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JEFF MILLER INTERESTING TIMES AT HALLIBURTON

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NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

NOVEMBER/DECEMBER 2016

CONTENTS FEATURE

Desalination in Texas – A Quick Primer

COVER STORY

Jeff Miller, the President and Chief Environment, Health and Safety Officer for Halliburton, tells of interesting times at Halliburton now, and in the future.

INDUSTRY

Finding More, Knowing Less

COVER PHOTO BY MICHAEL GIORDANO / TABLE OF CONTENTS PHOTO COURTESY OF HALLIBURTON

INDUSTRY 28 Innovative Minds and Technology 30 West Texas Is Ramping Up Oil and Gas Production 32 The SCOOP and the STACK 34 Gazprom’s Response to U.S. LNG Exports 36 Technology Has Transformed the Energy Industry

POLICY 40 Anti-Fracing Lessons from Colorado 42 The Texas Railroad Commission Must Be Reauthorized in Name and in Fuction

BUSINESS 46 An Unexpected Key to a Cutting-Edge Tech Career: Community Service

COMMUNITY

50 ConocoPhillips Drilling and Completions Scholarship Golf Tournament

POLICY

Big Data, Better Government

BUSINESS

5 Ways to Lower Pressure and Noise in Your Office

COMMUNITY

BHP Billiton Donates $14 Million to Protect Rivers and Forestlands in Texas and Arkansas

LIFESTYLE 54 A Hotel With History and Hospitality 56 Mediterranean-Inspired Holiday Entertaining

SCENE 60 July/August Cover Party 62 DUG Eagle Ford Conference and Exhibition 64 Texas Energy Advocates Coalition 66 State of Energy Mixer at Salt 68 Texas Tribune Festival

LIFESTYLE

Artisans Restaurant

SCENE

State of Energy Luncheon

NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

ADVISORY BOARD

Omar Garcia Senior Advisor

bradley h. lenz

Thomas Tunstall, Ph.D.

As President and CEO of the South Texas Energy & Economic Roundtable (STEER), Omar Garcia is an expert on business opportunities associated with the Eagle Ford Shale. He works with the oil and gas industry, local officials, community members, regional stakeholders, educational institutions and economic development organizations to ensure that the oil and natural 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 majors in international business and Spanish. In 2010, Gov. Rick Perry appointed Garcia to the Texas Economic Development Corporation.

Bradley H. Lenz is the Director of Economic and Business Development at AEP Texas. As Director, he oversees the company’s economic and business development operations, including oil and gas operations. This activity extends throughout the AEP Texas service territory. Previously, he was the Operations Support Manager of the Electric Distribution System of AEP Texas. His responsibilities included resource planning and managing the electric distribution budget, back-office functions and annual storm restoration drill to prepare for hurricanes and other major natural disasters. Prior to operations support, Lenz held several management positions with AEP Texas and the former West Texas Utilities Company. Lenz began his career in 1991 with West Texas Utilities in Abilene as an Engineer in marketing, focusing on commercial customers. Prior to that, Lenz was a cooperative student with TXU Electric. Lenz earned a bachelor of science degree in electrical engineering from Texas A&M University in College Station and has completed the Ohio State University Leadership Development program.

Thomas Tunstall, Ph.D., is the Research Director for the Institute for Economic Development at the University of Texas at San Antonio. Previously, he was a Management Consultant for SME and the Component 1 Team Leader for the Azerbaijan Competitiveness and Trade project. Tunstall also served as an Advisor Relations Executive at ACS and was the founding Co-chair for the Texas chapter of the International Association of Outsourcing Professionals (IAOP). He has published a business book titled Outsourcing and Management (Palgrave, 2007) and was the technical editor for Outsourcing for Dummies (Wiley, 2008). Tunstall has consulted in both the public and private sectors. In 2005, he completed a long-term assignment in Afghanistan, where he was Deputy Chief of Party for a central bank modernization project. In 2006, he taught Ph.D. candidates in a business and government seminar at the University of Texas at Dallas.

SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

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PUBLISHER’S NOTE OIL & GAS BUSINESS MAGAZINE VOLUME 3 ISSUE 6 • NOVEMBER/DECEMBER 2016

AS 2016 COMES TO A CLOSE,

I want to take a moment to look back and see where we are, what we’ve done and what we still need to do. This year has been a challenge for most companies directly and indirectly affected by oil and gas — that’s pretty much everyone. Like it or not, the energy industry is the backbone of our economy locally and nationally. The energy industry has had more disruptive factors this year than any other in the past decade. For many in the industry, this is the first downturn that we’ve lived through. It’s hurt a lot of companies and a lot of employees. But through all of the disruption, a silver lining presents itself. Companies are smarter; they’re stronger. And they are planning for the future. Investing in their employees — who are the future of energy — is becoming a main focus for energy companies, as well as developing new technologies to improve efficiencies and drive down costs. It’s been a hard year, but the energy industry has adapted. And it will continue to adapt and change as the next year approaches with the promise of a rebound in energy prices. SHALE has not been immune to the downturn. We’ve felt the tightening of the industry within our own walls. But in our struggle, we’ve found opportunities to branch out and grow. Take, for instance, our advocacy organization, the Texas Energy Advocates Coalition (TEAC). This organization was born out of the struggle between the energy industry and lawmakers who may not recognize the impact of the industry on our local and national economy. TEAC has grown larger than we originally foresaw due to the numerous business professionals and energy professionals who see a need to demonstrate their support of the industry to policymakers in Austin and beyond. We are proud to say we are doing what we can to support this crucial industry at a time when it’s needed most. Last year, we recognized a need to bring energy experts and community leaders together to discuss the current state of the energy industry and where we are headed, so we created the State of Energy luncheon to do just that. We recently held our second annual luncheon in October to share news on the energy market with the community. The event was a success and proved that the business community has an interest in supporting the energy industry. It’s always great to see our mission of linking the business and energy communities is coming to fruition. While I wish I could tell you I have all the answers, I don’t. I am lucky to be in the midst of some really intelligent industry experts who tell me that 2017 will be a better year for the oil and gas industry. I can only hope they’re right. Because I can see there is still so much to do. For SHALE, specifically, we need to continue to bring our readers the best energy news possible. One of my missions for 2017 is to grow our content nationally and globally. My other objective involves bringing our TEAC members together for a one-day trip to the state Capitol to address legislators about our ideas as energy advocates. I want to get as many TEAC members together as possible to show an overwhelming support of the energy industry. If you want to be involved in this trip, I highly encourage you to register as a TEAC member by visiting shalemag.com/teac. As I bring this letter to a close, I want to wish you all a happy holiday season. We’ll see you in 2017!

KYM BOLADO

CEO/Publisher of SHALE Oil & Gas Business Magazine kym@shalemag.com

KYM BOLADO

CEO / PUBLISHER CHIEF FINANCIAL OFFICER Deana Acosta

EDITOR IN CHIEF Lauren Guerra

OIL AND GAS ASSOCIATE EDITOR David Blackmon

ART DIRECTOR Elisa G Creative

COPY EDITORS

Katie Buniak, Maegan Sheppard

VICE PRESIDENT OF SALES Liz Massey Kimmel

ACCOUNT MANAGERS

Susan Brown, Kristy Sommers

ONLINE CONTENT MANAGER Fernando Guerra

SOCIAL MEDIA DIRECTOR Courtney Boedeker

CORRESPONDENT WESTERN REGION Raymond Bolado

CONTRIBUTING WRITERS

David Blackmon, Jamie Bobbitt, Alex Charfen, Kyle Frazier, Lauren Guerra, Bill Keffer, Simon Lomax, Christy Luquire, Sujoyini Mandal, Carl Neuhaus, Thomas Tunstall, Ph.D, Sen. Carlos I. Uresti

STAFF PHOTOGRAPHER Malcolm Perez

CONTRIBUTING PHOTOGRAPHER Michael Giordano

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SHALE OIL & GAS BUSINESS MAGAZINE MISSION STATEMENT:

SHALE Oil & Gas Business Magazine is a statewide 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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For advertising information, please call 210.240.7188 or email kym@shalemag.com. For editorial comments and suggestions, please email lauren@shalemag.com. SHALE MAGAZINE OFFICE: 5600 Broadway Ave., San Antonio, Texas 78209 For general inquiries, call 210.240.7188 Copyright © 2016 Shale Magazine. All rights reserved. Reproduction without the expressed written permission of the publisher is prohibited.

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 FEATURE

Desalination in Texas – A Quick Primer By: Kyle Frazier

water daily. This figure represents approximately 25 percent of the water for the region, which not only includes the greater El Paso metropolitan area but also Fort Bliss. The concentrate produced during this process is currently re-introduced into a saline aquifer in the region. The KBH plant is currently undertaking a project to commercialize the concentrate, separate the minerals and sell that material to an end user. This process creates additional fresh water, thereby increasing the overall efficiency of the KBH plant. The success and viability of this ongoing project could have a farreaching impact on the desalination process — not just here in Texas but all over the world. The Southmost Regional Water Authority (SRWA) Brackish Groundwater Treatment Facility outside of Brownsville also uses an RO type of process to treat brackish groundwater. This is the oldest desalination plant in Texas, having come online in 2004. The plant has recently completed improvements that have raised the capacity to 10 million gallons a day. The concentrate from this process is reintroduced into the Gulf of Mexico where it rapidly dissipates. This facility serves the city of Brownsville and an additional four communities in the region. The newest desalination plant is the San Antonio Water System (SAWS) desalination plant. Current capacity under the first phase of construction will be approximately

SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

12 million gallons per day. After the completion of two more expansion phases, in 2021 and 2026 respectively, the total capacity should exceed more than 30 million gallons per day. Concentrate produced from this facility will be disposed of in an injection well currently owned and operated by SAWS. While these three facilities represent the bulk of the desalination

Texas is home to several large inland desalination plants

PHOTO COURTESY OF KYLE FRAZIER

esalination is the process in which minerals are removed from saline water. While several different methods of removal exist, the most utilized procedure within the U.S. is reverse osmosis, or RO. This process forces saline water through a series of membranes that trap the mineral molecules and allow the water molecule to pass through. This method can also be adapted for use in the shale market to deal with the significant amounts of water associated with this technology. The result of these processes is sterile water, which is, in the case of drinking water, then slightly remineralized and distributed within the end user’s water system. In the oil field, this water can be processed to varying degrees to be reused in the fracking process or cleaned up to the point of being used for some other purpose. The highly mineralized waste, or concentrate, is then disposed of by either introducing it back into a highly saline water source such as the ocean or highly saline groundwater, or it is injected into waste injection wells. Texas is home to several large inland desalination plants. Perhaps the best-known major facility in Texas is the Kay Bailey Hutchison plant in El Paso. Part of the El Paso Water Utilities public water system, it is currently the largest inland brackish water desalination plant in the world. This facility has the ability to produce up to 27.5 million gallons of fresh

currently taking place in Texas, there are over 100 different desalination facilities within the state. While many of these are small or have limited operation, there are a number of larger plants currently under construction or in the planning phase. As an alternative to surface water, desalination is becoming more of a viable option for water planners. The ongoing myth that desalination is too expensive no longer holds water. In Texas, our surface water, for the most part, is accounted for. Many communities and industries must find new water. And while there are a number of planned surface water projects represented in the statewide water plan, the likelihood that all or even any of these proposed projects will actually be built is sketchy at best. Regardless, any “new” water is going to be more expensive than water that was planned for and allocated during the ’60s and ’70s. In this situation, desalination becomes a viable option. It is drought-proof and readily available. The Texas Water Development Board estimates that there are over 2.7 billion acre-feet of brackish water below our feet; and, of course, the Gulf of Mexico represents an unlimited amount of water that can be utilized. While desalination is not the only answer, it is part of the answer. Texas continues to grow at an exponential rate. There are many communities that should make use of the brackish water beneath their cities, and those on our coast should be desalinating for both municipal and industrial use. In the future, these water sources will be a critical component of our overall water portfolio. Texas’ water needs will certainly not diminish. Conservation and reuse are also part of the answer, but these methods will only go so far. We will have to develop new water, and desalination must be part of the solution.

The time has come to celebrate a Shale Revolution with a toast to excellence! Shale wine celebrates the innovation, creativity, performance and prestige of the energy industry. America now relishes in an era of energy independence thanks to hydraulic fracturing. We salute the individuals that work each day in the energy industry to provide Americans with the products they need to fuel our world. So enjoy your bottle of Shale wine and be thankful for our energy industry powering America.

As an alternative to surface water, desalination is becoming more of a viable option for water planners

About the author: Kyle Frazier is the Executive Director of the Texas Desalination Association, which he co-founded in 2011. He is also active as Kyle Frazier Consulting, Inc. representing legislative and public policy interests for a variety of business clients since 2004—these include water desalination, healthcare, alcohol regulation, and excise and sales taxes. Frazier has been involved in politics and governmental relations for more than thirty years. He studied at Baylor University and has participated in extensive professional development in a number of areas that are of benefit to his clients. He has served as a board member to Keep Texas Beautiful and the Woman’s Advocacy Project.

Enjoy SHALE Wine This Holiday Season The Creator of SHALE Wine Has Received Over 65 Awards The SHALE Cabernet Sauvignon is a Double-Gold Winner.

L E A R N M O R E AT S H A L E M A G . C O M NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

COVER STORY

JEFF MILLER By: David Blackmon

SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

PHOTO COURTESY OF HALIBURTON

INTERESTING TIMES AT HALLIBURTON

NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

PHOTOS COURTESY OF HALLIBURTON

Through it all, Jeff Miller remains upbeat and optimistic about the future, stemming from a strong belief in the company that he speaks of as an extension of his own family, and for the industry it serves 18

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“MAY YOU LIVE IN INTERESTING TIMES,” GOES THE OLD CHINESE CURSE. IT’S A CURSE THAT WE ALL WOULD LIKE TO AVOID IN OUR LIVES, SINCE HISTORY TELLS US THE MOST INTERESTING TIMES WE EXPERIENCE TEND TO BE ONES OF CONFLICT AND CHAOS OF ONE FORM OR ANOTHER. Jeff Miller, the President and Chief Environment, Health and Safety Officer for Halliburton, knows better than most what it means to live through such times. Having spent the last two decades serving in a variety of leadership roles for one of the world’s largest oilfield service firms, he has experienced all manner of interesting times in an array of locations across the globe. For Miller, who spent his younger years as a PRCA calf roper, this is not his first rodeo. But the last two years, as the price of crude oil has crashed on the world market, have been especially interesting for him, and for Halliburton. During downtimes, oil and gas producers tend to look to service firms as an early source for cost reductions, and the last two years were no exception. Thus, the latter half of 2014 and early 2015 saw a series of news stories announcing staff reductions coming mainly from the service sector. As the bust has continued, ultimately resulting in more than 100 industry bankruptcy filings, the pressures to further reduce costs and other impacts have kept flowing down the value chain, ultimately leading Halliburton to a series of location closures and further staff reductions that no executive ever wants to have to oversee. Earlier this year, the company sustained an added blow when, facing objections from federal antitrust regulators and a severe industry downturn, the company decided to terminate its proposed merger with rival service company Baker Hughes. Halliburton officials recently conceded that the resulting $3.5 billion breakup fee the company was required to pay to Baker Hughes contributed greatly to its reported large second-quarter loss. Through it all, Miller remains upbeat and optimistic about the future, stemming from a strong belief in the company that he speaks of as an extension of his own family, and for the industry it serves. A COLLABORATIVE FAMILY “Halliburton is a family,” Miller says as he looks out the conference room window over the sprawling Halliburton campus adjacent to Houston’s Sam Houston Tollway. “When you move as many times as we have, living all around the world where we operate and becoming friends with Halliburton employees in very different

cultures, the company becomes a part of your family.” During his 20 years at the corporation, Miller, his wife, Rhonda, and his children have experienced the Halliburton family environment in Venezuela, Angola and Indonesia. Miller chuckles as he reflects on the nature of some of these stops: “I’ve kind of made a career out of taking jobs that other people didn’t want.” Miller is a 1982 graduate of McNeese State University — he enrolled at the school on a rodeo scholarship — and his collegiate career had an auspicious beginning: “I met my wife, Rhonda, in college — first day of school, in fact. I’ve always told her that she chose to marry an itinerant calf roper, which is what I was at the time, and that that was a way-long investment,” he laughs, “I not only didn’t have a job, I wasn’t even looking for one when I met her.” They’ve now been married for 29 years and managed to raise two sons as Miller’s career took them to the far corners of the earth. As mentioned earlier, Miller sees Halliburton as an extension of that family, for reasons that will sound familiar to almost anyone. “The close relationships we have built with the company and the compassion the company has for individuals makes Halliburton a different kind of place to work,” he says, “A good place to work. “We care a lot about people and how they fit together. And, like any family, we argue and disagree plenty, too. But we have a lot of room in the family for different talents, for a lot of differing perspectives and views. And also like a family, when we get to the right answer, we’re all aligned around what that answer is. Then we’re out the door and ready to go. “We take this all very seriously, so when I say that Halliburton is a collaborative organization, what I mean is that that’s in our DNA as a company.” WORKING AROUND THE WORLD Following his undergraduate work at McNeese State, Miller went on to obtain an MBA from Texas A&M University. From there, he began his career in public

NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

guess what, honey, we’re moving!’” “And she said, ‘Great, where?’” “So I told her, ‘We’re going to the West Coast,’ to which she said, ‘I didn’t think Halliburton had all that much out in California.’” “Then I had to tell her, ‘I mean the other West Coast — the one in Africa.’” As things turned out, Miller found that the Angola assignment was another of many learning opportunities he’s experienced at Halliburton. “We met such great people — my wife would tell you today that that was one of her very favorite postings.” From Angola, Miller next went to Indonesia as Country Vice President, and then to “a range of other assignments, and here I am.” What he modestly refers to as a “range of other assignments” includes stints as Vice President of the company’s Baroid product service line, Senior Vice President of the Gulf of Mexico region, and Executive Vice President and Chief Operating Officer prior to the promotion to his current position in 2014. When asked about what he sees as the keys to his success, he again starts by referring back to family: “When I think about some of the key things I learned along the way, I realize my grandfather had told me most of them before I ever got started: ● Be willing to take the jobs that others don’t want; ● Treat every job like it’s the last job you’ll ever have, because no job is a stepping stone — you need to get completely immersed in every role; ● Finally, you have to be learning all the time. And that means really learning. That time in Venezuela, and working in the shops and in the fields, learning how we actually do the work that we do at Halliburton — that was some of the most important stuff that I still carry around with me today. You couldn’t have replicated that in any other sort of time or place.” SAFETY AS A TOP PRIORITY Most of us have an image of Halliburton as a company whose employees spend their days doing heavy, potentially dangerous work in the field: manning drilling rigs; running hydraulic fracturing operations; moving, maintaining and repairing heavy equipment. To a large extent, this image is accurate, and if workers are not properly trained and prepared to manage their jobs on a daily basis, there are plenty of potentially hazardous situations in such an environment. As Chief Environment, Health and Safety Officer at Halliburton, Miller’s initial response when asked what keeps him up at night is simple and to the point: “Safety is always on my mind. Always.” After a pause, he continues, “Probably the most important thing in my mind is whether or not our people are planning their work and following our processes. We do our best to simplify those processes to make them

SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

easier to understand and easier to execute. But if we do one thing to enhance safety, it is to have the work planned well. And that includes the morning safety meeting before we start work — does everybody know what they’re going to be doing?” Anyone who has ever worked in the oil and gas industry, or has even been lucky enough to tour a plant or drill site, knows the important role safety meetings play on location. At Halliburton, such meetings are ubiquitous and apply not only to field locations, but also to anywhere the company’s employees — at any level of the organization — are gathered. As Miller puts it, “We start our days with safety meetings; we start every meeting with safety reminders; it is always on our minds.” Highlighting another important safety factor, Miller points to the ability of every Halliburton worker on any job or location to immediately stop work for everyone on-site. “I really do believe that one of the most important things that our people can do is to stop the work if it is not clear to them. Anyone can stop work, at any level in the company. And we do want them to exercise this ability if they see anything they think is not safe or that is not clear to them, because they may or may not recognize something that is inherently unsafe. So if something is not clear, then we stop work, take the time we need to figure it out, and then move on.” One result of this focus on safety is staggering — the company has seen a 40 percent improvement in worker safety in its hydraulic fracturing operations in the last two years. “But look, we are always striving to do better, because we don’t want anyone hurt. To me, it’s really important to see why this improvement is taking place — what is the cause and effect? We believe it has a lot to do with systematically executing our processes around planning the work, controlling the work at each step.” Going back to the company’s overarching priority of customer service, Miller sees safety and quality of service as being intertwined. “That focus on planning and executing our processes drives not only safety but also service quality, because today I really don’t think you can differentiate between the two. They’re both connected to what we are doing and we’ve been very clear at Halliburton that when we plan work, we plan it to be safe and of the highest quality. Because if there is a mistake in the quality, that elevates risk from a safety standpoint.” ENVIRONMENTAL PROTECTION Oil and gas development is an industrial process, and, as with any such process, there are inevitably going to be environmental impacts. We asked Miller about the steps Halliburton takes to ensure that such impacts are as rare and minimal as possible, given the nature of the work. “No question that impacts exist, but it’s important to frame our business in the context

PHOTO COURTESY OF HALLIBURTON

accounting with the Arthur Andersen firm. Looking back, Miller realizes that his time at Arthur Andersen served as a valuable training ground for what was to come in his roles at Halliburton. “You know, in public accounting, you take care of customers. It isn’t so much accounting as it is client service,” he says, “So I was steeped very early at Andersen for what it means to take care of a customer, to provide deliverables on time, to give them what they need to succeed. And a lot of that translated very well at Halliburton. “When I joined Halliburton as Director of Financial Reporting, that was really the first time I had been engaged in accounting,” he chuckles, “and I realized I loved doing that at Halliburton.” Ironically, that initial job with Halliburton grew out of an overseas assignment with Arthur Andersen. “Early in my career I had been engaged in a project overseas — doing it for Andersen but engaged by Halliburton as the client. It was in Venezuela, and I was absolutely fascinated by the business of what Halliburton did. “That was 1993, early ’94 when I was on that assignment, and we ended up spending six months down there working with Halliburton. I got to spend a lot of time with the Halliburton Country Manager and was just fascinated by everything they did, in terms of the services they provided, the breadth of what they were capable of doing for their customers. It made me feel fairly limited after that as an accounting guy, compared to the scope of all the things Halliburton could get done.” When that assignment ended, Miller remembers looking at Rhonda and telling her, “I don’t know how or when, but someday I think we’re going to want to go and try that, you know, working overseas and selling all of that kind of stuff.” As fate would have it, Miller got his chance to go to work for Halliburton less than two years later, and he’s been there ever since. “I started with Halliburton in accounting and went to Venezuela [in] my first posting as what they used to call the back-office manager. I started calling on customers, kind of like I had done at Arthur Andersen, and then went from that to becoming the head of business development for Venezuela. At that point, I was effectively getting to do what that Country Manager I’d met a few years before had been doing. And I loved it.” From there, Miller’s next assignment was in Angola, a country located in southwestern Africa. “That was an assignment that caught me by surprise and was probably the biggest step change I’d had career-wise to that point.” Recalling the move to Angola brings Miller to a favorite story. “We’d been in Venezuela for all that time, we were in year No. 4 of what was supposed to be a two-year assignment, and Rhonda was expecting us to be heading back to Houston next.” When he found out where they were headed, Miller relates, “I had to go to her and say, ‘Well,

Looking back, Miller realizes that his time at Arthur Andersen served as a valuable training ground for what was to come in his roles at Halliburton of what natural gas has meant to emissions for the U.S. and what it could mean for the world,” he says. Miller refers to the fact that U.S. carbon emissions have fallen dramatically over the last seven years as a large portion of older, higheremission power generation plants have been retired and replaced mainly by cleaner-burning combined-cycle natural gas-generating capacity. This has allowed the United States to become the only developed nation on earth to actually meet the carbon emissions goals set out in the 1999 Kyoto Protocol on climate change, even though the U.S. Senate rejected the treaty on a unanimous vote at that time. None of that could have happened were it not for the creation and application of the technologies necessary to be able to produce natural gas from the massive shale formations that have been discovered and developed in the U.S. over the last 18 years. Without such technologies — which Halliburton played a major role in creating and refining — the U.S. would not have had the volume of natural gas necessary to facilitate the transition to cleaner plants. “There is no question that natural gas has done more to improve the emissions outlook than any other factor.” On more specific solutions and approaches to environmental protection, Miller again goes

back to Halliburton’s cultural norms of planning and following processes. “When it comes to doing our work, we think first about footprint — what is our smallest possible footprint on location? A lot of what we think of as our ‘frac of the future’ was designed with two things in mind: how to be more efficient and how to have the least impact on the environment. “This thought process led us to the development of the Q10TM pump — which is a more efficient pump — and that allows us to have fewer pumps on location. These are also equipped with Tier 4 engines. This is an important milestone in the EPA’s march to reduce emissions. These engines are very expensive, but they are becoming gradually required under [the] EPA’s latest emissions regulations.” The investment in and transition to this more expensive, more efficient equipment has been both significant and rapid: “Over the last two years, more than 65 percent of Halliburton’s high-horsepower equipment has been equipped with Tier 4 engines. This has been a substantial investment for Halliburton, right into and through the downturn. But this makes us the leader in the industry in investing in this kind of technology. “Then there is chemistry. The runway is almost infinite with respect to chemistry in terms of what we can do to protect the

environment and also reduce costs to make the industry more efficient.” Development of even more advanced solutions through chemistry is a core part of Halliburton’s business, and it leads into a more general discussion about the role that some of the company’s technological solutions have played in helping its customers control and reduce costs so dramatically over the last two years. MAXIMIZING RECOVERIES THROUGH TECHNOLOGY Miller points to the company’s focus on collaboration, both internally and with the customer, as a major key in ensuring Halliburton’s technological solutions are effectively developed and properly deployed. “I like to preface the technology discussion with recognition of Halliburton’s focus on collaboration and engineering solutions. Because before we start talking about the technological solutions themselves, it’s important to talk about what is the source of the value in those things. In my view, the value is how we collaborate and engineer solutions to maximize our customers’ asset value. We are just fanatical about these things. “The collaboration is not just with the

NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

Miller points to the company’s focus on collaboration, both internally and with the customer, as a major key in ensuring Halliburton’s technological solutions are effectively developed and properly deployed 22

SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

PHOTO COURTESY OF HALLIBURTON

Going back to the company’s overarching priority of customer service, Miller sees safety and quality of service as being intertwined

customer, but also within the Halliburton organization when we reach into the toolbox to help customers solve challenges. The process around how we do that is critical.” When thinking of specific Halliburton technologies that have worked to improve recoveries and reduce costs during the downturn, Miller points to AccessFrac®, a diversion technology to more efficiently stimulate a higher number of fracture clusters within a wellbore, and to MicroScoutTM, a technological application that allows for better initial penetration and connection of fractures and props them open more efficiently. “AccessFrac has been very effective both in high-temperature and low-temperature environments. This allows customers to stimulate more rock volume within the target formation through diversion. It’s important to recall again the process we use to assess the rock, how we assess the drivers the customer has, so that when we apply something like AccessFrac, it’s done in a way that is most economical for the customer. And the result has been that they are getting more barrels with less cost. “After we first induce fractures, MicroScout

allows us to better connect these fractures within the formation and prop them open. Again, this has been a very successful product, but not one that you ship in a box. The reality is that it is how the product is used, and that’s why I describe them as systems because there is a lot of shared thought upfront to determine the best way to put these things to work. “I’m very excited as we look ahead in this industry about the things that can be done to improve recovery factors. So in that context, when we think about AccessFrac, MicroScout and all the things that can be done with chemistry, I’m very encouraged. I really think that, from a recovery factor perspective, we are really in the early innings of unconventional oil. This is what makes these formations so attractive — not only are they the fastest incremental barrel of oil to the market, they are also the shortest cycle return barrel of oil in the market.” Of course, this reality — that the industry is actually just in the very early stages of unlocking the gigantic volumes of oil and natural gas held in shale formations beneath the United States — isn’t exactly understood by those outside of the oil and gas world.

Miller acknowledges that Halliburton and the rest of the industry could do a better job of telling this story. “What we probably don’t talk about enough relative to other market segments is that runway of opportunity associated with the recovery factor. We are only today beginning to crack the code around why shale formations produce the way they produce, and that’s a very exciting part of our business.” DOWNSIZING AND RAMPING BACK UP Everyone associated with Halliburton and the oil and gas industry in general is hopeful that the global market for oil will soon re-balance and that there will then be a fairly rapid increase in the price to a higher level that is healthier for everyone. One consideration such a happy scenario raises in the context of Halliburton and the service industry in general is whether it will be possible to rebuild staff and reactivate stacked rigs and other mothballed equipment rapidly enough to accommodate a sudden increase in customer demand. Miller reflects on the hardships of the

NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

past two years, as the company has found it necessary to reduce staff by upward of 40 percent of its previous level. “Let’s start with the people, who are so important to what we do at Halliburton. As we’ve gone through the downsizing the past couple of years, which has been so disappointing — I mean it just takes such a toll. Many of these folks are the same people I grew up with in the organization. This is nothing any executive ever wants to do. “Unfortunately, we’ve had to cut through the fat, through the muscle and into the bone here, so there are a lot of wonderful people who aren’t employed today that, if the market would get to where it needs to be, we would love to have back. “We have to the best of our ability retained a core of experienced people, so that when the time does come to staff back up, that experience is already in place. These are the people who, when it’s time to add equipment and start ramping back up, will provide the leadership necessary to get the job done. “These are also the same people who know how to find and get in touch with potential employees who were with the company before. Our HR department also keeps up with where many people are after they’ve left. Some will have left the industry, unfortunately, but many are still there, and clearly those would be people that we would like to get back in touch

with when the time comes. “We are accustomed at Halliburton to staffing back up rapidly and training a large group. As an example, during 2014, we actually hired 21,000 new people into the company. That’s also the year we started the downturn, but the gross number of new people who joined the firm was 21,000. So we do know how to reach out and staff up quickly. When you think about hiring 21,000, think of how many resumes were looked at and how many candidates were interviewed to bring in that number of new employees. So we have a lot of confidence in our ability to do that.” Miller addresses the question of Halliburton’s ability to reactivate the stacks of drilling rigs, pumping equipment, tanks and other oilfield equipment that the company has had to deactivate during this extended downtime. As one might expect, the conversation again turns to the company’s focus on process and collaboration. “There are two separate stories here, in the sense that, No. 1, broadly in the industry we have seen a lot of attrition and cannibalization for parts that has gone on the last couple of years as companies have wrestled with cash flows and how to simply survive. But at Halliburton, we have been very disciplined around segregating our stacked equipment, keeping maintenance schedules in place — in

SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

fact, we have re-engineered our maintenance so that it’s more effective than it’s ever been. “So the result for us is that the equipment that is stacked today is ready to come back, and the processes we have in place related to equipment are sustainable. We have actually seen through the down cycle improvements in both safety and service quality, which is not necessarily what one would expect.” THE FUTURE OF THE EAGLE FORD While the oil and gas industry at large remains mired in an extended downturn cycle, 2016 has seen a renewed boom in one major producing area. That, of course, would be the Permian Basin of West Texas and southeastern New Mexico, where, in August alone, more than $7 billion in new acquisitions by major players in the industry were announced. Early in September, the rig count in the Permian rose to more than 200 active drilling rigs. Meanwhile, the Eagle Ford region in South Texas remained comparatively stagnant, with little more than a handful of active rigs; and residents in the area are wondering when an upturn will take place in their part of the world. “Look, I’m an Eagle Ford bull. I like the Eagle Ford,” Miller says. “Unfortunately, I think that, because the Eagle Ford is now relatively defined and relatively developed, it doesn’t

have the same urgency that we see in the Permian Basin and the SCOOP and STACK plays in Oklahoma, where a lot of the drilling taking place right now is still to hold acreage.” This refers to the terms in most oil and gas leases that allow an operator to “hold” the acreage covered by the lease past its original term once a producing well has been drilled on it. Most such drilling requirements were satisfied in the Eagle Ford region during the boom that took place from 2009 through 2014. “Obviously, the thing that would help most in the Eagle Ford would be an increase in the price of oil. An increase in the price for natural gas liquids would also help — of course, that would help everywhere. “But the Eagle Ford is a top-tier rate-of-return basin in the United States. Those economics will sustain and be in place with any recovery.” Miller also believes technology has and will continue to play a significant role in the future development of the Eagle Ford Shale. “Simply because of the recovery factors that we talked about earlier. It’s one thing to drill the core of the core of the core,” he says, referring to the sweetest spots of any oil-bearing formation, which tend to be among the earliest targets for development. “But as we move away from that, advancing technology will play a big role in continuing to drive costs down and allow producers to make more barrels. I think the Eagle Ford will be a great beneficiary of that. “[For Halliburton,] it all goes back to our value proposition for our customers: We collaborate and engineer solutions to maximize asset value for our customers. We translate asset value for our customers into more barrels and less cost. It’s really that simple.” Miller is also bullish on the ability of the domestic oil and gas industry to address the challenge of making more and more Eagle Ford locations profitable to drill once again. “We have a base of incredibly creative customers, a dynamic industry in the United States that loves to solve these kinds of challenges. We have done it over and over again. So I have no reason not to be optimistic. I’ve seen it a couple times just in

my career, where the industry goes from ‘What do we do?’ to ‘OK, what do we do next?’ And we’re kind of at another one of those ‘What next?’ points. The resource is there — not just in the Eagle Ford, but in all of the U.S. — the resource will be produced, and technology will play a big role. I always bet on the future, and I always bet on our customers.” LIFE OUTSIDE THE OFFICE When asked what he likes to do to relax and have fun on days when he manages to actually get away from the office, Miller focuses on outdoor activities. “I like to jog. I’ve run a few marathons. Love to shoot skeet, play golf, do a lot of things when I have time. But mostly I like to get out and run. It helps to clear my head, keeps the heart beating.” Any favorite sports? Miller describes himself modestly at first as an “avid Texas Aggie.” Then he grins and expands on the theme: “I’m a huge Texas Aggie supporter. I love Texas A&M and Texas Aggie football. This year, I’m hoping for the best,” he pauses, and then adds, “like I do every fall.” As we have seen, that last statement reflects a real contrast between Jeff Miller, the avid fan of Texas Aggie football, and Jeff Miller, the President of Halliburton. The football fan, knowing he can’t do much to control the outcome, hopes for the best to happen every fall. The senior executive plans, innovates and collaborates with fellow employees and customers alike in order to ensure the best thing happens for everyone, every working day of his life. At Halliburton, he has found, that is the best way to get through interesting times like these.

To learn more about Jeff Miller and Halliburton, visit www.halliburton.com.

NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

INDUSTRY

Finding More, Knowing Less By: Bill Keffer

ow that I have entered my third year of teaching oil and gas law at Texas Tech University, I have already seen over 300 law students pass through my classroom. Keep in mind that these are students that have already had 12 years of education through high school, four years of undergraduate education at a college or university, and at least one year of postgraduate education in law school. However, some of them have also acquired, or are working on, other postgraduate degrees, and others already have some form of full-time employment in the real world. And, yet, despite all of that education, exposure and experience, the vast majority of my students arrive in my Oil & Gas Law I class with little or no understanding of oil and gas, or energy in general. In fact, I would describe them, quite simply, as energy illiterate. Ironically, a large percentage of my students actually come from the Permian Basin, and their parents oftentimes have some kind of direct or indirect connection to the oil and gas industry. Some folks might observe that this is not an uncommon situation and has more to do with the overall unfamiliarity of a generation not yet fully engaged in the workforce, rather than something that should cause us concern. While, admittedly, there are aspects that might be reminiscent of past generations that simply haven’t yet transitioned from student to privatesector employee, an unsettling and recurring feature that I have observed is the degree of misinformation about energy that goes far beyond mere ignorance. Students typically are under the mistaken impression that we are living on borrowed time with our limited oil and natural gas reserves; that somehow all energy sources are equal and that we could have everything we currently have but be getting it from renewable energy sources like wind and solar, and that simply stopping our use of oil and natural gas will allow us to bring the climate under our control. The most likely explanation for these students’ opinions is that they have never really thought about the issues beyond the headlines and agenda-driven articles that they have been

Despite all of their education, exposure and experience, the vast majority of my students arrive in my Oil & Gas Law I class with little or no understanding of oil and gas, or energy in general exposed to in many of the mainstream-media outlets. But once you start to realize that you never see airplanes, submarines, or interstatetruck traffic being powered by wind turbines or solar panels and that none of the items on the endless list of manufactured products made from petroleum could ever be made from wind or solar power, you start to understand the singular superiority oil and natural gas have over other energy sources. Likewise, when you understand that an immediate and absolute cessation of all use of oil and natural gas across the world would have very little effect on the numbers of concern that global-climate models generate, in exchange for the economic disaster that such a move would cause, you should start to ask some questions — not to mention the obvious impossibility of such an effort and the hubris that has to go into any movement that claims to know how to manage the climate. But the misconception that always has me scratching my head in amazement is the belief that we are close to running out of oil and gas. There have been many predictions and prognostications that the world has already reached peak oil and that we are on a steep decline curve toward the end of our reserves. We have been immersed in a nonstop shale revolution that has resulted in over a decade of record-setting drilling, production and increases in reserves; so much so that we are still experiencing the market-price effects of a glut in both oil and natural gas. The U.S. has been producing at levels not seen since 1970,

and there are actually more known reserves now than during any time period in history. Running out of oil and gas? We’re only running into more. To add to that reality and underscore just how fundamental the recent advances in technology in the oil field have been to this expansion in exploration and discovery of more and more reserves, Apache Corporation just announced yet another huge development in the Permian Basin in southern Reeves County. But, hold it! The Permian Basin has been producing for almost 100 years — haven’t they found all of the oil and gas that exists there? They found the oil and gas that was “findable” and economic to produce. But things change. Technology improves, economic circumstances change, applications change. The advent and convergence of 3-D seismic testing, hydraulic fracturing and horizontal drilling have enabled companies to find previously unknown reserves and have made previously uneconomic reserves now economic to produce. Geopolitical conditions around the world are also providing a renewed catalyst for the U.S. to strive for energy independence. In this new discovery that has been dubbed the Alpine High, Apache spent over two years conducting extensive geologic and geophysical work, acquiring acreage, and testing and drilling in at least five significantly productive formations. Apache has acquired over 300,000 acres in the play and estimates that it is now in control of 75 trillion cubic feet (Tcf) of rich gas and 3 billion barrels of oil in just two of the five formations alone. There is 4,000–5,000 feet of pay zone at depths starting at 9,000 feet. There is also sufficient space and production to support up to 3,000 future locations. Apache’s position will keep at least six drilling rigs busy every day for 20 years. Does it sound like we’re running out of oil and natural gas? If we continue to fail to educate our children about the realities of our energy resources, we are much more likely to run out of common sense and the ability to govern ourselves effectively long before we ever produce the last cubic foot of gas and the last barrel of oil. We have the resources, but the real question is — do we have the resolve?

About the author: Bill Keffer is a contributing columnist to SHALE Magazine. He teaches at the Texas Tech University School of Law and continues to consult. He served in the Texas Legislature from 2003 to 2007.

SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

Specializing in oilfield supplies and service throughout the Eagle Ford Shale  Oilfield Experts specializes in machine parts and machine work (wireline, coiled tubing, fracturing and gun loading departments).  Providing a full line of automotive and truck parts and accessories (OEM and after-market parts).  We offer a full line of gauges, butterfly valves, complete line of tools (Proto Tools), filters, chemicals, gear oil and synthetic gear oil, silicones, hydraulic hoses and hydraulic fittings, starters, alternators (12 and 24 volt), serpentine and V belts, hydraulic motors, pumps.  We are open and provide hot shot services 7 days a week and 24 hours a day. 

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water for reuse in the formation fracturing process. ReLoad is most effective when introduce into holding tanks or holding ponds with a circulating pump. ReLoad will also help keep out moisture when needed. ReLoad is used on water for the separation of water and hydro carbons PREMIUM RELOAD: is an all natural product use for treating frac and produced water. This product binds and encapsulates the heavy metals including the damaging iron sulfites and keeps them from the oxidation process. The method reduces iron sulfates by 90% and makes the separation of solids from water more efficient. This product pushes the hydrocarbons to the surface while creating a layer of encapsulated metals. This application is perfect for recovering oil from the formation fracturing process in the flow back and produced water will help in the recycling of the water for reuse in the formation fracturing process. Premium ReLoad is most effective when introduce into holding tanks or holding ponds with a high turbulence application. Premium ReLoad also binds heavy metals in acidic water and helps eliminate corrosive effects. Premium ReLoad is use on water for inert effect on heavy metals.

Clint Schweers / oilfieldexperts@gmail.com NOVEMBER/DECEMBER 2016  13611 U.S. Hwy 181 S., San Antonio, Texas 78223 / (210) 471-1923

SHALE OIL & GAS BUSINESS MAGAZINE

INDUSTRY

Innovative Minds and Technology MAKING AN IMPACT ON OIL AND GAS’ HISTORY AND FUTURE Special to SHALE

Today, as the oil and gas industry continues to face challenges — from the economic difficulties brought on by the ongoing downturn to the demands of new regulations and calls by some for a movement away from fossil fuels — innovative minds and technology will once again answer the call and PESA members — working with their customers and partners — have delivered. Drilling times have been cut by weeks through a combination of more efficient rigs and well-honed drilling crews. In addition to a more efficient drilling operation, the oil and gas industry has proactively advanced environmental and worker safety protections. Even in areas where regulations are pending, such as methane emissions, we can point to clear progress thanks to

SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

strong voluntary efforts. Additional innovations in multi-well pad drilling and powering rig components with natural gas and solar power provide collective benefits beyond saved time and money. The downturn in our industry has even kick-started tomorrow’s technologies. Take the focus many PESA member companies are placing on developing and implementing automation. The benefits of this effort are clear: improved efficiencies, safety and accuracy. Exponential growth in the use of data across the oil field has also further driven these efforts. Much like advertising companies are utilizing trends in Facebook likes and tweets to drive marketing campaigns, oil and gas innovators are using data trends to advance automation across the drilling rig. The largest fruits of these labors are still to come, but they promise to be exciting. Another area where innovation has advanced is the continued evolution of hydraulic fracturing techniques. While this completion method has been proven safe and effective for more than 50 years, the demands of the downturn have spurred further innovative improvements. While re-fracing existing wells has received the lion’s share of attention, other changes, such as improved pumps, specialized proppants and improved proppant logistics will provide larger success for the industry long term. And big data is playing a role here, as companies are using analytics to target the best technologies on the best production opportunities. Indeed, if there ever was an industry tailor-made for the phrase, “Where there’s a will, there’s a way,” it is the oil and gas industry. We have always found the way through the work of innovative minds, and innovation fuels the will that continues to drive our future.

To learn more about PESA, visit www.pesa.org.

CURRAHEESHUTTER/BIGSTOCK.COM

hile some industries are new to the concept of using technology to overcome challenges, the oil and gas industry has utilized this practice since its origins along the Oil Creek Valley in Pennsylvania. Without the combination of innovative minds and new technologies, Edwin Drake would have never completed his well, and the society-changing impacts of that effort may not have been realized. Today, as the oil and gas industry continues to face challenges — from the economic difficulties brought on by the ongoing downturn to the demands of new regulations and calls by some for a movement away from fossil fuels — innovative minds and technology will once again answer the call. Observing the efforts of the oilfield service, supply and manufacturing companies that make up the Petroleum Equipment & Services Association, one only has to look across the shale oil and gas regions of Texas to see this firsthand. Low prices have demanded greater efficiency,

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@STEEROUNDTABLE NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

INDUSTRY

West Texas Is Ramping Up Oil and Gas Production By: Thomas Tunstall, Ph.D.

he evolution of unconventional oil and gas extraction techniques has been interesting to watch over the past few years. Even now, there are still some surprises left. Take the recent announcement by Apache Corporation, which indicated it has discovered at least 2 billion barrels of oil equivalent in a remote part of West Texas. What’s particularly noteworthy is the area had been overlooked previously by other oil and gas companies because it was believed to be unproductive. After studying what is now called the Alpine High, Steven Keenan, a former EOG Resources employee — who was part of the team that helped develop the Eagle Ford — came to the conclusion that the area had potential. Of particular interest is the claim that the Alpine High can produce natural gas for just 10 cents per thousand

No doubt, one way or another, West Texas will be producing significant amounts of oil and gas for years to come cubic feet. That is an extremely low break-even point and contrasts nicely with the going rate for natural gas at around $3 per thousand cubic feet. Of course, any such initial announcements should be taken with a grain of salt. Remember the early reports in 2012 about the Cline Shale in West Texas, just east of Midland-Odessa? It was purported to hold 30 billion barrels of recoverable oil. Since then, companies operating in the area say the results so far have been disappointing. That said, the Permian Basin has over a dozen strata of shale from which to prospect. No doubt, one way or another, West Texas will be producing significant amounts of oil and gas for years to come. Take oil production, for example, which is now poised to cross the 2 million barrel per day mark. The Eagle Ford and the Bakken have been using unconventional techniques for several years now. In comparison, the Permian Basin is really just getting started, so its full potential has barely been tapped. Consider new-well oil production per rig. In the Eagle Ford, new wells produce, on average, over 1,100 barrels per day. The next most productive region for shale oil is the Niobrara in Colorado, at right around 1,000 barrels per day on average. On a production per rig basis, the Bakken is the third most productive field, with the Permian coming in fourth place. That ranking seems likely to change in the year ahead. The use of unconventional techniques in the Permian area really only got started relatively recently. Despite that, the Permian already produces the most

SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

crude oil of any shale field in the U.S. — over 1.9 million barrels per day, twice that of the Eagle Ford. The Permian is also producing a surprising amount of natural gas. While the Marcellus in the northeast is by far the most prolific gas field in the U.S. with production running at over 17 billion cubic feet per day, the Permian ranks No. 2, producing nearly 7 billion cubic feet per day. There is one other recent development worth noting. Both OPEC and non-OPEC countries around the world continue to produce oil at near record levels, including Saudi Arabia. Traditionally, the Saudis have acted as the world’s swing producer, periodically reducing production in order to stabilize oil prices. This no longer appears to be the case. The only country that has taken any noticeable steps

The Permian already produces the most crude oil of any shale field in the U.S. — over 1.9 million barrels per day, twice that of the Eagle Ford to curb production over the past year or two has been the U.S. Once again, shale oil production has changed the global landscape. For example, there are over 5,000 drilled but uncompleted wells in the U.S. The drilling has been done, but the hydraulic fracturing process has not yet taken place. This means the wells are not producing — yet. As oil prices rise to $50 or above, these wells can be brought online and start producing in relatively short order. In essence, the U.S. has become the world’s swing oil producer.

About the author: Thomas Tunstall, Ph.D., is the Research Director at the Institute for Economic Development at the University of Texas at San Antonio. He was the principal investigator for the Economic Impact of the Eagle Ford Shale studies released in May 2012, March 2013 and September 2014, as well as the West Texas Energy Consortium Shale Study. He has published peer-reviewed articles on shale oil and gas, and has written op-ed articles for The Wall Street Journal. Dr. Tunstall has spent a significant portion of his career on overseas workforce and economic development assignments in such locations as Azerbaijan, Afghanistan, Kenya and Zambia. He holds a Ph.D. in economics and public policy and an MBA from the University of Texas at Dallas, as well as a BBA from the University of Texas at Austin.

NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

INDUSTRY

The SCOOP and the STACK KEYS TO OKLAHOMA’S ENERGY FUTURE By: Carl W. Neuhaus, Drillinginfo

ver the past year and a half, the South Central Oklahoma Oil Province (SCOOP) and Sooner Trend Anadarko Basin Canadian and Kingfisher Counties (STACK) plays in Oklahoma have quickly become some of the most prolific and popular unconventional plays in the country, second only to the Midland and Delaware Basins. Some of the biggest operators by cumulative production in the last four years include Newfield Exploration, Continental Resources, Devon Energy, XTO Energy (ExxonMobil) and Cimarex Energy. While these operators have vastly different balance sheets and the SCOOP and STACK holdings make up a different part of their overall operations; stocks for these operators have surged between 30 percent and more than 100 percent over the course of the year, illustrating the confidence the capital markets have in their assets. Smaller operators by cumulative production include Gastar Exploration, EOG Resources and Chaparral Energy, some of which have not fared as well in the current downturn despite the quality of their underlying assets. For the STACK counties (Blaine, Canadian, Kingfisher), drilling activity saw an increase from 23 active rigs on Oct. 8, 2014, to 28 rigs on Oct. 8, 2015, to 32 rigs on Oct. 6, 2016. The SCOOP counties (Caddo, Grady, Stephens, Jefferson, Love, Carter, McClain, Garvin, Murray), on the other hand, saw a decrease from 69 rigs on Oct. 8, 2014, to 28 on Oct. 8, 2015, to 15 that are currently active (as of Oct. 6, 2016). As seen in Figure 1, the drilling activity in the STACK moved from the core of the play during the period of October 2014 to October 2015, to the fringe areas, further delineating the play for the period of October 2015 to October 2016. Figure 2 shows that for the SCOOP, horizontal rigs moved farther north, concentrating on what is perceived as the core area of the play and decreasing activity in some of the currently less-economic areas.

Figure 1: Horizontal rig movement for two time periods in the STACK area.

SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

Figure 2

Incremental production over the past four years for the STACK and SCOOP counties can be seen in Figures 3 and 4. Cumulative production from the STACK counties from July 2012 through July of this year totaled over 130 million barrels of oil equivalent (MMBOE), whereas the SCOOP counties have a combined production of over 150 MMBOE over the same period of time.

Figure 3: Incremental monthly production for Blaine County (blue), Canadian County (green), and Kingfisher County (red) from July 1, 2012, to July 1, 2016 in mboe (6:1). Figure 4

While both the STACK and the SCOOP reached a relative plateau in production earlier this year, with all signs pointing to a decrease in production from those areas if activity does not pick up and prices don’t recover, there is a significant amount of drilled but uncompleted horizontal wells in both plays that will move the needle in the other direction. Figure 5 shows a total of 287 drilled but uncompleted wells (DUCs, as of Oct. 7, 2016) that were amassed over the past two years. These wells hold significant production that can and will come online when prices recover.

ability to account for it and adjust their completion and treatment design accordingly. The room for improvement is tremendous; and as operators gain more experience in these relatively new plays and optimize their development strategies for the individual formations within the plays, we can expect the STACK and SCOOP to have an impact on Oklahoma hydrocarbon production similar to the impact of the Permian Basin on production in Texas.

Figure 5: Drilled but uncompleted horizontal wells in the STACK and SCOOP areas.

To illustrate the potential production these wells hold, we can focus on the 37 STACK wells that were left uncompleted in September of this year. Generating a type curve for the STACK counties compiled from horizontal wells that were completed in the last 12 months (to make sure the completion design is representative) and have consistent production data for at least six months quickly allows us to calculate a six-month cumulative oil production of roughly 44,000 barrels per well. Extrapolating that to the 37 September DUCs, we are looking at over 1.6 million barrels of additional cumulative production over the first six months that those wells are online. In comparison, there are currently over 4,700 horizontal DUCs that hold similar production waiting to be brought online once prices recover, potentially disturbing a very sensitive supply-demand balance. Further exploring the potential production for the area, Figure 6 shows the relative performance of operators in STACK and SCOOP counties, only taking into account horizontal wells that came online between Jan. 1, 2014, and October 2016. The relative deviation from the median shows a fairly large spread, highlighting the geological variability within a county as well as the operators’

Figure 6: Performance differential between worst and best operator for STACK counties (Blaine through Kingfisher) and SCOOP counties (Caddo through Stephens).

Looking forward, activity in the STACK and SCOOP is projected to increase moderately as confidence in the viability of a stacked play grows. Drilling permit count increased from 464 horizontal permits issued in both plays in 2014 to 564 in 2015. The count for 2016 totals 384 through Q3 with an increase to 140 permits in Q3 from 115 in Q2. It is likely that the SCOOP and STACK will close out the year at close to 2015 permit levels, providing for a healthy drilling inventory going into 2017 and a slight production increase that will follow along. Assuming commodity prices remain reasonably stable and considering the financial health of some of the smaller companies active in the area, the STACK and SCOOP present an opportunity for acquisitions toward the end of the year and going into 2017. According to big acreage holders like Devon Energy and Continental Resources, break-even prices are among the lowest in the country and comparable to Midland Basin Wolfcamp wells with attractive returns at far lower prices per acre. While smaller in size and with a total resource potential that is still being assessed, the STACK and SCOOP will provide an attractive alternative to the pricey Permian Basin.

About the author: Carl W. Neuhaus is the Director of Petroleum Engineering and manages the consulting practice at Drillinginfo, the leading SaaS company empowering the oil and gas industry with the intelligence, analytics and tools to succeed in today’s challenging environment. He is responsible for planning technical and strategic consulting services in unconventional and conventional fields for operators and non-operators as well as oilfield services and financial services companies.

NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

INDUSTRY

Gazprom’s Response to U.S. LNG Exports By: Sujoyini Mandal

With the first shipment of U.S. LNG exports earlier this year, there are several speculations on how Russia, currently the world’s second-largest producer of natural gas, will respond. Analysts predict a global LNG price war, with Gazprom undercutting its prices to retain market share in Europe. While Gazprom has economic advantages over U.S. LNG exports in both European and Asian markets, there are geopolitical and financial consequences of such a strategy. Gazprom’s Economic Advantages in Europe and Asia Global LNG prices are currently low in Europe due to the impact of plunging oil prices in oil indexed contracts; declining demand in key import Asian markets like Japan, Korea and China resulting from a mix of slowing economic growth and an increasing use of alternatives (e.g., nuclear energy in Japan); and an existing supply glut in the market from Russia, Australia and Qatar. Given low LNG prices and Gazprom’s excess capacity, it can flood the European market with cheap gas and out-price U.S. exports in the short run. The excess supply is a result of 100 billion cubic meters (BCM) spare capacity of fully developed gas from the Yamal Peninsula, available for sale in Europe at low marginal cost, as well as Gazprom’s lost domestic market share to upstream competitors like Novatek and Rosneft. The second advantage is cost. The Oxford Institute for Energy Studies (OIES) estimates Gazprom’s cost to export to Europe stands at $3.5 per MMBTU (million British thermal units) as opposed to the United States’ cost at $4.3–$5 per MMBTU, making it economically disadvantageous for the U.S. to export to Europe. Additionally, the U.S. will continue to face higher production costs if it goes ahead with greenfield project development like Jordan Cove LNG and Oregon LNG, which are economically less competitive than brownfield

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projects like Sabine Pass LNG, in spite of being closer to Asian markets. Thus, while the IEA projects LNG demand to increase to 250 million metric tonnes by 2030, almost double 2012 levels, it remains to be seen if the 109 BCM of currently approved U.S. LNG capacity will match actual supply due to the increasing cost of domestic and global LNG supply glut. Gazprom has an advantage in Asian LNG markets for three main reasons. First, U.S. exports will not benefit from price arbitrage in Asia since global gas spot market prices are increasingly streamlined with the current spread less than $5 per BTU between North America and Asia. While Europe will remain as Gazprom’s prime export market, Russia’s two gas deals with China in 2014 have implications for U.S. LNG exports to Asia. Petroleum Geologist and Consultant Art Berman estimates that Russian supply will be delivered to Asia for $10–$11 per BTU, too low for American LNG exports to be profitable, since estimates put the cost for U.S. LNG prices in Asia (including landing, transportation, etc.) to be $12 per BTU. Third, Gazprom has different production sources of natural gas for European and Asian markets, with its Kovykta and Chayanda fields expected to provide feed gas for the Russia-China pipeline.

There are specific geopolitical advantages to U.S. LNG exports that are directly derived from Russia, particularly Gazprom’s decreasing leverage in its immediate neighborhood

While these developments are solely for the Chinese market, it indicates Gazprom’s independent supply source for Asia. Geopolitical Consequences A more interesting aspect perhaps is the geopolitical component. There are specific geopolitical advantages to U.S. LNG exports that are directly derived from Russia, particularly Gazprom’s decreasing leverage in its immediate neighborhood. Russia’s recent aggressive moves against Ukraine, through which Russian gas travels to Europe, will make U.S. LNG exports an important geopolitical lever. Russia is not immune to this, as evinced by Vladimir Putin’s statement in the 2015 economic summit in St. Petersburg indicating that the U.S. shale revolution is changing the world political order. At the same point, Gazprom’s spread strategy of competitive pricing might win new friends in Europe and undermine Europe’s efforts at diversifying and investing in energy efficiency due to cheap and available gas that will be hard to pass up for European consumers. Some evidence already indicates that European states (e.g., Lithuania and Ukraine) would buy cheap Russian gas. In the Far East, the RussianChinese business relationship has potential to broaden into a shared security interest in Central Asia, if Russia views China as a strategic partner rather than a competitor in the region. Thus, while there are potentially some geopolitical opportunities for Russia, there is no doubt that in the shorter term, U.S. LNG exports will negatively influence Russia’s hard and soft power in its neighborhood. Finally, there are also financial implications if Gazprom undercuts prices in Europe. First, Gazprom would have to switch to hub pricing in Europe to fully compete. Gazprom has shown flexibility in renegotiating contracts with European utilities like Eni and GDF Suez (allowing them to link 15 percent of contracted gas volumes to cheaper spot prices), indicating that Gazprom is aware that it cannot enjoy high-price premiums in the current environment. OIES also estimates that depressing shorter-term prices will result in a loss of $25–$40 billion in revenue over the next few years. More than revenue losses, which it can arguably make up longer term if it can retain market share, Gazprom has to change its marketing and business model from longerterm oil-indexed contacts to increasingly hub-based contracts. This may not be completely new as Gazprom’s changing business strategy since 2012 includes supplementing wholesale customers in Europe with retail customers and diversifying its methods of distribution by supplementing its existing pipelines with LNG. But it remains to be seen if Gazprom is prepared to make the shorter-term hard choices for longer-term benefits.

While Gazprom has economic advantages over U.S. LNG exports in both European and Asian markets, there are geopolitical and financial consequences of such a strategy

About the author: Sujoyini (Joyi) Mandal holds a master’s in public policy from the Harvard Kennedy School. She was a Consultant at the World Bank in Washington, D.C., and for various government projects in Asia and West Africa. Mandal currently works as a Management Consultant in New York. Views expressed by the author are completely her own.

RethinkFLARING connect. share ideas. discuss. SHALE Oil & Gas Business Magazine is an industry publication that showcases the significance of the South Texas petroleum and energy markets. SHALE’s mission is to promote economic growth and business opportunity that connect regional businesses with oil and gas companies. It supports market growth through promoting industry education and policy, and it’s content includes particular insight into the Eagle Ford Shale development and the businesses involved. Shale’s distribution includes industry leaders and businesses, services workers and entrepreneurs.

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INDUSTRY

Technology Has Transformed the Energy Industry By: Jamie Bobbitt, WEN

here has never been a more compelling case for an industry to reinvent itself than there is for the oil and gas industry right now. After weathering changes in response to the drastic decrease in oil pricing through difficult resource-planning decisions and transactional plays, we must now look at how to proactively rejuvinate our organizations and design them for resiliency in the future. The key to transforming the industry is through technology and innovation. The Women’s Energy Network (WEN) recognizes the importance of technology and innovation, and has strategically planned technical topics at WEN luncheons and industry partnership events that focus on these emerging changes this year. WEN’s programs have included topics such as “How Cyber Security Is Changing the Role of the CIO With the Board,” a discussion by Maria O’Neill; and “Harness the Digital Evolution in Oil and Gas,” a discussion led by Soumya Seetharam. Additionally, the organization hosted a WEN/GE partnership breakfast at the 2016 Offshore Technology Conference that focused on innovation in unlikely places. With the addition of technology experts and imminent changes to the challenges faced by industry leaders, members have the opportunity to share their knowledge and experience through formal and informal discussions, driving innovation from within the WEN community. Technology connects the activities of an organization similar to the way that blood flows

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through the veins of the human body, providing function from one muscle to the next. It adjoins operational tasks through the collection and analysis of data, informing the next task of

Technology connects the activities of an organization similar to the way that blood flows through the veins of the human body, providing function from one muscle to the next

what, when or how to proceed. Among the earliest technology in oil and gas was the oil well itself, followed in time by a remarkable

flow of innovations, such as horizontal drilling, hydraulic fracturing and offshore drilling. Technology allows us to do more faster and better. Computing systems enable our communications, our reporting and our advanced understanding of our opportunities and risks. They make our operations more predictable, and they do so at the speed of our own networks. In this way, technology runs all traffic to and from the very heart of our organizations, our industries and the actual energy of the earth. Predictability and continuity are hugely important to the work we do each day. Predictability saves money by applying precision to our estimation of pinpoint drilling locations, resource needs, equipment durability and ranges in which we can minimize risk. Continuity is provided to us through availability of networks and the very information captured in our data. It means the avoidance of a costly shutdown or disconnection. Certain technologies enable predictability and continuity in ways we didn’t have available to us in the past. And with that, our future of cost saving lies in wait. The opportunities to support innovation and advanced technology as a career are wide open, reaffirming the broad set of skills that are needed in oil and gas. WEN’s STEM programs encourage curiosity and enthusiasm for pursuing a career in science, technology, engineering and math to an audience of young girls to collegiate candidates who will enter the workforce prepared to innovate and bring our industries to greater heights. “WEN prides itself in being a premier organization that inspires and empowers the next generation of innovators and thought leaders, by ensuring students have access to STEM programming,” says Tomira Eason, President of the Houston chapter. “Our goal is to leverage the experience of high-caliber women leaders in the energy industry to fuel confidence amongst the young females and encourage them to seek opportunities in STEM-related careers.” WEN hosts events to pass the torch to a next generation of brilliant leaders in energy. In addition, with 13 chapters nationwide and a growing interest around the globe, WEN holds frequent events for working professionals dedicated to industry focus and networking, including a biannual conference — the next of which is coming April 26–28, 2017, in Houston. Count on an agenda including panelists at the forefront of technology and innovation, in alignment with the event’s theme, Energy Resilience: Refueling Innovation.

For more information about participating with your local WEN chapter, or to begin a new chapter in your part of the world, visit womensenergynetwork.org.

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POLICY

Big Data, Better Government By: Sen. Carlos I. Uresti

“Big data” is the sort of buzzword thrown around so frequently that it sometimes seems devoid of real meaning. We’ve heard, for example, that data analytics will be able to do everything from predicting hurricanes to stopping the flu. Yet even when brushing off the hype, big data — or the collection and analysis of large amounts of information — has the potential to be a big deal. Increasingly, the potential of big data is being realized in the public sector. The applications are broad: everything from spotting payroll errors and streamlining duplicative processes to automatically reorganizing inefficient IT systems. With further advanced analytics, big data could also provide a way to manage government regulation. A big data regulatory system could help state and federal agencies issue regulations that are cost-efficient. Overall, a government regulation must save more money or prevent more harm than the costs of implementation. To determine this, difficult decisions must be made. For example, when designing environmental and safety regulations, a monetary value is assigned to a human life: The Environmental Protection Agency says $9.1 million, while the Food and Drug Administration says $7.9 million. While grim, imposing a large cost on the economy while doing relatively little good indirectly leads to deaths through economic externalities, such as lack of access to healthcare through unemployment. One can quickly see how regulatory calculations can become a convoluted process of assigning values and justifying one’s calculations. These technical arguments

often end up becoming legal ones, as happened when the EPA was taken to the Supreme Court for imposing regulations on toxic mercury from coal power plants. This exceedingly complicated math is open to multiple interpretations — leaving uncertainty on the location of the regulatory sweet spot of cost-efficiency. To improve this process, big data analytics could provide the underpinnings of more precise and less invasive regulations, which would maximize both public safety and economic growth. This is especially applicable in oil and gas regulation. Numerous scientific studies have concluded that the drilling of disposal wells can cause small earthquakes, yet the specific correlations remain vague. Disposal wells attempt to provide a means of sequestering produced waste, essentially comprised of water and the chemicals used to produce the well. Oftentimes the water being sequestered is from areas where there are already longterm issues of aquifer sustainability or water

cause wider problems. This would result in less cost to the industry as well as less cost to the public. Of course, these sorts of scientific surveys are currently the realm of academics, and the magnitude of these correlations remains hotly disputed — which implies that big data analytics are not quite at the point of producing the sort of concrete conclusions that would be the basis for complex rule-making. Yet the potential is there. The federal government is already exploring possible public uses of big data analytics. In 2011, the White House formed the Big Data Senior Steering Group to explore ways that big data analytics could fuel economic growth and improve government efficiency. There has been a major push, especially with tighter budgets, to make better use of analytics. Right now, the majority of federal agencies are using big data analytics to either increase security or efficiency — and mostly by hiring outside consultants to conduct reviews.

The federal government is already exploring possible public uses of big data analytics availability. This larger problem led Montana to institute a recycling requirement for fracking fluid instead of using injection wells — a policy objected to by the industry as too expensive. An alternative big data approach would instead collect a statewide data set combining earthquake frequency, aquifer health, quantity of liquid waste disposal, terrain and other factors. A skilled data analysis team could then craft algorithms to determine how these variables are related and how to efficiently reduce the frequency of earthquakes and protect groundwater. Instead of a blanket prohibition of disposal wells, the new solution could be a wider geographic dispersion of waste disposal or a limited mandate of recycling above thresholds that are likely to

Difficulties have emerged due to the shortage of talent available to government agencies. Essentially, big data experts are hard to find, and the best of the best are already working in the private sector. As more students train for these in-demand jobs, we may see this supply shortage lessen in severity. Given that the public sector represents over 40 percent of U.S. GDP, even small widespread improvements in efficiency have ripple effects that benefit everyone. Going forward, I would like Texas to watch the experiences, successes and failures in federal uses of big data. States, as the laboratories of democracy, should be on the lookout for new ways to adapt to the 21stcentury advancements in computing, analytics and logistics.

About the author: Sen. Carlos I. Uresti represents Senate District 19, which covers more than 35,000 square miles and contains all or part of 17 counties with more than 23,000 producing oil and gas wells. He is the only Senator who represents both the Eagle Ford Shale and Permian Basin. Sen. Uresti serves on the Natural Resources & Economic Development Committee and the Finance Committee, and is the first Senator from San Antonio to serve on the Legislative Budget Board.

SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

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POLICY

Anti-Fracing Lessons From Colorado By: Simon Lomax

nyone with an interest in oil and natural gas development has been watching the state of Colorado very closely for the past several years. Starting in 2012, national environmental groups ran several successful local “ban fracing” campaigns in Colorado and have threatened a series of constitutional amendments to drive oil and gas development out of the state completely. In 2014 and again this year, the activists claimed they were ready, willing and able to put their anti-fracing agenda on the statewide ballot by gathering tens of thousands of signatures from Colorado voters. And yet, on both occasions, the promised campaigns never materialized. The activists backed down in 2014, and this year they simply failed to gather the 98,492 signatures needed to propose an amendment to the state constitution. If history is any guide, Colorado’s antifracing campaign will be back again. Only time will tell what the rebooted campaign looks like, of course. But some lessons from the recent past can provide some idea of what to expect.

Needless to say, the huge difference between the talking points of the activists and the findings of state public health officials in Colorado is a big problem for the anti-fracing campaign

Not Local, National Ever since the 2010 collapse of carbon cap-and-trade legislation in Congress, many environmental groups have shifted their focus from Washington, D.C., to the state and local level. One of their biggest victories took place in New York, where shale gas development was banned in 2014 before it had the chance to start. But the activists have had a much tougher time shutting down development in states that already produce oil and gas, which is the kind of victory that would really turn heads in the nation’s capital. After New York, Colorado is an appealing target for a few reasons. It has a long history of oil and gas development, and according to the Energy Information Administration, it’s the seventh-largest energy producing state in the nation. The state’s population has been growing at an impressive rate thanks to inward migration from other states. This has resulted in major growth in and

around Denver and two college towns in northern Colorado, Boulder and Fort Collins. And the suburbs of these three cities have been growing into one of the state’s longestablished energy producing regions: the Denver-Julesburg Basin. Environmental activists seized on this situation by staging a series of local “ban fracing” campaigns in communities along the western edge of the DJ Basin. From 2012 to 2014, there were six campaigns and the activists won five of them. These campaigns were heavily supported by a national antifracing group called Food & Water Watch, also a key player in the New York fracing ban. But the campaigns were presented to the public as spontaneous and grass-roots efforts. The drumbeat for a statewide anti-fracing

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campaign began. And yet, the activists had a problem. As more national groups rushed into the fray — 350.org, Sierra Club, Greenpeace and others — they failed to broaden their support base inside Colorado. In 2014, the best they could manage was a loose partnership with Democratic Rep. Jared Polis, a millionaire and lawmaker with a lengthy track record of working with national antifracing groups. But Polis later withdrew two anti-fracing ballot measures under enormous pressure from other Democrats, who feared they would spell electoral disaster for the party. This year, the problem is the same, only worse. More than 85 percent of the financial and in-kind contributions to the statewide anti-fracing campaign came from East Coast and West Coast environmental groups, and the signature-gathering drive was led by the national activist organizations 350.org, Food & Water Watch and Greenpeace, according to records kept by the Colorado Secretary of State’s office. Going into 2017 and 2018, this problem is likely to persist. After four years of campaigning, Colorado’s anti-fracing movement still depends almost completely on national environmental groups to function. Unless this changes, the campaign’s effectiveness will be significantly limited. The Activists Won’t Be Appeased Environmental groups are an important — and growing — constituency for the Democratic Party. And yet, in Colorado, antifracing activists have spent four years attacking an oil and gas regulatory structure that was created almost exclusively by Democrats. Oil and gas regulations have been dramatically tightened in Colorado over the past decade, first under Gov. Bill Ritter and then under Gov. John Hickenlooper, both Democrats. For most of that time, Democrats have controlled the state legislature, too. In practical terms, environmental groups could not have asked for more access to state government and influence over oil and gas

policy in Colorado during the past decade. But the rhetoric from opponents of the oil and gas industry suggests exactly the opposite. Polis, the Congressman and millionaire backer of the 2014 ballot initiatives, has said the oil and gas rules developed under two Democratic governors lack “any meaningful protections for homeowners or communities.” Meanwhile, the anti-fracing committee formed to promote this year’s ballot measures said in a statement that “[fracing] is dangerous to the health and safety of the state’s residents.” After the failure of those measures to make the ballot, the national “ban fracing” groups will almost certainly turn their attention to the Colorado Legislature next year. Some lawmakers, no doubt, will argue that new laws or regulations will address the concerns of the activists and prevent a future ballot-measure fight. But the record tells a very different story. No matter how stringent the laws and regulations, if they allow oil and gas development to continue, the activists will not be appeased. Health Claims Don’t Match the Facts

SUPERIOR SERVICE, SUPERIOR PRODUCTS, SUPERIOR RESULTS The highest level of service providing the lowest cost of operation.

If history is any guide, Colorado’s anti-fracing campaign will be back again

Perhaps the most important lesson from the Colorado experience relates to public health. Through the years, national anti-fracing groups have made a series of alarming health claims, from asthma rates to cancer risks to birth defects. But state health officials have consistently fact-checked those claims against the data and reached very different conclusions. “We don’t see anything to be concerned with at this point in time,” Dr. Larry Wolk, Executive Director and Chief Medical Officer of the Colorado Department of Public Health and Environment, recently told the Greeley Tribune. “[The data] says that there’s no reason to believe that there is a causal relationship between oil and gas operations and chronic diseases or cancers,” he said. Needless to say, the huge difference between the talking points of the activists and the findings of state public health officials in Colorado is a big problem for the anti-fracing campaign. It undermines the credibility of that campaign in a serious and fundamental way. These aren’t the only lessons to be learned from Colorado’s experience with anti-fracing campaigns, of course. But if you are concerned about what the activists will do next, in Colorado and possibly in other states, they are a good place to start.

About the author: Simon Lomax is a Managing Director with FTI Consulting in Denver. He advises pro-business groups and holds an adjunct position with the Independence Institute, a free market think tank. Before going into advocacy, he was a news reporter for 15 years and covered energy policy for Bloomberg News and Argus Media. The views expressed are his own. Contact him at simon.lomax@ fticonsulting.com.

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POLICY

The Texas Railroad Commission Must Be Reauthorized in Name and in Function By: David Blackmon

When the Texas Legislature meets in January 2017, it will, for the third time in four sessions, take up the Sunset review process for the Texas Railroad Commission (RRC). For those unfamiliar with the Sunset system, the government of Texas is managed by a set of commissions that are authorized by the legislature for 12-year terms. At the end of 12 years, the legislature must review each commission’s functionality and determine whether to reauthorize it for another term or “sunset” it and assign its functions to other state commissions. For the RRC, 2011 was originally going to be the session during which its 12-year future would be decided. But that session saw a big controversy erupt over whether to continue the RRC’s current structure of three commissioners elected to staggered six-year terms or change it to a single elected commissioner — the so-called “three-to-one” proposal. The House and Senate were unable to reach an agreement prior to the end of the session that year; and, working with Gov. Perry, a decision was reached to kick the can down the road by reauthorizing the RRC, but only for two years. Two years later, everyone agreed to leave the whole three-to-one thing on the sidelines, but the 2013 session of the legislature was again left at an impasse over several other proposed changes to the RRC’s functionality that were offered by various sponsors. Again, a decision was reached at the end of the session to reauthorize, this time for four years. So here we are again, with the prospect of Sunset looming over the state agency where the vast majority of the state government’s knowledge about the oil and gas industry is housed. When one considers that the Texas oil and gas industry produces (per the Energy Information Administration) roughly 30 percent of all the oil and 27 percent of all the natural gas produced in the entire country, the importance of

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the RRC’s regulatory activities becomes obvious. This time around looks more promising, though a couple of points of potential controversy remain, thanks to recommendations made by representatives of the Texas Sunset Commission in August. The first is a proposal that would transfer the RRC’s responsibility to conduct contested case hearings to the State Office of Administrative Hearings (SOAH). The other is a proposal to change the RRC’s name to one that is more descriptive of what it actually does. Both ideas — which were also proposed in 2011 and 2013 — are bad ideas. I’ll explain why. First, the SOAH proposal. There is nothing wrong with the SOAH. It is a fine agency populated by fine people who work hard for the state of Texas and generally make good decisions. So nothing I write

Oil and gas is a very arcane, very intricate, very unique area of knowledge, and no two cases that are considered by the hearings officers at the RRC are the same

here should in any way be taken as a disparaging remark on the agency or its employees. That being said, there isn’t a shred of oil and gasrelated knowledge within the offices of the SOAH. Oil and gas is a very arcane, very intricate, very unique area of knowledge, and no two cases that are considered by the hearings officers at the RRC are the same. Look at it this way: I’ve had a 37-year career in and around the oil and gas industry, and I learn something new about the business each and every day. It is an industry in which technology constantly advances. One with constantly evolving contractual arrangements; thousands of operators, pipeline companies, midstream companies and refiners

often go into the voting booth thinking that when they vote for Joe Blow to be their next Railroad Commissioner, they do so in the belief that he will do a bang-up job of regulating the railroads for the next six years. But there are a couple of reasons why making this name change at this particular time makes no sense at all from a practical standpoint. First is the cost: The estimate from the Legislative Budget Board is that changing the name of the RRC would cost something in the range of $700,000. This estimate is low — absurdly low, in my opinion. Now this is just my opinion, but it’s a highly educated one. For starters, the cost of changing letterhead, other stationery and business cards alone would have to

So here we are again, with the prospect of Sunset looming over the state agency where the vast majority of the state government’s knowledge about the oil and gas industry is housed as participants; and hundreds of thousands of landowners and millions of royalty owners, every one of whom can be affected by the decisions made in almost any case that comes before the RRC. Because of all of these factors, it is absolutely critical that the officials who hear contested cases related to this complex and massive industry possess a highly specialized knowledge of it. The thought that responsibility for hearing and deciding such cases can simply be passed off to hearings officers who are also responsible for awarding doctor’s and beautician’s licenses is so bizarre that it is really hard to see why and how it keeps coming up as a Sunset Commission recommendation. As mentioned previously, the great preponderance of the specialized oil and gas knowledge in Texas state government is housed at the Texas Railroad Commission, and that is where these hearings need to continue to be conducted. Then there’s the name change, a proposal that at least makes sense from a logical standpoint, if not from a practical one. It makes logical sense because the Railroad Commission does not regulate railroads in Texas, and it hasn’t for a very long time now. It also makes logical sense because so many Texans simply do not understand that the Railroad Commission regulates the oil and gas industry. Thus, when a citizen has a complaint about something happening on their property related to oil and gas development, they often have no idea who to call about it. Voters

come to six figures. Then you’d have the cost of changing all the signage in Austin and at all RRC offices around the state. You’d also have the cost of changing legal documents. Finally, you’d have the cost — no doubt spread over many years — of changing the name of every single Railroad Commission sign that must be posted at every well site, drill site, compressor station, natural gas processing station, refinery and other oilfield-related site in the entire state of Texas, which, in case no one has told you, is a very big place. There are not just thousands, not just tens of thousands, but well over 100,000 such signs posted in thousands of locations around the state. The cost of changing out those posted signs alone would be quite large. And if you’re not planning on changing out each and every one of those signs, then isn’t that going to defeat the entire purpose of changing the name in the first place? After all, if you leave thousands of “Texas Railroad Commission” signs posted at thousands of locations all over God’s country (that would be Texas), then isn’t confusion still going to reign? It’s time for the Sunset Commission — and the Texas Legislature — to get serious and do the responsible thing here. It’s time to reject these senseless proposals and reauthorize the Texas Railroad Commission to regulate the state oil and gas industry for another 12 years. Nothing else makes any sense at all.

About the author: David Blackmon is Associate Editor for Oil and Gas for SHALE Magazine. He previously spent 37 years in the oil and natural gas industry in a variety of roles, the last 22 years engaged in public policy issues at the state and national levels. Contact David Blackmon at david.blackmon@shalemag.com.

NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

BUSINESS

Ways to Lower Pressure and Noise in Your Office

By: Alex Charfen

very year I speak to thousands of entrepreneurs about growth and scale strategies, transformational leadership, building a team and creating a performance culture. But there’s one topic that draws more questions than the rest: how to lower Pressure and Noise.

Noise anywhere lowers it everywhere. And where do entrepreneurs spend the majority of their time? Their office or workplace. So here are five ways you can keep Pressure and Noise to a minimum every day.

When it comes to Pressure and Noise, entrepreneurs feel it more than most, even if they haven’t found the words to express it

Entrepreneurs and business leaders in general are often pulled in multiple directions between relationships, responsibilities, business challenges, money issues, health problems and the commitments of everyday life. When these become overwhelming, they create what I call Pressure and Noise, which make it extremely difficult for people to focus on what they’ve set out to accomplish each day. When it comes to Pressure and Noise, entrepreneurs feel it more than most, even if they haven’t found the words to express it. That’s why talking about it, giving it a name and addressing it is so important. It’s been my experience that lowering Pressure and

SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

2. Walk Movement is an excellent tool for combating Pressure and Noise. Every morning, I start the day with a 20-minute walk (personally, I wear minimalist shoes and walk on natural terrain). This wakes the body up, pumps dopamine into your system and increases alertness. Walks also serve as an excellent “reset” throughout the day. Studies have shown that a quick walk in nature actually boosts positive thought and improves mood, which significantly lowers Pressure and Noise. 3. Minimize Blue Light This one’s a little unexpected, but most people underestimate the damage that prolonged exposure to computer and phone screens can do to our eyes. While natural blue light is good for you, hours of gazing at screens that emit artificial blue light has been proven to

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1. Focus on Daily Planning and Solitude Do you feel lost during the day? Do you forget what you’re doing or have trouble getting everything done? I used to feel the same way … often. And that ambiguity led to high levels of Pressure and Noise. But you don’t have to go through the day like this. That feeling of uncertainty can be eliminated with intention. Every morning, try setting aside some time to review your calendar and commitments, write out your intention for that day, and make a list of what you want to accomplish. This doesn’t have to be a long process (it takes me less than 20 minutes), but it will have a huge impact on your confidence and the amount you’re able to achieve in a day.

affect serotonin levels and circadian rhythm, as well as cause eye strain throughout the day. According to The Vision Council, 75 percent of U.S. adults who use multiple digital devices have reported symptoms of eye strain. To minimize the Pressure and Noise that this blue light can have on your health and productivity, I recommend limiting use of digital screens early in the morning and before bedtime. In addition, some smartphones and other digital devices allow you to adjust the settings to limit blue-light emissions. I also wear blue-blocking glasses while I’m at the office to keep my eyes rested and protected. This way, my eyes feel more relaxed, I don’t get headaches and I can use digital devices later in the evening without having trouble falling asleep.

Opening Doors in San Antonio Since 1974

4. Wear Comfortable Clothes It may seem like a little thing, but ties, suits and dress shirts for men, and high heels, suit jackets and pencil skirts for women can cause you to become uncomfortable throughout the day. This kind of incremental Pressure and Noise can affect your performance, focus and energy as the day progresses. If you have the option, work in whatever clothing makes you most comfortable. At my office, I fully advocate for function over fashion. My team members are encouraged to wear whatever they’re comfortable in, because I want them to focus all their energy on doing quality work rather than being distracted by discomfort.

Once lowering Pressure and Noise becomes a priority, you’ll find that your days start to become easier and less constraining, as well as more focused and productive

5. Meditate Meditation is a vital aspect of staying calm and present in the office. The more you can train your brain, the better you can actively lower Pressure and Noise in the moment. I’ve spoken to a lot of entrepreneurs who have trouble with meditation and think it’s a waste of time (I was actually one of them). But making a concerted effort to breathe, focus and relax your mind is one of the most helpful things you can do to lower Pressure and Noise. For me, and for many entrepreneurs, meditation can be difficult to get into because there’s no scoreboard (and I’m competitive). I like to be able to track my progress whenever possible, so I use a Muse headband that provides instant biofeedback on your level of calmness during meditation.

KING REALTORS is dedicated to helping San Antonio and the oil industry with their real estate needs. If you are looking to buy or sell a property, call us and say you saw it in SHALE Magazine!

Once lowering Pressure and Noise becomes a priority, you’ll find that your days start to become easier and less constraining, as well as more focused and productive. You will begin to limit what you tolerate each day, freeing yourself up for the activities that give you momentum.

TABITHA KING 210.414.4255 About the author: Alex Charfen is co-founder and CEO of CHARFEN, a training, education and consulting organization for entrepreneurs and small businesses. For more information, visit www.charfen.com.

5600 Broadway Avenue • San Antonio, TX 78209 KingRealtors.com tabitha@kingrealtors.com NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

BUSINESS

An Unexpected Key to a Cutting-Edge Tech Career: Community Service FEMALE FOUNDER AND JUNIOR LEAGUE MEMBER TURNS A PERSONAL PASSION INTO A PROFESSIONAL FOCUS. By: Christy Luquire

ompany culture is one of the pillars of success at any organization. Yet with thousands of decisions, such as how best to organize departments, fund research and development, and field leads each year, the values that contribute to a strong company culture often don’t make it past an organization’s mission statement. As a longtime member of the Junior League, first in New Orleans and now in Houston, being actively involved in community service has always played a large a role in my life. So when it came time to found a tech company, my business partners and I structured our organization to integrate community service into our weekly routine, which has contributed to the company’s continued success in a number of ways. When we founded Lucid, a venture-backed software company, we made a conscious decision to make community service a fundamental element of the company, designing a program that would both encourage

Structuring a company around community service has provided numerous benefits for our organization, staff and the community and allow our employees to get involved on a number of levels. Lucid is based in New Orleans, a city that was devastated by Hurricane Katrina. When Lucid began in 2010, the city was still heavily rebuilding, a community cause that we adopted as one of our core volunteer programs. Choosing a cause so closely tied to our city immediately engaged our employees and instilled a company mentality of giving back to the community. At Lucid, we offer more formal community days, where a large portion of our company volunteers for a half day or more at an organized project, such as the local animal shelter. We also open up our offices regularly for various tech-related service initiatives, such as teaching women to code and other specialized skills our tech team can offer our community.

Outside of these organized company events and projects, our leadership encourages our employees to get involved with a cause they are passionate about and to take time (away from the office) to volunteer in the community. Finally, multiple employees have been involved in various capacities mentoring other local start-ups through several incubator and accelerator programs. Structuring a company around community service has provided numerous benefits for our organization, staff and the community. These benefits include increased networking opportunities for employees, attracting and retaining stronger local talent, creating a visible presence that helped brand awareness, and forming a stronger connection to the community, which continues to create a happier company culture.

About the author: Christy Luquire is an active angel investor, member of the Houston Angel Network and a general partner in the Texas Halo Fund. Luquire co-founded Lucid, a venture-backed software company based in New Orleans, and served for five years as its CFO. She holds a BS in engineering from Duke University and an MBA from The Wharton School of the University of Pennsylvania. Luquire has been a member of the Junior League since 2009, and she currently volunteers as a CPR instructor and serves on the Junior League of Houston’s Finance Council.

SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

Redefining

Continuous Technology is the way STEP Energy Services is redefining coiled tubing. Our purpose-built technology is capable of servicing wells at record breaking depths, more efficiently and safer than ever before. Through job optimization and real-time data monitoring, STEP delivers collaborative solutions which ultimately save our clients time and money. We listen to our clients’ needs and execute on our commitments every time. We are redefining CT and redefining the industry. Coiled Tubing • Fluid and N2 Pumping Services

stepenergyservices.com 800-349-0921 NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

COMMUNITY

BHP Billiton Donates $14 Million to Protect Rivers and Forestlands in Texas and Arkansas Special to SHALE

his fall, BHP Billiton announced that it had joined forces with The Nature Conservancy to establish the joint Sustainable Rivers and Forests Initiative. The conservation initiative has led to the protection of nearly 3,700 acres of critical riverfront property and forestland in Texas and Arkansas. The program was funded by a $14 million donation from BHP Billiton and has helped The Nature Conservancy renew conservation efforts near Houston, the fastest growing metropolitan area in the United States. It will also enable nearly a dozen restoration and waterquality improvement projects to benefit drinking water, fish habitats and rare species in Arkansas. “BHP Billiton is excited to partner with The Nature Conservancy on this critical conservation initiative. We look beyond our operations to identify opportunities that enhance the resilience of our natural environment because we recognize that watershed protection through critical habitat conservation has a far-reaching impact,” says Steve Pastor, President of Petroleum Operations at BHP Billiton. The idea for the initiative came about in 2013, when the company approached The Nature Conservancy to discuss how it could make a lasting commitment to conservation in the two states. The selected sites, Texas' Columbia Bottomlands and Arkansas’ Greers Ferry Lake watershed, were natural choices. Both areas are considered national conservation

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priorities and are sites where conservation work will benefit both people and nature. “For decades, The Nature Conservancy has recognized that the private sector has an important role to play in advancing conservation,” says Laura Huffman, Texas State Director for The Nature Conservancy. “We applaud BHP Billiton’s leadership

migratory bird stopovers in North America, supporting more than 200 species of birds. In Arkansas, BHP Billiton’s investment enabled the Conservancy to purchase 1,840 acres along the upper Little Red River. Located in the scenic Ozark Mountains, Arkansas’ upper Little Red River is home to more than 80 native fish and aquatic species. The river also supports Arkansas’ robust tourism industry and is a tributary of Greers Ferry Lake, a source of drinking water for more than 150,000 people and a recreational area for millions. “The health of Arkansas’ rivers, lakes and streams [is]

The program was funded by a $14 million donation from BHP Billiton and has helped The Nature Conservancy renew conservation efforts near Houston, the fastest growing metropolitan area in the United States for pursuing conservation as a business strategy and for a level of investment that will make a lasting difference in both states. We have a shared commitment to improving our communities and protecting the natural systems that we all depend on.” In Texas alone, The Nature Conservancy has purchased close to 1,900 acres of forestland on the Brazos and San Bernard rivers, in a region southwest of Houston known as the Columbia Bottomlands. The Columbia Bottomlands are one of the largest and most important

dependent on good water quality,” says Scott Simon, Arkansas State Director for The Nature Conservancy. “BHP Billiton’s investment will play a critical role in shaping the future of Greers Ferry Lake and the rivers that feed it, not only through the initial land purchases, but through the planned water-quality improvement projects in the watershed.” The initiative will fund almost a dozen water-quality improvement projects ranging from reforestation and stream restoration to unpaved road improvement, which will ultimately serve as demonstration sites. The properties will also offer people from neighboring cities and communities, researchers, partner organizations and schools opportunities to spend time in nature and learn about conservation in important landscapes. “These investments in Arkansas and Texas provide benefits that will outlast our operations for generations to come,” says Pastor.

To learn more about community and sustainability efforts at BHP Billiton, visit www.bhpbilliton.com/society/communitynews.

SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

COMMUNITY

ConocoPhillips Drilling and Completions Scholarship Golf Tournament

nvesting in future generations and in the communities where it operates is a fundamental value for ConocoPhillips employees. On Oct. 21, ConocoPhillips hosted its third annual Drilling and Completions Scholarship Golf Tournament at the River Bend Golf Club in Floresville to raise scholarship funds for local graduating seniors. This year’s tournament raised over $63,000, and, to date, participants and sponsors from ConocoPhillips and various service partners have contributed almost $240,000 to the Drilling and Completions Legacy Scholarship endowment. “Being able to contribute to the community that gives so much to us allows for a continuing partnership. ConocoPhillips is proud to partner with Kenedy ISD and [support] our future leaders, while providing a forum for greater interaction is a win for all involved,” says Seth Crissman, Manager of Drilling and Completions. Kenedy ISD graduating seniors are encouraged to apply for the ConocoPhillips Drilling and Completions Legacy Scholarships to be awarded in 2017. Please contact Kenedy High School for more information and to apply.

Members of this year’s committee are pictured left to right: Derek Middleton, Levi Coon, Jessica Garza, Phil Taylor, Seth Crissman

SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

LIFESTYLE

Artisans Restaurant Eclectic French Cuisine Special to SHALE

n 2010, Chef-Owner Jacques Fox collaborated with David and Sylvain Denis to develop the innovative French dining experience of Artisans Restaurant, where dining is a passionate art form quickly becoming a tradition. Its signature dishes include Le Foie Gras, Les Noix de Saint-Jacques, Le Filet de Boeuf au Poivre and Le Poisson du Pacifique. Artisans Restaurant offers innovative and eclectic French cuisine, focusing on creative dishes using fresh market gastronomic products and original combinations of spices and seasonings. Located in the heart of Houston’s Midtown area, the restaurant delivers an authentic French dining experience to food connoisseurs of all age groups. From the intimate 28-seat Table du Chef — which offers front-row dining and up close and personal views of the lively open kitchen — to the mezzanine-level tables and more intimate Fleurs-de-Lis banquettes, the elegant ambience offers a distinctive dining experience for dinner dates, business lunches and events for all occasions. The menu is classic yet innovative; the décor is distinctive and elegant; and the servers are gracious and professional.

SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

Private Dining Rooms The Medieval Room I seats up to 12, and the Medieval Room II seats up to 10. When combined, the Medieval Rooms will seat up to 28. These spaces evoke the intimate, hidden charm of a private dining room or inner sanctum of a grand estate. With woodpaneled walls and low ceilings, over-sized farmhouse tables and the soft glow of custom chandeliers, this is the perfect

PHOTOS COURTESY OF ARTISANS RESTAURANT

The culinary staff, under Fox’s leadership, delivers unparalleled French cuisine. When you walk in, you feel like you are entering an upscale Manhattan bistro. The vast, open kitchen is striking, and you can see everything going on inside. The architecture and design of Artisans are outstanding. Large glass windows frame the interior scene so attractively that passersby are intrigued to come inside. Artisans’ walls have been built out to form curves instead of angles. The rustic iron handles that run up and down the doors are all custom-made. Hardwood features can be found throughout the restaurant, from the wall design in the private dining room to the dozens of cabinets that run above the kitchen and the bar area. The restaurant, with its unique décor and ambiance, offers private dining rooms designed to create a memorable experience for groups of all sizes.

Artisans Restaurant offers innovative and eclectic French cuisine, focusing on creative dishes using fresh market gastronomic products and original combinations of spices and seasonings setting for intimate gatherings and special occasions. The padded chairs offer the ultimate in comfort, and the one-way glass window provides an up-close-and-personal view of the kitchen as the artisans craft your meal. La Veranda seats up to 14. Behind the fleur-de-lis frosted glass panels lies a hidden wine cellar and a sophisticated French setting. The newly remodeled La Veranda features one full wall of wine bottles displayed in a custom-fitted wine rack crafted from premium woods. The stained concrete floors and cavernous ceilings lend themselves to Old World flavor and ambiance. Planners can choose from one long farmhouse table or two smaller 60-inch rounds. Tufted black leather chairs, attentive service and the finest in French cuisine will ensure your event is a success. Le Salon is the room for your grandest events and seats up to 80. An innovative moveable wall makes this room smaller, as needed, so that all events feel perfectly sized for the space. Artisans Restaurant’s Director of Group Sales will assist you in determining the right number of round and square tables, ensuring that each guest experiences the ultimate in sophisticated dining. Guests experience first-class service in this room, as it features a separate, dedicated kitchen — set apart from the restaurant’s regular diners.

Artisans Restaurant is located at 3201 Louisiana St., Houston. For more information or to make a reservation, visit www.artisansrestaurant.com or contact Michele Payne at michele@artisansrestaurant.com or 713.529.9111. NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

LIFESTYLE

EDITOR’S PICK:

A Hotel With History and Hospitality By: Lauren Guerra

the company open during hard times, such as Prohibition. She switched over operations to auto repair and dry cleaning, and had the brewery making “near beer,” bottling soft drinks, and making ice cream to survive. Walking into the hotel, you can see the history that has been preserved. As soon as you enter the building, you’ll observe original machinery preserved in the lobby. The walls and floors echo the originality

the hotel. Indeed, this is not your cookiecutter establishment. A room I thoroughly enjoyed was the guest library. Not only is the architecture simply stunning, the selection is eclectic and farreaching. My visit to Hotel Emma was supposed to be a staycation for my husband and me. But when my babysitter fell through at the last moment, an event every parent comes across from time to time, plans changed. I wanted to

Ultimately, there is a Southern charm to Hotel Emma that really makes you love being here and authenticity of the location. Everywhere you look in the common areas, you’ll find refurbished materials from the original brewhouse. The Sternewirth bar, for instance, hosts large brewing containers that have been repurposed and filled with comfy couches for an intimate gathering place. You’ll also find locally sourced items and antiques throughout

PHOTO BY NICOLE FRANZEN

an Antonio has not always been recognized as a prime travel destination. But the city has really stepped up to the plate to compete with its very popular neighbor to the north, Austin. You may be surprised to learn that San Antonio was voted by Budget Travel as the second best travel destination in the world. Yes, you read that correctly. The first-place spot went to Iceland, certainly a worldly, and expensive, destination. But who would have thought San Antonio would follow this extravagant location. San Antonio is also one of only four U.S. cities on Budget Travel’s list of best travel destinations of 2016. I was surprised by both these designations; but upon visiting Hotel Emma, I started to see how much San Antonio has to offer. Hotel Emma is full of history. Originally the well-known Pearl Brewery, the Pearl is now a local destination on its own. Whether you are looking for a delicious cup of coffee, authentic boutiques, an apartment to rent, a nationally recognized culinary institute or a place to stay for a night in the historic location, the Pearl has what you’re looking for. The Pearl Brewery was originally named the City Brewery, founded in 1883. But it wasn’t until 1887 when the first bottles and kegs of the beer called Pearl were produced and sold in local taprooms. Over the years, ownership of the brewery changed hands, with Pabst Brewing Company ultimately taking ownership in 1985. After 16 years at the helm, Pabst closed the doors to the brewery. Silver Ventures bought the 22-acre location in 2001, and so began the work of reimagining the Pearl community. At the heart of the diverse Pearl campus lies Hotel Emma. Rich in history, this hotel has quite a story to tell — starting with its name. Emma Koehler ran the brewery after the death of her husband, Pearl President Otto Koehler, in 1914 and is highly regarded as a strong force in keeping

PHOTO BY NICOLE FRANZEN PHOTO BY JASON RISNER

PHOTO BY NICOLE FRANZEN

PHOTO BY JASON RISNER

PHOTO BY NICOLE FRANZEN

explore the hotel; but with a one-and-a-half-year-old, your options for entertainment are skewed, heavily. I figured the library would be a great place for us to spend some time. The sophisticated venue had something for everyone, including children’s stories. This small detail really made me, as a mother, feel like I was included in the planning of this hotel. The library’s collection was acquired as a whole from a single collector, Sherry Kafka Wagner, who often visits the library with pride because her hand-selected collection can now be enjoyed by so many. As for the hotel room itself, I walked in and was instantly surprised. As a working adult, I’ve done my fair share of traveling. I’ve stayed in countless hotels, each with slight variations but overall having the same “hotel” look and feel. This room was completely different from any other I’ve ever stayed in. The high ceilings and concrete walls at first seemed cold and unfamiliar. But the more I was in the room, the more I realized this was the heart of the hotel’s theme: authenticity. The walls, the high ceilings, they’re both part of the history of the building. Changing them to fit into the “normal” hotel look would be a travesty. I’m thankful that the owners and designers kept the original influences, even in the very small details. Ultimately, there is a Southern charm to Hotel Emma that really makes you love being here. I’ll start with the staff. Is it possible that every single employee loves their job? Because every staff member I saw was so happy to help guests and give testimony to the amazing architecture, art, amenities, location and every other imaginable detail. They truly seemed to love their job, and their feelings were infectious. The hospitality in the details

added to the Southern charm. By “hospitality,” I don’t mean the industry. When you have visitors in your home, you show hospitality to them to make them feel more comfortable. This hotel is a home, and the staff showed us hospitality in a way I’ve never seen before. Upon arriving, I was given my room information and invited to visit the (amazing) library for complimentary margaritas. Cocktails on the house? Who has ever heard of such a thing? They were delicious, by the way. Apparently, the recipe was made by the hotel owner for his own ranch. Once I made it to my room, I was pleasantly surprised to find our ice bucket filled, complimentary artisan water and two of the most delicious macarons I’ve ever tasted (from Bakery Lorraine, also on the Pearl campus). This was truly a sweet touch. There were so many details I loved but was not able to cover in such a short article. I guess you’ll just have to plan a stay at Hotel Emma to see why it is unlike any other accommodations in the area.

To learn more about the history, charm and what’s new at the Pearl, visit www.thehotelemma.com.

NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

LIFESTYLE

Mediterranean-Inspired Holiday Entertaining Special to SHALE

Cuisine The Mediterranean diet serves as a foundation of foods and food groups to choose from. Fundamentally, the Mediterranean is a balanced diet of plant-based foods, lean proteins, fatty fish, dairy and healthy fats like olive oil. Think loads of fruits and vegetables, whole grains, legumes, seeds, nuts and nut oils. Save Time With Make-Ahead Menu Items Save yourself some of the holidayrelated stress by prepping a handful of items prior to the day of the party. Everyone loves a good meat and cheese platter; make yours spectacular by adding in some seasonal produce to sweeten up a tangy cheese or provide some crunch

and color to the tray. Pickled green beans, cauliflower or carrots provide a crisp, acidic flavor element to the tray. Make It Handheld Some of the best party foods make it easy to mix and mingle. Skewers are portable and serve as a convenient medium for small bites. Add some Mediterranean skewers to the menu with a fresh caprese-inspired appetizer using H-E-B's Select Sweet tomatoes from produce, house-made mozzarella from the deli and a bright basil leaf. A thick balsamic reduction won’t be too dangerous to drizzle on top. Provide a protein to satiate guests with grilled marinated chicken or shrimp served alongside a homemade tzatziki dipping sauce with H-E-B Greek yogurt as the secret ingredient. DIY Put your company to work with a build-your-own popcorn bar. Did you know that popcorn is considered a whole grain? Central Market Olive Oil popcorn has the crunch we all love with the velvety, nutty taste of olive oil. Stick with the Mediterranean theme by providing flavorful add-ins: ● Sweet and salty: dark chocolate, dried fruit, cinnamon-spiced nuts

● Savory: Parmesan or spices like oregano, dill, cayenne, or cumin Don’t Forget Dessert! Using foods rich in poly- and monounsaturated fats are highly encouraged. Make dessert meaningful with a creamy avocado-based dark chocolate pudding. Just blend avocado, cocoa powder, vanilla extract and Mootopia milk until it reaches the preferred consistency for a decadent dessert perfectly paired with a big, bold red wine.

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SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

For more holiday ideas and recipes, visit www.HEB.com.

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he best part of the holidays is gathering together with friends and family. If you find yourself as the dedicated host, here are some tips to add a Mediterranean flair to the food and festivities.

NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

SCENE

state of energy luncheon

PHOTOS COURTESY OF SHALE

SHALE and the Corpus Christi Regional Economic Development Corporation (CCREDC) hosted the second annual State of Energy luncheon on Oct. 12 at the Omni Corpus Christi Hotel. The event had a great turnout and featured some amazing speakers. The keynote address was given by Karen Alderman Harbert, President and CEO of the Institute for 21st Century Energy in Washington, D.C. Harbert gave an illuminating presentation on the current state of the energy market and its future, which so heavily depends on the policies lawmakers will discuss in the upcoming years. The event also included a panel discussion featuring David E. Dismukes, Professor, Executive Director and Director of Policy Analysis at Louisiana State Universityâ&#x20AC;&#x2122;s Center for Energy Studies; Adam Philippi, District Manager at MMR Group; Luke Legate, Director of the Joint Association Education Initiative; and Matt Barr, Director of Government and Public Affairs at Cheniere Energy. Sponsors of this event include the South Texas Energy & Economic Roundtable (STEER), Cheniere Energy, MMR Group, Marathon Oil Corporation, American Bank, Higginbotham Swantner & Gordon, HDR Engineering, Kleberg Bank, NavyArmy Community Credit Union, Del Mar College Foundation and IBC Bank.

SHALE OIL & GAS BUSINESS MAGAZINE ď &#x201C; NOVEMBER/DECEMBER 2016

NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

SCENE

july/august cover party

PHOTOS COURTESY OF SHALE

Another successful cover party is in the books! SHALE hosted a soiree honoring the July/August 2016 cover star, Regina Mayor, with KPMG. On Sept. 22 at The Grove in Houston, guests enjoyed the opportunity to mingle and taste delicious appetizers and cocktails. In addition to honoring Mayor for gracing the cover of SHALE, we were proud to announce her new promotion as the Global Head of Energy & Natural Resources at KPMG.

SHALE OIL & GAS BUSINESS MAGAZINE ď &#x201C; NOVEMBER/DECEMBER 2016

NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

SCENE

DUG Eagle Ford Conference and Exhibition

PHOTOS COURTESY OF SHALE

SHALE had a booth at the seventh annual DUG Eagle Ford Conference and Exhibition, held Sept. 12–14 in San Antonio. We enjoyed hearing from CEOs from private producers like Laredo Energy, New Century Exploration, Energy Hunter Resources, Hawkwood Energy and Teal Natural Resources, as well as senior executives from public operators like Noble Energy, Chesapeake Energy, BHP Billiton and Sanchez Energy Corporation. Kym Bolado and Alvin Bailey recorded the In the Oil Patch radio show live from the conference and had the opportunity to showcase some of the vendors on-air.

SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

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NOVEMBER/DECEMBER 2016 ď &#x201C; SHALE OIL & GAS BUSINESS MAGAZINE

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Texas Energy Advocates Coalition

PHOTOS COURTESY OF SHALE

The Texas Energy Advocates Coalition (TEAC) held a mixer following the DUG Eagle Ford Conference and Exhibition on Sept. 12 at Fogo de Chão in downtown San Antonio. Following a long day at the conference, DUG attendees flocked to the venue for some delicious Brazilian cuisine and cocktails. There were also drawings for many prizes at the event, but most importantly there was a discussion on how we can advocate for the energy industry.

SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

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state of energy mixer at salt

PHOTOS COURTESY OF SHALE

SHALE hosted a mixer generously donated by Port Corpus Christi Commissioner Barbara Canales at Salt Tequila Bar on Sept. 28 to celebrate the State of Energy luncheon. Guests discussed the details of the luncheon and its importance as an educational event for the community. In attendance were Malkan Interactive Marketing Consultant Jessie Hutchason and Ingleside Chamber of Commerce President/CEO Jane Gimler; both State of Energy co-chairs were key players in the planning and execution of both the mixer and the luncheon.

SHALE OIL & GAS BUSINESS MAGAZINE ď &#x201C; NOVEMBER/DECEMBER 2016

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texas tribune festival

PHOTOS COURTESY OF SHALE

The sixth annual Texas Tribune Festival was held Sept. 23–25 on The University of Texas at Austin campus. Hosting over 250 speakers, the event covered topics that affect all Texans, including energy. Speakers on energy topics included Tom Currah, Chief Revenue Estimator for the Texas Comptroller; Ryan Sitton, Texas Railroad Commissioner; Chris Paddie, State Representative; Drew Darby, State Representative; and Mine Yücel, Senior Vice President and Director of Research for the Federal Reserve Bank of Dallas, to name a few. The festival also included a one-on-one with T. Boone Pickens, Chairman and CEO of BP Capital.

SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

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NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

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NOVEMBER/DECEMBER 2016  SHALE OIL & GAS BUSINESS MAGAZINE

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SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016

TRAIN ELEVATE NETWORK The go-to resource for oilfield service providers, suppliers and manufacturers.

Get connected at PESA.org. NOVEMBER/DECEMBER 2016 ď &#x201C; SHALE OIL & GAS BUSINESS MAGAZINE

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SHALE OIL & GAS BUSINESS MAGAZINE  NOVEMBER/DECEMBER 2016