Bakken Oil Report Spring 2018

Spring

2018

Why North Dakota needs NAFTA Energy dominance making America competitive again North Dakota currently ranks number one in quality of life

www.bakkenoilreport.com

It's true that we have a broad product line available "anytime anywhere" to meet your everyday needs.

But we also design and manufacture just the right solutions to meet those special fluid transfer challenges where a standard product just won't do.

The difference boils down to commitment. It's called Uncommon Excellence™ – and we've been living it for over a century.

Boss Low Pressure Systems Dixon's Boss LPS (Low Pressure System) products are used in many of the applications found at hydraulic fracturing sites from the water source up to high pressure pumps.

These one-piece products with no-welds, no-threads and no-leaks help you avoid costly downtime and enhance up-time!

Visit dixonvalve.com/bosslps to learn more.

Uncommon Excellence • Uncommon Excellence • Uncommon Excellence • Uncommon Excellence • Uncommon Excellence • Uncommon Excellence • Uncommon ommon Excellence • Uncommon Excellence • Uncommon Excellence • Uncommon Excellence • Uncommon Excellence • Uncommon Excellence • Uncommon

877-963-4666 • dixonvalve.com • Dixon_Boss LPS_Bakken Oil Report_Spring 2018.indd 1

©2018 Dixon Valve. All rights reserved.

1/23/2018 11:42:29 AM

You’re building the future.

We’re here to help.

™

You need the right equipment, at the right place, right now. With an unmatched rental fleet and branch network, we are ready to help you maximize productivity and profitability. And our round the clock service and support means the equipment will work just as hard as you do.

United Rentals H95 , 5065 140th Avenue N.W., Williston, ND 58801

UnitedRentals.com 800.UR.RENTS © 2017 United Rentals, Inc.

SPRING 2018

CONTENTS

Message from the editor, Shayna Wiwierski – 6 Message from Senator John Hoeven – 8 Message from U.S. Senator Steve Daines – 10 Take another look: Update from the Williston Area Chamber of Commerce – 12 Our view: There¹s no debate. North Dakota needs NAFTA. Period. – 16 Energy dominance: Making America competitive again – 18 Regulating the regulators – 22 How the Keystone Pipeline spill proves pipelines are safe – 26 The Davis Refinery: Changing an industry by addressing flaring head on – 28 Six years & five-million barrels: An introduction and update to the Alberta Bakken Play – 30 Bakken is back on track in 2018 – 32 Williston STAR Fund provides stellar impact on community development – 34 Oil and gas companies continue to improve on LGBTQ equality in the workplace – 35 Growing the Bakken – 38 PTRC building on past successes to take Bakken research to the field – 40 LCO Technologies reinvents solar-powered chemical injection pumps – 44 What you can do today to help veterans experiencing homelessness – 46 New, patented oil-treating process meets vapor-pressure specification – 47 Risky business: Evaluating contractors by risk – 48 BLM 3175: Facts you need to know before choosing a flow meter – 50 An on-off tool for horizontals wells that minimizes risk – 52 Create efficiency & enhance your brand – 54 An evolution in solids treatment and waste control management – 56 How economic downturns can provide new opportunities – 58 The Reynolds French story – 60 Borsheim Crane Service, LLC keeping up with client safety compliance programs – 64

Published by: DEL Communications Inc. Suite 300, 6 Roslyn Road Winnipeg, Manitoba Canada R3L 0G5 President & CEO David Langstaff Publisher Jason Stefanik Managing Editor Shayna Wiwierski shayna@delcommunications.com Sales Manager Dayna Oulion Toll Free: 1.866.424.6398 Advertising Account Executives Brian Gerow | Gladwyn Nickel Mic Paterson | Anthony Romeo Contributing Writers Bernie Dardis | Ron Feigel Joel Godfredsen | Rob Hari | John Harju Camille Jensen | Dave Kimery | Tyler Klatt Kirsten Lund | Janna Lutz | Isaac Orr Barbara Peterson | Jeff Saponja Michael Sandoval | James Sorensen Allison Turner | Arnold Waldner Production services provided by: S.G. Bennett Marketing Services www.sgbennett.com Art Director Kathy Cable Layout / Design Dana Jensen Advertising Art Dave Bamburak © Copyright 2018 DEL Communications Inc. All rights reserved.The contents of this pub­lica­tion may not be reproduced by any means, in whole or in part, without prior written consent of the publisher­.

While every effort has been made to ensure the accuracy of the information contained in and the reliability of the source, the publisher­in no way guarantees nor warrants the information and is not responsible for errors, omissions or statements made by advertisers. Opinions and recommendations made by contributors or advertisers are not necessarily those of the publisher, its directors, officers­or employees.

Goldbridge Industries, providing oilfield equipment to the Bakken – 66 Cover photo provided by the North Dakota Energy & Environmental Research Center.

4

BAKKEN OIL REPORT – SPRING 2018

PRINTED IN CANADA | 05/2018

Octanes Octanes

Nitrogen

Heptanes

Ethane Ethane

Carbon Dioxide Carbon Dioxide

Nitrogen

Butane

Custom Heptanes Gas Mix Custom

Methane Gas Mix

Pentanes

Methane

Butane

Nonanes+

Pentanes

Hexanes

Nonanes+

Propane

Hexanes

Propane

Set and Log a Custom Hydrogen ArgonGas Mix! Set and Log a Custom Gas Mix!

Hydrogen The FT4X Gas-SelectX® allows the user to choose Argon pure gases or a custom gas mix with the The gases available in the Oil & Gas and to Mixed Gaspure Menus. gas composition FT4X Gas-SelectX® allows the user choose gasesSet or athe custom gas mix with in 0.1% increments in the field and the meter’s Flow Calibration, Density, and Gross Heating the gases available in the Oil & Gas and Mixed Gas Menus. Set the gas composition in Value areincrements automatically entered The new Data Logger willHeating store the 0.1% in theadjusted field andfor thethe meter’s Flowmix.

Calibration, Density, and Gross are automatically adjusted for the entered gas Value composition and other configuration data. mix. The new Data Logger will store the gas composition and other configuration data.

FT4X Advanced Features:

FT4X Advanced Features: • Robust 2nd Generation DDC-Sensor™ • Robust 2nd Generation DDC-Sensor™ • Data Logger with date/time stamp & 40 24-hour daily • totals Data Logger with date/time stamp & 40 24-hour daily totals • • Gas-SelectX® Gas Selection SelectionMenu Menu Gas-SelectX® Gas • • Density HeatingValue Valueofof Gases Density and and Gross Gross Heating Gases • • FM/FMc, IECEx,and andCE CEApprovals Approvals FM/FMc, ATEX, ATEX, IECEx, TRYTRY THETHE • • CAL-V™ Validation CAL-V™ Calibration Calibration Validation FOX ONLINE FOX ONLINE Upto to1000:1 1000:1 Turndown Turndown • • Up CONFIGURATOR CONFIGURATOR Optional RS485 RS485 Modbus • • Optional ModbusRTU RTU TOOL TOOL • Free FT4X View™ Software • Free FT4X View™ Software

ModelModel FT4X FT4X Flow Flow MeterMeter

Fox’s Model FT4X Data Loggerrecords records40 40 24-hour 24-hour daily events and alarms withwith Fox’s Model FT4X Data Logger dailytotals, totals,logs logs events and alarms a 7 year history, has settable Contract Time to define the contract day, and has a power off a 7 year history, Time to define the contract and has a power off totalizer.

The has FT4Xsettable also hasContract the 2nd Generation DDC-Sensor™ andday, advanced correlation totalizer.

The FT4X also has the 2nd Generation DDC-Sensor™ and advanced correlation algorithms to provide accurate, multi-gas-capable gas flow measurement.

Direct mass algorithms to provide accurate, multi-gas-capable gas flow measurement.

Direct mass flow measurement, exceptional low-flow sensitivity, fast response, and low maintenance flowrequirements measurement, low-flow sensitivity, alsoexceptional distinguish the Fox Model FT4X. fast response, and low maintenance requirements also distinguish the Fox Model FT4X.

Email at sales@foxthermal.com, call us at (831) 384-4300, or us online to find out how call we can help you384-4300, meet your gas Emailvisit at sales@foxthermal.com, us at (831) or measurement and process efficiency needs.

Use the online product visit us online to find out how we can help you meet your gas configurator to customize a meter for your application! measurement and process efficiency needs. Use the online product

configurator to customize a meter for your application!

w

w

w

w

w

w

.

.

F

F

o

o

x

x

T

T

Precision Mass Flow Measurement An ONICON Brand

.

Precision Mass Flow Measurement

h

e

h

e

r

r

m

m

a

l

a

c

o

An ONICON Brand

l

.

c

m

o

m

MESSAGE

Message from the editor Shayna Wiwierski Earlier this year, the U.S. News & World Report wrote that North Dakota ranked the highest for the best quality of life in the U.S. With a population of 755,393 (United States Census Bureau in 2017), it may be hard to believe that a state with such a small amount of residents would place number one.

However, it’s thanks to its social and natural environment, which includes metrics such as air and water quality, and pollution and prevalence of industrial toxins, that got the state such a high ranking.

The state’s unemployment rate is 2.6 percent, which is over one percent lower than the U.S.; the average medium wage in Williston is $90K; and best of all, the Bakken is booming once again.

The Bakken crude oil production is on the rise and is expected to beat its own production record of 1.23 million pbd from December 2014 in the first half of this year. In fact, the Bakken is doing so well that Continental Resources announced in Febraury 2018 that their new production has reached an all-time high in Q4 2017. Their president Jack Stark even commented that the returns from the Bakken compete head-to-head with the best oil plays in the U.S. today. That’s quite an improvement from this time last year, or the year before.

In this issue of the Bakken Oil Report, we take a look at what is happening around the Bakken and Williston region. We also explore some current issues happening, including why North Dakota needs NAFTA, why the Keystone Pipeline spill in 2017 proves that pipelines are safe, a look at the Alberta, Canada side of the Bakken region, and so much more.

I hope you enjoy this issue of the Bakken Oil Report, and as always, if you have any questions, comments, or story ideas, please send them my way. I also invite you to check out BakkenOilReport.com, where we post current news and topics year-round outside of our biannual spring and fall issues.

Strike oil! w

Shayna Wiwierski @DELCommInc

6

BAKKEN OIL REPORT – SPRING 2018

NICOLE WOLLA DICKINSON • 701.715.9028

KAYLA DEES WILLISTON • 701.715.9013

DEREK VAN DYKE MINOT • 701.858.5019

RYAN HARTJE

Passion. Grit.

BISMARCK • 701.255.5562

DETERMINATION. A comprehensive benefits package

MARIE BITTNER BISMARCK • 701.255.5565

Some essential elements of business success arise from within. Others come from a trusted network of advisors. Let our experts help you custom-design an employee benefits package that works for you today and helps you get to where you want to be tomorrow.

Let’s get started on your employee benefits plan.

MESSAGE

The ONSHORE Act provides regulatory relief, empowers domestic energy production and economic growth

By Senator John Hoeven In North Dakota, we have demonstrated time and again that we can encourage investment and innovation in our energy industry, while maintaining good environmental stewardship.

This has helped empower an energy renaissance that has benefitted both our state and nation.

Further, we have been able to maintain our oil and gas production even when faced with low prices. This success has occurred despite costly and overbearing federal regulations.

For example, it took the Bureau of Land Management (BLM) an average of 257 days to sign off on applications for permits to drill (APD) in 2016, compared to just 30 days for state agencies. While congress and the administration continue our efforts to provide regulatory relief for our job creators, there’s more work to do. To this end, I helped introduce the Opportunities for the Nation and States to Harness Onshore Resources for Energy (ONSHORE) Act earlier this year. This legislation will provide relief from regulatory burdens and lead to greater economic growth, good-paying jobs, and greater government revenues.

Our legislation has three major components: Delegate authority to states – allows the interior secretary to delegate to the states the exclusive authority to issue and enforce drilling plans and applications for permits to drill on federal land within their borders. This would provide greater certainty to energy developers and allow them to make investments decisions based on a project’s merits, rather than the variable cost of regulations.

Reduce federal overreach on state and private lands – exempts oil and gas operations on non-federal land from federal permitting and 8

BAKKEN OIL REPORT – SPRING 2018

environmental review if the federal government holds less than a 50 percent mineral ownership interest, a measure similar to my BLM Mineral Spacing Act. Making such a reform would not only ensure greater respect for the property rights of states and private entities, it would also free up BLM staff and resources to help the agency focus on its priorities and mission.

Establish state and tribal authority over hydraulic fracturing – grants states and tribes primacy over regulations, guidance, and permitting for hydraulic fracturing. Since the 1950s, this technology has been improved, tested, and proven safe. Further, states and tribes have the greatest interest in protecting their environment. This measure would help ensure we can continue to make use of this beneficial technology and maintain environmental quality.

Under our current regulatory system, the presence of federal land and mineral rights creates duplicative layers of regulations, resulting in energy developers passing up opportunities for investment and rerouting infrastructure. This means added cost for industry, as well as higher prices for consumers, fewer jobs for workers, and lower revenues for all levels of government – federal, state, local, and tribal. These impacts are especially felt in western states, where federal land is mixed among state and private lands. Because of this, it is time for the federal government to allow the states to take the lead in regulating energy production.

The ONSHORE Act is an important step in this effort. Our legislation will remove barriers to economic growth and unlock our nation’s energy potential, and I look forward to working with my senate colleagues to pass this important bill. w

Family owned and operated in Killdeer, ND for over 37 years, Benz Oil Co., Inc. is the experience you can trust to provide for all of your petroleum needs.

We take pride in our outstanding team of employees committed to service and safety excellence.

CALL US FOR A DELIVERY TODAY! 701-764-5556 BULK PRODUCTS AVAILABLE • Clear Diesel Fuel • Dyed (Off-Road) Diesel Fuel • Premier Diesel • Gasoline (Oxy 87, Regular & Premium Lead Free) • Propane (Hd5) • Methanol • Motor Oil & Lubricants OTHER FLUIDS AVAILABLE • Kerosene (5 gallon & 55 gallon Containers) • Packaged Motor Oil/Lubricants

TANKS AVAILABLE FOR LEASE OR PURCHASE: PROPANE TANKS • Available in 250, 500, 1000 & 6000 gallon.

FUEL TANKS • Various sizes available in stationary tanks or moveable cubes.

LUBRICANT TANKS • Talk to our sales department to find out what is currently available.

PROPANE CYLINDERS • Available for purchase in various sizes along with cylinder filling at our office location.

MESSAGE

Montana Energy Summit 2018

By U.S. Senator Steve Daines I’m co-hosting the Montana Energy Summit 2018 on May 30 and 31 in Billings. The summit will bring together energy thought leaders from around the country to discuss the future of Montana energy and Montana’s energy jobs.

At the Montana Energy Summit 2018, we will work together to find new ways to grow energy jobs in our state. Since the last Energy Summit in 2016, some important things have changed and the climate for energy jobs looks different. Earlier this year, while I was with him in Montana, vice-president Mike Pence declared the end of the war on coal. Following that announcement and years of conflict over the project, the Keystone XL Pipeline was finally approved. In Montana alone, this project has the potential to create at least 800 Montana jobs.

Northeast Montana is rich in oil and natural gas, and about one-fourth of America’s recoverable coal reserves are in Montana. Montanans have harnessed the power of these recoverable resources, and energy development has brought good-paying jobs to communities across our state. When it comes to energy, our state is a net supplier to the rest of the country.

We want to keep it that way.

At the summit, we will talk about the important role Montana plays in America’s energy supply.

We have the opportunity to be not only energy independent in America, but energy dominant.

Together, we will discuss the best way possible to position Montana as the future for energy in our country and around the world — this will create stable and high-paying jobs for Montanans.

The Clean Power Plan, a proposed regulation that threatened thousands of Montana jobs, is finally being reversed. Additionally, the Environmental Protection Agency’s financial 10

BAKKEN OIL REPORT – SPRING 2018

assurance rule is being put to death. We’ve also received good news from President Trump’s administration on the Waters of the United States (WOTUS) Rule. While we await the rewrite of these rules, I am encouraged by the administration’s steps to restore private property rights while still protecting the environment.

All of these advancements simply confirm what I’ve always believed to be true – the new administration wants to drive our country to energy dominance. The right federal policies can release the power of innovation and the wrong ones can stop us in our tracks. It’s important that we continue to talk about the federal policies that shape our ability to grow good-paying energy jobs in Montana and I look forward to hearing from Montanans about these critical issues.

While I’m honored to be working with the administration to fight for Montana’s energy potential, we know that energy dominance doesn’t start with the government – it starts with the states, and namely, Montana. That’s why it’s important that we bring the national energy conversation to Montana to hear directly from Montanans.

At the turn of the century we were talking about coal and hydropower. In 2005, we were talking about wind farms. Now in 2017, we’re talking about geothermal hotspots and biofuels. One thing has remained consistent – Montana leads the nation in energy. Let’s keep it that way. Join us on May 30th and 31st in Billings for the 2018 Montana Energy Summit.

To learn more about the summit and to stay updated about speakers and events, visit mtenergysummit.com. w

crane service • Hydraulic, conventional lattice boom truck cranes and crawlers.

• Certified rigging and spreader bars.

• Complete contract rigging and engineering services.

• Rentals available – hourly, daily, weekly, and long-term.

• Both operated crane rental and bare crane rental.

1947

introduCing

➔

• 8.5 ton capacity to 900 ton capacity cranes.

sinCe

the ltM 1750-9.1 900 ton hyd.

All terrAin CrAne

At BorsheiM CrAne serviCe, We Are here to provide exCellent, proMpt, And professionAl serviCe 24 hours A dAy.

FREE QUOTES • LICENSED • INSURED • LEASE OR RENT

Williston: randerson@borsheimcrane.com Minot: jhalland@borsheimcrane.com

800-932-8750 www.borsheimcrane.com

REPORT

Take another look

By Janna Lutz, President, Williston Area Chamber of Commerce

If you want to see why the U.S. News & World Report ranked North Dakota the number-one state for quality of life, take another look at northwest North Dakota. As the city of Williston, Williams County, and surrounding areas continue to expand and evolve, the Williston area demonstrates its leadership in becoming the regional front runner that it is.

Let’s start with our evolving community. More plans for school expansions and steadily high birth rates illustrate that our community is still growing. The median age is between 30 to 40 and our population is 49 percent women to 51 percent men. Part of the unwritten merger of newcomers to long-time residents includes not only a younger demographic, but also diverse one. We continue to enhance our caring community for the families that have made the Williston area their home.

Work/family balance is important to us, and the recreation center is integral in this – being utilized for sports and family activities.

Ribbon cutting at S&B Drilling’s new location in Williston earlier this year.

What makes the Williston area a regional frontrunner is how the past city and county leadership envisioned this growth and aptly planned not only to meet the current needs, but continue to look for the future needs as well. My last article noted all the infrastructure improvements, and the new airport project (XWA) is on track for its 2019 opening as the buildings started going vertical. The current leadership continues this vision.

Over 70 percent of our member businesses are small (less than 20 12

BAKKEN OIL REPORT – SPRING 2018

Opportunities are abound in the Williston area, with many new businesses opening every year. Seen here is the ribbon cutting for Promed Plaza, a 18,000-square-foot medical office building.

BU YERS OF NON-OPER ATED WOR K ING INTER EST • 13 Years Of Experience In The Non-Op Space • Well Capitalized And Purpose Built Team

CONTACT: SCOTT RICE - SVP ENG & BD: SRICE@RBOIL.COM / 713-874-9005 COLIN BARNETT – LAND MANAGER: CBARNETT@RBOIL.COM / 713-874-9000

REPORT

continued

Employment changes which highlights northwest North Dakota. employees), and some newer ones include an art studio, boutique shops, and medical spas, just to name a few. Long-time benefits like Williston State College's free tuition and room and board scholarships, along with expanded programs, dual credit, and hybrid delivery contribute to the benefits of living and working here.

North Dakota residents can pay off school loans faster thanks to lower rates from the Bank of North Dakota. With other programs, the BNC helps many businesses start up, expand, or relocate.

Workforce is both an opportunity and a struggle. Overall, the state's 14

BAKKEN OIL REPORT – SPRING 2018

unemployment rate (at 2.6 percent) is over one percent lower than the U.S. Williams County being even lower at 2.3 percent, with over 750 job openings mostly in CDL, healthcare, information technology, drones, heavy equipment, pipelines, and retail/hospitality. In the Williston area, we have long-term jobs and something for everyone, ranging from high school graduates to those with PhDs. The average median wage is in the $90K range and there is a need for higher skills. However, the struggle for many businesses remains employee turnover and not being able to fill open jobs.

Based on third quarter 2017 numbers, we have increased taxable sales and purchases, 45 more single-family homes sold in 2017 over 2016, and enplanements are up and on the rise.

This is evidence of what we already know. Opportunities abound in the Williston area.

So take another look at making the Williston area community your home.

Consider the potential: the numerous business, employment, investment, recreation, shopping, and entertainment opportunities which exist here already, and what the 50 more years of growth holds for the future. w

Bladder/Pillow Tanks • Containment/Spill Berms • Tarps and Covers Mini Basins • Decon Pools and Showers -• Portable Wash Bays

Protecting Containing Preserving

Lifetime warranty on welds and welded seams Husky® Portable Containment • www.huskyportable.com • 918-333-2000

REPORT

Our View: There’s no debate.

North Dakota needs NAFTA. Period.

By Bernie Dardis – Chairman, GNDC Board of Directors

In the heat being generated in the debate over the future of the North American Free Trade Agreement (NAFTA) keep one thing in mind: for North Dakota, there is no debate. North Dakota needs NAFTA. Period.

Facts are indeed stubborn things and the fact is North Dakota is one of the most export-dependent states in the country. Every sector of our economy – agriculture, energy, manufacturing, and retail – rely on, and benefits from NAFTA. Withdrawing from this trade agreement would deliver a crippling blow to our state’s economy, which could jeopardize the bottom lines of the 1,804 North Dakota companies that export, and the jobs of approximately 34,000 North Dakotans whose paychecks come from trading with our northern and southern neighbors.

Independent analysis after independent analysis verifies how critical NAFTA is to North Dakota. If you need any further proof, consider these numbers: · At 85 percent, North Dakota leads the nation in terms of the share of our total exports going to Canada and Mexico. · An astounding 98 percent of North Dakota’s grains, oil, and gas exports go to Canada and Mexico. · 73 percent of North Dakota’s manufactured goods are exported to Canada and Mexico. In fact, 50 percent of all North Dakota exports go directly to Canada.

Specializing in Mechanical Wireline Equipement Lab: 3226 Loop 124 Tyler, Tx 75707 O: 903-630-7144 C: 903-279-1698 Mailing: 6249 Bobwhite Rd. Gilmer, Texas 75645 E-Mail: icsicbis@aol.com www.icsi-we.com

16

BAKKEN OIL REPORT – SPRING 2018

Charlie Bishop

· The amount of goods exported from North Dakota’s largest cities – Fargo, Bismarck, and Grand Forks – is $884 million, most of which go to, you guessed it: Canada and Mexico.

NAFTA has been in existence since 1994. It was the first in a series of landmark trade agreements that knocked down barriers and opened new markets to U.S. goods, which has especially benefited land-locked states like North Dakota.

Since 2005, the rate of growth in exports from North Dakota to Canada, Mexico, and other free trade agreement nations has been 374 percent. Yes, you read that number right: 374 percent.

Numbers like these do more than punctuate a point. They serve as a demarcation line in time. There was a North Dakota before NAFTA and there is a North Dakota with NAFTA. A North Dakota without NAFTA is a state we dare not imagine.

This is especially true for our farmers. Already, there are discussions in Mexico about raising tariffs on American wheat from zero to 67 percent if the U.S. withdraws from NAFTA. This would be a direct hit felt on rural main streets across North Dakota.

Now, is NAFTA perfect? No. There is no such thing as a perfect trade agreement. But is it the devil some of its critics have made it out to be? Certainly not. And, for American policymakers, reasonable changes and modifications should be pursued to strengthen, rather than strangle, this agreement. But, for North Dakota, the facts speak for themselves: NAFTA has been a lifeline creating new jobs, new opportunities, and new wealth for thousands of North Dakotans.

When it comes to NAFTA, there is no debate, but there are only two outcomes: North Dakota either continues to win with NAFTA, or North Dakota will surely lose without it. Period. w __________________________________ Sources: U.S. Chamber of Commerce; National Association of Manufacturers; U.S. Department of Commerce, International Trade Administration

MEET VAPOR PRESSURE SPEC IN 60% LESS SPACE. Our patented Oil Treating Variance Solution (OTVS) outperforms conventional heaters and has been granted a variance to place it just 21 feet from oil storage tanks. OTVS minimizes applied heat at the lowest possible pressures to deliver low duty on specification product and fewer tank emissions.

Installations have already shown lower operating costs and little recycling of off specification oil. Let us put our innovation to work for you.

johnzinkhamworthy.com | +1 918 234 1800

For patent and trademark information, see johnzinkhamworthy.com/legal Š2018 John Zink Company LLC.

REPORT

Energy dominance

Making America competitive again

By Jessica Sena Love him or hate him, Donald Trump is presiding over one of the most exciting economic upticks Americans has ever seen. Coupled with a massive regulatory rollback, optimism is now flowing from Wall Street to Main Street.

GDP is up, unemployment is down, and thanks to a Reagan-sized tax reform package, overseas businesses are coming home, repatriating tax dollars in the United States. Countless others have announced plans to increase job numbers and wages.

Though the Tax Cuts and Jobs Act has received criticism, a report released by the Joint Committee on Taxation in December explains that 77 percent of total tax cuts will go to individuals. That’s $1.1 trillion in tax savings to average taxpaying Americans.

In fact, a whopping 94 percent of taxpayers will benefit from an increase in the standard deduction, which was doubled by the new act. That means that until 2026 when deductions revert to current levels, a single filer's deduction will increase from $6,350 to $12,000, while the deduction for married and joint filers will go from $12,700 to $24,000.

Increases in the standard deduction are met with changes to other deductions.

While some will go away come tax time next year, taxpayers will have other perks to look forward to, from the increased child tax credit, to the elimination of the Obamacare tax, and higher deductions for medical expenses.

Corporate tax rates in the United States are among the highest in the world, with 18

BAKKEN OIL REPORT – SPRING 2018

rates on U.S. energy firms at 37 percent – the highest of any industry. The act reduced the maximum corporate tax rate to the lowest rate since 1939, from 35 percent to 21 percent. Claims that the act disproportionately favors corporations are wrong. Reductions in corporate tax rates are offset by $695 billion of corporate loophole closers.

“Big business” is hardly the only sector of the economy poised to benefit from tax cuts. Until 2025, the standard deduction for pass-through businesses, including limited liability companies, sole proprietors, partnerships, and S corporations, will increase to 20 percent, though deductions for service professionals will be phased out once their income reaches $157,500 for singles and $315,000 for joint filers – well beyond a living wage.

In lowering tax rates, the U.S. will attract new business, make America competitive again, and provide business owners with more money to direct towards operations, such as upgrades and wages.

With oil prices over $60 dollars a barrel – the highest since 2014 – things are looking promising for American oil from American soil. According to data compiled by Bloomberg, 2018 forecasts for oil and gas company profits have risen higher than any other industry group at 28 percent over the past month.

Tax reform, while not the only factor, may have something to do with higher profit projections in the year ahead.

Preserved in the recent tax reform were two of the most key tax provisions

for petroleum producers of all sizes – intangible drilling costs and percentage depletion.

Intangible drilling costs, or IDCs, were first approved by congress in 1913. IDCs are not a tax credit, a public expenditure, or government spending outlay. They represent an accelerated deduction that applies to 60 to 80 percent of the costs an operator incurs on the development as well. Those costs include surveying, site preparation, repairs, and labor costs; everything put into the ground and not relating to benefits reaped from the ground.

The ability of operators to either expense or capitalize IDCs makes formation capital available for new exploration and production. Drilling is always a gamble, even with the best available information from geologists and geophysicists. The treatment of IDCs incentivizes continued investments in an otherwise risky business.

Another vital tax incentive which remains in place is percentage depletion.

In 1926, congress passed an accounting standard to spur investment in the robust development of American natural resources. Prior to this, the only deduction for mineral resources was cost depletion, which did not provide sufficient opportunity for smaller, independent businesses to retain revenues to keep up with well costs.

Percentage depletion is a tax allowance that honors the recovery of monetary investment over time. Not a subsidy or a tax credit, this cost-recovery mechanism

www.Millerinsulation.com

iNsULatioN, BUiLDiNgs, aND scaffoLDiNg services Oil Field • industrial • cOmmercial • residential

North Dakota WyoMiNg BraNch BraNch LocatioNs: LocatioNs:

Utah BraNch LocatioN:

3520 East Century Avenue Bismarck, ND 58502-1393 General Manager: Bill Eckroth Phone: 701-258-4323 Fax: 701-222-8045

3700 Salt Creek Highway Casper, WY 82601 General Manager: Fritz Messer Phone: 307-265-5646 Fax: 307-235-0052

50 North 500 West North Salt Lake, UT 84054 General Manager: Dennis Banyai Phone: 801-936-8352 Fax: 801-936-8397

3258 SW 110 Z Ave Dickinson, ND 58601 General Manager: Brian Janke Phone: 701-225-5877 Fax: 701-225-7884

2615 Industry Drive Cheyenne, WY 82007 General Manager: Fritz Messer Phone: 307-635-5311 Fax: 307-635-8500

texas BraNch LocatioNs:

3222 4th Avenue Southwest Fargo, ND 58103 General Manager: Curt Heiser Phone: 701-297-8813 Fax: 701-297-8816

MoNtaNa BraNch LocatioN:

9124 Derrick Avenue Williston, ND 58801 General Manager: Don Ell Phone: 701-572-2718 Fax: 701-572-7433

192 Northstar Lane Bozeman, MT 59718 Project Manager: Sean Reed Phone: 406-624-3701

704 West 3rd Street Big Spring, TX 79720 Houston Branch Manager: Ian Rogero Phone: 432-217-5501 Cell: 832-334-6861 5656 N Sam Houston Parkway E. Houston, TX 77032 Houston Branch Manager: Ian Rogero Cell: 832-334-6861

REPORT

continued

extends beyond oil companies as a deduction for investors and royalty owners to incentivize oilfield investment.

Like depreciation, percentage depletion allows an owner or operator to account for the reduction of a product’s reserves.

The costs associated with maintaining wells are high, including maintenance, disposal of water, and electricity costs to

run pumping units. The revenue retained by the percentage depletion deduction is essential to meeting costs. For larger wells, percentage depletion provides more revenue to be used on exploration and development of new wells.

projects for the next five years, before

In addition to IDCs and percentage depletion, a new provision was passed to allow businesses to expense the full cost of new investments in certain

sector something to smile about.

gradually phasing out. At a time when updated infrastructure is of high priority, including new energy infrastructure, this provision gives businesses operating across the full spectrum of the private It’s been just over a year since President Trump took office, and the state of American energy hasn’t looked this bright since $100/barrel oil.

The United States has become the largest producer of natural gas in the world, thanks to remarkable innovation in shale energy extraction through horizontal drilling and hydraulic fracturing. America is leading the way in emissions reductions and retrofitting the largest pipeline network in the world to deliver petroleum resources faster, safer, and more affordably to market.

With global economic growth on the rise, the Energy Information Administration predicts oil output to grow by 111,000 barrels a day (a 10 percent increase), pushing America to the forefront of global energy producers, and surpassing Russia and Saudi Arabia for the first time since 1975.

Increased production translates into opportunity. At the recent State of Energy Industry forum, Jack Gerard, outgoing chief executive of the American Petroleum Institute, said the oil and gas industry accounts for 10.3 million highpaying jobs, and that by 2025, 40 percent of the industry’s workforce will be made up of millennials.

President Trump put it best in his January State of the Union Address – “The war on American energy is over.” w Jessica Sena is an independent communications consultant and spokeswoman for the Montana Petroleum Association. Follow her on Twitter, @ MTPetroleum.

20

BAKKEN OIL REPORT – SPRING 2018

You have to protect offset oil wells from downhole communication when fracking.

Wouldn’t it be nice to do quickly, safely and cheaply?

www.wellsuspension.com

REPORT

Regulating the regulators

By Michael Sandoval

The way Colorado conducts its oil and gas permitting could change drastically under a bill currently moving through the state legislature this spring.

health” and “contribute to climate

House bill 1071, sponsored by State Rep. Joe Salazar (D-Thornton), would fundamentally alter the way the state’s oil and gas regulators – the Colorado Oil and Gas Conservation Commission – conducts permitting for development throughout the state. Salazar’s bill draws from a 2017 2-1 ruling by the Colorado Court of Appeals that directed the COGCC must consider whether drilling activities “adversely impact human

previous COGCC operating principle

22

BAKKEN OIL REPORT – SPRING 2018

change” before it grants a permit to an operator.

This new standard abandons the of “balancing” environmental and health concerns, and fostering resource development. It has the potential to cripple the state’s oil and natural gas sector through new, more onerous regulations designed to delay and deny permitting.

The so-called Martinez bill derives its name and its underlying argument from

the lawsuit, brought by the national anti-oil and gas group, Our Children’s Trust, on behalf of Xiuhtezcatl Martinez in 2013. The nationwide effort to bring lawsuits or petitions on behalf of young people is funded by deep-pocketed philanthropic organizations with an antifossil fuel message, like the Rockefeller Brothers Fund and the Leonardo DiCaprio foundation.

The bill would attempt to “codify” the Colorado Appeals Court ruling, even as the case was taken up for review by the Colorado Supreme Court in January 2018. Having passed out of

REPORT

continued

The nationwide effort to bring lawsuits or petitions on behalf of young people is funded by deep-pocketed philanthropic organizations with an anti-fossil fuel message, like the Rockefeller Brothers Fund and the Leonardo DiCaprio foundation. the Democratically-controlled House, it faces a much tougher slog in the state senate, where Republicans, including several from the state’s most prolific oil and natural gas-producing area – Weld County – hold sway.

The effort to enshrine the Martinez case has earned political backing from one of the Democratic frontrunners for this year’s gubernatorial race. U.S. Rep. Jared Polis has said he would back a statute that would “operationaliz[e] the Martinez decision” and sign it if he became governor.

Polis is running to replace the termlimited Gov. John Hickenlooper, a

24

BAKKEN OIL REPORT – SPRING 2018

Democrat whose more general support for oil and gas development has run counter to many within his own party, including Polis.

The bill’s sponsor, Salazar, also maintains political aspirations. He has tossed his hat into the ring for attorney general, and should make the Martinez bill and its messaging a central part of his electoral message. Cynthia Coffman, the current attorney general and a Republican, is running for governor.

Coffman supported the COGCC’s appeal of the split appeals court decision last May.

Although the bill’s prospects are dim— it will likely be “killed” by the Senate Republicans in the 2018 legislative session—the overall tactic will likely remain in place should Polis or Salazar, or both, be elected in November, along with sympathetic Democratic majorities in possibly both legislative chambers after the midterm election.

It would appear the game-plan of regulating the regulators may prove more enduring an approach, shifting the focus of anti-fracking and antidevelopment forces away from state and local ballot measures that have repeatedly failed. w Michael Sandoval is an associate policy analyst at the Denver-based Independence Institute’s Energy & Environmental Policy Center. He is also an energy and natural resources consultant in the private sector.

RD-6

ÂŽ

Coating System

Cold temperatures affecting epoxy cure?

Users and Contractors are finding RD-6 to be their solution. Applied at temperatures as low as -40° F with no cure times and less installation problems.

For more information, scan the QR code image on the right with your smart device or visit our website www.Polyguard.com/pipeline

25 Consecutive Years of Sales Growth 281-580-5700 www.Polyguard.com

Innovation based. Employee owned. Expect more.

REPORT

How the Keystone Pipeline spill proves pipelines are safe

By Isaac Orr On November 16, 2017, a section of the Keystone Pipeline that was completed in 2011 sprung a leak, spilling approximately 210,000 gallons of oil in South Dakota. Despite claims made by pipeline opponents that such incidents prove that pipelines cannot be operated safely—and therefore other pipeline projects such as Enbridge’s proposal to expand Line 3 should be denied—a closer look at the numbers proves pipelines are a safe, effective, and efficient way to transport the energy Americans rely on every day.

Before one can truly appreciate the safety pipelines provide, it is important to have a basic understanding of how many oil spills are reported and how much oil Americans use on a daily basis. Reports of oil spills generally report the quantity of oil spilled in gallons. The reason for this is probably two-fold: (1) Most people can visualize the gallon of milk in their refrigerator, and thus it gives people a frame of reference, and (2) reporting spills in gallons results in larger numbers and thus more “click-worthy” headlines.

While reporting oil spills in gallons may help people conceptualize the size of spills, it is a poor way of giving the public the context necessary to understand the

magnitude of an event when compared to daily oil consumption.

Oil is bought and sold in barrels, not gallons. There are 42 gallons in each barrel of oil, which means the November 16, 2017 Keystone leak resulted in about 5,000 barrels of oil spilling from the pipeline.

The Keystone XL Pipeline will transport 830,000 barrels of oil per day when completed, meaning the spill accounted for approximately 0.6 percent of the total daily capacity that Keystone will be able to move when finished, and it’s just a tiny fraction of the amount moved in a single month.

More importantly, the flow rate for the section of Keystone that leaked is approximately 410 barrels per minute. At that rate, a spill of 5,000 barrels means the pipeline only leaked oil for approximately 12 minutes before operators noticed the leak and shut down the pipeline. This is quite astounding considering the U.S. national average response time for police responding to a 9-11 call is 11 minutes. In many rural communities, it’s much longer.

That means pipeline operators can respond to emergencies at least as quickly as emergency responders can.

The ability to quickly identify and rectify oil spills is incredibly important,

Before one can truly appreciate the safety pipelines provide, it is important to have a basic understanding of how many oil spills are reported and how much oil Americans use on a daily basis.

26

BAKKEN OIL REPORT – SPRING 2018

because according to the U.S. Energy Information Administration, Americans use approximately 19.7 million barrels of oil per day. This total includes the gasoline used to power our cars, diesel fuel for trucks and tractors, heating oil to keep our homes warm in winter, and jet fuel that helps thousands of American travelers move swiftly across the world each day.

Data provided by the Association of Oil Pipelines (AOP) estimates 9.3 billion barrels of crude oil were transported by pipelines in the United States in 2014, amounting to nearly 25-million barrels per day. (The difference between the number of barrels of oil consumed by Americans and the number transported by pipelines is likely the result of AOP’s figures, including both imported and exported oil transported via pipeline.)

With these large numbers, it’s truly amazing that so few spills occur.

Additionally, it’s worth noting new pipelines are even safer than old pipelines because they are equipped with more sophisticated technology that help identify leaks. This means even fewer spills will likely occur in the future.

Although pipeline opponents attempted to promote the story of the spill to push their anti-pipeline agenda, a closer look at the numbers demonstrates the Keystone Pipeline spill and the response

by TransCanada, the company that operates the pipeline, were actually an energy success story, not a reckless environmental disaster. w Isaac Orr (iorr@heartland.org) is a research fellow for energy and environmental policy at The Heartland Institute.

• In-Service Inspections • New Product ASME coded Inspections • Phased Array Weld Inspection • TOFD Weld Inspection • AUT Corrosion Mapping, HIC/SOHIC Inspections • EMAT for Piping Systems • Remote Access Drone Inspections

Based in Laurel, MT, BII has been involved in extensive RBI programs that have seen 100% external inspection of nearly 500 different pieces of fixed equipment and hundreds of piping systems over the last 5 years. The savings to our clients in the form of reduced man-hours, support, and exploratory inspections is in the millions. Contact our CEO, David Vollert, at dvollert@bighorninspection.com to see how BII can help save you time and money before your next outage.

Call: 406-208-2267 PO Box 306, Laurel , MT 59044

WE ARE TRUCKS WE ARE TRUCKS

The Fastest, Easiest, & Most Cost Effective Way To Retrieve Land Records In North Dakota • • • •

Fast Convenient Cost-effective Subscribe Today

c/o High Plains Technology 1351 Page Drive, Ste. 6 Fargo, ND 58103 Phone: 701.364.1280 Fax: 701.271.1557

www.ndrin.com

BAKKEN OIL REPORT – SPRING 2018

846038_Trucks.indd 1

27

11/29/16 6:32 PM

The Davis Refinery Changing an industry by addressing flaring head on By the Davis Refinery engineering team

Meridian Energy Group, Inc. has been on a mission to revolutionize the refining industry for over five years. With the final issuance of the Permit to Construct (PTC) from the North Dakota Department of Health – Air Quality Division (the NDDoH) in sight, the finish line is on the horizon for the Davis Refinery. Because Davis is so close to the Theodore Roosevelt National Park, designing a plant that can meet stringent Class 1 air quality standards has been the major focus of the design and the Permit to Construct process. The result has been an extraordinary level of innovation. NDDoH posted its draft of the PTC last December, documenting the extensive measures taken to comply with Class 1 air quality requirements. This includes meticulous air dispersion modeling conducted by Meridian and NDDoH, and extensive monitoring to ensure ongoing compliance is achieved by the Davis Refinery.

28

BAKKEN OIL REPORT – SPRING 2018

A noticeable distinction between Davis and refineries utilizing legacy technology will be the greatly diminished usage and size of gas flares, alternatively known as flare stacks. Flare stacks, a common component of older plants, are no longer a requirement in a modern, greenfield refinery.

Flare stacks are gas combustion devices used to burn off flammable gas to protect against over-pressuring industrial plant equipment. Historically, during plant or partial plant startups and shutdowns, flare stacks were used for the planned combustion of gases over relatively short periods.

When petroleum crude oil is extracted and produced from onshore or offshore oil wells, raw natural gas associated with the oil is brought to the surface as well. Particularly in areas of the world lacking pipelines and gas transportation infrastructure, vast amounts of such associated gas are

commonly flared as waste or unusable gas, and a large flare stack is a common sight at an old refinery built around legacy technology.

Fast-forward 40 years, innovation and significant advances in technology will enable the Davis Refinery to regularly operate without any significant external flaring at all. In fact, most waste gas flaring will occur within an enclosed, ground-level unit, and not in a flare stack. Rather than flare gas as waste, most such gas, which was once waste, is turned into energy to power the refinery. Through complex vapor recovery systems, Davis will capture those gasses and recycle them for use in running its heater and boiler systems, and such flaring that does occur will be in the ground-level enclosed units.

The Davis design is unique in that the backup flare stack system, which is the main disposal mode in older refineries, is there merely as a secondary backup system. It will only operate in the event of upsets or malfunctions to the enclosed ground-level flare. During normal operation, the Davis Refinery vapor recovery system is the primary system designed to capture all relief flows, with the enclosed flare as its backup, and then, if needed, the flare stack will be employed.

The Davis Refinery will further safegaurd against flaring with the use of redundant relief valvers ("RVs") throughout the plant. Because of this feature, if a flaring event is due to a failed RV, then operators can simply switch over to the spare RV and isolate the failed one. Davis Refinery design will simply stagger the RV inspection cycles and not have flaring events because of inspections that are scheduled or having to shut down due to RV malfunctions.

Older refineries do not usually have enclosed flares or refinery-wide vapor recovery systems and typically send relief flows directly to the flare stacks as a part of normal operations. Given the advances in technology, as will be demonstrated by the Davis Refinery, older refineries will face tighter regulations by air quality agencies and be forced to install similar vapor recovery systems as those used at Davis to minimize flaring. This is just one of the many ways which Meridian’s Davis Refinery is leading the way in setting new standards for the hydrocarbon processing industry in general, and crude refining in particular. w

Hazardous & Non‑Hazardous Heating Solutions for Even the Most Extreme Environments

• Home to several state regulatory agencies • Bismarck Airport offers numerous daily flights • Well-rounded community for business and family • Offers a business-friendly tax structure • Sites throughout Bismarck-Mandan are available

www.cata-dyne.com www.ruffneck.com

BAKKEN OIL REPORT – SPRING 2018

29

Granite Oil Corp.

Six years and five-million barrels An introduction and update to the Alberta Bakken Play

By Tyler Klatt, Granite Oil Corporation To say at a social gathering that the Bakken Formation has little to do with Alberta’s petroleum accumulations, is somewhat of a geologic faux pas. The Bakken is the Exshaw, is the Sappington Formation; and in Alberta it’s the Exshaw, which was the main source rock for our oil sands deposits and numerous conventional oil pools. If you still have an attentive audience after talking about such things, the last one standing must ask the speaker what became of all of Alberta’s conventional Exshaw oil shale plays? It only seems logical that since such an extensive ‘blanket’ source rock exists, it must have a Bakken-like sister play?

drilled deeper, striking an oil-bearing zone that was different

This theory was tested with zeal in the years 2010 to 2013 as the oil industry looked to the southwestern Alberta basin and to the Blackfeet Reservation in the front ranges of Montana’s Rocky Mountains. It is in these areas that the pressure conditions created by sufficient burial depth are matched with the presence of source rocks in what could have been the next Saskatchewan/ North Dakota Bakken play. That, in a nutshell, is two organic rich shales sandwiching a siltstone reservoir, with lots of running room for drilling (resource play). Minor success was achieved by some of the oil majors, however one junior shallow gas company

the 2012 annual report Believe It, drill and core vertical delineation

than what others were chasing, which was rarely mentioned in the literature and with unique engineering parameters. At the time that company was called DeeThree Exploration Ltd., the underdog in the area, if you will, which is now Granite Oil Corp.

A discovered fresh oil play was on hand; to drill, delineate, and develop. Exciting times, but some winds were blowing… Very few investors believed we had found something; the oil pool lacked a gas cap, and in short, the horizontal wells were declining at uncomfortable rates. Our rebuttal was to hit the streets, entitle wells, conduct oil property testing and a third-party resource study, and, well, keep drilling…

In the background of all the drilling capital that was continuously deployed through the quarters, this oil pool was reviewed, with sleeves rolled up, in a different and pragmatic light. The 30°API oil was highly under-saturated with solution gas, and the solution gas itself had extensive surface shrinkage due to the naturally occurring 25 percent CO2 and nine percent N2 content,

Granite Oil rig drilling an extended reach horizontal well.

30

BAKKEN OIL REPORT – SPRING 2018

Granite Oil Corp.

a natural fit for a high-pressure gas re-injection EOR scheme. The choice was made to implement this EOR early, not later after the overcapitalization (and damage) might be clear, as can happen in the oil patch. Within months of the initial gas re-injection pilot, response was observed in a dozen horizontal-producing wells.

the older “first generation” wells at >190,000 bbls oil. The drilling efficiencies and the chosen EOR type produce finding and developing costs (F&D) for proven developed producing barrels in range of $15 to $16 of oil. Our staff geologist steers the bit from the rig, not from Calgary’s downtown.

Being a junior oil company on an exponential growth model, we were all entering into an unwelcomed global oil price rout of unknown duration. This type of EOR required constant review and a slowed down pace of development to do it justice. DeeThree split into two publically traded companies, one to carry on the growth model, the other, Granite, for slowed growth in return - immediate monthly dividend distributions as the Bakken oil pool was finessed with the gas injection and different drilling techniques.

Geological wise, extensive mapping has determined a resource of over 400MM barrels of oil in place, of which, 225MM is currently under gas flood. The cubic kilometer of eroded Exshaw silt and sand is an interesting period of low sea-levels that may have been the result of an early Mississippian ice age(s). This sequence may serve as a future exploration platform. It appears that areas in Alberta and western Montana had the accommodation space to deposit, preserve, and express this unique silt unit proximal to multiple source rocks, as seen also in Montana’s Sappington Formation. The play is unique from the original Bakken, yet is geologically related.

Fast-forward three-and-a-half years past the global oil price fall, and we are still working with the Bakken pool, fine tuning our operations for one purpose – to recover the most oil per meter drilled.

Operationally speaking, the “Alberta Bakken” nut has been mostly cracked. Time spent from spud to TD is averaging 7.5 days drilling to a total depth averaging 2,900 meters (9,500 feet). For measure of progress, it took 7.5 days to land the intermediate casing down to reservoir depth in the initial 20 wells drilled. The uphole drilling hurdles in the Livingstone (US Lodgepole Fm.) have been met with six blade PDC bits, and mono-bore well design – the laterals are drilled with highly aggressive PDC bits. All-in costs per well now average approximately $1.3 million (CAD), although we drill shorter lateral distances, the average EUR’s per well are exceeding

About Granite Oil Corp.

Granite Oil is a Calgary-based junior oil producer and a lead operator in the Alberta Bakken. Granite is traded on the TSX and OTC. Inquiries are always welcome. For more information on Granite, visit them at graniteoil.ca. w Pump jack on the discovery well.

BAKKEN OIL REPORT – SPRING 2018

31

North Dakota Petroleum Council

Bakken is back on track in 2018

The Williston Basin Petroleum Conference, happening May 22-24 in Bismarck, ND, is the perfect place to network with companies and suppliers working in the oil and gas industry.

Despite a few tenuous years for our

technologies will be on display in our

In terms of employment, 2014 marked

industry, the Bakken is back on track.

trade show and will be featured in several

a turning point when the permanent

In 2017, our petroleum industry stared

of our breakout sessions.

production jobs overtook the more

down world markets, and we are emerging stronger and better poised to succeed in 2018. This is thanks largely to the ingenuity and innovation on behalf of the Bakken’s leading men and women, and we’re excited to be featuring many of them at this year’s Williston Basin Petroleum Conference.

The industry is not without its challenges.

We still require more infrastructure, especially to capture more natural gas. The depressed market inhibited investment in gas processing and transmission assets. Industry has announced more than 900-million cubic feet per day of new or expanded

temporary, transient positions. Going forward, production jobs will account for a majority of energy jobs, meaning there will be more people and families calling North Dakota home. In fact, two out of every three people who moved to North Dakota since 2010 have been calling the western side of the state home. While communities have used the last few years

Efficiency and innovation have been

processing capacity that will help

major hallmarks of the past few years

accommodate production in the short-

as the industry has figured out how

term, but the industry will need to spend

to do more with less in the downturn.

$3 to $5 billion or more to meet the state’s

Today, our industry is leaner and more

more stringent gas capture targets. This,

Once again, communities may see a

technologically advanced than ever

however, also provides opportunity for

need for more single-family housing

before. Today, each drilling rig can do

more great-paying jobs and other sectors

and additional amenities. Attracting a

twice the work of rigs of the past, helping

to provide the products and services that

workforce will continue to be a challenge

stabilize production while reducing

will be needed to build this infrastructure.

that we must address, and these and

impacts. The Bakken was once one of

It also is a chance for entrepreneurs to

other issues related to community

the most expensive plays, but thanks to

showcase their solutions for remote

growth will be featured on a panel at

the ingenuity of our companies, North

capture and other technologies that will

the conference. This will be a must-see

Dakota now ranks first in rig economics

help us with our gas capture in the short-

session for community leaders and

as technology has boosted production

term and in some of our more challenging

developers, investors, and real estate

per rig. The latest developments in these

regions.

developers. North Dakota currently ranks

32

BAKKEN OIL REPORT – SPRING 2018

as an opportunity to catch up to the frenzied activity of the past, it is becoming clear that there is more to do.

North Dakota Petroleum Council

number one in quality of life according to the U.S. News & World Report, and we expect this panel will be a catalyst for the next phase of making North Dakota an even better place to live, work, and raise a family.

The health of the industry ultimately hinges on our global markets, and we have several renowned economists who will be presenting their views and insights at this year’s conference, including Citigroup’s Edward Lewis Morse, who will be discussing the Bakken’s impact on global markets with Continental CEO Harold Hamm. Neel Kashkari, president of the Minneapolis Federal Reserve Bank will provide his views of the U.S. economy and the relationship with energy and monetary policy, and Bob Morris with Citi, Doug Leggate with Bank of America, and John Gerdes of KLR Group will also take the stage to discuss investment opportunities now that shale and the U.S. has unseated OPEC as the energy king.

Neel Kashkari with Kathy Neset. He will be speaking again this year.

Many speculators have talked about the Bakken as though it’s a play of the past, but that is far from the truth. The Bakken continued to stay a step ahead in the downturn through innovation and has emerged as strong as ever. The Bakken is now.

This will be a major theme at our Williston Basin Petroleum Conference in May and we are excited to welcome more than 40 speakers to present on that to take the Bakken to the next level. The WBPC has become an international business development event offering the latest information and trends that are valuable to everyone, from the multi-national corporations to our local Main Street businesses, and from federal government leaders to those leading our local governments. We hope you will join us this May to learn more about how the Bakken can help you and your business in 2018 and beyond. w

Don Hrap, president of the Lower 48 for Conoco, who will be on the WBPS CEO panel this year.

President Donald Trump spoke at the WBPS in 2016.

BAKKEN OIL REPORT – SPRING 2018

33

Williston Economic Development

Williston STAR Fund provides stellar impact on community development

By Barbara Peterson, Marketing Coordinator, Williston Economic Development The Williston STAR Fund is having a stellar impact on community development.

The Williston City Commission has awarded nearly $1 million in STAR Fund grants to 30 businesses since June of 2017. The grants are aiding projects totaling almost $12 million in the Williston trade region.

The projects include daycare centers, a trucking company, an ethnic food market, a veterinary clinic, an oilfield company, cross fit gyms, and others.

“The dividends of STAR Fund investments are significant,” said Williston Economic Development executive director Shawn Wenko. “Residents benefit through increased quality of life, and the city as a whole profits as more businesses contribute to property taxes.”

The STAR Fund is financed through the Williston one cent sales tax. Seventy-five percent of the sales tax proceeds are dedicated to critical infrastructure projects and property tax relief though debt reduction, while the remaining 25 percent is allocated to community and economic development projects.

Katie Kringen opened Chatter Pediatric Therapy in 2015. The business quickly outgrew the office in her husband’s motorsports store, and thanks to the STAR Fund, she was able to put in an offer on an office building. Today, she employs 10 highly trained pediatric therapists.

Wenko said the program has helped businesses either startup or expand despite the challenges of doing business in a lively community.

“In areas of high activity, one can experience higher-than-average costs of doing business,” said Wenko. “Program assistance through the STAR Fund helps alleviate some of the cost-related issues and helps ensure a successful business venture.”

Chatter Pediatric Therapy is one business that has utilized the STAR Fund to expand. Katie Kringen opened the private practice in 2015 inside her husband’s motorsports store by converting an office into a one-room clinic.

“Only in Williston could you buy a four-wheeler and receive speech therapy in one building,” laughed Kringen.

But it didn’t take long for Kringen’s practice to outgrow her small space at Mondak Sports. Within two years she and her husband Josh made an offer on an office building for Chatter. Kringen Holdings, LLC applied for the Flex PACE Interest Buy-Down Program and received $72,000 from the STAR Fund and $133,714 from the Bank of North Dakota to buy down the interest on the $1.3 million project.

“Every dollar that is invested in programs like the Flex PACE, sees roughly two dollars contributed through the Bank of North Dakota,” said Wenko.

Today, Chatter employs 10 highly trained pediatric therapists that offer physical therapy, occupational therapy, speech and language therapy, feeding therapy, ABA therapy, child psychology, and nutrition counseling. The clinic serves families from as far away as Dickinson, ND and Glendive, MT. The Williston STAR Fund is administered by a seven-member board. The board meets monthly at Williston Economic Development. The board’s recommendations are subject to approval by the Williston City Commission. w To learn more about the STAR Fund programs, visit willistondevelopment.com, or call 701-577-8110.

34

BAKKEN OIL REPORT – SPRING 2018

REPORT

Oil and gas companies continue to improve on LGBTQ equality in the workplace

By Allison Turner, HRC Deputy Press Secretary Employer

Score

Air Products & Chemicals Inc. – Allentown, PA

100

BP America Inc. – Houston, TX

100

Chesapeake Energy Corp. – Oklahoma City, OK

80

Chevron Corp. – San Ramon, CA

100

Columbia Pipeline Group – Houston, TX

70

ConocoPhillips – Houston, TX

100

Exxon Mobil Corp. – Irving, TX

95

Hess Corp. – New York, NY

65

Marathon Oil Corp. – Houston, TX

85

Marathon Petroleum Corp. – Findlay, OH

85

ONE Gas Inc. – Tulsa, OK

70

ONEOK Inc. – Tulsa, OK

95

Phillips 66 – Houston, TX

85

Shell Oil Co. – Houston, TX

100

Spectra Energy Corp. – Houston, TX

85

Williams Companies Inc. – Tulsa, OK

80

Oil and gas companies continue to underperform on LGBTQ workplace equality and inclusion -- but are making improvements, according to the 2018 Corporate Equality Index (CEI) issued November 9, 2017 by the Human Rights Campaign (HRC) Foundation, the educational arm of the nation’s largest lesbian, gay, bisexual, transgender, and queer (LGBTQ) civil rights organization.

The CEI this year rated 16 oil and gas companies.

With a record-breaking 609 businesses nationwide earning 100-point scores in the CEI, five companies -- Chevron Corp., Air Products & Chemicals Inc., BP America Inc., ConocoPhillips and Shell Oil Co. -- are oil and gas companies. This is an improvement from last year, when only two earned that distinction. Chevron has long been a CEI high-performer and trailblazer in the oil and gas industry, earning a score of 100 for the past decade, demonstrating a sustained commitment to LGBTQ workplace equality and inclusion. BP America Inc. and ConocoPhillips achieved a 100-point score for the first time in the 2018 CEI. “The top oil and gas companies in the Corporate Equality Index demonstrate a depth of investment in LGBTQ inclusion, and the sector as a whole has made major improvements over the past year,” said Deena Fidas, director of the HRC Foundation’s Workplace Equality Program.

HRC’s Corporate Equality Index (CEI) is America’s premiere benchmarking tool for LGBTQ workplace equality. The results of this year’s CEI showcases how hundreds of U.S.-based multinational companies are not only promoting LGBTQ-friendly workplace policies in the U.S., but helping to advance the cause of LGBTQ inclusion in the workplace abroad.

The CEI rates companies and top law firms on detailed criteria falling under five broad categories: 1. Non-discrimination policies 2. Employment benefits 3. Demonstrated organizational competency and accountability around LGBTQ diversity and inclusion 4. Public commitment to LGBTQ equality 5. Responsible citizenship The full report is available online at www.hrc.org/cei. w BAKKEN OIL REPORT – SPRING 2018

Illustration by Anastasiya Ilina.

35

WILTON BASIN

SHARING AN UNDERSTANDING OF THE EFFECTIVENESS OF COMMUNITY-BASED DEVELOPMENT

NEWMONT FOUND A PARTNER IN PROJECT C.U.R.E. THAT SHARES ITS PURPOSE...

TO CREATE VALUE AND IMPROVE LIVES THROUGH SUSTAINABLE AND RESPONSIBLE MINING.

THE PARTNER As a leading gold producer with operations in the United States, Australia, Ghana, Peru and Suriname, Newmont depends on positive community relationships.

THE OBJECTIVE Newmont recognizes that its operations require support from the communities that host them and this support can only be earned.

To this end, Newmont looks for development partners who provide community-centred services that proactively engage employees and community members alike.

OUR PARTNERSHIP The commitment to positive relationships with host communities is a core value for Newmont, “Our business involves much more than exploring for and producing gold. It’s about understanding people’s interests and aspirations for their communities. Project C.U.R.E. helps make this happen through their extensive needs assessments and approach to gaining agreement from the end users on every piece of medical equipment before it is shipped.

They also provide great employee volunteer experiences to pack and deliver medical supplies and equipment to hospitals and clinics in communities close to where we operate.”

– Matt King, Senior Manager of Social Responsibility

36

BAKKEN OIL REPORT – SPRING 2018

©2017 PROJECT C.U. R. E. ALL RIGHTS RESERVED.

WILTON BASIN

WORKING TOGETHER

“With a return on investment of 20:1, the work we do through our partnership with Project C.U.R.E. is one of the most impactful investments we make.”

-- Matt King, Senior Manager of Social Responsibility

The Newmont and Project C.U.R.E. relationship extends far beyond providing employee volunteer opportunities or sponsoring a cargo container of medical equipment and supplies. While these are cornerstones of the partnership, Newmont and Project C.U.R.E. take their responsibilities to local communities seriously: • During the 2015-2017 baseball seasons and as part of a strikeout fundraising initiative with the Colorado Rockies, Newmont has generously donated a total of $124,650 to help deliver medical supplies to multiple countries. The donations from this initiative are distributed to projects in need of funding around the world where supplies are scarce and the need is real.

• Newmont employees not only volunteer to sort and pack materials and Kits for Kids at Project C.U.R.E. distribution centres, they pick up and deliver C.U.R.E. Kits when they are travelling to most international markets where they work.

• Newmont partners with Project C.U.R.E. to bring medical teams to Ghana, Peru and Suriname. These medical teams are comprised of 12 to 20 volunteer medical personnel and have provided primary care clinics, patient education and provider education to more than 7,000 community members. They use the supplies and resources provided by Project C.U.R.E. and a travelling pharmacy to serve the local communities. Newmont local staff and volunteers act as stewards, community liaisons and translators during the clinics.

• For four years, Newmont has sponsored the Helping Babies Survive training program in Ghana. Through this program they have trained more than 200 nurses and midwives in neonatal resuscitation and newborn care. The neonatal mortality rate in the regions of Ghana where Newmont operates has been reported at .79 while the national average is 8.7.

OUR IMPACT • Since 2005 the Newmont-Project C.U.R.E. partnership has engaged Newmont employees, strengthened the infrastructure of Newmont’s host communities and fulfilled Newmont’s objective to serve as a catalyst for economic development in local communities. With Project C.U.R.E., Newmont has delivered more than $8.8 million worth of medical supplies and equipment, which adds up to 19, 40-foot shipping containers, benefitting nearly one million people.

PROJECTCURE.ORG

NASHVILLE, TN HOUSTON, TX

PHOENIX, AZ CHICAGO, IL

DENVER, CO PHILADELPHIA , PA

©2017 PROJECT C.U. R. E. ALL RIGHTS RESERVED. BAKKEN OIL REPORT – SPRING 2018

37

EERC

Growing the Bakken

By James Sorensen, principal geologist, and John Harju, vice president for strategic partnerships at the University of North Dakota Energy & Environmental Research Center

James Sorensen

The Bakken play continues to be one of the most prolific oil-producing plays in North America. Data from the Energy Information Agency (EIA) shows that during the low-price environment of 2015–2017, Bakken production hovered around one-million barrels per day (Mbpd). Those data also show that although prices have not fully recovered to their pre-2015 levels, Bakken production has steadily climbed back to the precrash level of 1.2 Mbpd. When those numbers are considered in the context of the overall size of the resource, estimated by the North Dakota Geological Survey to be between 200 and 300 billion barrels of oil in place (North Dakota-only portion of the Williston Basin), there is

John Harju

clearly reason to be optimistic about the future of the Bakken.

However, those bullish numbers are tempered by the fact that continued application of current drilling, completion, and operational practices will recover less than 10 percent of the resource, leaving billions of barrels, and potentially trillions of dollars in the ground. Those recovery factors need to be improved if the Bakken play is to be sustained beyond the next 15 to 20 years. The Bakken play has also been beset by challenges related to the management of associated gas, with state and federal policies calling for reductions in flaring and fugitive emissions. Management of pipelines

A Bakken play that is both economically and environmentally sustainable over the coming decades will require visionary, cooperative actions on the part of government, industry, and the research community.

38

BAKKEN OIL REPORT – SPRING 2018

to reduce and ultimately eliminate oil and saltwater spills and development of technologies to remediate the spills that have occurred are also high on the list of challenges facing Bakken producers.

A Bakken play that is both economically and environmentally sustainable over the coming decades will require visionary, cooperative actions on the part of government, industry, and the research community.

For the past decade, the Energy & Environmental Research Center (EERC) at the University of North Dakota in Grand Forks, North Dakota, has been at the heart of several research efforts designed to address challenges that have confronted development of the Bakken play. The EERC has used a consortium approach to tackle such diverse topics as improved reservoir characterization, enhanced oil recovery, alternative uses for associated rich gas, produced water management, and pipeline safety.

The consortium approach includes partnerships with both the upstream and downstream sectors of the oil and gas industry, oilfield service companies, state agencies such as the North Dakota Industrial Commission (NDIC), and the U.S. Department of Energy. Those efforts have yielded tangible results. A 2013 EERC analysis of data related to

EERC

CO2 injection. flaring formed the technical foundation for the development of flare reduction targets that were established by the NDIC and successfully implemented by industry. A legislatively directed comprehensive pipeline study conducted by the EERC in 2015 served as the basis for the development of commonsense approaches to liquids gathering pipeline construction, management, and regulation in North Dakota. The EERC, in partnership with several of the largest Bakken producers, conducted a state-ofthe-art reservoir modeling exercise that was ultimately used by the NDIC as the basis for establishing new setback rules that reduced the potential for stranded oil between spacing units. Field-based projects conducted by the EERC have included real-world testing of produced water treatment and flare mitigation technologies that have enabled industry to identify viable technologies, and

the state to develop prudent policies regarding the use of those technologies.

The EERC has also led field-based efforts to develop technologies to improve oil recovery from the Bakken. Those efforts include a CO2 injection test into a Bakken reservoir in 2017, and a multiwell Bakken and Three Forks pilot-scale rich gas injection test planned for 2018.

Looking to the future, the EERC will continue to serve energy stakeholders by taking a comprehensive scientific approach to confronting the challenges facing the continued development of not only Bakken oil and gas resources, but fossil fuel resources of all types.

Sustainable development of the nation’s oil and gas resources can be achieved by recognizing the synergistic opportunities that lie within many of those challenges. Examples of such synergistic opportunities include the capture of CO2 from coal-fired power plants and rich

For the past decade, the Energy & Environmental Research Center (EERC) at the University of North Dakota in Grand Forks, North Dakota, has been at the heart of several research efforts designed to address challenges that have confronted development of the Bakken play. associated gas from Bakken wells for use as working fluids in enhanced oil recovery operations. The EERC will continue to provide industry and government with the information they need to make the capital investments and policy directives necessary to grow our economy and ensure that the healthy, vibrant society we all enjoy will be sustained for generations to come. w BAKKEN OIL REPORT – SPRING 2018

39

Petroleum Technology Research Centre

PTRC building on past successes to take Bakken research to the field The Aquistore injection well includes several measurement and monitoring technologies such as DAS and DTS lines.

A worker at the Aquistore field site lays charges as part of running a seismic shoot using the 650 geophone array.

PTRC building.

The Petroleum Technology Research Centre (PTRC) has a 20-year strong reputation in Canada for guiding new enhanced oil-recovery technologies from incubation, through research and development, and on to field trial and demonstration. With so many of Saskatchewan’s oil reservoirs presenting significant recovery challenges – both the heavy oil deposits along the border with Alberta, and tight oil in reservoirs like

40

BAKKEN OIL REPORT – SPRING 2018

the Bakken and Viking in the south – it’s perhaps no surprise that the PTRC has been at the forefront of working with oil companies to provide technological and scientific solutions to their most-pressing field challenges.

currently involved with three of the major companies in the Lloydminster area trialing a hot water vapour technology that could see significant improvements in post-CHOPS production, along with reductions in energy use.”

“We’ve had some remarkable successes in helping major operators in heavy oil improve both their recovery rates and energy efficiencies in operations,” notes Dan MacLean, CEO of the PTRC. “We’re

MacLean also notes previous vapour extraction trials conducted by PTRC with three other heavy oil operators from 2005 to 2011 (see the JIVE Project at ptrc.ca/ projects/jive/research for more) which

• Field Trials of Innovative EOR • Proven Results (Millions of Barrels of Incremental Production) • Government and Private Sector Leveraging • World Leader in CO2 Utilization and Storage

PETROLEUM TECHNOLOGY RESEARCH CENTRE MOVING THE NEEDLE ON ENHANCED OIL RECOVERY

1998-2018: CELEBRATING 20 YEARS OF EXCELLENCE IN R&D AND FIELD DEMONSTRATIONS VISIT US AT PTRC.CA FOLLOW US ON FACEBOOK AND TWITTER @PTRC_SK

PETROLEUM TECHNOLOGY RESEARCH CENTRE

Innovation Saskatchewan, which funds cutting-edge R&D and demonstration projects in many different industries, recently provided PTRC with additional funding to develop its tight oil program. led to Husky’s commercial application of solvent and CO2 at its operations at Lashburn and Luseland.

“Our Heavy Oil Research Network (HORNET) has had success at combining laboratory and bench-scale research with the needs of field operators that help fund our programs. And now we’re expanding that successful model to tight and light research.”

Innovation Saskatchewan, which funds cutting-edge R&D and demonstration projects in many different industries, recently provided PTRC with additional

funding to develop its tight oil program.

This has included support of surfactant research work potentially leading to field application in the challenging Viking reservoir, and examination of Bakken reservoirs that might accept injection of CO2. As well, the PTRC has approved the purchase of a high-resolution industrial X-ray CT-scanner for use by both the Saskatchewan Research Council and the University of Regina to examine and characterize Bakken and other tight oil cores.

successes in the past 20 years – with

“This new research infrastructure and our extensive demonstration project

Basin Conference in Bismarck, and follow us

CO2-EOR in the Weyburn oilfield and deep subsurface characterization at the Aquistore CO2 storage project – means PTRC and its network is ready to take on the Bakken. We welcome the opportunity to help operators in Alberta, Manitoba, North Dakota, and Saskatchewan improve recovery rates. We’re ready for an exciting few years ahead,” notes MacLean. w Visit PTRC at ptrc.ca for more on our research, look for our booth at the Williston on Twitter, @ptrc_sk.

The Energy & Environmental Research Center

VALUE-ADDED SOLUTIONS

Advancing technology to support all-of-the-above energy production

• Hand Protection

• Fall Protection

• Gas Detection

• Safety & PPE Supplies

• Provide custom website creation for easy ordering

• Specialize in FR Clothing

LYLE LORDEMANN Find out more at www.undeerc.org

O: 307.472.5519 C: 701.580.4252

llordemann@rmiwyoming.com

www.rmiwyoming.com 42

BAKKEN OIL REPORT – SPRING 2018

www.jmservicesinc.com

5610 Interstate Avenue, Billings, MT 59101 Office: 406-839-5035 Fax: 406-294-5269

JMS Crane and Rigging is a full service company from the start of a project to completion by providing planning strategies, engineering solutions, crane lift, transportation, and cartage all while performing with integrity, efficiency, and safety.

Call us for all of your travel needs, 701-258-5024.

It’s

YOUR flight on

YOUR schedule!

On Demand Charter Service • 24/7 FBO Services Aircraft Maintenace • Avionics • Parts • Flight Training Sales • FW & RW Air Medical Services • Custom Interiors

ALL THE GEAR YOU NEED Executive Air Taxi Corporation

2301 University Drive, Bismarck Municipal Airport, Bismarck, ND 58504

800-932-8924 • 701-258-5024 • Fax 701-258-2693

marketing@executive-air.com

www.executive-air.com

Herc Rentals Inc. | 5823 Jefferson Ln Williston ND 58801 USA 701-509-5561 Herc Rentals Inc. | 3101 Morrison Ave Bismarck, ND 58504 USA 701-425-7856

HercRentals.com | Call 888.777.2700 for rates and reservations BAKKEN OIL REPORT – SPRING 2018

43

LCO Technologies

LCO Technologies reinvents solar-powered chemical injection pumps LCO Technologies, a Canadian-based company, has reached new innovative peaks by reinventing solar-powered chemical injection pumps for the oil and gas industry, and in the process, discovered a way of dramatically reducing greenhouse gas (GHG) emissions and improving reliability of pneumatic instrumentation. This innovative technology is called the CROSSFIRE and was developed as a by-product of representing other manufactures' chemical injection pumps over the past nine years and becoming frustrated with the long list of product foibles.

The CROSSFIRE is an ultra-low-powered common platform that can be configured as either a chemical injection pump or an instrument air compressor. This device can be transformed into these two separate products with a few simple assembly steps, and can be used to inject chemical or produce clean, dry compressed air to power existing pneumatic instrumentation that would alternatively be powered off of scrubbed production gas.

The biggest complaint about solarpowered chemical injection pumps currently on the market is reliability.

Solar pumps are not as reliable as the traditional methane venting pneumatic chemical pumps, and therefore market acceptance is quite low. In Western Canada, some operators will only use a solar-powered chemical pump in environmentally sensitive areas where 44

BAKKEN OIL REPORT – SPRING 2018

Photo of CROSSFIRE Chemical Injection Pump Installed in Pittsburgh, PA. government regulations prohibit methane emissions.

“I can recall one sales call where I brought out my CROSSFIRE chemical pump to show an operator. I started my pitch by explaining that this solar pump is new, and different than anything that he had seen before,” said Steve Froehler, director of LCO Technologies. “The operator laughed at me, stating that every solar pump sales rep says that.

But when I put the CROSSFIRE in front of him, he immediately had a change

of tone and could tell this pump was indeed different and unique.”

The CROSSFIRE chemical pump has four main differentiation factors.

First, battery life and reliability of solar infrastructure. The CROSSFIRE has one of the most efficient electric-drive motors on the market. It has a variable speed motor that constantly runs and doesn’t constantly turn on and off like typical solar pumps. This decreases current consumption, eliminates the batterykilling phenomenon called “inrush”,

LCO Technologies

and therefore extends battery life by three to five times. This pump can last weeks without battery recharge on most applications.

Lastly, the CROSSFIRE is a complete

Second, serviceability. The CROSSFIRE uses the same fluid ends as the most common pneumatic chemical pumps on the market that have been the standard for decades (5100 series). Therefore, any operator who has serviced a 5100-series pump or equivalent will be able to service the CROSSFIRE with no additional training and no custom parts required.

of 0.6 pints/day to 180 gallons/day up

Third, the CROSSFIRE has a simple installation and operation. This product can be operated with an up/down speed switch to increase or decrease injection rates, a computer interface, a wireless Bluetooth app, or integrated within a SCADA system.

chemical management solution. It has four fluid heads and can deliver full pressure to all four heads and inject rates to 10,000 PSI. It is estimated that up to 80 percent of chemical is over injected, resulting in lost operational costs. The CROSSFIRE has sophisticated logic built into the controller, which allows for injection proportionate to flow, and injection rates will increase or decrease automatically based on a scalable input such as pressure or flow. MODBUS control is built in as a standard, allowing for complete automation within your larger SCADA system.

The CROSSFIRE, when configured as an instrument air compressor, can be used to reliably drive instrumentation with compressed air instead of gas. The

benefits to using compressed air instead are huge, starting from eliminating methane venting to the atmosphere, and yielding to less instrument maintenance required as clean air does not contaminate and plug up instruments like dirty or questionable field gas.

“The opportunity for the CROSSFIRE air compressor is huge and will have a huge impact on the oil and gas industry by dramatically reducing, if not completely eliminating, methane emissions from instrumentation in some cases,” said Steve Froehler. This technology is the lowest cost option for achieving a zero-venting condition without all the expenses of electrification. w The CROSSFIRE is an innovative solution that is green, cost-saving, and reliable.

For more information, visit our website at www.lcotechnologies.com.

BAKKEN OIL REPORT – SPRING 2018

45

Mile High Behavioral Healthcare

What you can do today to help veterans experiencing homelessness It is estimated that there are at least 40,056 veterans experiencing homelessness in the United States.

The Comitis Crisis Center (Comitis) in Aurora, Colorado is one of the few homeless shelters in the United States that will take the veteran and his/her family and provide them with a place to stay, for free, for up to two years. The program itself is a part of the United States Department of Veterans’ Affairs (VA) Homeless Providers Grant and Per-Diem (GPD) Program. This program awards grants to community-based agencies that provide transitional housing and supportive services to assist homeless veterans in achieving residential stability and self-sufficiency. The VA provides per diem payments to non-profit organizations to help offset the operational costs of these programs.

In fiscal year 2017 alone, 600 GPD-funded sites provided services to 23,737 veterans through the use of over 12,500 transitional housing beds. It is estimated that 2,500 dependent children of veterans stayed as well. Additionally, 13 percent of those served were homeless women and it is estimated that the number of veterans who are women will expand by 16 percent by 2035.

It is important that our services for veterans continually adapt to the changing face of our modern military, including the services offered by the VA’s GPD program. Currently, if you are a non-veteran homeless family in the United States, federal funds will pay a “head-in-bed” per diem for each family member to the service agency housing the family. If you are a veteran homeless family, the VA’s Grant and Per Diem (GPD) program will only pay for the cost of occupancy for the veteran, but not for the attached and dependent children.

This issue causes a barrier to access shelter services for both male and female veterans with children, but more so for veteran women who usually have children in tow.

Adapting policy to the changing needs of our homeless veterans, the Comitis Crisis Center is supporting H.R. 4099: To amend title 38, United States Code, to ensure that children of homeless veterans are included in the calculation of the amounts of certain per diem grants. H.R. 4099, also known as the Homeless Veteran Families Act, is a bi-partisan bill that gets us one step closer to providing better care for our veterans and their family members.

46

BAKKEN OIL REPORT – SPRING 2018

James Gillespie speaks with Congressman Mike Coffman, sponsor of HR 4099, on the needs for homeless veterans at the Comitis Crisis Center.

In addition to the Comitis Crisis Center, the following organizations also support this bill: The American Legion; The Wounded Warrior Project; Disabled American Veterans; Paralyzed Veterans of America; Got Your 6; National Coalition for Homeless Veterans; Veterans of Foreign Wars; Military Order of the Purple Heart; American Veterans (AMVETS); Gold Star Wives of America; National Coalition for the Homeless; and Volunteers of America.

Though the numbers of homeless veterans in the U.S. has been decreasing, some states in the Bakken region actually saw an increase. For example, there was an increase of 18 percent in North Dakota, and an increase of 7.8 percent in Montana between 2016 and 2017. Though South Dakota saw a decrease, about one in every five homeless individuals in the state were homeless veterans.

James Gillespie, community impact & government relations liaison with Mile High Behavioral Healthcare/Comitis Crisis Center believes that we can do better.

“The brave men and women who fight for our homeland deserve the best our nation has to offer, especially a safe place to call home,” says Gillespie. “I deeply encourage everyone to call their U.S. representative today and urge support of H.R. 4099.” w For more information, contact James Gillespie at jgillespie@ mhbhc.org, or 720-975-0155, ext. 13.

John Zink

New, patented oil-treating process meets vapor-pressure specification Safe indirect heat, more sellable product, and up to 60 percent less plot space

ETI, a division of John Zink Hamworthy Combustion and an innovative leader in oil-treating and well-pad solutions, recently announced a new, patented process that provides increased safety, environmental benefits, and can deliver higher yields along with controlled capital and operating cost—all while using up to 60 percent less space.

ETI’s Oil Treating Variance Solution (OTVS) minimizes applied heat at the lowest possible pressures to deliver low-duty, onspecification product, and fewer tank emissions. Installations have already shown lower operating costs and little recycling of off-specification oil.

“When attempting to meet vapor pressure specification, as heat losses increase, so do product losses,” explains Dr. Stephen Rehm, process engineering leader of ETI. “Conventional heater treaters exaggerate this effect by heating oil under pressure. This increase in heat vaporizes sellable product and sends it to flare increasing undesirable environmental emissions.”

In addition to solving this problem, the patented OTVS process reduces the plot space needed for oil treating up to 60 percent.

This small footprint reduces construction costs and makes OTVS ideal for retrofit applications.

According to Dr. Rehm, OTVS controls the process all the way to the oil storage tank, meaning it can easily meet vapor-pressure specification. Another benefit he points out is increased safety, as heat is applied indirectly.

“OTVS eliminates fire-tube failure in conventional direct-heated equipment, and it decreases vapors at the production tanks. It’s a much safer process,” he says.

ETI has been a leading provider of oil and gas processing equipment, including glycol dehydrators, amine units, water bath heaters, filter separators, molecular sieve adsorption units, and various skid-mounted modules for more than 25 years. John Zink Hamworthy Combustion (JZHC), which acquired ETI in 2014, is a global authority on emissions control and clean-air combustion systems. JZHC is affiliated with Koch Industries, one of the largest privately held companies in the U.S. w For more information on OTVS, please visit johnzinkhmworthy.com/eti, or call (918) 492-0508.

BAKKEN OIL REPORT – SPRING 2018

47

PEC Safety

Risky business Evaluating contractors by risk

Adding questions to the insurance section of your safety questionnaire, or requesting specific documentation, will help determine which additional coverages and endorsements a contractor may or may not need for a specific project.

When evaluating contractors, do you factor in the risks associated with the type of work they perform? According to the Campbell Institute’s report, Best Practices in Contractor Management, a majority of their research participants used methods of job task and risk assessments “to place contractors in a predetermined risk category” for better evaluation.1 This practice allows companies to accommodate and adjust their prequalification scoring based on separate risk levels, rather than applying general scoring to all contractors.

Think about the risk differences between a delivery driver and a hyperbaric welder—would you score and rank them using the same safety questions and requirements? Evaluating high-risk contractors using the same standards as lower risk ones can reduce the effectiveness of hazard mitigation, possibly resulting in overlooked training or inadequate insurance coverage.

Conversely, generic evaluation also places unnecessary burden on low-risk contractors to meet excessive standards for their scope of work and increases the chances of “pencil whipping” for compliance.

48

BAKKEN OIL REPORT – SPRING 2018

Consider the following when evaluating contractors: • Risk assessment questions & documentation The first step in effective contractor management is customizing safety questions to group contractors into work risk categories (such as high or low) based on their risk assessment questionnaires. Tailoring standardized safety questions to directly address and define your company’s risk categories ensures that you obtain the right documentation and requirements from each contractor.

• Scoring & ranking Scoring and ranking contractors using a tier system based on risk levels gives operators the ability to better avoid common hazards associated with specific job services, number of workers, locations, and environments. This method also provides an opportunity for peer-to-peer benchmarking in order to find out if a contractor is outstanding, average, or underperforming.

When operators can score based on their own criteria (training, protocols, EMR, TRIR, DART, etc.), they have more control over the quality of contractors bidding.

PEC Safety

• Levels of insurance Insurance requirements are based on the risk associated with the service a contractor is providing—the higher the risk level, the higher the required insurance limits. In some cases, specific endorsements will need to be added to a policy, particularly if it does not cover a location or exact service without an additional endorsement. Adding questions to the insurance section of your safety questionnaire, or requesting specific documentation, will help determine which additional coverages and endorsements a contractor may or may not need for a specific project. This ensures that high-risk contractors have the proper policies and coverage without burdening the low-risk workers with additional requirements that do not apply to their services.

• Training requirements Just because someone says their workers have the appropriate training required by an operator doesn’t mean it’s true. Thus, tracking individual employee training, especially in high-risk category services, is crucial. According to OSHA’s standard 1910.9, workers must have “training on hazards and related matters, such as standards requiring that employees receive training” and that

“[t]he employer must train each affected employee in the manner required by the standard […]”2. Does your current contractor management system verify, track, and help you secure the proper training for employees and/or contractors? If not, it’s time to reevaluate and find one that helps you comply with regulatory standards.

When assessing your current contractor management system or existing procedures, consider how contractors are grouped and evaluated, particularly by risk. If you lack the ability to customize and tailor this crucial aspect, are you mitigating your company’s risks or increasing them? w Footnotes http://www.thecampbellinstitute.org/wp-content/

1

uploads/2017/05/Campbell-Institute-Best-Practices-inContractor-Management-WP.pdf https://www.osha.gov/pls/oshaweb/owadisp.show_

2

document?p_table=STANDARDS&p_id=14019

GET SAFELANDUSA TRAINING FIND A PEC SAFELANDUSA INSTRUCTOR

PEC has hundreds of authorized professional trainers around the country that can supply your company with SafeLandUSA. To find a trainer in your area, visit www.pecsafety.com/map.

BECOME AN AUTHORIZED PEC TRAINER

For companies that have an in-house trainer, PEC offers a Train the Trainer course in our PEC Basic Orientation (8-hour) and PEC Core Compliance (24-hour). Both courses are accredited by SafeLandUSA. This option allows you to train on your schedule and at your own facility. For more information about PEC’s Train the Trainer, visit www.pecsafety.com/become-a-trainer.

HAVE YOUR IN-HOUSE SAFETY ORIENTATION ACCREDITED

As an accrediting organization, PEC has the ability to accredit your existing safety orientation as SafeLandUSA.

PEC Safety | Phone – 866.647.2338 | Email – safety@pecsafety.com | Website – www.pecsafety.com BAKKEN OIL REPORT – SPRING 2018

49

Fox Thermal

BLM 3175: Facts you need to know before choosing a flow meter What areas are affected by blm 3175?

The 43 CFR 3175 Gas Measurement Rule was entered into law on November 17, 2016 to establish minimum requirements for accurate measurement and reporting of all gas removed or sold from federal and Indian land. This rule updates and replaces requirements laid out in Order 5, but maintains current standards set in NTLs over the phase-in period. This rule also incorporates standards from API, GPA, and others*. The goal of this rule is to improve the accuracy of measurement standards, reporting, and accounting to secure correct royalty disbursements to the federal government, tribes, and individual allotment owners.

3175 - The facts The following are the main criteria stated in the regulation that work to fulfill the goal of more accurate measurement, reporting, and accounting. These criteria are discussed in general terms meant to broadly define each sub-section.

1. Flow rate measurement uncertainty levels – This rule lays out specific criteria for the flow meter’s accuracy specifications based on the FMP category (averaging the flow rate of that FMP over the previous 12 months) [3175.31(a)].

2. Heating value uncertainty levels – When the BLM refers to heating-value uncertainty, it is specific to the average annual heating value uncertainty [3175.31(b)].

3. Bias – The measuring equipment used for either flow rate or heating value determination must achieve measurement without statistically significant bias [3175.31(c)].

50

BAKKEN OIL REPORT – SPRING 2018

4. Verifiability – The accuracy and validity of any input, factor, or equation used by the measuring equipment to determine quantity, rate, or heating value must be independently verifiable [3175.31(d)].

5. Components to analyze – depending on FMPs, gas analyses through hexane+ (C6+) including CO2 and N2 is required and an extended gas analysis through nonane+ (C9+) is required where the concentration of C6+ meets certain criteria [3175.119(a), (b), and (c)].

Choosing the right flow meter - Specific performance requirements for flow meters defined: Thumbing through hundreds of pages of legalese is no one’s favorite pastime, so it’s important to have a list of criteria readily-assembled when you start your search for measurement devices. Use this summarized list of performance requirements to compare to instrument specifications so you can choose the right meter quickly and easily:

Fox Thermal

1. Flow rate accuracy of flow meters must meet these requirements: a. By FMP size: i. Measuring >35 Mcf/day: ±3% uncertainty level ii. Measuring <200 Mcf/day: ±3% uncertainty level (per existing NTLs) iii. Measuring >200 Mcf/day: ±2% uncertainty level 2. Relative density and heating value of gases must be reported. a. Average annual heating value uncertainty standards: i. ±2 percent for high-volume FMPs ii. ±1 percent for very-high-volume FMPs. 3. Components to analyze: a. Low- and very-low-volume FMPs: i. Gas analysis through hexane+ (C6+) b. High- and very-high-volume FMPs with concentration of C6+ >0.5 mole percent: i. Extended gas analysis (through C6+) every time the sample exceeds 0.5 mole percent of C6+; or ii. Periodic extended analyses and adjust the hexane-heptane-octane split to avoid any heating value bias that may exist.

4. Periodic meter inspections of insides of meter tubes every two to five years 5. All meters required to undergo routine verification every three months for measurement certainty and calibration accuracy or re-calibration When do we need to be ready?

This rule became effective on January 17, 2017, but implementation will be delayed for a period of two years. The delay in implementation is due to the need to develop reporting formats that can be used with GARVS. GARVS is a new database that the BLM is developing as part of the implementation of this rule that will have the ability to receive gas analysis reports from the operator. Once implemented, operators will be required to enter all gas analyses into the GARVS.

standards:

Abbreviations: API - American Petroleum Institute

• API 14.1

BLM - US Bureau of Land Management

• API 14.3.1, API 14.3.2, API 14.3.3, API

EGM - Electronic Gas Measurement

*Incorporated API, GPA, AGA, and PRCI

14.3.3 (1992) • API 14.5 • API 21.1 • API 22.2 • GPA 2166-05 • GPA 2261-13 • GPA 2198-03 • GPA 2286-14 • AGA Report No. 3 (1985) • AGA Report No. 8 • PRCI NX 19

FMP - Facility Measurement Points GARVS - Gas Analysis Reporting and Verification System GPA - Gas Processors Association NTL - Notice to Lessees QTR - Quantity Transaction Record (a report generated by an EGM system that summarizes the daily and hourly volumes calculated by the flow computer and the average or totals of the dynamic data that is used in the calculation of volume.) w BAKKEN OIL REPORT – SPRING 2018

51

HEAL Systems

An on-off tool for horizontal wells that minimizes risk

By Rob Hari, Dave Kimery, Camille Jensen, and Jeff Saponja Complexities intensify with deep, solidsladen producing wells as producers in the Bakken access deeper reserves such as those beyond the Middle Bakken and into the Three Forks formation. Production from horizontal wells is characterized by sluggy, inconsistent multiphase flow regimes that deliver rapidly fluctuating gas and liquid rates to the artificial lift system, continuously pushing the system outside its efficient operating range and reducing its run life. This complex fluid flow behavior creates an environment for gas interference in the artificial lift system and acts as the mechanism that transports damaging solids along the horizontal. The HEAL System solves these common horizontal well production challenges by mitigating slug flow, lifting fluids from the horizontal up into the vertical, and suppressing solids production.

Functioning, setting, and retrieving tools in deep horizontal wells with a high likelihood of solids is a precarious and often risky operation. Conventional on-off tools are riskier in these environments because of two design features. First, the tool functions by rotation; therefore, when depth and solids are present it becomes challenging to achieve adequate rotation to operate the tool, particularly when going around the bend. Secondly, the larger outside diameter of an on-off tool’s overshot component creates a region for solids to accumulate or for solids to bridge against when the tool is being pulled from a well.

HEAL Systems has significantly lowered operational risks by developing a

Figure 1. HEAL Safe Disconnect Tool

specialized on-off tool that addresses conventional on-off tool risks, allowing for lower risk deployment of capillary injection lines (electronic cabling) and offering a safe disconnect add-on to the productionenhancing HEAL System, the HEAL Safe Disconnect, or HSD, significantly lowers retrieval risks, making it ideal for deep and high solids horizontal well environments.

There are two keys to the HSD’s success: (1) the requirement to rotate to function the tool has been engineered out and, (2) the conventional on-off tool is turned inside out and upside down (i.e., the slick-joint is on the top side and overshot is on the bottom, see Figure 1).

The HSD was designed with a nonrotational on-off mechanism (commonly referred to as an Auto-J) with a modular seal bore slick-joint component that purposefully indicates positive seal/tool engagement. The Auto-J mechanism was incorporated on the slick-joint portion of the on-off, as opposed to conventional tools where a standard J mechanism is incorporated into the overshot portion of the on-off tool. Therefore, HSD’s overshot incorporates the on-off tool’s engagement lugs where conventional lugs are incorporated into the slick joint.

These design features mean the HSD’s slick-joint portion of the on-off tool is truly “slick”, or equivalent in diameter to the tubing string or work string above it.

This addresses the risk of a larger outside diameter component bridging with solids and causing retrieval challenges (such as stuck pipe).

The Auto-J mechanism allows the HSD to be latched and unlatched with a straight push-pull engage-disengage, eliminating the risk of achieving adequate rotation to function the tool. The HSD seal bore is modularly designed for sufficient stroke length in specific applications. It also features optional splines inside the tool that engages when latched-on to transfer torque through the tool if required. The HSD’s overshot has vortex-inducing flutes for optimizing flow through the area, a critically important feature for ESPs. The benefits of the HSD are proving to be significant to lower downhole tool retrieval risks in deep solids laden horizontal wells.

A combination of a HEAL System with the Safe Disconnect Tool gains the combined benefits of improved production and lower retrievability risk. w For more information, visit www.healsystems.com.

Figure 2. Special small OD stinger (right), fully assembled tool (left)

PP-17-014_ Bakken Oil Report-Ad.pdf 1 2017-09-01 5:05:24 PM

C

M

Y

CM

MY

CY

CMY

The HEAL Systemâ&#x201E;˘: The Foundation for Efficient Artificial Lift in Horizontal Wells Horizontal wells are known to have production challenges as a result of inconsistent flow, damaging solids, and gas interference. Maximizing drawdown through the lifecycle of these wells often requires complex and expensive artificial lift strategies.

K

The HEAL Systemâ&#x201E;˘ is a patent-pending downhole solution that easily joins to the horizontal as part of a standard well completion. It smooths flow from the horizontal, giving you the freedom to optimize your artificial lift strategy.

Install for the life of the well Offers frac-hit protection Simplify transition to artificial lift Accelerate transition from gas lift to rod pumping Improve performance in any artificial lift system Reduce capital investment and operating expense Proven technology in 250 installs in 37 formations

www.healsystems.com Follow us on info@healsystems.com

OnSharp

Create efficiency and enhance your brand Onsharp develops custom web and mobile app to improve workflow

By Kirsten Lund, digital marketing manager

How are you managing workflow?

In large organizations, managing workflow can be a challenge, particularly in the oil and gas industry. When your productivity requires manual work to orchestrate priorities, hazards, and more, it can hinder progress. In order to save time and make your job site function as smoothly as possible, a mobile app can help.

Onsharpâ&#x20AC;&#x2122;s talented team of designers and developers are dedicated to making sure the apps they create are easy to use, reliable, and secure.

At Onsharp, we have experience developing custom web and mobile apps that help companies improve workflow.

Our talented team of designers and developers are dedicated to making sure the apps we create are easy to use, reliable, and secure, and we have what it takes to develop the unique features you need to manage your business anywhere.

Are you standing out online?

Based out of Fargo, North Dakota, Onsharp is a technology consulting firm that has been designing and creating cutting-edge websites and mobile apps for more than 16 years.

54

BAKKEN OIL REPORT â&#x20AC;&#x201C; SPRING 2018

We believe that no matter what size your business is, people expect you to have a website that looks professional, is easy to use, and drives new business opportunities. Having an impressive, easy-to-use website is an instrumental part of your brand reputation. With a new website, you can make sure your customers, prospects, and community understand the quality and integrity of your brand.

OnSharp

Onsharp has worked strategically with a wide variety of clients to build high-quality websites that serve as an instrumental part of their growth strategy.

Your website isn’t just a pretty brochure –

At Onsharp, we have experience developing custom web and mobile apps that help companies improve workflow.

it’s a living and breathing entity that can do wonders for your business if properly maintained and used as a sales and communication tool. With our knowledge and experience, we have the latest tools to leverage your website so you can save time, money, and increase customer satisfaction.

Why Onsharp?

and development expertise to help our clients drive new business and gain more market share. Our balance of technology proficiency and industry experience allows us to provide tremendous value to clients across the entire country.

We’ve worked with a wide variety of businesses to deliver exactly what

Based out of Fargo, North Dakota,

they were looking for in a website or

Onsharp is a technology consulting

application. We continually put ourselves

firm that has been designing and

in our clients’ shoes to make smart,

creating cutting-edge websites and

purposeful decisions to ensure that their

mobile apps for more than 16 years.

dollars are being spent wisely. It’s because

We provide a unique blend of strategy

of this that so many companies continue

to trust Onsharp with their technology needs.

At Onsharp, we believe that we aren’t successful unless your business is successful. Whether we improve your workflow through a mobile app or make your website stand out among the rest, we want to be alongside you and deliver solutions that make your business thrive. w If you’re ready to improve your workflow or make a statement online, give us a call at 701-356-9010, or learn more about us at www.onsharp.com.

BAKKEN OIL REPORT – SPRING 2018

55

E2Terra

An evolution in solids treatment and waste control management Due to environmental concerns and regulations, the need to process, transport, and dispose of drill cuttings and direct and indirect exploration waste in an eco-friendly manner has become an important and expensive aspect of oil and gas extraction. The goal of E2TERRA was to successfully provide a costeffective product for the oil and gas and industrial waste industries that have no long-range effects to the environment.

That innovative idea has now become a successful reality.

Material that is mixed and ready. They then pour the ready material into the machine seen here, and then it t is bagged and ready to be delivered to the customer.

PO 400

LF 660

Will deploy, retrieve and store 660’ of 8 - 12” polyurethane layflat hose. The hydraulic-powered arms are capable of lifting and controlling each reel, while automatic safety latches engage to ensure safe operation over most terrain..

405-330-4733 56

BAKKEN OIL REPORT – SPRING 2018

Utilizing E2TERRA’s novel approach, our clients can (and have) reduced the cost

|

Designed and manufactured to lay out factory rolls of 2", 3", and 4" polyethylene pipe in the most rugged conditions. The PO 400 is ideal for anyone looking for an extremely heavy duty trailer to unroll poly pipe.

P.O. BOX 1225

|

EDMOND, OK 73083

E2Terra

of solids waste control while ensuring a more eco-friendly natural end-product.

Relying upon our vast knowledge of the drilling and geological applied sciences industry, E2TERRA developed Terra Waste, a unique product to stabilize exploration generated waste. Terra Waste is readily adaptable to solidify flowback waste in its many forms generated during stimulation operations.

Terra Waste stands out from our competitors. Our product contains no fly ash. Instead, it is derived from a byproduct of a consumable food source.

This natural makeup of our material is what helps make it cost effective for our customers.

Terra Waste was developed by E2TERRA’s patent holder and inventor as an organically-based, environmentally clean, cost-effective solidification product that

effectively will pose as a worthy alternate to traditional and currently-held methods.

Terra Waste is a competitively priced product and represents clearly the most, sound solution to solids treatment and waste control management products developed in the past 50 years.

Terra Waste’s patented process has been field tested and used over the last eight years in the Williston, Niobrara, and Haynesville basins with effective results.

Our customer base has been pleased with its time elapsed in hardening, as well as an improved performance window, in that it does not fall prey to perishability which happens with most oxide-based solidification products. What we have found is our customer feedback indicates that the areas to be solidified have been accomplished while using less material.

In most cases, it is reported 40 percent

E2TERRA bag hanging in production shop. less in tons than common oxides is leading to even more savings in headsup comparisons, in addition to its costeffectiveness.

With E2TERRA being based out of Williston, North Dakota, we originate all of our base materials within a favorable radius of our location. This allows us to be readily available for our customers.

Helping to dispose of drilling waste in a safe manner is a vital concern. E2TERRA believes our material and methods are not only a cost-effective approach, but also a safe and reliable alternative. w

A REVOLUTION IN SOLIDS TREATMENT AND CONTROL Due to environmental concerns and regulations, the need for you to process, transport, and manage your exploration related waste is of the utmost importance. Our geo-synthetic material solidifies drilling waste efficiently and is cost effective. We pride ourselves in the manufacture and sale of our materials using regional sources from the Dakotas.

Innovation at Work for You Our material has a core based organic make up.

E2TERRA sources and ships all material locally, taking great pride in this concept.

Call or email for a custom tailored solution.

701-577-5349 natalie.elmore@e2terra.com 701-934-1882 chris.calva@e2terra.com BAKKEN OIL REPORT – SPRING 2018

57

Universe Machine

How economic downturns can provide new opportunities

By Ron Feigel

The recent recession was among the worst Universe Machine Corporation has faced in over 53 years of business in Canada.

Work slowed significantly, forcing cost cuts and other changes, which included downsizing staff by over one third. The economic slowdown this time around was not just due to low oil prices.

Increasing global competition, as well as the change of our provincial and federal governments here in Canada and their ensuing damaging new policies, were also contributing factors.

Downturns are difficult for businesses and staff, but they can certainly bring some positives.

It’s been easier to find that skilled employees and staff tend to be more engaged and productive. Having to run leaner to survive has spurred innovation and efficiency improvements.

It’s led to exploring further diversification, automation, and increasing capabilities. Having more time and resources enabled us to uncover new opportunities, ramp up R&D, and work on improving our products and services. This has proven to be beneficial in the short term, and we are confident this will provide long-term benefits as well.

Our investments in research and development during this downturn have included focusing on the testing and upgrading of our existing products, utilizing compiled data and various research mediums for new or improved platforms, adding larger equipment capacities and more services. We have also increased Universe’s marketing exposure, focusing on strengths, new offerings, and other markets. All of this helps send the message that Universe Machine continues to move forward, even during difficult times.

Automated Power Tong & Backup.

58

BAKKEN OIL REPORT – SPRING 2018

During this downturn, Universe Machine has developed several new products, including Universe Hydraulic Bucking Units. This equipment utilizes existing in-house items that we manufacture vertically for rigs. With some creative engineering, we can costeffectively transform them into a completely new horizontal product line for pipe yards, thereby enabling customers to more quickly and accurately pre-assemble pipes and couplings in a more controlled environment. Many Universe products have been designed utilizing the same parts, and that cuts down on inventory costs for both our business and our customers.

Universe Machine

Torquing Pipe - Universe 9.625 Bucking Unit.

Besides the bucking units, Universe has also developed a revolutionary new hydraulic backup that mates perfectly with our seven-inch Universe Closed Mouth Power Tong. This is unique because currently only manual backups exist for this type of equipment.

Universe Machine has completed engineering our existing Hydraulic Power Tong Upgrades which beef up equipment and allow for higher operating torque. All these new offerings have been rolled out as industry improved, with the hope to increase sales and market share as our economy picks up again. Another benefit of all this research is that it indirectly provided much of the data required for a new line of Universe High Torque Power Tong equipment that will eventually also be introduced.

It’s important to invest in these opportunities during downturns, because as the economy turns around, companies will be better positioned to take advantage of it. Thankfully, industry confidence is slowly returning along with higher oil prices, providing some sustained improvement and a more positive tone.

However, Universe isn’t the only one who stands to profit from the efforts the company is taking to invest in research and development during challenging times. This move will enable Universe to produce products more efficiently in the future; thereby staying globally competitive, satisfying customers’ needs, and keeping Albertans employed.

In other words, investing in research and development means investing in Canada’s future economy, and that’s the best way to reinvest stability and growth into our future! w Ron Feigel does business development for Universe Machine. Find them on Facebook, Universe Machine Corporation, or on Twitter, @umcorpcanada.

7.0 Closed Mouth Tong + New Hydraulic Backup.

HIGHER TORQUE POWER TONGS

YOU DEMANDED MORE TORQUE 9 5/8 TONG 27,000 FT-LBS

13 5/8 TONG 36,000 FT-LBS

17 TONG

41,000 FT-LBS

20 TONG

50,000 FT-LBS

24 1/2 TONG 56,000 FT-LBS

* NOW OFFERING USED TONG UPGRADES AND REFURBISHING

EMAIL: SALES@UMCORP.COM

WWW.UMCORP.COM BAKKEN OIL REPORT – SPRING 2018

59

Reynolds French

The Reynolds French story

Machining flange in field.

To best understand a company like Reynolds French, one should take a look at its 75-year history and philosophy.

In the mid-1940s, Earl Reynolds and Don French began the company making repairs to cast iron equipment by a nonwelding method called “metal locking” or “metal stitching”. In fact, they began in Tulsa, Oklahoma as a franchise of the Metal Lock Corporation, doing nothing except making crack repairs. This was done in the field, as well as in their shop.

When the franchise broke apart in the ‘50s, the pair of men were free to start doing their repairs as Reynolds French.

Most importantly, this meant they could explore and implement new methods 60

BAKKEN OIL REPORT – SPRING 2018

of repair well beyond simple metal stitching, such as strength reinforcement in the casting, taking them from a crack patching business to a casting repair business. Thus, they were able to achieve a better job for their customers by finding new and innovative methods. And it separated Reynolds French from the other metallockers.

That philosophy of discovering newer and better ways, and a willingness to diversify, is what allowed Reynolds French to grow. This has been the hallmark of the company ever since. They found their niche in the energy sector, mainly for engines, compressors, steam turbines, pumps, and associated cast iron parts.

During the 1960s, Reynolds French (R-F) tripled its shop size and began doing in-house machining and fabricating. In the 1970s, they diversified once more by becoming a full-service field machining company, using specially designed portable boring equipment, flange facing equipment, and portable milling machines. As a part of this expansion of machine services, mainframe and crankshaft alignment was developed.

As its reputation for alignment expertise grew and became widespread knowledge, Reynolds French was approached by a major manufacturer of epoxy grouting and chocking products to be a stocking territorial distributor.

Recognized Leader

Innovator in State-of-the-Art Pipe Supports & Clamps Inventor of Flywheel Lock Leaders in Field Machine Work Pioneers in Casting Repair PRODUCTS: n Pipe Supports & Clamps n Epoxy Grout n Anchor Bolts n Flywheel Locks n Lubrication Systems n Spark Plugs

918-252-7545 www.r-f.com info@r-f.com Tulsa, OK

SERVICES: n Field Machining n Casting Repair n Crankshaft Machining n Machine Shop n Broken Bolt Removal n Frame Reinforcement n Alignment Services

Reynolds French

Chockfast red grout under skid.

TPS pipe support, clamp & base plate.

The products were being presented

pin turning and polishing with specially

as maintenance of alignment. This

designed machine equipment. Many

happened in 1980 and represented a

other machining and casting repair

diversification in two important ways.

services were innovated as well.

First, they now sold something by another company, not 100 percent of their own. And second, they now ventured into products, which the company had not done before in its history. For the first few years, Reynolds French was given a two-state territory.

Then in 1984, their distributorship was expanded to 17 states.

In the late 1990s, having worked with so many pipeline companies, they began making pipe supports in their shop from the epoxy materials they stocked and sold, plus making the steel clamps and base plates in their own fabrication section of their shop. This was accomplished under the brand name Tulsa Pipe Supports (TPS). Again,

Reynolds French in this same

the philosophical willingness to make a

approximate time frame also expanded

significant addition, going against the

its field machining to include crankshaft

grain of its past, was developed into a

Empire Oil Company offers a comprehensive package of oil and gas land services. Located in the heart of the Williston Basin, the Bakken Shale and Three Forks formations, we are in the midst of the largest on-going energy play in the United States. Our clientele come from a wide spectrum of industries, from closely held corporations to larger publicly traded companies. We currently provide services in the states of North Dakota and Montana.

• Mineral and leasehold ownership • Title research and examination • Lease acquisition • Abstracting land, mineral and royalty title • Title curative • Due diligence • Seismic permits • Site and surface evaluation • Land use permits • Pipeline/ROW agreements • Appraisal of mineral acres Empire Oil Company 510 2nd Street W. Williston, ND 58801

62

BAKKEN OIL REPORT – SPRING 2018

701-774-2824 www.empireoil.net

major segment of its business. And it has grown almost every year since.

Another product, literally invented, designed and manufactured solely

by R-F personnel, was their patented Flywheel Lock. The idea was originally problem-driven in 2007 by a customer who said, “You guys can do anything, and nobody has come up with a good way to hold the flywheel and crankshaft safely in place, exactly where we need to have it in its turning radius. Can’t you come up with a solution?” So, Reynolds French did. And once more, this was out of their comfort zone, but it was done successfully and it has helped many customers.

Last year they embarked on a new venture, Reynolds French Lubrication Systems. Targeted mainly at the compressor market, they brought in a team with over 50 years of experience and expertise in obtaining the most superior components for optimum lubrication. Inspection, engineering, installation, and training separates them from most other lube parts companies.

The story of Reynolds French, as told above, is an abbreviated account of a few of the highlights of this unique company. The enduring philosophy of aggressive diversity, plus the cando attitude of their highly capable personnel, make Reynolds French a most-likely continuing success story into the future. w

Family • Safety • Integrity Accountability • Social Responsibility

Our mission is to safely provide quality, dependable maintenance, and construction services to the energy industry. While working alongside our customers, we strive to meet and exceed expectations through consistently aligning ourselves with our company core values.

Our Services:

www.emservicesus.com 701-842-6309

• Hot-shot

• Welding & Fabrication

• Insulation

• Well Testing

• Roustabout Services

• Gauging & Pumping

• Hydro-Excavation

• Painting & Sandblasting

• Pipeline & Civil Services • Developmental Construction • Facility Maintenance & Management

“Providing Services to the Oil and Gas Industry”

• FLIR Optical Gas Imaging (OGI)

INTRODUCING THE NEXT GENERATION AERATOR WHICH CAN OUTLAST AND OUTPERFORM OTHER AERATORS WHICH HAVE FOUR TIMES THE HORSEPOWER. • Cuts power consumption in half • Can operate in sub-freezing weather • Requires no routine maintenance • Virtually clog free • Does not spray contaminated water into the air • Low water legs protect the pit liner

Has proven itself in numerous frac pits and frac tanks.

FracCure LLC is a distributor for VaraCorp LLC.

Go to www.fraccure.com or call 512-847-5026 (Shay) or 512-635-2486 (Richard). Toll free at 866-802-2455.

BAKKEN OIL REPORT – SPRING 2018

63

Borsheim Crane

Borsheim Crane Service, LLC keeping up with client safety compliance programs

By Joel Godfredsen

Borsheim Crane Service, LLC is not what it once was. From small beginnings as a division within Borsheim Builders Supply, Inc., Borsheim Crane Service has matured into one of the fastestgrowing crane companies in the region.

With offices located across the state of North Dakota, Borsheim Crane Service’s heart is in the midwest, however, they have the capacity to fulfill the needs of multiple clients simultaneously across the country to delivery services on time, all while keeping a heightened focus on safety.

Seven decades of providing quality services has allowed Borsheim Crane Service to deeply understand the demands of work in industries such as heavy industrial, petrochemical, agricultural, and renewable energy.

As these industries continue to grow, the focus on environmental health and safety (EHS) has never been greater. With a fleet of over 36 cranes, including hydronic, conventional, and crawler cranes ranging from 8.5 ton to 900 ton, keeping up with clients’ growing EHS and risk management has become one of their foremost thoughts when on their clients’ job sites. All operators and riggers are certified by the National Commission for the Certification of Crane Operators (NCCCO). This level of training helps to ensure their employees are skilled and knowledgeable regarding the lifting 64

BAKKEN OIL REPORT – SPRING 2018

Borsheim Crane

With a fleet of over 36 cranes, including hydronic, conventional, and crawler cranes ranging from 8.5 ton to 900 ton, keeping up with clients’ growing EHS and risk management has become one of Borsheim Crane Services’ foremost thoughts when on their clients’ job sites. of equipment safely to help reduce workplace risk.

Many clients have begun using thirdparty databases like ISNetworld, PEC Premier, or BROWZ prior to awarding a project to inquire about safety management programs implemented by individual companies. Borsheim Crane Service works diligently with multiple databases to become qualified and compliant prior to starting work.

They work tirelessly to stay current with their clients’ environmental health and safety programs. Borsheim’s safety director, Rodger Schmidt, strives to make Borsheim Crane Service stand out by being a liaison and advocate of safety. Schmidt finds direct points of contact with each clients’ safety management departments to discuss upcoming projects, safety concerns, and improvements for the future.

Conversations like these are invaluable to safety management to help ensure employees have access to the correct

training to ensure equipment is working properly so projects run smoothly and everyone returns home safely.

Borsheim Crane Service, LLC is constantly evaluating with market changes to keep

a full line of the latest crane equipment for lease or rent to meet the needs of clients. Borsheim Crane Service takes pride in the effort to stand out from the crowd and always think of safety first. w

Taking Care of Our Customers

®

is Priority One!

Since 1927

#taylorbigred

www.suddenserviceinc.com

www.taylorbigred.com

BAKKEN OIL REPORT – SPRING 2018

65

Goldbridge Industries

To our valued future customerâ&#x20AC;Ś Goldridge Industries, providing oilfield equipment to the Bakken

By Arnold Waldner Goldridge Industries began manufacturing livestock equipment in 1992 and have expanded to include an extensive line-up of oilfield equipment as well. Currently, we manufacture the following equipment in our 35,000-square-foot facility, located in southern Alberta: dewatering equipment, livestock equipment, oilfield equipment, and pipeline equipment. Some of our products include: pump packages, pipe racks, road crossings, manifolds, mud tanks, water tanks, oilfield skids, and pump jacks.

design your product and manufacture the quality you deserve.

With the fluctuating oil prices, we understand your need for value and know we can assist your company in saving money.

We buy direct from the mill, lowering our end prices for you, our customer. We would love the opportunity to discuss your manufacturing needs. Our strength lies in the ability to custom

start-to-finish shop, we start with design to the finished product.

Our staff includes certified welders, machinists, and CAD operators to assist in your design requirements. Our ship equipment includes high-definition plasma cutting up to threeinches thick, CNC milling and turning equipment, break and shear, as well as a vast array of other equipment to accommodate your manufacturing requirements. Our facility also houses an 1,800-square-foot paint pay and sandblasting facility. We are a Please contact us for more information and we look forward to working with you in the future. w Arnold Waldner is the operation manager at Goldridge Industries.

INDEX TO ADVERTISERS

66

Api Distribution................................................. 20

Fraccure................................................................ 63

Pec Safety........................................................... 49

Badlands Integrity Group.......................... OBC

Goldridge Industries......................................IBC

Benz Oil Company Inc.......................................9

Graham................................................................. 23

Petroleum Technology Research Centre.................................................................... 41

Bighorn Inspection Inc................................... 27

Heal Systems...................................................... 53

Polyguard Products......................................... 25

Bismarck-Mandan Development Association.......................................................... 29

Herc Rentals........................................................ 43

Reynolds French And Company................. 61

Husky Portable Containment...................... 15

Riverbend Oil & Gas......................................... 13

Blue Cross Blue Shield of North Dakota.....7

Innovative Completion Systems Inc......... 16

Rocky Mountain Industrial Supply LLC.... 42

Borsheim Crane Service, Inc......................... 11

Jms Crane and Rigging Co........................... 43

Taylor Machine Works..................................... 65

Dixon....................................................................IFC

John Zink Company LLC................................ 17

Thermon Heating Systems, Inc................... 29

E & M Services, LLC........................................... 63

Lco Technologies............................................. 45

Trucks of Bismarck Inc..................................... 27

E2terra............................................................... 57

Midland Carriers................................................ 56

United Rentals......................................................3

Eldred Environmental..................................... 22

Miller Insulation Co. Inc.................................. 19

Universe Machine Corp.................................. 59

Empire Oil Company....................................... 62

Minnesota Limited........................................... 24

Well Suspension Tools Ltd............................. 21

Energy Center of Excellence........................ 42 Executive Air Taxi Corporation.................... 43

North Dakota Recorders Information Network................................................................ 27

Fox Thermal Instruments.................................5

Onsharp................................................................ 55

BAKKEN OIL REPORT â&#x20AC;&#x201C; SPRING 2018

Goldridge Industries Box 207, Turin, Alberta, Canada T0K 2H0

Barrel Style GRI Performer Deployer

Goldridge De-watering Equipment

Built with operators safety in mind • • • • • • • • •

Double direct sprocket drive system Free wheeling or hydraulic deployment option Full lengths can be detracted without following the hose 1500 lbs., 8’ wide, 4’ long, 3’ tall 2300 ft. lbs. torque 660’ of 8”, 10”, 12” or flat lay hose Free wheeling hose reel stands Stackable stands Neoprene replacement wear parts

Custom built manifolds Dual filter pod trailers Pump packages Flat lay hose Reels, deployers, and more Custom manufacture products and design Fish screen suction cages Float cages Sub pac suction cages

Performer Deployer

Fold-up Road Crossing • • • • • •

• • • • • • • • •

Built with operators safety in mind

Engineered for oil patch traffic Folds up and unfolds in minutes 16’, 12’, 20’, 24’ x 16’ open Coffin style, over top style, split style For all your de-watering equipment needs Rough, tough, stackable, road crossing

• • • • • • • • •

Double direct sprocket drive system Free wheeling or hydraulic deployment option 2300 ft. lbs. torque 1000 lbs., 5’ wide, 3’ tall, 6’ long Full lengths can be detracted without following the hose 660’ of 8”, 10”, 12” or flat lay hose Free wheeling hose reel stands Stackable stands Neoprene replaceable wear parts

403-331-1350 • arnold@goldridgeindustries.ca

www.goldridgeindustries.ca

WE HAVE THIS

EASYâ&#x20AC;¦ I can do this

WHICH ONE?

ARE YOU READY?

STOP PICK ING ON M E

5 OVERLOOKED AND MISUNDERSTOOD FACTURES Badlands Integrity Group provides all-inclusive service that fulfill its mission to have their clients have a safe work, learning environment, and ensure regulatory compliance by implementing programs and services.

Call Badlands Integrity Group TODAY to see what we can do for your company!

1-855-235-4BIG

Badlands IntegrIty group 366 21st street east, dickinson, nd 58601 701-483-6559 | 1-855-235-4BIg