March 2013 - Exploring Energy

Great Plains National Bank
Energy
MARCH 2013
Vol. 1 Number 3
21,500 copies
City of Elk City Working on New Policy to Drill in Town
Elk City
High School
Football Field
Ackley Park
7th Street
neer
Although the previous
drilling site on the north
side of town was close
to a school, the prevailing south wind would’ve
carried any toxic fumes
away from town in case
of an accident. But from
the Seventh and Pioneer
location, the same south
winds would carry fumes
toward homes, businesses, and students, commissioners noted.
The Commission tabled the request for the
permit during the March
04 meeting. Mayor Teresa Mullican appointed Commissioner Tom
Johnson and City Attorney Steve Holloway to
study ways to strengthen
the City’s drilling policy
in order to better protect
residents.
“Our policy on drilling for oil and gas is
pretty vague,” Elk City
Manager Anita Archer
said. “It doesn’t specify
things like fencing requirements and noise
abatement. The Commission just wants to make a
policy that specifies requirements.”
Since the last Commission meeting, Johnson and Holloway have
met with local residents
involved in the oil and
gas industry to get their
input, according to Archer. Archer said Johnson and Holloway have
also combed through
the drilling policies of
several towns, including
Fort Worth, Texas, Oklahoma City, Duncan, and
smaller towns in Western
Oklahoma.
“They ‘red-lined’ the
policies,” Archer said,
referring to the practice
of crossing out aspects
that wouldn’t work, and
highlighting details more
favorable to a new policy
for Elk City. Archer said
that Chesapeake personnel have also come up
with their own suggestions, and Johnson and
Holloway are working to
make recommendations
to the Commission.
The City was hoping
to have recommendations
Sout
h Pio
Elk City officials are
working to create a policy on drilling within the
City limits that tightens
and specifies regulations
for energy companies
after Chesapeake Energy recently applied for
a permit to drill at the
corner of Seventh and
Pioneer Streets.
The move to restructure the City’s policy
on drilling began after
Chesapeake Energy applied for another permit
to drill in town. The energy company received
a permit to drill on the
north edge of town, near
Northeast Elementary,
approximately one year
ago.
With activity completed at that site, Chesapeake then planned to
move to an empty field
at Seventh and Pioneer,
more centrally located
in town. Chesapeake
began construction on
the site, but the company put the brakes on
drilling.
Meanwhile,
their permit to drill in
town expired last November.
Early this year,
Chesapeake
decided
to move forward with
plans to drill at Seventh
and Pioneer, so company representatives filled
out the required paperwork and submitted it to
City Hall. But City officials had begun discussing the need to specify
requirements for energy
companies, and Chesapeake personnel were
told about the City’s reservations about approving the permit under existing conditions.
At the March 04
meeting of the Elk
City
Commission,
Joe Creech and James
Roller with Chesapeake
Energy made the company’s case for the City
approving the permit.
During the meeting,
various commissioners
expressed concern about
the proximity of the
proposed drilling site to
residences, businesses,
and to the high school.
N
E
W
S
Proposed Chesapeake drilling site at Seventh and Pioneer in Elk City, near homes, businesses,
and upwind from Elk City High School, Pioneer Elementary, and Grandview 5th & 6th Grade Center. Image from Google Earth
for a new policy ready by
the mid-month Commission meeting March 20,
Archer said. Since the process would require changing a City Ordinance, a
new policy would have to
be introduced at a Commission meeting, then
there would be a period
for public input by residents. The Commission
could then vote whether to
adopt the new Ordinance
at a subsequent meeting,
according to Archer.
During the March 04
Commission meeting, Elk
City officials expressed
their desire to see Chesapeake move forward
with drilling, noting
both the importance of
energy exploration to
the economy, as well as
the fact that there were
no problems with Ches-
apeake’s activity on the
north side of town last
year. Commissioners
said they just want to
be sure they’ve done all
they could reasonably
do to protect area residents when drilling in
town continues.
The Equipment Locater
Being unable to find a piece of equipment to finish a job wastes time, which costs a company money.
Like so many other innovations in the energy
industry, one of the most recent began when a few
buddies were sitting around last spring talking about
this common frustration. They had an idea—why
not use the Internet to list equipment rather than just
a company’s name?
And now, almost a year later, Equipadvantage.
com is bringing together the people who need equipment and the companies that provide it.
THE FOUR HORSEMEN
The men behind Equipadvantage have worked
in the oil and gas industry for a while. Trevor McCollom and Kirk and Kyle Willard are flow hands
for several energy companies, controlling all of the
fluids and natural gas coming out of the ground after a frac job. And Trevor McCollom’s brother has
worked for several oilfield companies, including
BOP Ram during college. Brother went on to be a
frac engineer for Weatherford Fracturing Technologies, and now he’s an engineer for a local energy
company.
The McColloms were born and raised near Roosevelt, Oklahoma.
“I lived there on our family farm until I graduated from Hobart High School,” Trevor said.
Kirk and Kyle Willard are from Kent City, Michigan, and moved to Oklahoma to start a landscap-
Listen Live To Great Plains National Bank Exploring
Energy Show weekdays from 8:05 a.m. - 9 a.m. on
ing business. Trevor McCollom went to SWOSU
in Weatherford after high school, then he moved to
Tulsa and began working for a construction excavation company. He eventually started his own business doing the same thing.
(See FINDING EQUIPMENT, Page 4)
Trevor McCollom, one of the co-founders of
equipadvantage.com, was recently a guest on
Exploring Energy on KWDQ and KECO Radio.
Exploring Energy, March 2013, Page 2
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Exploring Energy, March 2013, Page 3
Dust Up On Rig #9 or Labor Relations in the Oil Patch
By author/storyteller
the trailer. Except this time he came
Bobby D. Weaver
right back out with a 38 in each hand
Butch was motorman on Rig #9 and nothing on but his boxer shorts.
out west of Elk City back in the fall Before anybody could figure out
of ‘79. The boom was really on in what was happening he began blastthose days. There was so much work ing away. The roughnecks dived for
all you had to do to hire out was be the nearest cover and the driller hid
able to walk and talk and they were behind the draw works, but poor old
none too picky
Darrell was
about the talkleft all alone
ing part. The
up in the derThen, sure enough, in rick exposed
driller
was
pretty good at about ten minutes out he to all sorts
his job but both
of potential
the floor hands came and began target mayhem. The
were rank boll practice on the rig lights.
gunfire went
weevils
and
on until the
Darrell, the dershooter ran
rick man, was
out of ammo,
about a half thread off to the left. To but not before he had killed about six
complete the picture the tool pusher or seven rig lights which seemed to
was one of those tough old oil patch be the object of his ire. Then he went
birds who thought of himself as akin back inside his trailer and passed out.
to those who made the Dodge City
As might be expected the incident
boom along side Wyatt Earp.
disrupted things for a while but soon
It was the habit of the pusher to everything returned to normal. Matbe gone for extended periods of time ters rocked on for another week or
and returning at odd hours. Butch ten days with the pusher keeping to
was pretty sure there was drink- his usual routine although he didn’t
ing involved on those forays but pull another shooting stunt. Then one
he couldn’t swear to it. It probably night he blasted up to the rig, got out,
had something to do with observ- stumbled and fell, and entered the
ing his erratic walk pattern and the trailer as usual. Then, sure enough,
occasional falling down on the way in about ten minutes out he came
to the trailer, but who knows. The and began target practice on the rig
important thing was that the push- lights. Everybody ducked for cover
er stayed to himself afterward and except for old Darrell who whipped
didn’t bother the crew.
out a semi-automatic pistol and beAnyway, that all changed one gan to return fire. According to Butch
graveyard shift when the crew was it sounded like World War III around
coming out of the hole with an 8,000 there and everybody found a hidey
foot string of pipe. As usual the push- hole except the two combatants.
er came roaring up and went into
You might say that little incident
presented somewhat of a labor relations problem. What with the pusher
standing out there in his underwear
cussing a blue streak and threatening
to fire the derrick man and old Darrell
calmly reloading his pistol it seemed
like a good time to institute labor negotiations. Ever the one to seize the
moment Butch spoke up and said,
“I’ll bet twenty that the pusher can
shoot out more rig lights than Darrell.” The driller took the bet and
both floor hands decided they would
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also put twenty each on the derrick man which old Butch covered
on the spot. Well sir, those two fine
examples of oil field trash squared
off and began to shoot. By the time
the pusher sobered up and Darrell
got over his mad they had ran out of
lights, were tied at eight bulbs each,
and the entire incident was closed.
The only drawback to the situation was, to quote old Butch, “It’s
damned hard drill oil wells all night
without any lights.”
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Exploring Energy, March 2013, Page 4
Finding Equipment
(Continued from Page 1)
“That’s how I met Kirk and Kyle,”
Trevor said. “We became friends and
business partners. Then, when the housing market crashed a few years ago,
we were forced to find other work. My
brother worked for a local energy company. We found jobs through his contacts, and now here we are.”
THE IDEA
Needing to find equipment for a job
proved problematic for the McColloms
and the Willards. Trevor McCollom said
it led to a new company.
“The idea came from frustration
more than anything. The yellow pages or
rolodex or normal directories are great for
finding businesses and numbers, but calling and finding out they have no equipment available starts the headache all
over. I wanted to cut right to the heart of
the problem. Lots of other industries use
search engines. Why couldn’t a company
man have one to help him? That’s how the
idea came about. It was extremely easy to
find almost anything you wanted on the
web except for equipment that’s available in the energy industry. Now that’s
changed.”
The McColloms and Willards decided
to develop an app that allows companies
to list the equipment they have available,
and it lets users find out who’s got what firms in Oklahoma and Texas,” Trevor
they need and where to find it.
said.
Plans for businesses that want to use
“Equipadvantage.com works by eliminating countless phone calls to find a spe- Equipadvantage.com start at $39 per
cific piece of equipment. It allows compa- month for a classified ad. The $99 per
nies to list the specific equipment in our month plan lets a customer list one piece
powerful search engine that, unlike nor- of equipment, one yard, and one salesmal directories, helps the customer find man. As the price goes up, so does the
the equipment instead of the company number of pieces of equipment, yards,
name. It also puts the number of the actual and salesmen. Other plans are $299 per
salesman in your hands instead of chasing month, $699 per month, and $1,199 per
down a number. We know that time is one month.
SUCCESS
of the most valuable assets in the oilfield,
Trevor McCollom said Equipadvanand we wanted to save people time.”
tage.com has worked for businesses that
THE TECH SIDE
Besides the McCollom Brothers and have tried it.
“Several companies have profited
the Willard Brothers, the technological
from
so far. Martin’s Mainteforce
behind
Equipadvantage.com
is
New
911 South Main • Elk City, OK Medio, a technical software developer out nance the& site
Specialized Welding out of
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“When we told them about the idea work from companies two hours away.
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401 S. Pioneer, Elk City, OK 580-225-7772
24 HR. ROAD SERVICE (NATIONWIDE)
OTHER LOCATIONS:
LARGE, FULLY EQUIPPED SERVICE FLEET
CONVENIENT SERVICE LOCATIONS
Oklahoma City, OK
405-787-6711 NATIONAL
ACCOUNT SERVICE
ASE CERTIFIED MECHANICS/24 HR. MECHANIC SERVICE
Tulsa, OK
918-437-8383 COMPLETE
LINE OF NEW AND RETREAD GOODYEAR TIRES
24 HR. ROAD
SERVICE
(NATIONWIDE)580-332-5145 TIRE MANAGEMENT PROGRAMS
Ada,
OK
- CRADLE TO GRAVE TIRE HISTORY (G-TRAC)
LARGE, FULLY
EQUIPPED
ANALYSIS (TIRE VALU-CALC)
Enid,
OK SERVICE FLEET
580-234-7704 - COST PERAMILE
GOOD
DEAL ON A GREAT
- FLEET ANALYSIS
AND RECOMMENDATIONS
(TV TRACK) TIRE
CONVENIENT SERVICE LOCATIONS
Lindsay, OK
405-756-4416 - COMPUTERIZED REPORTING
NATIONAL ACCOUNT SERVICE
NATIONWIDE WARRANTIES
Lawton, OK
580-354-9992
ASE CERTIFIED MECHANICS/24 HR. MECHANIC SERVICE
-- 12 LOCATIONS -TX RETREAD
210-661-8271
COMPLETESan
LINEAntonio,
OF NEW AND
GOODYEAR TIRES
Wichita Falls,
TX
940-767-8212
TIRE MANAGEMENT
PROGRAMS
TX
940-683-3558
- CRADLE Bridgeport,
TO GRAVE TIRE
HISTORY (G-TRAC)
Metroplex
817-295-0493
Fort
Worth,
TX...DFW
- COST PER
MILE
ANALYSIS
(TIRE
VALU-CALC)
Cleburne,
TX
817-202-9946
- FLEET ANALYSIS
AND
RECOMMENDATIONS
(TV TRACK)
254-662-6600
Robinson,
TX...Waco
- COMPUTERIZED
REPORTING
NATIONWIDE
WARRANTIES
Ardmore,
OK
580-223-0854
A GOOD DEAL ON A GR
T he
2012’s
Must Go!!
!
www.douggrayautogroup.com
25 N. Council
Oklahoma City, OK 73127
(405) 787-6711
410 SE 4th Street
Lindsay, OK 73052
(405) 756-4416
15705 E. Skelly Dr.
Tulsa, OK 74116
(918) 437-8383
1018 SE
Lawton, OK
(580) 354
1722 N. Van Buren
Enid, OK 73703
(580) 234-7704
500 E. Main
Ada, OK 74820
(580) 332-5145
1908 Chico Hwy.
Bridgeport, TX 76426
(940) 683-3558
1917 S.
Cleburne, T
(817) 202
5011 Jacksboro Hwy.
Wichita Falls, TX 76302
(940) 767-8212
5834 IH-10 East
San Antonio, TX 78219
(210) 661-8271
605A East Renfro
Burleson, TX 76028
(817) 295-0493
1121 S.
Elk City, OK
(580) 225
Exploring Energy, March 2013, Page 5
ELK CITY
RV SALES
Allmand & Magnum
Light Towers
The Smokin Rib Wagon
For All Your Catering Needs
Call for more
information now!
580-374-RIBS (7427)
RENTAL TRAILERS AVAILABLE
580-243-3300
3306 S. Hwy 6 • Elk City, OK
1 mi. S. of I-40
Hours: Monday- Friday 9-5; Sat. 9-noon
PARTS, SALES, SERVICE
Owners: James & Lanette Redd
For All Your Roustabout, Contract
Pumping, Transport & I&E Meter Tech
Needs, It’s Canyon Oilfield Services,
Where The Key Word is “Service.”
LOOKING FOR
• Experienced Roustabout • Experienced Mechanic
• Experienced Pumper (CDL A Plus)
• Equipment Operator (CDL Required)
To Work In A Family Environment,
Where You’re Treated Like Family, Give Us A Call
Elk City - South Hwy. 6 • Sayre - North Hwy. 283
Stillwater - South Perkins Road
580-928-3511
Energy highlights
• The weekly U.S. average regular gasoline retail price fell in early March
for the first time since mid-December. The March 11 average was $3.71 per
gallon, down $0.07 per gallon from February 25. EIA expects that lower
crude oil prices will result in monthly average regular gasoline prices staying near the February average of $3.67 per gallon over the next few months,
with the annual average regular gasoline retail price declining from $3.63
per gallon in 2012 to $3.55 per gallon in 2013 and $3.38 per gallon in 2014.
Energy price forecasts are highly uncertain and the current values of futures
and options contracts suggest that prices could differ significantly from this
forecast.
• EIA expects that the Brent crude oil spot price, which averaged $112
per barrel in 2012 and rose to $119 per barrel in early February 2013, will
average $108 per barrel in 2013 and $101 per barrel in 2014. The projected
discount of West Texas Intermediate (WTI) crude oil to Brent, which increased to a monthly average of more than $20 per barrel in February 2013,
will average $16 per barrel in 2013 and $9 per barrel in 2014, as planned new
pipeline capacity lowers the cost of moving mid-continent crude oil to the
Gulf Coast refining centers.
• U.S. crude oil production exceeded an average level of 7 million barrels
per day (bbl/d) in November and December 2012, the highest volume since
December 1992. EIA estimates that U.S. total crude oil production averaged
6.5 million barrels per day (bbl/d) in 2012, an increase of 0.8 million bbl/d
from the previous year. Projected domestic crude oil production is expected
to average 7.3 million bbl/d in 2013 and 7.9 million bbl/d in 2014.
• Total U.S. liquid fuels consumption fell from 20.8 million bbl/d in 2005
to 18.6 million bbl/d in 2012. EIA expects total consumption to rise slightly
over the next two years to an average of 18.7 million bbl/d in 2014, driven
by increases in distillate fuel and liquefied petroleum gas consumption, with
little change in gasoline and jet fuel consumption.
• Natural gas working inventories ended February 2013 at an estimated
2.08 trillion cubic feet (Tcf), about 0.36 Tcf below the level at the same
time a year ago but still 0.27 Tcf greater than the 5-year average (2008-12).
EIA expects the Henry Hub natural gas spot price, which averaged $2.75
per million British thermal units (MMBtu) in 2012, will average $3.41 per
MMBtu in 2013 and $3.63 per MMBtu in 2014. Current options and futures
prices imply that the lower and upper bounds for the 95-percent confidence
interval for June 2013 contracts at $2.79 per MMBtu and $4.67 per MMBtu,
respectively
Source: U.S. Energy Information Administration
10794 N. 1990 Rd, Elk City
Well
Inc.
Well Services,
Services, Inc.
580-225-4096
580-225-4096
Larry
Odom
Larry Odom
Elk
OK 73648
73648
Elk City,
City, OK
www.tlrws.com
e-mail:www.tlrws.com
[email protected]
Fax:
580-225-6792
e-mail:
[email protected]
• Flowe
Back Manifolds
Fax: 580-225-6792
•
Production
Testing
Secure
Flow Systems
• Plug Catcher
• Environmentaly
Flow Back Unit
•
Kill
Truck
• Flow Back Manifolds
• Vacuum Truck
• Production
Testing
•
KCL
Water
• Plug Catcher
• Ball
Frac
Tanks
•
Catcher
• Hydraulic Chokes
• KCL Water
• Sand Separators
• Frac Tanks
• DSA & Spool Rental
• Hydraulic Chokes
• Frac Trees
• Sand Separators
• Light Towers
•
DSA
& Flow
SpoolSystems
Rental
• Secure
• Frac Trees
• Light Towers
es, Inc.
4096
om
Serving the
Oil & Gas Industry
• WInch trucks
• pipe trucks
• Hotshots
• Forklifts
Call 580-799-2443
Hiring CDL Drivers
with HazMat
Need to live within 45 minutes of Elk City
• Most competitive pay around
• Benefits include:
Health and life insurance & Uniforms
Duties Include: Hauling flatbeds,
doing hotshots, helping with driver services
580-799-2443
Exploring Energy, March 2013, Page 6
STORAGE CONTAINERS
FOR SALE
Call us for all
your storage needs!
Why Work your tail off?
20-ft., 40-ft., 40-ft. High Cube Call For Prices!
FREE
DELIVERY
John Deere compact excavators work their little tails off — so you
don’t have to. Zero- and reduced-tail-swing designs allow them to
rotate fully without banging into anything. Independent-swing boom
and 360-degree rotation provide the extra maneuverability you need
to work more productively within tight lot lines and setbacks. Standard
mechanical quick-coupler and auxiliary hydraulics allow you to hook
up to rakes, breakers, and augers for maximum versatility. Opt for
a bucket with a thumb to handle large materials.
in 405 and
918 area codes
*Prices subject to change without notice
John Deere
Whether you’re digging retaining walls or trenches for drainage
or septic systems, a Deere compact excavator will fit right in. Compact
Why Work your tail off?
Excavators
Contact us today.
John Deere compact excavators work their little tails off — so you
don’t have to. Zero- and reduced-tail-swing designs allow them to
rotate fully without banging into anything. Independent-swing boom
and 360-degree rotation provide the extra maneuverability you need
to work more productively within tight lot lines and setbacks. Standard
mechanical quick-coupler and auxiliary hydraulics allow you to hook
up to rakes, breakers, and augers for maximum versatility. Opt for
a bucket with a thumb to handle large materials.
Call for
delivery in
580 area code.
Night & Weekend Delivery Available
CACTUS TANKS, LLC
www.cactustanks.com
1-877-258-1020
Whether you’re digging retaining walls or trenches for drainage
or septic systems, a Deere compact excavator will fit right in.
Contact us today.
Visa • MasterCard Accepted
BAR L TRANSPORTS
1GGA0D01GGCU3JM0618
CU3JM0618-00389177
L
L
C
Serving Western Oklahoma & Northeastern Texas
A0D01GGA0D01GGCU3JM0618
CU3JM0618-00389177
• Flowback Services • Water Transfers
• Disposals • Steaming Services
• Mud Hauling & Much, Much More!
580-303-4566 or 580-799-4737 - Sweetwater, OK
BAKER HUGHES
ROTARY RIGS RUNNING - BY STATE
MARCH 2013
Mar 1
Mar 8
Mar 15
Mar 22
Mar 29
Mar Avg
ALABAMA-LAND
ALABAMA-INL WATER
ALABAMA-OFFSHORE
TOTAL ALABAMA
4
0
0
4
4
0
0
4
ALASKA-LAND
ALASKA-OFFSHORE
TOTAL ALASKA
7
1
8
10
0
10
9
1
9
ARIZONA
ARKANSAS
0
17
0
15
0
16
CALIFORNIA-LAND
CALIFORNIA-OFFSHORE
TOTAL CALIFORNIA
33
1
34
37
2
39
35
2
15
COLORADO
FLORIDA-LAND
FLORIDA-INL WATER
FLORIDA-OFFSHORE
TOTAL FLORIDA
GEORGIA
HAWAII
IDAHO
ILLINOIS
INDIANA
KANSAS
KENTUCKY
55
1
0
0
1
0
0
0
1
1
26
0
57
1
0
0
1
0
0
0
2
2
23
0
N LOUISIANA-LAND
S LOUISIANA-INL WATER
S LOUISIANA-LAND
S LOUISIANA-OFFSHORE
TOTAL LOUISIANA
24
19
12
49
104
24
19
15
48
106
MARYLAND
MICHIGAN
MISSISSIPPI
MONTANA
NEBRASKA
NEVADA
NEW MEXICO
NEW YORK
N DAKOTA
OHIO
OKLAHOMA
OREGON
PENNSYLVANIA
S DAKOTA
TENNESSEE
TEXAS-OFFSHORE
TEXAS-INL WATER
DISTRICT 1
DISTRICT 2
DISTRICT 3
DISTRICT 4
DISTRICT 5
DISTRICT 6
DISTRICT 7B
DISTRICT 7C
DISTRICT 8
DISTRICT 8A
DISTRICT 9
DISTRICT 10
TOTAL TEXAS
0
1
11
12
1
3
77
0
175
28
187
0
74
1
0
1
0
140
75
38
35
17
29
13
78
286
42
24
63
841
0
1
11
11
1
3
78
0
176
27
180
0
72
2
0
1
0
141
73
39
34
16
27
12
81
280
43
22
66
835
28
0
0
22
45
1757
653
2
655
2412
29
0
0
22
45
1752
578
2
580
2332
UTAH
VIRGINIA
WASHINGTON
W VIRGINIA
WYOMING
TOTAL UNITED STATES
CANADA-LAND
CANADA-OFFSHORE
TOTAL CANADA
GRAND TOTAL
0
0
0
0
0
0
0
0
0
0
0
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80
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43
23
65
335
0
29
0
29
0
29
0
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those defined as consumers in the Magnuson-Moss
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513 W 20th
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800-UR-RENTS
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580-225-9696
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Source: U.S. Energy Information Administration
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