventually a second officer, as well. The end result has been a 41 percent reduction in traffic accidents in the past year. The growth continues, and with it, the challenges of infrastructure, but the city leaders continue to clear the hurdles. As with all

inspectors in order to keep up with the current demand from commercial construction. A few short years ago, the city was dealing with two or three modest commercial projects at a time, but now they are handling 12 to 15 projects simultaneously. Further, the complexity of the projects has taken a decided turn upward. For instance,

ÒTHIS TOWN HAS OLDFASHIONED VALUES WHERE FAITH AND FAMILY ARE VITAL.Ó communities in the shale play, housing is at a premium, and in this case, rental costs have tripled since 2010. In Pleasanton, the city leaders have responded by spurring housing construction. There are four subdivisions currently underway, including projects from out-of-state and international developers. One project with preliminary approval will see 115 condos built to satisfy the need for starter housing. The building growth is not just residential, but commercial, as well. Pearson and the city leaders have expanded their community development department to add experienced

there have been five multi-level hotels built in the past year-and-a-half alone. In retrospect, the decision to upgrade the competitiveness of the city employment packages is paying off. This decision has enabled Pleasanton to attract the level of expertise required to oversee such projects. And Pleasanton benefits from its central location in the EFS. As a result, there are many companies that are set up for a long-term presence: Marathon, Pumpco, EOG, RCW Energy Services and UPS, to name a few. As for the future, the city council has ad-

opted a master plan for new roads, reconstruction of existing roads and expansion of services such as fire, police, water and wastewater. There is currently a public/private initiative underway to expand operations at the airport. Additionally, construction is near completion on a new 12,000-square-foot civic center, a new 10,000-square-foot library and, in front of both, a memorial called the Freedom Center to honor the city’s police and military heroes who have fallen in the line of duty. In this regard, the city is building quality infrastructure that will benefit its citizens for years to come. All of this is occurring while holding tightly to their identity as the “Birthplace of the Cowboy.” Pearson directs effusive praise to the mayor and city council, but he reserves his greatest praise for the citizens. “Pleasanton has always possessed an independent frontier mentality and is a very hardworking, entrepreneurial and spiritual community,” he says. “This town has old-fashioned values where faith and family are vital. And that’s the best foundation to build on.” For more information, email jimmy@shalemagazinetexas. com or visit www. pleasantontx.org. SHALE OIL & GAS BUSINESS MAGAZINE

FEATUR E

CORPUS CHRISTI: A CITY ON THE MOVE Thanks to the efforts of Mayor Nelda Martinez and other leaders within the city and the state, the Sparkling City By the Sea is about to grow up. BY: JIMMY PERKINS

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PHOTO COURTESY OF SHALE

here is no doubt Corpus Christi is a city on the move. The Eagle Ford Shale boom continues to have a monumental impact on the 320,000-plus residents who reside there. After having a population growth of about 2 percent per annum for the past decade, these numbers have essentially doubled in the past two years. And it’s not just population growth. Mayor Nelda Martinez and her office recently provided the statistics that show this tremendous growth in all areas of life in Corpus Christi. Unemployment is down to 5.7 percent (from 8.9 percent in 2011); 7,000 new jobs were created in 2013 through October (many oil and gas related); sales tax revenues went up 8.61 percent; and property values went up 7.99 percent. So it is no surprise that Corpus Christi jumped from No. 44 to No. 17 on the list of best-performing cities, as researched and published by the Milken Institute. And there is so much more to come. Martinez’s approach to governing is best represented in her own words: “You can’t deal simply with your local area or you will be operating in a vacuum. You have to work together as a region and with the state if you want to compete globally.” And the plans from city leaders emphasize global competition. Already the fifth largest port by tonnage in the United States, the city of Corpus Christi intends to build for the future. And this future is being significantly powered by the Eagle Ford Shale activity. More oil is being exported through the port than ever before, and as a result, 10 new oil docks are being constructed. The Port of Corpus Christi works diligently with the harbor pilots to manage the significant increase of traffic. And the reality of global competition is helping drive tectonic shifts in port infrastructure. There is a plan to widen and deepen the channel, and the construction of a new and taller harbor bridge is within reach. None of this is happening in a vacuum thanks to the combined efforts of Martinez, the city council, city leaders, their regional counterparts and the state. Corpus Christi represents the key to the world for the oil that is being produced in the Eagle Ford Shale, so these decisions and plans reach far beyond the gulf shores of this coastal city and are being influenced by world events. The Panama Canal Expansion Program, underway since 2007, will effectively double the capacity of the canal by creating a new lane of traffic and allowing more and larger ships through.

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CORPUS CHRISTI IS A CITY PLAYING OFFENSE, MANAGING ITS CURRENT GROWTH AND PREPARING FOR FUTURE REALITIES. The existing locks in the Panama Canal can help move vessels that max out at 4,400 TEUs (20-foot equivalents in cargo shipping). The new locks being built can move vessels up to 12,000 TEUs. Without a taller harbor bridge and a deeper and wider channel, the global trade in and out of the Port of Corpus Christi will be limited to the smaller ships. And this is precisely what the city is trying to avoid. Beyond the oil and gas industry, Corpus Christi relies heavily on its natural beauty and the eco tourism that is attracted to the coast.

As a result, the city embraced natural gas vehicles long ago, even constructing and maintaining its own municipal natural gas filling station. According to Martinez, “CNG has a huge multiplier of positive effects on the economy and the environment.” A recent directive from city leaders requires that all-new fleet vehicles be CNG. What we are seeing in Corpus Christi today is a city playing offense as they manage current growth and prepare for future realities. The old harbor bridge is constructed of steel and

built to World War II standards, but 54 years of service and a saltwater environment have taken their toll. The bridge has served the citizens of Corpus Christi and the city’s visitors well, but the realities of the global shipping market, combined with the increase in domestic oil and gas production, provide this city with the opportunity to lead the way forward for its citizens, its visitors, the entire region and the state. If you haven’t been to Corpus recently, you should go soon. That sleepy little city on the gulf is about to grow up.

For more information, visit www.cctexas.com or www. pancanal.com, or email jimmy@shalemagazinetexas. com.

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FEATUR E

JOBS TODAY AND JOBS TOMORROW

Several education institutions in the Coastal Bend are responding to the regionÕs growing need for educated and skilled workers by providing a variety of pathways to careers in the oil and gas industry. BY: DR. JANET CUNNINGHAM

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HE COASTAL BEND REGION is rapidly changing before our eyes. As new Eagle Ford Shale companies move to the area, the need for educated and skilled workers increases. Education institutions are responding to this need through innovative programs created specifically for the oil and gas industry, dual credit and certification programs for high school students and changes to traditional classes that have led to expanding educational opportunities. One institution designed to alleviate manpower shortages is the Craft Training Center of the Coastal Bend (CTC), a nationally recognized nonprofit education center that has been training and certifying skilled craft professionals since 1987. CTC recently celebrated the expansion of a state-of-the-art facility – now over 70,000 square feet housing some 98 welding booths, numerous labs and classroom space. With more than 400 high school and adult students enrolled year-round, CTC helps train tomorrow’s employees in the petrochemical, industrial construction and oil and gas industries. The Eagle Ford Shale boom has played a large role in the increased enrollment and community support of the CTC, prompting a $6 million expansion of their training facility. CTC trains adults for careers in welding, pipefitting, scaffold building, industrial painting, safety, mobile crane operations and instrumentation. They also provide training to high schools students from more than 15 campuses in Nueces and San Patricio Counties, with offsite National Center for Construction Education and Research (NCCER) programs at seven other high school locations in the area. In partnership with the U.S. Department of Labor, CTC also offers both an electrical and a plumbing apprenticeship program. Students in these programs will complete more than 8,000 hours of on-the-job training and 656 hours of classroom instruction in preparation for state licensure exams. To accommodate the need for more Eagle Ford Shale personnel, CTC is adding a pipeline training and testing area that will use space both inside and outside of the new buildings to meet the increasing demand for pipeline maintenance personnel, which must by certified through USDOT. Del Mar College (DMC) in Corpus Christi serves as a mainstay for South Texas companies needing skilled employees. Ranked in the top 2 percent of community colleges in the country granting associate degrees to Hispanic students, DMC serves more than 22,000 credit and noncredit students each year. As it is a nationally recognized, locally focused community college, 90 percent of students come from and remain in the community, making DMC a primary economic catalyst for the region. In response to the energy production boom in the Coastal Bend, DMC has ramped up credit and noncredit training. The college has long been a venue of choice for workforce preparation, training about 6,000 students in occupational and short-term training programs every year that range from commercial truck driving, welding, environmental/petrochemical lab technology and nondestructive testing to industrial machining, process technology and occupational safety and health, among other high-demand fields. Students can complete associate’s degree and certificate plans quickly to fill positions offered by South Texas employers. Some in-demand, industry-specific programs allow potential employees to complete their studies within a few weeks or months. One such program is the Commercial Driver’s License. With six truck driving simulators, programs that can be completed by adults in as little as three weeks and another program offered to high school students, DMC is working to meet the high demand for licensed truck drivers. “Del Mar College has always been known for our ability to adapt to meet the needs of our industry partners,” says Dr. Mark Escamilla, DMC president. “We’re a key driver in training workers in technical and occupational fields in South Texas, as well as preparing students for university transfer. The college is ready to provide the education targeting crucial skills needed by industries connected to oil and gas production and other trades.” These partnerships include training employees for companies new to the Coastal Bend such as the Chinese seamless-steel pipe manufacturer TPCO America Corporation, Italian plastic company M&G Resin and Austria-based iron ore processing company Voestalpine. Serving the heart of the Eagle Ford Shale with campuses in Beeville, Pleasan-

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ton, Kingsville and Alice, Coastal Bend College (CBC) is addressing the need for skilled workers through a variety of programs. Last year, CBC awarded more than 800 credentials, marking the fifth year in a row that the college has seen an increase in the number of certificates and degrees awarded. Through industry-specific programs and opportunities for students to work and earn college credit in the Weekend College program, CBC is providing pathways to industry careers. The Oil and Gas Technology program, which began in 2007, has grown tremendously and recently was awarded a grant to purchase a drilling simulator that will be housed at the Beeville campus. The state-of-the-art simulator will give students hands-on experience with operating full-sized drilling, production and workover equipment and situations they might encounter in the field. CBC is also working with area school districts to implement an oil and gas technology program that will begin when students are in the ninth grade and conclude with students receiving an Oil & Gas Specialist certificate. With additional classes, students can receive an Oil & Gas Technology Level I certificate, earn an Oil and Gas Technology Associate of Applied Science degree

or continue their education at a university to receive a BAAS in Petroleum Technology. In addition to the Oil and Gas Technology program, CBC offers several pathway courses, including Oil and Gas Safety Certificate, Welding Specialist Certificate and Commercial Driver’s License Certificate. The pathway preparation programs are available for the general public, GED students (for free) and high school students. They are designed to provide the public with workforce skills and/or to introduce a career field. Workers with certificates are needed for the petroleum industry, but graduates with bachelor’s, master’s and doctoral degrees are needed, as well. With nearly 11,000 students,

Texas A&M University-Corpus Christi (TAMUCC), designated as a Hispanic-Serving Institution, offers more than 60 of the most popular degree programs in the state. One field that has experienced tremendous growth is the accredited mechanical engineering bachelor’s degree program, whose graduates understand the complex and evolving mechanics of the Eagle Ford Shale developments. Students are well grounded in the fundamentals of engineering, mathematics, science, communications and problem-solving, while learning both the applications and the theories of engineering methods and processes. Announced only a few years ago and receiving full accreditation this year, program enroll-

AS NEW EAGLE FORD SHALE COMPANIES MOVE TO THE AREA, THE NEED FOR EDUCATED AND SKILLED WORKERS INCREASES. SHALE OIL & GAS BUSINESS MAGAZINE

ment has more than doubled initial projections. TAMUCC continues developing additional engineering programs as the need grows, and articulation agreements with DMC and CBC have increased the number of students preparing for future workforce demands. As advancements are made and industry evolves, TAMUCC continues to seek input from graduates, employers and an industry advisory committee so that students are prepared to meet the changing needs of the industry. Another Coastal Bend four-year institution, Texas A&M University-Kingsville (TAMUK), has made a special place for itself in higher education when it comes to serving the needs of oil and gas industry workers. In 1937, Dr. Frank H. Dotterweich, namesake of the university’s college of engineering, founded the nation’s first degree in natural gas engineering. Thousands graduated from that program and provided

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the majority of workers for South Texas’ oil and natural gas industry. Today, in response to the increased need for workers, TAMUK once again offers an undergraduate degree in natural gas engineering. TAMUK furthers continuing education opportunities for industry workers at all levels with the Eagle Ford Center for Research, Education and Outreach (EFCREO). The center began in 2013 with the purpose of uniting industries and communities affected by the Eagle Ford Shale to address a broad spectrum of issues ranging from roads and transportation to oil and gas recovery and production to educational and environmental concerns. EFCREO helps prepare students for careers in fields related to natural gas and unconventional oil and gas production. According to Dr. Jianhong-Jennifer Ren, interim associate dean of the college of

engineering, “As a public institution of higher education, we have the responsibility to produce students who will be able to fill the needs of the highly skilled workforce associated with the Eagle Ford Shale.” With 10 engineering disciplines and social science and business programs, TAMUK is poised to provide support for the Coastal Bend area. Advisors from all of these local institutions have relocated to the Coastal Compass Education & Career Resource Center at La Palmera Mall in Corpus Christi. Information is provided on all types of education and career programs, and advisors help connect people with skills necessary for in-demand jobs, with no charge for services. The landscape is changing in the Coastal Bend – and so are the education and the training required for growing workforce needs. With the innovative ways Coastal Bend institutions are responding, it’s evident that the area is preparing for jobs today and jobs tomorrow.

The article is a compilation of information provided by Craft Training Center, Del Mar College, Coastal Bend College, Texas A&M UniversityCorpus Christi and Texas A&M UniversityKingsville.

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Wishing everyone a prosperous NewYear, especially our oilfield customers: • Holt • Patterson-UTI Energy, Inc • Energy Transfer • Basic Energy Services • Hilcorp Energy Company • Orion Drilling Company LLC • Repcon • Francis Drilling Fluids, LTD. • Valerus • Champion Technologies • Exterran • Anderson Machinery Company • Stallion • Siscorp • Diamond Fiberglass • South Texas Electric Cooperative • Marathon Oil Co. • Murphy Exploration

361.576.0003

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INVESTING AT STOCK MARKET HIGHS BY: CHRIS WOLFE, NILADRI MUKHERJEE AND AHMED SHAN HASNAT

WITH OVER 80% of this year now behind us, we can reflect on another strong year of equity returns. Yet, the year has not entirely been smooth sailing. There have been choppy waters related to Federal Reserve (Fed) tapering, global economic growth has been disappointing again (according to the International Monetary Fund, 2013 growth is expected to be well below the long-term average), U.S. fiscal battles remain unresolved

IN SUMMARY  Equity markets have navigated several speed bumps over the last five years and climbed to new highs. We fear some investors may not have participated in this rally and are understandably hesitant to do so even now. By investing to goals, investors can make decisions based on progress to these goals and avoid costly choices resulting from rapidly shifting portfolios based on emotions.  As the global economy and asset markets become more “normal” in 2014, we believe investors should take the opportunity to rebalance their portfolios closer in line to their goals-based allocations.

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BIGSTOCK.COM

ONE OF THE KEYS TO SUCCESSFUL LONG-TERM INVESTING IS THE ABILITY TO KEEP EMOTION OUT OF THE DECISIONMAKING PROCESS.

and China faced the real prospect of its own “Lehman-like” liquidity moment. Still, investors who were willing to back equities have been rewarded handsomely. While markets keep us on our toes, a key worry of ours is that many investors – through fear of experiencing significant equity drawdowns – have remained on the sidelines of a strong equity bull market that began in March 2009. Since then, global equities have more than doubled, yet investors who have preferred to hide in safe-haven assets (such as short-duration government bonds) are likely to have underperformed. The rationale for remaining underinvested in the equity market is clear: during the 2000s decade, equities experienced two major bear markets, the second of which related to the deepest financial crisis since the Great Depression. Understandably, investing, especially with the financial crisis so close in the rear view mirror, can too often lead to the belief that timing the equity markets (to avoid the large drawdown and get in just after the bottom) is a successful strategy. Surely, timing the equity markets is more successful than being invested in equities throughout the last few decades, the argument goes. We caution against this philosophy. Numerous studies have shown, as well no doubt from the experience of many investors still waiting to get into global equities that are persistently making new highs, timing these market moves is a near impossible task. As Exhibit 1 shows, on most occasions over recent years the largest down days have been followed by quick reversals – even the swiftest of investment hands are unlikely to be that precise. Instead, remaining invested and using volatile and turbulent markets as opportunities to rebalance provides a more rewarding investment experience, in our view. In recent years, it seems as though every new headline warned of the next market sell-off or conversely the new policy move that would lead to a three-month opportunity. We are concerned that this has led to many investors adopting a “short-term” strategy of investing to try and beat a benchmark, result-

ing in either focusing on a higher frequency of timing or otherwise sitting out of the market entirely. In our view, forecasting short-term moves is inherently difficult, and generally speaking, the degree of confidence when making market predictions is higher over longer horizons. We believe that a stronger approach to investing is to adopt a goalsbased strategy. In a goals-based strategy, a set of personal goals is created based on many factors such as risk tolerance, investment experience and investment objectives. These goals provide a target by which a disciplined investment strategy is created. With this approach, investors can move away from reacting to every short-term market movement and instead remain invested over a longer time period, using those same market moves to fine tune portfolio rebalancing, which can enhance risk-adjusted returns. A goals-based strategy is particularly important for those investors that have not partaken in the market performance of the last few years. Consider that goals are based on the expectation of achieving returns, which essentially requires the need to be invested. By following some of the best practices we outline – practices heavily adopted by institutional investors – we believe this can reduce the possibility of not achieving goals. One of our key themes for 2013 was for in-

vestors to get back into markets. For those who still haven’t, we believe a goals-based approach can provide the confidence and lay the initial steps to do so. One of the keys to successful long-term investing is the ability to keep emotion out of the decision-making process. According to a Dalbar study (see Exhibit 2), the average annual return for the S&P 500 from 1991 to 2011 has been nearly 8%. But the return earned by an average equity investor has been only 3.5%, or less than the market return by more than 4%. The primary reason for the average investor’s underperformance is due to behavioral biases, which often lead to an investor buying and selling at inopportune times. There are plenty of understandable reasons why in the recent years investors may have sold equities at the wrong time, or why those who waited to invest post-March 2009 are still sitting on the sidelines: Washing-

ton has thrown three major fiscal impasses at the market – the debt ceiling debates of 2011 and 2013 as well as the fiscal cliff of late 2012; the Arab Spring of 2011; more than two years of a Eurozone sovereign crises; and a real threat of a hard landing in China, to name just a few. And yet at every turn, the markets have defied the bad news and continued to march higher to the detriment of those underinvested. For those who believe that this cycle is unique, we would draw their attention to the similarities of these times to the late 1970s and the 1980s. Concerns about budget deficits, the possibility of a Fed policy mistake and geopolitical risk (Iran) were the order of the day during that time and yet the markets kept climbing the “wall of worry.” In the 1980s, the S&P 500 Index returned 141% or 9.2% on an annualized basis, and this is despite the 20% crash experienced on Oct. 19, 1987. So what are the common behavioral biases investors have? “Recency,” or the overreliance on recent events to predict future outcomes and make investment decisions, is a significant one. The financial crisis of 2008-2009 jolted the confidence of many investors, shaking their faith in equities and made investors so risk averse that they piled into bonds in droves. Many of these investors had the capacity to take more risk and research suggests that this is true for young investors as well, some of whom have missed the multi-year rally in the markets. “Myopic GAP: 4.3% Loss Aver-

sion” is another common bias in which an investor focuses on the potential for short-term losses, which can lead to overreactions and underinvestments.

WHAT SHOULD INVESTORS BE DOING? We believe there is a method which can make it easier for investors to reduce their focus on potential losses or underperformance from market timing and get around their behavioral biases. In our view, generating a disciplined investment strategy based on the objective of achieving real tangible and distinct goals is a better approach. We recommend investors first understand their “Investment Personality” (i.e., risk tolerance, liquidity preferences, experience and comfort level with the financial markets, among others) and then articulate their specific and distinct goals. By investing to binding goals, rather than measuring performance relative to indices, investors can make decisions based on progress to those goals and avoid costly choices resulting from rapidly shifting portfolios based on emotions. In many ways, as we approach 2014 – a year where we believe economic growth, corporate earnings, monetary policy and investment returns will be closer to normal – we believe this is an appropriate time for investors to consider how their current portfolios have drifted away from their desired goalsbased portfolios. A key focus for investors in the months ahead will be working with their Financial Advisor to get their portfolios “back to normal,” which includes understanding important risks.

A GOALS-BASED APPROACH TO PORTFOLIOS As previously mentioned, the first and most important step is to move away from benchmarks and toward tangible goals. Whether this goal is saving money for retirement in 30 years, or sending kids to college in 18 SHALE OIL & GAS BUSINESS MAGAZINE

years, or starting a business next year, it all comes down to an understanding of how much risk an investor needs to take to achieve these goals. Merrill Lynch’s Wealth Allocation Framework (WAF) attempts to bring together aspects of behavioral finance with diversification and portfolio construction as recommended by the Modern Portfolio Theory (MPT). In our view, the WAF provides a useful starting point to begin adopting this new mindset. The WAF identifies three very different risk dimensions for an individual investor and incorporates the aspects of safety and aspiration. The three risk dimensions are: • Personal Risk: Reduce downside risk and accept belowmarket returns so that the investor’s basic standard of living is not jeopardized. • Market Risk: Invest in a broadly diversified portfolio, which can earn a rate higher than inflation and allow the investor to maintain their lifestyle. • Aspiration Risk: Take measured but significant risk, which can lead to outperformance and hence to enhance the investor’s lifestyle.

REBALANCE TO APPROPRIATE ASSET ALLOCATION1 Once goals-based portfolios have been constructed, we recommend investors stay the course. However, market disruptions are out of the control of the investor and this is where rebalancing comes into play. If creating a goals-based portfolio is laying the foundation, consider the rebalancing component as continuously updating the structure for changes in the environment. Rebalancing on a regular basis is an effective way to capitalize on market opportunities because the discipline enables investors to sell when assets have run up in price and buy when they are out of favor. Our work also suggests that portfolio rebalancing helps to reduce risk. Exhibit 3 illustrates the concept by comparing the

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PORTFOLIO STRATEGY: Timing the market successfully on a consistent basis is impossible. Behavioral biases are a key reason for portfolio underperformance. A disciplined investment strategy based on tangible goals may help investors achieve a more fulfilling investment outcome because it provides the framework and rigor to remain invested while using price trends to rebalance portfolios to enhance risk-adjusted returns. As the global economy and asset markets become more “normal” in 2014, we believe investors should take the opportunity to rebalance their portfolios closer in line to their goals-based allocations. For those investors who have not partaken in the equity upside so far, we especially urge the need to get invested and highlight strategies such as dollar-cost averaging as an effective way to invest when the task of buying at the highs seems too daunting.

performances of two long-term portfolios that start out with a traditional 60/40 (stocks/fixed income) allocation. One is rebalanced annually, and the other is not. The former has lower volatility, a lower drawdown and better risk-adjusted returns (i.e., higher Sharpe Ratio). A disciplined approach to rebalancing (whether done on a quarterly or annual basis), will prevent investors from shifting assets in response to short-term events and will help to mitigate some of the behavioral biases we have discussed.

USE DOLLAR-COST AVERAGING TO INVEST2 Managing “Market Risk” can be achieved through diversification and rebalancing, but for many clients who are currently underinvested, the prospect of buying equities at their historic highs is a difficult task to enact. Here, we believe dollar-cost averaging is an effective way to manage this difficulty while still following our guidance of getting back into being invested in markets. Dollar-cost averaging entails purchasing assets over predetermined intervals at fixed amounts rather than lump sum. The potential advantage of this technique is that it helps diversify the price investors pay for securities. A constant amount buys more assets when prices are falling and less when they are rising. While portfolios utilizing a dollar-cost averaging (DCA) approach typically lag those using a lump-sum investing (LSI) style when markets are trending higher, DCA can often

GVICTORIA/BIGSTOCK.COM

help reduce portfolio risk during volatile market periods. As an example, consider the five-year performance of a portfolio where $1,000 was invested lump sum in stocks at the end of 2007, against one that used a DCA method, where the same $1,000 was invested in three equal increments of $333.33 (at the beginning, after six months and at the end the year). That means, at the end of 2008 both portfolios are completely invested. For simplicity, we assume a (very conservative) zero risk-free rate. Exhibit 4 shows the terminal values of the two portfolios. Even though the difference in the time both portfolios were fully invested was just 12 months, DCA outperformed LSI by 26%. The results, however, are intuitive and emphasizes the impact losses can have on cumulative gains. Since a smaller fraction of the investor’s principal faced the brunt of the market’s steep decline in 2008, the DCA method ended up with greater assets than the LSI style when the markets eventually bottomed. To state it differ-

TIMING THE MARKET SUCCESSFULLY ON A CONSISTENT BASIS IS IMPOSSIBLE. ently, when stocks are volatile and trending down, as in 2008, DCA can help investors avoid buying high and allows them to buy more at lower prices. More broadly, using a bootstrap simulation that generated thousands of potential paths for stock prices using historical data over the last 25 years, we found that on average when investments declined in value, losses are 15% less for portfolios using dollar-cost averaging.3 DCA can thus offer downside protection during market downturns.

Sources: Asset allocation and rebalancing do not ensure a profit or protect against loss in declining markets.

Dollar-cost averaging does not ensure a profit or protect against loss in declining markets. Since such an investment plan involves continual investment in securities regardless of fluctuating price levels, you must consider your willingness to continue purchasing during periods of high or low price levels.

Merrill Lynch Wealth Management makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S) and other subsidiaries of Bank of America Corporation. Investment products: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value

Our bootstrap method resampled with replacement monthly stocks prices between 1988 and 2012. We ran 1,000 iterations of potential investment paths for both DCA and LSI portfolios. As before, our principal amount was $1,000, with the DCA approach investing the same over six-month periods in equal increments. The duration of the portfolio run was five years.

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A SURF’S UP

On top of the world: successful businessman and lifelong surfer Brad Lomax BY: JIMMY PERKINS

SHALE OIL & GAS BUSINESS MAGAZINE

GOOD SURFER pays atten-

tion to the details. You have to watch the surf and know where you are going before you paddle out. You have to anticipate where the waves will be breaking and position yourself accordingly to the best of your ability. And when the time comes, you pick your spot and you rise on that wave, and for those few spectacular moments, you really do feel like “you’re sittin’ on top of the world.” It’s just you and your board and the sun and that wave, and everything you feel is just as vast and unknowable as all that is alive in the eternity of the ocean just below your two feet. There are many parallels that can be drawn between surfing and business, and Brad Lomax represents those parallels as well as anyone can. And to take the surfing metaphor further, Lomax made an important distinction between surfing and Texas surfing when he told me, “It takes a truly committed or a truly crazy person to be a Texas surfer. You have to work harder to paddle out, and there are fewer waves.” In Lomax’s case, he is committed. He bought his first surfboard in 1969 from the legendary Pat Magee. Little did either man know that 36 years later, Lomax would purchase most of Magee’s entire lifelong collection of surfboards and surf memorabilia and then open the Texas Surf Museum. It was an appropriate passing of the torch from Magee, the man who still defines Texas surfing, to Lomax, a man who recognizes the incredible power of such an important collection and is com-

mitted to being a worthy curator. Lomax is exactly what I expected him to be: a surfer, a businessman, an entrepreneur, friendly, self-effacing and well-respected and loved by his employees and customers. His story begins in San Antonio, and it was his family’s frequent visits to Corpus Christi and Port Aransas that fostered in him a love of the ocean at an early age. He graduated from St. Mary’s University in 1976, and he learned the restaurant business by working for Cappy Lawton in San Antonio. Then in 1983, at the age of 28, he moved to Corpus Christi and opened the Water Street Oyster Bar in what was once a transmission shop. Being a good surfer, Lomax paid attention to the details, but at some point, the wave takes over and it either plays out or breaks big. According to Lomax, “Seafood was surging in those days, but I didn’t know what to expect. It’s also inherently more expensive than other types of food. It hit out of the gate.” And so began a 30-year odyssey that has grown from that original restaurant to now include several other businesses on the same city block: the Water Street Seafood Company (1986), the Executive Surf Club (1990), the aforementioned Texas Surf Museum (2005), Surf Club Records (a record store and gift shop) and Water Street Catering. Today, Lomax employs 200 people, and it is clear from spending time at any of the businesses that it is a family feel that dominates. But it wasn’t always great waves every day. The tides ebb and flow. “I never realized I was in the oil business until 1985 when the price of oil dropped,” Lomax said. “We lost of lot of companies in town that shut down or moved. We had petroleum engineers applying for jobs here. The ‘80s were tough on Texas, but we survived.” And in some respects, flourished. That same year, Lomax married and soon after started a family. He and his wife have been married for 28 years, and together, they have three children. And now the current boom in South Texas is powering the economy like never before. There is a two-block downtown restoration project approved by the voters currently underway on North Chaparral Street with entrances to Water Street Seafood Company, the Texas Surf Museum and the Executive Surf Club. Phase one is due to be completed by the end of January, and the second phase by summer. When asked about any new plans, Lomax said, “We just want to stay focused on fleshing out what we have. It works, and we are good at it. We have a banquet space

PHOTOS COURTESY OF SHALE

FEATUR E

PHOTOS COURTESY OF SHALE

ÒIT TAKES A TRULY COMMITTED OR A TRULY CRAZY PERSON TO BE A TEXAS SURFER.Ó THE EXECUTIVE SURF CLUB:

WATER STREET SEAFOOD COMPANY:

http://executivesurfclub.com

http://www.waterstreetrestaurants.com

THE TEXAS SURF MUSEUM:

SURF CLUB RECORDS:

http://www.texassurfmuseum.com

http://www.surfclubrecords.com

and some other properties, and Water Street Catering is going strong.” Before the interview ended, an employee who was leaving work walked near where I was talking to Lomax. The man said, “I’ll see you at the Christmas party, Brad.” I asked Lomax about the Christmas party. He said, “It’s our tradition on Christmas Eve to shut all the businesses down early, then have a company Christmas gathering so all of the employees and their families can be together. It’s a good time for all of us to just be together and relax.” Then I asked him about the name of the Executive Surf Club. He told me how it was a group of about 20 guys he started surfing with in the

late ‘60s, “and we just called ourselves ‘the Executive Surf Club’ because we weren’t kids anymore. I always liked the name, so I used it.” When I asked if they were still around and surfing together, Lomax smiled and said, “Yeah, some of us. We are aging white-collar surfers. It’s not pretty anymore, but we’re still out there.”

For more information, email jimmy@ shalemagazinetexas.com. SHALE OIL & GAS BUSINESS MAGAZINE

COVER STORY

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SERVING WELL

TEXAS RAILROAD COMMISSIONER DAVID PORTER works to protect the health and safety of Texans while simultaneously promoting the energy production that is vital to both the state and the nation.

BY: JIMMY PERKINS PHOTOGRAPHY: EMILY PERDUE

he Eagle Ford Shale boom in South Texas can be attributed to many things. The abundance of natural resources, the technological advances in drilling techniques and equipment and of course, the determination and innovative genius of George Mitchell, the pioneer of horizontal hydraulic fracturing, to name just a few. One must also include on this list Texas Railroad Commissioner David Porter, though he will vociferously argue against inclusion. You see, he possesses a rare and admirable quality in an elected official: humility. So whereas I would describe his role as quarterback, he would undoubtedly prefer the less glamorous description of pulling guard. And perhaps it is more appropriate. With up to a dozen federal agencies to contend with, there is no doubt he spends ample time out in front blocking; however, he is no less vigilant in his efforts to ensure that the Eagle Ford Shale has a healthy and lasting impact on Texas. As complicated as it is to drill 10,000 feet down into the hardscrabble, mesquite-covered land in South Texas, then turn and drill another 3,000 feet horizontally, it may well be easier than getting Porter to talk about himself or his accomplishments. So here are a few facts that speak for themselves since his election in 2010. He formed the Eagle Ford Shale Task Force (EFSTF); issued the EFSTF Report; was appointed by Gov. Rick Perry to the IMCC and the IOGCC to lead on SHALE OIL & GAS BUSINESS MAGAZINE

energy issues on a national level; has overseen a near record amount of rule makings since taking office; worked diligently to maintain the current structure of the Railroad Commission during two Sunset review processes; refocused the efforts of the Alternative Fuel Resource and Education Division to promote natural gas, as well as propane; and continues to fight overregulation from the federal government. However, what really seems to define his leadership style is his proactive efforts to engage the public and industry and work with all stakeholders to implement policies that simultaneously protect the health and safety of Texans and promote energy production that is vital to our state and our country. Becoming the Texas railroad commissioner during the biggest boom in our state’s rich energy history was not an accident of fate. Porter was born in 1956 in Fort Lewis, Wash., while his father served in the U.S. Army. After his Army days, Porter’s father pursued his calling as a preacher, and what followed was the life of a family whose roots were mobile by necessity. Porter graduated magna cum laude from Harding University in May 1977 with a bachelor’s degree in accounting. He met his wife while attending Harding, and they were married in 1979. The family moved to Midland, and Porter pursued his career as a CPA in the oil boom of that era. It was 1981,

Porter isn't interested in taking credit - he only cares about

RESULTS.

and no doubt everyone was about to be rich and would need a good CPA. He found a job at a firm in Midland and became a partner by the young age of 26. As the excitement of the oil boom receded, Porter found himself at home in Texas, and by 1985, he had opened his own CPA firm focused on oil and gas. It is here that he developed the skills and tools that serve him so well in his current position. Porter long ago concluded that America’s energy needs could be bolstered by an increase in domestic production. While active in Midland politics, Porter was not looking to run for office, but then in 2008, two significant things happened that spurred him to action. In October of that year, Petrohawk completed its first successful well in La Salle County in the Eagle Ford Shale, setting off the current frenzy in South Texas. A few weeks after this, Sen. Barak Obama was elected president of the United States. Over the next year, Porter saw a democratic administration poised to stunt the growth of domestic energy production through broad federal regulation. In his own words, “a one-size-fits-all federal approach to regulation cannot work, given the diverse geological conditions in the United States.” Long a believer in the state’s ability to better manage its affairs, Porter entered the race for the open Texas railroad commissioner’s office. He was elected with nearly 60 percent of the vote and took office in 2011. He immediately went

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to work by creating the EFSTF, a mix of local community leaders, industry officials and environmental interests, to chart a logical course forward with the coming expansion of the energy industry in South Texas. Learning from the mistakes of previous booms, Porter’s task force focused the efforts of all of the stakeholders in South Texas. The EFSTF may well be the most important accomplishment of his current tenure. And in typical Porter behavior, he downplays the idea. To him, the credit lies with the stakeholders who all stepped up and embraced the idea. In particular, he singles out the local leaders in the Eagle Ford Shale communities. The EFSTF serves as a vehicle to bring people together, to build relationships and to face short-term challenges together that will result in long-term benefits for the local communities and the state as a whole. When the boom is over and we look south, we won’t see a land that served its purpose and was then abandoned. We will see vibrant communities with much-improved infrastructures, economies and civic and educational institutions. And these stories are unfolding throughout South Texas right now (see “Building for the Future” on page 12 and “Corpus Christi: A City on the Move” on page 14). The EFSTF was an inspired idea that is making a real difference every day in managing the challenges and the successes of the region. Now Porter has his eyes set a new goal. The Natural Gas Vehicle (NGV) Initiative has been set up to promote the use of natural gas as a transportation fuel in Texas. “Texas is blessed with an abundance of natural gas reserves, accounting for nearly 30 percent of our nation’s total natural gas production,” Porter said. “When used as a transportation fuel, natural gas emits up to 30 percent less greenhouse gas emissions than

Porter possesses a rare and admirable quality in an elected official:

HUMILITY.

gasoline or diesel vehicles. In my opinion, natural gas vehicles are a win-win. It is my goal to gather all the stakeholders and have a productive conversation on what we can all do to best utilize this affordable, environmentally friendly domestic resource.” To this end, Porter has launched a series of NGV Initiative workshops across the state. The first was held in Austin on Oct. 31, with more than 200 participants. Future workshops will be held in Midland on Feb. 26 at the Petroleum Club; in Longview on March 12 at the Convention Complex; and in Laredo on April 17 at the Uni-Trade Stadium. The purpose of Porter’s statewide NGV Initiative is to increase the volume of natural gas used in Texas as a transportation fuel by facilitating communication between potential consumers, existing users and regulators. And beyond use as a transportation fuel, companies such as Apache Energy are already using natural gas to provide power to some of their drilling rigs. There will be much more of this in

the near future from other industry leaders, as well. As the oil and gas industry continues to flourish in Texas, it will be efforts such as the EFSTF and the NGV Initiative that will prove the most effective in creating a lasting impact. Both of these efforts are a result of Porter’s leadership, and both will serve the industry and the people of Texas well. The pulling guard is out front; let others be the quarterback. David Porter isn’t interested in taking credit. He only cares about results – results that are good for Texans.

For more information, visit www.rrc.state.tx.us or email jimmy@shale magazinetexas.com.

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INDUST RY

[ SHALE PLAY ]

LET’S PLAY!

SHALE Oil & Gas sets the stage for the new Shale Play column with a brief look at the year 2013 in review and at what we can expect in the industry in 2014 and the years ahead. BY: SCOTT COURTNEY

WE ARE EXCITED about the inaugural article in our new Shale Play column! Shale Play will be your regular source of news, information and in-depth analysis of the play. We will keep you up-to-date on issues, trends, challenges and opportunities in the Eagle Ford and other shale plays around Texas and the nation. We will cover the oil and gas industry from different perspectives in every issue, and we will delve into what makes the play tick. Shale Play will look at upstream, midstream and downstream sectors because it takes all three components to make a successful play. Throughout 2014, Shale Play will discuss industry trends, economics, commodity pricing, production, regulation and taxation, transportation and logistics, natural resources, human resources, leasing trends, development plans and other issues that drive the play. With the stage set, let’s play! Wow – what a year 2013 was for the Eagle Ford Play in Texas. With more than seven million acres of opportunity, the future is bright! If you have seen the view from space, at night, the Eagle Ford trend looks like a whole new city that rivals the San Antonio-to-Austin I-35 corridor. The Eagle Ford is producing approximately one million barrels of oil per day after just a few short years of existence. More than 8,000 wells have been drilled since 2008, and we are currently on pace to drill more than 4,000 wells per

year. Karnes, Webb, La Salle and Dewitt Counties lead the way with more than 75 percent of the production. Close proximity to the Gulf Coast refineries gives the Eagle Ford an advantage over other plays across the state and nation. Midstream development and refinery expansion are struggling to meet the demand while smiling all along the way to the bank. With commodity pricing stable or moving upward, the activity in the shale play is secure. Oil is pushing $100/bbl, and natural gas is inching toward $5/MCF. With the best operators breaking even, pricing at $60/bbl or less, there is plenty of room to run in the Eagle Ford for years to come. Eagle Ford production is estimated to peak around the year 2020 at close to 2M bbl/ day and to ride the high for four to five years. In order to meet the production estimates, exploration and production (E&P) operators must maintain a steady production pace. They are sitting on large cash reserves, and they need to continue to invest in production. In 2014, capital expenditures (cap ex) are estimated to grow 10 to 15 percent over the 2013 numbers. The transition to pad drilling (multiple wells on one location) over single-well pads designed to meet lease hold requirements or held by production (HBP) that began in 2103 will continue in 2014. E&P companies have literally moved into the “manufacture” mode of operation. Efficiency is

EFFICIENCY IS THE NAME OF THE GAME. 32

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the name of the game. The drive to efficiency is changing the face of the industry. Look at how long it took the auto industry to move from the Model T assembly line to current manufacturing methods. The dynamics and economics of the shale plays have forced the operators to make a quantum leap in their drilling and completion procedures in just a few short years. Hats off to those who have the vision and commitment to make it in today’s shale play. Shale Play expects to see significant acreage change hands in 2014, with more than 100,000 acres set to expire in 2014 as the bigger and better operators begin to take over the smaller, less efficient operators. One of the ways operators are looking to improve the bottom line and operate more efficiently is paying close attention to their use of natural resources (specifically water) – improvements in fracking technology, along with a sincere desire to be good stewards of the environment. Operators are using less water and looking to augment their frac water makeup by using brackish and brine water, as well as treating and recycling flowback and produced waters. It all adds up to a better, more efficient production of energy while utilizing our natural resources in a safe and responsible manner. That’s all for the inaugural Shale Play article, and we hope you enjoy the column and find the information useful and informative. Please let us know your thoughts and comments, as we will be constantly probing and looking under every rock we can find to bring you the latest information on the shale play.

For more information or to make any comments, contact Scott Courtney, P.G., at scott@ shalemagazinetexas.com. Keep us informed so we can keep you informed.

Why Stay anyWhere elSe? THE STUDIOS FROM CARRIZO SPRINGS $ 6 at

No Lo ng Contra -Term cts!

the StudioS at Carrizo SpringS were deSigned to offer SpaCiouS, Comfortable, fully-furniShed apartment-Style living. Unlike most housing options for workers in the oilfield industry, The Studios at Carrizo Springs will become your Home Away From Home in the Eagle Ford Shale area. All Studios have a living room with comfortable seating, a flat screen TV, dining table, kitchenette with full size refrigerator, microwave, coffee maker and a full size bath. All beds are either full size or king size, with top of the line mattresses. The Studios consist of ten buildings on a quiet, paved 25-acre site approximately 1/2 mile off of Highway 83 in Carrizo Springs. There are accommodations for up to 56 men in a single building or almost 500 for

the entire site. We can uniquely offer a single building or private dining hall as may be necessary. The dining facility, operated by Taylors International, can serve up to 1,000 men per day in four separate dining rooms. •Fully Furnished, Single and Double Occupancy Bedrooms •Executive and VIP Suites •Kitchenettes with Full-Size Refrigerator, Microwave and Coffee Maker •Living Rooms and Bedrooms with Free Satellite Flatscreen TVs and Wi-Fi •Fully-Staffed 24-Hour Dining Facility, with Three All-You-Can-Eat Meals, Snacks and Refreshments Daily

•Daily Housekeeping, Weekly Linen Changes and On-Site Laundry Facilities •Spacious Recreation Facility with Pool Tables, Ping Pong Tables, Poker Tables, Domino Tables, Large Screen TV and Lounge Area •Gated with On-Site Management, Maintenance and 24-Hour Security •Secure Keyless Building and Room Entry •Private Training and Conference Facilities •Four Spacious Outdoor Gazebos with Eight Professional Horseshoe Pits •Full Exercise Facility and Grassed Playing Area •NBA Quality Basketball Goal

for reServationS ContaCt: tom Caufmann #855-842-7799 thomas@strattonoilfieldsystems.com • www.studiosatcarrizosprings.com 909 MUNSON ROAD • CARRIZO SPRINGS, TEXAS 78834

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PRIMERA ENERGY recently received the inaugural South Texas Energy Economic Roundtable (STEER) Eagle Ford Excellence Award for Safety Performance. We are humbled by such an honor, as it came from such an ambitious and prestigious project. The organization was founded by 11 of the industry’s largest and most influential companies to be the facilitator for relations between the oil and gas industry and the communities involved in the Eagle Ford Shale boom. Receiving this award was special for Primera Energy because it helped remind us of our obligation to keep safe those who make the Eagle Ford Shale possible. Each day an operator functions should present it with a new opportunity to improve its procedures for safety for the personnel who staff its locations. We are committed to providing the safest workplace environment possible because our success means nothing if it comes at the expense of someone’s health and livelihood. Safety is often a function of making certain that everyone on a location is sufficiently informed to conduct themselves in a manner consistent with good safety practices. For example, no one should be allowed on location when hydrogen sulfide gas (at any level) is present unless they are properly trained and provided with personal gas monitors. Safety meetings on every subject should occur early and often. We have regular safety meetings before we embark on a new procedure such as “spudding in,” running casing, testing blowout preventers, fracture stimulation operations, workovers and setting up surface facilities. We advise personnel of what to do in an emergency and the location of the nearest hospital. We have designated drivers to transport any injured personnel and the vehicle to be used. We cover everything during our safety meetings, including all potential hazards from slip and fall protection to snake bites. We also welcome input from all attendees regardless of the service they provide. Another important component of a proper safety formula is preparing the location for adverse circumstances. At our well sites, all vehicles parked on location are “backed in” to a designated parking spot so that leaving the location during an emergency will be much easier to facilitate and prevent additional accidents that could block other vehicles and personnel from leaving the location. We prohibit the use and/or presence of alcohol and drugs on location. We require that each and

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THE FORMULA FOR SAFETY

STEER applauds Primera Energy’s focus on worker safety and constant improvement by honoring the company with its inaugural Eagle Ford Excellence Award for Safety Performance. BY: PATTON L. ZARATE

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SAFETY MEETINGS ON EVERY SUBJECT SHOULD OCCUR EARLY AND OFTEN. every vendor on location engage in a safety program that employs random drug testing. Furthermore, no unauthorized personnel are allowed on location at any time. Gate guards indentify all personnel entering or leaving the location and provide a running log of vehicles, plate numbers and companies they represent. To add an extra, physical layer of safety, we fence in all wellhead, artificial lift equipment, separators, heater treaters and tank batteries. To control emissions, all flare stacks that are used comply with current air quality permitting and meet Railroad Commission requirements as far as height, ignition systems and safety shutoff valves. Any location with dangerous levels of sour gas will be equipped with a remote monitoring system to alert the escape of dangerous gas and the ability to remotely or automatically shut the well in to prevent exposure to personnel or livestock. We use windsocks to detect and measure the prevailing wind around tank batteries. Part of Primera Energy’s formula for safety performance also comes in the form of being

able to deal with an accident if one should occur. To address the potential for hazard, Primera Energy carries various forms of insurance to ensure that resources will be available in the event of a mishap. For example, Primera Energy carries an aggregate general liability policy of $2 million, with a $10 million umbrella policy to supplement the general policy. Separate from those policies, Primera Energy carries a $20 million control of well policy that addresses blowouts, pollution concerns and redrilling if necessary. To protect any equipment that may be damaged, Primera Energy carries a $2-and-a-half million policy on equipment within its care, custody and control. The Eagle Ford Shale is a boon to us all, but we cannot simply charge headlong into developing it. Special care must be taken to guarantee the safety of those who are helping us gain energy independence. At Primera Energy, we value this principle highly, and there have been no injuries at any of our locations. With the help of meticulous and conscientious staff, we hope to keep improving day by day.

Patton L. Zarate is a corporate attorney with Primera Energy LLC. For more information, visit Primera Energy online at www.primeraenergyllc. com.

We are a safety training and consulting company that focuses on the Eagle Ford Shale play. “Your Custom, Quality, Safety Solution”

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INDUS T RY

TAKING A CLOSER LOOK A recent UT study says fracking actually saves water. Are the activists listening? BY: RICK BURLESON

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IN TEXAS, FRACKING IS RESPONSIBLE FOR LESS THAN 1 PERCENT OF OUR ANNUAL STATEWIDE WATER CONSUMPTION. stand), the better and clearer the story actually is. Of course, activists may not want to hear the story. But that doesn’t make it any less powerful and persuasive.

Rick Burleson has been practicing law in the

oil and gas industry for more than 30 years. In 2005, he founded Burleson LLP with a handful of seasoned energy lawyers. The company has quickly become the largest law firm in the country devoted primarily to the oil and gas industry. For more information, visit www.burlesonllp.com or email Burleson at rburleson@ burlesonllp.com.

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AMONG THE MANY misinformed criticisms activists throw at the oil and gas industry is the idea that hydraulic fracturing consumes so much water that it can cause severe droughts. But, like so many opponents’ “the sky is falling” fears, that claim has come apart under closer examination. Recently, the University of Texas at Austin (which, by the way, is doing some of the best energy-related research around) released a study that says in Texas, the shift from coal-fired electricity generation to natural gas generation is actually saving water and making the state less vulnerable to droughts. Here are some of the findings, according to UT: The amount of water saved by converting a coal-fired plant to a natural gas-burning plant is 25 to 50 times more than the amount of water required to extract gas through fracking. And natural gas “enhances drought resilience by providing so-called peaking plants to complement increasing wind generation, which doesn’t consume water.” In 2011 alone, Texas would have consumed an additional 32 billion gallons of water if all of its gas-fired plants had been coal-fired. “The bottom line is that hydraulic fracturing, by boosting natural gas production and moving the state from water-intensive coal technologies, makes our electric power system more drought-resilient,” said Bridget Scanlon, senior research scientist at UT’s Bureau of Economic Geology, which led the study. No one denies that fracking uses a lot of water (anywhere from three million to nine million gallons for one well). But to put that in some perspective, it’s been estimated that golf courses consume 476 billion gallons of water annually for irrigation, or roughly 150 million per course per year. And in Texas, fracking is responsible for less than 1 percent of our annual statewide water consumption. None of this is to argue that drillers shouldn’t be sensitive to water use. They should, and we’re seeing that concern translated into broader reuse and recycling initiatives across the country. It is, however, to argue for a lot more awareness on the issue. Because as the UT study shows, this is one of those cases where the more people know (and take the time to under-

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AIR DRILLING REDUCES DRILLING AND SERVICING COSTS AND INCREASES OIL AND GAS PRODUCTION RATES

Air and generated nitrogen foam based, under-balanced drilling (ÒUBD drillingÓ) techniques accelerate well drilling and workovers, reduce costs and boost gas and oil production by creating a low pressure zone that draws petroleum products to the well. A report by the Society of Petroleum Engineers, states that Òusing UBD is a sound and economical procedure with an average of $500,000 being saved per wellÓ ... with 19 days being cut from the average drilling time per well. BY: KATHY MOORHOUSE

N OILFIELD EXPLORATION and production, normally when costs are cut, production is reduced. Short cuts just do not work. It is the law of logic – correct? Omni Compressed Air, Ltd. defies logic every day. “We use our proven compressed air and nitrogen services to boost production from existing wells, while at the same time we reduce service and exploration costs,” says Dee Moorhouse, one of the owners of the Midland-based company. Omni Compressed Air works with oil and gas exploration and production companies to reduce well drilling, completion, and workover costs, while at the same time, increasing production to its maximum potential. Today most companies use over-balanced drilling (OBD) and servicing procedures that utilize heavy fluid based mediums for material removal. This process creates high pressure in the well and can sometimes irreversibly damage the oil and gas formation. Omni’s air and generated nitrogen foam based, underbalanced drilling (“UBD drilling”) techniques accelerate well drilling and workovers, reduce costs and boost gas and oil production by creating a low pressure zone that draws petroleum products to the well. The technology is not new. A report by the Society of Petroleum Engineers in September, 1984, states that “using UBD is a sound and economical procedure with an average of $500,000 being saved per well,”… with 19 days being cut from the average drilling time per well. According to the report, “the major advantages of UBD are: lower cost, reduced drilling days and reduced trouble time.” Omni cites those advantages, but adds others such as: reducing formation damage, increasing the rate of penetration (ROP) and bit life, allowing the well to be tested

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while drilling is underway, reducing the number of trips into the hole, minimizing differential sticking of pipe, limiting lost circulation problems, facilitating early production while drilling, and providing access to depleted or low pressure reservoirs. When using UB services for completions, the customer is left with a cleaner well bore and has recovered several thousand barrels of frack fluid. The use of UBD technology is not limited to the U.S. The Sichuan Basin, one of the largest gas producing areas in China, has complex geological conditions that require low drilling speeds resulting in major problems. In recent years, UBD has been used and has increased the average penetration rate by 2.6 times and cut the average drilling cycle from 138 days to 57.4 days. At the same time the yield from UBD horizontal wells is 3 – 8 times more than vertical wells. “We work with companies every day that are experiencing problems created by using the standard over-balanced drilling and servicing methods,” states Ray O’Dell, a partner in Omni Compressed Air. “Reducing or eliminating downhole pressure during both drilling and servicing helps to avoid potential problems, while at the same time allowing production to resume much faster.” “If air drilling was beneficial back in the day of shallow wells and vertical drilling, it is even more beneficial today with horizontal drilling and high volume fracking. New drilling and production methods have boosted oil and gas production. However, using over-balanced drilling techniques increases the pressure inside the well, which increases drilling time, circulation problems, and it impacts how readily the gas and oil can flow from the well,” O’Dell explains. “We find that many of our customers call us when they have to reduce hydrostatic pressure to solve a problem,” Moorhouse adds. “In reality, if they would use our compressed air or nitrogen foam services from the beginning,

they probably wouldn’t encounter the problems in the first place.” The explosive growth of fracking in the Permian Basin has increased the demand for Omni Compressed Air’s services. “Wells that have been fracked using over-balanced production techniques naturally have sand and particles that tend to reduce oil and gas flow, and it can also cause tubing to stick and pumps to fail. We can use compressed air and nitrogen foam

to clean out the well. If this was done when the well was put into production, it has the potential to dramatically reduce these problems. When we provide the service to existing wells, we can solve the problems, and we can also improve the production flow of the well at the same time,” explains Moorhouse. “Some customers see our service as an added expense. They should see it as an investment in the future,” O’Dell emphasizes. “If a well is clean when it begins production, you reduce the likelihood that you will lose production due to problems created by sand and debris left in the well. That is money in the bank.” “Another benefit of using UBD during drilling and servicing a well is the time saved in getting the well back into full production. “When we clean out a well, we are not adding any materials down-hole,” explains O’Dell. “In fact, we are removing the particles and left over frack debris

commonly left by over-balanced completions. This means there is nothing left to block the flow of oil and gas. You have immediate production capability. When using UB techniques to clean out a well, the production zones are allowed to produce thus bringing excess sand and debris out of the formation during the actual clean out. When over-balanced drilling and servicing methods are used, production is restricted by the hydrostatic pressures of the drilling mud/fluid

ÒTHE MAJOR ADVANTAGES OF UBD ARE LOWER COST, REDUCED DRILLING DAYS AND REDUCED TROUBLE TIME.Ó and the formation slowly recovers. However, due to the potential blockage caused by OBD, it may never reach its full potential,” O’Dell concludes. Shell Oil Company uses UBD drilling and servicing on more than 80% of the wells they drill, and estimates that UBD has the potential to improve well production by 800%. Thanks to the improved flow of oil and gas, fewer wells are needed to drain a reservoir and the overall environmental footprint is smaller.

Omni Compressed Air, Ltd., originally called Redman Air Drilling, was founded in 1978 by Bob O’Dell. The company’s main focus was air drilling in the Austin Chalk. The company relocated to West Texas in 1987 doing workovers and completions because at the time air foam units were not capable of providing sufficient air volumes to properly clean wells and handle excessive fluid influxes. Today, the company uses the very latest in SHALE OIL & GAS BUSINESS MAGAZINE

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USING UBD IS A SOUND AND ECONOMICAL PROCEDURE WITH AN AVERAGE OF $500,000 BEING SAVED PER WELL.Ó

compressed air and nitrogen foam technology to service wells throughout the Permian Basin area. “We have more than 50 pieces of portable equipment, and we can be onsite in a matter of hours,” says O’Dell. Omni’s air foam unit’s newer, larger air-end design delivers up to 1500 SCFM at 2500 PSIG. Air foam is ideal for sand cleanout, bridge plug drilling, fluid recovery, fishing, and deepening projects in lost circulation zones or pressure depleted reservoirs. Air foam and N2 foam increase penetration rates while minimizing formation damage. They also feature selfcontained, D.O.T. approved drop deck trailers for maximum portability and quick rig up times. All units feature a Sullair compressor capable of discharge pressures of 350-500 PSIG. With one booster, discharge pressure climbs between 2000-2550 PSIG. And, for extreme jobs requiring even more compression, Omni can stack an additional Super Booster to reach pressures of up to 5000 PSIG. Omni Compressed Air’s customers have set many drilling records, drilling at paces up to 200 ft. per hour while utilizing Omni’s equipment and services. Omni’s air services are generally used in the following types of projects: dust drilling, drilling with membrane nitrogen, mist drilling, aerated fluid drilling, foam drilling, percussion hammer drilling, directional drilling, and payzone drilling. “If you want to speed up the drilling

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process and eliminate a lot of problems in the future, air drilling is the answer. It can increase drilling penetration rates by 5 to 7 times, eliminate lost circulation, differential sticking and formation damage,” states Moorhouse. Omni is a leading provider of air foam, N2 foam and air packages for drilling in the Permian Basin area. “There are other companies who provide similar services, but we bring almost 30 years of proven experience, plus when you work with us – you are working with the owners of the company. We will be onsite to ensure everything is done correctly and that we maximize the benefits of the services we provide,” says Moorhouse. Drillers, Pumpers and others involved in the oil and gas industry need to recognize that there are ways to reduce costs and increase production at the same time. Compressed air drilling and well servicing may be an old method, first used decades ago, but combined with the latest technology, it has the power to cut costs and at the same time boost productivity and profitability. Omni Compressed Air is growing to meet the needs of the Permian Basin and is currently expanding operations into the Eagle Ford Shale and other markets. “Right now, we are focused on providing our customers the best service possible,” explains O’Dell. “We have learned that if you provide excellent service and use the

CMY

best technology available to solve a customer’s problems, company growth takes care of itself.”

For more information, visit www. omnicompressedair.com or contact Kathy Moorhouse at kathy.omniair@gmail.com. Note: This article has been reprinted with the permission of PR Web.

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ONE TO WATCH

The South Texas chapter of the WomenÕs Energy Network continues to gain momentum as the number of women within the area energy industry continues to thrive. BY: JOYCE VENEMA

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THE WOMEN’S ENERGY NETWORK, better known as WEN, is a nonprofit organization established to promote networking and developmental opportunities for women within the energy industry. The organization is 20 years old, and it has more than 2,000 members and seven chapters nationwide. WEN’s vision is to be the premier global organization that educates, attracts, retains and develops professional women working across the energy value chain. The South Texas chapter of WEN was established in 2013 by women who were determined to provide South Texas women in the energy industry with resources and education. One of the founding women is Paula Waggoner-Aguilar, president of the South Texas chapter of WEN. Waggoner-Aguilar is a very passionate, intelligent, funny and business-savvy woman who genuinely believes in giving everyone an opportunity to succeed. She is a successful senior finance executive with more than 20 years of experience in the industry. She has worked for entrepreneurs, in independent exploration and production, in midstream master limited partnerships, in integrated energy, in natural resources and for oilfield service companies. She is also a San Antonio-based entrepreneur who founded the Energy CFO, a niche energy-consulting firm providing CFO services to energy entrepreneurs and private equity startups based in the Eagle Ford Shale and Houston markets. The Energy CFO specializes in entrepreneurial energy finance and works for entrepreneurs of all sizes. According to Waggoner-Aguilar, there is a growing gap in the energy industry, but it is especially great in South Texas, where women are helping fill that gap in growing numbers. “The founding board of WEN South Texas established the chapter to support women working in the

PHOTO COURTESY OF WOMEN’S ENERGY NETWORK

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THE FOUNDING BOARD OF WEN OF SOUTH TEXAS HAS WORKED TIRELESSLY TO MAKE THE ORGANIZATION AN ESSENTIAL PART OF THE SOUTH TEXAS ENERGY COMMUNITY. industry, help them expand their networks across this large geographical region, educate them about the industry, foster their careers, develop them as leaders and reach out and help other women.” The founding board of the South Texas chapter of WEN worked tirelessly to develop this organization and to make it an essential part of the South Texas energy community. The founding board includes Monica Madrid Rose, Itsa Energy Inc.; Janet Irwine, Tesoro Corporation; Nora Bryant and Siobhan Karger Mullen, Burleson LLP; Lynnae Willette, BHP Billiton; Haley Curry, STEER; Jana Kennelly, UTSA College of Engineering; and Lisa Trefger, NuStar Energy Inc. With their combined years of experience, they have ensured WEN South Texas will be empowering women in the energy industry for years to come. One of the most productive undertakings is the networking opportunities, education and career and leadership development topics hosted quarterly by WEN South Texas. Last year, the chapter had a list of impressive speakers at these events, including David Porter, commissioner of the Texas Railroad Commission; CPS Energy; Marathon Oil; and Halliburton. Waggoner-Aguilar says they have also been fortunate to have financial sponsors and corporate members supporting their efforts, which has made a big difference in their organization’s growth. The membership goal for their first year was 25, but it is already at 120 and it continues to grow every day. In 2014, the chapter will look to grow membership in Corpus Christi, Austin and Laredo, where the number of women in the energy industry continues to thrive. WEN South Texas is focused on women currently in the industry, but it is also involved

in inspiring young collegiate women with futures in the energy industry. In October 2013, the organization announced a partnership with UTSA for empowering young women in energy. The board is currently working to establish the first WEN collegiate chapter in South Texas at UTSA, creating a scholarship fund for emerging students to enter the energy industry. “For our corporate members and sponsors, this is an added benefit in that this program will help in providing earlier access and recognition of the graduating pipeline of women in STEM fields,” Waggoner-Aguilar says. “Providing members opportunities to lead, mentor and expand their knowledge of the industry and skill sets beyond their present professional responsibilities, WEN South Texas has a dynamic and diverse group of women on our board and serving as committee chairs. We are exploring new programs for 2014 to expand our capacity to help even more women.” In 10 to 15 years, WEN of South Texas will be credited as a catalyst for inspiring, developing and promoting a deep pool of women energy leaders throughout South Texas and encouraging young women to enter STEM disciplines. As Waggoner-Aguilar says, “Keep your eye on this organization – this group has a lot of momentum.”

For more information about WEN of South Texas, visit www.womensenergynetwork. org/southtexas. And to learn more about Paula Waggoner-Aguilar, visit www. theenergycfo.com. SHALE OIL & GAS BUSINESS MAGAZINE

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RECOGNIZING EXCELLENCE

The South Texas Energy & Economic Roundtable announces the recipients of its first annual Eagle Ford Excellence Awards. SPECIAL TO SHALE / PHOTOGRAPHY: JULIAN LEDEZMA

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he South Texas Energy & Economic Roundtable (STEER) recently announced that HOLT CAT, Halliburton, Caesar Kleberg Wildlife Research Institute at Texas A&M University – Kingsville, Dynamic Industries Inc., Energy Waste Rentals & Service and Primera Energy are the recipients of the inaugural 2013 Eagle Ford Excellence Awards. The awards honor leading companies and organizations working in or with the oil and gas industry by recognizing diligent efforts in the areas of community and social investment, environmental stewardship and safety performance within the Eagle Ford Shale region. “STEER stands by its commitment to protect and preserve the health of the environment, communities and individuals in our South Tex-

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THE EAGLE FORD EXCELLENCE AWARD RECIPIENTS SET THE STANDARD FOR GOOD CORPORATE CITIZENSHIP.Ó as communities,” said Omar Garcia, president of STEER. “The Eagle Ford Excellence Award recipients set the standard for good corporate citizenship, and STEER is honored to provide a forum to recognize companies that make this a priority.” “The economic transformation taking place in the Eagle Ford Shale is remarkable,” said Henry Cisneros, keynote speaker at the lun-

cheon. “South Texas transitioned from being one of the poorest areas in Texas to a thriving region, but it is also important to preserve and protect the rapidly growing counties along the shale and their residents during this time of swift change. The Eagle Ford Excellence Awards allow for recognition of such efforts.” This inaugural event provided both oil and gas companies and their contractors with an

opportunity to be acknowledged for their efforts in preserving the environment, contributing to the communities in which they work and promoting safety in and around the workplace. The awards were given to applicants that exemplify innovation, take initiative and benefit the greater South Texas region. “When selecting judges for the Eagle Ford Excellence Awards, getting the perspective of professionals outside of the oil and gas industry was important to STEER and its members,” Garcia said. “We felt it was necessary to truly be able to judge the efforts and results of companies and organizations working in the region.” Judges for the 2013 Eagle Ford Excellence Awards include representatives from the Alamo Area Council of Governments (AACOG), CPS Energy and the University of Texas at San Antonio (UTSA). “As a judge for the Eagle Ford Excellence Awards, it is important to see the collaboration between the oil and gas industry and com-

munities in the Eagle Ford Shale region,” said award judge Peter Bella, natural resources director for AACOG. “It is exciting to see the attention that is being paid to environmental stewardship from within the oil and gas industry.”

In the Environmental Stewardship category: For companies or organizations with less than 250 employees: Caesar Kleberg Wildlife Research Institute at Texas A&M University – Kingsville For companies or organizations with more than 250 employees: HOLT CAT

Recipients of the inaugural 2013 Eagle Ford Excellence Awards are: In the Community and Social Investment category: For companies or organizations with less than 250 employees: Energy Waste Rentals & Service For companies or organizations with more than 250 employees: Halliburton In the Safety Performance category: For companies or organizations with less than 250 employees: Primera Energy For companies or organizations with more than 250 employees: Dynamic Industries

The South Texas Energy and Economic Roundtable (STEER) is the leading Eagle Ford Shale resource in the region, and it is the primary coordinator for communication and public advocacy surrounding the oil and natural gas industry in South Texas. With a focus on South Texas, STEER will serve as the bridge connecting the industry and legislature, academia and the communities throughout South Texas to ensure positive collaboration and communication surrounding the activities associated with the Eagle Ford Shale. For more information about STEER, visit www.steer.com.

Continued on page 44 

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2013 EAGLE FORD EXCELLENCE AWARD RECIPIENTS COMMUNITY AND SOCIAL INVESTMENT Less than 250 employees: Energy Waste Rentals & Service Energy Waste Rentals & Service was started in 1986 with two trash trailer rentals and a commitment to customer service. Shortly thereafter, portable toilet rentals and more trash trailers were added. Exceptional customer service allows Energy Waste to continue to grow and add more equipment and items to satisfy its growing customers’ needs. Today, Energy Waste is a full-service rental company with modern equipment and exceptional employees who believe in servicing their customers. Currently, Energy Waste has yards and personnel available in Cuero, Texas; Cotulla, Texas; and New Castle, Penn. More than 250 employees: Halliburton Founded in 1919, Halliburton is one of the world’s largest providers of products and services to the energy industry. With more than 75,000 employees representing 140 nationalities in approximately 80 countries, the company serves the upstream oil and gas industry throughout the lifecycle of the reservoir – from locating hydrocarbons and managing geological data to drilling and formation evaluation, well construction and completion and optimizing production through the life of the field. SAFETY PERFORMANCE Less than 250 employees: Primera Energy Primera Energy is a Texas-based oil and gas company with a significant presence in the Eagle Ford Shale and Barnett Shale in Texas. Their commitment and dedication are based on the financial success of their partners, along with being environmentally responsible. Their success can also be attributed to their use of innovative technologies such as top drive rigs, horizontal drilling and multi-stage hydraulic fracturing using state-of-the-art proppants. This strategy has proven to be the most effective method for drilling shale. More than 250 employees: Dynamic Construction Services Dynamic Construction Services is one of the largest offshore construction companies servicing the US GOM with shore bases for the Western, Central and Eastern Gulf in Harvey,

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La., New Iberia, La., and locations throughout Texas, including Alvin, Dumas, Ingleside, Carrizo Springs and Gonzales. The company has aggressively expanded into the shale plays, providing a full line of site development services and a full line of specialty craft services in Texas in the Eagle Ford Shale, in West Virginia and Pennsylvania in the Marcellus Shale and in Ohio in the Utica Shale. The specialty craft services include electrical and instrumentation, automation, coatings, mechanical/civil services, fire and safety, scaffolding, staffing and plant services. ENVIRONMENTAL STEWARDSHIP Less than 250 employees: Caesar Kleberg Wildlife Research Institute at Texas A&M University – Kingsville The Caesar Kleberg Wildlife Research Institute at Texas A&M University – Kingsville is the leading wildlife research organization in Texas and one of the finest in the nation. Its mission is to provide science-based information for enhancing the conservation and management of wildlife in South Texas and related environments. South Texas Natives is committed to providing economically viable sources of native plants and seeds to both the private and the public sector for the restoration of native plant communities in South Texas. More than 250 employees: HOLT CAT HOLT CAT sells, rents and services Caterpillar machines, engines, generator sets and trucks in a 118-county Texas territory spanning from the Red River to the Rio Grande. HOLT also sells used equipment internationally and fabricates a patented line of land clearing equipment and HOLT Spray King branded water tankers. HOLT is a Link-Belt Crane dealer in selected markets, an AGCO/Challenger and a CLAAS farm equipment dealer in portions of Texas, Arkansas, Missouri and Louisiana. SITECH Tejas, another division of HOLT, is an authorized dealer for Trimble and AccuGrade grade-control heavy equipment technology solutions. The HOLT name has been associated with heavy equipment and Caterpillar for more than 100 years. Peter M. Holt, chief executive officer of HOLT CAT, is the great-grandson of Benjamin Holt, who, in 1904, developed the first successful track-type tractor, which he named the “Caterpillar.” HOLT CAT has come to be synonymous with quality, integrity and commitment to customer service. The HOLT team is dedicated to providing rock-solid stability with superior products, unmatched service and the latest in technology.

2013 EAGLE FORD EXCELLENCE AWARD RECIPIENTS COMMUNITY AND SOCIAL INVESTMENT Less than 250: Energy Waste Rentals & Service The award recognized Energy Waste Rentals & Service for its culture of giving and volunteerism. This year alone, Energy Waste gave to more than 40 charities and organizations through both in-kind and monetary contributions, in addition to approximately 400 volunteer hours. The organizations they helped include their local medical foundation and fire departments, as well as many civic projects and youth groups. “On behalf of all the employees at Energy Waste, I am both humbled and honored to accept this award. I am happy to say everyone in the Energy Waste organization knows the value of customer service and giving back to the community. We are very thankful to be a part of the Eagle Ford Shale in our great state of Texas and very appreciative of being recognized by the STEER organization and the companies they represent.” – Kenneth Schumacher, president, Energy Waste Rentals & Service More than 250: Halliburton The award recognized Halliburton for its culture of giving and volunteerism. With its own foundation and charity golf tournament, Halliburton extends its support to many charitable organizations, donating thousands of dollars in 2013. By partnering with local colleges and universities, Halliburton is investing in education, including women in science and engineering programs. “It is a great honor to receive the STEER Excellence Award for Community and Social Investment. At Halliburton, we take great pride in being a good neighbor in the communities where we live and work. Helping enhance the well-being of people in the communities where we do business is one of the defining values of our company. Halliburton would like to thank

STEER for hosting this great event and for this very special award.” – Neil Schmidt, senior district manager, Halliburton SAFETY PERFORMANCE Less than 250 employees: Primera Energy “Primera Energy is humbled to be the recipient of the inaugural Eagle Ford Excellence Award for Safety Performance presented by STEER. The Eagle Ford Shale is a blessing to us all, and every day presents us with an opportunity to improve our safety procedures. We feel our success will continue for decades to come.” – Brian Alfaro, president, Primera Energy More than 250 employees: Dynamic Industries The award recognized Dynamic Industries for developing a world-class safety, health and environmental (SH&E) management system database that allows them to communicate corporate-wide safety alerts, meetings and safety moments in real-time. Their safety practices are reinforced regularly through multiple safety campaigns and their corporate motto: “Everyone arrives home safely.” “Dynamic Industries is committed to maintaining world-class SH&E performance in all of the areas that we operate. To be recognized by STEER, an organization that was founded by the largest companies who operate in the Eagle Ford, is the greatest kind of recognition. Dynamic Industries truly believes that our employees are our greatest asset, and we operate in a manner that is consistent with this belief. We have worked diligently to fully integrate our SH&E policies and procedures into our operations, as we believe one cannot exist without the other. It is an honor to receive this award from STEER, and we look forward to continuing our investment and growth in the Eagle Ford area.” – Matt Oubre, executive vice president, Dynamic Industries ENVIRONMENTAL STEWARDSHIP Less than 250 employees: Caesar Kleberg Wildlife Institute at Texas A&M University – Kingsville

The award recognized the Caesar Kleberg Wildlife Institute at Texas A&M University – Kingsville for using technology with agronomy and botany to identify a process that enables landowners to reseed their land and conserve the grass and soil that is native to South Texas. With this initiative, the Caesar Kleberg Wildlife Institute at Texas A&M University – Kingsville produced native seeds to restore 50,000 acres a year from invasive and non-native plants that make up the Eagle Ford Shale region. “We are humbled and honored to have been recognized by STEER for the firstever Environmental Stewardship Award. Because South Texans care deeply about their wildlife and its habitat, we believe this genuine endorsement of using native plants in restoration will have a lasting benefit in the Eagle Ford. To try and put the habitat back the way it was is a step in the right direction for Eagle Ford landowners. We deeply appreciate STEER for the recognition that our hard work adds value to this wildlife-rich region of Texas.” – Fred C. Bryant, Caesar Kleberg Wildlife Institute Texas A&M University – Kingsville More than 250 employees: HOLT CAT The award recognized HOLT CAT for implementing programs including idling restrictions on vehicles, building new facilities that adhere to the U.S. Green Building Council Leadership standards, encouraging participation in the Texas Emissions Reduction Plan and introducing an emissions-reducing technology to customers in the Eagle Ford Shale region, which, through its Dynamic Gas Blending System, has the ability to cut diesel deliveries by 50 percent and decrease harmful emissions. “HOLT CAT is honored to be recognized for our efforts to support a more sustainable environment. We seek to help our customers reduce their impact on the environment and to integrate sustainability into our core businesses with reuse, recycling and installing solar power on many of our facilities. All new facilities are designed with LEED standards in mind.” – Dave Harris, executive vice president and general manager, HOLT CAT

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PO LICY

A SWIFT LOOK AT THE SWIFT What Proposition 6 really means

James M. Summers is a partner specializing in oil and gas and real estate in the San Antonio office of Norton Rose Fulbright, a global legal practice providing the world’s preeminent corporations and financial institutions with a full business law service. Recognized for its industry focus, Norton Rose Fulbright is strong across all of the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and health care.

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BY: JAMES M. SUMMERS

“WATER, WATER EVERYWHERE” is not a phrase that comes to mind in Texas. With our diverse geography and weather conditions, we’ve always enjoyed a mix of climates ranging from areas in the east that can be swamp-like to the arid and – well, let’s just say it – parched land of the west. Thanks to a drought of historic proportions, our dry area now extends from the Valley north to the Panhandle, and many are questioning Texas’ water future. Energy production, urban expansion and agriculture all rely on water, so Texas’ continued economic growth hinges on the state’s ability to provide water sustainability. It’s no secret that a significant challenge of fracking operations is securing water supplies. Water may be obtained from surface water, groundwater, municipal water suppliers, treated wastewater from municipal and industrial treatment facilities, power plant cooling water, recycled produced water or flow back water. Where possible, wastewater from other industrial facilities or recycled fracking water is used, followed by ground and surface water sources, with the preference of non-potable sources over potable sources. And of course, the oil and gas industry is working every day to innovate the fracking process, exploring the use of fluids and solvents to gain access to the reserves released in the fracking process. Technological innovations and smart conservation continue to provide more efficiencies in the fracking process, but the question of a sustainable water supply is one that must be answered not only for the oil and gas industry, but for our agricultural industry and our general population growth, as well. Thanks to the November passage of Proposition 6, an amendment to the Texas Constitution based on legislation that was passed in the 2013 Texas legislative session, the answer to that question has become a bit clearer. The 83rd Legislature approved three bills as part of a broad package to provide funding for projects within the state water plan. These bills include Senate Joint Resolution 1, House Bill 4 and House Bill 1025. Taken together, these bills comprise the now-approved amendment to the Texas Constitution creating the State Water Implementation Fund of Texas (SWIFT).

So What Does That Mean? By approving Proposition 6, Texans authorized a $2 billion investment from the state’s Economic Stabilization Fund (also known as the Rainy Day Fund) to create two accounts to help fund water projects in the state: the SWIFT and the State Water Implementation Revenue Fund of Texas (SWIRFT). Designed to make the financing of water projects more affordable and to provide consistent, ongoing state financial assistance for water supplies, this one-time investment dedicated to the implementation of the state water plan is intended to work closely with other constitutionally created funds and provide a broad funding framework for future water projects. The implementation, based on the deadlines in House Bill 4, may not be complete until March 2015.

The State Water Plan While water is essential to all of us, not everyone knows the legislation behind it. Before we get into the specifics of Proposition 6, now referred to as the SWIFT, let’s talk about how Texas governs water. Following the historic drought of the 1950s, the Texas State Legislature created the Texas Water Development Board (TWDB) in 1957 to manage the state’s water resources. The agency has three main responsibilities: assisting with regional water planning and preparing the state water plan every five years; collecting and distributing water data; and providing loan and grant money for Texas water and wastewater projects. Every five years, 16 regional water planning groups assess the projected population and water demands and supplies in their areas for the next 50 years. Each region then compiles a regional water plan, and those plans are compiled into what becomes the state water plan. The state water plan also includes information on statewide trends and policy issues, as well as lists the water supply strategies identified to meet the regional water shortages over the next 50 years. The most recent state water plan was presented to the governor in 2012, and it addressed

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the needs of roughly 3,000 water user groups, encompassing more than 4,500 projects with a range of water strategies including reuse, conservation, new reservoirs, development of new groundwater supplies, desalination and more. “Water user groups” include cities, rural water users, agriculture, livestock, manufacturers, mining and steam-electric power – every community and every water user group in Texas is planned for. Through the regional water planning process, local and regional water experts recommended these projects as the most efficient and viable ones for their communities. The total cost to implement all projects in the 2012 State Water Plan is approximately $53 billion. Of that, local and regional entities identified that $27 billion would be needed through state financial assistance programs. Until now, much of the state water plan process has not been fully realized – there simply has not been enough money to fund most of the projects proposed. In other words, financial assistance is needed in order to meet the needs outlined in the state water plan. That’s where Proposition 6 comes in. The SWIFT, and ultimately the SWIRFT, creates the funding needed to make many of the projects a reality, and then the state can start determining which water strategies to finance. The SWIFT funds will be used to provide low-cost financing for projects in the state water plan, allowing the projects proposed by local and regional entities to meet future water demands with the assistance of the state. The TWDB will invest the funds provided to create the SWIFT and use the revenue to help communities afford the projects they have identified as crucial to their progress. Not every project in the state’s 50-year water plan will have equal priority – the TWDB must determine a method for prioritizing the projects. Although that process has yet to be determined, according to the TWDB website, “many factors would be considered in this evaluation, including the number of people served, the urgency of the project, the ability of local and regional sponsors to support the project and the degree of conservation achieved.” The prioritization criteria will be further defined through the rule-making process. It’s important to note that the SWIFT may only be used to support projects identified in the state water plan, and the legislation behind the SWIFT stipulates how the money will be used. The TWDB must attempt to spend 10 percent of the funds for rural areas and agricultural water conservation and 20 percent for water conservation and reuse. The catch is that while the legislation designates funding for rural water and some for conservation or reuse of water, the specific definitions of what will be considered “conservation” and “rural” are still to be determined.

TEXASÕ CONTINUED ECONOMIC GROWTH HINGES ON THE STATEÕS ABILITY TO PROVIDE WATER SUSTAINABILITY. These will also be defined through the rulemaking process. The uncertainty regarding the definitions and other aspects of the SWIFT that are still to be defined have led to rumors that the SWIFT will mean an overhaul of the laws governing water rights. However, there appears to be nothing in any of the proposition’s supporting legislation that would indicate that it could change water rights.

The SWIFT will not affect groundwater rights or other private property rights in any way. Further, the SWIFT will not affect how groundwater conservation districts manage local groundwater supplies. And of course, surface water – water from lakes and rivers – is governed by an entirely separate set of statutes. An interesting side note from the 2012 State Water Plan: For all practical purposes, the vast majority of Texas’ surface water supply is SHALE OIL & GAS BUSINESS MAGAZINE

THE SWIFT WILL NOT AFFECT GROUNDWATER RIGHTS OR OTHER PRIVATE PROPERTY RIGHTS IN ANY WAY. already allocated and permitted. It is estimated that groundwater will supply almost 10 percent of the state’s water needs by 2060. Conservation and reuse projects are forecasted to supply triple that amount.

Funding the Future The initial $2 billion will be transferred from the Rainy Day Fund to the SWIFT. The legislation for these funds outlines several planning requirements and milestone dates before the funds will be available in March 2015. The funds specifically provide for an initial capitalization coupled with the state’s bond authority and allow the ability to leverage a $2 billion investment to finance an estimated $25 billion to $30 billion in water projects over the next 50 years. Over time, revenue generated from SWIFT projects will be deposited into the SWIRFT and then used to fund even more projects. It is expected that this infusion of funds can be loaned, repaid and re-loaned, providing a replenishing fund to support most of the state

water plan needs for the next 50 years. The TWDB will manage the money and make decisions about which projects to fund. The upfront costs on water infrastructure can often make it difficult for some communities to build what they need, but the SWIFT provides the economic opportunity for communities to overcome this hurdle by providing low-cost, flexible financing options for water projects. The money may be used for low-interest loans, credit enhancement agreements, deferral of interest obligations and other methods of financial assistance for public entities developing and managing water supplies. The funds would help communities develop and optimize water supplies at cost-effective interest rates. Cities, counties, water districts, river authorities, irrigation districts, regional water authorities and nonprofit water supply corporations across this state are all eligible to use TWDB’s financial assistance programs to address implementation of state water plan projects. An interesting aspect of the SWIFT that shows how important water conservation is to Texas’ water future: In addition to the require-

ment that 20 percent of the SWIFT funds be used for conservation projects, water conservation is also promoted by requiring that applicants for SWIFT assistance have already implemented effective conservation programs, helping ensure communities use their water wisely and extend the life of their current supplies.

The Way Forward As we’ve discussed in previous articles, two of the most vital resources we have are water and energy. Our use of each of these most basic needs of society is reliant on and affects the availability of the other: Water is needed to produce energy, and energy is necessary to make water available for use, so the two are intrinsically linked. Balancing our water use and our energy use is vital to our future, and the oil and gas industry is leading the way through research and development to minimize its water needs. And thanks to the SWIFT, long-term water sustainability is coming into focus.

SWIFT Timeline

• Lieutenant governor and house speaker appoint SWIFT Advisory Committee.

June 1, 2014

Sept. 1, 2014

Dec. 1, 2014

• RWPGs submit draft prioritization of projects from 2011 regional water plans.

• RWPGs submit final prioritization of projects from the 2011 regional water plans.

• TWDB shall provide SWIFT implementation report to the governor, the lieutenant governor, the house speaker and the legislature.

• TWDB creates the Regional Water Planning Group (RWPG) stakeholder committee to establish standards for project prioritization.

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• The SWIFT Advisory Committee submits recommendations to TWDB regarding rules relating to the allocation of funds for specific purposes and for prioritizing projects.

Dec. 1, 2014 – March 1, 2015 • TWDB shall adopt rules relating to the allocation of funds for specific purposes and for prioritizing projects.

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As soon as practicable after Nov. 5:

EDUCATIONAL NETWORKING MEETING Come learn whatâ&#x20AC;&#x2122;s coming in 2014 for the Eagle Ford Shale Corpus Christi Town Club Sponsorship and Silent Auction items are now being accepted for Halo Flight

THURSDAY

MAR6 6-8:30PM

800 N Shoreline Blvd, Corpus Christi, TX 78401 Bring plenty of business cards to network

KEYNOTE SPEAKERS: Omar Garcia, President/CEO of STEER Thomas Tunshall Ph.D., U.T.S.A. Institute of Economic Development If you would like to attend please email us at kym@shalemagazinetexas.com

Proceeds Benefiting Halo Flight

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PO LICY to vote upon the legislation which is supported by the two largest Mexican political parties – the PRI and the PAN. But the leftist PRD party attempted to subvert the vote by barricading the House Chamber, relegating House members to an auditorium to consider legislation which is the centerpiece of Mexican President Peña Nieto’s plan to revitalize the energy sector and stimulate the Mexican economy. The groundbreaking legislation, which passed by overwhelming

cash based contracts for service companies, production sharing contracts paid in oil, and development licenses to E&P companies with post-extraction fees and taxes, but the as yet unwritten secondary laws will determine how these agreements are administered. Questions certainly remain about how the Energy Reform legislation will be implemented, but yesterday’s enactment of this groundbreaking legislation shows that

THE ENERGY REFORM PRESENTS AN EXCITING OPPORTUNITY FOR SUPER MAJORS, INDEPENDENT E&PS AND ENERGY SERVICE COMPANIES. majorities in the Mexican House and Senate, permits non-Mexican oil companies to participate in profit sharing contracts and concession-like “licenses.” And while implementation of the energy

Mexico is serious about reforming its energy industry to attract foreign investment, presenting an exciting opportunity for United States energy companies.

BY: ALEX PEREZ

mid fisticuffs, bitter invective and an attempt by the leftist PRD party to barricade the House Chamber, the Mexican House of Representatives yesterday passed the long awaited Energy Reform laws which are seen as a crucial step towards modernizing Mexico’s energy industry. After the Mexican Senate voted to approve the legislation a day earlier, the Mexican House of Representatives immediately undertook

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reform legislation through “secondary laws” and regulations will determine the bottom line benefit to United States energy companies, it is clear that the energy reform presents an exciting opportunity for super majors, independent E&Ps as well as energy service companies. Important details remain to be determined, however. For instance, it is not clear whether the new legislation will be implemented to permit energy companies to book reserves. The new law outlines

If you have questions about this case, you may contact Alex Perez, managing partner, at aperez@ burlesonllp.com or Armando Sanudo-Trueba, foreign counsel, at asanudo@burlesonllp.com. Note: This article was originally printed by Burleson LLP, and it has been reprinted with permission from the company.

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ENERGY REFORM LAW COULD GREATLY IMPACT MEXICO’S ENERGY INDUSTRY

THE PERFECT PLACE TO PLAY IN THE TEXAS HILL COUNTRY

Ra nc NO h Cl W ub a OP nd EN Poo ls

Boot Ranch is quite simply like no other place on earth. Here, the spectacular Hal Sutton-designed course challenges and rewards you with every scenic ridge and valley. The luxurious amenities are as endless as the deep blue Texas skies. And the rugged ranch-style architecture fits into the majestic terrain as naturally as a comfortable pair of boots.

BOOT RANCH

We invite you to discover all that Boot Ranch has to offer. Please visit us online or call 830.997.6200. Reference SHALE-92013 with inquiries.

Fredericksburg, TX - bootranch.com

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xperience a customized itinerary and the “Best Quail Hunting in Texas” just 40 minutes northwest of San Antonio in the beautiful Texas Hill Country along the pristine Guadalupe River. Walk up hunts behind world-class pointing and flushing dogs with professional guides assure you of an exceptional day in the field. Also enjoy fast action European-style driven pheasant shoots or Continental shoots - Fly fishing for trout and gunning on three different automatic clay target shooting scenarios.

Hunt free-roaming whitetail deer and Rio Grande turkey in season and world-class, free-range axis deer year-round. Gourmet dining and lodging with spectacular views top off the ultimate outdoor experience. “This is the best day of quail hunting I’ve ever had in my life.” Chuck Wechsler, Publisher, Sporting Classics Magazine

Joshua Creek Ranch is celebrating 24 years of outstanding client satisfaction and earning the designation as a Beretta Two Trident Lodge for Excellence in Upland Bird Hunting.

www.joshuacreek.com

a 830-537-5090 a

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info@joshuacreek.com

L IFESTY L E

BRINGING THE MAGIC

The pieÔs the limit for your next celebration at Don Strange of Texas, where they stop only at the impossible to make any event sparkle. SPECIAL TO SHALE

Pie·o·neer:

one who leads the way; one who blazes trails; one who ventures into unknown or unclaimed territory; one who savors the last piece of a good pie, celebrating every bite. Celebrating every bite, or celebrating every moment, is something Don Strange of Texas knows well. Three generations of the Strange family have seamlessly fused the mystique of Texas history and culture with worldclass cuisine and unsurpassed style to create a business known for creating unforgettable celebrations and flawless events. One of the most sought-after catering and event companies in the nation, Don Strange of Texas Inc. has a culinary vision that has forever changed the public’s perception of catered events. Thanks to its anything-but-boring approach, the reputation of the company is so far-reaching that it counts U.S. presidents, movie and music stars, professional athletes, corporations and brides throughout the world as clients. Don Strange of Texas can answer any event need and handle everything for you. From a conference luncheon to a dream wedding and from a private dinner to a corporate barbecue with more than 30,000 guests – whatever your dream, the team at Don Strange of Texas can create and customize each event to fit your wishes, stopping only at the impossible to make any event sparkle.

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And as trailblazers in the hospitality industry, Don Strange of Texas is not afraid to set a trend: The award-winning caterer is credited with commercializing the fajita, inventing the fried jalapeño and the grilled white wing and developing the ever-popular display cooking and food station service. Regardless of where the event is held, Don Strange of Texas can make it happen. From a remote island off the Texas Gulf Coast or the top of a mountain in Big Bend to the Rockefeller Center or the White House, the company specializes in taking its catering services far and wide, creating the over-the-top events. So whether it’s San Antonio, South Texas, Dallas, Houston, Austin or the middle of nowhere, just say the word and they’ll bring the magic to make your event one to remember. “Our creed at Don Strange of Texas is: never limit ourselves or our clients,” Brain Strange said. “There is no event too big or too small or any location too remote. Weather doesn’t stop us. We’ve catered events through ice storms, torrential rainstorms, driven around flooded roads and put snow chains on our catering trucks to get to wherever we’re headed to put on the best event possible, no matter what. And having our own unique venues also gives our clients options: We can create their event for them in one of our venues or bring the party to wherever they’d like to go.” That’s right: If you don’t have the perfect location for your event, Don Strange of Texas does. The company owns and exclusively manages a number of event venues, including the Don Strange Ranch in Welfare, the general store in Waring, the Buckhorn Saloon and Museum on the San Antonio River Walk and The Settlement – Circa 1850 in the foothills of the Texas Hill Country. So grab your slice of the pie and let Don Strange of Texas make your next celebration a sweet success.

For more information, visit www.donstrange. com.

Don S PIE PASTY INGREDIENTS:

2 cups all-purpose flour 1 teaspoon kosher salt 1 teaspoon sugar 1 cup solid shortening 4 to 6 tablespoons ice-cold water

trange Apple Pie

APPLE FILLING INGREDIENTS: 4 pounds Granny Smith apples 1 teaspoon ground cinnamon 1/2 teaspoon freshly ground nutmeg 3/4 cup granulated sugar 2 tablespoons flour 1 stick of butter (1/2 cup) 1/2 cup firmly packed light brown sugar Cinnamon sugar

DON STRANGE OF TEXAS CAN ANSWER ANY EVENT NEED AND HANDLE EVERYTHING FOR YOU. APPLE PIE

Place the flour, salt and sugar in a large bowl; toss to blend well. Add the shortening. Using a pastry blender or two knives, cut the shortening into the flour until the mixture resembles coarse meal. Incorporate the water until the dough comes together into a loose mass. Turn out onto lightly floured work surface; using your hands, bring the dough together to form a smooth, cohesive pasty. Divide the dough in half and form each piece into a round disk. Wrap each disk in plastic wrap and refrigerate until ready to use. To roll out the dough, flour the work surface lightly. Roll the dough out into a large circle about 1/16 to 1/8 inch think.

Preheat oven to 350 degrees. Place pie shell in pre-greased pie pan. Peel apples and cut into wedges, about half an inch thick. Melt butter in a sautĂŠ pan over medium heat. Add apples, cinnamon, granulated sugar, brown sugar and flour to sautĂŠ pan and cook for 4 to 5 minutes. Pour into pie shell and top with second pie shell. Sprinkle with cinnamon sugar. Cut 4 to 5 slits in the top for steam to escape. Bake at 350 degrees for 45 minutes or until golden brown and bubbly. You may need to shield with aluminum foil during the last 10 minutes to prevent excessive browning. Cool for 30 minutes before serving.

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PIE PASTRY

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L IFESTY LE

THE GOOD OLD DAYS ARE BACK Whether you travel with a shotgun or a camera, Texas waterfowlers can once again look forward to a long and liberal waterfowl season. BY: DR. TODD MEREDINO / PHOTOGRAPHY: DR. TODD MEREDINO

SIT DOWN AND DISCUSS waterfowl hunting with your dad, grandpa or greatgrandpa, and the stories will likely revolve hunting days of long ago, affectionately known as the “good old days.” While those tall tales exude a degree of hunting myth and lore, truth be known, in recent memory, it has been just about as good as it gets. That is especially true for the current younger generation of waterfowl hunters, especially those younger than 25 years of age or so. Even for me, a 43-year waterfowl hunting veteran who’s nearly 50 years of

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age, the past decade has been as good as I can remember. High bag limits of six birds per hunter (with some restrictions) and long seasons 70-plus days have been in play for more than a decade. With a few exceptions, most common waterfowl and those most prized by hunters are doing very well. The result has been an increase in bag limits and hunting season lengths that hearken back to the good old days. For many of us, the good old days are back, and for the younger generation, the good old days are now. Texas waterfowlers will again enjoy a long and liberal waterfowl season, with bag limits of six birds per hunter and a season ranging from early November through late January depending on where you hunt. Long-term above-average wetland conditions and sound conservation programs in the northern breeding areas of North Dakota and southern Canada have combined to allow breeding waterfowl to be extremely productive. Texas supports millions of wintering and migrating waterfowl, with some parts of the state such as the Texas Panhandle, the Gulf Coast and East Texas providing significant habitat to the millions of waterfowl winging their way south. Stock tanks and other water bodies scattered throughout the central part of the state also provide crucial habitat. Unfortunately, drought conditions continue to plague most of the state, and as waterfowl head south, they will have to search farther and wider in their quest to find suitable habitat. Most of Texas is in severe and extreme drought conditions. Many inland reservoirs are at near historic lows, but nonetheless will provide crucial wintering habitat for waterfowl. Well-managed smaller wetlands on private lands will be critical to providing habitat across the wintering areas of Texas. The ongoing drought magnifies the importance of and need for large-scale conservation efforts currently underway by Ducks Unlimited (DU) and its many conservation partners. DU is continuing to address wetland habitat issues, and it strives to keep the table set for when Mother Nature provides some drought relief. On the Gulf Coast, DU continues a strong presence on private lands through the Texas Prairie Wetlands Program, which provides cost-share assistance to private landowners for wetland restoration and enhancement. Since July, DU has completed almost 1,100 acres of projects and it has another 2,000 acres under construction. With nearly 95 percent of Texas being privately owned, working with private landowners is crucial to maintaining and enhancing waterfowl habitat across the landscape. DU

COLLECTIVELY, DUÔS CONSERVATION EFFORTS IN 2013-14 WILL EXCEED 7,000 ACRES IN TEXAS. has two projects underway on public lands: one in Jefferson County and one in Calhoun County. Another six projects are slated for bidding and construction by June 2014. Collectively, DU’s conservation efforts in 2013-14 will exceed 7,000 acres in Texas. These projects are not possible without a strong conservation and funding partnership. It is always good to get out in the field, and for those who pursue waterfowl, either with a

shotgun or a camera, the good old days are definitely now. High waterfowl populations should produce quality results in the field, assuming, of course, that your hunt area has water. DU is the world’s largest nonprofit organization dedicated to conserving North America’s continually disappearing waterfowl habitats. Established in 1937, DU has conserved more than 13 million acres thanks to contributions

from more than a million supporters across the continent. Guided by science and dedicated to program efficiency, DU works toward the vision of wetlands sufficient to fill the skies with waterfowl today, tomorrow and forever.

For more information on our work or how to support DU, or to find a DU event in your area, please visit www.ducks.org.

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L IFESTY LE

A SENSE OF URGENCY MOST PEOPLE who know me know that I live every day with a sense of urgency because it kind of dovetails with my “not one day wasted” philosophy. Now, while I have had this “sense of urgency” point of view for many years, I thought I was just a bit manic and did not realize it meant much more. That was until I read the book, “A Sense of Urgency,” by Dr. John P. Kotter of the Harvard School of Business. As you read through the book, with its corresponding author’s views and wonderful stories, you will find that many of the traits and strategies he uses in the book are things some of us have might have been doing for quite a while without realizing it. After finishing Kotter’s book and realizing its compatibility in my life, what got me was how I have changed since moving my company to San Antonio about 30 months ago after 62 years in Houston – also, how this change has transformed not just the company and me, but also the people around me, especially over just the past year. Let’s start by going over a statement Professor Kotter makes that describes how to live with a sense of urgency: “Create action that is exceptionally, externally originated, relentlessly aimed at winning, making some progress each and every day and constantly purging lowvalue-added activities, all by always focusing on the heart and not just the mind.” Like me, the statement is concise, but chock full of great ideas. But the implementation of them on a daily basis is what will make that concise statement come alive. So let’s break it down. Kotter says the problem with more

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than 70 percent of the companies he has been involved in (throughout his 30-plus years of researching urgency in businesses) is that they are complacent. If you have read my previous columns or blogs or know me personally, you know there is not a single cell of complacency in me. So Kotter’s first two words get the party started: Create action that is exceptionally alert. If you are just sitting around waiting on the next email or phone call to be the million-dollar contract you were waiting for, well, you are going to be waiting a long time. “Externally originated”: I used to be glued to my desk … and I liked it that way. I rarely visited my clients except for the Christmas holidays, and I minimally kept abreast of my industry, much less my competitors. Now I am like a lion in a cage when I am at the office. I cannot wait to go out and visit with my clients and to hear about what is going on in the industry. I try to find out at least one thing every day that I did not already know, and I like it. Expose yourself to your clients, vendors, industry and employees. You will be able to make the most of upcoming opportunities and prepare for potential hazards. Are you “relentlessly aimed at winning”? If you are an ex-jock like me, I am willing to bet you have the intensity and an utter distain for losing, which is the only thing that kept you on the field. Are you getting up every day not willing to accept any failure? Is doing “your best” good enough for you? Trust me: Your clients do not want to hear about how hard you tried to help them – they just want to know how you succeeded in taking care

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What we can learn from Dr. John P. Kotter of the Harvard School of Business about taking both our personal and our professional lives from ordinary to extraordinary BY: DOUGLAS S. CAIN

of their needs. If your clients can demand that level of response from you, why can’t you demand that level of effort and success from yourself? Are you “making some progress each and every day”? We have a Dougism here at the company. If you let something little slide for a day, it turns into three; two days turns into a week; and letting something slide for a week turns into a month. No matter how little the thing is, get after it and get it accomplished. It’s the daily forward motion that turns your company and your life from ordinary to extraordinary. Remember: Repetition sets you free. Over the last few years, I went from doing literally everything to having an internal office staff of 15. Needless to say, one learns to delegate responsibilities, but one also learns that for one thing you delegate away, two more things will pop up to rob you of your most important resource: time. So over the past year, I have become very good at “constantly purging low-value-added activities.” I have flushed so many time wasters from my life over the past year that it has become an inside joke at the office. All meetings are planned and have agendas in bullet points and a set time limit. Everybody talks to me in Doug Bites (only three at a time – if you

“

CREATE ACTION THAT IS EXCEPTIONALLY, EXTERNALLY ORIGINATED, RELENTLESSLY AIMED AT WINNING, MAKING SOME PROGRESS EACH AND EVERY DAY AND CONSTANTLY PURGING LOW-VALUE-ADDED ACTIVITIES, ALL BY ALWAYS FOCUSING ON THE HEART AND NOT JUST THE MIND.Ó

- DR. JOHN P. KOTTER

have more, you have to leave my office for an hour and return). Plan your work and work your plan. But it’s those last words in Kotter’s quote that really speak to me: “…all by always focusing on the heart and not just the mind.” Folks, you have all heard some variation of the “hearts and minds” speech, whether it was from President John Adams or LBJ, but its most effective use is when you are affecting the hearts of people. That is where the real buy-in is. You have to get your people on board on all major and minor projects. I have learned that one cannot do it alone.

So as you assess your personal and business life, are you living it with a sense of urgency? Are you making every opportunity count? Is there not one day wasted? You have no idea how far you can take yourself in such a short amount of time if you just apply yourself. Until next time …

Douglas Sterling Cain is the president and CEO of Lake Truck Lines and Lake Oilfield Services. For more information, visit www.laketrucklines. com.

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www.delmar.edu/trucking

(361) 698-2707

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L IFESTY LE

YOU WANT YOUR DEBT-TO-CREDIT RATIO AT ABOUT 30 PERCENT. accounts. One 30-day late payment can lower your credit score by 30 to 75 points.  Do continue to use your credit as you normally do. If it appears you are diverting from your normal spending patterns, it may cause your score to go down.

The don’ts: 

Lenders offer their suggestions about what to do and what not to do in the mortgage process. BY: TABITHA KING

WHILE MORTGAGE RATES are at historical lows, many people are looking to buy homes after years of renting or maybe just to upgrade their current homes. Due to the competitive real estate market in many areas, buyers need to be qualified for a mortgage before they shop for a home. If you have made the decision to buy a house or are considering buying a house, you should not do anything that will have an adverse effect on your loan process. Getting approved for a mortgage loan is all about meeting and staying within certain ratios used by lenders to determine how much house you can afford. There is a lot that goes into getting a mortgage loan. Though it may seem overwhelming, a good rule of thumb is to try not to do anything that might affect your credit rating. Suggested by lenders, here are some things

you can do (and things not to do) to make the process smoother.

The dos:  Do find a loan officer you feel comfortable with and confident in before you submit a formal loan application.



Do ask for a written loan estimate before you start the loan and discuss it thoroughly with your loan officer.  Do promptly provide all requested documents to speed up your closing process.



Do keep records of all bank transactions.



Do stay current on all of your existing

 Don’t pay off collections or charge-offs unless instructed by your loan officer.

 Don’t close credit card accounts – this can affect your ratio of debt to available credit, which has an impact on your credit score.

 Don’t max out your credit card or charge significant purchases. You want your debt-tocredit ratio at about 30 percent.

 Don’t change jobs if possible. Employment stability is a factor in the underwriting process, and most lenders like to see a two-year work history.

 Don’t make large unexplained deposits into your bank account. Deposits exceeding your past history will be questioned by an underwriter.

While no single list can completely cover every loan, following these dos and don’ts will certainly help with your loan process, according to lenders. You can meet with a local mortgage lender, or nowadays apply online with a national lender. When you have found a lender you feel comfortable to work with, do ask plenty of questions and stay in constant contact with them. Happy mortgage hunting!

Established in 1974, King Realtors is one of the oldest and finest real estate companies in Alamo Heights. They are and always have been a staple within the Alamo Heights community. They know all of the wonderful assets and jewels that lie within this wonderful community. Tabitha and Trey King head up 20 experienced agents who provide exceptional service to clients with housing needs in the oil industry. For more information, please call 210-826-2345 or visit www.kingrealtors.com.

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MAXXYUSTAS/BIGSTOCK.COM

DOS AND DON’TS

Don’t apply for new credit of any kind.

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/ / N O NPR OF I T

ANSWERING THE CALL When you or a loved one needs emergency medical care in South Texas, the angels at Halo-Flight are there to help. BY: JOYCE VENEMA

IT WAS THE WORST moment in my family’s life: a horrific car accident that left a beloved cousin on death’s doorstep. When the accident occurred, she was miles away from medical care and her chances of survival were very slim. On that night, though, she had angels that came in the form of a pilot, an EMT and an R.N. from Halo-Flight. Halo-Flight is a nonprofit organization that was founded in September 1987 in Falfurrias, Texas. Today, they are based in Corpus Christi, Texas, covering 28,000 square miles, 26 counties and a population of well over a million. Halo-Flight has three helicopters that have the ability to fly at 140 miles per hour with a roundtrip capacity of 400

miles. In 2014, they will add another unit to their fleet that will have the ability to fly in more inclement weather, according to Tom Klassen, executive director and pilot. Their entire fleet is equipped with the state-of-the-art avionics. They recently received a grant from the Charity League of Corpus Christi, allowing them to add autopilot to their technology. Each day, they conduct an average of three flights throughout South Texas. Sometimes pilots have to land in the middle of a field to reach the critically ill or injured. Halo-Flight works with ranch and land owners throughout South Texas to ensure they are trained in helping the flight crew establish

landing zones. Ranches have plans that have been put into effect, should the need arise for HaloFlight to land on their property. This ensures that when help is needed, they can get to their destination as quickly as possible to help. Each flight crew consists of highly trained and experienced nurses, paramedics and pilots who are the elite in their field. Nurses and paramedics must have years of critical care experience, along with several certifications to qualify for employment. Halo-Flight tests their medical crews with written and hands-on exams to ensure the quality of care they provide is of the highest quality. For those desiring to be part of their elite

ÒWE ARE THERE IN THE WORST HOURS OF SOMEONEÕS LIFE. WE TRANSPORT PEOPLE WHO NEED US REGARDLESS OF THEIR ABILITY TO PAY.Ó 64

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team, a good place to start is at the Halo-Flight EMS Training Academy. Here, they offer EMR and EMT levels of TDSHS EMS certification training, continuing education and EMS Skills proficiency testing. The goal of Halo-Flight’s academy is to ensure that South Texans are provided with the best quality of care no matter where they live. Halo-Flight also offers peace of mind for those who like to prepare for the unexpected: the Guardian Plan. The program allows transportation when medically necessary to subscribers, even if they do not have insurance, for a small yearly fee of less than 7 cents per day. Not only are individual plans available, but corporate plans can be purchased for employees, as well. Klassen has been with the company for four years, and he is very passionate about the mission of Halo-Flight. “We are there in the worst hours of someone’s life,” he says. “We transport people who need us regardless of their ability to pay.” Each flight costs roughly $15,000, with reimbursement being less than 40 percent, leaving the rest up to the person who needed their service. As a nonprofit, Halo-Flight instituted its financial aid program so those who need assistance have the help they need. Donations are key to helping Halo-Flight continue to provide much-needed medical assistance to South Texas. Corporate sponsorships and individual donations are always welcome. As a 501(c)(3) nonprofit organization, all donations are tax deductible and they help the company continue its essential mission. On a final note, my cousin is a successful college freshman able to pursue her dreams and live a happy, healthy life. It wouldn’t have been possible if the angels of HaloFlight hadn’t answered the call to help her that night.

To make a donation or to learn more about Halo-Flight, visit www.haloflight. org.

SHALE OIL & GAS BUSINESS MAGAZINE

/ / N ONPR O F I T

FIRST TIME’S A CHARM

If the first Midstream Classic Sporting Clay Shoot serves as any indication, the annual event is off to a great start. PHOTOGRAPHY: RAQUEL STARK THE FIRST ANNUAL Midstream Classic Sporting Clay Shoot in November was a resounding success. A total of 70 shooters with 14 teams participated in the event, and overall, everyone had a great time. The National Shooting Complex in San Antonio, Texas, was the prefect venue. We were very grateful to have sporting clay shooting legend Brad Kidd, who was the top shot with a final score of 102. And Anissa Banks was our top shot lady with a final score of 93. THE TOP THREE TEAMS WERE: First Place: Terracon / Second Place: S&B I Pipeline Engineering / Third Place: S&B I Pipeline Engineering Our total profit for this event is $8,000, which will go toward local university scholarships. Great job, all, and a special thanks to everyone who made this first event a huge success!

FIRST PLACE: Terracon

SECOND PLACE:

S&B I Pipeline Engineering

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THIRD PLACE:

S&B I Pipeline Engineering

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If you are looking to buy or sell a property, call us and say you saw it in SHALE MAGAZINE!

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TABITHA KING 210.414.4255 SHALE OIL & GAS BUSINESS MAGAZINE

 SC ENE 

Pictured here from left to right: award recipient Jeff Schwarz of Marathon Oil and Scott Courtney, committee chairman of the South Texas Wildcatters

MAN OF THE YEAR

Jeff Schwarz of Marathon Oil Corporation receives the prestigious Wildcatter of the Year Award.

PHOTOS COURTESY OF SHALE

On Dec. 4, 2013, the Texas Alliance of Energy Producers and the South Texas Wildcatters honored Jeff Schwarz, Eagle Ford region manager for Marathon Oil Corporation, with the prestigious Wildcatter of the Year Award. The event was held at the JW Marriott Northwest in San Antonio.

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UND IN SAN ANT

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GOV. RICK PER

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MEN AT THE CREWFO RD WEATHER

OIL & GAS BUSINESS MAGAZINE

Living the Dream American

ROD LEWIS HIL HEAVEN IN THE

MAGAZIN

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FOR ADVERTISING INFORMATION PLEASE CONTACT: KYM BOLADO

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PLANNING FOR THE PIPELINES The San Antonio Pipeliners Association hosts a luncheon featuring keynote speaker Jeremy Hanzlik of Terracon Consultants.

PHOTOS COURTESY OF SHALE

ON NOV. 14, 2013, the San Antonio Pipeliners Association hosted a luncheon at the Petroleum Club. Jeremy Hanzlik, PE of Terracon Consultants, was the keynote speaker who discussed “Natural Resource Planning for Pipelines.” Hanzlik works with engineers, environmental scientists and architects during the conceptual, final and post-design phases of projects in order to avoid or minimize impacts to the environment. His presentation was well-received by the full house of attendees.

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NATURAL GAS VEHICLE NGV INITIATIVE

TEXAS RAILROAD COMMISSIONER

DAVID PORTER WILL BE HOSTING A SERIES OF WORKSHOPS THIS SPRING

The goal of these workshops is to link fleets that are moving to natural gas with fuel suppliers that, either have, or are building, refueling infrastructure.

The Workshops are open to all Texans and we encourage public participation. FEB 26

MIDLAND AT THE PETROLEUM CLUB

MAR 12

LONGVIEW AT THE CONVENTION COMPLEX

APR 17 LAREDO AT THE UNI-TRADE STADIUM

JOIN US as we explore options to

encourage more use of natural gas for drilling equipment and other oil and gas production and exploration activities.

For more information visit http://www.rrc.state.tx.us/index.php SHALE OIL & GAS BUSINESS MAGAZINE 71

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FIRSTHAND LOOKS

FROST BANK OF SAN ANTONIO hosts a bus tour through the Eagle Ford Shale.

ON WEDNESDAY, DEC. 4, Frost Bank of San Antonio organized a bus tour through parts of the Eagle Ford Shale to present a firsthand look to several of their bank officers and other community leaders. Scott Courtney, P.G., president of Premier Hydro, gave a thorough overview of the play to those in attendance. Stops included a briefing in Pleasanton by City Manager Bruce Pearson; an overview and tour of the Gardendale Railroad Spur in La Salle County by Rene Montalvo; a presentation of building growth in Cotulla by City Manager Larry Dovalina; and a stop in Tilden for a look at an active drilling rig.

PHOTOS COURTESY OF SHALE

City Manager Larry Dovalina and Rene Montalvo address the group at the stop in Cotulla.

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the ce group 73

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event based marketing

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THE DIGITAL OILFIELDS USA SUMMIT

THE DIGITAL OILFIELDS USA SUMMIT was held at the Doubletree by Hilton Greenway Plaza in Houston from Dec. 9 through 11. The event was moderated by Dutch Holland, Ph.D., and presented by Oil & Gas IQ. There were many great presentations by experts in the IT and oil and gas industries. Of particular note were former Chevron Senior Advisor for Upstream IT Jim Crompton; Halliburton North American Solutions Manager of Intelligent Operations Basim Mousilli; Shell Oil Global Manager WFRM and Production Technical Data Manager Sushma Bhan; Weatherford Senior Integrated Project Manager David Joy; and many other distinguished professionals and scholars. Topics ranged from “Enabling the Digital Oilfield with Ultra High-Speed Data Transport” and “Integrating Seismic, Geologic, Engineering and Production Data from Multiple Sources to Enhance Operations and Reserve Discovery” to “Data Integration and Real Time Monitoring.” But perhaps the sentiment of the entire gathering was best summed up by Crompton’s presentation, “The Future Belongs to the Digital Engineer.” It is clear that data collection, data management, data transport and digital technology will continue to expand at a rapid pace. Spending on data management in the oil and gas industry is expected to increase 57 percent in the next two years and reach $17 billion. Companies across all spectra of the industry that embrace technology will be more competitive, more efficient, more precise and more profitable. Those that do not invest in their digital and data futures will be at a decided disadvantage. For more information, visit www.oilandgasiq.com.

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PHOTOS COURTESY OF SHALE

Oil & Gas IQ brings together a number of distinguished professionals and scholars to discuss a wide variety of topics within the IT and oil and gas industries.

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A GREAT START

Leaders from the energy industry and the business community gather for the first annual SHALE magazine open house celebration. PHOTOGRAPHY: JULIAN LEDEZMA WITH THE PERFECT VIEW of the San Antonio skyline from the 21st-floor offices of Norton Rose Fulbright in downtown San Antonio, SHALE magazine hosted its first open house celebration. More than 80 attendees from the energy industry, business and community leaders and the SHALE Advisory Board and staff came together to celebrate a successful start to SHALE magazine. Don Strange provided exquisite catering for the event and created a signature drink, the Shale Pipeline, that guests enjoyed the entire night while taking advantage of this great networking opportunity. Joyce Venema, vice president of operations for SHALE magazine, was our mistress of ceremonies as we honored Rod Lewis of Lewis Energy, our first pictorial feature. On hand to receive the plaque honoring Lewis were Garret Glass, vice president of finance and accounting, and Chad McGuffin, vice president of land of Lewis Energy. Both delivered amazing acceptance speeches and

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extended Lewis’ gratitude for receiving this honor. Omar Garcia, president and CEO of STEER, introduced the SHALE Advisory Board and shared encouraging words about the future of the magazine and the Eagle Ford Shale, noting that this boom is a great economic opportunity in the state. “Our magazine allows business and community leaders to be put in front of oil and gas industry leaders,” said Kym Bolado, publisher and CEO of SHALE magazine. “This begins an open dialogue, giving a better insight into this emerging industry in our great state of Texas.” Several companies were represented at the open house, including BPH, Marathon, Baker Hughes, Oil Field Experts, The Palm Restaurant, Norton Rose Fulbright, the CE Group, Don Strange, Mass Mutual and Lake Truck Lines, just to name a few. Thank you to all attendees, and we look forward to having another successful open house very soon.

To be added to our cover page networking events, please email kym@ shalemagazinetexas.com. And for more information on SHALE Oil & Gas Business Magazine, please visit www. shalemagazinetexas.com.

THE SHALE PIPELINE INGREDIENTS: 1.5 ounces Garrison Brothers’ Cowboy Bourbon 3/4 ounce triple sec 3/4 ounce lime juice 1 teaspoon grenadine syrup INSTRUCTIONS: Shake ingredients with a glassful of ice. Pour unstrained into an old-fashioned glass.

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$12 per employee. Protect their financial freedom. HALO-Flight is a 501(c)3 Not for Profit Air Ambulance Service

Business Agreements now available: HALOFlight would like to extend coverage to your employees for an annual rate of $12 per employee household. Whatâ&#x20AC;&#x2122;s the bottom line? An average emergency helicopter transport exceeds $15,000. As a Guardian Member, if you or a member of your household require our service, your insurance (if any) would be billed and HALO-Flight would accept that as payment in full. Itâ&#x20AC;&#x2122;s that simple! Contact Stephanie Knox, Marketing Director stephaniek@haloflight.org 361.265.0509

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