THE MAGAZINE FOR LEADERS IN AMERICAN ENERGY
January / February 2017
OilmanMagazine.com
LOUISIANA
Swift Energy Sells Remaining
Louisiana Assets
p. 30
NEWS AT A GLANCE
Trump Selects Exxon CEO
for Secretary of State
p. 24
TEXAS
Gulf Tech Receives Full Certication
as a SEMS Audit Service Provider
p. 28
OKLAHOMA
Oklahoma AG Nominated
as Director of EPA
p. 26
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IN THIS ISSUE
Feature
O&G Training and Education
Taps Technology for the Modern Classroom Experience
By Jennifer Delony - pages 18 through 20
In Every Issue
Letter from the Publisher – page 2
OILMAN Contributors – page 2
OILMAN Crossword Puzzle – page 3
OILMAN Online // Retweets // Social Stream – page 4
Downhole Data – page 4
Calendar of Events – page 17
OILMAN Crossword Puzzle Answers – page 17
— OILMAN PRIDE —
Photos from Oil & Gas History – pages 7 through 9
— OILMAN COLUMNS —
Steve Burnett: Oilman Cartoon – page 3
Mark A. Stansberry: America Needs: Energy Education – page 10
Steve Burnett: Safety Programs vs. Training Programs – page 12
Josh Robbins: Oil and Gas Acquisition Market 2017 Outlook – page 15
Eric R. Eissler: Innovation Wastewater Management Processes Gain Traction – page 21
Alex Mills: Natural Gas Production, Storage, Exports on Record Pace – page 23
Energy Scene with Jason Spiess: An Interview with Nick Candito, CEO and Co-founder, Progressly – page 32
— NEWS—
News at a Glance – pages 24 and 25
Oklahoma News – pages 26 and 27
Texas News – pages 28 and 29
Louisiana News – pages 30 and 31
Oilman Magazine / January-February 2017 / OilmanMagazine.com
11
During the oil and gas slowdown the last two years, employees across many
sectors of the industry were laid off, wage increases were limited, and many
were denied promotions. The brighter side to that unfortunate slowdown was
many employees took that as an opportunity to improve their skills by attending
seminars, streaming webinars, and brushing up on knowledge that would propel
them for better opportunities as the industry turned around. A wise decision for
those that are still employed, as well as for the unemployed seeking a marketing
advantage over the next candidate.
Our feature in this edition takes a look at education and training technology the oil and gas industry
will need for the future. It’s difcult to know what specic niche skills will be in demand ten years
from now; however, starting from the basics of what we know today, either through a bachelor’s
degree, a trade program, such as welding technology, and even a graduate degree to learn advanced
techniques, is the best approach for a successful career.
Learning the latest skills and knowledge is often found in continuing education and advanced
certication programs. It is proven that on-the-job training and real-world practice is the best way
to learn a skill and gain knowledge. But once you’ve reached your profession’s standard body of
knowledge through higher education or on-the-job training, over time standard practices change, ways
of doing tasks become obsolete, and new techniques and knowledge are introduced to the eld, as
the oil and gas industry advances. Some have even found that attending trade shows provide valuable
knowledge they can use at work.
There is no doubt that completing continuing education courses, learning an in-demand industry
skill, earning a degree, or joining a professional organization, is the best investment you can make in
yourself for an industry that is in constant change.
MAGAZINE
JANUARY FEBRUARY 2017
PUBLISHED BY
Oilman Magazine, LLC
P.O. Box 771872
Houston, TX 77215
(800) 562-2340
OilmanMagazine.com
PUBLISHER
Emmanuel Sullivan
publisher@OilmanMagazine.com
(800) 562-2340 Ex. 5
EDITOR
Jennifer Delony
DIGITAL CONTENT MANAGER
Tim McNally
GRAPHIC DESIGNER
Kim Fischer
CONTRIBUTORS
Don Briggs— LOGA President.......
Mark Stansberry Chairman of The GTD Group.......
Joseph DeWoodyPresident of Clear Fork Royalty, an
oil & gas royalty investment company located in
Fort Worth, Texas.......
Steve Burnett— CrudeOilCalendars.com....
Story Sloane III— The Sloane Gallery in Houston,
Texas (281) 496-2212).......
Paul Flessland— Photographic Artist,
PaulFlesslandPhoto.com.......
Jason Spiess
Joshua Robbins
SUBSCRIPTIONS
OilmanMagazine.com/subscribe
ADVERTISING
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advertising@OilmanMagazine.com
OilmanAdvertising.com
© Copyright 2017 by Oilman Magazine, LLC. All rights reserved.
Reproduction without permission is prohibited. All information in
this publication is gathered from sources considered to be reliable,
but the accuracy of the information cannot be guaranteed.
Image credits The Sloane Gallery, Houston, TX; 123rf.com..........
LETTER FROM THE PUBLISHER
CONTRIBUTORS — Biographies
Don Briggs
Don Briggs is the President of the Louisiana
Oil and Gas Association. The Louisiana Oil
& Gas Association (known before 2006 as
LIOGA) was organized in 1992 to represent the
Independent and service sectors of the oil and
gas industry in Louisiana; this representation
includes exploration, production and oileld services. Our
primary goal is to provide our industry with a working
environment that will enhance the industry. LOGA services
its membership by creating incentives for Louisiana’s oil &
gas industry, warding off tax increases, changing existing
burdensome regulations, and educating the public and
government of the importance of the oil and gas industry in
the state of Louisiana.
Mark A. Stansberry
Mark A. Stansberry, Chairman of The GTD
Group, is an award-winning author, columnist,
lm producer, radio talk show host and 2009
Western Oklahoma Hall of Fame inductee.
He has been involved in the oil and gas
industry for over 39 years. He is currently
serving as Chairman of the Board of the Gaylord-Pickens
Museum/Oklahoma Hall of Fame, Vice Chairman of the
Board of Regents of the Regional University System of
Oklahoma, Board of Directors of OKC Port Authority,
Board of Governors of the Recording Academy/Grammys
Texas Chapter, Lifetime Trustee of Oklahoma Christian
University and Board Emeritus of the Oklahoma Governor’s
International Team. He has served on several private and
public corporate boards.
Jason Spiess
Jason Spiess is an award winning journalist, talk
show host, publisher and executive producer.
Spiess has worked in both the radio and print
industry for over 20 years. All but three years of
his professional experience, Spiess was involved
in the overall operations of the business
as a principal partner. Spiess is a North Dakota native,
Fargo North Alumni and graduate of North Dakota State
University. Spiess moved to the oil patch in 2012 living and
operating a food truck in the parking lot of Macís Hardware.
In addition to running a food truck, Spiess hosted a daily
energy lifestyle radio show from the Rolling Stove food truck.
The show was one-of-a-kind in the Bakken oil elds with
diverse guest ranging from U.S. Senator Mike Enzi (WY) to
the traveling roadside merchant selling ags to the local high
school football coach talking about this week’s big game.
Joshua Robbins
At Beachwood Marketing Group, our mission is to
market oil and natural gas properties in the most
cost effective and efcient way. We strive to provide
excellent leadership and unparalleled service for
each of our clients. Josh has been instrumental in
dening Beachwood’s market leading solutions and
has overseen the company’s expediential growth. Josh is also an
accomplished writer on the acquisition and divestment market
and a speaker and presenter at conferences. He continues to keep
his focus on the strategic direction of Beachwood Marketing
Group and its expansion into new markets.
Paul Flessland
Paul Flessland is an editorial, event and portrait
photographer based in Fargo, North Dakota.
Featured in over fteen regional and national
publications, Flessland is passionate about visually
telling the story of the Bakken’s impact on
North Dakota and the nation. Visit his website at
paulesslandphoto.com
Joseph DeWoody
Joseph P. DeWoody (@jpdewoody) is the president
of Clear Fork Royalty, an oil and gas royalty
investment company located in Fort Worth, Texas.
Clear Fork Royalty works with accredited investors,
trusts and family ofces to provide portfolio access
to oil and gas mineral rights and royalties to hold
for long term investment through various direct investment
vehicles. Joseph was selected by Oil and Gas Investor Magazine
as a winner of the Top 20 under 40 Award, and by TIPRO and
Texas Monthly Magazine as a Texas Top Producer. Joseph is a
member of the Young Presidents’ Organization (YPO). He was
appointed by Texas Governor Rick Perry to a six year term on
the Texas Board of Professional Geoscientists. He serves on the
Board of Directors for the National Stripper Well Association
and the Texas Alliance of Energy Producers.
Steve Burnett
I was raised in a small West Texas town where
the school mascot is a roughneck. Growing up
with a roughneck as the town symbol, how could
I not spend most of my adult life working in
the petroleum industry? I started working in the
oilelds age 16. In Texas you had to be 17 with a
signed minors release from your parents, but my parents were
glad to keep me working. I had been working since my rst job
working on a commercial elephant garlic farm at age 12. By
the time I reached 16, I had enough work experience to prove
I knew how to hold my own on a work crew. Anybody whose
parents survived the great depression can attest to the fact that
their children learn the value of a solid work ethic.
Oilman Magazine / January-February 2017 / OilmanMagazine.com
2
Emmanuel Sullivan, Publisher, OILMAN Magazine
Oilman Magazine / January-February 2017 / OilmanMagazine.com
33
OILMAN CARTOON
1 Society of ___ Engineers
5 It could be rened or crude
7 Oklahoma show that focuses
on technological advances
10 Launching ___
11 ___ water, water a long way
from the clay surface
12 Pittsburg's state
13 Fifth zodiac sign
14 Where Deals Happen
16 Pours out fast, like oil from
a well
19 American petroelum group,
abbr.
22 A large inlet
23 What is the Corrosion
Conference & Expo?
24 Length x width
25 __ the people
27 Open up
29 American "Uncle"
31 Cadillac __ Ville
32 Happens every two years in
Lafayette, Louisiana
34 The T in ILTA
36 Vehicle used for transport
37 Innovative
39 Overhead railway
40 Short subassembly used to
enable two components with
different thread types to
become connected, goes
with 33 down
41 ____ wave, in geophysics
Down
1 Part of the Texas A&M
Turbomachinery Symposia
2 Really small amount
3 Oklahoma Oil & Gas ____
4 Drilling uids term for any
particle in the size range 74
to 250 microns
5 ___ Technology Conference
6 Paper size, for short
8 Jiffy container
9 We want a ____ Gulf
15 Geology term for the deepest
part of the ocean basins
17 There's been a huge discovery
of this type of oil in Texas
recently
18 Measure of weight, for short
20 Hinged catch
Across
21 Frozen liquid
26 Time lapse
27 What is fueled by SPE -
AAPG - SEG
28 Hydrochloric and others
29 It involves a transfer of assets
30 Event controller (abbr.)
31 The end of a negotiation
32 Rose___ Oil & Gas
33 See 40 across
35 Brazilian city that hosted the
2016 Olympics
38 Apple state
See page 17 for answers.
OILMAN CROSSWORD PUZZLE
Oilman Magazine / January-February 2017 / OilmanMagazine.com
4
FOR THE WEEK ENDING December 23, 2016
DIGITAL DOWNHOLE DATA
Connect with OILMAN anytime at
OILMANMAGAZINE.com and on social media
SOCIAL STREAM
facebook.com/OilmanMagazine
RETWEETS
@OilmanMagazine
#OilmanNEWS
Stay updated between issues with weekly reports
delivered online at OilmanMagazine.com
Louisiana: 48
Last month: 52
Last year: 56
Oklahoma: 84
Last month: 79
Last year: 88
Texas: 321
Last month: 279
Last year: 319
U.S. Total: 653
Last month: 593
Last year: 700
OIL RIG COUNTS
*Source: Baker Hughes
Brent Crude: $53.53
Last month: $46.32
Last year: $37.22
WTI: $52.13
Last month: $47.48
Last year: $39.39
CRUDE OIL PRICES
*Source: U.S. Energy Information Association (EIA)
Per Barrel
Louisiana: 4,666,000
Last month: 4,688,000
Last year: 5,009,000
Oklahoma: 12,439,000
Last month: 13,245,000
Last year: 12,282,000
Texas: 94,891,000
Last month: 97,853,000
Last year: 103,773,000
U.S. Total: 257,413,000
Last month: 271,156,000
Last year: 285,980,000
CRUDE OIL PRODUCTION
*Source: U.S. Energy Information Association (EIA) 09-30-16
Barrels per month
Louisiana: 152,677
Last month: 159,759
Last year: 143,661
Oklahoma: 205,096
Last month: 213,352
Last year: 207,703
Texas: 654,159
Last month: 684,065
Last year: 647,606
U.S. Total: 2,644,125
Last month: 2,742,424
Last year: 2,438,262
NATURAL GAS
MARKETED PRODUCTION
*Source: U.S. Energy Information Association (EIA) 09-30-16
Million Cubic Feet
Per Month
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Background photo courtesy of The Sloane Gallery in Houston, TX.
Working With Tongs - West Texas 1930s.
What our readers & advertisers are saying...
Oilman Magazine / January-February 2017 / OilmanMagazine.com
6
1 OF 3 WILDCATTERS AND DREAMS OF BEING A TEXAS OILMAN, 1928
Pride
Photo courtesy of The Sloane Gallery – Houston, Texas.
These images and more are for sale and can be found
by visiting www.SloaneGallery.com
or calling 281-496-2212.
Oilman Magazine / January-February 2017 / OilmanMagazine.com
7
Oilman Magazine / January-February 2017 / OilmanMagazine.com
8
2 OF 3 WILDCATTERS AND DREAMS OF BEING A TEXAS OILMAN, 1928
PridePride
Photo courtesy of The Sloane Gallery – Houston, Texas.
These images and more are for sale and can be found
by visiting www.SloaneGallery.com
or calling 281-496-2212.
Oilman Magazine / January-February 2017 / OilmanMagazine.com
9
3 OF 3 A HELPING HAND - HUMBLE GAS STATION, 1920s
Photo courtesy of The Sloane Gallery – Houston, Texas.
These images and more are for sale and can be found
by visiting www.SloaneGallery.com
or calling 281-496-2212.
Pride
Oilman Magazine / January-February 2017 / OilmanMagazine.com
10
OILMAN COLUMN
Future generations are depending on us
to keep the American dream alive. For
too long we in America have been wasting
time blaming the energy industry or the
government for failure to adopt a national
energy strategy when we each should be
responsible for creating the plan.
In order to create a plan, energy education
should be at the forefront.
Since I entered the energy business in
1977, going on 40 years, the industry has
continually been forced to defend itself.
For example, in 1985, I testied before
the U.S. Senate and Natural Resources
Committee, in a 43-page report, on the
potentially devastating effects that proposed
regulations would have on the oil and gas
industry, in term of job loss, and reductions
in drilling expenditures, at a time when the
vital industry most needed support. Sound
familiar?
At a White House brieng I attended in
September 2006, I asked U.S. Secretary of
Energy Samuel Bodman about the status
of pending national energy education
initiatives. He did not have an answer, but
promised he would have an aide contact
me with answers. The aide did call, but
provided me little information. Energy
education was needed then, as it is now.
On Dec. 4, 2013, at the South Texas
Wildcatters Association in San Antonio, I
launched the energy education campaign
“It’s Time to Tell Our Story!” based upon
my book “America Needs America’s
Energy: Creating Together the People’s
Energy Plan!” The message has been
delivered through radio interviews in more
than 30 states and 150 radio stations, a
weekly radio show, weekly column/blog,
speeches throughout the U.S., op-eds,
newspaper interviews, and other media
outlets.
The following are among those who I
personally am involved with to provide
energy education:
IEPC energy policy conference:
In 1992, I
founded and chaired the rst conference,
which was held at the University of
Oklahoma. Conferences have been held in
Washington, D.C., Tulsa, Denver, Houston
and Oklahoma City. In 2017, the 25th
anniversary, events will be held throughout
Oklahoma. Upcoming conferences/
roundtables that are planned to be held
include 2018- Detroit, 2019-Washington,
D.C., and 2020-Houston.
The Energy Advocates:
Energy Advocates
was founded in 1974. The primary mission
of The Energy Advocates is to inform
the general public about our vital energy
industry and energy policy.
Exploring Energy
radio show and
newspaper: On the rst Monday of each
month, I am the guest on the award-
winning radio show and have a monthly
column in the newspaper. Through news
and interviews, hosts Shawn Wilson and
Nathan Brewer talk about all aspects of
energy, from oil and gas to wind, solar, coal,
nuclear, and geothermal, for one hour/
ve days a week. Big Chief Plant Services
Exploring Energy Show is the main
sponsor and Paul Joseph is the producer.
Exploring Energy newspaper distributes
20,000 copies per month.
Oilman Magazine:
I have a column in
each issue of the magazine. The magazine
is Houston based. In addition to the
magazine, the website oilmanmagazine.com
is a good source for energy education.
GTR Newspapers:
I have a monthly
column in the Greater Tulsa Reporter
newspapers – Union Boundary, Midtown
Monitor, Jenks District Gazette, Broken
Arrow Express, Owasso Rambler, and the
Bixby Breeze. Thanks to Forrest Cameron,
GTR editor and publisher, for providing the
opportunity to provide energy education.
University of Tulsa Master of Energy
Business Industry Advisory Council:
I
serve as a member of the advisory council
along with around 25 others from across
the nation. The program is designed for
working professionals who already have
some experience in the energy industry. It
has a broad-based energy business focus
and is designed to train students on and
managing organizations across the entire
energy complex. The Master of Energy
Business (MEB) is a 34-credit-hour
graduate program offered in a technology-
enriched online delivery format.
The oil and gas industry touches our lives
daily. Petroleum-based consumer products
that Americans use daily include: antiseptics,
asphalt, bottles, clothes, computers,
contacts, deodorant, drinking cups,
eyeglasses, plastics, shampoo, shoes, shaving
cream, telephones, toothbrushes, trash bags,
tires, vitamin capsules, and thousands of
other products.
There are men and women taking great care
in making sure – 24/7 – that the consumer
has the necessary energy to maintain a
standard of life. From the drilling rig to
pipeline to renery to oil truck to tanker,
the energy industry is making a difference.
We should not become complacent at any
time when it comes to providing energy
education. Energy is the future of America
and America Needs America’s Energy!
America Needs: Energy Education!
By Mark A. Stansberry
Mark A. Stansberry
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Oilman Magazine / January-February 2017 / OilmanMagazine.com
12
OILMAN COLUMN
The petroleum industry has made
great strides in developing safety
programs since the 1970s. One of the
greatest improvements is the industry’s
recognition of the eld employees as
experts and realizing in order to develop
a functional safety culture the company
has to respectfully seek guidance from
the eld specialist. In the 1970s, when
companies were developing safety
programs, they recruited degreed safety
experts. These educated safety experts
would come to the eld locations to train
eld employees on safety procedures.
Field employees found it difcult to
develop any type of respect-based
working relationships with these safety
experts since they were not part of the
eld employee’s culture and had no
idea on how equipment or procedures
worked. Without a mutual respect-
based relationship, the culture of safety
only existed within the connes of the
priorities of the eld hands.
Today petroleum companies are making
great strides in developing a culture
of safety through respect-based safety
programs. However, even with these
great strides in safety, the U.S. Bureau
of Labor Statistics conrms that during
the recent boom the rate of fatalities
in the oil and gas industry increased
signicantly along with the boom.
A great safety program needs to be
supported with a training program to
decrease the high accident rates. History
has demonstrated in both the boom
of the 1970s and the recent boom
that ended in 2014, that you cannot
reduce fatality rates by relying on safety
programs alone.
Safety v. Training
A safety program and a training program
are not the same thing. Although they
are both focused on the same goals,
the training program enforces the
safety program by developing skills and
knowledge that allow the new employee,
or career transitioning employee, to
operate in a safety culture in the eld. A
safety program will certify employees on
the theories of working safely, the use of
PPE and safety procedures with tools.
A training program develops skills
and knowledge with the use of tools,
trouble shooting skills by hands-on focus
on repairing equipment and develops
the culture of safety by imparting
knowledge and skills on how to operate
safely around dangerous pressurized
hydrocarbons. A safety program does
not establish a culture of safety by
developing a habit of safe procedures.
Safety training programs do not address
any operational procedures, equipment,
or tools, which is basic knowledge and
skills required of the eld level employee
to work safely.
The petroleum industry is facing a
workforce crisis that will require a large
inux of new employees just to keep
production levels current to meet market
demands. The “Great Crew Change”
means the petroleum industry will lose
close to 700,000 employees due to
retirement over the next 5-7 years.
“The current petroleum market
downturn will have virtually no impact
on the Great Crew Change, which is
coming whether oil is booming at $100 a
barrel or moving along at $45 a barrel.
(2015, Birenhaum, Kate)
These are the eld level experts with an
average of 20 years of hands-on eld
experience. Just to keep production at
its current level to meet market demands
that means the industry will have to
hire 100,000-140,000 employees a year
to replace the Baby Boomers lost to
retirement.
It is more critical today than ever before
that petroleum companies establish a
training program, primarily due to the
skills the new workforce brings to the
career. Each generation brings a different
set of skills to the job, simply due to the
culture in which they were raised. Baby
Boomers were raised using hand tools,
and are much more procient at problem
solving and repairing equipment. Gen
Xers and Millennials are much more
procient in high-tech applications, and
have no experience in using tools or
repairing equipment. And since most
high schools do not offer workforce
trade classes anymore, Gen Xers and
Millennials do not have any opportunities
to develop skills with tools.
A good training program will include
oileld equipment to utilize in hands-
on training. New employees need to be
skilled professionals with condence
and skills in trouble shooting real oileld
equipment, experience using tools,
repairing and completing maintenance
on real oileld equipment.
I recommend a standard set of skills and
knowledge that every oileld employee
must acquire before they can work at
Safety Programs vs. Training Programs
Do not mistake a safety program
for a training program
By Steve Burnett
Oilman Magazine / January-February 2017 / OilmanMagazine.com
13
any level in the petroleum industry. For
example, if your HR department has an
understanding of hydrocarbon processing
and how to repair and maintain
equipment, they will have a much
better understanding of the skills and
knowledge needed for new employees.
A few of the recommended skills would
include:
Take for granted everything is
pressurized and work accordingly (for
example, never stand in front of any
ange or opening while working on
equipment, and never take all the bolts
completely off before breaking a seal)
Never put a tool on anything
pressurized
Always use two sources to bleed
pressure off equipment
Use basic troubleshooting skills
based on knowledge and hands-on
experience repairing and maintaining
process equipment, including all
control and safety valves, separators,
and pumps – verify possible solutions
by eliminating easy solutions to hard
solutions
Have the knowledge to know when
you arrive on location, through visual
observation of equipment, what the
pressure rating of the processes are
Know how hydrocarbon process
equipment works and have the skills
to trace the ow to gain knowledge
of how individual process equipment
operates
Understand the importance of the
history of equipment to apply trouble
shooting theories
These are just a few of the basic
knowledge and skills that all employees in
all phases of the petroleum industry need
to perform in a culture of safety.
The required skill level should use other
professional industries as a model of
operations. For example, a professional
welder requires a level of professional
skills and must pass a hands-on
certication test to demonstrate skills.
The petroleum industry worker also
needs a level of professional skills and
should be required to demonstrate a
standard level of skills through a hands-
on certication test. Field level operations
in the petroleum industry require
employees that are condent, skilled,
knowledgeable, and capable of using
tools and equipment to solve problems
on the location.
Here are a few things to keep in mind
while developing your training labs:
The training equipment needs to be
real oileld equipment
The training equipment does not need
to be operational nor pressurized
Skills are developed through
troubleshooting scenarios on the
equipment
To add the danger of using operational
equipment takes away the learning
process of being able to make mistakes
without consequences. It does not have
to be all the equipment the employee
will work around, but enough equipment
to develop troubleshooting skills and
practice with tools.
A lot of training facilities use equipment
models. These models seldom resemble
the actual eld level equipment and add
the task of the employee being trained to
have to translate the training equipment
to eld level equipment when they go to
work in the eld. I would equate this to
training the individuals in one language
and expecting them to work in operations
using a different language. It is simply
adding an unnecessary burden on the new
employee.
I would also be very cautious utilizing
online training. While online classes are
efcient and cost-effective, they do not
support the development of skills. There
are a few subjects the new employee
can learn online, but keep in mind the
employee’s career will require them to
work in hands-on operations in the eld.
I equate it to teaching welding online.
Companies would not hire a welder that
only had online training.
It is critical that the trainer has extensive
eld experience. I would recommend
use some of these retiring baby boomers
that have 20 years of experience. In my
previous training position, I worked
with petroleum engineers that had no
eld experience and educators that
never worked in the oileld. They simply
could not teach the hands-on portion
of the training. Again I would refer to
the welding example. Would you use a
trainer who had never welded to instruct
a welding class?
The petroleum industry seems to believe
that on-the-job training will upgrade
the new employees’ skill sets adequately.
However U.S. Bureau of Labor Statistics
on the oil and gas industry do not
support this theory. My experiences in the
petroleum industry does not support this
theory either. I have witnessed too many
men die needlessly simply due to the fact
they had no experience in what they were
doing or their on-the-job training was
inadequate. It is time for the petroleum
industry to reconsider outdated theories
on employee training and develop a
model for improving efciency and
reducing accidents.
If anybody has any questions or
comments, I would be glad to hear them.
steveab62@yahoo.com
OILMAN COLUMN
Oilman Magazine / January-February 2017 / OilmanMagazine.com
14
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Future Trends
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Technology
January 25-26
2017
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Oilman Magazine / January-February 2017 / OilmanMagazine.com
15
As the calendar rolled into 4Q16, many
companies decided it was nally time to
put their non-core assets on the market.
The result was a massive deal inux and
actual transactional volume – which we
had not seen in 2016. After the OPEC
meeting, oil swung to the mid-$50 range
and, at end of 2016, was continuing to
trend upward.
This increase in price will bring more
deals to the market in 1Q17. However,
we believe these deals will have a price at
which buyers will not be able to transact.
The increase in dollars per barrel will
widen the buyer and seller gap to mid-
2015 levels, and nearly all deal ow will
stop in 2Q17.
As deals slow, dollars will be reallocated
to development projects. We expect
the last three quarters of 2017 to see
favorable oil and gas prices (est. $60+
oil and $4+ gas). If the trend continues
upward, we expect to see projects that
have been shelved to be started, and with
favorable service costs, will be completed
quickly.
2017 will be a positional build year. The
acquisitions and divestitures market
will be heavily focused on natural gas
deals – especially if the trend toward $4
continues – and bolt on positional blocks.
The majority of the large dollar deals will
be spent on the midstream assets that
help build on the long-term strategies of
specic acreage positions.
If oil continues to rise and is able to
stabilize at plus $60, we expect companies
currently working through restructuring
to emerge fully restructured in late 1Q17
or early 2Q17. These companies will
look to immediately clean their portfolio
of assets not dened as core to the
newly restructured entity. Expect 2Q17
and 3Q17 to be lled with a number
of smaller deals that help core up these
companies.
The theme moving all the way through
2017 and into 2018 will be changing
positions. Prior to the bust, companies
were focused on diversied portfolios.
Assets from the Bakken to the Gulf, with
assets from one side of the spectrum
to the other. We will see this position
move from a diversication of assets
to operational efciency. If a company
cannot operate efciently, they will look
to divest. If they can automate processes,
they will. If employee costs continue to
rise (insurance, etc.) look for companies
to outsource for operational efciency.
Many companies will have to replace the
workforce that was lost during the bust,
and to save time, they will outsource a
signicant portion of their workforce to
take advantage of the favorable oil/gas
price.
We expect 2017 to be a springboard into
2018. If the trend of increased barrel and
MCF pricing continues upward, we expect
some of the private equity positions to
begin their marketing efforts in late 4Q17
and early 2018.
Oil and Gas Acquisition Market
2017 Outlook
By Josh Robbins
OILMAN COLUMN
Photo Credit: George Tsartsianidis - www.123RF.com
Josh Robbins, Beachwood Marketing Group.
Credit: Edgar Lance Photography
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Oilman Magazine / January-February 2017 / OilmanMagazine.com
17
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abbr.
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Down
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OILMAN CROSSWORD PUZZLE - ANSWERS
Oilman Magazine / January-February 2017 / OilmanMagazine.com
18
Oilman Magazine / January-February 2017 / OilmanMagazine.com
18
FEATURE
O&G Training
and Education
Taps Technology for the Modern
Classroom Experience
By Jennifer Delony
Photo Credit: Jirapatch Iamkate - www.123RF.com
Oilman Magazine / January-February 2017 / OilmanMagazine.com
19
Oilman Magazine / January-February 2017 / OilmanMagazine.com
19
FEATURE
As oil and gas companies in 2017
face unique challenges in workforce
development, education and training
providers will be working diligently to
continue shaping options for workers
that tap into a vast range of technologies
designed to accommodate the way people
want to learn today.
Compounding a reality oil and gas
companies have been facing for many years
— the retirement of a large percentage
of experienced workers and the need
to transfer their knowledge to the next
generation — is the new reality that the
downturn has forced younger workers
out of the industry into other stable job
environments. An uptick in oil prices that
is forecast to continue to grow gradually
throughout the year isnt going to bring
those workers back. But as the industry
grows, it will need to rell lost jobs.
In this current environment, industry is
asking, “where are we going to get the
individuals that we need to be in this
industry, and how can we make sure they
have the basic competencies required?”
That’s the view according to Coy Wilcox,
director for the Petroleum Extension
(PETEX), a part of the Texas Extended
Campus at The University of Texas at
Austin. He told
Oilman
that PETEX is
trying to put in place training and education
programs that use technologies available
today — such as drilling simulators or
hands on training simulator tools that
are an actual set of tongs, or an actual
measurement ow, so workers can learn
to properly calibrate and measure systems
— and then run those workers through
programs that combine theory- and
competency-based models with hands on
experience.
“Those are going to be key things that we
see over the next several years,” Wilcox
said. “It’s about combining e-learning tools,
putting them in a classroom, and being able
to use simulations, then getting workers
outside to perform those same tasks to at
least an entry level competency.”
Wilcox calls it the “technology-enhanced
learning platform.”
He said that PETEX is focusing on using
technology to provide people with the most
realistic training that they can possibly get
without actually having to be on the job.
“We’re taking the e-learning format, we’re
putting in what was once a traditional
publication, now more of an e-book, and
then bringing that into the classroom so
that, with the environment that people see
sitting in front of a computer, now they
get that same look, the same feel, with all
the simulations, the graphics, the ability
to see things that they may not be able to
see, but now they have an instructor in the
classroom facilitating this learning at the
same time,” he said.
PETEX has been providing training
courses and content for the oil and gas
industry for decades. It is headquartered
at the J.J. Pickle Research Campus in
North Austin, and it offers technical and
nontechnical training courses, publications,
and e-solutions for employees in various
sectors of the industry, with instructor-led
courses located at the Bammel Business
Park in Houston as well as client locations
around the world.
Wilcox says that companies account for
about 70 percent of the total usage of the
PETEX instructor-led platform, while
individuals account for about 65 percent of
the usage of the PETEX publications and
e-learning platforms.
Technology also provides the foundation
for training platforms offered by Louisiana
Workers’ Compensation Corporation
(LWCC) for its policyholders at no charge.
Among LWCC’s offerings are streaming
videos, webinars, online courses, a mobile
training center, and a virtual driver
simulator.
LWCC’s oil and gas customers are
largely made up of service providers that
work contracts for larger multinational
petrochemical companies. They utilize
LWCC’s training programs to ensure they
are qualied for ISNetWorld, according to
Richard Perkins, safety and loss prevention
manager for LWCC.
A lot of companies use our online course
for ISNetWorld to meet general awareness
criteria to work for larger clients, whether
it’s petrochemical plants or oileld related
accounts,” he told
Oilman
. “They use these
services because they get a certicate for
each person that takes the test.
Companies also use LWCC’s streaming
video in a safety-meeting capacity to keep
training costs down.
LWCC takes training to customer work
sites with its mobile training center. With
this option, “most of the crew can still
work, while some of the crew takes online
courses, and then they can rotate them
out,” Perkins said.
Coy Wilcox, Director, Petroleum Extension, University of Texas at Austin Richard Perkins, Safety and Loss Prevention Manager,
Louisiana Workers’ Compensation Corporation
FEATURE
Oilman Magazine / January-February 2017 / OilmanMagazine.com
20
The benet, he said, “is they don’t have
to leave the work site. If they have to go
deal with an issue, they can do that. It
helps contain costs.”
The mobile training center is equipped
with laptops and satellite internet so
online courses or streaming video are
available to the classroom. Perkins said
that the mobile training center is out in
the eld about two weeks per month,
and while in the eld, the mobile unit
supports the completion of between 200
to 400 courses per week.
He said that LWCC sees an average
of between 8,000 to 10,000 courses
completed by policyholders per year,
and it has about 500 streaming video
checkouts per year. Policyholders can
access ve streaming video titles per
month, and have unlimited streaming of
those titles during the 30 days.
Outlook for New Tech
Perkins said LWCC is always trying to
stay abreast of what’s new and current in
education and training solutions.
“We try to see if something new is
coming on the training side,” he said. “If
we come across new technologies, we’re
surely going to try to implement those.
He added that LWCC, for example, is
looking into podcasts, and options for
recording them and emailing them out to
key people across LWCC’s policyholder
base.
At PETX, the future of the technology-
enhanced learning platform is wide open.
Augmented reality (AR), virtual reality
(VR), simulation in general – it’s the way
to immerse people,” Wilcox said. “It’s
the Xbox generation. People entering the
market today learn differently than they
did 20 years ago. They are still tactile, and
that could be a joystick, a game pad, a
tablet; but it still needs to be that visual
encompassing world.
He added that learning outcomes with
AR and VR are “incredible.
“If you put people in scenario-based
learning situations, where they are sitting
in front of the simulator or they have
VR goggles on, and they are walking
through or interacting with avatars, for
example, they will forget they are in a
game environment, as long as it’s done
properly,” he said.
Wilcox noted that the combination of
these technologies reinforces learning. An
idea is introduced in the classroom; then
students are immersed in the concept
with AR, VR or simulation, before they
go outside for a hands-on experience in
real time. This process ensures that they
experience the concept in a number of
situations before they get to an actual
work site.
Wilcox said that PETEX has plans in
place to bring VR into the learning
environment, but they are still
investigating the technology to make sure
that it works seamlessly.
“We are targeting full on VR as soon
as possible,” he said. “Within the next
three years, you’ll see VR implemented
across the board. Combined with current
simulation technology, you have a really
powerful tool.
Photo Credit: Sitthinan Saengsanga - www.123RF.com
Oilman Magazine / January-February 2017 / OilmanMagazine.com
21
Hydraulic fracturing, commonly known as
fracking, has been a double-edged sword
for the U.S. This method of hydrocarbon
recovery has allowed the country to become
one of the world’s largest oil and gas
producers, after decades of dependence
on foreign oil. The advent of this recovery
technique has been a boon to the industry
and for consumers at the gas pumps.
However, the downside is that the fracking
process requires vast amounts of water;
around 1 million gallons of fresh water per
well per day and produces some 100,000
gallons of wastewater per well per day. The
ow-back wastewater is dangerous to the
environment because it comes loaded with
bacteria, minerals, radioactive materials, and
oil and gas particulate.
To mitigate the use of fresh water for
fracking, some solutions have been
purposed to either dispose of or reuse
wastewater. As the fracking method of
hydrocarbon extraction has grown since
the late 1990s, more and more government
regulations have entered into force to curb
harmful practices. This has led industry
leaders to reconsider the fracking lifecycle
and how to reuse wastewater to their
advantage.
Old Storage Methods Proven
Destructive
Previously, deep-well injection was one of
the main disposal methods for produced
water. This method injects the wastewater
deep underground for storage. However,
this has been made illegal in many states
because it has been known to seep into
groundwater and contaminate drinking
water supplies. Another costlier method
is to lter the wastewater and return it
to nature, however, a regular municipal
wastewater treatment plant cannot be
used to remove such things as radioactive
materials. Thus, the water needs to be
transported via truck to special treatment
facilities. However, this wastewater disposal
process carries high costs: between $3 and
$7 per barrel of produced water, which can
add up to some $20,000 per day per newly
drilled well.
New Technologies, New Methods, New
Opportunities
A promising, sustainable method of
treating wastewater that is emerging is
known as centralized treatment. In this
method, efuent pipelines are connected to
the wellheads to transport the wastewater
to treatment plants within a 40- to 50-mile
radius. In addition, each well is specically
monitored to best treat that particular well’s
wastewater. Once the water is treated it is
essentially sent back to the well to be reused
in the fracking process, which in turn cuts
costs, reduces work performed, and leaves a
smaller environmental footprint.
Recycling and purication treatment
options that are now gaining traction within
the oil and gas industry range from the
following processes:
Primary three-phase separation to
remove dissolved natural gas, oating
gel, oil, sand, and suspended solids,
followed by storage for equalization of
chemical composition and ow
Secondary separation using dissolved
air or gas otation for removal of a
wide variety of contaminants, including
polymers, oils, and suspended solids;
bactericide is added to reduce bacterial
growth
Removal of metals by precipitation, and
removal of salts by reverse osmosis
Sludge management for dewatering
collected solids
Purication through chemically induced
occulation and coagulation to remove
iron and suspended solids, and bio-
contamination particles
Electrocoagulation uses electrodes to
add ions to induce coagulation
Chemical oxidation produces natural
coagulation; this approach is good for
use in working tanks, or for high loads,
coupled with solids separation and
dewatering equipment
Bubble-enhanced oatation is used to
suspend oils and solids and lift them
to the surface, where they are then
skimmed away
As these processes become more promi-
nent and more government regulation
enters into force, more companies will
adopt these methods. Additionally, many
oileld services companies are offering
newer wastewater management options.
Over time, these improved practices will
save time, money, and will help the industry
become greener.
Innovative Wastewater Management
Processes Gain Traction
By Eric R. Eissler
OILMAN COLUMN
Innovative wastewater management processes gain traction
By: Eric R. Eissler
The Fracking Process
A drill is used to create an opening
to pump uid into the well.
The drill is usually then turned hori-
zontal while underground to crack
rocks that contain hydrocarbons.
After drilling, a high-powered mixture
of water, sand, and fracking uids
are injected to the rock causing it
to fracture.
Gas or oil is then released into
the main well and pushed up for
collection.
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Oilman Magazine / January-February 2017 / OilmanMagazine.com
23
Even though natural gas prices at the
wellhead remain at, production continues
at a record pace, resulting in record high
storage and record high exports.
Natural gas prices peaked at a little
above $3 earlier in 2016, but they have
not changed much since the crash of
2008 when they were above $10. Natural
gas closed at $2.76 on the New York
Mercantile Exchange on Nov. 16.
The economic theory of supply and
demand states that when prices are low,
production should decline, too. However,
that has not happened with natural gas.
Just the opposite has happened: produc-
tion has increased 25 percent since 2008.
Natural gas production set a record in
2015, and production from January to
August 2016 is slightly ahead of last year’s
pace.
Working natural gas in storage reached
a record high of 4,017 billion cubic feet
(Bcf) as of Nov. 4, 2016, according to
EIAs
Weekly Natural Gas Storage Report
released on Nov. 16, 2016.
“Inventories have been relatively high
throughout the year, surpassing previous
ve-year highs in 48 of the past 52 weeks,”
the report stated. “Declining natural gas
production and strong demand from the
power sector were offset by a warmer-
than-usual winter, which left natural gas
inventories in April (the beginning of the
2016 injection season) above the previous
ve-year maximum.
The injection season for natural gas
storage typically runs from April through
October, although net natural gas
injections sometimes continue for several
weeks during November. In fact, the
previous record for natural gas storage was
set at 4,009 Bcf for the week ending Nov.
20, 2015. This year, natural gas inventories
have been relatively high in almost every
natural gas storage region in EIAs survey.
From October 2016 to November 2016,
the Midwest and Mountain regions
exceeded and remained above the previous
ve-year maximum inventory levels. In
the two weeks between October 21 and
November 4, the South Central region
added 59 Bcf to its inventories, but
still remains slightly below its one-year
maximum of 1,352 Bcf. Additionally, the
East region remains 14 Bcf below its ve-
year maximum capacity of 960 Bcf. With
the other regions at near or at full capacity,
any injections at the end of 2016 were
expected to occur in the South Central and
East regions.
Based on the National Oceanic and
Atmospheric Administrations (NOAA)
winter forecast, EIA expects U.S. average
household natural gas consumption to
increase 8% this winter, with the largest
increases in the Northeast and Midwest
census regions. Under this scenario, EIA
expects inventories to end the winter
at slightly below 1,900 Bcf. However,
temperatures so far this winter have
consistently been at or above weekly
average normal levels, and NOAAs latest
three-month temperature outlook forecasts
that December–February temperatures will
be higher than normal.
In a scenario with temperatures 10%
warmer than forecast, U.S. average
household natural gas consumption would
be 1% lower this winter compared to last
winter, with inventories at winter’s end
near 2,300 Bcf.
Bloomberg news agency reported that
the exports follow a massive shale boom
in the U.S. that’s unleashed a ood of gas
supplies from the Marcellus and Utica in
the east to the Eagle Ford in Texas.
The country is on course to become a net
exporter of natural gas next year, a stark
turnaround from just a decade ago, when it
was facing a shortage.
“The continental U.S. becoming a net
natural gas exporter is a milestone of the
U.S. energy revolution and transition to
‘energy independence,’” Citigroup Inc.
analysts wrote in a note to clients on Nov.
16, Bloomberg reported.
The Sabine Pass complex in Louisiana has
exported 40 cargoes totaling about 6.5 mil-
lion cubic meters of LNG since February,
Zach Allen, president of Pan Eurasian
Enterprises, said in a research note.
Cheniere, which became the nations rst
and only exporter of shale gas in February,
was cleared by U.S. regulators to start
loading tankers from a second plant at
Sabine Pass.
Alex Mills is President of the Texas
Alliance of Energy Producers. The
opinions expressed are solely of the
author.
Natural Gas Production, Storage,
Exports On Record Pace
By Alex Mills
OILMAN COLUMN
Photo Credit: macgyverhh - www.123RF.com
NEWS AT A GLANCE...
Oilman Magazine / January-February 2017 / OilmanMagazine.com
24
GE-Baker Hughes Merger to Create
Second Largest Oileld Services
Provider
By Tim McNally
General Electric Co. is positioning itself
to be one of the largest oileld services
providers in the industry. GE on Oct. 31
said it plans to merge its O&G business
segment with Baker Hughes. The plan to
acquire 62.5% of Baker Hughes will give
the newly merged company a combined
revenue of $32 billion, an amount which
will place it right behind Schlumberger in
terms of total revenue.
The combination of GE’s technological
prowess with Baker Hughes oileld
services experience should produce the
much needed innovative solutions that
clients require in order to navigate the
rough economic terrain currently plaguing
the energy industry.
“This transaction creates an industry
leader, one that is ideally positioned to
grow in any market,” GE Chairman and
CEO Jeff Immelt said in a statement. “Oil
& gas customers demand more productive
solutions. This can only be achieved
through technical innovation and service
execution, the hallmarks of GE and Baker
Hughes.”
Martin Craighead, chairman and CEO
at Baker Hughes, agreed, saying, “with
employees of Baker Hughes and GE
Oil & Gas coming together, the new
company will be an industry leader, well-
positioned to compete in the oil and gas
industry, while pushing the boundaries of
innovation for our customers.”
Baker Hughes shareholders will retain
37.5% of ownership, with GE owning
the rest. GE also plans to give a one-time
dividend payment of $17.50 per share
to all Baker Hughes shareholders, which
amounts to a total of $7.4 billion.
Halliburton made a similar attempt to
merge with Baker Hughes earlier in the
year, but the deal failed to receive approval
from multiple international anti-trust
agencies. It remains to be seen whether
or not this merger between GE and
Baker Hughes will face similar issues, but
Craighead seems to think that regulatory
authorities will look more favorably upon
this merger with GE.
“We dont anticipate anything like what
we’ve encountered before happening
again,” Craighead told Reuters.
Trump Selects Exxon CEO for
Secretary of State
By Tim McNally
President-Elect Donald Trump’s decision
to nominate an oil and gas CEO to the
Secretary of State position has been met
with criticism from both the Democratic
and Republican parties. Rex Tillerson,
CEO of Exxon-Mobil, has nearly a
decade of experience as chief of the
huge multinational oil rm, a role which
concerns many politicians and agencies
pushing for environmental regulatory
reform in the industry.
Environmental agencies have had an
eye on Trump because of his talk of
deregulation in the energy industry, among
other things. They worry that the desires
of oil and gas companies will trump
the concerns of environmental groups.
The appointment of Tillerson to the
position of Secretary of State surely only
exacerbated such worries.
Another issue critics bring to light
is Tillersons involvement in Russia.
Tillersons relationship with Putin, in
particular, has stirred concern among
certain individuals who are wary of
Russian involvement in U.S. politics. The
nature of the relationship is nearly entirely
professional due to Exxons operations
within Russia, but recent speculations
regarding Russian involvement in the U.S.
election, combined with the communist
nations support of Assad’s vicious regime
in Syria, understandably creates a sense of
unease.
However, a company’s role in a country
is to succeed and create the appropriate
relationships to enable that success.
As Pavel Molchanov, an oil analyst at
investment rm Raymond James, told the
Washington Post
, “They’re there to invest
in resources. Saying that he personally
has some special feelings toward Russia
just because Exxon has invested there is
probably overstating the case.
No one can know how Tillersons
appointment will affect U.S. policy
towards Russia until he actually has the
opportunity to act in the capacity as
Secretary of State. One can only hope
that it will be in the best interest of the
American people.
Rex Tillerson will be replaced by Darren
Woods as CEO of Exxon Mobil.
ExxonMobil Reexamines Value of its
Oil Reserves
By Tim McNally
ExxonMobil expects that the downturn
could affect the value of roughly 4.6
billion barrels of oil reserves.
With the oil price hovering around $45,
many companies have found that it is
not protable to produce certain types
of oil, which cost more to extract from
the ground. As such, certain oil and gas
reserves that are relatively expensive to
extract must be reevaluated to establish a
more accurate value.
Despite the widespread reduction of asset
values in the oil industry, ExxonMobil
resisted writing down their assets, insisting
that the value of its oil and gas reserves
were accurate. However, New York
attorney general Eric Schneiderman
was not swayed, and he launched a
probe to determine whether Exxon was
appropriately accounting for its assets in
a market downturn. The probe was also
intended to nd out if Exxon misled
investors about the effect that climate
change regulations will have on future
operations.
A few days after the attorney general’s
announcement in September, the
Securities and Exchange Commission
decided to get involved, announcing that
it was also investigating Exxons asset
valuation practices.
It seems that the combination of pressure
NEWS AT A GLANCE...
25
Oilman Magazine / January-February 2017 / OilmanMagazine.com
25
exerted upon Exxon by these authorities
convinced the rm that it may need to
reevaluate its oil and gas reserves.
“Certain quantities of oil, such as those
associated with the Kearl oil sands
operations in Canada, will not qualify as
proved reserves at year-end 2016,” the
company stated in its third-quarter earnings
press release. The company stressed that if
the oil price continued to stay at its reduced
level for a prolonged period of time, more
North American assets would have to be
written down.
Exxon reported third quarter earnings
of $2.7 billion, a 38% decrease from the
previous year’s earnings during the same
period.
Oil Recession Wipes Out Billions in
Wages
By Emmanuel Sullivan
The U.S. Bureau of Labor Statistics
reported that the prolonged oil recession
has wiped out billions in potential wages
from oil and gas employees who work in
the extraction side of the business.
The latest data indicates that from 1Q16,
wages were more than a billion dollars
less than in 1Q15. The industry generated
more than $31 billion in wages last
year, with oil and gas construction and
extraction representing the largest group of
employees.
One of the hardest hit states OILMAN
covers is Oklahoma, where oil and gas jobs
represent 10 times the national average on
a per-capita basis – the Sooner state wages
fell by nearly $1 billion on an annualized
basis. Wages evaporated in Texas and
Louisiana as well, where in Harris County,
Texas, home to the energy capital Houston,
wages fell by $1 billion on an annualized
basis in 1Q16.
Between 2010 and 2013, employment
in the oil and gas industry surged by 30
percent. During the same period the
average annual wage increased by 6 %, with
engineering making up the largest wage
group. However, the oil and gas slowdown
beginning in 2014 brought a tidal wave of
layoffs – Louisiana lost 6,000 jobs just over
the past 12 months – along with pay cuts
that have eaten away at the buying power of
oil and gas employees.
The crash in oil prices from $110 a barrel in
July 2014 to $50 today introduced a painful
economic drought throughout the oil patch.
Rigs in operation fell with the price of oil
from a high of 2,000 in 2014 to 593 as of
November 23.
OPEC Agrees to First Oil Production
Cut in Eight Years
By Tim McNally
In September, OPEC announced that it
would nalize an oil production cut by the
end of November. The announcement was
met with much doubt and skepticism, as
the cartel seemed anything but a cohesive
group capable of rallying around such a
decision. However, for the rst time in
eight years, the coalition of nations has
agreed to have certain members cut their oil
production.
OPEC has been toying with the idea of
a production cut as global oil inventories
have mounted, but the talks appeared
inconsistent and rather halfhearted,
prompting many to believe it was merely
optimistic rhetoric. The most recent
announcement offers a solid structure as
to what specic member-nations will cut
production.
The plan is to reduce output by 1.2 million
bpd by January, the bulk of which will be
shouldered by Saudi Arabia, Iraq, the UAE
and Kuwait. Saudia Arabia, OPEC’s largest
producer, will cut their output the most
with a suggested 486,000 bpd reduction.
OPEC also managed to convince Russia
to cut its own output, which is an entirely
unprecedented and astounding event in
its own right. Russia will attempt to cut
production by 300,000 bpd.
It is unusual for a nation outside of OPEC
to abide by a production cut agreement,
especially given that just a few days before
the announcement of the agreement Saudi
Arabi walked out on talks with Russia and
other non-OPEC members, according to
Forbes.
Disagreements frequently occur as to
which nations should cut production, as no
nation wants to reduce its income earning
potential. Unfortunately, a production
cut requires that some countries make a
sacrice for the long-term benet of the
industry.
Agreeing to cut production is one matter,
but actually following through on it is quite
a different consideration. The ckle nature
of such an agreement is founded upon
the temperamental relationships between
many nations with varying interests. The
possibility of a swifter recovery of the oil
price will hopefully motivate these nations
to follow through on the production cuts.
Photo Credit: gyddik - www.123RF.com
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26
OKLAHOMA NEWS AT A GLANCE...
Oklahoma Ranks Top Among Regions
for Oil and Gas Investment
By Tim McNally
The Fraser Institute, an independent,
Vancouver-based think tank, on Dec.
6 released its 2016 Global Petroleum
Survey. The survey is the institute’s 10th
annual edition and “is designed to identify
provinces, states, and countries, as well
as offshore regions and other geographic
areas, with the greatest barriers to
investment in oil and gas exploration and
production.
Criteria, such as high tax rates, costly
regulatory demands, political stability, and
uncertainty over potential environmental
regulations, were considered when
constructing the survey, which was sent
out to executives within the upstream
petroleum industry.
According to the individuals surveyed,
Oklahoma was the most attractive region
for investment this year, followed by
Texas, Kansas, Saskatchewan, Wyoming,
North Dakota, the North Sea in Norway,
Mississippi, Utah, and Montana.
Oklahoma, Texas, North Dakota and
Mississippi have been ranked in the top 10
list for the past ve editions of the survey.
Texas also ranked rst, again, among
jurisdictions with the largest petroleum
reserves, followed by UAE, Qatar, Alberta,
and China.
Kenneth Green, senior Director of
Natural Resource Studies at the Fraser
Institute and co-author of the Global
Petroleum Survey, said in a statement:
“Most U.S. states are bucking the global
trend of decreasing condence for
investment, and Oklahoma’s top spot
in this year’s ranking demonstrates how
coherent environmental policy and
sound regulation can improve investor
perception.”
Taylor Jackson, a senior policy analyst at
the Fraser Institute and another co-author
of the study, also noted, “With oil and
gas sector condence declining around
the world, it’s especially important for
policy makers to pursue competitive tax
and regulatory regimes, and to have stable
environmental protections that attract, not
deter, petroleum investments.”
The 10 regions with the most barriers to
investment included Venezuela, Quebec,
Libya, Bolivia, New Brunswick, California,
New South Wales, Ecuador, Ukraine,
and Russia, with Russia being the least
attractive for investment.
The enduringly low oil price over the
past two years has created a difcult
international environment for oil-related
companies, and it is, therefore, critical
that all oil-interested regions enact
economic and political policies which are
conducive for investment in the oileld.
After all, that is the intended purpose of
the study – to reveal which regions could
use improvements in their regulatory and
economic policies regarding oil-driven
activity.
Oklahoma AG Nominated as
Director of EPA
By Alex Mills
President-elect Trump’s nominee for
Director of the Environmental Protection
Agency, Oklahoma Attorney General
Scott Pruitt, has been met with praise and
criticism from members of the Senate,
who will be voting to conrm him soon
after Trump takes ofce on Jan. 20.
Praise has come from both Senators
from Oklahoma, Jim Inhofe and James
Lankford, and numerous conservative
organizations.
Opposition has been expressed by
Democratic members of the Senate,
including Chuck Schumer of New York,
who will become Senate Minority Leader
when the new Congress convenes in
January.
Trump said Pruitt’s nomination is a sign
that the EPAs role will be recongured in
his administration.
“For too long, the Environmental
Protection Agency has spent taxpayer
dollars on an out-of-control anti-energy
agenda that has destroyed millions of jobs,
while also undermining our incredible
farmers and many other businesses and
industries at every turn,” Trump said.
As my EPA administrator, Scott Pruitt,
the highly respected attorney general
from the state of Oklahoma, will reverse
this trend and restore the EPAs essential
Photo Credit: Frank Romeo - www.123RF.com
Oklahoma Attorney Generation Scott Pruitt.
Credit: Oklahoma Ofce of the Attorney General
27
Oilman Magazine / January-February 2017 / OilmanMagazine.com
27
OKLAHOMA NEWS AT A GLANCE...
mission of keeping our air and our water
clean and safe.
“I am deeply grateful and honored to
serve as President-elect Trump’s EPA
administrator,” Pruitt said. “The American
people are tired of seeing billions of
dollars drained from our economy due to
unnecessary EPA regulations, and I intend
to run this agency in a way that fosters both
responsible protection of the environment
and freedom for American businesses.”
Pruitt has been a defender of common
sense rules that protect the environment,
and he has challenged the legality of
overreaching regulations by federal
agencies. He strongly supports states’ rights.
Pruitt led the charge in 2014 against “an
arrangement” between some environmental
groups and bureaucrats within EPA and the
Fish and Wildlife Service called “sue and
settle.” Environmental groups would bring
a number of petitions to FWS. The law
required FWS to respond within 90 days or
one year depending on the circumstances.
It’s often impossible for FWS to respond
adequately to the barrage of petitions
before the deadline. The FWS would then
go to the environmental groups with an
offer to settle the case without any input for
other affected groups. The environmental
groups collected attorneys’ fees out of the
federal Judgment Fund and agency budgets.
In effect, the environmental groups would
get what they wanted, and the federal
government would pay their attorneys’ fees.
If approved by the Senate, he will be a
breath of fresh air at EPA.
Alex Mills is President of the Texas
Alliance of Energy Producers. The
opinions expressed are solely of the
author.
Oklahoma Oil and Gas Industry Sees
‘Slow but Steady Improvement’
Oklahoma State Treasurer Ken Miller
in December said that the state’s oil and
gas industry is making “slow but steady
improvement.
Miller said that, for the second month,
November tax collections from the
production of oil and natural gas exceeded
collections from the same month of the
prior year.
Prior to October, gross production tax
collections had been lower than the prior
year each month since December 2014.
In November, gross production taxes
generated $34.1 million, up by $3.9 million,
or 12.9 percent, from November 2015.
Miller also cautioned that the “spillover
effect” of the energy price downturn on
income and consumer spending is ongoing.
“My hope is that we will begin to see overall
improvement with renewed oil eld activity
following OPEC’s plans to cut production
levels and bring supply more in line with
demand,” Miller said.
—JD
Panhandle Oil and Gas Sees 4Q16
Uptick After ‘Difcult Year’
Oklahoma City-based Panhandle Oil and
Gas Inc. in December 2016 reported
a 4Q16 prot — a small gain in what
President and CEO Michael Coffman called
a “difcult year” for the company.
Coffman said that product prices were
“extremely low,” with an average per Mcfe
sales price of $2.73 in 2016 compared to
$3.97 in 2015 and $5.88 in 2014.
Panhandle reported a 4Q16 income of
about $737,000, and scal year 2016 net
loss of $10.3 million, or $0.61 per share,
compared to a net income of $9.3 million,
or $0.56 per share, for 2015.
In a company statement, Panhandle Senior
Vice President and Chief Operating Ofcer
Paul Blanchard said that the company
decided not to participate in most of the
wells that were proposed to Panhandle last
year, and instead focused on leasing mineral
acreage in what Blanchard described as
higher risk areas compared to core resource
plays.
As product prices climbed later in scal
2016 and into [1Q17], we have seen
meaningful activity return to our core
resource play holdings,” he said.
Blanchard noted that drilling has started on
an eight-well horizontal drilling program
in which Panhandle has an average of 20%
working interest and 27.4% net revenue
interest. The program, which is operated by
BP America in the Southeastern Oklahoma
Woodford Shale gas play, should begin
producing in 2Q17.
He also said that Panhandle will participate
with working interest and net revenue in its
leasehold in six Woodford Shale wells that
Cimarex Energy is drilling. The projects will
begin producing in 3Q17.
In addition, Blanchard said that pad drilling
is scheduled to resume on Panhandle’s
Eagle Ford leasehold in 2Q17.
“The operator plans to move in one rig
and drill a 10-well program,” he said. “The
drilling…will be on some of the lowest risk
acreage in the company’s portfolio, as it is
in the cores of well-developed and under-
stood resource plays. These investments
should materially increase Panhandle’s daily
oil, NGL and natural gas production when
the wells come online.”
—JD
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28
Gulf Tech Receives Full Certication
as a SEMS Audit Service Provider
By Emmanuel Sullivan
Gulf Tech, an auditing rm based in
Plano, Texas, has been working on
becoming a fully accredited Safety and
Environmental Management System
(SEMS) audit service provider for over
a year, and is now one of several elite
companies who can provide audits of
offshore oil and gas producers.
“Gulf Tech’s internal management
systems are fully compliant with the
[Center for Offshore Safety’s (COS)]
requirements concerning the ISO 17021
standards for audit and certication
of management systems. Gulf Tech
fully meets all of the latest COS and
[Bureau of Safety and Environmental
Enforcement (BSEE)] requirements,”
said auditor Jason Perrin.
BSEE requires an audit of offshore oil
and gas operators every three years.
The SEMS 30 CFR § 250.1900 audit is a
set of workplace safety regulations that
have been enhanced as a result of the
2010 BP Deepwater Horizon disaster.
“The purpose of SEMS is to enhance
the safety and cleanliness of operations
by reducing the frequency and severity
of accidents,” the bureau explains on its
website.
The safety program was originally
voluntary as established by the American
Petroleum Institute’s Recommended
Practice for Development of a Safety and
Environmental Management Program for
Offshore Operations and Facilities – API
RP 75 – the institute has now adopted the
SEMS audit as mandatory.
To comply with BSEE’s requirements, the
SEMS audit must be conducted by a COS-
accredited audit service provider. The
COS ensures that third-party auditors are
evaluating an offshore operator’s SEMS
program as intended by the BSEE.
Many of Gulf Tech’s auditors have
worked and managed large production
operations and have over a hundred
years of combined offshore experience.
That much experience gives the rm a
unique position in that they understand
the challenges that face many offshore
operators in a highly-regulated
environment.
Jay Bailey, Gulf Tech’s Auditor, stated,
“SEMS isnt what you audit every 3 years
– it’s what you do 365 days a year.
There are several SEMS elements the
BSEE requires of offshore operators,
such as, to identify, address and manage
safety and environmental hazards, and
the impacts during design, construction,
startup, operation, inspection, and
maintenance of new and existing facilities
(30 CFR § 250.1901).
Outer continental shelf operators
must implement a SEMS program that
addresses 17 elements covered in an audit,
ranging from written operating procedures
and safety and environmental policies to
developing safe work practices, analyzing
facility and job-safety hazards, and
implementing a training program.
The BSEE also requires operators to
conduct audits whenever there is a
signicant change, such as change of
operator control or large increases in the
number of offshore leases.
The deadline to submit SEMS audits to
BSEE was Nov. 15, 2016.
FMC Technologies and Technip
Shareholders to Vote On Merger in
December
By Tim McNally
Houston-based FMC Technologies
said this week that Technip and FMC’s
respective shareholders will vote on Dec.
5 to approve or deny the companies’ plan
to merge. Earlier in May both companies
announced their intentions to combine
into a new rm, TechnipFMC, which will
be valued at about $13 billion.
Despite the ongoing downturn, FMC
Technologies has managed to improve
protability by increasing efciency
and reducing costs. FMC recorded $1.1
billion in revenue for the 3Q16 with an
adjusted EPS of $0.35, beating the Zacks
consensus estimate of $0.23 per share.
“The strong performance resulted from
solid project execution, combined with
the benets of our cost reduction actions
that continued in the quarter,” Doug
Pferdehirt, President and CEO, said in a
statement. “We have used this downturn
as a catalyst to make fundamental changes
to our business model that will continue
to provide sustainable benets.
TEXAS NEWS AT A GLANCE...
Photo Credit: hxdbzxy - www.123RF.com
29
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29
TEXAS NEWS AT A GLANCE...
Some of these cost reductions come
from the continuing process of laying off
employees. The company cut 1,000 jobs
in the third quarter and made it clear that
more were to come in the future. The
elimination of jobs is unfortunate but
effective, as evidenced by the company’s
impressive protability.
Various other methods to improve
protability seem to have been effective as
well, but, as FMC Technologies has learned,
pushing employees to reach certain prot
thresholds can lead to the company being
implicated in undesirable issues.
In a push to improve the nancial standing
of the energy infrastructure business
segment, controllers Jeffrey Favret and
business unit controller Steven Croft
enlisted unapproved accounting methods
in order to produce a skewed nancial
position. An SEC announcement made on
Oct. 20 detailed that FMC Technologies
would be ned $2.5 million for overstating
the departments pre-tax operating prots
by $800,000.
The two controllers involved in the
accounting mishap have since been let go,
and FMC Technologies, without admitting
or denying the claim, consented to pay the
ne.
US Geological Survey Discovers Largest
US Continuous Oil and Gas Deposit in
Texas
By Tim McNally
The U.S. Geological Survey (USGS)
estimates that it has discovered the largest
continuous oil and gas deposit ever assessed
in the U.S. The agency on Nov. 15 released
an announcement detailing the discovery,
noting that the region where the discovery
was made, the Wolfcamp shale region
located in the Midland basin section of the
Texas Permian Basin, is estimated to hold
“20 billion barrels of oil and 1.6 billion
barrels of natural gas liquid.
Walter Guidroz, the program coordinator
for the USGS Energy Resources Program,
is quoted in the announcement as saying:
“The fact that this is the largest assessment
of continuous oil we have ever done just
goes to show that, even in areas that have
produced billions of barrels of oil, there is
still the potential to nd billions more.
The ever-increasing capabilities which
technology enables can make signicant
productivity gains for companies and
agencies operating in the oileld. The ability
of the USGS to detect the aforementioned
Wolfcamp deposit is, in part, due to
advancements in technology.
Guidroz noted that: “Changes in
technology and industry practices can have
signicant effects on what resources are
technically recoverable, and that’s why we
continue to perform resource assessments
throughout the United States and the
world.
The discovery of this deposit in the
Wolfcamp shale highlights how critical
technology is in the oileld. Continual
advancements in oil-extraction and
detection technologies allow for more
accurate, efcient retrieval of the black
gold. This should enliven the efforts of
those companies involved in the extraction
of oil and the development of technologies
to accomplish such purposes.
Companies that choose to revisit wells
with previously unobtainable oil or gas
might now nd a different result due to
advancements in the eld. The continuous
adaptation of technology to suit oil
producers’ purposes can accomplish many
feats that would be considered infeasible
just a few years ago.
Texas Railroad Commissioner Sitton
Joins Research Consortium on
Seismicity
Texas Railroad Commissioner Ryan Sitton
in November 2016 joined a research
consortium that is working to understand
both naturally occurring and potentially
induced seismicity in the state and the
associated risks.
Sitton will collaborate with the Bureau
of Economic Geology (BEG) Center for
Integrated Seismicity Research (CISR),
an industry-sponsored, multidisciplinary,
trans-college research center. The research
of CISR is designed to identify the subsur-
face processes that may inuence seismicity,
quantify and reduce risk to the citizens and
infrastructure of Texas, and inform regula-
tors and operators so that they can improve
standards of practice to mitigate seismicity.
In a statement, Commissioner Sitton said:
“I take the issue of induced seismicity
very seriously. The science is clear that it
is physically possible for injection wells
that dispose of uids deep underground
to cause earthquakes in certain rare
cases, given the right set of conditions.
Unfortunately, this often is confused with
hydraulic fracturing, which can cause micro
earthquakes that are almost never felt.
Sitton noted that, after careful study of
operations in Texas, he determined that
the Texas Railroad Commission should
look “more closely at oil and gas injection
activities in specic areas.
He named Johnson County, Texas, as one
area that has “elevated risks of seismicity
related to disposal activities.
“The governor’s technical advisory
committee to the Texas Seismometer
Network, BEG, CISR and other reliable
scientic groups are working on smart
scientic approaches to comprehensively
evaluate seismicity and the associated
risks in our state,” he said. “I am working
with those groups, and if research points
to a causal link between oil and gas
and seismicity in the state, the Railroad
Commission will address those situations in
an appropriate way.
—JD
Photo Credit: doodlebugs - www.123RF.com
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3030
LOUISIANA NEWS AT A GLANCE...
Gulf Coast States May Receive Extra
Offshore Oil and Gas Royalties
By Emmanuel Sullivan
If Sen. Bill Cassidy (R-LA) gets his way,
Alabama, Louisiana, Mississippi, and
Texas will receive extra offshore gas
and drilling royalties from the American
Energy and Conservation Act. Currently,
the four states receive 37.5 percent of the
offshore drilling revenue, which is capped
at $500 million a year. Under Cassidy’s bill
the cap would increase to $835 million by
2027.
“I think Republicans are on board,
Cassidy said. “We put a lot of things
in there that would be appealing to
Democrats, and President Trump can do a
lot of this by executive order.
To sweeten the deal for Democrats,
Cassidy proposes more money channeled
to the Land and Water Conservation
Fund. He added offshore windfarms
could be a potential revenue share as well.
However, Sen. Bill Nelson (D-Fla.)
believes the measure is a threat to Florida’s
coastline and opposes the legislation.
Florida has a ban on offshore drilling
in the Gulf within 125 miles of its
coastline that expires in 2022. Florida
is not included in Cassidy’s legislation,
but Nelsons position is, if you increase
royalties to neighboring states, that would
give Florida’s congressional leaders an
incentive to open up waters to drilling
when the state revenue runs lean.
“The pressure builds on Florida to get
more revenue and therefore they don’t
look at the tradeoffs of oil on our beaches
and damage to our environment, etc.,
Nelson said.
Nelson also mentioned the bill creates
new revenue sharing opportunities for
Georgia, North Carolina, South Carolina,
and Virginia, which adds more pressure
to open up drillings off Florida’s Atlantic
coast.
Cassidy is calling this an energy jobs
bill, and he added revenue sharing
allows Louisiana to rebuild and maintain
a healthy coast and in turn support
American energy security.
Even though there are items in the bill
that both sides of the political aisle nd
attractive, there is strong concern and
opposition from government watchdog
groups who are concerned that the
untapped shale, oil, and natural gas
reserves means more offshore drilling.
They would prefer that offshore drilling
revenue go to reducing the national debt
and to programs that benet taxpayers.
Nelson is also concerned that more
drilling would increase the chance of
another 2010 Deepwater Horizon oil spill.
He said the spill decimated Louisiana’s
tourist-driven economy.
Cassidy has support from GOP leaders
and intends to introduce the stand-
alone bill if he can get the votes. Nelson
successfully thwarted a similar measure
from an energy bill that was passed this
spring, and he said he’ll invoke a libuster
rule that will require approval from 60 of
the Senate’s 100 members to get a oor
vote.
Swift Energy Sells Remaining
Louisiana Assets
Swift Energy Company in December 2016
said it has sold its remaining 25% interest
in the Burr Ferry and South Bearhead
Creek Fields in central Louisiana.
The company said that net proceeds of
about $8 million from the sale will be
used to reduce the amount of borrowings
under the company’s credit facility, which
was approximately $212 million prior to
receipt of these funds.
“We set out this year to redene the
company and reposition our portfolio
through a series of non-core divestitures,
Interim CEO Bob Banks said in a
statement. “We achieved our objective,
as this transaction effectively concludes
our Louisiana divestiture process. These
transactions to date have simplied our
business model, as our cost structure is
now more representative of our Eagle
Ford development program. This will
allow us to realize greater efciencies and
scale within our operational footprint.
The company also said it has increased its
gas hedge position for 2017 and initiated
a hedging program for 2018. Specically
for 2018, Swift completed approximately
4.4 Bcf of natural gas swaps at an average
price of $3.47 for 1Q18.
—JD
Foothills Exploration, Magna Team
Up on Labokay Prospect
Foothills Exploration Inc. in December
entered into a participation agreement
with Magna Operating LLC for the
Labokay prospect, which covers 240 acres
in Calcasieu Parish, Louisiana.
The company said that Labokay is an
amplitude versus offset oil (AVO) play in
southwestern Louisiana targeting the Frio
Nododaria Blanpiedi Sand.
The agreement between the companies
established an area of mutual interest
for ve years and provides Foothills with
access to all of Magna’s 3D seismic data,
including interpretations and AVO data
relating to the lands within the area of
mutual interest.
Foothills said it will earn 100% working
interest before payout for drilling the well,
and Magna Operating will back in for a
20% working interest after payout.
“We’re pleased to have reached an
agreement with Magna Operating, which
establishes a beachhead for the company
in the Gulf Coast through development
and operation of this asset,” Foothills
CEO B.P. Allaire said in a statement.
Foothills Petroleum Operating, an indirect
wholly owned subsidiary of the company,
will drill a test well to a total measured
depth of 8,575 feet and true vertical depth
of 8,190 feet and will also operate the
project.
Foothills said that three offset analogue
wells nearby produced a total of 1.9
million barrels of oil from the same Frio
trend 3D seismic data set that Devon
Energy acquired in 2012, which was
reprocessed in 2016.
—JD
Oilman Magazine / January-February 2017 / OilmanMagazine.com
3131
LOUISIANA NEWS AT A GLANCE...
Louisiana Oil and Gas Companies
Optimistic about Trump Policies
By Tim McNally
As it currently stands, many oil and gas
companies are required to provide capital
up front to fund the removal of their
offshore equipment in case of bankruptcy.
For larger oil and gas rms, this isn’t much
of an issue, but it can be a struggle for
smaller companies.
Many expect that President-elect Trump’s
energy reforms will be a reversal of the
policies and regulations instituted during
the Obama administration. Trump’s
appointments of Rick Perry, the former
governor of Texas, as the Secretary for
the Department of Energy, and Rex
Tillerson, former CEO of ExxonMobil,
as the Secretary of State are seen as a step
in the right direction by those hoping
for less-stringent regulatory policies
within the oil and gas industry. This has
environmentalists highly concerned, but
oil and gas companies are viewing Trump’s
appointments and proposed elimination of
regulations as a blessing.
According to wwl.com, Louisiana Oil and
Gas Association acting president Gifford
Briggs stated that “there’s hope that this
next administration is going to look at what
are some of the roadblocks that are keeping
companies from investing and drilling
and producing here in the U.S. and start
removing some of those barriers.”
Louisiana-based oil and gas rms will most
likely nd the new administration enabling
for business purposes, but experts believe
that only an upward oil price movement will
give a boost to the energy industry in the
state. Of course, the oil price is controlled
by external factors that will be out of
Trump’s control for the most part.
For this reason, Briggs advises a stance of
cautious optimism. He notes, “It’s certainly
a measurable amount of excitement, but it’s
also reserved in that a lot of these things
are one, going to take time and two, they
are unpredictable.
Only time will tell how benecial Trump’s
policies will be for businesses operating in
the oil and gas industry.
Many experts acknowledge the dual-nature
of this situation – relieving companies of
some of the capital-intensive regulatory
requirements would certainly liven business
and hopefully accelerate growth. However,
removing too many regulations could
lead to another environmental disaster,
such as the 2010 BP oil spill. President
Trump and his team must carefully
examine the repercussions of removing
certain regulations to identify safety or
environmental issues which could arise.
Oilman Magazine / January-February 2017 / OilmanMagazine.com
3232
EVERY WORKER. EVERY INDUSTRY. EVERY TIME. Because that’s how workers’ comp is supposed to work
with the future of Louisiana’s working men and women at the center of everything we do.
Visit us online at lwcc.com or call 225-924-7788 to learn more.
Louisiana Oilman 8.75" x 11".indd 1 7/13/16 1:55 PM
OILMAN COLUMN
Jason Spiess: Since you are the founder,
let’s start with the genesis of your company
and then transition into what it is that you
are doing today.
Nick Candito: What we are with
Progressly is a way for companies to
digitize their internal procedures in a way
where we can make it so communication is
tied to the processes that they are actually
running on a day to day basis. We make it
so the people who are actually executing
those processes can be more efcient in
how they do their jobs. And ultimately what
we get to is data-driven insights around
inefciencies tied to those processes and
where you can optimize through Progressly
on an end-to-end platform.
JS: When you say digitize, are you talking
about an App procedure to a software
procedure?
NC: Specically, with oil and gas, there
are a lot of procedures that are paper right
now, in like a true paper format – meaning
they are hung up somewhere or you have
a binder that you need to carry around.
So the rst thing we want to do is take
their same procedures and move them to
a digital format so it is easier to access it
wherever you are. And then we can do a lot
of things to how you need to communicate
with teams that are in remote locations, in
different time zones and tying to end-to-
end stakeholders, i.e. move a process from
start to nish. It is bringing the paper
format to an electronic format where the
power of software can start to help these
companies with efciency.
JS: Do you only work in oil and gas or do
you venture into other industries?
NC: We denitely have clients outside
of oil and gas. The industry that we rst
started with is energy and utilities. What
we are really excited about is that there are
a bunch of traditional industries where
there are a few factors coming into play.
This is tied to the fact that there is an
aging workforce with a bunch of industry
knowledge within these companies. They
need to think about the next evolution
and how they are going to stay relevant
and productive. Our technology has had a
wide application across industries like that.
Transportation is a good example.
JS: Let’s go back to oil and gas and their
push for remote monitoring. Whether it
is an App or some software with drop
down menus or in some cases, especially in
pipelines, it’s becoming just automated. Are
you involved in any of those examples or
what niche within the energy industry are
you nding success?
NC: It really touches on all three of your
examples. And a good example is with Shell
Oil, who is one of our biggest supporters.
We focus on processes tied to management
of change, stakeholder management and
risk management; so things that touch
the corporate ofce where there is a huge
amount of transparency that is needed
where you need to execute those processes
effectively, and where it is very easy to
hit a blocking point if you do not have
something in place like a Progressly that
enables you to move that process forward.
So not only do we prevent the other when
you are executing a manager of change
process one time, we are able to do some
of the automation for them around where
there might be a block. We are recognizing
there is the same problem time and time
again. You can use Progressly as a platform
to make a change to that process and
then automate the way it is going to move
forward across all those stakeholders who
are involved.
JS: What kind of learning curve are you
experiencing?
NC: I think it helps to be mindful of the
fact that the big crew change is something
that is coming to an industry like oil and
gas. Fifty percent of the workforce is
going to retire in the next 10 years. They
are already thinking through what the next
generation of work is going to do?
We align nicely with the workers that are
already in the company today. We
fundamentally do not want to change the
way their employees are doing their job
at all. We give you a tool that helps you
become more productive with the job they
are doing. So really we t into their existing
workow, then using the tool, which is
designed to be as simple as possible, only
then can you augment the way you are
working.
JS: What are your biggest hurdles or
barriers to entry with your technology?
NC: We took the time to really get to know
our customers in oil and gas. We emerged
ourselves in the industry. Shell Oil and
Valero came to us with some problems,
and we wanted to make sure we listened
thoroughly before suggesting any solutions
our software could solve. Solving problems
at an early stage they’ve essentially helped
us create the story around what it impacts
and what it means to the industry. Now
that we’ve followed it more as a similar
technology within our team, that was the
biggest barrier to entry up until this point.
Now I think we are at a really good point to
accelerate our growth across the industry.
Energy Scene with Jason Spiess
An Interview with Nick Candito, CEO and Co-founder, Progressly
Nick Candito
OILMAN COLUMN
Oilman Magazine / January-February 2017 / OilmanMagazine.com
3333
EVERY WORKER. EVERY INDUSTRY. EVERY TIME. Because that’s how workers’ comp is supposed to work
with the future of Louisiana’s working men and women at the center of everything we do.
Visit us online at lwcc.com or call 225-924-7788 to learn more.
Louisiana Oilman 8.75" x 11".indd 1 7/13/16 1:55 PM