SHALE Magazine Nov/Dec 2018

SHALE MAGAZINE

NOV/DEC 2018

FAMILY MATTERS: EXAMINING EYE HEALTH AT EVERY AGE

PERMIAN OIL & GAS PRODUCTION:

OVERCOMING BARRIERS TO DIGITAL

WHAT TO MAKE OF WTI MIDLAND BASIS?

HOW THE OIL & GAS INDUSTRY IS SAVING AMERICA’S NATIONAL PARKS

THE BAKKEN HAS A GAS PROBLEM

SARA ORTWEIN: XTO ENERGY INC. WRINGING THE MOST OUT OF LIFE’S EVERY HOUR NOVEMBER/DECEMBER 2018  SHALE MAGAZINE

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NOVEMBER/DECEMBER 2018

CONTENTS SHALE UPDATE

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Shale Play Short Takes

FEATURE

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Permian Oil & Gas Production: What to Make of WTI Midland Basis?

COVER STORY

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COVER AND TABLE OF CONTENTS PHOTOS COURTESY OF ROBERT SEALE

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INDUSTRY

LIFESTYLE

36 Alliance Rolls Out the Texas Permian Basin Petroleum Index 38 The Bakken has a Gas Problem 40 Forward Thinking: 2019 and Beyond 42 A Future of Opportunity and Challenge 44 Unlocking performance through data analytics and Integration

60 5 Ways to Make This

POLICY 48 How the Oil & Gas Industry is Saving America’s National Parks

BUSINESS 54 Advancing Technology Has Created a “New Normal” for the Oil and Gas Industry

56 Overcoming Barriers to Digital

Holiday Season Special for the Family

62 Basic Apple Pie Recipe

Sara Ortwein, the President of ExxonMobil subsidiary XTO Energy, has had a very successful career with a company that puts value in its employees. XTO Energy has quite an interesting background and a very bright future. Discussing safety, technology and work-life balance, Ortwein has a wealth of knowledge and insight to share.

INDUSTRY

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New Chapter at STEER

POLICY

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An Even Playing Field?

A Look at Renewable Energy Subsidies

BUSINESS

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UTSA Honors College Prepares Students for the Challenges Ahead

LIFESTYLE SOCIAL 67 DUG Eagle Ford Hosted in San Antonio

68 ConocoPhillips hosts Legacy

Scholarship Golf Tournament

69 WEN South Texas and

Women Empowered Host Mentorship Luncheon

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Family Matters: Examining Eye Health at Every Age

SOCIAL

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Deloitte Oil & Gas Conference Gives Insight Into Energy Sector NOVEMBER/DECEMBER 2018  SHALE MAGAZINE

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VOLUME 5 ISSUE 6 • NOVEMBER/DECEMBER 2018

KYM BOLADO

PUBLISHER / CEO CHIEF FINANCIAL OFFICER Deana Andrews CHIEF OPERATING OFFICER & EDITOR-IN-CHIEF Lauren Guerra EDITOR David Blackmon ASSOCIATE EDITOR David Porter ART DIRECTOR Elisa G Creative COPY EDITOR Kelly Hamilton VICE PRESIDENT OF SALES & MARKETING Joyce Venema ACCOUNT EXECUTIVES John Collins, Ashley Grimes, Doug Humphreys, Matt Reed, Amanda Villarreal ONLINE CONTENT MANAGER Fernando Guerra SOCIAL MEDIA DIRECTOR Courtney Boedeker CORRESPONDENT WESTERN REGION Raymond Bolado

Introducing the SHALE Mobile App

CONTRIBUTING WRITERS Vijay Asava, Christopher Ashcraft, Leslie Beyer, David Blackmon, Bette Grande, Melissa Griffiths, Lauren Guerra, Karr Ingham, Bill Keffer, Alby Modiano, Denis Pone, David Porter, Josh Schulte, Dr. Sheekha Sethi, Thomas Tunstall, Ph.D. STAFF PHOTOGRAPHER Malcolm Perez EDITORIAL INTERN LeAnna Castro

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Copyright © 2018 Shale Magazine. All rights reserved. Reproduction without the expressed written permission of the publisher is prohibited.

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PUBLISHER’S NOTE

HAPPY HOLIDAYS FROM SHALE! As 2018 comes to a close, we take stock of a wonderful year! The industry had a few rough years there, but we are happy to be reporting wonderful news as the industry, particularly the midstream sector, sees enormous expansion opportunities. We are seeing an upward trend in hiring, spending and producing around the country. Similarly, growth to the export industry is helping the U.S. on its way to being energy independent and the largest exporter of natural resources in the world.

Of course, much of the growth and prosperity of the industry relies on quality and conducive legislation and regulation that doesn’t hinder the industry from continuing to move forward. It’s crucial that pro-energy constituents do research and

vote for candidates that see the benefits of the oil and gas industry and will aid the industry in creating and supporting beneficial legislative agendas.

Looking forward, 2019 seems it will be a great year for the industry. We hear from industry experts with a variety of backgrounds on the future of the domestic and global energy market regularly and are happy to say most experts have a positive outlook on the upcoming year for the energy industry in the U.S. What great news to share in this, our last issue of 2018. Thank you all for your support of SHALE Magazine and In the Oil Patch radio show. We look forward to bringing you information on the market, advancements, projects, plans and more for years to come.

Wishing you and your family a happy and safe holiday season!

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SHALE UPDATE

SHALE PLAY SHORT TAKES By: David Blackmon

Bakken Shale – North Dakota/Montana

The Bakken is another shale play that is currently experiencing a boost in capital being reallocated out of the Permian Basin. A new report from Bank of America Merrill Lynch finds that year-to-date drilling activity for the Bakken is 20 percent higher than in the same period for 2017. However, Bank of America sees a similar issue with pipeline constraints looming for the Bakken in 2019: “During 2019, we expect Bakken production to exceed takeaway capacity again, which should cause oil there to trade at a more persistent discount to WTI until new pipeline capacity arrives,” Bank of America Merrill Lynch wrote. “Oil pipelines aren’t the only limitation for Bakken growth, gas processing, and gas and NGL pipeline expansions will likely be needed to accommodate growth.”

It’s a good problem to have, but it is a problem that will need to be resolved by the midstream industry in order for production growth to continue.

Denver/Julesberg (DJ) Basin - Colorado

The big issue facing the DJ Basin as this issue of Shale Magazine went to publication was the outcome of Proposition 112, which was successfully placed on the November ballot by anti-oil and gas activist groups. Though Prop 112 was expected to be rejected by Colorado voters, if successful it would enact a statewide setback rule of 2,500 feet any occupied structure, water source or “vulnerable area.” The Denver Post published an editorial opposing Prop 112 when an independent study determined that, if enacted, it would represent a de facto ban on further drilling in the state of Colorado.

Anadarko Petroleum obviously felt comfortable that Prop 112 would fail, announcing in its third quarter results that its overall production for 2018 would increase by 12-14 percent by focusing on what it calls the “3 Ds” — the DJ Basin, the Delaware Basin and its Deepwater assets in the Gulf of Mexico.

In mid-October, Earthstone Energy, Inc. announced the purchase of 20,800 net acres from Corpus Christi-based Sabalo Holdings and its subsidiaries. The new acreage will grow Earthstone's Midland Basin acreage by 69 percent and double the company's production. Earthstone said it will have 50,800 net acres in the Midland Basin after the deal closes, which is expected by the first quarter of 2019.

DrillingInfo issued a report in late September detailing more than $32 billion in oil and gas merger-and-acquisition activity that took place during the 3rd quarter of 2018. More than half of that activity — almost $18 billion — centered on properties in the greater Permian Basin, which, despite the current temporary issue with pipeline takeaway capacity, remains the hottest oil and gas play area on the face of the earth.

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SHALE MAGAZINE  NOVEMBER/DECEMBER 2018

Eagle Ford Shale – Texas

Energy Secretary and former Texas Governor Rick Perry was on-hand in San Antonio on Oct. 19 to help celebrate the 10th anniversary of the first successful horizontal well completed in the Eagle Ford Shale. The event, called the Shale-a-Bration, featured more than 350 attendees, and was held in Hangar 9 at Brooks Air Force Base.

The EIA expects November crude production in the Eagle Ford to climb to a robust 1.438 million bopd, up 30 percent from the low of 1.1 million bpd reached in Aug. 2017. The Eagle Ford is one of several basins currently experiencing an influx of drilling capital originally targeted for the Permian Basin, as pipeline takeaway constraints force producers there to reallocate.

VOLINA/BIGSTOCK.COM

Permian Basin – Texas/New Mexico

Marcellus Shale – Pennsylvania/West Virginia/Ohio

The Pennsylvania Department of Environmental Protection (DEP) is proposing to raise well permit fees on Marcellus wells by 150 percent, from the current level of $5,000 to $12,500, effective in 2019. The $5,000 per well fee was implemented in agreement with the oil and gas industry and initially generated enough funds to foot the bill for the entire DEP budget, even though only about 60 percent of the agency’s work is related to the Marcellus.

But DEP officials now say that the fee is no longer sufficient, and wants this massive increase. The industry is opposed to the new fee level, and suggests the agency should be partially funded from the state’s general fund in order to cover its work that is unrelated to the oil and gas industry.

Kinder Morgan announced in mid-October that it was shelving its proposed Utica Marcellus Texas Pipeline project, which was to be designed to transport natural gas liquids from the Utica/Marcellus region to the Texas Gulf Coast. The company said it will instead focus on reversing the flow of its existing Tennessee Gas Pipeline and retooling it to carry NGLs.

Haynesville Shale – Louisiana/East Texas

According to the DrillingInfo Daily Rig Count, the number of drilling rigs active in the Haynesville region has remained essentially unchanged over the past year. Yet, the EIA data show Haynesville gas production ramping up from 4.2 bcf per day to about 6.5 bcf per day, an amazing 50 percent increase in just a year. That is truly stunning for a play area that was almost dormant for three years beginning in mid-2013.

This has been made possible by the combination of two key factors: 1) Impressive gains in efficiency have significantly reduced the time it takes to drill, frac and complete each well.

Some producers report that wells that used to take 25-30 days to drill and complete now take only 10-12 days to get done. Thus, each active rig is able to drill more wells than was formerly possible; and 2) Rapid advancements in drilling, fracking and completion technologies are resulting in impressive per-well productivity gains.

SCOOP/STACK Play – Oklahoma

Production continues to ramp up in Oklahoma’s most prolific play area. The U.S. Energy Information Agency (EIA) expects overall production in the SCOOP/STACK to average 550,000 barrels of oil per day in 2019, a 9 percent increase over 2018 levels.

LINN Energy Inc. and Roan Holdings, LLC reached an agreement in September to combine their holdings to form a pure SCOOP/STACK play company named Roan Resources Inc. The new company owns 150,000 net acres in the play and was producing about 40,000 bopd at the end of the first quarter of 2018.

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

NOVEMBER/DECEMBER 2018  SHALE MAGAZINE

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ď “ FEATURE

Permian Oil & Gas Production: What to Make of WTI Midland Basis?

By: Josh Schulte

W

ith improvements in technology driving down the breakeven cost for the production of oil in the rich shale plays of West Texas, the Permian Basin has become more attractive to exploration and production (E&P) companies over the past few years. Since the beginning of 2016, oil production in the Permian Basin has nearly doubled and this trend does not show signs of slowing. Production in the region increased by nearly 30 percent since the beginning of 2018. (Figure 1)

projects is not set in stone. Below are a few planned projects with their expected takeaway capacities and completion dates: Pipeline (Developer)

Capacity (bbl/day) Completion

Cactus II (Plains All American)

670,000

Q3 2019

EPIC (EPIC Midstream)

550,000

Q3 2019

Gray Oak (Philips 66/Andeavor)

700,000

Q3 2019

Midland to Nederland (ETP)

600,000

2020

(Source: Information from company websites)

The differential between the national crude oil benchmark at WTI Cushing and the WTI Midland price has widened throughout 2018, with current WTI Midland prices at around a $10 a barrel to $15 a barrel discount to WTI Cushing.

Figure 1: Permian Basin Oil Production, January 2016-September 2018 (Source: U.S. Energy Information Administration)

This boom in production has caused a supply glut in the region. The rate of production has overtaken takeaway capacity on the various pipelines, trucks and rails, which in turn has put downward pressure on crude prices realized in the Permian. With most of the rail and truck capacity being used to transport the vast amounts of fracking sand being used in the region, the imbalance should eventually be rectified with additional pipelines that are in the works, but they will take time to complete.

Midstream companies are planning expansions and new pipeline construction to help bring all of this additional Permian crude to the U.S. Gulf Coast for refining and export, but the timing of the completion of these

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SHALE MAGAZINE ď “ NOVEMBER/DECEMBER 2018

Figure 2: WTI Midland Basis Swap Prices (Source: CME)

This imbalance of production exceeding takeaway capacity has happened before. In 2014, WTI Midland prices dropped to a $10 a barrel to

$15 a barrel discount to WTI Cushing. Then, like now, some companies are benefiting from the market dynamics.

Some larger companies such as Chevron, with the foresight and available capital to anticipate these pipeline constraints, purchased additional pipeline capacity while it was still available and protected themselves from exposure to this current WTI Midland basis blowout. (Figure 2) Another company faring this oversupply situation well is Occidental Petroleum who has been in the Permian for longer than most. By owning their own pipelines and other midstream assets, Occidental has more takeaway capacity than they currently produce. Occidental has reportedly been cashing in on their excess capacity by selling it to other producers or buying Permian oil at a discount and using their own pipeline capacity to transport and sell at higher prices on the U.S. Gulf Coast.

Other companies have tried to limit the impact to their future cash flows by executing financial hedges to lock in a fixedprice differential between WTI Midland and WTI Cushing. By selling basis swaps at a fixed price, these companies are locking in a spread to WTI Cushing for future production. If the basis spread grows in the future, the swap counterparty will pay out the difference between the current spread and their lockedin spread at the time of settlement. However, if the spread narrows to less than the locked-in spread, the company will pay out the difference.

The evolution of the WTI Midland basis swap forward curve would seem to signal that the market has priced in the expectation that these new pipelines will help ease the oversupply issues in the basin and we should see WTI Midland prices much closer to WTI Cushing levels as soon as the end of 2019.

(Figure 3)

Figure 3: WTI Midland Basis Forward Curves

However, recent hedging activity on the WTI Midland basis swap may indicate that producers are wary that these pipeline projects will be completed on schedule. According to the CME Group, open interest on 2020 WTI Midland basis swaps has increased over 400 percent since the beginning of 2018. During that same time period, the 2020 WTI Midland basis swap forward curve averaged around ($0.75). This would suggest that producers are willing to lock in a relatively small negative basis price now rather than risk delays in planned pipelines causing WTI Midland prices to remain depressed into 2020.

Companies in the Permian Basin will likely continue to produce vast quantities of oil for years to come. Imbalances between production rates and takeaway capacity will likely continue to provide incentive for midstream companies to invest their time and capital to build additional pipeline capacity.

The timing between these two moving targets may cause problems for producers in the region in the form of lower realized oil prices in the next few years. It is up to the producers to decide if and how to mitigate this risk through securing pipeline capacity, hedging their position through financial contracts or other strategies.

Farm & Ranch Real Estate Hunting & Recreational Properties

Steve Bilicek, ALC 281.497.2774 steve@texasagrealty.com www.texasagrealty.com

(Source: WTI Midland basis forward curves from CME)

Featured Ranch

About the author: Josh Schulte is a Senior Consultant with Opportune’s Risk Advisory Services group, assisting companies with risk management strategy development, hedge execution and derivative valuation. He has a Bachelor of Science in mathematics from the University of Texas at Austin and has a Series 3 Securities License.

Dos Lagos Ranch High Fenced Game Ranch 1,867.69 Acres Maverick County, Texas $2,250 per acre

NOVEMBER/DECEMBER 2018 ď “ SHALE MAGAZINE

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cover story

SARA ORTWEIN WRINGING THE MOST OUT OF LIFE’S EVERY HOUR

BY: DAVID BLACKMON PHOTOGRAPHY: ROBERT SEALE

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SHALE MAGAZINE  NOVEMBER/DECEMBER 2018

NOVEMBER/DECEMBER 2018  SHALE MAGAZINE

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It is an increasingly rare thing indeed to come across anyone in America today who has spent an entire career working for a single corporate entity. The advent of constantly-advancing technologies and our increasingly mobile and restless society has by and large ended the American dream of working for one company for 40 years and retiring on a comfortable pension.

That’s just not how things work in America anymore. The U.S. Bureau of Labor Statistics estimates that the typical American can expect to change jobs 10 to 15 times during his or her career, with around half of those changes involving a change in employer.

In the past, remaining with the same company throughout a full career typically meant becoming very good at a single job and eventually developing some leadership and supervisory skills if one wanted to advance up the chain. Today, especially in a constantly evolving business like the oil and gas industry, the ability to do so requires high degrees of adaptability, equanimity, innovation, constant improvement, leadership and the ability to consistently add value to advancing the company’s goals.

Sara Ortwein, the President of ExxonMobil subsidiary XTO Energy, is that kind of person — the kind of person with the set of skills necessary to not just spend an entire career within the ExxonMobil corporate umbrella, but to deploy those skills so ably that she has advanced to one of the organization’s most senior leadership positions. As she noted when we caught up to her in September, that career has now endured for 38 years, and she feels fortunate things have worked out this way. She also points out that her longevity with the company is actually in keeping with the long-term view ExxonMobil takes with its employees.

“I have had the pleasure, as you say, of spending my entire career with one company,” she says. “We recruit, train and develop employees with a long-term view. The company invests heavily in its employees, and that’s what has been done with me and those who work around me.”

That career investment by a global company like ExxonMobil most often involves a willingness to relocate frequently and adapt to new cultural situations. “I’ve been exposed to a variety of cultures. I’ve had the opportunity to work on a lot of exciting and challenging projects all over the world, things that I never would have envisioned when I first came to work,” Ortwein notes.

“Most importantly, I’ve had the opportunity to work with outstanding people at ExxonMobil and across the industry.”

But it isn’t all exotic new places and international travel. When Ortwein graduated from the University of Texas with a Bachelor of Science degree in civil engineering in 1980, she went to work as a drilling engineer for the Texas operations of Exxon Company, U.S.A. To illustrate how much has changed in the industry in the intervening 38 years, she recalled an example of one of the company’s early efforts at drilling a horizontal well in the prolific Austin Chalk formation, which was in the midst of its first of several boom times.

“Shortly after I had left the drilling group, one of my colleagues designed and drilled a horizontal well in the Austin chalk. That well was 500 feet in the horizontal section,” she begins, “and I remember it was a dry hole, but it was a technical success that we were all excited about at the time. Today, we’re drilling horizontals up to 3 miles in shale and tight formations. And in some places offshore, we’re drilling up to 8 miles in the horizontal.”

Another part of Texas she points to as having evolved radically during the course of her

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SHALE MAGAZINE  NOVEMBER/DECEMBER 2018

PHOTO COURTESY OF XTO

“WE BELIEVE IN LONG-TERM CAREERS.”

NOVEMBER/DECEMBER 2018  SHALE MAGAZINE

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career is the Permian Basin, where XTO Energy has a very large and active position. “The other interesting piece that has changed is the Permian,” she says, “I have had the opportunity to work the Permian three different times in my career. And it keeps evolving and changing, and we keep finding new and different ways to get the resource out of the ground, this time with horizontal drilling and fracturing.

“So, a lot has evolved and changed.”

Indeed, it has.

As the company continued to invest in Ortwein, she continued to produce value-adding results, as the chart of her rapid career progression over the last 21 years clearly demonstrates: • 1997 - she was named reservoir evaluation and planning manager for Exxon Ventures, CIS (Commonwealth of Independent States), focusing on new venture pursuit and capture in Russia, Azerbaijan and Kazakhstan.

• 2001 – Became corporate upstream advisor to senior management at ExxonMobil headquarters in Irving, Texas.

And, in 2018, she was recognized with the Women who Mean Business award by the Houston Business Journal.

Recognitions such as those listed above do not materialize out of nowhere. They are in fact the kinds of awards designed to recognize extraordinary achievements in a person’s field of expertise.

The kinds of achievements that made Ortwein the obvious choice for leadership at XTO Energy.

Ortwein and the increasing number of other women in positions of senior leadership in the oil and gas industry probably grow weary of being asked about it, but their status remains an all-toorare feature of the industry today. For many decades, a female presence in the industry’s board rooms was almost unheard-of, and it has only been during Ortwein’s own time in the business that things have begun to really change.

When asked to discuss the reason why she has been able to become one of the pioneers in this time of change, she didn’t hesitate about where to begin. “It started with my parents. I was fortunate in that I had parents who taught me a strong work ethic, and to treat everyone with dignity, respect, while at the same time not be intimidated by others.”

The company where she has spent her entire career and the people in it also played a major role. “I was very fortunate to come into an organization like ExxonMobil that has this focus on a long-term career, on allowing every employee to progress to their own potential and providing opportunities for employees to do that. There’s a structured approach to people development that is a key part of what our organizational leaders spend their time on. It’s making sure that we’re providing opportunities for our employees to develop, including training, experiential learning and job opportunities that match the business needs.

“Throughout my career I’ve had some outstanding supervisors and personal mentors, and those mentors weren’t people assigned to me. They were people who took an interest in me in various phases of my career and helped me along the way. They helped me see the potential that was there and helped me understand what I needed to accomplish to achieve that potential.”

• 2004 - Named production manager for ExxonMobil’s operated U.S. production operations.

• 2006 – Became vice president of engineering for ExxonMobil Development Company.

• 2010 – Named president of ExxonMobil Upstream Research Company.

• 2016 – In November Ortwein was named President of XTO Energy.

Ortwein’s career achievements have not gone unnoticed outside of the ExxonMobil corporate umbrella. Far from it. This paragraph from her profile on the XTO website tells part of that story: Sara has been a champion for math, science and engineering, with a particular focus on mentoring future leaders in these fields. In 2009, she was honored by The University of Texas as a Distinguished Engineering Graduate from the Cockrell School of Engineering.

Sara has been recognized by the Women’s Energy Network of Houston as an individual who exemplifies commitment to excellence and a role model for women engineers. In 2012, she was honored by Bio Houston with the Women in Science Excellence award.

In 2013, she was recognized by the Greater Houston Women’s Chamber of Commerce as a breakthrough leader in the field of energy. In 2014, she was recognized as one of Houston’s Top Ten Women in Energy by the Houston Business Journal. In 2017, she was recognized by the Society of Petroleum Engineers with the Distinguished Membership award.

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NOT YOUR ORDINARY CORPORATE SUBSIDIARY XTO Energy began its life in 1986 as a company named Cross Timbers Oil Company. Cross Timbers was founded by three former executives of the Southland Royalty Company, helped by $35 million in seed money raised by former Goldman Sachs Chairman Robert Rubin, who later became Secretary of the Treasury under President Bill Clinton.

Cross Timbers began life as an acquirer and operator of long-lived oil and gas properties in several states, the largest part of which in the beginning were in the San Juan Basin region of Northwest New Mexico. As the company grew, its financing needs grew along with it, and in 1993 the decision was made to take the company public. Traded on the NASDAQ, where its stock symbol happened to be “XTO,” the company continued its rapid growth trajectory, becoming one of the early large operators in the Barnett Shale play. In 2001 the decision was made to change its name to the current XTO Energy.

When ExxonMobil’s management was looking for the best way to get into the U.S. shale business in 2009, it ultimately decided the best way to do that was to acquire what had become a very large, Fort Worth-based independent producer. The company’s leaders made a special commitment as part of the $36 billion deal to preserve the spirit of an “independent” producer within XTO while leveraging from the broader corporate organization. To ExxonMobil’s credit, it has held to that commitment, and the results have been rewarding.

Today, XTO owns interests in more than 50,000 wells across the United States, Western Canada and Argentina. It is a major player in multiple shale basins, including the Permian Basin, the Marcellus and Utica Shales, the Bakken Shale, the Haynesville Shale, the Barnett/Woodford Shales, the Eagle Ford Shale and the Fayetteville Shale. Taken with its operations in other play areas, it constitutes one of the largest independent producer portfolios in the industry.

But there’s more to the ongoing success of the merger than preserving XTO’s independent company culture: the ability to leverage ExxonMobil’s integrated business model and expertise in managing large projects has helped make XTO even more competitive than it already had been.

Here’s how Ortwein describes the plan. “We invested heavily in unconventional resources

through our merger with XTO in 2010. One of the clear intents was to make sure that we gained access to a wealth of shale development experience as well as the shale and tight assets of XTO,” she says. “We recognized that there are differences in how you progress the development of shale and tight resources. So, we have maintained XTO as a separate entity.

“That said, we’ve got a unique competitive advantage having a strong corporation with significant project and technology development capability,” she continues. “We have the ability to take the unconventional experience and XTO’s expertise and manage that business as appropriate, but also bring to bear the research and project know-how, and significant capabilities from the rest of the corporation.

“For instance, the downstream, chemical and midstream capability that we have in ExxonMobil is very relevant in the Permian — being able to connect the dots to maximize the value to our shareholders.”

As the company’s asset base and operational results clearly indicate, it’s a plan that is working extremely well.

MANAGING THE ELEPHANT IN THE PERMIAN’S LIVING ROOM Sara Ortwein, the President of ExxonMobil subsidiary XTO Energy, is the kind of person with the set of skills necessary to not just spend an entire career within the ExxonMobil corporate umbrella, but to deploy those skills so ably that she has advanced to one of the organization’s most senior leadership positions

The growing issue with a lack of pipeline capacity for both oil and natural gas coming out of the Permian Basin has been extensively reported by the energy media in recent months. There is no question that it is a real problem, and most expect the issue to linger for the next year before a raft of pipelines currently under construction begin to come online and provide relief. Until that time, operators in the hottest play area in North America must find ways to get their product to market and deal with a growing price differential for their production.

Simply put, it has become the Permian’s own “elephant in the living room.” And it is obviously a subject that has been high on Ortwein’s radar for some time.

“We are tremendously excited about the

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potential in the Permian. That includes the potential for XTO, for ExxonMobil and for the entire industry,” she begins. “And with that potential we can move drilling rigs in and out very quickly — it’s one of the advantages of the unconventional — but it takes time for the midstream infrastructure to catch up with the drilling.

“With any new development, the key is to get the right infrastructure in place both in the basin and then to the markets. And that is especially the case in unconventional basins, where the production growth is tremendously rapid, and then it takes the industry a bit longer to get the midstream and the downstream logistics and markets all connected.”

It is that lag time between upstream results and midstream build-out that is at the top of Ortwein’s mind. She continues: “You may be aware that earlier this year, with the potential we’re seeing on our acreage, we committed to triple our daily production in the Permian to 600,000 barrels by 2025. That’s a tripling of our overall production and a fivefold

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increase in our unconventional production. So, with that commitment, we recognize the need for infrastructure to be able to transport our production out of the Permian Basin.”

Not surprisingly, Ortwein and her management team have a detailed plan to address the issue. “One of the things we’re doing is to make sure we can control our own destiny and move our products. We’ve announced a joint venture with Plains All American to construct a long oil pipeline and that’s going to transport crude and condensate from our Wink oil terminal (near Wink, Texas) to various delivery points along the U.S. Gulf Coast. We also have plans to ship up to 500,000 dekatherms of natural gas per day on Summit Midstream Partners’ Double E pipeline in the Permian Basin, which will go to the Waha Hub in West Texas.

From there, our plans are to ship up to 450,000 dekatherms per day on the Permian Highway Pipeline project, which is a joint venture between Kinder Morgan, Eagle Claw Midstream and Apache. That long-haul pipe-

PHOTO COURTESY OF XTO

There’s more to the ongoing success of the merger than preserving XTO’s independent company culture: the ability to leverage ExxonMobil’s integrated business model and expertise in managing large projects has helped make XTO even more competitive than it already had been

positions associated with the infrastructure as we progress.

“Through these kinds of investments, we’re making sure that we are able to move our product out of the basin and able to connect our production in the Permian to our refining and chemicals infrastructure on the Gulf Coast.”

That full value chain proposition is an advantage pure independent producers cannot replicate.

“TECHNOLOGY HAS MADE AN ENORMOUS IMPACT IN OUR BUSINESS.”

line will transport natural gas from Waha to the Gulf Coast.”

Here, the plan illustrates some of the advantages of XTO’s affiliation with ExxonMobil. “You may recall that I mentioned the Wink terminal. ExxonMobil purchased the Wink terminal last year to enhance our ability to move our production. It’s strategically positioned to handle Permian crude and condensate from the Delaware Basin, very near the Texas-New Mexico border, and to be a hub from which we can transport to Gulf Coast refineries and marine export terminals. We’re making plans to expand that terminal and add key infrastructure upgrades that will allow us to efficiently move ExxonMobil production and also third-party production from the Delaware and Midland basins down to the Gulf Coast.

“So, we have a lot of work underway to ensure that we have the right infrastructure in place to support our production growth.

The investments that we’re contemplating today are expected to exceed $2 billion. To me, one of the exciting things about it is that it will support short term construction jobs, but also longer-term

Ortwein’s reference to the jobs being created in all the midstream infrastructure buildout led to another jobs-related question: How will the rapid adoption of increasingly-advanced technologies in oil and gas operations change the job market in the industry? Given her background, it’s a question Ortwein is well-positioned to address.

“This is an area of the business that’s really exciting to me,” she says. “Before becoming President of XTO, I was the President of our upstream research company. I came into that position out of a production operations background predominantly, and I’ve had some experience in working our major projects around the world in our development company. But I had never actually been in a research role. I spent six years in our research company, supporting the teams in making a connection with the business on where technology was needed, where it was applicable and what the possibilities were.

“I talked earlier about the examples of the long laterals and the horizontal wells, and hydraulic fracturing, and if you go back in history, there are lots of different examples of how technology has made an enormous difference in our business.

“Think about when I started in 1980 as a drilling engineer and the jobs on drilling rigs were fundamentally manual functions. Now, look at how much of that work has been automated today. We have fewer people on the rig floor today, for example, which makes it much safer.

“At ExxonMobil and XTO we believe in the promise of technology to help us develop energy in the safest, most environmentally responsible, efficient and effective manner. We have seen lots of different examples for how technology has enabled that for us. We’re different from most of the independents and also the integrated majors in that we have large in-house research capabilities both upstream and downstream. Additionally, our corporate strategic research organization conducts research in fundamental science.

“We also partner with many universities and other interests,” she continues.

“Technology is key to our business and you can see it in the changes that have occurred over time in industry. One of the key areas is automation. It’s important now, but we’re really just getting started in what it can do for us in changing the way we go about our business. It can make us more efficient, allowing us to have access to a wealth of data, enabling data analytics and machine learning.

“Ultimately, it is going to change the way we run our business, and that is going to require that we have skilled employees to make sure that we understand the data we have access to and the capabilities that are out there. And with our growing production and our increased drilling operations in the Permian, it’s going to be all that much more important to enhance efficiency.”

One aspect of advancing technology is the ongoing refinement in the areas of horizontal drilling and hydraulic fracturing. “One of the key areas that we’re really excited about is our ability to drill longer lateral wells. And we’re excited NOVEMBER/DECEMBER 2018  SHALE MAGAZINE

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“SAFETY IS ABOUT PEOPLE.” I mentioned to Ortwein that, during the course of my own career in the oil and gas industry, I’d had the opportunity to visit several ExxonMobil/ XTO operations sites and was always highly impressed by the constant emphasis the company places on safety in the workplace. I asked her to talk about some of the innovations and advancements in safety related processes and technologies her team has implemented since she became the company’s president.

She was happy to oblige. “Maybe it’s in my blood because of my 38 years of ExxonMobil training,” she says, “but at the end of the day safety is about people. It is a fundamental part of our identity as a company and ultimately our goal is that nobody gets hurt. That’s something that I take incredibly seriously as do all of us in ExxonMobil and XTO, and it’s something that is an important aspect of my role as the leader of this organization.

But the unfortunate thing is that despite that continuous focus on safety, the company still does have incidents, she admits. “We look at each and every incident. We identify ways to prevent similar events from happening in the future, we make changes as appropriate, learning from

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the events we have. Automation is allowing us to gather and analyze data from well sites and other facilities, reducing hours spent driving to sites. So, we can actually improve safety of individuals just by how much data they can collect in an automated fashion.

“We’ve recently implemented a program at XTO called “Safe Choice.”

You might think, ‘well, what does a program called Safe Choice have to do with technology?’ But the defining aspect of Safe Choice is that it examines the science behind how all of us make decisions. It uses scenario-based learning to illustrate how our individual decision-making processes impact the potential for an incident to occur.

“So, this is another example of where we’re investing in our workforce. We’re getting a better understanding about how we make decisions and how it could potentially impact our safety and the safety of individuals around us. We piloted the program in our Delaware Basin operations last year and we are migrating the program through all of our operations in XTO. We’ve received very positive feedback from our leaders, our managers and our employees. I’m very excited about the potential for that program to make a significant impact on safety in the future.”

“EVERYONE’S BALANCE IS DIFFERENT.” International assignments. Overnight business travel. Late nights at the office. The stress of managing large organizations. All of these factors and many more present challenges for any parent who rises to a senior leadership position within a company, and Ortwein is no exception.

“Through a career like mine, where I’ve had the opportunity to travel to many locations all around the world and have not been home all the time as a result, there have been events that I’ve missed over the years,” she says. “But I think you learn over time that if you’re going to drop a ball make sure you don’t drop the one that’s going to break.”

But then she focuses on a point that so many tend to forget: The resilience of a strong family unit. “Something that you learn with family and children is that if you spend the quality time with them, as a family unit, you’re pretty resilient,” she notes. “As we’ve moved as a family multiple times, we’ve always looked at it as an adventure. A family unit moving to

Today, XTO owns interests in more than 50,000 wells across the United States, Western Canada and Argentina

PHOTO COURTESY OF XTO

about that because it means greater efficiency from a capital expenditure standpoint,” she says.

“We can drill fewer wells to gain access to the oil and gas reserves.

But it will also mean that we have a smaller surface footprint and that’s very important to us as well. So, both from a commercial standpoint and an environmental standpoint, we’re focusing on what is the optimum length lateral well for cost as well as access to the resource.”

ExxonMobil’s January 2017 acquisition of the Fort Worth-based Bass Companies’ West Texas assets has also enhanced the company’s ability to optimize its horizontal drilling operations. “We’re very fortunate in that, with the acquisition of the Bass companies and that large, contiguous acreage position of 250,000 acres in the Delaware Basin — it allows us to really lay out and optimize an efficient development.

“We drilled our first 12,500 foot horizontal well in the Delaware earlier this year, and we recently drilled our first 16,000 foot horizontal well in the basin. We’re also in excess of 15,000 feet in the Midland Basin in West Texas. And so, we’re going to continue to work on optimizing the lateral lengths, and the completions that go with those wells.”

The fact XTO produces in every major shale and unconventional basin in the U.S. also allows the company to transfer learnings not only between operational areas within each basin, but also from one basin to another. This kind of sharing of information is a key part of optimizing the company’s operations across its entire asset base.

Having all that contiguous acreage in its portfolio also enables XTO to be a lot more efficient in terms of water usage, water transportation and movement of water between leases. “This is a focus area for us. Water usage and water conservation is a key issue both from an efficiency standpoint and also environmentally. In both the Delaware Basin and in the Midland Basin we’re continuously looking at how we access water, produce water and move it through our operations. As a result, we are growing our recycled and reused volumes and will continue to do so.

Having the contiguous acreage in the Delaware gives us an opportunity to lay out a system that enables us to optimize the use of recycled water within our operations. It’s something we’re very excited about.”

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“Maybe it’s in my blood because of my 38 years of ExxonMobil training,” she says, “but at the end of the day safety is about people.” a new place and seeking out things about that place that were different and unique, things we could learn and do together.

“And it was interesting because every time we moved, the family was not excited to leave when we left,” she says with a chuckle. “You know, there was a lot of ‘Why do we have to leave?’, but that happened again the next time

we moved as well. And each one of the places where we had the opportunity to live, we’ve considered home and have great memories.”

The topic of “work/life balance” became a corporate buzzword in the United States back in the 1990s, and it ended up being something that some companies spent a lot of time and thought in trying to address, while others gave

it mainly lip service. Ortwein points out that it can be a very hard thing to get right since all people are unique individuals, and what works as a “balance” for one person may not work for another.

“I am very fortunate in that I have a spouse, two children, and extended family that are quite supportive, and that’s really been helpful over my career,” she says. “And it’s really been ‘our’ career as a result. One of the things I’ve learned through time, though, is that people ask me about work/life balance and I think everyone’s balance is different. It’s a very hard thing to describe because what’s one person’s balance doesn’t work for another. And it’s different for each person at different points in time, different points in life, different points in a career.”

Here, Ortwein also notes how the rapid advancement of technology can play a positive role in people’s lives.

“With cell phones and laptops and Skype and all the different technologies we have for communicating, you don’t have to always be in the office. You can do what we’re doing today quite easily from anywhere. And it’s a global business. That combination of 24/7 op-

DON’T EV ER WASTE A CHAN CE TO

WANDER.

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erations with the ability to work from anywhere has really changed the complexion of how one manages time and given us a lot more flexibility than we had in the past.”

At the end of the day, with all the travel and relocations and late meetings and managing organizations consisting of thousands of people, Ortwein jumps at the chance to brag just a bit about the children that her resilient family unit has turned out.

“Absolutely I’d love to brag about my kids, because along the way it has to go down as my greatest accomplishment,” she gleams.

“I have two children — a son, Adam, and a daughter, Megan. They both graduated from my alma mater, the University of Texas, although neither of them is an engineer. They both got not only their mom’s analytical engineering side, but they got their dad’s creativity.

“My son is an architect and my daughter is in Public Relations. I’m very proud of them because both are their own people and they have followed their own paths, and now are out making their own way in the world. They have also done quite well at picking life partners who support them in their endeavors. So, I’m very proud of their accomplishments and

look forward to seeing what else they’re going to do with their lives.”

Between traveling all over the world, raising a family and managing huge organizations, you might be thinking that Sara Ortwein probably was never able to find time to have any interests outside work and family. But if you were thinking that, you’d be wrong.

“I actually have a pretty wide variety of interests,” she says. “One, I love to travel. Obviously, I’ve had the opportunity to travel for business for many years, but some of my recreation is to travel for fun and for learning.

“I also like the outdoors. I love hiking and sports, both to watch and to play. I met my husband playing tennis and we both still play that as well as golf. Those are two things that I find very relaxing and enjoyable. We also love music as a family. My father-in-law was a musician, so my husband was born with a love of music that he has shared with me and our kids.

So, there’s nothing to me more enjoyable than to go to a concert and enjoy live music.

“I also enjoy volunteering in the communities we live in and operate in so that has been a passion throughout my career. So, I have a pretty diverse, broad set of interests, and just

try to spend a little bit of time doing a lot of different things.”

There are only 24 hours in every day, and Sara Ortwein seems to wring the most out of every one of them. It’s a work/life balance that wouldn’t work for everyone, but it obviously works for her, her family and for the employees, contractors and customers of XTO Energy.

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

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INDUSTRY

New Chapter at STEER By: Christopher Ashcraft

A

s you might have all read in industry news, the South Texas Energy and Economic Roundtable has seen a change in leadership. After 6 years, Omar Garcia, STEER’s founding President and CEO, accepted an offer as the Port of Corpus Christi’s Chief External Affairs Officer. While we are sad to see him go, we look forward to what the future holds in the oil and gas industry Eagle Ford Shale region.

For the last five and a half years, I have served as Director and Vice President of STEER, and have worked hand in hand with my friend and former boss Omar Garcia to build STEER as the premier stakeholder-focused oil and gas trade association in America. I am happy to share I have recently accepted the position as Interim President of STEER. I am excited to step into this new role, and assure you that STEER will continue to be a source of information concerning the oil and gas industry throughout South Texas. You will continue to see STEER in the Eagle Ford area communities, speaking with the stakeholders in South Texas and ensuring collaboration while producing the energy supply for our nation and beyond.

After celebrating the 10-year anniversary of shale production in the Eagle Ford in October, it’s clear that the oil and gas industry has benefitted South Texas in many ways. The economic impact, growth in the communities of South Texas and job numbers are unmatched.

STEER board members and staff remain committed to the communities of South Texas and are prepared to adapt to the changing industry environment.

The STEER team and I are incredibly grateful for the opportunity to lead a team of members who are truly dedicated to those living and working in South Texas. I look forward to a successful 2019 at STEER!

I am happy to share I have recently accepted the position as Interim President of STEER 36

SHALE MAGAZINE  NOVEMBER/DECEMBER 2018

More about Christopher Ashcraft Interim President As President and former Vice President of the South Texas Energy & Economic Roundtable (STEER), Ashcraft facilitates communication, education and public advocacy surrounding the production of energy resources in South Texas. An experienced industry leader, Ashcraft works directly with the oil and natural 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 mutually beneficial to both the community and the industry.

Prior to joining STEER, Ashcraft served as the Alternative Energy Transportation Manager with the Alamo Area Council of Governments. There, he founded the South Central Texas Natural Gas Vehicle Consortium and managed the Alamo Area Clean Cities Coalition. Ashcraft has provided environmental, alternative energy and agricultural analysis to the federal government and numerous state and local organizations. While employed by the United States Environmental Protection Agency, he assisted with issues related to agriculture, rural communities, and alternative energy.

Ashcraft is currently pursuing an Executive MBA from the University of Texas at Austin McCombs School of Business.

He holds a Bachelor’s degree in political science from the University of Maine with a minor in military science and leadership development. Upon graduation, Christopher Ashcraft received a Commission as an Officer in the United States Army where he completed his military service obligations with an honorable discharge. Ashcraft has twin daughters, Aurelia and Francesca.

Visit STEER.com to learn more about the STEER team.

NOVEMBER/DECEMBER 2018  SHALE MAGAZINE

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INDUSTRY

Alliance Rolls Out the Texas Permian Basin Petroleum Index By: Karr Ingham, Petroleum Economist, Texas Alliance of Energy Producers

T

he Texas Alliance of Energy Producers has long been the owner and purveyor of the Texas Petro Index (TPI), an upstream (exploration and production) activity index that tracks growth rates and business cycles in the statewide Texas oil and gas exploration and production economy. The TPI, introduced by the Alliance in 2002, is based at 100.0 in January 1995 and has been calculated each month since then.

The original upstream activity index in Texas, however, was the Texas Permian Basin Petroleum Index, created in the late-1990s as a part of a general economic analysis package for the Midland-Odessa metro area, a partnership effort of the Midland Reporter-Telegram, the Midland Chamber of Commerce, and what was then First American Bank. In October 2018, the Texas Alliance of Energy Producers acquired the Texas Permian Basin Petroleum Index, and that association was announced at the Midland Petroleum Club Oct. 10.

The Texas Permian Basin Petroleum Index is based at 100.0 in January 1996 and has been calculated for each month now through September 2018. The components of the two indexes are nearly identical — prices paid to producers for crude oil and natural gas, the working rig count, the number of drilling permits issued, oil and gas well completions, the estimated volume and value of crude oil production, and the number of employees on upstream oil and gas company payrolls. (The employment total includes operating and producing companies, service companies and drilling companies.) The Texas Permian Basin Petroleum Index has an additional component:

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localized stock index. The basket of companies included in that index has changed over the years as companies have come and gone, but the present lineup includes Dawson Geophysical, Patterson-UTI, Concho Resources, Parsley Energy and Diamondback Energy.

The shape of the Texas Permian Basin Petroleum Index looks very similar over time to the TPI. The cyclical movements in the Permian regional oil and gas economy and the statewide upstream oil and gas economy largely mirror one another, which makes perfect sense, of course; the Permian numbers are a large part of the statewide numbers and price trends for crude oil and natural gas cause the same general movements and outcomes at the statewide and regional level.

The Texas Permian Basin Petroleum Index is thusly named because it includes only Texas numbers and does not cross over into New Mexico. The price data for crude oil is the monthly average posted West Texas Intermediate price and the gas price component of the index is the monthly average Waha Hub price.

The rig count, drilling permits, well completions and production data are the sum totals for Texas Railroad Commission districts 7C, 8 and 8A. The employment data is the estimated oil and gas employment in the Midland-Odessa area (monthly payroll employment by sector is available only at the Metropolitan Statistical Area level).

As is the case with the TPI, the Texas Permian Basin Petroleum Index has now chronicled four complete cycles (expansion followed by contraction) with a fifth in the making. All of these cycles were significant in their own right, especially the 1998-99 contraction, the long

The shape of the Texas Permian Basin Petroleum Index looks very similar over time to the TPI To learn more about TPI and the Texas Alliance of Energy Producers, visit texasalliance.org.

expansion from 2002-2008 and the expansion 2010-2014 when Permian (and statewide) crude oil production exploded. The contraction beginning in the fourth quarter of 2014 was a brutal event in which crude oil prices declined by 80 percent, the regional rig count declined by 75 percent, drilling permits dropped by 70 percent, and some 10,500 industry jobs were lost in Midland and Odessa alone.

The index finally hit rock bottom in September 2016 and has now increased for two years — 24 straight months of expansion — through September 2018. Notably, however, for all the fantastic things that have occurred in the current recovery and expansion, particularly in terms of Permian crude oil production, the Texas Permian Basin Petroleum Index remains below its record peak achieved in the previous expansion in November 2014. Neither crude oil nor natural gas prices are as high now as they were then, the rig count remains below its late 2014 peak, and the number of drilling permits and well completions remain below 2014 levels as well.

prices in 2018 suggests total unrealized production revenue of some $8 billion across the Texas Permian region, and that doesn’t include the high and rising volumes of flared natural gas. Natural gas production growth in the Permian (and statewide, for that matter) is largely accidental at this point, meaning it is simply associated gas production from crude oil wells.

The natural gas takeaway capacity shortage limits the amount of that gas that can be marketed (though those volumes remain on the rise), hence the greater flaring volumes as permitted by the Railroad Commission.

The effects of the pipeline takeaway shortage may appear to be minimal ― the index continues its rise and production volumes continue to increase. Rig count growth has slowed (but not flattened, amazingly, though that still may happen), however a number of larger companies are shifting their focus to the Eagle Ford.

Texas Statewide Crude Oil Production (000’s BPD)

Texas Permian Basin Petroleum Index January 1996 - September 2018

INDEX (Base = 100.0 January 1996)

450.0 400.0

November 2014 384.9

350.0 300.0

Sep 2008 285.7

250.0 200.0 150.0 100.0

Aug 2001 Nov 1997

June 1999

Aug 2002

Sep 2018 338.4

Nov 2009 188.3

Sep 2016 210.2

50.0

96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20

Crude oil production is the phenomenal story. And while that is the case for statewide Texas and the U.S., crude oil production did something quite remarkable — or rather didn’t do something — during the downturn.

Crude oil production statewide and in the Permian began to grow in earnest in 2010 on the heels of the recession-induced downturn of 2008-2009. Between 2010 and 2015 statewide daily crude oil production increased by over 2.5 million barrels per day, but then ultimately declined by nearly 14 percent between March 2015 and September 2016. Permian crude oil production, however, appeared to be utterly unfazed during the contraction and the only observable reaction was production growth at a somewhat lower rate — but it was growth nonetheless, and strong growth at that, even in the face of an 80 percent crude oil price decline and a 75 percent drop in the rig count.

The most high-profile phenomenon in the Permian in 2018 is clearly the takeaway capacity issue in which burgeoning crude oil and natural gas production have overwhelmed the pipeline capacity to move that production from the field to the marketplace. While relief is on the way in 2019, the effects are significant in 2018. Localized Permian crude oil prices are as much as $15 a barrel lower compared to posted WTI and Cushing prices, and Waha Hub natural gas prices are routinely $1 lower — sometimes more — compared to Henry Hub, the Houston Ship Channel and other pricing points.

A simple rough estimate based on current production at localized

Texas Permian Basin Crude Oil Production (RRC Dist 7C, 8, 8A, 000’s BPD)

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INDUSTRY

By: Bette Grande

M

ake no mistake, the Bakken is a tight oil play, and a very good one. But the Bakken, especially in the core areas, is a bit gassy. The latest challenge facing operators and regulators in North Dakota is what to do about the natural gas produced as wells are brought online. The answer, much like when they first ‘cracked the code’ in the Bakken, will likely come from the cooperation and ingenuity of producers, service providers, regulators and advanced technology.

Despite significant investment in gas gathering pipelines and gas processing that has already reached $13 billion and climbing, the amount of gas being produced in the Bakken has made it a challenge to meet the stateimposed flaring targets. The most recent ‘Director’s Cut’ from the North Dakota Department of Mineral Resources stated that 18.2 percent of the gas produced in North Dakota was flared, up slightly from the prior month. There is work to be done because the state’s gas capture goal increases to 88 percent on Nov. 1, 2018.

The increasing gas capture requirement is forcing producers to restrict well production and defer well completions. Most agree that throttling back production is not a viable long-term solution. This is not fair to all the stakeholders involved including the private mineral owners.

The industry is responding with additional gas processing plants are being planned and built. North Dakota is looking at seven new plants over the next seven years. Based on plans, there will be three new plants oin operation by the end of 2019, two more by 2020, and another two by 2025. Each of these will require new investment of at least $4.5 billion per plant, including the pipelines. This is a large investment to keep up with production in an area that is considered an oil play, not a gas play.

While the associated gas from Bakken oil production is a significant challenge today, industry and regulators are committed to reducing the flaring of natural gas. There are logistical and economic challenges to capturing and processing natural gas, but the associated gas is a valuable commodity. That value has everyone in North Dakota looking outside the box for solutions.

Recently, the Houston Chronicle ran a three-part article on natural gas production in the Gulf Coast and, specifically, the value of ethane. From Part Three of that story: “Nobody could have foreseen the U.S. becoming a ma-

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a commitment to develop the resource prudently and economically by focusing on improvements in drilling and completion techniques and, more recently, controlling costs. The next advancement may be the underground storage of natural gas, allowing time for gas processing infrastructure to catch up, or better yet value-added petrochemical investments in North Dakota.

Thinking Outside the Box The North Dakota Industrial Commission recently requested a study of the storage of natural gas in underground geological formations in North Dakota, focusing mainly on the Broom Creek Formation (Minnelusa Group). This creative solution is a twist on an idea that has been under study by the Energy & Environmental Research Center (EERC) for a few years.

The EERC has been studying the feasibility of capturing and

STEVE OEHLENSCHLAGER/BIGSTOCK.COM

THE BAKKEN HAS A GAS PROBLEM

jor exporter of plastics,” said Neil Chapman, a Senior Vice President at ExxonMobil. “It’s a byproduct of shale gas. That is what’s truly amazing about this breakthrough.”

The Houston Chronicle feature focused on Texas gas production, but it also applies directly to the Bakken. While associated gas production is small compared to oil production in the Bakken, the gas, especially in the core Bakken area, is very wet, with ethane and propane being significant components.

The Bakken has unique logistical disadvantages as compared to the Gulf Coast and, while significant investment is being made in gas processing infrastructure, the industry and regulators are looking for new ways to prudently manage this valuable resource.

The history of the Bakken as a test site, a laboratory of technological advancements, over the past 10-plus years shows

storing CO2 underground and now that science is being used to look at the underground storage of natural gas.

Lynn Helms the Director of North Dakota’s Department of Mineral Resources, who suggested the study, says, “North Dakota is the only state that has the legal and regulatory process in place to do this study quickly. We have spent the time to get Class 6 UIC primacy, and as a result, we have everything in place and able to do this at the state level, not the federal, which will allow us to move quickly. More than 10 years studying CO2 storage has prepared us for a process of only 90 days to do the study and 60-90 days to issue a storage order and permit.”

According to Bethany Kurz from the EERC, the study will include assessing the produced gas compositions, gathering options, compression requirements and costs. Also, the study will have a simulation of produced gas injection into the Broom Creek Formation to estimate the site-specific compression needs while looking at injection rate and storage potential.

The possible plume extent and migration over time and future recovery efficiency will similarly be a focus as well as the highlevel assessment of alternate targets for produced gas injection (e.g., carbonate reef structures, conventional and unconventional oil reservoirs). The study will include the assessment of economic impacts and regulatory issues.

“North Dakota’s geology is like a stack of pancakes or a layer cake of rocks, allowing for many innovative technologies and advancements in the future,” says Helms.

“Storing natural gas underground is an interesting possibility, especially considering the gas is extracted from underground in the first place. Assuming underground storage meets state regulatory requirements, this could be a be a solution benefiting the interests of all parties,” says James Taylor, Senior Fellow for environment and climate policy at The Heartland Institute.

A shift in focus from sequestering CO2 to the storage of natural gas has many proponents because it gives producers one more tool in the process of producing oil from the Bakken without the regulatory constraints related to North Dakota’s gas capture requirements. Producers and mineral owners benefit when the full value of the associated gas is realized, and consistent and well-planned drilling programs can be designed and implemented.

Producers and regulators are working to solve the gas problem, and one thing is certain; the Bakken laboratory is alive and well.

About the Author: Bette Grande is a Research Fellow for energy and environment issues at The Heartland Institute.

She served as a North Dakota state Representative from 1996–2014. Grande was a member of the House Appropriations Committee, Education and Environment Division. She was born and raised in Williston, North Dakota.

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INDUSTRY

Forward Thinking: 2019 and Beyond By: Leslie Beyer, President, PESA

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he Petroleum Equipment and Services Association (PESA) is the national trade association for the oilfield services and equipment sector. PESA’s goal is to elevate critical issues and amplify the voices of stakeholders sector-wide, highlighting the innovation, job creation and energy security provided by the strong value chain of oil and natural gas development.

It’s undeniable, 2018 has been an exciting year for our sector. Despite a recent leveling, rig counts have consistently exceeded 2017 numbers, and crude prices have held near the $70 mark. Technological innovation has also been on the rise, with PESA members spearheading efforts to increase productivity and efficiency across the supply chain. By most accounts, the downturn is truly behind us, and that has significant implications for our industry in the coming year.

Broad trends provide optimistic prospects for 2019. Strong domestic production growth combined with market volatility abroad has pushed American oil and gas markets toward net exportation of natural gas, crude oil and petroleum products, an exciting economic prospect for the future. We are closer than ever to delivering energy security, with the U.S. Energy Information Administration (EIA) predicting that U.S. crude production will exceed that of Russia and Saudi Arabia in 2019.

Still, the services and equipment sector will undoubtedly face challenges in the coming year.

Retaining talent, especially in high impact, high turnover regions like the Permian Basin, will be critical. PESA will continue to offer opportunities for intra-sector collaboration and development opportunities for our member company employees to generate lasting solutions for maintaining the greatest oil field assets, the men and women who compose our workforce.

To maximize potential for long-run growth, pipeline infrastructure must improve, without which underground resources are worthless.

This is especially imperative in the Permian,

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where low pipeline takeaway capacity is already slated to suppress production through 2019, possibly forcing prices to unsustainable heights.

Such an issue provides an opening for our sector to step in and provide needed expertise, and PESA member companies are fully engaged in creating solutions to this challenge.

Our sector’s success is also intrinsically linked to decisions made in statehouses, capitols and economic forums worldwide. Policy outlooks for the coming year are mixed, bringing both opportunities and challenges for our sector.

On a global scale, trade policy will remain a wild card. Despite cross-industry pushback, the toll of the Sino-U.S. trade dispute has grown to encompass $53 billion, with the potential to increase nearly fourfold. China has also imposed a 10 percent tariff on liquified natural gas, indicating a new willingness to target domestic upstream development. PESA has and will continue to spearhead efforts to firmly advocate for a thoughtfully considered approach to trade, and these efforts will continue into 2019.

Tensions in the Middle East also complicate market outlooks. Supplies have become increasingly volatile with sanctions on Iran and rife sector mismanagement only increasing the importance of America’s push toward global energy dominance.

Despite international challenges, the domestic policy environment is largely positive for the oilfield services and equipment sector. Regulations continue to be re-examined and refined, and this trend shows no signs of slowing. Both Houses of Congress have advanced measures in our sector’s interest. Economic reforms, like the Tax Cuts and Jobs Act of 2017, have contributed to an atmosphere conducive to growth.

The question of how this will continue will be answered after the 2018 Midterm Elections, but regardless of outcomes, much sustainable change has already been made.

The current position of our industry and sector begs many critical questions. Are upward

Broad trends provide optimistic prospects for 2019 trends the new normal? Is the tapering of last year’s rapid growth a sign of decline or an indication of steadying markets? And most importantly, where do we go from here? After a crippling downturn, we’ve rebounded to a far better place than anyone could have expected.

Predictions show that we have reason to keep looking up, though we should shift our mindsets from survival to sustainability, from growth only to steadiness. In short, 2019 is the year to adjust to our new normal. It is the time to grow, to strategize, and to prepare for the tremendous opportunities that lie ahead, this year and beyond.

For more information about PESA, please visit pesa.org.

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INDUSTRY

A Future of Opportunity and Challenge

A

s 2018 draws to a close, let’s do a quick review: the U.S. is now the number-one producer of both oil and natural gas in the world, moving ahead of Saudi Arabia and Russia; Texas is the number-one producer of both oil and natural gas in the U.S. (in fact, Texas, were we our own country, would now be the numberthree producer in the world); and the Permian Basin is the number-one producing oil field in the state (second in the world only to the monster Ghawar oil field in Saudi Arabia — and in such an impressive position even after having produced over 30 billion barrels since 1923).

Both the U.S. and Texas are meeting and exceeding peak oil-production rates that haven’t been seen since the 1970s.

Even though the U.S. has been producing oil since 1859, and Texas has been producing

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at significant rates since the Spindletop discovery in 1901, in a most counterintuitive way, we have discovered more reserves yet to be produced than we have ever known in the history of the oil industry. Stated another way, the U.S. has produced well over 200 billion barrels of oil since 1859, and yet, we have identified even more oil reserves available for production than we have ever known to exist.

How is that logically possible? How can we have produced so much of a finite resource over such a long period of time — and still have an ever-increasing amount in reserves?

The more we produce, the more we have. It is because the dynamic variable in this equation is human ingenuity. The amount of crude oil in the U.S. hasn’t changed; but our ability to find and produce crude oil and natural gas is always changing and improving in technol-

ogy and efficiency. Why has human ingenuity in the oil and gas industry thrived in the U.S.?

It continues to blossom here because we are the only nation in the world that recognizes the private ownership of minerals in a significant way, and our free-market system encourages and rewards private innovation.

How does it look for 2019 and beyond? The Energy Information Administration (EIA) forecasts that U.S. crude oil production will continue to grow, as will natural gas production.

That development, quite simply, has far-reaching ramifications beyond setting records. It is undeniable that U.S. foreign policy has been heavily influenced over the past 50 years by the expectation of our need for crude oil and natural gas, given the once-held belief that domestic production had peaked and was on a decline curve.

With current and anticipated domestic production rates, not only will the U.S. no longer have to make geopolitical decisions based on oil and gas needs, we are now in a position to use our domestic production as an affirmative foreign-policy tool — like replacing Russia as the only available source of oil and gas to Eastern Europe and persuading China to engage in fairer trade practices by providing them with much needed and desired oil and natural gas to replace their coal-fired power plants.

Because the longstanding ban on exporting crude oil was lifted during the Obama administration in 2015, export volumes have substantially increased, bringing a whole new level of industrial activity to the Houston Ship Channel and the Port of Corpus Christi. In addition to crude oil exports, there’s a brand new market for liquefied natural gas (LNG), sparking an impressive rush to build LNG export facilities along the Gulf Coast. The U.S. is awash with natural gas production from gas fields and gas wells, as well as from the associated gas that is unavoidably and invariably produced from

RONNIECHUA/BIGSTOCK.COM

By: Bill Keffer

oil wells. The excess supply of domestic natural gas production has kept market prices depressed, but global demand could both help countries thirsty for natural gas and bring market prices to a healthier level. It is a development that vividly illustrates the irony and unpredictability of the marketplace; As recently as 2003, the Texas legislature was exploring the need for permitting LNG facilities along the Gulf Coast — for importing natural gas.

Most of that natural gas that is being exported to foreign markets from the Gulf Coast is coming from the Eagle Ford area of South Texas. However, much of the natural gas being produced along with the record levels of crude oil in the Permian Basin, unfortunately, is being stranded because of a shortage in pipeline capacity As a result, the gas is being flared or vented into the atmosphere to the benefit of no one. That is one of the challenges to be addressed in the coming year. In order to build more pipelines, though, more pipeline easements will need to be acquired. Will that exercise go smoothly, or will there be more resistance, both from landowners not wanting to give up their land willingly and environmental activists looking for their next Keystone XL or Dakota Access protest opportunity?

Will there be a continued push to retire coal-fired power plants?

Will nuclear power plants also continue to close because of their inability to compete with the low market rates for natural gas and the heavily-subsidized market prices for wind and solar energy? Will even natural gas power plants eventually find it difficult to operate at a profit because of the subsidized rates for wind and solar energy?

What would happen if ERCOT (the operator of the electricity grid in Texas) could no longer look to coal plants, natural gas plants, or nuclear plants as reliable electricity providers for those (frequent) times when the wind isn’t blowing and the sun isn’t shining to provide the electricity that Texans expect and need every minute of every day?

I wonder if utility providers ever think about how subsidized rates for wind and solar energy are slowly pricing every other energy source out of the market and could lead to the “Wal-Mart” effect in the electricity market. By the way, the effect that Wal-Mart has had on putting locally-owned businesses in towns across Texas out of business is further worsened when, in some cases, Wal-Mart then closes its stores in those same towns, leaving local residents with no place to shop. Similarly, subsidized wind and solar rates will push reliable energy sources out of business, which could lead to brownouts and black-outs because there will no longer be a reliable energy source sufficient to back up the inherently intermittent nature of the wind and the sun.

The coming year presents great potential and opportunity for Texas and the U.S. The challenges, however, are significant and many.

As with all matters subject to our system of self-government, we are the masters of our own destiny.

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.

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

http://www.linkedin.com/company/ shale-oil-&-gas-business-magazine NOVEMBER/DECEMBER 2018  SHALE MAGAZINE

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UNLOCKING PERFORMANCE THROUGH DATA ANALYTICS AND INTEGRATION By: Denis Pone

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he turbulent oil and gas landscape over the last few years has forced the oil and gas industry to a deep introspection and re-examination of the changes needed to adapt to an environment of unpredictable oil price. This situation has lent real urgency to the efforts to improve operational efficiency and invest in technology and innovation.

Across the whole unconventional space, operators are investing in established and conventional technologies at their disposal and are successful in capturing some value from those investments. In the Eagle Ford, for instance, operators have been able to reduce drilling and completion costs through: multi-well pad design; optimizing completion designs by modeling

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well interference and using descriptive tools for infill drilling; proppant volumes, water chemistry and well spacing have been adjusted accordingly to maximize the return on capital deployed; refracturing the parent well independently or before completing the offset child wells to boost production in both the parent and child wells. Also, enhanced oil recovery (EOR) applications using natural gas injection is delivering positive production results and is emerging as a potential opportunity to further increase production in both the parent and child wells.

Despite the glaring advances, the hard truth is that most operators are lagging behind and are not maximizing the value potential of their assets.

Many well-intentioned engineers and scientists who are involved in the day-to-day operations of shale assets develop a simplistic and deterministic view that enables them to make the best of what is available to them in order to increase the efficiency and the recovery from the shale wells.

However, the transition to infill development in the shale fields has brought additional technical complexities, and production rates have been highly variable and unpredictable. This is due to a multitude of factors including depletion effects of the parent well that can cause fracture hits and inter-well communication among child and parent wells.

Significant depletion caused by parent wells is complicating the performance prediction of new infill wells. Geological heterogeneity is still poorly understood. Although operators expect infill wells to perform comparably to, or better than, existing parent wells, the reality is that infill wells often produce below the established offset parent well decline curves. This

scenario adversely impacts future reserve estimates and, ultimately, field economics.

There are many opinions and speculations on what exactly happens and what to do as we embark upon drilling, completing and hydraulically fracturing shale wells. It is however selfevident that effectively capturing the value of a shale asset require going beyond simple intuitions and develop a solution more adequate for a multidimensional problem. The fact remains that, as an industry, we collect a significant amount of data during the operations that result in oil and gas production.

It is not unrealistic to assume that the collected data contains the knowledge we need in order to optimize production and maximize recovery from this prolific hydrocarbon resource.

To mitigate operational inefficiencies, and raise the overall shale assets performance, operators must embrace advanced petroleum data analytics and integration. The rapid advances in computer science have enabled the development of readily-available powerful tools that use a combination of state-of-the-art engineering, data science, and computing power to identify superior solutions to complex production optimization problems. Using these tools to supplement conventional models will improve the physical understanding of shale assets and alleviate the gaps in performance that hold back production. A few operators are moving in this direction and are already capturing significant benefits using simple predictive analytics to catch failures before they happen.

This technology is transforming maintenance strategies from reactive to proactive, effectively reducing unplanned downtime and improving asset utilization It should be stressed that realizing the full value of data

FUNTAP/BIGSTOCK.COM

INDUSTRY

analytics require that we alter how we do things. Data analytics and integration mean new ways of thinking and working, new collaborations structure and a boundaryless organization. Data analytics and integration across different functions (reservoir, completion, drilling, geology, finance) will enable the development of a unified view of the asset and create a system of continuous learning from the data generated on a regular basis. Insights from such integration will improve reservoir models to better account for the real impact of infill wells, to fully understand critical timing, spacing and job sizes, to solve these dynamic challenges related to field development planning in unconventional basins.

Adopting data analytics and integration brings improvements but might also bring new challenges — however, these are solvable. It is crucial to revisit and upgrade accepted organizational decision-making processes and risk-management techniques. It is also important to develop new standards, procedures and methodologies and to apply historical experiences only in new ways.

Data analytics is an is an exciting opportunity that enables not only that each molecule of hydrocarbon produced brings a return to our investment, but also enriches our understanding of how this resource should be managed for sustainable return. We are just at the start of the development curve for much leaner, efficient industry and this technology is unquestionably a big part of the solution.

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POLICY

An Even Playing Field?

A Look at Renewable Energ y Subsidies

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growing healthy economy needs cheap and abundant energy to fuel growth. That is why you hear people say they are in favor of an all-of-theabove energy policy. We need all the energy we can get from which ever source we can get it.

The market will sort out what energy source works best for different applications. The market will do this, if we have a fair and free market. However, we don’t have one because of mandates and subsidies for renewable energy.

If oil, natural gas and other forms of energy can’t compete against renewables, it’s just too bad for those energy firms. If those firms can compete, but aren’t allowed to because of subsidies, mandates and regulations, then our economy, both state and national, are going to be hamstrung, bringing higher prices to both consumers and producers. Tax funds will be wasted on subsidies.

The Texas Public Policy Foundation recently had a panel discussing this issue. U.S. taxpayers have spent over $65 billion on wind and solar tax credits. While $65 billion won’t solve the nation’s debt crisis, it would be a step in the right direction. Wind farms have roughly half their capital building cost covered by tax credits and subsidies. In Texas, ratepayers have spent $7 billion dollars building transmission lines to move wind generated electricity. When a natural gas generating plant is built you would normally build it close to its respective market so extensive amounts of transmission lines would not have to be built. In Texas, the amount of local property tax abatements under Chapter 312 and 313 that have gone to wind farms is about $1.8 billion dollars. This tax abatement is not solely for wind farms, but they are a substantial user providing few jobs after the initial construction phase.

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If you are interested in more information on this topic I would urge you to visit www.texaspolicy.com, the website of the Texas Public Policy Foundation. If you look under energy and environment in the issues area, you will find several papers on these topics.

As bad as tax subsidies are, at least they are relatively easy to see and understand their impacts. Regulations and mandates can have more effect on your pocket book and since they are not directly paid to government entities it’s much harder for individuals to add up their total cost.

Two type of mandates that I would challenge the readers to keep a look out for in the future are those that will mandate a certain percentage of electric vehicles (or zero emission vehicles (ZEV) as environmentalist like to call them) sold by car companies in a state. A hypothetical example — manufactures operating in a state would be required to sell 25 percent ZEV by 2030. Another policy being pushed are mandates requiring a certain percentage of renewable energy usage for electrical generation. This is an actual example — California is now mandating 100 percent renewable energy by 2045.

These mandates are prime examples of the type of policies that if adopted would not only cost individuals through higher prices on utility rates and other energy inputs but would be detrimental to the Texas oil and gas business — a major factor in both the state and national economy.

Subsidies, mandates and onerous regulations in favor of renewable energy are a clear and present danger to our state and national economy. Oil and gas and renewables should compete on a level playing ground.

About the author: David Porter has served as a Railroad Commissioner (2011–17) and Chairman (2015–16), as well as Vice Chairman of the Interstate Oil and Gas Compact Commission (2016). Prior to service on the Commission, Porter spent 30 years in Midland, Texas, as a CPA working with oil and gas producers, service companies and royalty owners.

Since leaving the Commission, Porter works as a consultant for oil and gas companies. He also serves as Chairman of the 98th Meridian Foundation, a nonprofit concerned with water, energy and land issues.

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By: David Porter

NOVEMBER/DECEMBER 2018  SHALE MAGAZINE

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POLICY

How the Oil & Gas Industry is Saving America’s National Parks By: Alby Modiano

R

ecent months brought a wave of changes to oil and gas related policy and legislation. From the Environmental Protection Agency (EPA) to the Department of the Interior (DOI) to the National Parks, the current administration is taking a good hard look at how to streamline processes to empower oil and gas companies to make a positive difference in the lives of millions of Americans.

It comes as no surprise that proposed changes to Obama-era regulations have brought criticism from mainstream media; the oil and gas industry has long been framed as a villain to the environment. This narrative has continued as the media has framed the new methane regulation changes announced by the Trump administration with headlines such as “Trump tells Oil and Gas not to Worry about Methane” and claiming that “Trump … puts Americans at Risk.’”

However, there are a few relevant facts that no one is talking about. These proposals are aimed to streamline processes by removing duplicated regulations, while at the same time using revenues produced in energy development to maintain National Parks and Public Lands.

Putting the States in the Lead on Methane Regulation Many states throughout the country already have methane regulations, and they are proving successful. In Colorado, for example, energy companies have found and repaired about 73,000 methane leaks since 2015, in compliance with a state-required oilfield inspection program.

According to a state report, the number of leaks has fallen by 52 percent from 2015 to 2017. The purpose of the Trump administration proposals is not to ignore the dangers of methane, but to give the states the power and responsibility to create methane regulations that

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fit their unique needs and situations.

So what do the new regulations change?

The first change came from the Environmental Protection Agency’s proposal to ease certain aspects of the 2016 Oil and Natural Gas Sector: Emission Standards for New, Reconstructed and Modified Sources Act. One of the most significant changes is in the monitoring frequencies of well sites. Originally, well sites had to be monitored every six months, and repairs had to be completed within 30 days of finding the leak.

The Obama-era EPA acknowledged the difficulties that extreme conditions often create, and included provisions which attempted to fit the different needs of states. While the EPA recognized that different areas of the country had different needs, they failed to see the burden that one size fits all regulation created on companies.

When speaking about the federal regulations, Tracee Bentley, head of the Colorado Petroleum Council, said, “I think that the states know best, and honestly, every state is different.”

In response to industry feedback, EPA Acting Director Andrew R. Wheeler signed a notice Sept. 11, 2018, outlining proposals to revise the Obama-era methane rules. One of the proposed changes is to decrease monitoring frequencies. The changes would decrease monitoring frequency to (1) annual monitoring for non-low production well sites, (2) biennial (once every other year) monitoring for low production well sites, (3) semiannual and annual monitoring for compressor stations, and (4) yearly monitoring for compressor stations located on the Alaska North Slope. Additionally, the EPA proposed that monitoring would no longer be required when all major production and processing equipment is removed from a well site such that it becomes a wellhead only well site. Further, the EPA is proposing that companies must make the first attempt at repair within 30 days of identifying a

While agencies have been hacking away at excessive regulations, Congress has also been busy creating legislation to put revenues received from energy development to good use

Alby Modiano is the President and CEO of the U.S. Oil & Gas Association.

Halea Walker, Research Assistant at USOGA, contributed to this article.

component with fugitive emissions, with final repair completed within 60 days.

The EPA rule applies to new oil field facilities, while the DOI has rules that apply to new and existing facilities on federal and Native American lands. The U.S. Department of the Interior’s Bureau of Land Management (BLM) announced a final rule Sept. 18, 2018, revising the Obama-era 2016 Waste Prevention Rule (also known as the Venting and Flaring Rule).

According to the DOI, the new rule will “reduce unnecessary burdens on the private sector and restore proven regulations at a time when investment in Federal onshore oil and gas is skyrocketing.”

The BLM reviewed the 2016 rule and found that it had considerable overlap in existing State, Tribal and Federal regulations. Kathleen Sgamma, President of Western Energy Alliance, said the old rule improperly put the Bureau of Land Management in the role of regulating air quality, which she said should instead be done by the EPA or state agencies. State agencies are much more aware of the challenges companies face locally and are more agile in creating rules that fit their needs.

Congress Advances Energy Legislation While agencies have been hacking away at excessive regulations, Congress has also been busy creating legislation to put revenues received from energy development to good use. This September, the House Committee on Natural Resources’ markup produced one of the most significant bi-partisan conservation measures in recent memory.

Chairman Rob Bishop (R-UT) and ranking member Raúl Grijalva’s (D-AZ) “Restore Our Parks and Public Lands Act” which was introduced last July is designed to help fund the nearly $12 billion deferred maintenance backlog currently plaguing the National Parks. The bill would establish the National Park Service and Public Lands Legacy Restoration Fund, which will receive its funding from 50 percent of the unallocated revenue paid to the federal government from energy production on federal lands.

Revenue raised through both onshore and offshore development and alternative and renewable energy sources such as solar, wind, geothermal and hydropower will be included in the fund, up to $1.3 billion annually.

Lease payments, rental and other fees and royalty rates all remain unchanged. Instead, the legislation directs additional unobligated funds towards reducing the maintenance backlog on federal lands. The bill proposes to allocate 80 percent of the fund to the National

From the Environmental Protection Agency (EPA) to the Department of the Interior (DOI) to the National Parks, the current administration is taking a good hard look at how to streamline processes to empower oil and gas companies to make a positive difference in the lives of millions of Americans

Parks Service, with the remaining 20 percent divided between the Fish and Wildlife Service, Bureau of Land Management and Bureau of Indian Education.

Leveraging Energy Revenue to Conserve Public Lands Leveraging revenue from federal energy leasing to support conservation of public land is a not a new concept. The Reclamation Fund, Land and Water Conservation Fund (LWCF), Historic Preservation Fund (HPF) and coastal restoration through the Gulf of Mexico Energy Security Act (GOMESA) funds are all supported through receipts derived from energy leasing. The new National Park Service and Public Lands Legacy Restoration Fund expands this funding mechanism to assist land management agencies and BIE schools but does not divert funding from the previously mentioned funds.

The committee also passed H.R. 502, which was introduced by Grijalva. The bill proposes to permanently authorize the Land and Water Conservation Fund (LWCF). Created in 1965, the LWCF was initially enacted to preserve, develop and ensure public access to outdoor recreation resources. The bill also requires that no less than 1.5 percent of the annual authorized funding amount, or $10 million, whichever is greater, be used for projects that secure recreational public access to existing federal public land for hunting, fishing and other recreational purposes.

More recently, on Oct. 2, similar bills to

those passed in the House Committee were passed in the Senate Committee on Energy and Natural Resources. The “Restore Our Parks Act” would set aside unallocated federal money received from onshore and offshore drilling. Senator Rob Portman (R-Ohio), the bill’s main sponsor, said that the bill is “...about good stewardship.”

In another bipartisan win, the committee also passed a bill to permanently reauthorize the LWCF. Although differences between the house and senate versions will need to be worked out, the recent trend of bipartisan support of National Parks looks promising. These two conservation measures are expected to become the drivers of a much larger omnibus public lands and energy package later this fall to which dozens of smaller energy and natural resource bills that have piled up over the past two years will be added.

The U.S oil and gas industry makes all of this possible through federal royalties and fees paid from the production of the national assets. Unfortunately, this is often lost on many of those same groups which oppose the industry but very much benefit from the federal revenues produced through oil and gas development.

The Administration’s streamlined regulation efforts are not just providing much needed and expedited access to our abundant resources but is robustly funding our national parks, wildlife refuges, forest and public lands. Those are values we all share and is made possible by our nation’s oil and gas producers.

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BUSINESS

UTSA Honors College Prepares Students for the Challenges Ahead By: Thomas Tunstall, Ph.D.

T

his fall finds me teaching Honors College freshmen in an introductory course under the rubric of Energy.

Other sections address themes such as Sustainability, Media and even Happiness.

The Honors Tutorial I is a required course for all Honors College matriculates. Instructors work with aspiring scholars on how to read, write and engage in popular intellectual discourse.

As such, the approach is, by definition, highly interdisciplinary in nature. Students identify and evaluate sources of information, and develop a base of knowledge essential for engaging in public policy conversations.

Given the acrimonious rhetoric now common in public policy debates, it’s worth dissecting where those exchanges sometimes go off the rails. In many cases, issues are oversimplified — a hammer sees everything as a nail. Alter-

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natively, sometimes experts enter the fray with such a narrow focus that the bigger picture gets lost in the exquisite detail. All too often, the debate merely descends into personal attack.

Honors College freshmen have excelled over their academic careers at specialized study in discrete courses: math, physical sciences, biology, selected portions of world history and the like.

Rarely, however, are they tasked with bringing the pieces together as public policy discussions require. Their challenge then is to cultivate confidence by linking the individual disciplines with which they have become familiar to create meaningful, coherent and credible narratives.

The facility to discuss public policy issues in a lucid manner benefits from a unifying context to encourage those linkages. The framework employed in my class is a concept called Big History, which David Christian, among

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Big History presents an opportunity for undergraduates to see the long arc of how we arrived at this precise moment in time and — as future policymakers — to articulate thoughtful scenarios about the path forward other scholars, has developed as a way to paint a very large canvas in broad strokes. In barely 300 pages, Christian lays out an account of events not possible until very recently. Big History elucidates a timeline in rapid-fire succession, from the origin of the universe to present day. This

high-level, yet comprehensive view across disciplines allows learners to plug their individual specialization of study into the larger picture.

For the theme of energy, I chose to take an expansive definition in order to give students latitude to pursue their own particular research interests. For example, all of the mega-innovations over the course of human history involve releasing new flows of energy — including some that we don’t often stop to consider. With the Agrarian Revolution, which began around 10,000 years ago, humans systematically extracted the energy from photosynthesis — essentially captured sunlight. This caused a big change in lifestyles. Prior to that, human ancestry spent roughly 2 million years wandering the earth as hunter-gatherers — by far the dominant era of human history in terms of duration.

Another, more recent megainnovation involved harnessing

fossil fuels such as coal, oil and natural gas, which constitute other forms of captured sunlight. The Industrial Revolution represents a recent and profound transformation of human civilization, activity and lifestyles — first with steam power, then later with more efficient internal combustion engines.

The ability to tap these new sources doubled human energy consumption during the 19th century. Then in the 20th century, energy consumption rose by a factor of 10 — much faster than the rate of increase in human populations.

Unleashing such enormous energy flows reverberates widely across regions and continents. According to Christian, diesel pumps remove freshwater from aquifers 10 times faster than natural flows are able to replenish them. We produce minerals, rocks and other forms of matter that have never existed before, such as plastics, pure aluminum, stainless steel and massive amounts of concrete.

Intelligent and practical public policy should inform our capacity to harness vast quantities of energy and their associated products.

According to Christian, most modern educational systems don’t spend much time working with students to look at the future in a systematic fashion. Big History presents an opportunity for undergraduates to see the long arc of how we arrived at this precise moment in time and — as future policymakers — to articulate thoughtful scenarios about the path forward.

About the author: Thomas Tunstall, Ph.D., is the Senior Research Director at the University of Texas at San Antonio’s Institute for Economic Development, and was a principal investigator for numerous economic and community development studies. He has published peer-reviewed articles on shale oil and gas, and has written op-ed articles on the topic for the Wall Street Journal. Dr. Tunstall holds a doctorate degree in political economy, a master’s in business administration from The University of Texas at Dallas, and a bachelor of business administration from The University of Texas at Austin.

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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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BUSINESS

Advancing Technology Has Created a “New Normal” for the Oil and Gas Industry

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s I mentioned in our last issue, I’ve been employed in some way, shape or form by the oil and gas industry since my first summer job working as a welder’s helper on a pipeline crew in South Texas in 1976. The minimum wage at the time was something like $2.21 per hour, and that’s what I was paid that first summer — I got a 25 cents/hr. raise the next year.

But we did get paid double time for overtime, and since we worked 80 to 90 hours each week, that 10 weeks of work paid for everything but tuition and fees for the fall and spring semesters. Living was cheaper then. So was a college education.

So much has changed in the industry — and the world — since then, and given that the theme of this issue of Shale Magazine is all about the deployment of high technology in the industry, I spent some time reflecting on just how much has changed the last 42 years.

The truth is, anyone under the age of 40 today will have a hard time imagining the scope of the advances of technology since that time. When I obtained my first full-time job at Coastal States Oil & Gas Company in June 1979, the advent of the common use of even fax machines was still a decade into the future.

Lease agreements and other legal documents common to the industry were still typed up on forms that created multiple carbon copies because high-speed copiers still had not come into use in most offices.

There was no such thing as a personal computer in the workplace. The huge mainframe computers in use at the time had less memory than your microwave oven (far less) and

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still used card-based programming and tape drives. I was an accountant early in my career, and the first adding machine I was assigned

by Coastal States was one of those old handcrank mechanical things. No joke.

In 1979, most Americans still got up to walk to the television in our living rooms to change the channel. The more well-to-do at the time were able to record TV shows, but used either Sony Betamax or VHS recorders to do it. There was no such thing as email, or even the internet for that matter. No cell phones, and thus no texts. If you were on the road for business travel and wanted to call home to check in with your spouse and kids, you found this thing called a “pay phone” or just waited until you got to your hotel room and called from there.

No really, I’m not putting you on here, kids.

That’s how I communicated home with the wife until 1996, when my employer literally forced me to get my first cellphone, which I resisted doing for at least two years because it seemed silly.

We did have hydraulic fracturing — or “Fracking,” as it is called today — back in the dark ages of the 1970s, but it was a little different at the time. Frac jobs then were much smaller, used much less water and were used mainly to free up more production out of vertical wells drilled into “tight” sand formations or coal seams.

Horizontal drilling? Are you kidding me?

Not in 1979. While the first successful true “horizontal” well was drilled and completed way back in 1929 (in Texas, of course,) efforts to deploy it for the next 50 years or so were isolated and experimental in nature. It did not

truly become a widely-deployed technology in the oil patch until the late 1980s, when the first oil fields to see it commonly used were the Austin Chalk in Texas and the upper Bakken Shale formation in North Dakota.

The typical horizontal lateral displacement at that time was generally measured in terms of a few hundred feet or so, in stark contrast to the laterals of two miles or longer that are common today. To illustrate just how far the technology has advanced in that time, those 1980s-era wells took months to drill and complete. Today’s wells are drilled, fracked and completed in 10 to 15 days.

That is one of the most amazing aspects of the rapid pace of change the oil patch has experienced over the last half-decade since the bust in oil prices began forcing oil producers and service companies to become more efficient and effective in everything they do.

Everyone was able to make money when oil was selling for $100 a barrel; but when the price fell to $40 and below for a span of two to three years, companies had no choice but to become much better in every aspect of the business in order to just survive. In fact, those who failed to evolve didn’t survive.

At the same time, service companies who were having to cut their rates dramatically and lay off much of their staff in order to retain business during the down times knew they would have to become far more efficient and technology-driven if they wanted to still be around a few years into the future. As with the operators, most were able to do that, but some did not survive. But the advances these companies produced in their technology offerings

LEOWOLFERT/BIGSTOCK.COM

By: David Blackmon

The truth is, anyone under the age of 40 today will have a hard time imagining the scope of the advances of technology since that time have enabled the industry to move into what I call the industry’s “new normal,” which is a far higher degree of profitability at lower prices, driven by technology and human ingenuity.

In just the past few years, average per-well recoveries in many of the country’s oil shale basins have more than doubled. At the same time, the average number of days needed to drill, frac and complete a well has been cut essentially in half. Obviously, a company that can now recover twice as much production from each well and drill twice as many wells with each active rig than it formerly could is going to be much more profitable than it was in the past. That would be the case even had

the commodity price remained at $40, but at $70 a barrel and higher, it’s easy to see why the U.S. domestic oil and gas industry is in a full-fledged boom today.

Rapid improvements in an array of technologies, both above the surface and down the hole, have played an enormous role in making this new boom time for the industry come about. While the stronger crude price has certainly helped, this “new normal” boom doesn’t need $100 oil in order to be sustained for some time to come. That’s good news for everyone.

Thank you for indulging me in this little walk down memory lane. I hope you enjoy the rest of this issue of SHALE Magazine.

About the author: David Blackmon is the Editor of SHALE Oil & Gas Business Magazine. He previously spent 37 years in the oil and natural gas industry in a variety of roles — the last 22 years engaging in public policy issues at the state and national levels.

Contact David Blackmon at david. blackmon@shalemag.com.

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BUSINESS

Overcoming Barriers to Digital By: Vijay Asava

As we review these barriers, one thing is evident — these are the same barriers that organizations face for ANY type of transformation — not just digital. In the past, successful and forward-thinking companies have found ways to overcome these types of barriers to achieve their end goal — organizational transformation.

Business Reorganization In today’s increasingly complex business environments, organizations are constantly undergoing reorganization to stay ahead of their competition.

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Companies must be able to run transformation efforts in parallel with in-flight reorganization efforts. Leaders must analyze their organizational structures and identify areas where digital transformation can supplement in-flight efforts. ​

In the past, successful and forward-thinking companies have found ways to overcome these types of barriers to achieve their end goal — organizational transformation Change Resistance from Leadership No matter how great an idea is, if it does not have executive level support, there is very little chance it will have the desired impact. Digital transformation may require changes in organizational structures, processes, tools and behaviors. Organizations often have strong internal resistance to these types of changes, and thus require a strong executive voice that can articulate the vision and purpose of transformation.

Legacy Operating Models Most organizations embrace the sentiment, “If it isn’t broken, don’t fix it.”

This behavior could be justified a decade ago, however any company that aspires to

SHALE MAGAZINE  NOVEMBER/DECEMBER 2018

continue to be successful must embrace the idea of modernization. Companies currently transforming their operating models should ensure they are building in the right digital capabilities. Companies that have delayed major updates to their operating models should see digital transformation as an opportunity to get started today.

Cost and Complexity of Cyber Threat Management Whether its securing PII or proprietary information, cybersecurity is one of the hottest topics in the industry today. With most of today’s daily transaction volume being executed on infrastructure that we no longer manage, it is increasingly important that the right tools are in place to protect against all cyber threats.

Lack of Digital Skills in the Workforce No matter what industry or line of business, one of the most critical success factors for any transformation is access to the right set of skills to drive quality results. Digital skills are currently a hot commodity, and the ability to grow them organically within an organization requires a significant investment of both money and time.

For more information: Want to continue the conversation? Contact us at insights@ enaxisconsulting.com.

About the Author: Vijay Asava is a seasoned management consultant with 11+ years of Information Technology (IT) Strategy and Service Delivery experience. Asava has extensive knowledge of all elements of the global sourcing model – from the perspective of client, service provider and third-party advisor. Asava has planned, designed and delivered comprehensive IT sourcing solutions for leading global companies in the Healthcare, Banking & Financial Services, Retail and Technology industries.

KURHAN/BIGSTOCK.COM

D

igital transformation. We hear this term used in many different contexts in our day to day conversations. Regardless of when or how it is used, one thing is clear, digital transformation could be the key to ensuring an organization’s survival over the next several years. During the recent Enaxis Leadership Forum, attendees were asked what they believed to be the biggest barriers they faced to achieve benefits of digital transformation:

• Business Reorganization • Change Resistance from Leadership • Legacy Operating Models • Cost and Complexity of Cyber Threat Management • Lack of Digital Skills in Current Workforce

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LIFESTYLE

Family Matters: Examining Eye Health at Every Age By: Dr. Sheekha Sethi, Optometrist at Cohen Eye Associates

Children Vision loss seems like it would be the first thing that anyone would notice going wrong; however, gradual vision loss can often go unnoticed, especially in young children who are unaware — oftentimes it can be a sign of a much larger problem. Children who experience vision loss think that’s the way the world is supposed to look, and they don’t inform their parents. Nearly 35 percent of preschoolers need vision correction, and the risk of nearsightedness and the advancement of nearsightedness continues through the school years.

Concerning the health of the eyes, there are genetic eye diseases, childhood glaucoma, pediatric cataracts and developmental abnormalities which are all issues that include vision loss as a symptom. Any of the previously mentioned eye problems plus some less obvious vision problems can seriously affect the way a child learns. These issues can lead to struggling to focus on school work, poor hand-eye coordination, poor reading comprehension, lower efficiency and rapid fatigue due to eyestrain. In fact, undetected vision problems can

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display similar symptoms as Attention Deficit Hyperactivity Disorder (ADHD). Many children get misdiagnosed with ADHD when all they really needed was a pair of glasses.

So, when should your child have eye exams? The American Optometric Association recommends children see an eye doctor at six to 12 months, at least once between 3 to 5 years old, right before they start first grade and annually after. Be sure to alert your eye doctor if your child has a history of prematurity, delayed development, poor eye tracking skills or if they frequently rub their eyes, blink excessively or are unable to maintain a fixated gaze on objects, or if your family has a history of eye issues and diseases as these are signs your

child could be more at risk for eye issues and need to see an eye doctor more frequently.

Tweens and Teens Tweens and teens should visit an eye doctor annually in order to learn how to better care for their eyes as there are several factors that put this age group at risk for eye infections or eye damage.

Attendance at school and participation in group activities increase the risk for problems such as conjunctivitis. Likewise, tweens and teens are staring at computer and tablet screens, which can lead to eye strain, blurry vision, trouble focusing at a distance, dry eyes and headaches. If patients know they

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AS THE LEAD OPTOMETRIST at Cohen Eye Associates, it is my job to educate patients about the importance of regular eye exams. There is a misconception that if you do not have eye or vision problems, you do not need to go to the eye doctor. This is a huge problem as eye diseases and vision loss develop gradually and can go unnoticed for years. As a wife and mother with a growing family, I want to help not only my individual patients but also their families to understand why eye health matters for each family member, no matter their age.

will be staring at a screen for too long, they can discuss computer glasses or updating their prescription with their eye doctor.

When doing an extended amount of near work, a good rule of thumb is to take time every 20 minutes to look at something at a distance of about 20 feet away. This helps to relax the eyes.

With this age comes major changes, which can impact confidence. As tweens and teens begin using makeup, they need to be aware of the risks and rules of eye makeup. For example, eye brushes should be cleaned at least twice a month. Using old makeup can increase the risk for serious eye infections, and eye makeup brushes should never be shared.

With all of the extreme changes going on in the lives of tweens and teens, the right pair of glasses can do wonders for their confidence. Not only will they be able to see properly by having the most updated prescription, but they can find frames that are the right color and shape to perfectly accentuate their best features. There’s no need to feel insecure when wearing glasses. One of my favorite parts of my job is helping my patients, one-on-one, find the perfect frame to fit their face and features.

Those that are at risk or those that wear contacts and glasses should see an eye doctor annually.

Tweens and teens should be seeing the eye doctor at least once every two years if they show no signs of eye issues.

Adults Vision loss that adults typically blame on getting older can be signs of something much more serious. With the latest retinal imaging technology at our practice, Cohen Eye Associates, we are able to evaluate high-resolution images of the back of your eyes, which is critical in detecting early signs of serious issues such as retinal detachments, retinopathy and glaucoma. Detecting these issues early allows a doctor to treat it before it gets worse. Not only can this technology save you from major damage later on, but the eyes do not have to be dilated, which means you can avoid side effects, such as eye drops that sting, and conveniently go back to work after your exam.

Those that are at risk or need a prescription should see their eye doctor annually. It is especially important for adults 65 and older to visit their eye doctor at least once a year.

As a wife and mother with a growing family, I want to help not only my individual patients but also their families to understand why eye health matters for each family member, no matter their age

For more information, please visit www.cohen-eye.com or call 713-658-8301. Follow us on Instagram and Facebook.

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LIFESTYLE

5 Ways to Make This Holiday Season Special for the Family By: Lauren Guerra

Arts and Crafts: Options are endless in this area.

Get some wooden figures or letters to decorate, ceramic ornaments for the Christmas tree or just simple construction paper and crayons and let the kids do their thing. Give them ideas on what they can do to get into the holiday spirit with their art, such as a word map of things they are grateful for on Thanksgiving or design a unique snow globe of their favorite Christmas characters. Again, options for arts and crafts are endless and many times you have an array of items already at your home to allow your child’s imagination and creativity create a masterpiece to be enjoyed around the holidays for years to come.

Start a new tradition: Traditions are wonderful for families and especially children. It’s something to look forward to each year as a regular occurrence. Traditions can be something small and fun, just make it something you and your family will look forward to each year. Maybe it’s a specific food made together in the kitchen, like decorating cookies or making homemade peanut brittle.

Perhaps a physical activity with some friendly competition is more your family’s speed, such as a holiday season basketball game and winners get to choose a special dessert to be

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served on Thanksgiving.

Regardless of the tradition, your family will appreciate the consistency and nostalgia of your special activity.

Donate: Nothing promotes the holiday spirit more than helping others. Whether it’s cleaning out the closet to find those outgrown clothing items and abandoned toys or giving your time to a worthy cause, your family will be humbled and happy to help others in the season of joy and cheer. There are plenty of options for donating your items and time. One fun idea you can do from the comfort of your own home is to make care packages for the needy. Get together some everyday items such as hygiene items, snacks, water, etc. to put into a large zipper bag and package it with a warm “happy holidays” message from your family to be given to a shelter or hospital of your choice.

Learn together: With the kids out of school, don’t let the opportunities for your family to continue to learn together slip away. Visit a nature center or museum, do science experiments in the kitchen or watch (child-friendly) documentaries and have discussions on what you learn.

A family that is rich in knowledge will find opportunities to learn together to be of the greatest of gifts.

Make a meal together: Nothing brings people together like food. Try to pick a recipe that the kids can help with.

Depending on their ages, your choices might be limited. However, putting together an easy meal everyone contributes to will bring satisfaction to your hearts and tummies when you sit down for a family meal.

Kids can help with pouring, stirring, measuring, serving and more depending on their age and it will also help them to learn confidence in the kitchen as they age.

Happy holidays from the SHALE team!

About the author: Lauren Guerra is the Chief Operating Officer and Editor-in-Chief of SHALE Magazine. For editorial inquiries, please email lauren@ shalemag.com.

TVERDOKHLIB/BIGSTOCK.COM

AS THE HOLIDAYS APPROACH, families get to spend some quality time together again between school breaks. This time can be used for many different things, but making quality time a priority is always a good option.

Why waste those precious days with your kids plopped in front of a TV or iPad? Instead, find ways to maximize your time and make lasting memories that are both fun and functional!

Here are some ideas for you to consider doing with your family as 2018 comes to an end.

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LIFESTYLE

Basic Apple Pie Recipe By: Melissa Griffiths, Bless this Mess

Prep Time: 15 mins Cook Time: 45 mins Total Time: 1 hour Yield: 8-10 servings INGREDIENTS

• 3 tablespoons sugar • 3 tablespoons all-purpose flour • 1-2 teaspoons cinnamon • Dash of salt • About 5 cups thinly sliced apples (peeled and cored), 8-10 medium apples • 2 tablespoons butter, cut into small pieces • Double pie crust (meaning pie crust for the bottom and top of the pie) • 1 egg white + 1 tablespoon water • Granulated or chubby sparkling sugar, optional INSTRUCTIONS

1. Mix first 5 ingredients together in a medium bowl.

2. Roll out and place an uncooked pie crust in the bottom of a deep 9-inch pie plate.

3. Place the apple mixture in the uncooked pie shell. Place small pieces of butter on top of apple mixture.

4. Top with second pie crust, crimp the edges and then cut a few slits in the top crust to allow steam to vent.

5. Mix the egg white and 1 tablespoon of water together in

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a small bowl and then brush the top with water and sprinkle with sugar before baking.

6. Bake at 450 for the first 15 minutes, then reduce the heat to 350 and continue cooking for an additional 30 to 40 minutes, or until the top is golden brown.

7. If the edge of the crust starts to brown more quickly than the center, carefully cover the edge with foil for the last 15-20 minutes of baking to prevent over-browning.

8. Let the pie cool for 10 minutes before serving. Can be made ahead of time and served at room temperature.

NOTES

You’ll want to cut these apples about 1/4 inch thick.

Try to find a firm apple to use in this recipe. I like a mix between a sweet and sour apple. You can use Granny Smith, Jonathan, Jonagold, Winesap, Golden Delicious, Honey Crisp, Gala or Rome Beauty. I used Golden Delicious from our trees for this pie and it was great.

Pie crust recipes and tips can be found at the website below.

In the world of pies, this one has a very low amount of added sugar.

If you are using tart apples you might need to double the amount of sugar. Just taste and see.

For tips, tricks and other delicious holiday recipes, visit www.blessthismessplease.com. *This recipe was originally published at www.blessthismessplease.com/basic-apple-pie-recipe

MIZINA/BIGSTOCK.COM

My go-to apple pie recipe made with fresh apples! Homemade, flaky crust with juicy apple filling. Makes a delicious pie that goes perfectly with ice cream!

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SOCIAL

Deloitte Oil & Gas Conference Gives Insight Into Energy Sector

PHOTOS COURTESY OF SHALE

The Deloitte Oil & Gas Conference was held Oct. 30 at the Marriott Marquis Hotel in Houston. The conference featured a diverse group of speakers, sharing insight into the future of the oil and gas industry from across the value chain. Kym Bolado, SHALE Magazine CEO and Host of In the Oil Patch, was on hand to do live interviews from the conference which can be heard on the radio in the weeks following the conference.

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SOCIAL

DUG Eagle Ford Hosted in San Antonio

PHOTOS COURTESY OF SHALE

SHALE attended the DUG Eagle Ford Conference in San Antonio Aug. 19-21.

The conference featured exhibitors from various oil and gas related companies.

Featured speakers gave presentations on key topics affecting the energy industry in South Texas across the Eagle Ford Shale play.

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SOCIAL

ConocoPhillips hosts Legacy Scholarship Golf Tournament

PHOTOS COURTESY OF CONOCOPHILLIPS

ConocoPhillips hosted the Legacy Scholarship Golf Tournament on Friday, Oct. 5 at the River Bend Golf Club in Floresville, Texas. The tournament consisted of 144 golfers on 36 teams, 60 team and hole sponsors, and raised $210,636 for scholarships. The fundraiser benefits all Karnes County schools (Runge, Karnes City, Kenedy and Falls City) with scholarships for high school seniors. A total of $25,000 will be given each year in scholarships. Applications for scholarship recipients are due April 15, 2019, and a committee of ConocoPhillips employees will review, rank and award the scholarships prior to graduation. Over the past five years, $590,000 has been raised by the Legacy Scholarship Golf Tournament. Kenedy ISD, as the fiscal agent for the funds, will invest the surplus of the monies to be used in the future. Through 2018, $100,000 in scholarships have been awarded to 20 scholarship recipients.

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SOCIAL

WEN South Texas and Women Empowered Host Mentorship Luncheon

PHOTOS COURTESY OF SHALE

Women’s Energy Network (WEN) South Texas and Women Empowered (WE), a professional organization within CPS Energy, hosted THE Making a Difference Through Mentorship luncheon to give guidance and insight into the mentor/mentee opportunities and best practices. The keynote speaker of this event was Paula Gold-Williams, President and CEO of CPS Energy. A panel, moderated by Jackson Walker Partner Stephanie Chandler, featured Lori Johnson Leal, Director of Corporate Responsibility at CPS Energy; Briana Lyssy, Government and Community Affairs Lead at Marathon Oil; and Laura Vaccaro, VP of Community Relations and Events at Valero Energy.

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Delivering insight into the development of the U.S. oil and natural gas industry and the businesses affected

SHALE SHALE SHALE SHALE SHALE SHALE MAGAZINE

MAY/JUNE 2018

US TRAVEL DESTINATIONS FOR EVERY PERSON DESK & DERRICK CLUB OF MIDLAND HOSTS 67TH ANNUAL INDUSTRY APPRECIATION DINNER

WOMEN’S EDITION

WOMEN IN LEADERSHIP

SPREAD THE WORD: AMERICAN ENERGY IS INNOVATIVE

EMBRACE & EXCEL IN A MOBILE ERA PIPELINE PROJECTS GET NEW LIFE UNDER TRUMP

AND SUN COAST RESOURCES A BUSINESS WORLD EXAMPLE OF THE BUTTERFLY EFFECT

MAR/APR 2017

COMBILIFT: INNOVATION IN THE FORKLIFT INDUSTRY ATTRACTING MORE WOMEN AS THE INDUSTRY POWERS PAST IMPOSSIBLE

CULTURE OF INNOVATION:

OIL & GAS BUSINESS MAGAZINE

JULY/AUGUST 2017

OIL & GAS BUSINESS MAGAZINE

ATV ADVENTURE TAKES FLIGHT NATIONAL SAFE DIGGING MONTH

CITIZENS FOR LNG & ENERGY DAY A GREAT SUCCESS!

DOUG SUTTLES WITH ENCANA

THE BLM METHANE RULE WAS FLAWED FROM THE START

WAYNE CHRISTIAN A GOOD MAN FOR A CHALLENGING TIME

THE INFLUENTIAL LEADER:

OIL & GAS BUSINESS MAGAZINE

JAN/FEB 2017

MAGAZINE

SEPTEMBER/OCTOBER 2017

MAGAZINE

JANUARY/FEBRUARY 2018

2016 FUTURE OF THE REGION SOUTH TEXAS

TRUMP MEANS BUSINESS

»

THE NORTH AMERICAN FREE TRADE AGREEMENT – GOOD FOR AMERICAN ENERGY

BALANCE AND DIFFUSION OF POWER: THE 10TH AMENDMENT

STEER HOSTS PRESS CONFERENCE ON EAGLE FORD IMPACT STUDY RECLAIMED LAND CREATES AN OUTDOOR ASSET FOR EVERYONE

LIFESTYLE GUIDE: RESTAURANTS AND FOOD

WOMEN IN BUSINESS

ANNUAL WOMEN’S EDITION

SHANA ROBINSON HEALTHY SOLUTIONS FOR TEXANS

CONFIDENT, COMPETENT AND CREDIBLE

CAN ALASKA TURN IT AROUND?

OSHA

MAKE 2017 HEALTHY

ENFORCER OR YOUR FREE SAFETY COACH?

STEER

ENERGY EMPLOYEES MUST LEAD IN THE HALLS OF GOVERNMENT

OIL AND GAS OUTLOOK IN 2018

LEADING GROWTH AT THE PORT OF CORPUS CHRISTI

SOCIAL: STEER EAGLE FORD EXCELLENCE AWARDS

SEAN STRAWBRIDGE

NEW OPPORTUNITIES IN THE NEW YEAR

A NEW KIND OF TRADE ASSOCIATION A RISE IN TEXAS’ LNG EXPORTS

THE 98TH MERIDIAN FOUNDATION

TEXAS ATTRACTIONS AND FUN

WEN ENJOYS WINE AND CHEESE

APPALACHIAN BASIN SEES GROWTH IN NATURAL GAS PRODUCTION

THE FDA APPROVES THE FIRST DIGITAL PILL

CYBERSECURITY IS IMPORTANT FOR ENERGY INDUSTRY INFRASTRUCTURE

FOR ADVERTISING INFORMATION PLEASE CONTACT:

KYM BOLADO / kym@shalemag.com / 210.240.7188 www.shalemag.com @shalemagazinetexas Shale Oil & Gas Business Magazine @shalemag

OTHER SERVICES OFFERED BY SHALE MAGAZINE Branding / Web Production / Search Engine Optimization / Ad Design / Social Media Video Production / Public Relations / Email Marketing / Campaign Strategy / Direct Mail SHALE Magazine is a statewide industry publication that showcases the significance of the South Texas petroleum and energy market. SHALE’s mission is to promote economic growth and business opportunities that connect regional businesses with oil and gas companies. The publication supports market growth through promoting industry education JANUARY/FEBRUARY 2018  SHALE MAGAZINE 73 and policy, and its content includes particular insight into the development of the Eagle Ford Shale and Permian Basin plays and the businesses affected.

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