SHALE Oil & Gas Business Magazine Sept/Oct 2015

SEPT/OCT 2015

WEATHERING THE STORM BUSINESS IN A DOWNPOUR

OIL & GAS BUSINESS MAGAZINE

OIL AND GAS FACING PUZZLING POLICIES

LIFT THE BAN THE IMPACTS OF LOW OIL PRICES

REPRESENTING THE SERVICE SECTOR

LESLIE SHOCKLEY PESA BEYER PRESIDENT

CONNECTING THE DOTS WITH START INTERACTIVE MUSEUM EXHIBIT TEACHES OIL AND GAS

ASSISTING THE OILFIELD COMMUNITY: OILFIELD HELPING HANDS SEPTEMBER/OCTOBER 2015 // SHALE OIL & GAS BUSINESS MAGAZINE

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AEP Texas: Your Business Partner in Shale Oil & Gas Extensive shale oil/gas reserves are located in and around geographic areas that align with the AEP Texas electric delivery service territory. Let the AEP Texas service team assist you with timely information regarding the location, capacity and availability of AEP Texas facilities.

To request electrical service or gain access to a certificated planning map, please complete the information request form located at www.AEPTexas.com/shaleoilgas Contact: Bradley Lenz 361-881-5455 bhlenz@aep.com

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John Longoria 361-881-5867 jflongoria@aep.com

SHALE OIL & GAS BUSINESS MAGAZINE // SEPTEMBER/OCTOBER 2015

www.AEPTexas.com/shaleoilgas @AEPTexasEconDev

Specializing in oilfield supplies and service throughout the Eagle Ford Shale  Dual & single belts -Cam belt  Hydraulic Rams, Value Banks, Pumps, Motors  Sauer Danfoss, Chains, Chain Drive  Specialized Tooling. Tool Box, Machining  Discharge & Suction Pumps  Suction Manifold  Discharge Manifold  Murphy Gauges  Sensors  Circuit Board

Exclusive Dealer for the Eagle Ford Shale Territory PYRICOAT: is an all-natural soil treatment application designed to inhibit the oxidation process of soil with harmful metals and minerals. By coating the soil with Pyricoat, minerals will be encapsulated, which will stop any liquids from further contamination such as coal mining runoff.

This application has increased acidic waters PH levels from 3.4 to 6.5 for over three years now in alpha test in coal mining areas.

FECONTROL: is an all natural product used to binds, encapsulates and creates a carrier for iron sulfites and other damaging microscopic particles from crude oil. When applied to crude oil directly it reduces iron, sulfides and other corrosives by up to 93% when separated. Using this product will save downtime by reducing maintenance days by eliminating the corrosive iron sulfides from the crude before being introduced into the refineries. This application will also augment the existing downstream process of removing iron from crude oil.

RELOAD: is an all natural product use for treating frac and produced water. This product creates a top layer of hydro Cardons in Frac or produced water. This application is perfect for recovering oil from the formation fracturing process in the flow back and produced water will help in the recycling of the water for reuse in the formation fracturing process. ReLoad is most effective when introduce into holding tanks or holding ponds with a circulating pump. ReLoad will also help keep out moisture when needed.

- Sand Kings - Sand Chiefs - Blenders - Hydration - FRAC Pumps - Falcons - Batch Mixers

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

Premium ReLoad also binds heavy metals in acidic water and helps eliminate corrosive effects.

Premium ReLoad is use on water for inert effect on heavy metals.

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

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CONTENTS

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FEATURE

18 Navigating Businesses in a Downpour

COVER STORY LESLIE SHOCKLEY BEYER 20 PESA, a historical organization that acts as the

unified voice for the energy industry’s service, supply and manufacturing organizations, has a new president.

INDUSTRY

28 The Impacts of Low Oil Prices 30 Oil and Water 32 Prospective Shale Oil and Gas in Mexico 34 Empowering Females in Engineering 36 Bringing Together Women in Energy

POLICY

38 Puzzling Policies Throughout the Nation 40 Pay Attention, Washington

BUSINESS

42 START: Helping Energy Operators Connect

the Dots

Two Major Plays

Need for Natural Gas

44 Kerrville: Texas Hill Country Charm Between 46 Manufacturing Plants in Mexico Increase

LIFESTYLE

48 Energy Adventures: Happening Now ...

and More on the Way!

The Key to Optimal Health and Wellness

50 Family, Recreation, Tennis, Fitness and Fun 52 Understanding Your Body’s Composition: 54 El Machito: Carnes al Mesquite

NONPROFIT

56 Oilfield Helping Hands: Fundraising for Family 58 25 Years of Fun, Education and Conservation

at the Texas State Aquarium

COMMUNITY

60 Eagle Ford Energy Camp for Karnes County Kids

SCENE

62 July/August Cover Party 64 Corpus Christi Hooks 66 Piperliners’ Summer Mixer 68 TAMACC’s 40th Annual Convention and

COVER AND TABLE OF CONTENTS PHOTOGRAPHY BY: MICHAEL GIORDANO

Business Expo

70 Legislative and Regulatory Forum 72 Women in the Wild Retreat SEPTEMBER/OCTOBER 2015 // SHALE OIL & GAS BUSINESS MAGAZINE

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ADVISORY BOARD

OMAR GARCIA - SENIOR ADVISOR

JAMES M. SUMMERS

BRADLEY H. LENZ

JEFFREY A. WEBB

THOMAS TUNSTALL, PH.D.

PAULA WAGGONER-AGUILAR

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

Jeffrey A. Webb is a Senior Associate in the San Antonio office of Norton Rose Fulbright, a global legal practice providing the world’s preeminent corporations and financial institutions with a full business law service. Recognized for its industry focus, Norton Rose Fulbright is strong across all of the key industry sectors: financial institutions, energy, infrastructure, mining and commodities, transport, technology and innovation, and life sciences and healthcare.

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

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

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Bradley H. Lenz is the Director of Economic and BusinessDevelopment at AEP Texas. As Director, he oversees the company’s economic and business development operations, including oil and gas operations. This activity extends throughout the AEP Texas service territory.

Previously he was the Operations Support Manager of the Electric Distribution System of AEP Texas. His responsibilities included resource planning, managing the electric distribution budget, and managing the back-office functions and the annual storm restoration drill to prepare for hurricanes and other major natural disasters. Prior to operations support, Lenz held several management positions with AEP Texas and the former West Texas Utilities Company. Lenz began his career in 1991 with West Texas Utilities in Abilene as an Engineer in Marketing, focusing on commercial customers.

Prior to that, Lenz was a cooperative student with TXU Electric. Lenz earned a bachelor of science degree in electrical engineering from Texas A&M University in College Station and has completed the Ohio State University Leadership Development program.

Paula Waggoner-Aguilar is a Chief Financial Officer and the Owner and President of The Energy CFO, LLC, a niche entrepreneurial energy finance firm providing CFO leadership to energy and technology entrepreneurs and start-ups. She started her career in the 1990s working her way up the accounting ranks in Latin America, beginning in oilfield services and highly engineered equipment. Over the past 20 years, Waggoner-Aguilar has built a successful track record working in senior leadership roles alongside hard-driving independents, notable industry executives and engineers. In 2014, the San Antonio Business Journal awarded Waggoner-Aguilar BEST CFO for Private Medium Companies. Likewise, she has also been recognized as a trailblazer for her various efforts in recruiting and helping promote women in the industry. Originally from Dallas, she is a graduate of The University of North Texas (MS, taxation) and The University of Texas at Arlington (BBA, accounting), a Texas CPA and a member of the Association of International Petroleum Negotiators.

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CONTRIBUTORS

Thomas Tunstall, Ph.D. is the Research Director for the Institute for Economic Development at the University of Texas at San Antonio. Previously, he was a Management Consultant for SME and the Component 1 Team Leader for the Azerbaijan Competitiveness and Trade project.

Tunstall also served as an Advisor Relations Executive at ACS and was the founding Co-chair for the Texas chapter of the International Association of Outsourcing Professionals (IAOP). He has published a business book titled “Outsourcing and Management” (Palgrave, 2007) and was the technical editor for “Outsourcing for Dummies” (Wiley, 2008).

Tunstall has consulted in both the public and private sectors. In 2005, he completed a long-term assignment in Afghanistan, where he was Deputy Chief of Party for a central bank modernization project. In 2006, he taught Ph.D. candidates in a business and government seminar at the University of Texas at Dallas.

David Porter was elected statewide to serve a six-year term as Railroad Commissioner in November 2010. Commissioner Porter has been appointed to the Interstate Oil and Gas Compact Commission as the Official Representative of Texas, and in 2015, he will serve as the second Vice President. He has also been appointed as the Official Representative on the Interstate Mining Compact Commission and currently serves as an Advisory Board Member for the Texas Journal of Oil, Gas, and Energy Law.

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David Blackmon is a Managing Director of the FTI Strategic Communications practice and is based in Houston.

Throughout his 34-year career in the oil and gas industry, Blackmon has led industry-wide efforts to develop and implement strategies to address key issues at the local, state and federal level. Blackmon has more than 15 years of experience working legislative and regulatory issues in Washington, D.C., Texas and other states. He is a recognized subject-matter expert on a variety of oil and natural gas issues, and regularly offers testimony at legislative hearings. Blackmon is currently a contributing columnist for Forbes.com, focusing on public policy issues affecting the oil and gas industry. He also writes regular commentary for World Oil magazine.

Katie Carmichael is an Austin-based communications specialist. She is the founder and owner of Carmichael Communications and Consulting, which provides a wide range of communication services, including public affairs, government relations, consulting and writing, primarily within the energy industry. Carmichael is a consultant for the Texas Alliance of Energy Producers and Railroad Commissioner Chairman David Porter’s reelection campaign. Most recently, Katie was the Director of Public Affairs for Commissioner Porter. Prior to the RRC, she worked in the Texas House of Representatives. Carmichael received a bachelor’s degree in journalism from Texas State University.

Gloria Leal is an Attorney and Government Affairs Consultant in Austin, Texas. Leal has a solo practice primarily relating to energy, environmental and healthcare/insurance matters.

She represents the Texas Alliance of Energy Producers, a national association of independent producers and service providers, and other clients. Leal is former General Counsel and International Counsel of the Texas Department of Insurance and represented the department in international financial services negotiations with Mexico. She was also an Assistant Attorney General in the Energy and Transportation divisions. Leal is a graduate of the University of Texas School of Law.

Rogelio Cuevas is a Co-Managing Partner at Cuevas & Cuevas LLP. He is an expert on developing business opportunities across the border with Mexico. He works directly with the Mexican oil and gas industry at the federal, state and local government levels, developing and forming business legal entities for corporations and suppliers both in the U.S. and Mexico. He also works directly with mineral rights owners in Texas, serving the role as a Landman providing oil and gas accounting and management services for them.

He graduated from St. Edward’s University in Austin with a BBA in economics, and he holds an MBA in accounting/finance from Our Lady of the Lake University in San Antonio. His co-managing partner oversees the International Tax Department at both their offices located in San Antonio and Ciudad Acuña, Coahuila, Mexico.

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Omar Garcia, President and CEO of the South Texas Energy & Economic Roundtable (STEER), is an expert on business opportunities associated with the Eagle Ford Shale. He works with the oil and gas industry, local officials, community members, regional stakeholders, educational institutions and economic development organizations to ensure that the oil and natural gas industry in South Texas is advancing in a positive way that is beneficial to both the community and the industry.

Garcia has more than 12 years of economic development experience, and he spent two years working for Bank of America as Vice President of Business Development for the bank’s treasury management division. He is a Certified Economic Development Finance Professional through the National Development Council, and he graduated from St. Edward’s University with a degree in international business and Spanish.

In 2010, Gov. Rick Perry appointed Garcia to the Texas Economic Development Corporation.

Bill Keffer has practiced law for 30 years as In-House Counsel at a major oil and gas company and in private practice.

He currently teaches at the Texas Tech University School of Law and continues to consult. He served in the Texas legislature from 2003 to 2007 representing the 107th District in Dallas.

Paula WaggonerAguilar is a Chief Financial Officer and the Owner and President of The Energy CFO LLC, a niche entrepreneurial energy finance firm providing CFO leadership to energy and technology entrepreneurs and start-ups. She started her career in the 1990s, working her way up the accounting ranks in Latin America, beginning in oilfield services and highly engineered equipment. Over the past 20 years, Waggoner-Aguilar has built a successful track record working in senior leadership roles alongside hard-driving independents, notable industry executives and engineers.

Waggoner-Aguilar is an expert in her field and is passionate about starting up, fixing, and growing strong companies. In 2014, the San Antonio Business Journal awarded Waggoner-Aguilar Best CFO for Private Medium Companies. Likewise, she has also been recognized as a trailblazer for her various efforts in recruiting and helping promote women in the industry. Originally from Dallas, she is a graduate of The University of North Texas (MS, taxation) and The University of Texas at Arlington (BBA, accounting), a Texas CPA and a member of the Association of International Petroleum Negotiators.

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& GAS BUSINESS MAGAZINE OIL OIL & GAS BUSINESS MAGAZINE VOLUME 2 ISSUE 5 • SEPTEMBER/OCTOBER 2015

KYM BOLADO CEO / PUBLISHER

Insuring Oil & Gas Related Industries Including:

CHIEF FINANCIAL OFFICER Deana Acosta

EDITOR IN CHIEF Lauren Guerra

ART DIRECTOR Elisa Giordano

ASSOCIATE EDITOR Katie Carmichael

COPY EDITORS

Katie Buniak, Maegan Sheppard

EDITORIAL INTERN Julia Le-Nguyen

F.W. Offenhauser & Co. 5701 Broadway Suite 103 San Antonio, TX Direct: 210.865.7816

ADMINISTRATIVE ASSISTANT Josie Cuellar

Ross Ormond

Property & Casualty, Life & Health Agent

offices also in TEXARKANA, MT. PLEASANT, & ATLANTA, TX

OFFENHAUSERINSURANCE.COM

VICE PRESIDENT OF SALES Liz Massey Kimmel

ACCOUNT MANAGERS

Ingrid Hollinger, Gloria Perez, Salome Stevens

ASSISTANT ACCOUNT MANAGER Laura Martinez

SENIOR BUSINESS ANALYST Fernando Guerra

CONTRIBUTING WRITERS

David Blackmon, Katie Carmichael, Rogelio Cuevas, Omar Garcia, Bill Keffer, Rita Olofowoshe, David Porter, Thomas Tunstall, Paula Waggoner-Aguilar, Deborah Silliman Wolfe

STAFF PHOTOGRAPHER Malcolm Perez

CONTRIBUTING PHOTOGRAPHER Michael Giordano

www.shalemag.com For advertising information, please call 210.240.7188 or email kym@shalemag.com.

For editorial comments and suggestions, please email lauren@shalemag.com.

SHALE MAGAZINE OFFICES: 5600 Broadway Ave., San Antonio, Texas 78209 18756 Stone Oak Pkwy, Ste. 301, San Antonio, Texas 78258 For general inquiries call: 210.854.3361

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Copyright © 2015 Shale Magazine. All rights reserved. Reproduction without the expressed written permission of the publisher is prohibited.

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PUBLISHER’S NOTE THIS SUMMER HAS BEEN A SCORCHER, AND I’M NOT JUST REFERRING TO THE HOT WEATHER! SHALE HAS BEEN ON FIRE! SHALE Oil & Gas Business Magazine has seen amazing growth throughout 2015. We recently celebrated our three-year anniversary, and looking back I can see how much we have learned and perfected our process. Starting in 2013, we were a small publication no one had heard of with a dream of producing the most prestigious energy and business publication in South Texas. I may be a bit biased, but I see that we have hit that goal. I am amazed each day by the amazing support we receive from the oil and gas majors who see SHALE as a reputable and professional publication with a reputation of excellence.

But, what’s really heating up for the SHALE team is the new marketing arm of SHALE, the In the Oil Patch radio talk show. I am so deeply proud of the amazing growth and success we have had with our blossoming, new project. When we started the radio show, I dreamt that one day it would take on an audience as loyal and intrigued as the magazine has come to possess.

Never in my wildest dreams could I have expected it to do that in such a short period of time.

If you haven’t heard the news, I cannot wait to inform you that In the Oil Patch has been syndicated and will now air in two new markets! That’s three times the industry talk in three different regions! Our original show on KTSA 550 AM/107.1 FM will continue to air as usual in San Antonio, Corpus Christi, Austin and some of Houston on Saturdays from 10-10:30 p.m. You can now hear the ins and outs of the industry in the Permian Basin on KWEL 1070 AM on Saturdays from 1-2 p.m. And our Houston followers can tune in to In the Oil Patch on iHeartRadio’s KTRH 740 AM on Sundays from 8-9 p.m.

The SHALE team just got a whole lot busier. But educating the community and promoting the economic development spurred by the oil and gas industry has always been our mission, so this growth will only aid us to further accomplish our goals.

On a slightly more serious note, I want to touch on the crude oil export ban that is making headline news and gaining recognition nationwide. We at SHALE have and always will rally around legislation that benefits the industry and promotes economic stimulation. After all, we all have a vested interest in this topic. I think most people see the exportation of crude oil as counterproductive in raising the price of oil back to a healthy range; but as backward as it may seem, the exportation of oil to foreign markets will help the U.S. oil and gas industry bounce back quicker and create a substantial amount of new jobs.

I’m encouraging you, SHALE readers, to email me personally on any topic you would like to learn more about. Please send me your questions, comments and concerns, and I promise to do my best to answer them or at least find someone who can.

KYM BOLADO

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

SHALE OIL & GAS BUSINESS MAGAZINE MISSION STATEMENT:

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

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O I L & G A S P L AY E R S

|

BUSINESS

|

TECHNOLOGY

|

POLICY

AUSTIN CORPUS CHRISTI HOUSTON MIDLAND ODESSA SAN ANTONIO

RADIO SHOW

KTSA 550 AM/107.1 FM Saturdays 10 p.m.

(San Antonio, Corpus Christi)

iHeartRadio KTRH 740 AM Sundays 8-9 p.m.

KWEL 1070 AM FM107.1 Saturdays 1-2 p.m.

(In Houston)

(In Midland)

Now aired throughout the Eagle Ford and Permian Basin

Where industry comes to speak

Pantone - Red 032c

sponsored by:

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FEATUR E

NAVIGATING BUSINESSES IN A DOWNPOUR BY: PAULA WAGGONER-AGUILAR reports are prepared on a daily, weekly or monthly basis.

Basically, the time period depends on how tight cash is (if it is really uncomfortable, then daily or weekly is preferred).

This tool promotes tactical cash planning and financial discipline, and is often used to facilitate cash discussions with owners, executives and trustees. The projections are best when they are realistic and achievable.

Cash Report: The cash report forecasts how much money you expect to receive (cash receipts) and how much you expect to spend (cash disbursement). Cash

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Cash Flow Forecast: This is a longer term cash forecast used to estimate cash receipts and disbursements (see Cash Report, left). For borrowers, most bankers want to see at minimum a 13-week cash forecast. Many companies use a more robust rolling forecast with 12 to 18 months of data. The forecast is updated frequently for new information, which is one of the major factors distinguishing it from the dreaded annual budget (a static forecast that in most companies is out-of-date by the time it is approved).

When we build these rolling forecasts, they will vary in sophistication and complexity depending on the needs of the client, project budgets and the systems they are using. In my experience, hands down some of the hardest forecasts are large midstream businesses with master limited partnership structures and end-to-end liquefied natural gas businesses (wellhead to the tailgate of the regasification plant). Building one of these more complicated forecasts is kind of like performing mindbending mathematical gymnastics.

Monthly Operational and Financial Review: This review is used by owners, executives and leadership teams to review performance across the company.

Depending on the size, structure and ownership of these companies, this type of review may actually be conducted in board meetings (more common for multinationals and foreign-owned subsidiaries).

The standing agenda or order of topics will vary by

TTSTUDIO/BIGSTOCK.COM

HIGHLY SUCCESSFUL COHESIVE TEAMS CHECK THEIR EGOS AND AGENDAS AT THE DOOR AND USE REVIEWS AS AN OPPORTUNITY TO SPOT TRENDS, BRAINSTORM AND/OR DEBATE WHETHER THEY NEED TO PIVOT

H

ave you ever been driving in the middle of a nasty rainstorm and you just could not see out the front windshield? You are forced to basically rely on your other senses and instrumentation, and, if you are lucky, solicit assistance navigating the road from your passengers (trust me, once their hands are locked around the door grips and they are assuming the crash position, they are of no use). After it is all over, do you decide to start planning ahead and pay more attention to the forecast so you can avoid putting yourself in such a dangerous situation? If so, you are not alone!

There are times when navigating our businesses in this industry can feel like you are driving blindly in a torrential downpour. Do you find yourself wondering what tools your competitors are using to run their businesses? Are you curious about what types of information large energy companies’ strategic, operations and financial planning departments produce to assist executives in their decision-making? What key business drivers or key performance indicators (KPIs) do these companies track that are really useful in running their business (versus what we call “vanity metrics”)?

Having the benefit of 20 years’ experience designing, building and using planning tools for all sizes of companies across the energy value chain, here are a couple basic tools to start with:

Flash Report: The flash (goes by various names, but this is the most common) is a tool used by management to gauge the weekly liquidity (working capital or accounts receivable, inventory and accounts payable), productivity (production, wells drilled and completed, services performed, products delivered, barrel oil equivalent or pounds of chemical sold) and estimated profitability or income of the company (meaning for every dollar of sales, how many cents on the dollar you put in your pocket). Flash is intended to enable owners, executives and managers to quickly understand the current financial picture. It’s an 80/20 estimate at best — the direction of the weekly trend gives you a feel for how the company is doing.

company, sector and specific business:  Health, Safety, Environment and Community  Capital Expenditure Spending  Sales and Marketing  Business Development  Procurement or Supply and Logistics  Financials  Operations or Production  SWOT Analysis  Operating Costs  Human Resources  Project Execution and Current Schedule  Management Scorecard Note: SWOT stands for strengths, weaknesses, opportunities and threats.

Keep in mind, the composition of the individuals making up the leadership team will vary by company. Actual composition depends on the size, ownership of the business and what the CEO or owner wants.

In larger companies, that may include owners, executives, heads of functional areas or divisions, strategic/operational/financial planning teams supporting these folks, and sometimes guests or high potentials. In private family-owned companies, it is not uncommon to have the younger generations sit in to learn.

Likewise, there are some private owners who prefer to limit the information and audience with whom that information is shared.

This review typically includes charts, graphs, calendars and other data comparing actuals, the latest estimate and the annual budget. Frequently, the business or functional owner of each section will provide commentary including:

»

Explanations for major variances (rigorous questions are expected)

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Expected changes (brief the team if you expect to miss a target or hit roadblocks)

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Risks and threats (local and global)

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Signposts ahead (local indicators, disruptive technologies and applications, trends with competitors or emerging companies, direction of macroeconomic factors like currency and GDP, OPEC supply playbook, etc.)

REMEMBER, THE MEN AND WOMEN WHO KEEP US ON OUR TOES (OUR TOUGHEST COMPETITORS) ARE OFTEN SUCCESSFUL BECAUSE OF THEIR FLAWLESS EXECUTION OF THE FUNDAMENTALS a substitute for daily communication and coordination or “for show.” Rather, these reviews are used by the team to assess their past and present performance, and anticipate what the future holds. Highly successful cohesive teams check their egos and agendas at the door and use these reviews as an opportunity to spot trends, brainstorm and/or debate whether they need to pivot.

They also show a high level of trust — participants maintain confidentiality, and disagreements are respectfully not shared with staff outside of these meetings. The planners and next in line are expected to observe, contribute, ask questions and learn. And their participation is twofold — holding them accountable and being the recipient of the leadership team’s commitment to mentoring and the transfer of the organization’s “brain trust.”

Now, there are many more tools in use.

These are the basics. Likewise, there is a lot of variation in practice. If you are just starting out, keep it simple. Remember, the men and women who keep us on our toes (our toughest competitors) are often successful because of their flawless execution of the fundamentals — what we call “good blocking and tackling” at my firm. Be assured these competitors do this day after day and have developed a kind of “execution mojo” that we would argue is analogous to the muscle memory exhibited in great athletes.

Honestly, you do not have to be a billiondollar titan of industry or have an army of planners to have these tools — what it does take is a commitment of time and resources, a culture of integrity and candor, great communication and coordination across the business, a willingness to experiment and tinker with data, and analyzing patterns and consistency.

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Any other uncertainties (When will the Federal Reserve raise interest rates? How much Iranian oil will hit the market? What is the overall health of Europe’s and China’s markets?)

Without fail, there are always lively debates and good conversations. Honestly, no one knows the answers to all the questions, and it is not uncommon for folks to circle back after meetings with additional analysis.

These sessions should not be used as

About the author: Paula Waggoner-Aguilar is with The Energy CFO LLC, a niche entrepreneurial energy finance firm providing CFO leadership to energy and technology entrepreneurs and startups. To learn more about services available at The Energy CFO, visit www.theenergyCFO.com.

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COVER STORY

New Face Oilfield Service Sector The

of the

PESA’s New President: Leslie Shockley Beyer By: Katie Carmichael

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PHOTO BY MICHAEL GIORDANO

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The Journey to PESA A quick glance at Beyer’s résumé reveals an impressive career trajectory, including time at the White House, a prestigious public relations firm and one of the country’s largest industrial trade associations. Through her extensive and diverse experience, Beyer has developed and sharpened the exact skill set that makes her uniquely qualified for her newest venture at PESA. Born in Lubbock, Texas, Beyer spent her childhood years living in various West Texas communities, as members of her family were primarily cotton farmers and teachers. She recalls attending a different school every year from third grade through high school, when the family finally settled in Sugar Land, outside Houston.

“Being the new kid every year, I think that did kind of form my personality,” the extrovert jokes.

After briefly moving back to Lubbock to attend college, Beyer transferred to the University of Texas at Austin, where she earned a bachelor’s degree in Latin American Studies and Spanish.

During her senior year of college, Beyer scored a coveted internship in Washington, D.C. with the U.S. Department of State working on the Mexico desk. Her original plan was to eventually become a Foreign Service Officer within the department.

“When I did my internship at the State Department, I did my best to network, meet the Texans and figure out who was who,” Beyer says. “As soon as I went home after the internship was over, I started applying at different congressional offices.”

She was soon hired by Sen. Kay Bailey Hutchison as a Legislative Aide in her Austin office; and upon graduating from UT, Beyer transferred to the Washington, D.C. office.

After Beyer spent about two years in the congressional office working primarily on border relations and immigration, Texas Gov. George W. Bush announced his bid for presidency. Beyer applied for a job as part of his

PHOTO COURTESY OF PESA

Beyer plans to focus on helping PESA grow into and refine some of the recent modernizations

n the early days of petroleum exploration, drilling an oil well was somewhat short of an exact science. Wildcatters and wannabe oil barons would chance their luck, hoping to strike it rich yet often turning up dry holes.

Today, oil and gas is one of the most complex, intricate and expansive industries on the planet. It employs cutting-edge technology, analyzes high-level scientific data and meticulously manages constantly moving parts.

The ability to accurately pinpoint and extract minerals has increased exponentially due to the advancements in equipment and new sophisticated drilling techniques.

While many outside the industry might give cursory credit to big oil companies for this evolution, the service and supply sector is the real unsung hero of the American energy renaissance.

This segment of the industry, valued at $150 billion last year, is behind some of the most important innovations and activities in the oil field. It provides the crucial support, service and equipment necessary in all upstream operations — from surface equipment and drilling fluids to completion and well services.

Service and supply companies also employ a significant portion of workers in the oil field. In 2014, the oil and gas support activities plus oilfield machinery and equipment sectors directly supported almost 200,000 jobs in Texas.

For more than 80 years, the Petroleum Equipment & Services Association (PESA), formerly known as the Petroleum Equipment Suppliers Association, has served as the unified voice representing the collective interests of this segment of the industry.

Formed in 1933 to help the federal government craft a fair-practice code for the oilfield equipment industry, the association today represents more than 200 companies and a global workforce of more than 1.3 million.

Despite its age, this is not your grandfather’s PESA. Within the last year or so, the association’s new president has instituted some substantial changes in an effort to evolve with the times and better serve its membership, as well as the technologically advanced industry it represents.

“I am, every day, working on ways to make PESA a greater resource to the members, more of a resource to the industry in general, a better support system and a more productive organization,” says Leslie Shockley Beyer, the vivacious new President of PESA.

PHOTO COURTESY OF PESA

Presidential Advance team and for the next year or so traversed the campaign trail ahead of the candidate, handling nearly every aspect of planning and coordinating all events and public appearances.

“I think that experience taught me how to walk into a room, figure out what needs to be done and talk to who needs to be spoken to in an efficient and appropriate way,” Beyer says. (It also led her to her future husband, Todd, who worked on the Presidential Advance team as well.)

President George W. Bush was elected in 2000 and out of hundreds of campaign volunteers, Beyer was one of only a handful hired on as full-time staff for the White House Presidential Advance. Her workload expanded to include coordinating with multiple departments and agencies on protocol and frequent international trips.

“It was a great experience for me because we would go to so many different

embassies and work with all the Foreign Service Officers, which I wanted to be my whole life,” Beyer shares enthusiastically, adding that she prefers her chosen career path but enjoyed the opportunity to work with them.

After several years of both her and her husband constantly traveling for the Presidential Advance office, Beyer felt it was time for a change.

In 2002, the White House staffer took a position at the Department of Housing and Urban Development (HUD) as the Legislative Officer, serving as the chief liaison between the department and multiple congressional committees.

Within the year, Beyer left HUD to start her own public relations and strategic consulting firm, GreyShockley LLC, with a former campaign colleague. There, she honed her PR skills in corporate positioning, marketing and advertising, crisis management, operations consulting, targeted advocacy and public affairs.

In 2010, Beyer and her family — which included three small children — relocated to Houston, where she began work at Burson-Marsteller, a leading global public relations and communications firm.

However, after a few months with the company, she got a call from a former administration colleague who was at the time with the National Association of Manufacturers (NAM), one of the largest national trade associations based out of Washington, D.C. As luck would have it, NAM was looking for someone to run its Texas region.

“It was perfect,” Beyer says. “It was everything I knew how to do and it helped me, because I was a little homesick for D.C. after being there for 15 years.”

During her year and a half with NAM, Beyer began to familiarize herself with the energy industry as it directly impacted manufacturing. Although in her role as Director

“

The goal is for people to understand that PESA represents the service and supply sector.”

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Bringing PESA into a New Era “The goal is for people to understand that PESA represents the service and supply sector,” Beyer asserts. “And what that sector provides to the industry is an exponential amount of jobs and all the cutting-edge technologies and efficiencies that are driving the energy revolution.”

Coming in with a fresh perspective and a lengthy background in government, public relations and board member relations, Beyer knew she had some work to do to fully achieve this goal.

“I knew from the beginning that there was a branding shift that needed to happen,” she says.

Beyer launched into a rebranding campaign, starting with updating the association’s name, which was the Petroleum Equipment Suppliers Association.

“Equipment manufacturing is a significant portion of who we are, but only a segment of what our sector provides,” the PESA President states. “We needed to be able to more accurately describe ourselves and our membership.”

To further engage in the conversation and provide another channel of communication, the PR expert ramped up the association’s social media presence and outreach.

This initial phase took about four to six months, according to Beyer. However, when it came time to get the board of directors to vote on these alterations, another area for improvement became noticeable.

At that time, there were approximately 60 board members. Getting a group of that size together and in agreement could sometimes prove to be rather cumbersome, so the bylaws were rewritten to streamline the board structure. The former Executive Committee is now the board of directors, which includes about 16 members; and roughly 30 members now comprise the advisory board.

Additional committees were also restructured, and some were newly created.

One area Beyer particularly focused on was government relations.

When the former White House staffer

Policy Chairman on the PESA board, Beyer formed two supporting committees, the Government Affairs Committee and the International Trade Policy Committee, to further enhance outreach and education both in D.C. and Houston.

“Engaging in government relations is not something we do once a year on a trip, it’s something that we focus on constantly,” Beyer says.

She adds that PESA’s goal is not to lobby individual members of Congress on particular pieces of legislation. Instead, the group’s focus is on increasing federal lawmakers’ knowledge and awareness of the issues that impact the industry, and those critical to the service and supply sector particular.

The International Trade Policy Committee also monitors regulations and makes recommendations on how PESA should get engaged, whether through written comments, public statements or meeting with the appropriate regulatory officials.

PESA continues to offer the training and resources to members that have made it a successful and valuable organization for many years The name was changed to the Petroleum Equipment & Services Association, along with the logo and mission statement.

The website also received a face-lift, as Beyer focused on creating a digital resource for members and the general public. The site now includes an online policy center that provides tools and updates to learn more about the industry, the policies that impact it and ways to get involved.

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started at PESA, the only legislative outreach that took place was a fly-in once a year to Washington, D.C. Beyer recalls that PESA board member Bob Moran, Vice President of Government and External Affairs for Halliburton, has graciously and skillfully planned these trips for PESA membership and handled this responsibility on his own for quite some time.

With Moran continuing his lead role as

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“At the same time, so many issues that affect PESA member companies’ business happen on the state level, and we didn’t have any footprint there,” Beyer says.

In February, PESA hosted its first-ever Austin Legislative Summit at the Texas Capitol, during which members heard from an impressive lineup of prominent energy leaders in the state, including Railroad Commission of Texas Chairman David Porter and

PHOTO COURTESY OF PESA

of Member and Board Relations, she was focused more on relationships.

“I worked with board members on the issues facing those companies, making sure their needs were being articulated correctly in D.C. and that the board members and member companies were being adequately represented by NAM,” Beyer says of her primary responsibilities.

Things were going smoothly for Beyer, who loved her job at NAM, when one day she was approached about another organization, PESA. The president at the time, Sherry Stephens Blanks, was retiring after more than 35 years with the organization. PESA was in need of a new leader, one who could take the established association into a new era. Beyer officially came onboard as President of PESA in July 2014.

Commissioner Ryan Sitton, Sen. Carlos Uresti, and Reps. Jim Keffer and Phil King. The group also held several private meetings with legislators.

In addition to the creation of new committees, PESA recently formed two new regional districts to better serve their nationwide membership: the West Texas/South Texas region and the Northeast Texas region. In May, PESA also relocated its original Houston headquarters to a new office complex.

As for what’s next, Beyer plans to focus on helping PESA grow into and refine some of the recent modernizations, in addition to allowing time for some members to acclimate to the changes.

“Change inherently is not comfortable; even when you embrace it, there’s a process you move through,” Beyer says in a matter-of-fact yet empathetic manner. “I believe the membership is very supportive, but I know that not everyone is fully on board with everything, and it’s OK. It’s where the industry is.”

While everyone may not be thrilled just yet, Beyer knew from the get-go that she had the full support of the PESA board of directors. “I have felt from the beginning that they were together with me on vision,” Beyer says. “That they trusted me, which gives me confidence to make change and is very motivating.”

Beyer had the confidence of the board, but more importantly, the self-confidence that is undoubtedly necessary for such an undertaking. “When my parents dropped me off in D.C., I lived in a closet,” Beyer says, remembering she had only a twin mattress on the floor and a wardrobe box with a few hanging clothes after graduating college. “I would work all day in Kay Bailey Hutchison’s office, and then I would get in my car and drive out to wait tables every night until midnight.”

“A few years later, I’m making regular work trips on Air Force One.” Her incredible career progression, all thanks to hard work, dedication and the support of great mentors, has given her the professional know-how to do her job and a seemingly fearless attitude.

“There’s not much, at this point, that I’m afraid to change,” Beyer laughs.

PHOTOS COURTESY OF JOWDY PHOTOGRAPHY

Programs Providing Value Not everything has changed. PESA continues to offer the training and resources to members that have made it a successful and valuable organization for many years.

Foreign and Civil Service Officer Energy Industry Training One of PESA’s flagship programs that Beyer and her predecessor are particularly passionate about is the Foreign and Civil Service Officer Energy Industry Training.

For more than 20 years, PESA has partnered with the U.S. Departments of State, Energy and Commerce to provide this weeklong training session. Approximately 25 Foreign and Civil Service Officers already stationed at embassies around the world — typically in energy-intensive countries — travel to Houston to gain the background and resources necessary to help

them make informed policy decisions.

“They form relationships with our member companies, learn about the industry; they get the jargon down and then they’re able to more effectively understand and advocate for the industry when they are in-country,” Beyer explains.

During training, officers meet with both PESA member and non-member companies to learn about all the various segments and activities within the energy industry, not just the service and supply side of the business.

Since the program’s inception, more than 600 federal government officers — hand-selected by federal agencies from a long waiting list — have participated in the training course.

The program is so popular, PESA recently began offering the training twice a year instead of just once.

Beyer hopes at some point in the future, PESA can provide training even more frequently, as she is still excited about working with Foreign Service Officers.

PESA and IPAA Petroleum Academies Since 2012, PESA has partnered with the Independent Petroleum Association of America (IPAA) to support STEM education and administer five Petroleum Academies in Houston and Fort Worth, including the first-of-its-kind Energy Institute High School in Houston, a magnet school geared toward the development of geosciences, alternative energy and offshore technology.

The Petroleum Academies strive to get students interested and involved in science, technology, engineering and math, in addition to preparing a future workforce to meet the growing needs of the highly technical oil and gas industry.

The program also offers students the opportunity to participate in a three-week summer externship with PESA member companies, which culminates with a festive banquet for students, parents and mentor companies.

PESA’s Energy Educators Committee oversees these and other educational programs; it also

Service and supply companies employ a significant portion of workers in the oil field

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“In a downturn, there isn’t money for training,” Beyer says. “Where you want to develop your high performers, you need another option. We’re able to do that [for our members] and it’s great.”

supports activities throughout the year, such as hosting an annual Energy Educators Sporting Clays Tournament to help fund PESA’s education programs and provide scholarships.

Emerging Leaders PESA’s Emerging Leaders Committee was formed in 2006 to help narrow the generational gap between industry newcomers and longtime veterans.

One high performer from each member company is eligible to serve on the committee, which provides a wealth of

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resources to help companies cultivate and develop employees who have shown exceptional potential.

Emerging leaders receive special perks, like executive coaching opportunities.

They also organize and participate in high-attended events, such as Oil and Gas 101 training and the Executive Address Series, and network at members-only social gatherings.

Beyer explains that the program is not only beneficial to the participants, it adds incredible value for the member companies, especially in the current pricing atmosphere.

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“When we talk about all these new offerings that PESA has, it sounds like some things might be really expensive, but they’re not,” Beyer reassures. “I’m very cognizant about doing more with less.”

This viewpoint is certainly a common theme in the oil and gas industry lately, especially for the service and supply sector, which depends largely on spending and activity by exploration and production (E&P) companies.

With the price of oil either declining or hovering below what most producers consider profitable, E&P companies have significantly reduced capital spending. In January, Moody’s Investors Service announced capital spending by E&P companies could be cut by 30–40 percent in 2015 if oil prices average below $60 a barrel, resulting in a 25–30 percent decrease in earnings for the oilfield services sector.

Dwindling profits mean shrinking budgets, which has forced several companies to downsize their personnel. As of March, Forbes reports that the oil and gas industry — including E&P companies, oilfield services companies, parts manufacturers and steel pipe makers — had laid off at least 75,000 employees worldwide. Of those, nearly 60,000 came from the service and supply sector.

“Our mission is to figure out how we’re going to be as efficient as possible so that we can come out of this stronger,” Beyer says of the industry and of PESA. So it seems that often the most trying and difficult times turn out to be the most formative and productive. This is especially true in the oil and gas business, as the oilfield services sector avidly searches for ways to innovate and remain ahead of the curve.

Improving operational performance has become a key focus for service companies, who are looking to increase drilling efficiencies and techniques. For example, many are examining the potential of re-fracturing already-drilled wells, as it costs about 25 percent less than drilling a new well. Additionally, the industry is exploring technology to produce higher yields; reducing downtime between use of rigs; and streamlining the delivery of supplies, like sand, which can be distributed with little need for storage.

Mergers and acquisitions are also on the rise, as many companies use the current conditions to buy out competitors in order to increase their market share and service offerings.

Beyer maintains that PESA membership is also a great way to add value, especially during trying times.

“Even in a downturn, we have huge value proposition,” Beyer says.

“It is about the training opportunities, the networking opportunities and doing what’s best for the sector,” she says, adding that a stronger sector will benefit individual companies.

PHOTOS COURTESY OF JOWDY PHOTOGRAPHY

Doing More With Less

PHOTOS COURTESY OF JOWDY PHOTOGRAPHY

And while PESA has experienced some contraction due to the drop in oil prices — mainly felt so far in a slight dip in attendance and participation at some events — Beyer is confident in the staying power of the association and longtime membership.

“I think we will come out of the downturn stronger because we’re using the time to figure out how we can be more efficient and provide more for the members, which is what our member companies are doing — and they rightfully expect the same of PESA.” Although the current outlook may be a bit overcast for the industry, the future is certainly bright for PESA.

The Beyers: On the Home Front As far as what the future holds for Beyer, that may be a little harder to forecast.

“I hope to achieve the goals that the board challenged me to accomplish here,” Beyer says. “And when I feel like that’s done, I will probably look to accomplish something new.

That’s just who I am.”

While she has no plans of leaving PESA or slowing down anytime soon, it seems she has already contemplated retirement, at least to some degree.

“I know exactly where I want to retire:

Annapolis [Maryland] or Crested Butte [Colorado], or both preferably,” Beyer says without missing a beat, and then laughs. She explains that she loves Annapolis because of the culture of the Naval Academy, the beautiful scenery and the proximity to Washington, D.C.; but she also enjoys spending time in Crested Butte, as the Beyer family loves to ski.

In addition to skiing and spending time with her family, Beyer enjoys Bikram yoga — although she rarely has time to attend classes these days — and studying languages. She’s currently working on Russian, in addition to being fluent in Spanish.

Beyer’s husband, Todd, runs his own crisis communications company. After years of serving as the Deputy Assistant to President George W. Bush for White House Presidential Advance, with what Beyer refers to as “the highest level of stress that ever existed,” she says her husband is incredibly even-keeled and supportive.

The Beyers have three children, one girl and two boys, ages 6, 7 and 9. As any working parent knows, sometimes balancing life at home with work at the office can be a challenge, but the Beyers seem to have mastered a tag-team approach to parenting.

“Our home life probably doesn’t look like anyone else’s,” Beyer endearingly admits.

“He’s packing the lunches some mornings,

he’s getting kids to soccer practice, and then sometimes he’s out of town with a client and I’m doing it.”

“We don’t look like your typical family, but it works for us.”

Congruently, Beyer’s professional experiences have not exactly been typical — from starting as a congressional intern to serving directly for the Commander in Chief, and running her own PR firm while taking care of three babies to taking charge of a nationwide association — but it has certainly worked for her, and she works perfectly for PESA. For more information on the Petroleum Equipment & Services Association, visit www. pesa.org.

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THE IMPACTS OF LOW OIL PRICES BY: OMAR GARCIA

THE IMPACTS OF LOW OIL PRICES have been editorialized and analyzed across the country at an exhaustive pace. However, the stark reality of these low prices can be felt right here in South Texas — outside the boardroom and newsroom — where rigs are being idled and hardworking Texans are losing their jobs.

We need these jobs back, and the answer is simple: Washington needs to lift the decades-old ban on crude oil exports.

The United States is the only major oil-producing country in the world that prohibits the export of crude oil. Historically, this was never a challenge. Today, given the increase in oil produced from shale formations, the U.S. has a surplus of crude that our domestic refining system cannot process. While the prohibition on exporting crude oil was enacted in 1975 — during a time of perceived oil scarcity — refined products such as gasoline are freely exported from the U.S. Repeal of the antiquated ban on exporting crude oil would allow companies in the Eagle Ford Shale to compete and sell oil in the global marketplace. This would increase domestic energy production, create thousands of new jobs and help grow local economies in South Texas.

The fight to repeal the ban has received bipartisan support. Rep. Henry Cuellar (D-Laredo) recently noted: “It’s time the crude oil ban is lifted, allowing the U.S. to compete in the global marketplace and reap the benefits of doing so, including hundreds of thousands of jobs — many of which [are] right at home in Texas.”

Local lawmakers have also taken a stand in encouraging Washington, D.C. to repeal the ban. State Rep. Rafael Anchia (D-Dallas) led the way in authoring House Concurrent Resolution 57, encouraging Congress to lift the ban, which was signed by over 100 members of the Texas House.

Regardless of political party, these leaders recognize the immense economic benefits of boosting energy production for communities across Texas. By enforcing the ban, the federal government is undoubtedly denying communities in the Eagle Ford, our state and the rest of the nation of new opportunities for job creation and economic growth.

According to a recent study by economic research firm IHS, Texas could gain a total of 40,000 supply-chain jobs — not just in oil and

REPEAL OF THE ANTIQUATED BAN ON EXPORTING CRUDE OIL WOULD ALLOW COMPANIES IN THE EAGLE FORD SHALE TO COMPETE AND SELL OIL IN THE GLOBAL MARKETPLACE 28

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gas — if the crude oil export ban was repealed. This same study found that for every one direct job in the oil field, three additional jobs would be created along the supply chain and six more jobs created throughout the economy.

Changing this decades-old policy will also benefit Texas families and businesses by helping to lower gasoline prices. How is this possible? It’s a matter of supply and demand.

According to the U.S. Energy Information Administration, gasoline and other transportation fuels are priced according to the international crude oil benchmark. By allowing U.S. crude oil to access these markets, there would be more oil on the global market, which would then put corresponding downward pressure on the price of gasoline.

While it may seem counterintuitive at first, economists from across the political spectrum have exhaustively studied this issue and arrived at the same conclusion: Crude oil exports will reduce the price at the pump. In fact, according to one recent study from Columbia University, co-authored by a former top advisor to President Barack Obama, this reduction could be up to 12 cents per gallon.

Our state is stronger today because of shale development. But let’s commit to continuing the “Texas Miracle” by allowing crude oil from the Eagle Ford Shale to flow freely to our friends and allies around the world. It’s time for lawmakers in Washington, D.C. to join Rep. Cuellar and others in advocating for repealing the ban in order to create jobs, boost local economies and lower prices for consumers.

For more information, visit www.steer. com or email info@steer.com.

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OIL AND WATER BY: BILL KEFFER

IN THE EARLY 1990s, Texas Monthly published an article titled “More Precious Than Oil,” which discussed the proposition that, despite the undeniable value of the abundant supplies of oil and natural gas in the Permian Basin, there was an equally undeniable realization that there was a limited supply of usable water for people and businesses in that area. And, in periods of drought, such as the one we have experienced over the past few years, that realization becomes even more acute. In my own experience litigating several oilfieldpollution lawsuits over the past 25 years — in which the contamination of freshwater aquifers was often the focus of the complaint — I both used and was on the receiving end of the argument that usable water, ultimately, is more precious than oil.

Of course, that is more of an emotional statement designed to elicit a certain response from a jury than it is a logical, deliberative statement. On the most fundamental level, we need water, but not oil, to live. However, as it has turned out, oil provides the energy and the equipment that make water production more accessible and abundant. The extent to which we are able to develop and expand new technologies that make it more economically feasible to convert wastewater, brackish water and seawater into potable sources of drinking water will no doubt be due, in large part, to energy and equipment provided by oil and natural gas.

The onset of hydraulic fracturing and its use of massive amounts of water to develop oil and natural gas residing in tight shale formations previously considered too expensive to produce has added to the “false-choice” argument fomented by extreme environmentalists, in which they protest that we can either have oil and natural gas or usable water — but not both. In fact, we need the oil and natural gas to produce the quantity and quality of water that we need to live.

Last September, Texas Tech University hosted a national conference on hydraulic fracturing, at which Texas Tech Engineering Professors Venkatesh Uddameri and Danny Reible presented a paper on water availability in the Permian Basin. In it, the authors reminded us that the Permian Basin is the “richest hydrocarbon basin in the United States with 14 identified oil- and gas-bearing geologic plays. It is estimated to contain 106 billion barrels of oil or roughly one-fourth of all the oil discovered in the United States.” The Permian Basin in Texas covers a vast area of 50,000 square miles. Most of this area receives an average of only 15–18 inches of annual rainfall, and much of that comes in brief, intense bursts, which means that most of the potential benefit is lost to runoff and evaporation. Groundwater is the primary source of all water usage in the area.

In addition to the oil and gas industry’s historical and continuing use of groundwater for water flooding and enhanced oil-recovery purposes, hydraulic fracturing is the new technique requiring significant groundwater resources. A horizontally fractured well typically uses 3–5 million gallons of water. Needless to say, the increased need for water in order to produce more oil and gas has created some tension.

However, necessity being the mother of invention, the industry has been researching different ways to reduce — if not eliminate — its use of freshwater with hydraulic fracturing. In a recent Houston Law Review article, Yong Eoh referenced several such efforts currently underway.

One company is replacing water altogether with a gelled liquefied petroleum gas; another company is recycling the wastewater from frac jobs for reuse; and another has developed a chemical-free method to clean flowback water from frac jobs for reuse.

All of these approaches and developments in technology sound promising and can play a role in responsible stewardship. But the

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most obvious option that can not only be a source for oil and gas exploration and production, but also a long-term source of usable water in general, is the endless resource of brackish groundwater.

The Texas Water Development Board estimates that we have 880 trillion gallons of brackish groundwater in Texas. Industry has already successfully started integrating brackish water with freshwater in frac jobs, beginning the process of reducing the need for freshwater for that purpose.

While we’re at it, why not continue to pursue ways to desalinate brackish water for irrigation and domestic use?

Efforts have been made in the past, but there hasn’t been the sense of importance one would expect, given the dire warnings that we’re constantly confronted with by opponents of hydraulic fracturing. Although El Paso is home to the largest inland brackish water desalination plant in the U.S., and Texas actually has 46 such facilities across the state, we currently only get 2.7 percent of our water in this way; even more curious, our 2012 State Water Plan anticipates increasing that number by 2,060 to only 3.44 percent.

This past legislative session in Austin included the passage of HB 30, which is yet one more statement of our interest in improving the technology and making this resource more accessible. More research is to be done, and more reports are to be submitted, but it remains a real mystery as to why this area of potential has remained relatively dormant.

The oil and gas industry’s use of water in hydraulic fracturing has brought to the forefront, once again, the limits of readily available freshwater in the Permian Basin and the continuing need for ingenuity and responsible stewardship. So, now that I have everyone’s attention, let’s start figuring out how to make more and better use of our

WE NEED OIL AND NATURAL GAS TO PRODUCE THE QUANTITY AND QUALITY OF WATER THAT WE NEED TO LIVE 880 trillion gallons of brackish groundwater.

In Samuel Taylor Coleridge’s well-known poem “The Rime of the Ancient Mariner,” the sailor bemoans his condition at sea: “Water, water, every where, nor any drop to drink.” We, too, are surrounded by groundwater that, in its natural condition, is unusable. Fortunately, technology fueled and formed by oil and natural gas can convert that water and make it usable. Instead of being paralyzed by the false choice of water versus oil, we have the opportunity and ability to produce water because of oil.

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

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PROSPECTIVE SHALE OIL AND GAS IN MEXICO BY: THOMAS TUNSTALL, PH.D.

RECENTLY, the University of Texas at San Antonio Institute for Economic Development completed a preliminary study on the prospects for shale oil and gas in Mexico. The study included an overview of the economic landscape, the current progress of legal reform and a high-level road map for private companies interested in doing business in the Mexican energy sector. A comprehensive report on shale opportunities in Mexico is expected to be released sometime in 2016.

Opportunities for unconventional or shale oil and gas production in Mexico are in the earliest stages of development. While shale gas production has increased significantly in the U.S. since 2000, and shale oil production

OPPORTUNITIES FOR UNCONVENTIONAL OR SHALE OIL AND GAS PRODUCTION IN MEXICO ARE IN THE EARLIEST STAGES OF DEVELOPMENT since 2008, no other country in the world has yet to replicate that success.

Due to its close proximity to major shale field development in South and West Texas, Mexico is particularly well-positioned to take advantage of unconventional extraction techniques. However, significant challenges will have to be addressed.

Mexico already imports refined products and natural gas from the United States. In 2013 and 2014, for example, Mexico imported over 650 billion cubic feet of natural gas per year from the U.S., up from only 333 billion cubic feet in 2010. New natural gas pipeline projects will transport additional supplies to Mexico in future years. All of this while Mexico sits atop an estimated 545 trillion cubic feet of natural gas reserves. According to the U.S. Energy Information Administration, unconventional oil reserves in Mexico are estimated to be 13 billion barrels. The lack of available geological information, though, remains an issue.

The importance of energy reform in Mexico cannot be understated. Despite increasing amounts of investment on exploration and production by PEMEX, oil production in the country peaked in 2004. Were it not for the prospect of energy reform implementation, Mexico would likely transform from a net exporter of crude oil to a net importer within a few years.

While some tentative steps toward energy reform in Mexico were

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undertaken in 2008, they amounted to little more than the ability of private companies to work as subcontractors for PEMEX. It wasn’t until President Enrique Peña Nieto ushered in an overhaul across several sectors of the economy in 2013 that the prospect for change began to get significant traction. Private companies are now allowed to bid on blocks of mineral rights that formerly were under the exclusive purview of PEMEX. The bulk of Mexico’s shale prospects appear to lie in the north and northeastern sections of the country, where infrastructure is often largely undeveloped. This means that in order to tap the country’s bounty of shale oil and gas, infrastructure such as roads, housing, rail, pipeline and many others will have to be built out first. The ability to develop a suitably skilled workforce will be essential to long-term success. Security issues must also be addressed.

Potential unconventional oil and gas production in Mexico poses many interesting challenges in the wake of recently enacted energy reform. Key shale development issues that will be examined include, but are not necessarily limited to:

» » » » » »

Pipeline infrastructure Road, rail and port infrastructure Security Workforce Working with PEMEX in the new environment Exporting services to Mexico

The effectiveness of the Mexican government at the state and federal levels will be critical to the ultimate success of energy reform.

Successful implementation of energy reform initiatives will serve to encourage private sector investment and help achieve long-term sustainable community and economic development in Mexico. The preliminary report on the prospects for shale development in Mexico can be found on the Center for Community and Business Research’s website, ccbr. iedtexas.org.

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

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SEPTEMBER/OCTOBER 2015 // SHALE OIL & GAS BUSINESS MAGAZINE

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INDUS T RY

EMPOWERING FEMALES IN ENGINEERING BY: DEBORAH SILLIMAN WOLFE, UNIVERSITY OF TEXAS AT SAN ANTONIO COLLEGE OF ENGINEERING

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ÒI BELIEVE THAT THIS PROGRAM IS DIFFERENT FROM OTHER PROGRAMS BECAUSE THEY STARTED EDUCATING US FROM THE HEART. THIS PROGRAM HAS HELPED ME TO STEP OUT OF MY COMFORT ZONE AND GET TO THE NEXT LEVEL

BY FOLLOWING MY HEART AND BELIEVING IN MYSELF. Ó Ñ MELISSA ESCOBAR, SOPHOMORE IN MECHANICAL ENGINEERING and the heart when working with people.

It has also given me a confidence to be able to speak up in class and not feel discouraged when other students sometimes may ignore your suggestions.”

The College of Engineering’s Assistant Director for Engineering Outreach Brandy Alger helped bring the workshop to campus, because as an alumni of UTSA Engineering, she knows how vital it is to network with other female engineers.

“It is so important to have female peers in engineering that understand what fellow female engineering students are going through,” says Alger. “I think the best thing that came out of this workshop is bringing together these females who didn’t know each other before and helping them make connections with their peers. Those connections will help them be more successful.”

To learn more about UTSA’s engineering program, visit engineering.utsa.edu.

PHOTOS COURTESY OF THE UNIVERSITY OF TEXAS AT SAN ANTONIO COLLEGE OF ENGINEERING

SLEEPING IN on a Saturday morning is more precious than gold to many engineering students who burn the midnight oil during the week to work on papers, presentations and projects. But no matter how tempting it is to sleep in on the weekends, 25 female engineering students volunteered to attend The University of Texas at San Antonio College of Engineering Women’s Leadership Academy — a three-part educational series — over the course of three Saturday mornings this spring semester in an effort to build relationships, increase communication, help build their career goals, work on public speaking and develop their own personal branding.

“The leadership training is called the

Women Empowered Leadership Series, and my theme is based on Aristotle — ‘Educating the mind without educating the heart is no education at all,’” says Cynthia Rocha, CEO of L3-Life Long Legacies and workshop leader. “Many times women in male-dominated industries may begin to feel a lack of confidence and question their own knowledge. They may feel alone, whether it is in the classroom or in their future workplace, and I believe they just need some motivation to believe in themselves and not question their own brilliance.”

Rocha says she focuses on the three H’s — the head, the heart and the hand.

She says that individuals can be taught the academics — the head — but unless they believe it and feel it — the heart — they may not be able to go out and do their best — the hand.

“I focus on leadership and motivation,” says Rocha. “I believe that sharing my own personal stories and experiences is so important for them to relate to the lessons on leadership.”

The three-part leadership workshop was designed to prepare female engineering students for the competitive global marketplace and encourage them to take on leadership roles as they enter the future workforce. The workshop focuses on leadership development, communication skills, generational and cultural nuances, and career planning. According to Rocha, students who participate in the workshop gain self-awareness about how their own cultural values and beliefs can be leveraged in today’s global business environment and gain confidence on how to optimize these values for their future business advancement and during their tenure at UTSA. “I really liked this seminar because it made us think outside the box of how to be a leader,” says Rachel Peadson, a junior in electrical engineering. “It has taught me to use the head, the hand

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SEPTEMBER/OCTOBER 2015 // SHALE OIL & GAS BUSINESS MAGAZINE

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INDUS T RY

BRINGING TOGETHER WOMEN IN ENERGY SPECIAL TO SHALE

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the same time providing support and giving back to others. The organization also offers opportunities for volunteering, mentoring, leadership and careeradvancement training seminars, and a memberexclusive job board.

On behalf of WEN national sponsor Sidley Austin LLP, Partner Tracy LeRoy says, “Sidley is proud to support WEN. Each event offers the opportunity for Sidley employees and our clients to learn about issues particular to the energy industry in a dynamic and challenging environment.”

“The mission of the Women’s Energy Network and the companies who sponsor and support it are moving the needle to advance women in the energy industry and [are] opening doors to continue the dialogue with our male counterparts.

Increasing our members’ awareness by providing

THE WOMENÕS ENERGY NETWORK OFFERS THE OPPORTUNITY TO LEARN FROM SOME OF THE FIELDÕS MOST EXPERIENCED WOMEN AND FOSTERS PROFESSIONAL ADVANCEMENT AND LEADERSHIP THROUGH A NETWORK OF ENERGY CONTACTS AND PROGRAMS educational, networking and leadership opportunities are the cornerstones of our success as an organization; and we look forward to continuing to partner with companies and organizations who share in our passion,” says WEN President Dannetta English Bland.

The organization’s corporate sponsorship benefits include WEN membership for employees, speaking opportunities, recognition on WEN media outlets, admission to WEN events, executive memberships and more. By becoming a corporate sponsor of WEN, your company’s brand will not only promote advocacy for women in leadership positions, but will also invest in the development of core competencies for female employees that are essential in today’s job market. Corporate support of WEN will also encourage and enable more events like the Kayo Women’s Energy Investment Conference, empowering women in energy.

For more information regarding corporate sponsorship opportunities and partnering with WEN, visit www.womensenergynetwork.org.

PHOTOS COURTESY OF WEN

RECORD-LOW OIL PRICES in the current market are forcing all aspects of the energy industry to focus on the future of finance and investments. As a leading industry organization aiming to educate, develop and foster careers and leadership among women in the energy sector, the Women’s Energy Network (WEN) did just that earlier this summer.

WEN partnered with Kayo — in its inaugural conference — to educate women on “energy issues not often discussed through the eyes of professional women within the private equity and venture capital sectors,” says Rashonner Lillie, WEN’s Membership Outreach Chair.

The Kayo Women’s Energy Investment Conference was held this past June in Houston.

Participants discussed topics ranging from the macro perspective of the future of prices to opportunities and obstacles in the midstream and oilfield services sectors, as well as buying opportunities and restructuring the upstream landscape. The conference provided a muchneeded platform for female leaders in real assets and energy investing to get together and discuss the real issues facing the industry.

In conjunction with networking sessions, conference-goers were able to hear from women on topics such as “Female Founders: Emerging Managers in Energy & Power” and “How to Be Effective on a Corporate Board.”

“With attendance [numbers] less than 200, it was intimate enough to allow effective networking with women from all regions of the United States. This was not your typical energy conference,” Lillie adds.

The Kayo Women’s Energy Investment Conference facilitated important discussions and acknowledgment of what the energy industry as a whole is facing. WEN’s presence at the conference complemented this effort by allowing for important networking among attendees.

Founded in 1994, WEN was created by Karyl McCurdy Lawson to bring together women across the energy sector and address their needs for leadership development and networking. WEN offers the opportunity to learn from some of the field’s most experienced women in the energy industry and fosters professional advancement and leadership through a network of energy contacts and programs.

“WEN’s incredible network of energy executives is an inspiration and a window into the future of the energy industry where we see women playing a huge part,” says Lindsay Burton, president of the Kayo Conference Series.

WEN provides the perfect opportunity to foster development, network with other women in the energy industry and advance your career, while at

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POLIC Y

PUZZLING POLICIES THROUGHOUT THE NATION

A look at some bizarre legislation related to oil and gas BY: DAVID BLACKMON

S

peaking in Washington, D.C. in late July, Sen. John Cornyn, R-TX, told his audience that he does not expect real movement in the effort to repeal the archaic U.S. ban on crude oil exports until next year. U.S. producers and refiners haven’t been allowed to export crude oil produced in this country for more than 40 years now, so hey, what’s one more year?

Meanwhile, and somewhat ironically, Sen. Cornyn’s comments came shortly after President Barack Obama signed his name to a multinational treaty that will allow the rogue government in Iran to put as much of its own crude onto the international market as it can produce with impunity. Thus, our national government works to ensure that an already oversupplied market for oil will become even more oversupplied, placing even more downward pressure on the price of the commodity. At the same time, our national leaders leave in place a policy that prohibits domestic producers from enjoying the benefits of being allowed to market their own products globally.

It’s been a year for odd rhetoric and choices where energy is concerned here in the land of the free and the home of the brave.

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Staying on the matter of crude oil exports, around the same time that Sen. Cornyn was delivering his remarks in Washington, leadership on the relevant committees in both the U.S. House and Senate released “comprehensive” energy bills. Again somewhat ironically, neither bill contained any provision related to crude oil exports, or really any other provision related to the industry that provides the vast majority of energy this nation consumes. (For those wondering, that would be the oil and natural gas industry.)

If that seems like an odd policy choice to you, join the crowd.

Now, the politics of the export issue are complex — like any other issue in Washington, come to think of it — and by the time you read this piece, something may well have happened related to the matter that breaks the logjam, and either or both versions of “comprehensive” energy legislation may well have become worthy of that tag after all. For the time being, however, it just seems like we are pursuing an energy bill without anything related to oil and gas; somewhat like building a highway with only one lane and no pavement.

And speaking of highways, let’s next address the debate over passing a new highway bill that took place in late July, specifically a proposal on the Senate side of the Capitol building to take about 101 million barrels of oil out of the Strategic Petroleum Reserve and sell it on the open market in order to help pay for all the myriad projects the bill would help fund.

So how is this plan flawed, you ask?

Well, let me count the ways.

The first problem is that the main tax that has historically been reserved for funding highway projects by the federal government, the national gasoline tax, has been at the same level of 18.4 cents per gallon since

ALL THIS ODDNESS, AND WEÕRE NOT EVEN IN AN ELECTION YEAR 1993. The average U.S. price for a gallon of gasoline in 1993 was around $1.20. This year it has hovered in the range of $2.50–$3. An increase of a couple of cents per gallon in this tax would more than offset the amount of money the Senate hopes to gain from selling oil from our national reserve.

Wouldn’t it make more sense to do that, especially given that the current rate of the tax is in no way reflective of market conditions as they have developed over the last 22 years?

Second, it’s called the Strategic Petroleum Reserve for a reason. That reason is its intended use only in times of national emergency, i.e., times of war or other major world events that cut off or severely limit our country’s

DOOMU/BIGSTOCK.COM

ability to import oil from other countries in order to meet our military and domestic needs. In total, the Reserve contains enough oil to meet our national needs for only a few months. How much sense, then, does it make to take a significant portion of that and sell it in order to raise a few billion dollars to help fund a highway bill, especially when other, more sensible options are available?

Third, in case folks in the U.S. Senate haven’t noticed, the price of crude oil right now is already depressed. Why would you want to sell part of our nation’s oil reserve — much of which was obtained by the government at far higher prices than we are experiencing today — at a time when prices are so low? We seem to be missing the old concept of “buy low, sell high” here.

Finally, the domestic oil and gas industry is already suffering enough from the dramatic drop in oil prices over the last 10 months. It hardly needs the U.S. government placing further downward pressure on prices by artificially putting another 30 million barrels of oil on the market.

Note to senators: If you want to sell oil from our Strategic Petroleum Reserve during a time when no national crisis exists, why not do so when the price is high, so that it at least makes sense from an economic perspective? As things stand today, this proposal makes no sense at all from any point of view.

And that’s just what Congress is up to related to the oil and gas industry — don’t even get me started on all the insanity coming out of the Environmental Protection Agency and the Department of the Interior related to the industry in the form of new command and control regulations. There isn’t enough space in this entire magazine to begin chronicling all of that.

But at least things are making more sense in the states, right? Right. Well, except for New York and California, of course.

In New York — a state that obtains more than half of its power generation capacity from natural gas power plants — Gov. Andrew Cuomo recently unilaterally banned hydraulic fracturing. For those who may not know, some of the richest potential reserves in the Marcellus Shale formation lie beneath the southwestern portion of New York state.

Thus, by taking this action, based solely upon false claims and half-truths spread by environmental activists, Gov. Cuomo is denying the people of that region billions of dollars in future royalties, taxes and investments. One can only wonder what the governor would do if the companies selling gas in the state of New York suddenly decided they’d rather market their product elsewhere?

Meanwhile, in California, Gov. Jerry Brown is supporting the efforts of fellow Democrats in the legislature there to pass Senate Bill 350, which would mandate a 50 percent reduction in the use of gasoline and diesel fuel in that state by the year 2030. The bill provides no solutions related to how such a dramatic reduction is to be achieved, just a mandate that it happen. This in the state where there are more passenger cars running on gasoline than any other state, and where there are more heavy trucks running on diesel than any state other than Texas.

Brilliant, right? Gov. Brown sure thinks so.

All this oddness, and we’re not even in an election year. It’s scary to think what 2016 might bring.

About the author: David Blackmon has spent 35 years in the oil and natural gas industry, in a variety of roles. He has spent the last 20 years engaged in public policy issues at the state and national levels. Contact David Blackmon at david.blackmon@shalemag.com.

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PO LICY

PAY ATTENTION, WASHINGTON Texas is ready for change

BY: DAVID PORTER

W

e all know Texas is an energy powerhouse. Our state has been a leading oil and gas producer throughout the last century, serving as a model for states across the country and countries around the world.

Although, many fail to recognize that our success has less to do with our geology and more to do with our regulatory framework.

Texas relies on stable free-market policies that encourage innovation and competition, and prevent overregulation from hindering job creation and economic growth, as we’ve unfortunately seen in states like New York and California. The Railroad Commission of Texas has safely and efficiently regulated our state’s oil and gas industry for almost a hundred years; as a result, the Texas economy

marketplace makes our oil supply and demand especially vulnerable to volatile OPEC prices.

Expert studies support that if Congress and the Obama administration repealed the federal crude oil export ban, U.S. domestic energy production would increase along with GDP, job growth and capital investment, while reducing our national trade deficit at the same time. And consider the geopolitical advantage: Our Western European allies import their fuel from countries like Iran, Saudi Arabia and Russia. Lifting the ban gives our allies an alternative source of oil while creating jobs and opportunities here at home.

Secondly, we need to strengthen natural gas production by expanding domestic and international markets. For example, compressed natural gas (CNG) and liquified

with its conventional tar sands deposits, but delayed infrastructure construction in the U.S. — namely the Keystone Pipeline — has been a major setback. We need to be able to trade energy resources easily and efficiently.

Mexico’s energy production should increase substantially now that its oil and gas sector has opened up to private investment for the first time in 75 years. These reforms offer potential business opportunities for the U.S., while also providing North America access to a more secure, abundant energy supply. The

has flourished, even during times of national economic hardship.

In contrast, since the current administration has been in power, the federal government has put short-sighted, inefficient energy policies in place that combat fossil fuels and favor alternative, renewable energy sources that are decades away from reliability and affordability — namely solar, wind and biomass; as a result, the American economy has suffered.

Texas is stronger today because of its revolutionary oil and gas shale development, and we need a common-sense national energy policy that mirrors our business practices and philosophies.

First, lift the federal crude oil export ban from the 1970s. Crude oil is one of a handful of commodities that’s illegal to export from the U.S., even though oil is one of the most — if not the most — important commodities produced in the world. The ban is not only unfair and illogical, it’s actually damaging.

Our inability to compete in the international

40

natural gas (LNG) have increasingly been used as engine fuel in Texas; and state leaders, fleet managers and station developers continue to invest in natural gas to meet transportation needs. Using more natural gas as fuel at home translates into more jobs and revenue for our state and national economies; and by using more natural gas in markets that rely on traditional fuels like diesel, we can continue to reduce our dependency on foreign energy sources.

Exporting LNG would also give the U.S. a major geopolitical advantage, provide tens of billions of dollars in capital investment and create hundreds of thousands of jobs.

Washington must speed up the painfully slow permitting process for export terminals, so we can increase natural gas sales and exports beyond our domestic markets to our European and Pacific trading partners.

Finally, we need to cooperate with our neighbors to the north and south. Canada has historically been a strong trading partner

SHALE OIL & GAS BUSINESS MAGAZINE // SEPTEMBER/OCTOBER 2015

Mexican government is working with Texas leaders to create a regulatory framework that allows both of our countries to maximize our energy-production potential.

For years, Texas leaders like me have advocated for common sense energy policies that move America closer to energy independence, boost our economy and create thousands of well-paying jobs. It’s time for our lawmakers in D.C. to listen.

About the author: Commissioner David Porter was elected statewide to the Railroad Commission of Texas on November 2, 2010.

A certified public accountant and successful small-business owner, Commissioner Porter has worked with oil and gas producers for nearly three decades, providing strategic financial advice and tax counsel. He has a long record of pro-business, free-market, conservative credentials. He can be reached at mary.bell@rrc.state.tx.us.

PHOTO BY MICHAEL GIORDANO

TEXAS IS STRONGER TODAY BECAUSE OF ITS REVOLUTIONARY OIL AND GAS SHALE DEVELOPMENT, AND WE NEED A COMMON-SENSE NATIONAL ENERGY POLICY THAT MIRRORS OUR BUSINESS PRACTICES AND PHILOSOPHIES

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SEPTEMBER/OCTOBER 2015 // SHALE OIL & GAS BUSINESS MAGAZINE

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BUSINE S S

START: HELPING ENERGY OPERATORS CONNECT THE DOTS SPECIAL TO SHALE

T

he South Texas Alliance for Regional Trade (START) was formed to further the missions of three of South Texas’ most important economic entities — Port San Antonio, Port Corpus Christi and Port Laredo. All three ports provide strategic support to the energy sector of South Texas and have foreign-trade zones. START, using its strategy of cooperation and joint engagement of customers, has become a go-to group that can provide an array of solutions to energy operators.

Today, with the development of the shale area of northern Mexico on the horizon, START’s role could be even more important, helping energy companies communicate with the various governmental and business entities whose assistance will be necessary to provide the infrastructure required to spur that development.

Growing the Economic Pie

Look at a map. South Texas is a triangle anchored by three strong economic engines. In the north is Port San Antonio, with its sophisticated aerospace infrastructure and bustling railroad complex. Since 2012, Port San Antonio, its on-site logistics customers (including CIG Logistics and Watco Companies) and public partners have invested nearly

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$30 million in upgraded rail, road and storage improvements to become a strategic hub for rail-to-truck transportation of equipment and sand throughout the shale play. Other port customers also offer services that include equipment repair and staffing. Furthermore, the Port of San Antonio has in-house construction expertise for development of built-to-suit logistics and manufacturing facilities both on and off its footprint.

In the east on the Gulf Coast sits Port Corpus Christi, the fifth largest seaport in the United States. With its excellent highway and rail access, the port is the refining hub for shale oil and is quickly becoming known as the “Energy Port of the Americas.”

Currently, Port Corpus Christi is also experiencing a gigantic economic spurt fueled by U.S. and international investment.

In the south, at the U.S.-Mexico border, lies Port Laredo, America’s largest inland port of entry, the trade gateway to the huge Latin American market. Every day more than 10,500 trucks flow north- and southbound through Laredo, and traffic is increasing every year. More than 500,000 railcars cross the border every year at Laredo, making the city the No. 1 railroad exchange on the U.S.-Mexico border.

Any one of these ports has enough firepower to help a local economy prosper, but in combination they make up a powerful ally to the industries they serve. “That is what START

PHOTOS COURTESY OF START

Port Corpus Christi, the emerging Energy Port of the Americas

is all about ... growing the economic pie,” says Port San Antonio President and CEO Roland Mower.

“START helps businesses and public-sector entities connect the dots to some of the fastest-growing industries in South Texas, developing regional teamwork, trust and business expertise.”

One of the biggest proponents of START is IBC Bank Executive Vice President Gerald Schwebel, who for many years has been talking the talk and walking the walk of regional economic development.

Schwebel’s “geography is our destiny” speech before the Eagle Ford Shale Consortium earlier this year in San Antonio is helping propel START toward a more inclusive and aggressive approach to regional economic development. Miguel

AT PORT CORPUS CHRISTI ALONE THERE IS MORE THAN $35 BILLION OF NEW INVESTMENTS Conchas, who, as President and CEO of the Laredo Chamber of Commerce, represents Port Laredo in the START initiative, holds a similar opinion to Schwebel, “Laredo and South Texas, because of our location and proximity to Mexico, are poised to be at the center of the next boom, starting with the development of the Mexican shale market.”

Port San AntonioÕs East Kelly Railport has grown capacity fourfold in support of Eagle Ford projects thanks to $30 million in rail, road and storage expansions.

every day,” Mower points out. “Look at Mexico’s will to reform its energy sector and provide new opportunities for South Texas companies,” says Conchas. Yes, it certainly appears pieces of the economic pie are falling into place.

Whoever thought South Texas, the land of cattle and vaqueros, could one day lay claim to becoming the economic capital of the Americas?

It will happen — remember, geography is our destiny and energy is our game.

For more information on START, visit www.southtexastrade.com.

The Emergence of a Region

None of this just happened overnight. In 2008 the United States went through its worst economic slump in modern times. Housing, auto manufacturing, banking and other major economic sectors ground to a near halt. High unemployment followed, with minimal new business investment. During a time of great uncertainty throughout the country — and in particular in the historic centers of commerce on the west and east coasts — South Texas took decisive steps forward, as it had for several years, as a vibrant center of economic growth, providing the region with remarkable stability during the economic downturn. Now South Texas is positioned as a leader that is helping steer America’s economic future in the 21st century. South Texas invested money and infrastructure to further develop its international trade, energy, aerospace and military sectors — contributing billions of dollars each year to America’s bottom line. Today, South Texas is harvesting the fruits of that labor. At Port Corpus Christi alone there is more than $35 billion of new investments by companies not only from the United States, but Austria, China and Italy, as well.

“Yes, we are definitely on the fast track to becoming the Energy Port of the Americas,” says Port Corpus Christi Executive Director and START partner John LaRue. Like Schwebel, LaRue sees a “New South Texas” developing, making the case that geography is not only our destiny, but with the tools we possess, we control that destiny. “Look at our infrastructure,” says LaRue, “seaports, airports, highways, railroads ... no area in America has a better transportation network.” Mower and Conchas share a similar sentiment. “Look at the resilience and work ethic of our people, the fact that our workforce is getting better educated, more sophisticated

Every day more than 10,000 trucks flow north-and soutbound through Laredo

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BUSINE S S

KERRVILLE: TEXAS HILL COUNTRY CHARM BETWEEN TWO MAJOR PLAYS

K

errville, Texas, is a community of approximately 22,000 people on Interstate 10 between the Eagle Ford, Cline and Permian Basin energy production plays.

“We have held our tax rate to a historical low rate for the last five years, though we have been through one of history’s worst economic eras, while improving our bond rating from AA- to AA,” states Mayor Jack Pratt, who was recognized for outstanding leadership and dedication as a municipal official. “We have improved municipal services, developed an in-house road program and implemented a robust capitalimprovements program,” Pratt adds. Since fiscal year

AS ONE OF THE LARGER CITIES BETWEEN THE PERMIAN BASIN AND EAGLE FORD SHALE, KERRVILLE IS CENTRALLY LOCATED AND A VERY COST-EFFECTIVE OPTION FOR THE OIL AND GAS INDUSTRIES 2010, approximately $52 million in capital projects has been completed and another $61.4 million is underway. A very successful economic development program has also been created, adding over 650 jobs in the past two years.

As one of the larger cities between the Permian Basin and Eagle Ford Shale, Kerrville is centrally located and a very cost-effective option for the oil and gas industries. Industry employees can live in Kerrville, conduct business and enjoy their evenings at home in the Texas Hill Country.

Kerrville fosters an environment that invites business enterprise. Astute community leadership, wise technology and utility infrastructure planning, and a spirit of entrepreneurship make it a prime spot

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for starting and sustaining a business. The city’s local economic development entity, the Kerrville Economic Development Corporation (KEDC) facilitates new investment, industry jobs and primary job growth. The KEDC has identified energy as a target market. The community actively promotes energy industry growth through organizations like the South Texas Energy & Economic Roundtable (STEER), the Eagle Ford Consortium and the University of Texas at San Antonio Institute for Economic Development.

The Fox Tank Company, a steel tank manufacturer, has developed a heater treater/pressure vessel plant in Kerrville and is predicted to add 153 permanent direct and indirect jobs, adding $136 million to the local economy. The city has a vibrant industrial base that is also home to James Avery Craftsman Inc. and Mooney Aviation Company.

Local commitment to the growth of the energy sector is reflected in its robust economic development programs. Economic development incentives can be tailored to the unique needs of qualified businesses seeking to relocate to or expand in Kerrville. Packages may include, but are not limited to, tax rebates, job training and grants for construction and improvements.

Kerrville has an exceptional school system with an almost 100 percent graduation rate. Schreiner University and the Alamo Colleges Greater Kerrville Center provide many educational alternatives that benefit local employers. The region is served by the Kerrville/Kerr County Airport, which has been recognized by the Texas Department of Transportation with the General Aviation Airport of the Year award.

This facility has a 6,400-foot runway based for approximately 155 aircraft, including single- and multiengine jets, planes, helicopters and gliders. The airport contains 28 hangers with another 12 in the planning

RICHARD MCMILLIN/BIGSTOCK.COM

SPECIAL TO SHALE

D K DIXON/BIGSTOCK.COM

stages. It is a base for recreation enthusiasts as well as corporate entities.

World-class healthcare is provided by the Peterson Regional Medical Center (PRMC). Administering exceptional, compassionate patient care, PRMC is a 124-bed hospital with 24/7 emergency care on a gorgeous, 35-acre campus that wraps patients in a quiet and healing environment.

A fun place to live and to visit, Kerrville has a distinct personality formed from a historic legacy of Texans — entrepreneurs, celebrities, artists, musicians, soldiers, sailors and statesmen. A vibrant community lives on today in the place, people and traditions — the home of legends past and present.

A rich history of commerce and the abundant natural beauty of the river, hills and wildlife, along with a beautiful year-round climate make Kerrville a jewel of a place. It’s a healthy, welcoming place for people of all ages and for businesses, visitors and tourists. And it’s perfectly situated for business and fun. Kerrville is a hub of everything that makes the Hill Country wonderful — shopping, dining, education, healthcare and lodging. Not to mention the wonderful outdoor activities and entertainment venues.

Kerrville also offers a rich array of arts and entertainment. Worldclass artists, artisans and performers flock here — unexpected for a city of its size. Vibrant performing, fine and folk art, music (including a 75-piece orchestra) and art venues, along with museums and art galleries rival Texas’ metro areas. Diverse fine and casual dining and local specialties are offered throughout the Kerrville area.

Local wineries and craft agriculture combine to make the area an adventure in sights, flavors and aromas.

Kerrville is an enterprise town. Wise infrastructure

A RICH HISTORY OF COMMERCE AND THE ABUNDANT NATURAL BEAUTY OF THE RIVER, HILLS AND WILDLIFE, ALONG WITH A BEAUTIFUL YEAR-ROUND CLIMATE MAKE KERRVILLE A JEWEL OF A PLACE planning and a spirit of entrepreneurship make it a prime spot for starting and sustaining a business. Its citizens enjoy the best in technology and utility services. Kerrville upholds a desirable essence of small-town living, yet with all the lifestyle amenities we expect — it is an authentic Hill Country experience.

The city is also quite a contrast to suburban and urban America. Kerrville is a safe, friendly community, and it promotes a wonderful quality of life with excellent schools, healthcare, parks and year-round special events. From preschool programs to college, post-graduate, trade and vocational training, and lifelong learning, the educational opportunities, both public and private are remarkable. These institutions open their doors to everyone and ensure this community continues to thrive.

Kerrville’s beautiful river, tree-covered hills and wildlife make it an extraordinary place to live, work and visit.

Choose from an endless selection of year-round outdoor activities and entertainment — hunting, camping, fishing, youth sports, boating, cycling, running, kayaking, climbing, hiking, golfing, tennis, shooting sports and more. Stateof-the-art sports and recreational facilities abound, including an Olympic-class shooting range.

And if the natural beauty of Kerrville isn’t gorgeous enough, a newly remodeled downtown and city hall have revitalized the once-sleepy rural community into a sprawling cosmopolitan city. Kerrville’s Guadalupe River runs through downtown, showcasing approximately $8 million in park improvements along the waterfront, including a new 4.2-mile river trail corridor promising a Texas good time of relaxation, exercise and tubing. “The parks have transcended beautifully with these improvements and are truly remarkable assets for our community,” says Pratt. “The dancing water and sparkling lights from the new fountain plaza are sure to captivate, adding more to the substantial beauty of our community. This will be a place for many generations to play, enjoy and make lifelong memories.”

Residents of Kerrville are blessed to live in a safe community, with abundant natural beauty, outstanding yearround weather and a stable economy. The city has been highlighted numerous times as a destination for visitors in publications such as Texas Highways magazine. But, what visitors come here to do is available to community members year-round. When looking for places to explore over the next several months, remember to think of Kerrville. You’ll be glad you did.

For more information, visit www.kerrvilletx.gov or just take a drive out there!

SEPTEMBER/OCTOBER 2015 // SHALE OIL & GAS BUSINESS MAGAZINE

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BUSINE S S

MANUFACTURING PLANTS IN MEXICO INCREASE NEED FOR NATURAL GAS BY: ROGELIO CUEVAS, CO-MANAGING PARTNER AT CUEVAS & CUEVAS LLP

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il and gas suppliers are showing interest in establishing operations in Mexico to power automotive manufacturing plants. Round one brought in nine companies. Only these contenders were permitted to propose a financial offer on the 14 contractual areas, of which only two were awarded. The rest of the contractual areas were retained by the state.

However, through a combination of low wages, good geography and free-trade agreements, many automobile manufacturers have invested in Mexico. The hope is that this will boost the country’s manufacturing base.

Recently, Mexico has seen an increase in its automobile manufacturing and export industry. In the 1980s, manufacturing plants often extended across the border to assemble automobiles in Mexico from parts produced in the U.S. and re-export the finished product back to the states. Since the 1990s and early 2000s, Mexico has seen a climb in investments by automotive manufacturers for the production of increasingly complex modern car parts and assembly plants, positioning the country to become a vital center of high-value manufacturing.

In April, Toyota Motor Corp. announced that it will build a plant in Mexico to manufacture the 2020 compact Corolla. Following the news, Ford Motor Co. released its plans to build and expand its engine and transmission manufacturing plants in the northern and central states of Chihuahua and Guanajuato. These extensions and expansions of manufacturing plants in Mexico certainly seem to be a trend in the current automobile industry.

There is a need to power all Mexican manufacturing plants with new energy sources. The country’s natural gas production capacity is higher than it was in 2000, but it has not been able to keep up with the demand, increasing 123 percent between 2000 THROUGH A about and 2014. Nearly all of Mexico’s COMBINATION internal natural gas production OF LOW WAGES, supports its oil operations and electricity generation.

GOOD GEOGRAPHY national Mexico’s proven gas reserves AND FREE-TRADE are on the decline due to AGREEMENTS, underinvestment in exploration.

MANY AUTOMOBILE Production began to decline in years, as well, as price MANUFACTURERS recent differentials have made it more HAVE INVESTED profitable for PEMEX to produce IN MEXICO oil than gas.

Despite the fact that Mexico may have important unconventional natural gas resources, the country is further behind in developing them than others, such as Canada. The Mexican energy reform wishes to attract private investment for exploration and production of both conventional and unconventional natural resources, but also to increase funds for much-needed infrastructure for transportation, distribution and storage.

As a result of demand rising faster than production, Mexico’s

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SHALE OIL & GAS BUSINESS MAGAZINE // SEPTEMBER/OCTOBER 2015

imports of natural gas have also increased, accounting for about 35 percent of consumption today compared to less than 10 percent in 2000. Fifteen years ago, Mexico imported 30 percent of U.S. natural gas exports, accounting for 100 percent of its natural gas imports.

In 2006, to help meet its growing demand for gas, Mexico started importing liquefied natural gas at very high costs from Nigeria, Qatar and Peru.

Due to the North American Free Trade Agreement (NAFTA), Mexican imports of U.S. natural gas are

IN 2014, U.S. NATURAL GAS EXPORTS ACCOUNTED FOR APPROXIMATELY 69 PERCENT OF MEXICOÕS NATURAL GAS IMPORTS AND 24 PERCENT OF ITS NATURAL GAS CONSUMPTION accepted in the public interest and permitted without any holdups.

In 2014, U.S. natural gas exports accounted for approximately 69 percent of Mexico’s natural gas imports and 24 percent of its natural gas consumption. From 2008 to 2013, U.S. pipelines to Mexico doubled their capacity. Current U.S. export capacity to Mexico is 4.9 billion cubic feet per day. By the end of this year, that capacity should reach 8 billion cubic feet per day. It seems that in the near future Mexico will likely remain dependent on U.S. supplies of natural gas to meet its growing manufacturing demand.

Visit www.cuevasandcuevas.com to learn more about the international business advisors at Cuevas & Cuevas LLP.

THE CURRENT CAPACITY OF U.S. NATURAL GAS EXPORTS TO MEXICO IS 4.9 BILLION CUBIC FEET PER DAY. BY THE END OF THIS YEAR, THAT CAPACITY SHOULD REACH 8 BILLION CUBIC FEET PER DAY

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ENERGY ADVENTURES: HAPPENING NOW ... AND MORE ON THE WAY! SPECIAL TO SHALE

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L

ong before the topic of hydraulic fracturing started to grab headlines in the news media, visitors to the Houston Museum of Natural Science (HMNS) have been able to experience that process firsthand during an imaginary trip down a working oil and natural gas well aboard the Geovator. Since 1994, the immersive exhibit — part of the museum’s popular Wiess Energy Hall — has helped visitors experience hydraulic fracturing, casing, cementing and perforating a well from inside the borehole.

Along with the Geovator, Wiess Energy Hall offers a wealth of interactive ways to experience the science and technology of energy. Wide-screen video shows the formation of energy, from the Big Bang to the deposition of sediments that eventually form hydrocarbons. A floor-to-ceiling wall of rock offers visitors the chance to explore geologic formations and see for themselves how oil migrates through the rock layers. A holographic illusion features a pair of geologists in the field and a Vibroseis truck that rumbles onto the scene. Nearby, the loud discharge of a real working seismic sleeve gun may startle firsttime visitors.

Around the corner, interactive exhibits offer the

SHALE OIL & GAS BUSINESS MAGAZINE // SEPTEMBER/OCTOBER 2015

chance to activate a hydrocyclone separator and see the swirling action separating particles from liquid. In the same area, visitors can spin wheels to pump crude oil samples through clear pipes and view animation showing what happens to hydrocarbons at an oil refinery. Other exhibits offer the chance to propel a pipeline pig through a glass pipe and explore the networks of pipelines and power lines that crisscross our country. Visitors may have to wait their turn to test their ability with the Energy Crank, racing to spin the wheel as fast as possible, only to see that their efforts do not measure up to gasoline power.

PHOTOS COURTESY OF HMNS

DUBBED ÒWIESS ENERGY HALL 3.0,Ó THE THIRD ITERATION OF THIS WELLLIKED HALL WILL EXPAND FROM ITS CURRENT 8,500 SQUARE FEET TO AN IMPRESSIVE 30,000 SQUARE FEET

Coming Soon: The Future of Energy

These exhibits have already been enjoyed by generations of visitors, but now a big change is in the air. All of them will be reinvented and renewed as part of an expanded Wiess Energy Hall set to open in 2017. Dubbed “Wiess Energy Hall 3.0,” the third iteration of this well-liked hall will expand from its current 8,500 square feet to an impressive 30,000 square feet. Loads of new exhibits will join the classics, making the updated hall the most contemporary, comprehensive and technologically advanced exhibition on the science and technology of energy anywhere in the world.

Visitors to the new energy hall will step from the elevator to the dynamic floor of a working 21st-century offshore drilling rig, complete with an automated top-drive mechanism and an iron roughneck appearing to handle drill pipe. A projection of the offshore environment, sound effects and lighting will enhance the realism.

An oversized replica of a tricone rotary drill bit, approximately 14 feet in diameter, will gyrate vigorously in the overhead space.

Nearby, a new automated drilling control console will offer a chance to take charge of the operation of multi-ton drilling machinery. And the daring can try their hand at “making hole” safely using the most technologically advanced systems available.

The new hall also will feature a must-see, 3,000-square-foot scale model representing the city of Houston and the landscape of southeast and central Texas. This animated diorama will use mechanical motion and projected imagery to depict the energy value chain, including activity in the Eagle Ford Shale, refining, LNG terminals, nuclear plants, wind farms rotating offshore, power plants, trainloads of oil and coal, and a dynamic city skyline and bustling freeways.

Finally, no 21st-century energy exhibition would be complete without addressing the changes brought about by unconventional hydrocarbon energy. Wiess Energy Hall 3.0 will feature a sprawling new gallery called The Unconventional Resources Revolution, which will enlighten visitors on how shale oil and gas have transformed the U.S. energy picture. Other parts of the exhibition will investigate how additional unconventional forms, including heavy oil, oil shale, coalbed methane and even gas hydrates are changing not only the U.S. energy outlook for the better, but that of the entire world.

Visit HMNS now to see the current Wiess Energy Hall; then drop by its other compelling exhibit halls covering topics as diverse as gems and minerals, Native American culture and Texas wildlife — not to mention one of the largest paleontology collections in the world.

Then stay tuned for 2017 — and prepare to see the future.

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WTxEC Business & Industry Involvement Please tune in to KWEL 1070 AM every Saturday from 2-3 p.m.

Where industry comes to speak!

Listen to the latest podcasts www.wtxec.org/shale-podcasts

CALL NOW FOR MORE INFO! Katherine Stokes 325-795-4206 or e-mail me: Katherine@wtxec.org Visit our website: www.wtxec.org for additional information.

For more information and to plan your next trip to the Houston Museum of Natural Science, visit www.hmns.org.

SEPTEMBER/OCTOBER 2015 // SHALE OIL & GAS BUSINESS MAGAZINE

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L IFESTY LE

FAMILY, RECREATION, TENNIS, FITNESS AND FUN

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ounded in 1965, the Houston Racquet Club is the birthplace and home of the Professional Women’s Tennis Tour and has been rated among the Top 50 Clubs

by Tennis magazine. Representing a unique alternative among country clubs in the area, it’s a private recreational tennis and athletic club that provides an oasis of secure relaxation in a distinctive social and family atmosphere.

Situated on 31 beautifully landscaped and wooded acres in the heart of the fashionable Memorial neighborhood, sophistication meets elegance in the recently renovated lobby, providing a perfect backdrop for special occasions. From large wedding receptions in the ballroom, to small relaxed family celebrations in one of several available private rooms, the Houston Racquet Club is the ideal event venue.

With unparalleled tennis facilities, including

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34 tennis courts (19 clay and 15 hard-surface), the club is the city’s premier locale for tennis, earning it the honor of being named the United States Tennis Association’s 2008 Member Organization of the Year. The Houston Racquet Club has assembled one of the finest teaching staffs in the nation — its tennis pros have won 109 national titles combined and have accumulated 100 years of teaching experience.

The club also features a resort-style pool complex, including a recreational pool and a heated lap pool for adults and children alike.

The exciting water features, oversized slide and two-board diving well attract members all summer long to enjoy at their leisure. Adjoining the pool complex is the 17,000-square-foot fitness center, offering three studios for group exercise classes, a large open fitness floor complete with brand-new Cybex strengthtraining machines and free weights, as well

SHALE OIL & GAS BUSINESS MAGAZINE // SEPTEMBER/OCTOBER 2015

as many state-of-the-art cardio machines, providing many choices for a total-body workout. For a group workout setting, the facility offers over 220 classes per month, including aerobics, Pilates, yoga and group cycling. The Houston Racquet Club Fitness Center continually strives to offer members the latest quality programming in the industry.

On-site supervision of children is available to members while they enjoy a tennis lesson, personal-training session or some time away for lunch, dinner or an event at the club. The club offers numerous special events and activities for members of all ages during every major holiday, such as the Annual Halloween Party, Mother’s Day Brunch and July Fourth cookout. Special-interest groups such as the Barristers, Uncork’d and Oil & Gas Societies are also popular outlets available to members to network and share similar interests among

PHOTOS COURTESY OF HOUSTON RACQUET CLUB

SPECIAL TO SHALE

Houston Racquet Club has two dining outlets with something for every palate. Its culinary team researches all of the latest food trends and offers members various culinary experiences featuring both local and international favorites.

With a variety of ingredients, fresh produce and the highest quality meats coupled with a professional, highly trained team, the restaurants at Houston Racquet Club meet and exceed the culinary expectations of its members and guests.

The casual Courtside Cafe serves healthy food options, including breakfast. The Grill has an extensive buffet and a variety of entrée selections for lunch and dinner. Additionally, the Creekside Lounge is ideal for an evening cocktail in this adults-only space overlooking Soldiers Creek. If the weather is just right, members can enjoy a drink or nice meal out on the Redwood Deck or Grill Deck, while their children play out on the nearby gated playground or sand volleyball and basketball courts.

The possibilities for general leisure activities, maintaining a healthy lifestyle and bringing friends, family or business associates to this home-away-from-home destination are endless at the Houston Racquet Club. See for yourself what the buzz is all about, and witness how history, professionalism and reputation combine to make the Houston Racquet Club the perfect choice in private clubs.

each other. The dedicated Youth Activities staff schedules seasonal programs for children, including swim team, summer/winter day camps and tennis camps.

Other activities consist of year-round junior tennis programs, fitness programs and an extensive adult tennis program, which offers fun and competitive play at all levels for men and women. Golf privileges are another membership bonus at Houston Racquet Club, which has established partnerships with many local, national and international clubs.

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For more information, visit www.houstonracquetclub.com.

SEPTEMBER/OCTOBER 2015 // SHALE OIL & GAS BUSINESS MAGAZINE

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UNDERSTANDING YOUR BODY’S COMPOSITION The key to optimal health and wellness BY: RITA OLUFOWOSHE

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ody composition is pivotal to a healthy body and mind. Understanding your body’s composition is essential for optimal health and wellness. The benefits include developing a strong skeletal muscle for competitive events, minimizing exhaustion, a reduced risk of injury, decreased inflammation, improved circulation and a vital energy boost — all leading to a more balanced immune system.

For athletes, personal trainers and fitness enthusiasts, a better understanding of the body’s composition is crucial for successful results. Knowledge of body fat, muscle mass and body water rate can help identify the ability to burn calories, determine workout recovery, track progress and avoid various health risks. Monitoring body water rate is important for preventing dehydration and optimizing training, while also serving as a good indicator for heart deficiencies, kidney problems and diabetes-associated health risks. Knowing your body composition is essential for attaining optimal weight loss; however, body composition goes beyond body mass index (BMI).

Historically, many studies have used BMI to determine weight assessment (underweight, healthy weight, overweight and obesity) based on age, height and sex. However, new studies show that BMI alone is not enough to determine a person’s weight. For example, consider two individuals with identical height, weight and sex: one with more extracellular fluid and

high fat mass, and the other with high free-fat mass and high intracellular fluid, both with a BMI of 30.5 (considered obese). In this scenario, the individual with high fat mass and extracellular fluid shows water retention and more fat mass, which is unhealthy. The second person with high free-fat mass and intracellular fluid may have less health issues because of the lean muscle supporting the bones and intracellular fluid for optimal organ function — especially the colon. Also, BMI does not account for different ethnic groups and individual health circumstances or activity level in determining weight levels. Therefore, the knowledge of BMI in addition to fat mass, free-fat mass, and intra- and extracellular water rate is pivotal to weight-reduction programs, and maintaining one’s health and well-being.

As previously mentioned, intracellular fluid is essential for maintaining a healthy body. It is stored in the body for the effective function of organs such as the colon, kidney, liver, skin and lungs. High levels of intracellular fluid, especially in the colon, help with colon cleansing and detoxification. Low levels hinder colon function and can cause constipation, autointoxication, diseases, illnesses and obesity. Understanding the colon and its role in the digestive cycle is important for effective weight-loss program success.

The colon is also called the large intestine. A muscular tube that stores digestive food, the colon absorbs water and expels waste and toxins from the body. If intracellular fluid levels are low, the colon can begin to function poorly causing constipation.

Many natural healing professionals believe that most diseases begin with a toxic colon.

Therefore, the most important step toward improved health is cleansing the colon for proper wellness. A healthy colon means a more balanced immune system, increased circulation and optimal health and well-being.

Disclaimer: This article is for your information only. It is neither a diagnosis nor prescription.

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Take a deeper look from the inside out!

Body Composition Benefits: »

Optimized training control through differentiated body composition analysis.

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Quality control for physiotherapy and nutrition therapy.

» »

Better evaluation of fitness level.

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Accurate and precise results are validated by clinical studies.

Easy operation ensures smooth integration into daily routines.

For more information on understanding your body composition, visit www.depremierspa.com or contact Rita Olufowoshe at info@depremierspa.com or 281-496-3772.

SHALE OIL & GAS BUSINESS MAGAZINE // SEPTEMBER/OCTOBER 2015

PHOTO COURTESY OF DE PREMIER SPA, B-D-S/BIGSTOCK.COM

UNDERSTANDING THE COLON AND ITS ROLE IN THE DIGESTIVE CYCLE IS IMPORTANT FOR EFFECTIVE WEIGHT-LOSS PROGRAM SUCCESS

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SEPTEMBER/OCTOBER 2015 // SHALE OIL & GAS BUSINESS MAGAZINE

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EL MACHITO Carnes al Mesquite SPECIAL TO SHALE

and the chef’s signature dish — locally sourced Cabrito al Pastor.

Grilled entrées are paired with traditional Mexican appetizers and sides such as rice, beans, potatoes and grilled vegetables.

Fresh tortillas are made at Chef Hernandez’s newly opened molino, Tortilleria La Gloria, using traditional methods passed down from generation to generation. Diners are served family style in a rustic and relaxed, yet elegant setting. Completing the dining experience at El Machito is an ornately carved, artisan-crafted bar serving an extensive selection of beverages including a full bar, wine and beer imported

artisans and families in Mexico and created especially for El Machito and Chef Hernandez.

Handmade carved and painted tiles with mini replicas of El Machito adorn the walls, while brightly painted serving dishes carry the meats and sides to diners’ tables. The giant canopy of oaks on the property are adorned with large tin lanterns, helping set the atmosphere and transport guests to Mexico.

Staying true to his passion for historic and unique establishments, Chef Hernandez chose to open El Machito is one of San Antonio’s most iconic buildings — the former Alamo Cement Company building, located in the

from Mexico and margaritas made with select tequilas handpicked by Chef Hernandez.

Continuing his trademark commitment to authenticity, art and décor was sourced from

Alamo Quarry Market. The renovation of the old cement mine offices include an upgraded patio with imported lighting and custom furniture built by Mexican craftsmen. And the exterior has been painted with vibrant colors that welcome guests to a new experience in the Quarry like no other.

El Machito joins Chef Hernandez’s family of acclaimed eateries — La Gloria, The FruteríaBotanero, True Flavors and Casa Hernán. He and his restaurants have been featured in acclaimed publications such as Texas Monthly, Bon Appétit, Poder, Saveur, Travel & Leisure, Martha Stewart Living, Garden & Gun, Food & Wine, Tasting Table and Southern Living.

Chef Hernandez also served as a guest judge on season nine of Bravo’s Top Chef and has appeared on the Cooking Channel’s Man Fire Food and Simply Ming, as well as the Travel Channel’s Bizarre Foods with Andrew Zimmern.

E

l Machito is the third dining concept from acclaimed chef, Johnny Hernandez. A a carnivorous celebration, El Machito specializes in mesquite-grilled meats prepared in the traditional style of the carne asadas of northern Mexico and campestre style of Guadalajara. Influenced by the history, technique and artistry of the parrilleros (grill chefs) of Mexico, Chef Hernandez has created a dining experience that brings this unique cooking style to American diners.

The heart of El Machito is without a doubt the handcrafted asadero. The open-fire mesquite grill is framed by a wooden altar, providing a window for diners to admire the skills of the specially trained grill chefs who masterfully control the heat to prepare every variety of mesquite-grilled meat imaginable.

Specialties include Cecina Asada, a delicacy of Yecapixtla, handmade Mexican sausages

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El Machito is conveniently located in the Alamo Quarry Market at 7300 Jones Maltsberger.

Visit www.elmachito.com, email info@elmachito.com or call 210-314-3971 for more information.

SHALE OIL & GAS BUSINESS MAGAZINE // SEPTEMBER/OCTOBER 2015

PHOTOS COURTESY OF EL MACHITO

L IFESTY LE

500 North Water Street | Corpus Christi, TX 78401

361. 887. 2121 bleubistrocc.com Mon-Thurs: 5pm - 10pm | Fri-Sat: 5pm - 12am Closed Sunday Lunch: Mon-Fri:11am - 2pm SEPTEMBER/OCTOBER 2015 // SHALE OIL & GAS BUSINESS MAGAZINE

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// NONPR O F I T

OILFIELD HELPING HANDS: FUNDRAISING FOR FAMILY SPECIAL TO SHALE

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UPCOMING EVENTS HOUSTON GOLF TOURNAMENT Ñ SEPTEMBER 14 ROCKY MOUNTAIN SPORTING CLAYS TOURNAMENT Ñ SEPTEMBER 18 OKLAHOMA SPORTING CLAYS TOURNAMENT Ñ SEPTEMBER 25 TEXAS FALL SPORTING CLAYS TOURNAMENT (HOUSTON) Ñ OCTOBER 9 PERMIAN SPORTING CLAYS TOURNAMENT Ñ OCTOBER 30 ROCKY MOUNTAIN BOWLING & BILLIARDS BASH Ñ DECEMBER 3

SHALE OIL & GAS BUSINESS MAGAZINE // SEPTEMBER/OCTOBER 2015

PHOTOS COURTESY OF OHH

hose in the oil and gas industry know that it takes one large team working together to make things happen from start to finish in the field, offshore and in the office. This family-like spirit is what drives Oilfield Helping Hands (OHH) to host multiple fundraising events every year to raise money and support for oilfield workers who are suddenly faced with an unexpected crisis. Medical emergencies, weather-related disasters and unpredictable personal struggles can leave individuals and their families with a heavy financial burden.

All of OHH’s annual fundraising efforts and donations directly assist people in the oilfield community.

A nonprofit oil and gas industry-focused organization, OHH began in 2003 as a single fundraising effort centered on a sporting event for one family. The success of that initial event, and the positive impact on the sponsors and the recipient family, inspired the formation of the organization. The nonprofit has since grown into a dedicated team of volunteers, sponsors and individual and corporate members who all work in the oil and gas industry. Launched in Houston, OHH has helped families throughout the oil patch with expansion efforts and regional chapter formation in Oklahoma, Acadiana and the Rocky Mountains.

In December 2014, OHH welcomed the Permian Chapter to the roster, furthering its goal to expand wherever the energy industry and its workers have a need. Recently,

RECENTLY, OILFIELD HELPING HANDS HAS REACHED A MILESTONE OF $3 MILLION IN FUNDS DISTRIBUTED TO 276 RECIPIENTS the organization announced they have reached a milestone of $3 million in funds distributed to 276 recipients.

“We couldn’t do anything without the support of our sponsors, volunteers and corporate members,” says OHH President Gary Brooks. “It’s humbling to see how many people give their time, energy and funds to help manage these exciting and rewarding events. We have all been through hardship and understand that life isn’t perfect. For people and families facing unexpected bumps in the road, OHH is here to help.”

OHH currently has 28 corporate members who are dedicated and committed to helping the communities in which it serves. With corporate support and fundraising efforts from 13 annual events nationwide — including clay shoots, fishing and golf tournaments — OHH proudly helps families in need.

To learn more about Oilfield Helping Hands, to become a corporate member or event sponsor, or to volunteer, please visit www.oilfieldhelpinghands.org.

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.

OIL & GAS BUSINESS MAGAZINE

http://www.linkedin.com/company/ shale-oil-&-gas-business-magazine SEPTEMBER/OCTOBER 2015 // SHALE OIL & GAS BUSINESS MAGAZINE

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25 YEARS OF FUN, EDUCATION AND CONSERVATION AT THE TEXAS STATE AQUARIUM $50 Million Caribbean Journey Expansion Underway

SPECIAL TO SHALE

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or 25 years, the Texas State Aquarium has introduced visitors to the sights, sounds and vibrant wildlife of the Gulf of Mexico and beyond.

Located on beautiful Corpus Christi Bay, it houses more than 4,000 animals representing more than 320 different species that help the aquarium complete its mission every day — connecting people with nature and inspiring conservation of the Gulf of Mexico.

Springing from an idea that arose among visionary leaders in the late 1960s, the Texas State Aquarium opened its doors to the public on July 6, 1990. Since then, the nonprofit organization has grown into a regional leader in marine education, wildlife rehabilitation, and nature and wildlife research and conservation.

To date, the Texas State Aquarium has educated and entertained more than 12 million visitors. Accredited by the Association of Zoos & Aquariums, the facility has been honored as one of the “Best Aquariums in the U.S.” by the Travel Channel, has earned TripAdvisor’s Certificate of Excellence again

As a result, the aquarium’s wide range of educational programs focuses on promoting STEM (science, technology, engineering and math) learning. From on-site field trip opportunities and programs to annual summer SeaCamp, home school programs, outreach programs that take the aquarium to the classroom and Aquavision distancelearning programs, the Texas State Aquarium’s educational messaging and programming

this year based on guest ratings, and was chosen as one of the “10 Best Aquariums in North America” through USA Today’s 10Best Readers’ Choice Awards.

In 2014, the aquarium partnered with Flint Hills Resources to create the Flint Hills Resources Center for Excellence in STEM Education at the facility.

are designed to foster exploration and discovery, and empower learners of all ages to reach their full potential.

In 2014, the aquarium’s educational programs reached more than 84,000 students of all ages.

Another conservation cornerstone for the aquarium is its Second Chances Wildlife Rehabilitation Program. Since its establishment in 1995, the program has successfully rehabilitated and released more than 1,000 animals back into their natural habitats. Focused primarily on shorebirds, raptors and sea turtles, the Second Chances program typically treats over 200 animals per year, always with the goal of returning them to their natural environment.

SHALE OIL & GAS BUSINESS MAGAZINE // SEPTEMBER/OCTOBER 2015

The Wildlife Care, Conservation, and Research Fund is another way in which the aquarium furthers its mission. Each year, the aquarium dedicates a percentage of its earnings to funding a number of research programs that focus on habitat restoration, wildlife management, conservation and wildlife rehabilitation in the Gulf of Mexico.

Both the Corpus Christi Bay scenery and the opportunity to enjoy and often interact with the aquarium’s animal collection have made the Texas State Aquarium a popular venue for private events for many years. The aquarium has hosted everything from weddings and proms to corporate events, business meetings and birthday parties.

A number of community partners and companies support the aquarium through the Aquarium Partnership program, and, in return, they receive recognition and benefits for their employees.

Whether it is through general admission, membership, Aquarium Partnership or hosting a private event, a portion of every dollar spent at the Texas State Aquarium contributes directly to the care of the animal collection, as well as wildlife rehabilitation and the conservation of animals and habitats.

The Texas State Aquarium is in the process of a $50 million, 65,000-squarefoot Caribbean Journey expansion, which will bring the exciting and unique wildlife and ecology of the Western Caribbean to the shores of South Texas. Expected to open in spring 2017, the expansion is estimated to increase the aquarium’s annual economic impact on Texas’ Coastal Bend from $48.5 million in 2014 to $69 million in 2017.

For more information on the Texas State Aquarium and its Caribbean Journey expansion, visit www.texasstateaquarium.org.

PHOTOS COURTESY OF TEXAS STATE AQUARIUM

// NONPR O F I T

SEPTEMBER/OCTOBER 2015 // SHALE OIL & GAS BUSINESS MAGAZINE

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C O M M UNI T Y

EAGLE FORD ENERGY CAMP FOR KARNES COUNTY KIDS

R

oller coasters, robotics and forensics are some of the subjects the oil and gas industry has helped bring to Karnes County students. The first week of June, 120 students from Karnes City, Kenedy, Runge, Falls City and Pawnee, Texas, attended Eagle Ford Energy Camp, which was funded by various oil and gas companies that operate in the Eagle Ford.

Throughout the week, students were engaged in many hands-on activities related to science, technology, engineering and math (STEM). They worked in teams to build small rockets, program small robots to run through an obstacle course, build miniature roller coasters, and even identify mock robbery suspects via fingerprint analysis and perform other evidence-based investigations. Students were also able to visit a Science on Wheels exhibit, which included activities related to weather, aerodynamics, biotechnology, energy and space.

“We’re making learning fun, and we’re exposing students to careers and activities that have the potential to impact their future,” says Jo Ann Gutierrez, Energy Camp Coordinator and the Karnes City Independent School District’s Director of Instructional Services. “We are fortunate to offer this opportunity to students and are thrilled to hear them asking about the topics that will be studied next summer.”

The idea of a STEM camp began with the Karnes City ISD Education Foundation and the oil

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SHALE OIL & GAS BUSINESS MAGAZINE // SEPTEMBER/OCTOBER 2015

and gas industry’s shared goal of preparing local students for industry jobs. One of the results is a weeklong camp for fourth to eighth graders where students are introduced to fun math and science activities and careers.

The program has tripled in just three years from an initial 36 participants to 120 this summer.

During camp, students were visited by industry representatives.

They also learned more about the industry around them and the careers the industry has brought with it to South Texas.

“I’m so proud to have been part of the camp’s initiation,” says Glynis Holm Strause, ConocoPhillips Stakeholder Relations Advisor. “Many of these kids would never have been exposed to the various opportunities that exist out there in the world if it wasn’t for this camp. Camp has broadened students’ abilities and opportunities.”

“Our community is thankful for the industry’s generosity,” says Gutierrez. “The companies have given back to the community and its students, and it is greatly appreciated.”

For more information on the Eagle Ford Energy Camp, visit www. conocophillips.com.

PHOTOS COURTESY OF CONOCOPHILLIPS

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PHOTOS COURTESY OF SHALE MAGAZINE

SHALE HAD THE GREAT HONOR of welcoming guests to the Las Colinas Country Club on Aug. 6 to celebrate the July/August magazine issue with Pioneer Natural Resources’ CEO, Scott Sheffield. Guests enjoyed hearing from Omar Garcia with STEER, Railroad Commissioner Ryan Sitton and Railroad Commission Chairman David Porter, before Sheffield addressed the crowd. The passed hor d’oeuvres and cocktails added to the delightful evening of networking and mingling.

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PHOTOS COURTESY OF SHALE MAGAZINE

SHALE, ALONG WITH STEER, enjoyed some fresh air and great networking at a Corpus Christi Hooks game on July 22 for their first oil and gas night! SHALE and STEER guests enjoyed complimentary hotdogs and hamburgers, drinks and game day fun as the Hooks took on the Midland RockHounds. It was an exciting game, with the Hooks ending the game in victory. SHALE was happy to support the teams, as well as the oil and gas industry representatives, employees and supporters in attendance.

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SHALE OIL & GAS BUSINESS MAGAZINE // SEPTEMBER/OCTOBER 2015

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PHOTOS COURTESY OF SHALE MAGAZINE

SHALE WAS A SPONSOR of the San Antonio Pipeliners’ Summer Mixer on July 30. The mixer hosted a great turnout at the Topgolf San Antonio location.

Guests enjoyed cocktails and appetizers along with a great networking atmosphere! Raffled prizes were up for grabs throughout the event as well. The sponsorship used to fund science, technology, engineering and math scholarships for college students in South Texas.

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SHALE OIL & GAS BUSINESS MAGAZINE // SEPTEMBER/OCTOBER 2015

EPA FRIENDLY GAS DRYING SOLUTIONS Looking for a cost effective way to dry your natural gas stream? At DRY ROCK, we have the solution to eliminating outdated GLYCOL UNITS with our NATURAL GAS DEHYDRATION SYSTEMS. We manufacture and service what we sell.

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SHALE ATTENDED TAMACC’S 40TH ANNUAL CONVENTION AND BUSINESS EXPO on Aug. 6-8 at

PHOTOS COURTESY OF SHALE MAGAZINE

the Hilton Austin Airport hotel. Elected officials, business owners and community leaders from across the state of Texas gathered at the expo for business and leadership development workshops, facilitated by some of the best trainers in the state. The Business Matchmaking and Networking Sessions held at the event provided an opportunity for business owners, corporations and state agencies to meet and network.

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SHALE OIL & GAS BUSINESS MAGAZINE // SEPTEMBER/OCTOBER 2015

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 S C ENE 

PHOTOS COURTESY OF SHALE MAGAZINE

SHALE ATTENDED a Legislative and Regulatory Forum on Aug. 4 hosted by the Texas Alliance of Energy Producers in Houston. Speakers included Lt. Gov. Dan Patrick, U.S. Congressman Joe Barton, Railroad Commissioner David Porter, Texas Rep. Phil King, and Director of the Bureau of Economic Geology, Scott Tinker.

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UNMATCHED TEXAS HUNTING RETREAT After hunting several ranches throughout South Texas over the last 15 years, I have finally found one that has it all. Fantastic accommodations, food and overall comfort are second to none. The number of quality animals is simply unbelievable.

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Excel Safety Consultants also provides Case Management services. We have partnered with a board-certified occupational physician and a Texas Workers’ Compensation insurance adjuster who believe in the ability to interpret OSHA recordkeeping standards and to implement best-practice methods which not only offer the employee the best medical care but also allow for reduced OSHA recordability to our customers.

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K

PHOTOS COURTESY OF SHALE MAGAZINE

ym Bolado was honored to represent SHALE at the WEN South Texas chapter’s Women in the Wild retreat Aug. 14-15 in Mathis, Texas, at InFlight Outfitters. The ladies enjoyed networking and mingling the first evening. The following day consisted of learning archery and practicing skeet shooting.

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SHALE COVER PARTY OIL & GAS BUSINESS MAGAZINE

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STATE of ENERGY

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OIL & GAS BUSINESS MAGAZINE

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WHAT HAS CHANGED IN THE ENERGY SECTOR? GET YOUR QUESTIONS ANSWERED!

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Why you should attend:

Why you should attend:

• Get the latest oil & gas information directly from the energy industry • Learn how to turn challenges into opportunities in the energy industry • Find out what the future holds for you in the energy industry • Learn what your business needs to grow

• Get the latest oil & gas information directly from the energy industry • Learn how to turn challenges into opportunities in the energy industry • Find out what the future holds for you in the energy industry • Learn what your business needs to grow

To secure your sponsorship contact: Emily Veazey, Events Director, Corpus Christi Chamber of Commerce, 361-881-1800, emily@theccchamber.org, corpuschristichamber.org.

To secure your sponsorship contact: San Antonio Hispanic Chamber of Commerce, Blanca at blancam@sahcc.org or 210-225-0462.

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