- Well Servicing Magazine

Transcription

March/April 2006
RADIOACTIVE MATERIALS SECURITY 2006
SAFETY STATISTICS
FISHING FOR DOLLARS
High-Quality Products,
Dedicated Service
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Circle Number 133
661-322-5966
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March/April 2006
OFFICIAL PUBLICATION OF
THE ASSOCIATION OF ENERGY
SERVICE COMPANIES
Executive Director: Kenny Jordan
Publisher/Sales Manager: Patty Jordan
Editor: Polly S. Fisk
Production & Design: Polly Productions
Contributing Writers: Steve Adams,
Dennis Ash, Patty Jordan, Michael Kardos,
Andy Maslowski, Jim Patterson,
Jeanne M. Perdue, Phillip M. Perry,
Eric Rosemann, Jonathan Williams
About the Cover: Acid Services, LLC
(A JetStar Energy Services Company) is
preparing to pump a 6,000 bbl slickwater
frac in the Mississippi Chert for Woolsey
Operating in Barber County, Kansas.
Web Site: www.aesc.net
Unless expressly stated otherwise,
all editorial and advertising material
published is the opinion of the respective authors and/or companies involved
and should not be construed as official
action by or approved by Publisher
or the Association. No part of this
publication may be reproduced in
any form without the express written
consent of the publisher.
If available, extra copies of current
issue $2.00 and back issues $4.00.
All prices for U.S.A. © 2006, all rights
reserved.
CHANGE OF ADDRESS : Please send
copy of mailing label with new address
to Well Servicing, P.O. Box 600489, Dallas,
Texas 75360-0489.
Official publication of the Association
of Energy Service Companies.
Editorial, business and advertising
offices: 10200 Richmond Ave., Suite 275,
Houston, Texas 77042; (713) 781-0758 or
(800) 692-0771; Fax (713) 781-7542
I n s i d e
t h i s
i s s u e
President’s outlook ––––––––––––––––––––––––––––––––5
Well service rig count ––––––––––––––––––––––––––––––8
Oilfield weather ––––––––––––––––––––––––––––––––––11
2005 safety statistics for the well service industry ––14
RFID technology ––––––––––––––––––––––––––––––––––20
Fishing for dollars ––––––––––––––––––––––––––––––––24
Canadian oil sands ––––––––––––––––––––––––––––––––28
Radioactive materials security 2006 ––––––––––––––––32
Personality Profile: Danny Cagle ––––––––––––––––––38
Market report ––––––––––––––––––––––––––––––––––––40
• Overcoming addiction
• A nuclear lesson in economics
• Laissez les bon temps rouler?
• A level playing field
• IPO is the way to go
• Man versus machine
Greenbacks for plugbacks ––––––––––––––––––––––––48
Choosing the right web hosting service ––––––––––––54
Well Servicing (USPS 537-670)
(ISSN 0043-2393) is published bimonthly
by Workover/Well Servicing Publications,
Inc., 10200 Richmond Ave., Suite 275,
Houston, Texas 77042. A wholly owned
subsidiary of the Association of Energy
Service Companies. Periodicals postage
paid at Houston, Texas 77201.
Profit from oil is a dirty word––––––––––––––––––––––60
POSTMASTER: Send address changes
to Well Servicing, P.O. Box 600489, Dallas,
Texas 75360-0489.
Industry items ––––––––––––––––––––––––––––––––––––81
Emergency planning ––––––––––––––––––––––––––––––63
Association news ––––––––––––––––––––––––––––––––––74
AESC membership application ––––––––––––––––––––80
Well Servicing March/April 2006 3
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Circle Number 086
President’s outlook
ur 50th Anniversary celebration
has begun with a great meeting
in Odessa, Texas. It was exciting
to return to Odessa, the birthplace of our
Association 50 years ago. It was fitting
that one of our founders, Frank Pool,
attended and participated in our
meetings. We honored him with a
special award. Mr. Pool was the first
president of the AOSC, having been
elected to office on February 21, 1956
–– 50 years and 2 days before our 2006
Winter Meeting. He truly is a legend of
our industry and a fine person. An
interesting historical note: Pool Well
Service had 21 rigs on the day that Mr.
Pool was elected president of the AOSC.
The meetings and speakers at the
Winter 2006 Meeting were excellent.
Topics ranged from paperless job work
tickets, to better quality of service
processes, to creating a cash flow
analysis, to new technologies and wireline. The opening night reception at the
Permian Basin Petroleum Museum was
an exceptional experience for all of us.
My sincere thanks to our sponsors who
made our meeting first class through
their very generous support. I ask that
we remember our sponsors when
selecting vendors. Last, but not least,
“kudos” to our staff who organized and
ran a great meeting.
O
Michael Stovall
2005-2006 AESC President
Genie Well Service
Tulsa, Oklahoma
One of the high points of the meeting,
for me, was the Liaison Breakfast with
our national committee chairmen and
chapter chairmen. Our national committees work on many of our initiatives and
bring the speakers to our meetings. Our
local chapters are “where the rubber
meets the road.” A great deal of the
enthusiasm for the AESC is generated at
the chapter level, which then carries to
the national level. Many of the national
initiatives are generated by concerns that
arise in our chapters. In the upcoming
months, I will be visiting a number of our
chapters. I look forward to doing so.
A topic discussed with the chapter
chairmen was the issue of regulatory
matters and the impact of ever-more
regulation of our industry. This is an area
that has concerned me for quite some
time on both a state and federal level.
Congress and the state legislatures
continue to pass laws which empower
regulatory agencies to interpret,
implement and enforce the laws. Due
to the ever increasing numbers of these
laws, we must become proactive in
this area. A recent experience at the
national level of the AESC is illustrative.
For several months, the AESC has
been discussing with OSHA a proposed
Safety Health Information Bulletin (SHIB)
regarding the operation of vacuum
trucks picking up, hauling and disposing
of basic sediment and water (BS&W).
Because of our alliance with OSHA, we
have been permitted to provide input
on the OSHA recommendations and
conclusions to be set forth in the
proposed SHIB. This has been a lengthy
process. However, because we were
proactive in entering into the alliance,
our concerns were heard and we
may possibly have some impact on the
final result.
At about the same time we received
the proposed OSHA SHIB, we were
advised that the API had issued a revised
Mergers and Acquisitions for the
Oil and Gas Service Industry
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Email:
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[email protected]
The numbers of agencies and their enforcement
powers are considerable. Stop for a moment and
think about the following alphabet soup of agencies,
all of which impact your operations: OSHA, EPA,
NRC, IRS, DEQ, DOT, ATF, TSA, BLM, BIA….
There are many, many others.
recommended practice covering vacuum
trucks –– RP 2219. The revised RP
contains several new requirements for
the transportation of oilfield fluids that
may be problematic for our members.
We are currently discussing this matter
with API in an effort to resolve our
concerns about certain issues contained
in the RP. However, unlike the OSHA
matter, we were not given the
opportunity for input prior to publication
of the RP.
The moral of this story is that we must
get a seat at the regulatory affairs table.
The oilfield service industry may well be
far more endangered by the regulatory
process than by the legislative process.
Yes, the state legislatures and the U.S.
Congress pass laws. However, the laws
are then sent to the governmental
agencies (both state and federal) to be
interpreted and enforced. It has often
been said, “the devil is in the details.” In
the area of regulatory matters, this is
very, very true.
The numbers of agencies and their
enforcement powers are considerable.
Stop for a moment and think about
the following alphabet soup of agencies,
all of which impact your operations:
OSHA, EPA, NRC, IRS, DEQ, DOT, ATF,
TSA, BLM, BIA…. There are many,
many others.
A cursory review of current federal
regulatory issues shows that the EPA is
6 Well Servicing March/April 2006
currently revising its storm water
management rules as they pertain to oil
and gas well sites; OSHA is working on
vacuum truck issues; the DOT has
changed our hours of service; the EPA
is revisiting its SPCC regulations;
and the NRC (Nuclear Regulatory
Commission) is proposing regulations
that would cover our members who use
radioactive materials in wireline and
other operations.
In addition, each state in which we
operate has at least one agency that
probably covers some of the same
territory as the federal agencies. For our
industry, most states have regulatory
authority over many of our oilfield
operations
through
Corporation
Commissions, Railroad Commissions,
Conservation Commissions, Size and
Weights and a cornucopia of other
enforcement activities.
What is a beleaguered oilfield service
company to do? At times, one would
like to simply bury his head in the sand.
However, this would probably cause the
rest of one’s body to be buried. We, at
both our state chapter level and our
national association level, must become
more vigilant not only in watching for
legislation that might adversely impact
us, but also the myriad regulatory
issues.
At a minimum, we need to meet those
who regulate our operations. From
personal experience, I have found that
regulations are drafted by well-intentioned people. However, they frequently
have little, if any, experience in our
specific industry. Sadly, they receive
little, if any, input from our industry.
Once a rule is adopted, it is often too late
to change the regulation.
The regulatory issue was discussed
with our chapter chairmen present in
Odessa. It was the consensus of our
group to begin by appointing a team of
chapter members to determine what
regulatory agencies impact the oilfield
service industry in their area. From
there, the members in the chapter can
begin the process of meeting those who
regulate us and ask to be involved
in future regulatory issues. This applies
to all members –– sustaining, associate
and producers. We all have a stake in
the outcome.
At the national level, we are
redoubling our efforts to keep a watchful
eye on the regulatory process. This must
also be done on the chapter level. Please
join your colleagues and friends at the
state chapter level in helping all of us
achieve better, more well thought out
regulations by the various governmental
agencies. Attend chapter meetings and
become involved. Each of us, joining
together to create a team, can make a
true difference in the regulatory arena.
Let’s go forward and exercise the power
of our AESC Team.
Michael Stovall
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Circle Number 086
Well Service Rig Count
Welcome to the Weatherford/AESC Service Rig Count. This
service is being provided by Weatherford, in conjunction with
the AESC. The Weatherford/AESC Service Rig Count is now
available in each issue of Well Servicing magazine and on the
Weatherford website at www.rigcount.weatherford.com.
West Coast
with Alaska
Mid-Continent
West Texas/
Permian Basin
Rocky Mnt.
Texas Gulf Coast
ArkLaTex
South Louisiana
Eastern U.S.A.
DECEMBER 2 0 0 5
12 months ago
Active
Rigs
Available
Rigs
Idle
Rigs
Stacked
Rigs
TEXAS GULF COAST
206
20
50
110
53%
202
50%
ARKLATEX
143
8
11
25
76%
128
71%
EASTERN U.S.
70
17
14
47
47%
69
47%
SOUTH LOUISIANA
49
8
6
21
58%
54
60%
MID-CONTINENT
381
44
41
124
65%
327
58%
WEST TEXAS/PERMIAN
730
30
37
124
79%
664
70%
ROCKY MOUNTAIN
345
49
15
23
80%
315
79%
WEST COAST/ALASKA
313
32
35
60
71%
304
64%
2237
208
209
534
70%
2063
64%
860
30
25
110
84%
810
81%
3097
238
234
644
74%
2873
68%
AREA
TOTAL U.S.
CANADA
TOTAL U.S. & CANADA
Active %
of total
JANUARY 2 0 0 6
Active
Rigs
%
Utilization
12 months ago
Active
Rigs
Available
Rigs
Idle
Rigs
Stacked
Rigs
TEXAS GULF COAST
216
13
50
109
56%
199
50%
ARKLATEX
143
5
12
24
78%
128
70%
EASTERN U.S.
74
16
14
47
49%
70
47%
SOUTH LOUISIANA
42
11
6
16
56%
53
57%
MID-CONTINENT
393
38
43
117
66%
327
57%
WEST TEXAS/PERMIAN
745
14
40
122
81%
701
72%
ROCKY MOUNTAIN
355
40
15
23
82%
309
77%
WEST COAST/ALASKA
317
22
47
61
71%
304
64%
2285
159
227
519
72%
2091
65%
864
24
28
110
84%
823
85%
3149
183
255
629
75%
2914
69%
AREA
TOTAL U.S.
CANADA
TOTAL U.S. & CANADA
Active %
of total
Active
Rigs
%
Utilization
Active Rig - The rig is active if, on average, it is crewed and worked every day during the month.
Available Rig - The rig is available if a rig has a crew and is ready to work, but is not working.
Idle Rig - The rig is idle if the rig is capable of being put to work in less than 48 hours and does not require spending in excess of $50,000 to activate it,
and does not have a crew currently assigned.
Stacked Rig - The rig is stacked if the rig does not have a crew assigned and could not be put to work without significant investment in repairs and
additional equipment in excess of $50,000.
Circle Number 015
Oilfield weather
O
il and gas wells have
been drilled with the
mercury roller-coasting
within a wide range of 160 degrees
–– from “ice islands” in the Arctic
to the deserts of the Middle East.
Within this range, all kinds of
weather events occur –– hurricanes,
tornadoes, high winds, blizzards,
ice, hail, rain and even fair skies.
Long-term oilfield workers will
probably experience just about
every form of weather, proving
that their concern is not only
what lies below in the borehole,
but also what weather patterns
are forming skyward.
Granted,
many
important
decisions about an oil or gas well
probably derive from inside an
office. These involve such things
as
financing,
employment,
scheduling, geology, engineering
and such.
However, the real
action occurs on location where
the main products, crude oil and
natural gas, are found. Because of
this, oilfield work is largely outside work and the changing
weather is a consequence of being
in the great outdoors.
Weather conditions
“Everyone complains about the
weather but no one does anything
about it.”
Mark Twain’s famous expression
is not exactly true for the oil and
gas extraction business. This
industry can adapt to changing
conditions and has made numerous
innovations to face the weather
head on through several, but not
all, weather events. Of course,
sometimes Mother Nature wins.
Most offshore platforms are
designed to face hurricane
strength winds or waves, whether
they be located in the Gulf of
Mexico, the North Sea or elsewhere.
Usually a few days –– thanks to
weather satellites and meteorological forecasting –– before a big
storm approaches, production
and drilling facilities in the projected path of the storm are shutin or evacuated. Once the storm
passes, if possible, the platforms
are brought back online and the
offshore crews return to work.
Last year, when hurricanes
Katrina and Rita hit, this was not
altogether possible.
By ANDY MASLOWSKI
The U.S. Department of the
Interior’s Minerals Management
Service (MMS) reported that of
the approximately 4,000 platforms
in the Gulf administered by the
MMS, about 3,050 were in the path
of the two hurricanes. Preliminary
assessments indicated that 115
platforms were destroyed and
another 52 suffered significant
damage. The MMS also said about
180 pipelines were damaged, with
more than 400 minor pollution
incidents reported (the MMS
defines a “minor pollution incident”
as one involving less than 500
barrels of oil that does not reach
the coast line).
“The overall damage caused by
hurricanes Katrina and Rita has
shown them to be the greatest
natural disasters to oil and gas
development in the history of the
Gulf of Mexico,” explained MMS
regional director Chris Oynes.
New underwater damage assessments were still being conducted
into February, and “it is likely
these will discover additional
damage when they are completed,”
he said.
“These have been
delayed because of overwhelmed
support resources, such as diving
equipment, support vessels and
remotely operated vehicles.”
Near the end of January [2006],
the MMS reported that about
373,000 barrels of oil and 1.6
billion cubic feet of natural gas
were still shut-in because of the
2005 hurricanes. This represented
about 25 percent of the Gulf’s
daily oil production and about 17
percent of its daily natural gas
production.
Some mainland
refineries and pipeline facilities
were also not up to par some five
months after the storms. Some
believe it will take at least a year
or more before production and
refining gets back to pre-Katrina
levels in the region. And the new
hurricane season begins in June.
True, the majority of this shut-in
production is not irretrievable
production since it will eventually
be brought back online once
repairs are made. However, supply
disruptions cause havoc on the
spot markets, and last September
oil prices surged pass $70/barrel
because of these weather-related
disruptions in the Gulf. That may
be one of the greatest lingering
effects related to the weather.
Routinely, bad weather reports, or
even the threat of bad weather,
make speculators in New York
and elsewhere nervous and jerky.
Justified or not, oil and gas prices
fluctuate accordingly. Maybe that’s
not the best way to determine
product prices for an industry,
but that’s the way it is.
On the positive side, about 30
million barrels of oil were sold or
released as emergency loans from
the Strategic Petroleum Reserve
to make up for some of the lost
production. Who knows how high
oil prices would have gone if this
American safety valve hadn’t been
in place? The U.S. Department of
Energy said these deliveries were
completed on January 4, 2006.
Onshore also, the weather can
create many problems in the oil
patch. Heavy rains can wash out
rig roads or make them impassable with oceans of mud, shutting
down wellsite activity. Snow and
ice, freezing and thawing, can also
create mud and slippery conditions
on rig floors or derricks. Storms
can knock out the electricity that
powers pumping wells or other
production facilities that are
serviced by electric lines.
Mud also can create headaches
for operators and county, township or other municipal officials
who must keep paved roads
clear of mud or keep dirt
roads operational. Freezing, frost
heaving and thawing conditions
can also destroy roads. To try to
limit such problems, many
governmental agencies impose
frost laws, usually during the
spring, which limit heavy truck
traffic and speeds. In many areas
legal axle weights are reduced by
up to 50 percent and heavy
vehicles must travel at 35 MPH or
slower. Needless to say, when
such restrictions are in place,
servicing rigs, drilling rigs, tanks,
other heavy equipment cannot
be moved.
High winds can do damage, too,
and there are reports from the
field of rare tornado strikes,
toppling a rig, tanks, or other wellsite equipment. Although many
rig masts have engineered wind
loads of up to 70 MPH or more, a
worker has to be careful when
climbing a derrick 30, 60, 90 or
more feet above the ground, even
if there is no wind.
As best they can, oilfield workers adapt to changing weather
with specialized equipment,
motor vehicles, clothing and
other safety considerations.
Heated doghouses, warm clothing,
personal protective equipment,
rain gear and even Mickey Mouse
boots for extreme cold help keep
crews on the job.
Engine block heaters, propane
heaters and other kinds of heat
equipment warm trucks, water
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Circle Number 056
sources and other equipment
around a well location so work
can continue. Now if onsite heated
porta-potties were more widespread, everyone would be in
better shape. It’s not easy to go to
the bathroom in a frozen steel or
plastic box!
Perhaps something should be
said about the catskinners and
scrappers who have pulled crews
and motor vehicles out of trouble
innumerable times on isolated rig
roads around the oil patch. At
some locations, only a Caterpillar
rig or bulldozer can make it to the
wellsite location. God bless the
catskinners!
Safety first
Many organizations, like the
American Society of Safety
Engineers and the American
Petroleum Institute (API), offer
specific safety tips for outdoor
oilfield work. Some of these
involve such duties as rigging
practices, fall protection, working
in confined spaces, fire prevention, welding on or near rigs,
crane regulations, electrical hazards, fleet safety, well control and
emergency action plans.
For example, in its specification
4E, "Drilling and Well Servicing
Structures," the API said there
have been a sizeable number of
failures in portable masts in
winter while in the lowering or
raising process. “While the risk
may be considerably greater
because of the change in physical
characteristics of steel at low
temperatures, operators may
carry on normal operations even
at extremely low temperatures,”
the report said. “This may be
accomplished by a program of
closely controlled inspection
procedures and careful handling
and operation.”
Among other things, the API
recommended the following practices in cold weather conditions:
• To the extent possible, schedule
mast raising and lowering
operations to take place at the
“warmest” time of day, and take
advantage of any sunlight or
predictable atmospheric conditions. Take into account wind
velocity factors.
• Make use of any practical,
available means to warm sections
of the mast, such as using high
pressure steam to heat the
points of attachment between
the mast and its base.
• Take up and loosen mast raising
lines several times to assure the
free movement of all parts.
• Warm up engines and check the
proper functioning of all
machinery to assure that there
will be no malfunctions that
would result in sudden braking
or jarring of the mast. Mast
travel, once begun, must be
slow, smooth and continuous.
Numerous publications and
seminars have been prepared on
the subject of oilfield safety. Not
surprisingly, our friends at the
U.S. Department of Labor,
Occupational Safety & Health
Administration (OSHA) are the
publishers and sponsors of many
of them. Some of these discuss
how the weather often affects
safety in the field and on the road.
OSHA Fact Sheet Number 98-55
is entitled “Protecting Workers in
Cold Environments.” It warns
workers who must brave outdoor
conditions and face the occupational hazard of exposure to the
cold. “Prolonged exposure to
freezing temperatures can result
in health problems as serious as
trench foot, frostbite and
hypothermia,” the report states.
Workers in such environments
“need to be especially mindful of
the weather, its effects on the body,
proper prevention techniques and
treatment of cold-related disorders.” OSHA also reminds us
about safe winter driving, including
tips about keeping your vehicle
maintained, having supplies like a
shovel and ice scraper onboard,
and slowing down and increasing
distances between vehicles during
bad weather.
Conversely, another OSHA
release offers tips to protect
workers in hot summer weather.
Simple precautions, such as those
listed on OSHA’s Heat Stress Card,
can prevent many health-related
injuries, even deaths. During
periods of high temperatures,
among other things, block out
direct sunlight, rest regularly, and
drink plenty of water.
While many of the above items
seem to be common sense, each
year workers are injured or killed
during a too-fast to-react accident,
falling on a slippery rig floor or
driving off a wet or icy road. Even
during nice weather, oilfield work
can be dangerous, so bad weather
can only worsen the odds of an
accident.
Weather is often no more than
the subject of small talk, but it is a
big safety concern for outdoor
workers, particularly those in the
oilfields. Work hard. Work smart.
Work safe.
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Circle Number 055
2005 safety statistics
for the well service industry
CHART 1 – LTIR and TRIR FREQUENCIES
By KENNY JORDAN
AESC Executive Director
O
ur industry has experienced unprecedented
growth in the last two years, putting a
strain on our infrastructure, our ability to
recruit and retain employees, and our ability to
provide adequate training for our existing and new
employees. Safety is paramount with every company
in terms of keeping their employees safe, avoiding
costly accidents, and adding to the bottom line. In
2004, the Association was involved with a number of
initiatives that we knew would benefit the membership and contribute to their safety programs. Here
are the items in 2005 that the Association addressed
to help our membership with their safety programs.
• Continued OSHA alliance initiatives
• Initiated HSE quarterly meetings with programs
and presentations
• Participation in the API Contractor Workshop
• Participation in numerous API initiatives
• Rewrite of the Recommended Safe Procedures &
Guidelines for the Oil & Gas Well Servicing
(Green Book).
• Drafting standards initiatives for wireline,
hot oiler operations and pumping services
As we proceed into 2006, a greater emphasis will be
exercised by the Association to continue to expand
on the above initiatives and to keep working with our
entire membership in identifying areas that will make
our industry a safer place to work.
What occurred in 2005
The collected data reveals details on the most
prevalent accident occurrences:
Average Age:
Avg. Time on a Rig:
Avg. Time in Position:
Time of Year:
Time of Day:
Day of the Week:
Position:
Type of Incident:
Equipment Involved:
Work Activity:
Part of the Body:
35.2 years
4.1 years
3.3 years
August
Morning/Afternoon
Monday
Floorhand
Struck By or Against
Tubulars
Tripping Pipe
Fingers/Hands/Wrist
(31 – 40 years old)
(1 – 5 years)
(1 – 5 years)
(3rd Quarter)
(50/50)
(19.7% of the time)
(33.6% of the time)
(33.3% of the time)
(15.1% of the time)
(29% of the time)
(39.5% of the time)
CHART 2 – JOB TITLE OF INJURED PERSONNEL
A direct comparison with last year’s statistics
indicates the only two variables that changed were
the month and day of the week most accidents occur.
The most prevalent month in 2004 was October
versus the month of August in 2005. The day of the
week in 2005 that accidents occurred was clearly
Monday in comparison with 2004 statistics that
showed the days of Monday and Friday evenly split.
The statistics for 2005 actually show an improvement from those reported in 2004. The LTIR (Lost
Time Incident Rate) and the TRIR (Total Recordable
Incident Rate) both decreased in comparison to 2004.
The LTIR went from a rate of 2.70 in 2004 to a rate of
2.25 in 2005 or a decrease of 16.7 percent. The TRIR
went from a rate of 3.96, down to 3.63 or a decrease
of 8.2 percent (Chart 1).
Chart 2 depicts the job title of the injured
personnel. Once again, the floorhands are the most
likely to be injured in the course of rig jobs,
accounting for almost 34 percent of the accidents
that occurred in 2004.
Chart 3 depicts the type of incident frequency that
occurred in 2005. In comparing the incident rates
with 2004, the incidents for Stuck By/Against and
Caught In/Between are almost exactly the same
frequency rates.
Chart 4 and 5 show that as in 2004, the handling of
tubulars is the number one cause of incident in the
well servicing industry.
CHART 3 – TYPE OF INCIDENT
CHART 4 – EQUIPMENT INVOLVED WHEN INJURED
CHART 5 – ACTIVITY INVOLVED WHEN INJURED
Committed to Quality
Catheads Kelly Spinners
Power Tongs Bucking Units
SALES/SERVICE NEW/USED
Dedicated to Service
Mary Gill
Chairman
Bob Smith
Tom Burggraff
General Manager
Gay Wathen
Operations Manager
President
650 Aldine Bender
Houston, Texas 77060
(281) 820-5400
FAX (281) 820-0034
CHART 6 – BODY PART INJURED
CHART 7 – AGE OF INJURED
CHART 8 – WORK EXPERIENCE ON RIG
WHEN INJURED
CHART 9 – JOB POSITION EXPERIENCE
WHEN INJURED
Chart 6 depicts the part of the body which is most
injured in the incidents reported. Again, as in years
past, the hands, wrist and fingers are the most
injured body parts.
Charts 7, 8 and 9 give us statistical information
about the age of the injured employees, the experience
they have on the rig, and the experience in the
particular position he was in at the time of injury.
For the purposes of this analysis, we had a total of
51 companies reporting their safety statistics and the
details involved with their accident investigations.
This was a total of over 44 million manhours of work
performed in our industry which equates to over 22
thousand man years of work.
SPECIALIZING IN HYDRAULIC ROD & TUBING TONGS:
MANUFACTURING, SALES, SERVICE & RENTALS
REED MASTERS
ODESSA, TEXAS 79760
FAX 432-334-7961
www.cartertoolco.com
PHONE 333-5824
P.O. BOX 3388
The AESC is committed to assisting its membership
in developing programs, providing information and
working with both regulatory agencies and
customers to develop a safe workplace for all
members of our industry. This becomes even more
critical as we look to the future and realize that in
order for us to continue to “Keep America’s Oil & Gas
Flowing,” companies will be bringing in new,
inexperienced employees to our industry who will
require the needed training and skills which our
industry will develop.
We invite all companies to participate in the
Association’s Safety Statistics Program. Let’s make
our industry a safe place for everyone.
Performance is Key
6UHYLN\SHYZJOLK\SLL]LY`^VYRV]LYYPNPUV\YL_[LUZP]LÅLL[PZNP]LU
a thorough, top-to-bottom inspection to make sure it’s in peak working
condition. In some cases, that means stripping it down to the frame to
re-build it like new.
When Key Energy Services pulls on to your site, you can be sure we’ve
done everything possible to prepare for the job at hand. The industry’s
TVZ[JVTWYLOLUZP]LYPNYLTHU\MHJ[\YPUNWYVNYHTTHRLZOPNOLMÄJPLUJ`
jobs possible each and every time.
With well-maintained equipment, talented, experienced rig personnel,
advanced technology and more, we’re all about performance at Key
Energy Services.
And Performance is Key.
www.keyenergy.com
Circle Number 029
Well Services
n
Fluid Services & Logistics
n
Fishing & Rental
n
Electric Wireline
n
Pressure Pumping
2005 AESC SAFETY AWARDS
Presented February 24, 2006
at the AESC National Winter Meeting,
held in Odessa, Texas
GOLD AWARD
Group I
Group II
Group III
Group IV
Group V
Phillips Well Service Inc., El Dorado, KS
Resource Well Service Inc., Deerfield, OH
Alliance Energy Service Co. LLC, Rangely, CO
D S & W Well Servicing Inc., Claflin, KS
Mackellar Services, Oklahoma City, OK
Swabbing John’s Inc., Lindsay, OK
Western Well Service, Wichita Falls, TX
Globe Well Service Inc., Big Lake, TX
Kings Oil Tools, San Ardo, CA
TEC Well Service, Longview, TX
Nabors Well Services Co, Houston, TX
SILVER AWARD
Group
Group
Group
Group
Group
I
II
III
IV
V
TWS Inc., Tatum, NM
McConnell & Scully Inc., Homer, MI
Pratt Well Service, Pratt, KS
Martex Well Service Inc., Marshall, TX
Key Energy Services Inc., Houston, TX
BRONZE AWARD
Group
Group
Group
Group
Group
I
II
III
IV
V
Group
Group
Group
Group
Group
I ––
II ––
III ––
IV ––
V ––
Gressel Oil Field Service Inc., Hays, KS
Clarke Corporation, Medicine Lodge, KS
Great Basin Petroleum Services Inc., Odessa, TX
Energy Service Company, Bowie, TX
Basic Energy Services, Midland, TX
5,000 - 50,000 manhours
50,001 - 100,000 manhours
100,001 - 200,000 manhours
200,001 - 500,000 manhours
Over 500,000 manhours
Association of Energy Service Companies
2005 Safety Award
Non-Well-Servicing Sector
Gold Award
Two-State Equipment Inc., Hobbs, NM
Silver Award
Southern Wireline Service Inc., Lafayette, LA
Special thanks to the sponsors of the 2006 AESC Annual Winter Meeting
C OFFEE B REAKS /R EFRESHMENTS
Weatherford OCM
O PENING N IGHT R ECEPTION
Caterpillar, Inc.
P OLITICAL A FFAIRS L UNCHEON
National Oilwell Varco
S AFETY AWARDS L UNCHEON
Industrial Foundation of America (IFA)
AESC
P LATINUM
Buster’s Well Service Inc.
Nabors Well Services Co.
G OLD
Basic Energy Services Inc.
Lewis Friction Products
Moncla Well Service Inc.
S ILVER
Dragon Rig Sales & Services
Globe Well Service Inc.
Stewart & Stevenson
Moncla Marine LLC
B RONZE
BOSS - Brothers Oilfield Service & Supply
Stoehr Wire Rope
WSI Cased Hole Specialist
RFID technology
advances toward
second generation,
standardization
By JEANNE M. PERDUE
Upstream CIO
T
he market for radio
frequency identification
(RFID) systems is poised
to rise substantially, as companies
like Wal-Mart, Best Buy, Target
and even the U.S. Department of
Defense are mandating that their
suppliers attach RFID tags to shipments for efficient tracking. The
RFID market is expected to rise
from $2.7 billion this year to $24.5
billion in 10 years.
The result of this coming RFID
boom is that major enterprise
software companies from Sun
Microsystems to Oracle are
devising software and various
RFID extensions in anticipation of
the greater volumes of data to be
handled and analyzed. Systems
integrators are also going to benefit
from this boom as companies
attempt to link their RFID systems
to their back-office financial systems.
Uses of RFID
Similar to bar codes for identifying
items, RFID technology uses
electronic or “smart” tags for
storing data, which receives a
radio signal and transmits
relevant information in another
radio signal using a transducer.
An RFID reader/writer, which is
sometimes a rugged, handheld
device, transmits a signal at a
given frequency to one or more
smart tags within its range and
can also write new information to
the tag, such as the date the
Radio Frequency Identification chip
equipment it is attached to was
inspected, replaced or repaired.
RFID uses radio band frequencies
in the range of 900 mHz (high
band) to 134 kHz (low band).
When “activated” by the reader,
the smart tag establishes communication for exchanging data.
The technology is used for EZ
Tags on toll roads, as well as for
security purposes in building
access cards. In active RFID,
transmitters are battery-powered
and can send information up to 30
feet away. Passive RFID has
smaller, less expensive tags that
generally require an electronic
reader to scan it to obtain
information about the item.
Under a program devised by the
Department of Homeland Security
called US-Visit, people and
vehicles entering the U.S. from
Canada and Mexico are filling out
forms that use RFID chips. They
are then linked to a government
database that checks their status.
The department has been at pains
to point out that only government
employees can "see" this related
information. There also is talk in
Washington of the government
eventually issuing e-passports
that would use RFID technology.
RFID and the oil patch
In the oil patch, most of the
upstream uses of RFID center
around drilling and processing
plants. Charles Mohrmann, VP
strategy and business development, SAT Corp., says RFID for
engineered assets is increasing in
popularity for four reasons:
• Task validation – RFID tags
ensure data is time-stamped
only when a person is close to
an asset they are inspecting,
thus the RFID tag cannot be
easily falsified, as is the case
with bar codes. As such, RFID
facilitates compliance with EPA
and OSHA requirements.
• Cost effectiveness – RFID tags
last for a decade or longer in the
process industries because they
hold up to harsh environments
(e.g., painting, corrosion, sand
blasting, etc.). The total cost to
replace any type of tag in the
process industry is estimated at
more than $20, so rugged RFID
tags can pay for themselves
over time.
• Convenient data storage – RFID
tags store significant amounts of
data, so customers can have
their ERP #, OEM #, location #,
Tag #, warranty/repair status,
etc., all readily available on the
actual asset.
• Bi-directional communication –
The ability to both read and
write to the tag if information
changes enables the customer
to put inspection information on
the tag for comparison with the
next inspection.
Further downstream, ExxonMobil
uses RFID on a key fob as a device
that can “talk” to gasoline pumps
and allow payment directly from
customers’ bank accounts. Nearly
6 million people already pay for
their gasoline and snacks electronically using ExxonMobil’s
Speedpass. Other gas stations are
developing their own proprietary
RFID systems that are not
compatible with ExxonMobil’s,
and so now there are efforts
under way to standardize RFID
technologies.
RFID standards developing
Several organizations, such as
the International Organization
for Standardization (ISO), the
International
Electrotechnical
Commission (IEC), and memberdriven EPCglobal Inc., are working
to address interoperability of RFID
technologies and systems.
EPCglobal U.S. is an affiliate of
EPCglobal Inc., serving to help
foster the adoption of the
EPCglobal Network™ and related
technology in the U.S. The
EPCglobal Network combines RFID
technology, existing communications network infrastructure, and
the Electronic Product Code™
(EPC – a number for uniquely
identifying an item) to enable
accurate, cost-efficient visibility of
information along the supply
chain.
EPCglobal has worked cooperatively to develop the EPC Generation
2 RFID standard, the newest and
most advanced of the RFID
specifications for the ultra-high
frequency (UHF) band centered
around 900 MHz. EPC Gen 2 has
several advantages over the firstgeneration EPC Class 0 and
Class 1 standards, including
optimized performance in different
global regulatory environments,
read/write field programmability,
faster tag read/write rates, operation in dense reader environments
and migration to future EPC classes.
According to a white paper from
Intermec about the Gen 2 RFID,
“a new feature in Gen 2 from
previous generations is the use of
the Q algorithm to identify tags
and
manage
transmission
collisions. The Q algorithm is an
important innovation that enables
many tags to be accurately
identified quickly. To accomplish
this, it establishes a structure for
tag-reader communication and
puts tags into a ‘sleep’ mode until
it is their turn to respond.
Previously identified tags are
ignored, so time-wasting re-identification is avoided.” This is just
one of the benefits of the Gen 2
spec, which should be widely
adopted by the end of 2006.
Like many current numbering
schemes used in commerce, the
EPC is divided into numbers that
identify the manufacturer and
product type, but the EPC uses an
extra set of digits (a serial number)
to identify unique items. The EPC
is the key to the information about
the product it identifies that exists
in the EPCglobal Network. An EPC
number contains:
• Header, which identifies the
length, type, structure, version
and generation of EPC
• Manager Number, which identifies the company or entity
• Object Class, similar to a stock
keeping unit, or SKU
• Serial Number, which is the
specific instance of the Object
Class being tagged.
Additional fields may also be
used as part of the EPC in order to
encode and decode information
from different numbering systems
into their native (human-readable) forms.
The EPCglobal Network is a set
of RFID technologies that enable
immediate, automatic identification
and sharing of information on
items along the supply chain.
The network is comprised of
five fundamental elements: the
Electronic Product Code (EPC),
the RFID System (tags and readers),
Object Name Service (ONS) that
tells the computer systems where
to locate product/equipment
information on the network,
Physical Markup Language (PML),
and Savant, a software technology
that acts as the central nervous
system of the EPCglobal Network.
We Know
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Circle Number 094
Philips and Texas Instruments
are currently working on conformance testing for the technical
interpretation of the EPC Gen 2
standard to ensure interoperability
between EPC Gen 2 products
(labels, hardware and system
solutions) to accelerate global
adoption of the technology. The
companies are also extending
their collaboration efforts through
the ISO process for accelerated
ratification of the ISO/IEC 18000-6
Type C standard, which is based
on the EPC Gen 2 specification.
Gen 2 suited for drilling rigs
Brady Moritz, chief technology
officer of California-based Fitiri
Inc., told Upstream CIO that the
second generation of RFID tag is
better suited for use on drilling
rigs for asset management.
“The drilling rig is a different
environment than a WalMart ––
there’s metal, chemicals, high
temperatures and bad weather.
The metal reduces the scan range,
and thick plastic enclosure that
protects the tag from the
elements makes the tag heavier
and more difficult to stick to the
equipment than paper, which
doesn’t hold up to the elements.
Some people have resorted to
hanging the plastic tags with a
cable rather than hard-mounting
them, but if they are swinging at
head level, that could hurt somebody,” he said. “With the secondgeneration tags, the scan range is
better, extending from several
feet to up to six feet away, even on
metal.”
The rugged handheld reading
devices are also suited for the
drilling environment, Moritz said.
After scanning the tags the handheld stores the information in
cache until the mechanic or
technician can download data
to the PC using a cradle.
Alternatively, the device can send
the data to the network via Wi-Fi
(wireless Ethernet) or by cellular
general packet radio system
(GPRS). Maintenance or repair
people can even scan RFID tags
and barcodes using the same
handheld device to see if any
work needs to be done, or just to
verify that the equipment has
been checked. If they see that
repair is needed, they can log the
work order directly into the Rig
Management System software.
“One of the biggest problems
with the good-old-boy method
was that it was easy to lose track
of preventive maintenance. They
Decision factors for RFID tag selection:
• Tag memory size and data format
• Operating range – short scan distance may help avoid scanning other tags on
nearby equipment (collisions).
• Lifetime – passive tags need no batteries, but active tags may need to have
batteries replaced.
• Environmental impacts:
- Extreme heat/cold
- Electromagnetic areas (will it work near metal?)
- Vibration effects at specific frequencies
- Pressure (9,000 ft deepwater applications)
would run it until it broke, then fix
it, even though this was the most
expensive way to handle rig maintenance. There was more rig
downtime as they waited on parts
to be delivered. With RFID to
monitor the assets, proactive
maintenance can be done on a
schedule, which is much better,”
Moritz said.
Challenges remain
Some of the challenges other
than
standards
that
RFID
technology faces include:
• Radio frequency engineering
and deployment
• Significant investment in RFID
infrastructure
• Scalability from small RFID
pilots
to
enterprise-wide,
production-strength deployments
• Storage and protection of the
increasing amounts of RFID data
• Secure sharing of RFID data
across suppliers, partners and
customers
These
challenges
present
excellent opportunities for systems
integrators to assist the many
companies investigating RFID in
creating the right solution for
their situation.
ABOUT
THE
AUTHOR: Jeanne
M.
Perdue
is
editor of Upstream
CIO
newsletter,
published by Zeus
Development
Corp. The Society
of
Petroleum
Engineers
has
selected her as a Distinguished Lecturer
for 2005-2006.
The oilfield equipment manufactured by Crown is at the
forefront in making recovery processes more efficient,
faster and safer. Manufactured completely in North
America, our equipment meets the most rigorous industry
standards. Major operators around the globe rely on the
innovation and superior quality of Crown.
• OILFIELD EQUIPMENT MANUFACTURING
• RIG REPAIRS AND RETROFITS
• PARTS SUPPLY AND SERVICE
Bakersfield, CA
Calgary, AB
Casper, WY
Edmond, OK
Houston, TX
Odessa, TX
Victoria, TX
Toll Free: 1-800-661-6172
ISO 9001:2000
WWW.CROWN-ENERGY.COM
Circle Number 089
By STEVE ADAMS, DENNIS ASH &
JIM PATTERSON
Norris/A Dover Company
M
illions of dollars are
spent each year on
fishing tools. And that
enormous expenditure doesn’t
even account for rig hours, man
hours and lost production.
Therefore, if these costs are to
be controlled, it is extremely
important to use the right fishing
tool for each application.
“Not all fishing tools are created
equal.” Good performance, design,
engineering,
and
controlled
tolerances in the manufacturing
process, along with rigid inspection,
assure that quality fishing tools
reach the field. A fishing tool that
provides quality and reliability is
pivotal to properly perform the
fishing job. Each tool is designed
for a specific job or function. So,
depending on the fishing application, choosing the right tool can
be the difference between success
and failure. When a well goes
down, time is money. In this
article we are going to discuss the
proper use and application of
fishing tools. Remember, when
you have a fishing application,
you are truly fishing for dollars.
History of sucker rod sockets
(fishing tools)
The oil business was developing
fast in the early 1920s. Many of
the wells in the major fields, in
states such as Arkansas, Kansas,
Oklahoma and Texas, were
operating on sucker rod lift.
Wooden sucker rods were used
extensively during this time
although some “iron” sucker rods
were in limited use. While still
considered experimental, iron
sucker rods were coming to the
forefront because of the deeper
depths and harsher operating
environments required from rod
lift applications. When iron rods
parted at the joint, a tubing job
was necessary and, as iron rods
became more prevalent, more and
more operators were swamped by
rod and tubing jobs. Wickered slip
sockets to engage rod body
failures were available, but these
cheaply made fishing tools were
considered a nuisance product by
most manufacturers and their
availability was limited by the
small market demand.
The correct tools for fishing
applications
Today, a variety of fishing tools
exists. Understanding what application each tool is best suited for
will help accomplish the job with
minimum downtime and expense.
Operators can save time and
money by carefully examining the
Figure 1
Figure 2
lower end of the failed piece when
it is pulled out of the hole. This
examination along with answers
to a few questions will help the
operator determine what needs
to be “fished” downhole. For a
successful fishing job, begin by
determining where in the rod
string the failure occurred and what
the fishing tool must catch. Then
determine what type of fishing
tool best suits the application at
hand and size the tool by determining the inside diameter of the
tubing. Following these few steps
is important, because using the
right fishing tool and properly
sizing the wickered slips and/or
slip unit is vital to success.
from the preceding list is worn or
faulty, as all three wickers in the
lower bowl may not engage.
Combination socket
The
combination
socket
(Figure 1) consists of an inner
bowl that is attached to the top
bushing and positioned inside the
tapered outer bowl. The inner
bowl employs an upper spring
and a set of upper wickered slips
that engage the sucker rod body.
The outer bowl consists of a
spring and lower wickered slips
that engage the pin-shoulder and
pin of the sucker rod. This socket
also is capable of engaging
non-hardened couplings, nonhardened polished rod bodies
and pins, top valve rod bushings,
pins and the fishing neck on the
valve rod guides of the subsurface
pump. However, there is the
potential for damage to the lower
wickered slips and/or enlargement of the lower outer bowl
opening, if one of the components
Overshot socket
When producers began using
spray metal couplings a new
problem presented itself in the
fishing operation. It was found to
be impossible to fish spray metal
couplings with wickered slips. To
overcome the difficulty, an
overshot socket was designed
that would utilize a slip unit to
swallow the coupling rather than
try to engage it with wickered
slips. The overshot socket is
similar in construction to the
combination socket, in that it is a
two-stage fishing tool and comes
in both a regular and oversize
configuration (Figure 2). The
oversize overshot socket is
constructed like the regular overshot socket, however this tool
was specifically made to “fish”
larger diameter components in
smaller diameter tubing, where
the “fish” could not be caught by a
regular overshot socket. The bowl
and slip units of the oversize overshot socket are thinner and thus
their strength is limited due to the
smaller cross-sectional area of the
lower bowl and slip unit. As a
result, the lower bowl and slip
unit of the oversize overshot
socket is designed as a single run
tool and does not carry a
guarantee or warranty by most
manufacturers. To preclude any
argument or misunderstanding,
this fact should be fully understood by the user.
Circle Number 127
regular sockets. Operators will
often fish parted rods with the rod
body socket and immediately put
the well back on production,
leaving the fishing tool as a
“splicer tool” in the rod string.
Later, when the pump is pulled,
the socket is removed from the
rod string and the broken rod
body replaced with a new
sucker rod.
Figure 3 and Figure 4
The upper wickered slips in
both the combination and overshot socket will engage rod body
breaks. However the overshot
socket replaces the lower wickered
slips with a lower slip unit in the
lower bowl which allows this tool
to swallow API Class T and SM
(spray metal) couplings, the pinshoulder of the sucker rod, and
the fishing neck of the valve rod
guide on the subsurface pump.
In operation, the “fished”
component forces the slip unit in
the lower bowl up until the “fish”
enters the slip unit of the lower
bowl. Once the “fish” enters the
overshot socket, the lower slip
unit drops, under spring tension,
between the shoulder of the “fish”
and the shoulder in the lower end
of the bowl. Thus, the “fish” is
caught and can’t get out. Some
operators prefer an overshot
socket that consists only of the
lower bowl, spring and slip unit
assembly. This modified overshot
socket can be achieved by
removing the upper bowl assembly
and engaging the top bushing with
the lower bowl assembly.
Rod body socket
The rod body socket (Figure 3)
was designed to fish rod body
breaks. This socket has received
wide acceptance because of its
durability and proven performance.
The smaller OD of this tool will
not restrict production in most
wells and permits this socket to
bypass some areas where
paraffin, scale and flattened areas
in the tubing offer resistance to
Polished rod socket
The polished rod socket
(Figure 4) is for non-hardened
couplings (API Class T), pin
shoulders, pin threads and
polished rods. However, this
socket with a short body and a
single set of wickered slips is
primarily used to economically
“fish” polished rods. The polished
rod socket uses a slip stop to
prevent damage to the spring
caused by shear lip discontinuities.
The wickered slips and springs
are interchangeable with the
lower wickered slips and springs
of the combination socket.
Small tubing socket
The continuing trend in dual
and slim hole completions presents
new fishing problems when 11/4",
11/2", 13/4", or 21/16s" integral joint
tubing is used. Dimensional
limitations make it impossible or
impractical to make a wickered
slip or overshot socket that will fit
these applications. As a result, the
small tubing socket (Figure 5) was
designed with permanently cut
wickers in the lower bowl. The
socket is lowered onto the fish
and rotated to the right. As it is
rotated, the wickers cut into the
fish, threading the socket onto the
fish so that the fish may be pulled.
Operators may use spray metal
couplings on 5/8" rods in 13/4"
tubing. If the small tubing socket
is used to “fish” this coupling,
damage to the socket may occur.
Because it is possible that the
socket may not screw on securely
to the hard surface of the spray
metal coupling in order to make
the catch, operators should not
use the small tubing socket on
spray metal couplings. Small
tubing sockets cannot be guaranteed against damage caused by
spray metal couplings.
Figure 5
Precision fishing tools perform
an important job and are entitled
to proper care by users in order
to guarantee maximum performance. These tools are engineered
to be assembled by hand, with the
use of a 12” crescent wrench on
the flat of the top bushing and a
strap wrench on the bowl.
Careless handling or improper
makeup can result in damage to
bowls, slips or slip units. Proper
makeup
procedures
should
include clean, lightly lubricated
threads and clean, dry (non-lubricated) contact-faces. (The use of
pipe wrenches on fishing tools is
never recommended). Care must
be taken when freeing the “fish”
from the tool to avoid damage to
the socket. After being used in the
field, maintenance of the fishing
tools entails inspecting for
excessive wear, fatigue, or other
damage; this will help achieve
long service life. Sockets should
be
promptly
cleaned
and
thoroughly oiled prior to storage.
Oiling the socket is important due
to the heat treat condition of the
alloy steel and the need to
maintain the close manufacturing
tolerances necessary for a long
service life. This systematic
procedure will maintain the user’s
tools in top condition. So, the
next time you go “fishing for
dollars,” remember that proper
selection and careful maintenance
of your fishing tools can mean
the
difference
between
a
successful fishing job and pulling
the tubing string.
Circle Number 064
Canadian oil sands
All Photos: Suncor Energy
Heavy oil deposits of Alberta could be tapped for the next two centuries!
By ANDY MASLOWSKI
N
ow yielding more than 1 million barrels of oil
per day (MMBOPD), the oil sands of Alberta
are only beginning to strut their economic
stuff. After all, estimates indicate up to 300 billion
barrels of oil sands oil may be recoverable, placing
Canada ahead of even Saudi Arabia in total oil
reserves, if this comes true.
Produced by strip mining surface deposits and
through steam injection in underground wells, the oil
sands do not surrender their precious liquid fuels
easily. But with oil prices surpassing $60 and whoknows-how-high, there are incentives to go for it.
That’s exactly what companies are doing with the
full cooperation of their provincial and federal
governments in Canada. And as this Alberta oil sand
production increases over the next decade, there’s
a good chance more of it will be exported south to
the world’s greatest energy importing nation, the
U.S. of A.
Oil mines
The Alberta oil sands play is located some 1,500
miles north of Grand Junction, Colorado, the heart of
the American oil shale district. The two plays are not
the same. While the oil sands base is bitumen –– stuff
like asphalt or very heavy oil –– the American oil
shales are sedimentary rocks containing organic
material like kerogen, which is less soluble than
bitumen in giving up its hydrocarbons.
There’s another difference. While the shale play in
Oil sands mining pit.
Colorado has been tested with only a few projects
during the past 30 years (see “American oil shale” in
Well Servicing July/August 2005), Canada has
embraced its unconventional petroleum resource
with years of government and industry cooperation.
More than 1,800 oil sands lease agreements are in
place in Alberta in three different districts:
Athabasca, Cold Lake and Peace River.
The
Athabasca area is the largest, where the sands are
closest to the surface and account for much of the oil
sands development around the city of Fort
McMurray, one of the world’s hottest oil boom cities.
The Alberta Department of Energy (ADOE) also said
the resource covers some 140,000 square kilometers
(about 54,000 square miles) of the province, enough
for several decades of development. Incidentally, the
Alberta government prefers the term “oil sands” to
the former designation “tar sands.”
According to the ADOE, the oil sands typically
contain about 10-12 percent bitumen, about 4-6
percent water, and the remainder mineral matter,
including sand and clay minerals. The goal is to
separate the bitumen from the sand and water,
normally using hot water or steam, and then
processing the resulting synthetic oil into usable
products. About two tons of oil sands must be dug up,
moved and processed to produce one barrel of oil.
The first oil sands leases were issued in the late
1950s and commercial production began in 1967 with
a surface mine operated at the Great Canadian Oil
Sands (now Suncor Energy, Inc.) project. Production
increased significantly with the addition of the
Syncrude Canada Ltd. operation in 1978 and the
Albian Sands project, operated by Shell Canada, in
2003. Numerous other companies, like Canadian
Natural, ExxonMobil, Imperial Oil and PetroCanada,
are in developmental or planning stages for both
additional open pit mines and new recovery wells.
To date, open pit mining has recovered most of the
oil sands production. This process is spectacular
and has garnered most of the attention in the news
media. For example, CBS 60 Minutes did a feature on
the oil sands in January [2006]. Huge machines,
including 300-400 ton trucks, power shovels with
capacities of 80-90 tons, giant sizers and crushers, are
used to mine the oil ore and bring it to nearby
processing plants.
Charles Ruigrok, Syncrude Canada CEO, described
the process as follows, “We start by mining the oil
sand using large shovels and trucks. Then the heavy
black bitumen is separated from the sand using hot
water and steam in an extraction plant. Finally, the
bitumen is sent to our central upgrader for processing
into a light, sweet crude oil blend before it is shipped
by pipeline to refineries across North America.”
In 2004, Syncrude’s oil sands operation, the largest
one in Alberta, produced about 87.2 MMBO, or about
238,000 BOPD. Ruigrok projected this total could
reach 350,000 BOPD by this summer, 2006.
During the past few decades there have been a
number of improvements in extracting oil from the
sands in a more economical and environmentally
favorable manner, resulting in about a 40 percent
savings in energy, Ruigrok stated. This includes the
“hydrotransport” of bitumen slurry through pipelines
and refinery enhancements. On the policy side,
there have also been a number of encouraging moves
that assist the climate for new investment in the
oil sands.
Circle Number 006
The Alberta Energy & Utilities Board reported oil sands production has risen about 63 percent since 2000.
“Our governments, provincial and federal, are
supportive of improved market access, “ Ruigrok
said. “We are seeing more regulatory efficiency and
more timely regulatory approvals for access to the
resource. However, we can still do better and we
continue to press federal and provincial regulators to
reduce needless overlap and duplication of effort.”
He also said oil sands developers are successfully
dealing with cost pressures through such things as
continued investment in new technology and more
equitable relationships with key suppliers including
First Nations (Canadian Native People) contractors in
Western Canada.
Of course, there are those adamantly opposed to
oil sands mining. A number of environmental groups
believe open pit mining devastates the landscape and
requires too much water and energy, mainly natural
gas, to process the oily rock. Some also claim the
environmental work done so far has been highly
experimental and that there is no proof reclamation
work will adequately restore the land free of longterm damage.
The industry and various governmental agencies
are highly sensitive to these concerns and
continuously monitor and study local environments,
eco-systems, water quality, wildlife, and the like. But
with some $80 billion ($C) worth of projects already
announced, the Alberta oil sands are a key ingredient
to Canada’s energy future, a steppingstone to
creating thousands of jobs and billions of dollars of
revenue from taxes, royalties and lease auctions on
Crown lands.
At the start of the new year, consultations were
taking place between the various stakeholders,
reviewing developmental policies. “I’ve heard the
desire of Albertans to discuss how we develop this
valuable resource in a way that protects and sustains
the environment,” explained Alberta’s Environment
Minister, Guy Boutilier. “There is a need to review
our policy principles, but how we engage with
Albertans to develop them is equally important.”
Recovery wells
The Alberta Energy & Utilities Board (EUB) reported
oil sands production has risen about 63 percent since
2000. At about 1.1 MMBOPD, it represents about 42
percent of Canada’s daily production of about 2.6
MMBOPD. In 10 years, the oil sands of Alberta could
be giving up about 2.7 MMBOPD, constituting
approximately 70 percent of Canada’s projected
production of an estimated 4.0 MMBOPD.
Spread over a region equal in size to the land area
of Florida, the Cretaceous Age oil sands and bitumen
deposits represent a tremendous accumulation of
hydrocarbon material. However, the EUB said about
80 percent of the estimated 300 billion barrels of
recoverable bitumen lies below 250 feet, making them
too deep to economically mine (but if world oil prices
hit $90-100 barrel one day, this depth to mine could
deepen).
So while the majority of oil sand production is now
derived from mining operations, there’s a good
chance that one day in the future most will be
collected by in situ wells.
At the end of 2004, the EUB said there were more
than 7,700 bitumen wells operating in the province,
producing about 450,000 BOPD or about 58 BOPD
from each well, on average. More than 90 percent of
the oil produced from in situ operations is blended
with a lighter crude oil or condensate stream for
transportation outside of Alberta to refining markets
elsewhere in Canada or in the U.S.
There are two main commercial methods of
recovery in these wells, according to published EUB
reports. “Cyclic steam stimulation” uses a single well
to both inject high pressure steam into the oil sands
to heat the oil and to pump the oil to the surface.
This technique is applied in the Cold Lake region by
such companies as Imperial Oil. Another method
called “steam assisted gravity drainage” makes use of
two horizontally drilled wells into the oil sands.
Steam is injected through the upper well, causing the
bitumen to flow to the lower well where it can be
pumped to the surface. The large amounts of water
and energy needed for these kinds of recovery wells
make this type of production more expensive than
open pit mining of the resource.
Some calculate that by using both techniques ––
mining and recovery wells ––beginning about 2015,
the oil sands reserves could sustain production of
more than 2.5 MMBOPD for more than 200 years!
That is a lot of oil!
Does the successful Alberta oil sands play offer
lessons for the U.S. and its potential oil shale
reserves? Absolutely. It positively proves it requires
government and industry cooperation, complete
with investment, tax incentives, public land
access, water rights and new infrastructure such as
roads, processing plants and pipelines. Does the U.S.
have the stomach to proceed with such operations
in Colorado, Utah or elsewhere? That’s another
question all together….
Circle Number 076
By ERIC L. ROSEMANN, CSP
Gray Wireline Services Inc.
Industry representation continues to work with
government to keep commerce healthy while
casting a watchful eye on the storage and
transportation of hazardous materials.
I
n the December 2002 issue of Well Servicing, an
article titled “HazMat Security After 9-11”
described, in part, the past, present and
future of hazardous materials security. The author
encouraged cooperation between regulators and
industry to prevent burdensome and unproductive
security regulation of hazardous materials,
particularly in our industry. In the past, industry
representation, such as the AESC, has been actively
involved. In the present, industry representation
continues to work with government to keep
commerce healthy while casting a watchful eye on
the storage and transportation of hazardous materials.
In the future –– well, the future is here! And now a
development in these security regulations affects a
portion of our membership directly, but indirectly
affects us all as we work together at the well site.
Historical background
In August of 2001, very few of us would have heard
of the concept of a “Dirty Bomb” or in the
euphemisms of government, a “Radiological
Dispersal Device or RDD.” The other nuclear
scenario involves a true nuclear device, “Improvised
Nuclear Device or IND,” but that scenario involves
fissile material in quantities not found in our servicing industry and for our purposes will not be
discussed. The terrorist use of the RDD is a “Weapon
of Mass Disruption,” rather than the far more
dangerous “Weapons of Mass Destruction or WMD”
such as a true nuclear (IND), biological or chemical
weapon. The RDD uses an explosive device to
disperse radioactive material, or “RAM,” upon the
public in a crowded public area such as a downtown
or a mall. Aside from the initial blast of the explosive
device propelling the RAM, the resulting “salting” or
“seeding” of the properties results in low-level
radioactive contamination. This situation poses a
varied degree of long-term health risks to the public
from the radiation, depending on the quantity and/or
quality and/or activity of the RAM, coupled with
the resulting dilution of the original RAM by the
explosive. Generally speaking, if the terrorists had
sufficient quantity, quality and activity to make a
RDD a long-term health hazard, they had enough to
make an IND.
The real damage of the RDD (after the initial
conventional explosive blast) is in the public’s mind.
In the months that followed the events of September
11, 2001, the concept of theft of radioactive material
from industry to create the RDD started to rise to the
top of public awareness, due in part to the media’s
extensive use of the term “radioactive.” Also, the film
industry’s use of radiation to create monsters in
popular movies helped develop the scary vision of
radioactivity. And lastly, the very real
health dangers from events like
Three Mile Island and Chernobyl
fueled a phobia of radiation and RAM.
Simply stated, radiation and radioactivity are terms that create panic in
the general public’s mindset. This
skewed public perception plays a
part in developing regulations concerning radioactive
material (RAM), particularly in transportation and
security.
If a RDD went off, the affected area would carry a
stigma that would restrict trade in the area, regardless of the actual health hazard initially or after
remediation. Would you be inclined to shop at a mall
that was an RDD contaminated site, even if the
government assured you that the area was “clean?”
Public reaction to other radiation events indicates
that you probably would not. The result would be
bankruptcy of the mall, resulting in millions or
billions of dollars in losses in sales, property use and
taxes. A Weapon of Mass Disruption does just that,
disrupts massively. These RDD’s are also cost-effective.
A terrorist can buy low cost, low-level radioactive
material like processed uranium ore, or “yellowcake,”
and economically disperse it explosively and “kill by
fear” a mall or section of downtown with less than
$50,000 invested. The RDD is a pure terror tool.
Circle Number 017
The present
Enter the radiological experts in our business, the
nuclear loggers and tracer companies. Expertly
trained, competent and certified personnel
(regulations require very specific minimum
professional radiological training by state or
federally-approved trainers/courses with annual
refreshers) coming to a well site near you. These
professionals have a lot of security issues on their
minds in the way they need to conduct business at
home, on the road and at your well site. In 2003, the
EPA and NRC, at the behest of the Department of
Homeland Security, working with Departments of
Labor (DOL), Defense (DOD), Energy (DOE),
Commerce (DOC), and Health and Human Services
(HHS), came up with requirements for augmenting
existing
security
arrangements
concerning
radioactive materials.
The 2005-2006 result has the governing federal and
Agreement States’ radiological protection agencies
implementing increased security controls for certain
radioactive materials, quantities and devices of
concern listed by the Nuclear Regulatory
Commission. The term “RAMQC” will be used to
augment existing radiological security.
These
RAMQC sources are so listed because of their
“attractiveness” for use by terrorists by the
international community. The U.S. is adopting this
same list and many of the security concepts of the
international community. Some of these RAMQC
sources can be found in use in the oilfield by several
logging suites offered to customers. The experts in
the field agree that discrete logging sources are not
all that “attractive” individually. Although there are
very specific requirements for RAMQC, there is a
regulatory expectation for enhanced security of all
radioactive materials, regardless of
classification –– and field inspections are
The radiological experts in our business
starting to reflect that expectation.
(nuclear loggers and tracer companies) have
Currently, our radiological service
providers with RAMQC have to comply
a lot of security issues on their minds in the
with issued orders from the NRC and,
way they need to conduct business at home,
subsequently, the Agreement States for
increased controls in six areas:
on the road and at your well site.
1. Written “Trustworthiness and Reliability”
certifications of the radiological worker via background checks, work history verifications, resume
checks, and such. for unescorted access to RAMQC.
Uncertified radiological workers and members of the
general public must be escorted.
2. Security and monitoring by the licensee during
use, storage and transportation that includes
mechanisms to immediately detect, assess and
respond to unauthorized access to RAMQC,
including a pre-arranged plan to engage local law
enforcement agencies (LLEA) and reporting to the
regulators with dependable communication systems
in case of theft.
3. Pre-screening (by licensee) of the licensee’s
selected common carriers (including commercial hot
shots) of security and monitoring requirements
similar to the first two controls, plus package
tracking, constant control and surveillance during
transit, confirmation of arrivals, receipt, delays, and
such. with licensee and NRC/Agreement States in
case of non-performance and follow-up investigations
and reports involving problems in transit. There are
some additional security obligations for very large
shipments of RAMQC that do not affect the normal
field operations on a well site.
4. Physical security of RAMQC to prevent
unauthorized removal in storage at the shop and field
involving two minimum physical barriers to access
and in the field, plus methodology to disable vehicles
or trailers when not under the direct control and
supervision of the licensee.
5. Documentation requirements for changes in
certifications, physical security changes, security
plan revisions, approved common carrier/hot shot
Circle Number 082
company discontinuations and
By understanding the why, we can understand
reduction/elimination of RAMQC
the importance of these regulations and can help
or termination of license for a
period of not less than three
these nuclear loggers by complying with their
years.
directions for on-site security and helping to
6. Development and implementation of a protection plan for the
keep a watchful eye out for suspicious activities
documentation/lists as “sensitive
involving hazardous materials, particularly
information” associated with the
radioactive materials and explosives.
previous five topics.
In many ways, all of these
requirements
have
been
(OSRP) has been a step in the right direction for
addressed in part by the existing Department of
recovery of lost or stolen radiation sources,
Transportation (DOT) and radiological safety
charging nothing for the service and offering to
regulations of the NRC and Agreement States. As
match unwanted sources with licensees that can
non-radiological workers on a well site, you will
use those sources rather than increase the
probably notice the additional physical security
proliferation of new sources to meet today’s
noted in item 4 and more restriction to access to the
logging demands.
areas around the logging unit or trailer that stores
• On the topic of Storage of radiation sources that
any radioactive material. Now you know why. By
are not used in a safe and secure manner, most
understanding the why, we can understand the
agree that existing regulations are adequate.
importance of these regulations and can help these
• On the topic of the national source tracking system
nuclear loggers by complying with their directions
for radiation sources, the general view was that
for on-site security and helping to keep a watchful
licensees maintain records of the present locations
eye out for suspicious activities involving hazardous
of all Category 1 and Category 2 (common logging
materials, particularly radioactive materials and
sources are Category 2 and 3) sources they
explosives.
In the future, it may become clear that these are not
the only changes needed, only what have been
implemented so far. The AESC and other industry
groups like the Oil Field Services Industry Forum for
Radiation Safety and Security (Forum) and Health
Your Business is Our Business
Physics Society (HPS) that are involved with
radiological safety are solicited by government to
comment on proposed additional regulations
concerning the security of radioactive material,
Well Servicing inventory ready and
particularly those used in oil and gas extraction.
Significantly, comments from the members of these
waiting at your best value.
associations can influence decisions to implement a
particular course of action concerning security of
Products:
Wire Rope, Rig Supplies, Pipe Handling Equipment, Hand
radioactive materials.
Tools, Rubber Goods, Hose & Fittings, Hammer Unions,
Recent comments to the NRC’s Radiation Source
Swivels, Safety Equipment, Pump Parts, Brake Blocks,
Protection and Security Task Force from the AESC,
Air Valves
the Forum (which comprises a large number of AESC
members) and independent RAM users forwarded
Services:
comments to apply practical approaches to proposed
Wireline Services, Pull Testing Certification, Tong Repair,
Overhead Lifting Safety Training, Valve Repair,
security regulations for radioactive material by a
Machine Shop Services
government that is generally unfamiliar with our
industry’s applications of RAM, but is very much
Locations:
familiar with the public’s mindset concerning
Bakersfield: 661-324-9721
Hobbs: 505-393-9927
radioactivity and also privy to security threats that
Casper: 307-235-1569
Odessa: 432-367-8116
are not familiar to us or in the public domain. So, as
Farmington: 505-325-0291
Oklahoma City: 405-491-9988
the comedian Joan Rivers says, “Can we talk?”
Ft. Lupton: 303-857-1715
Rock Springs: 307-382-7131
The AESC and other involved organizations and
Gillette: 307-682-8990
Williston: 701-774-8361
Dallas: 214-987-9868
Vernal: 435-789-1525
individuals produced comments on topics under
Midland: 432-687-0993
government consideration for additional regulations.
Listed below are some of the general comments:
• Most concurred with the United States getting in
line with international codes of conduct on
Howard Supply Company
radiological security issues and the associated lists
www.howard-supply.com
of RAM that would be attractive to terrorists.
• The establishment of the Off-Site Recovery Project
Circle Number 098
possess. Monthly reporting of all movements
through web-based tracking system would be
acceptable. Notification of recipient licensees when
a source is sent, to insure their expectation and
timeliness of receipt is all right. Reporting within
24 hours of Category 1 or Category 2 sources in
transit that cannot be located by the freight carrier
is also a good idea. However, detailed wellsite-towellsite tracking logging sources in Category 2 and
many other logging and calibration sources in
Category 3 pose little security enhancement and
pose expensive and cumbersome clerical
applications. Additionally, current security
tracking is adequate and proven.
• Comment on Import and export controls on
radiation sources to insure that recipients of
radiation sources are able and willing to adequately
control radiation sources that, generally speaking,
existing rules are adequate
• On the topics of Procedures for improving the
security and control for use and storage of
radiation sources and transportation of radioactive
materials, it was felt that adequate policies and
regulations are in place at present to provide for
control and security of these sources.
• Background checks for individuals with access to
radiation sources is not a bad idea, but it is being
Circle Number 118
Regulations require very specific minimum professional
radiological training by state or federally-approved
trainers/courses with annual refreshers.
duplicated by regulations governing similar security
requirements for explosives (BATFE) and hazmat
drivers under DOT. Essentially, the folks in
government should talk to each other more and
come up with one security check that would
satisfy all of the agencies for an individual’s
security requirement.
• Alternatives technologies to logging sources is a
good idea but limited to only a few select systems
already available, and others are very cost
ineffective when compared to general application
chemical sources. The current inventory of sources
and types is a result of industry’s nuclear logging
demands, and the well-evaluation techniques are
based upon the current technologies. Alternative
logging source research is not in the domain of the
majority of current providers of these evaluation
services, and government should fund any
research and share the fruits of its labor with
all industry.
Keep in mind that these are comments by industry
and individuals and will not necessarily be adopted.
The future of radiological safety and security has
arrived and continues to evolve along with other
aspects of Hazardous Material Security after 911.
Cooperative effort with industry and government is
essential to prevent regulators from operating in a
vacuum and demanding compliance to ill-conceived
rules, regulation and law. Thanks to all of you who
engage in activities to work with government to “keep
it real.” If you would like to further understand this
issue and other regulatory issues facing our industry
before it becomes your problem, contact the AESC
and get involved.
Personality profile
By MICHAEL KARDOS
swabbing units, hot oilers, high pressure pump trucks and a
variety of other energy services transport and service trucks.
But Cagle’s start of the climb to his present success was
working on the floor of drilling and workover rigs. The
beginning was 1975, but he soon became an experienced hand
and showed an ability to take on more responsibility. It would
only be a matter of a few years before he worked his way up
through motors, derricks, worked as a driller, a toolpusher,
operations manager, area manager, district manager and
general manager.
During his career, Cagle has worked for a number of
companies, including drilling outfits like Ratliff, Stevens, Big
Chief, Arden, EW Moran, and well servicing companies such as
Pride, Shebester, N.L. and Well Tech. And as so many in the
energy services industry have, Cagle worked for Pool Well
Servicing. “I go back with Frank Pool for many years and
learned many things from him,” he said.
s a young man growing up in the southeast Oklahoma
town of Coalgate, Danny Cagle realized job prospects
were somewhat thin. As he explained it, “When you
lived in Oklahoma back then, there were not a lot of
opportunities.” But drawbacks did not hold back the ambition
and willingness to work hard that has served the 52-year old
Oklahoma native well during his 31 years in the energy industry.
By age 16, he was an Oklahoma cattle buyer, representing
others in the purchase and sale of feeder cattle. That
experience put the idea in his head of becoming a veterinarian.
But the investment of so many years of schooling gave him
second thoughts. Like many ambitious young men, Cagle had
in mind a regular paycheck and the chance to advance in a
career, so he took a job in the oil patch. “There was opportunity
in oil and gas and drilling. There was a steady paycheck and
money was certainly part of it. There were plenty of rigs
running back then, and I could see that if you tried hard and
worked at it, you could move up.”
He has certainly moved up. These days, Cagle works as a
vice president for Beckman Production Services Inc., headquartered in Michigan. The company also has operations in
Wyoming and Montana with completion and workover rigs,
A
Recounting turning points, Cagle quoted a conversation he
had with a driller when he was working for Stevens Production.
“The driller said, ‘What do you want to do?’ I said,
‘Advancement is what I want.’ He told me, ‘If you want to do it,
you will get there.’”
In 1970, Beckman Production Services moved from
Oklahoma to Michigan. Back then it was a one-rig operation,
but has since grown to become Michigan’s largest complete
well servicing company, with about 500 total employees on
the payroll.
It does not take long to realize that Cagle has a jovial, easygoing personality, but at the same time, he is clear about his
focus and goals. Like colleagues in the energy services
industry, Cagle has polished some of the rough edges. After 31
years, “It changed me. I was a tough hombre back in those
early days. I’ve become more mellow,” he said.
In 1980 Dart Energy Corporation acquired Beckman
Production Services. “Now we fly under Dart’s flag,” he
explained, pleased with the arrangement. Like thousands of
observers, Cagle has seen firsthand the consolidations and
mergers that are part and parcel of today’s energy industry.
Dart Energy has grown in part by bringing smaller well servicing
companies under its corporate flag. “My strategy is, when we
acquire these companies, we don’t change their names. We
keep the existing management and it works for us,” he said.
As hard as Cagle works, he makes time for family and
relaxation. He married his wife, Karen, 24 years ago when she
was working in a bank. They have a grown son, Johnny, who
lives in California, and he and his wife, Thresa are expecting
their first child in May. For fun, Cagle likes to hunt whitetail
deer with either a rifle or a bow. He also enjoys fishing. He and
Karen like to travel and spend as much time as possible at their
vacation home in Florida. They have traveled to numerous
places around the world, including Africa, Tahiti, Mexico and
the Caribbean.
From his small-town Oklahoma beginnings, Danny Cagle has
carved a fine niche in life.
These days Cagle spends much of his time as a modern-day
circuit rider, driving to the various energy services companies
under the Dart Energy heading. He flies from Beckman’s offices
in Michigan and spends about two weeks visiting operations in
Powell, Pinedale and Thermopolis, Wyoming, then on to
Midwest, Casper and Douglas. “There’s a lot of driving in
Wyoming. Car rental companies are good to me,” he jokes.
“I’m not a micro-manager. I try to be with the local office heads
one-on-one. I think interaction is better when you’re meeting
with your management on their turf, rather than talking on the
phone. I look at my people around me and they are very loyal,”
he said.
Change is a big part of the energy industry and Cagle feels
that trend will continue. When asked about the single biggest
change, he said, “The people. There was a mass exodus in the
1980s. Some of us tough ones, we survived.”
Safety is a central area of change, he said, acknowledging it
is for the best. He points out that Beckman’s web site touts its
national recognition with five gold, four silver and two bronze
safety awards from AESC over the past 17 years.
AESC is an important part of his professional life, and he
currently serves as the Association’s chapter chairman for
Michigan. He hopes to grow the chapter’s membership and has
encouraged the Association’s leadership to more actively
promote AESC’s programs and benefits, among others, their
insurance programs.
Circle Number 037
Market report
By MICHAEL KARDOS
Information in the Market Report is researched, gathered, compiled and reported by contributing writer Michael Kardos. The
Market Report provides market intelligence, forecasts, trends and operational data on the U.S. and international energy service
segment of the oil and gas industry.
Overcoming addiction
T
o anyone working in the oil and gas industry, it
came as no surprise when President George W.
Bush proclaimed in his recent State of the Union
address that, “America is addicted to oil.” In fact, the
nation’s near-insatiable appetite for hydrocarbons is
both legendary and widely known. What has
changed, judging from President Bush’s pronouncement during his address before a joint session of
Congress, is a resolve, of sorts, to end that addiction.
During his first term in the White House, Mr. Bush
championed the notion that America could reduce
dependence on foreign oil by opening up exploration
and production (E&P) in previously off-limits areas
like the Arctic National Wildlife Refuge (ANWR),
environmentally sensitive U.S. coastal areas, and
regions in the Rocky Mountains, to name a few. Until
his State of the Union address this past January, the
president (along with Vice President Dick Cheney
and others) has consistently called for more drilling.
The president, vice president and their supporters
no doubt continue to support expanded E&P, as well
they should. But the 2006 State of the Union address
was dramatic in terms of the new directions Mr. Bush
wants to take the nation. During his address, the
president advocated setting a national goal of
replacing 75 percent of oil imported by the U.S. from
Mideast suppliers by 2025. He also proposed a 22
percent boost in funding for clean-energy research at
the Department of Energy to speed up improvements
in how homes, businesses and autos are powered. In
his 2007 budget to Congress, Mr. Bush would earmark
$150 million to make ethanol from such sources as
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wood chips, stalks and weeds a cost-competitive
alternative by 2012. And he called for more investment in zero-emission coal-fired energy plants, solar
and wind technologies, safe nuclear energy and
better batteries for hybrid and electric cars, and
hydrogen vehicles.
Ending America’s dependence on foreign sources
of oil (and to a lesser extent, natural gas) would be an
enduring legacy of achievement for any president.
However, proclaiming such a goal and reaching it
requires both a fierce political will and a wholehearted
commitment to generating the requisite financial
wherewithal. On both of those counts President Bush
will have to put his shoulder to the wheel in order to
make that possibility a reality.
Historically, President Bush has been reluctant to
force change upon business and industry through
legislation. For example, there has been little in the
way of mandating greater automobile fuel efficiency
requirements, despite the fact that Republicans have
controlled both houses of Congress since Mr. Bush
has been in office. And with a proposed 2007 federal
budget of $2.77 trillion, a $150 million investment to
produce ethanol from wood chips only serves to call
into question the President’s determination.
If President Bush shows the same political resolve
and financial commitment to reducing America’s
dependence on foreign sources of energy that he has
in spreading democracy throughout the world, the
day of America’s energy independence will be much
closer at hand. Then and only then will we break the
cycle of foreign oil addiction.
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Circle Number 112
Market report
A nuclear lesson in economics
T
hese days, just about any
international flap can roil
the price of oil. The latest evidence
of this was when President
Mahmoud Ahmadinejad announced
Iran’s intention to develop its own
nuclear program. While President
Ahmadinejad and other Iranian
leaders insist their nuclear intentions are peaceful, shock waves
reverberated throughout the
world and oil prices spiked. Given
the stern political climate in Iran,
tensions in the Mideast, and
Iran’s relations with some of its
neighbors, the world is justified in
being suspicious about that
country’s nuclear ambitions.
On the other hand, given the
response from world bodies
regarding the nuclear ambitions
of other nations, Iran might see
this as a good time to forge ahead.
For example, Newsweek reported
in late January that when North
Korea’s nuclear program was put
before the United Nations Security
Council three years ago, almost
nothing happened. And, the magazine reported, Iran has made it
clear that if the International
Atomic Energy Agency (IAEA)
should refer Iran’s activities to the
Security Council, Iran will suspend voluntary cooperation to
IAEA snap inspections.
With some of the world’s largest
oil reserves, Iran has deep pockets
to finance a nuclear program.
That scenario is most frightening
to Israel, whom Ahmadinejad has
said he hopes to wipe off the map.
More insulting, he has openly
questioned whether the Holocaust
actually took place. Israel, for its
part, has not been afraid to act in
the face of nuclear aggressions
from antagonistic neighbors. In
1981 Israel bombed a nuclear
facility in Iraq and put a stop
to Saddam Hussein’s nuclear
program. This time around, Israel,
or any other nation, will have a
tougher time knocking out
nuclear facilities because Iran has
taken pains to diversify its nuclear
infrastructure and bury key
elements deep underground in
hardened facilities.
Oil –– and fragile economies in
key countries –– make Iran’s
nuclear
ambitions
possible.
Russia, desperate for cash, is
willing to make nuclear technology
available. And China, with
approximately $100 billion in
energy contracts with Iran, is
reluctant to openly criticize Iran.
As permanent members of the UN
Security Council, both Russia and
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China would be forced to go
against their own national interests
in sanctioning Iran.
President Ahmadinejad has
made the issue of Iranian nuclear
capability a matter of national
pride. And even though Mr.
Ahmadinejad claims an Iranian
nuclear program is focused on
energy production, and not
weapons, documents and other
information recovered by the
IAEA indicate otherwise. In the
Newsweek article referenced earlier,
IAEA inspectors have reviewed
documents in Iran’s possession
that outline a basic theory of how
to build a nuclear bomb. And the
IAEA has obtained information
that Iran has worked on missile
designs that could carry nuclear
warheads. Iran has offered little
more than vague and non-specific
explanations about these items, a
response which has done little to
assuage IAEA’s concerns.
All of which brings the discussion
back to the price of oil. With a
tight world supply and refining
capacity, almost any sort of
bad news keeps the price of
energy high. And nothing is more
frightening than a rogue nation
bent on nuclear know-how and
ambition.
Market report
Laissez les bon temps rouler?
A
nyone who has spent time in New Orleans
knows the English translation of the above
headline is “Let the good times roll.” And for
hundreds of years, that philosophy was the underpinning of what residents and visitors could expect
on a visit there, even though the phrase is normally
posed as a certainty, not a question. But Hurricane
Katrina ravaged the Crescent City’s levees and laid
waste to huge portions of one of America’s unique
cities. Though New Orleans’ collapse was lightning
fast, its recovery has been a long time in coming. So,
any mark of progress is both welcome news and a
clear demonstration that New Orleans is coming back.
Along with virtually everything else in New Orleans
(including huge sections of the Gulf Coast), the
region’s oil, gas and petrochemical industries were
dealt a severe body blow. The industry was
staggered and is still in the process of recovery. But
an article published in late January by the Christian
Science Monitor announced the return to New
Orleans of a major energy company. Shell
Exploration & Production Co. is in the process of
bringing back 1,000 workers. The decision is even
more heartening to the city because Shell E&P had
considered leaving there prior to Hurricane Katrina
because the political climate and tax incentives are
thought to be more favorable in places like Houston.
But by staying put, Shell E&P has demonstrated a
commitment to New Orleans’ future. Other employers
are also back, including manufacturers like Northrop
Grumman and Lockheed Martin. In early February,
Tulane University Hospital reopened.
And New Orleans officials could not be more
pleased. Mark Drennen, president and CEO of
Greater New Orleans, Inc., was quoted in the Monitor
article, “Shell’s return… is very, very significant. It
has been a major corporate player in New Orleans
historically, and its loss would not only have been a
huge economic blow, it would have been a very
serious blow to our recovery efforts as well.”
The biggest single impediment to speeding that
recovery seems to be housing. Approximately
180,000 homes are habitable, about the same number
as the city’s current population. And while companies
are housing some workers in trailers or compensating
them for long commutes, lack of available housing is
a serious issue. Ross DeVol, director of regional
economics at the Milken Institute in Santa Monica,
California, estimates that for every month’s delay in
rebuilding, approximately 20,000 residents are lost.
But, the Monitor reported, New Orleans officials are
crisscrossing the nation, pitching companies and
telling them about the Gulf Opportunity Zone Act
that Congress passed. For example, the act allows
companies to depreciate up to 50 percent of their
investment in the first year, or makes them eligible
for long-term financing via tax-exempt bonds.
Thanks to the commitment of companies like Shell
E&P, New Orleans is coming back, slowly but surely.
No doubt the day will arrive when “letting the good
times roll” will no longer be a question, but a fact.
Circle Number 005
Market report
A level playing field
W
hen hubris infects the
mind, disaster almost
certainly follows. Such is the case
for once-über lobbyist Jack
Abramoff, whose egregious exercise
of lobbying in the corridors of
Washington, D.C. politics has
resulted in his reputation being
reduced from jet set “playa’” to a
perp walk in a black fedora. As
Lord Acton wrote in April 1887 in
a letter to Bishop Creighton,
“Power corrupts and absolute
power corrupts absolutely.”
Abramoff’s shenanigans have
tarred powerful members of the
U.S. Congress, including Rep. Tom
Delay (R-TX), who was forced to
relinquish his position as House
Majority Leader.
The tipping point of this latest
lobbying scandal was a long time
in coming. It seems to be a
Washington political tradition
that when one party’s stranglehold is unduly protracted,
corruption sets in. This time
around, more Republicans than
Democrats have been caught
playing fast and loose with the
rules and ethics. But Democrats
have had their share of shame as
well, such as when Rep. Jim
Wright (D-TX) was caught padding
the sale of his book or when Rep.
Dan Rostenkowski (D-IL) earned
17 months in jail for corruption
when the Democrats held sway.
Abramoff seemed to delight
in pushing the envelope of
impropriety as far as possible, to
the point of ridiculing the very
clients who hired him to
represent them in Washington.
Most notable were Native
American tribes who retained
Abramoff to lobby on behalf of
their tribal gaming and casino
operations. Abramoff and his
cronies scooped up tens of
millions of dollars in fees and
assured the hapless clients they
were in good hands.
Lobbyists are generally viewed
as being a tool of rich and
powerful special interests intent
on getting favorable legislation for
business, industry, or a point of
view. The nation’s capital has
become a revolving door of sorts
where former representatives,
senators and their aides, in
cahoots with special interest
groups, trade their erstwhile
paychecks for lavish fees,
contracts and special privileges.
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PRESIDENT
GEO-LOG, INC
One highly prized perk given to
former members of Congressturned lobbyists is the privilege
of lobbying current members
of Congress on the House and
Senate floors. Many of those
lobbyists end up on K Street
in downtown Washington, D.C.,
where plump firms set up shop.
Understandably, Congress has
taken up the cry for reform, with
talk of banning privately funded
travel junkets, expensive gifts,
dinners and perks doled out
solely for the purpose of currying
favor. The results of reform have
yet to be realized, but it is a good
bet that something will be done,
if for nothing else, then for the
appearance of political correctness.
As much as the scandal has
tainted the political process, there
is an upside in this. There are
many special interest and trade
associations of modest means
trying to get their message before
elected officials. So lobbyists
working on behalf of organizations
like AESC should take heart that
the playing field is being leveled
because in the end, it is the
message, not the messenger that
deserves to be heard.
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DIESEL ENGINE REBUILDERS
220 INDUSTRIAL AVENUE
GRANBURY, TEXAS 76049
817 326-5321
FAX 326-5324
2600 W. 43RD. ST. P.O. BOX 4635
ODESSA, TEXAS 79760
EMail: [email protected]
LEON LACY
VP - Manager
432-367-2747
800-677-2747
Circle Number 011
Market report
IPO is the way to go
N
o question about it, timing is everything, and
based upon a sustained level of high energy
prices, strong demand for oil and gas around the
world and the very healthy profits in the industry, the
growing number of energy companies who have
made an initial public offering (IPO) have seized the
right day to go public. The current climate for energy
industry IPOs is as favorable as it has been in
many moons.
An article published in late January in the Pittsburgh
Business Times under the headline “Hot energy sector
drives stock offerings” reported that in 2005, 20
energy companies went public, double the number in
2004. Additionally, it reported that James DeStefano,
an analyst with Renaissance Capital, in Greenwich,
Circle Number 014
Connecticut, found that since 2001, 43 energy
companies had IPOs. And in mid-January of this year,
Lehman Brothers initiated coverage of Basic Energy,
headquartered in Midland, Texas, and gave the
company’s stock an overweight rating. The analysts,
James C. West and James D. Crandall, wrote, “The
domestic well servicing business is continuing to
improve as activity levels in the U.S. have
increased…. Basic Energy Services was one of the
first well servicing companies to order new capacity
this cycle and has first mover advantage....”
Those in the industry have observed that Basic
Energy is not the only oil and gas industry company
to go public recently. The Internet website
www.ipohome.com is replete with the names of
energy industry companies who have recently gone
–– or soon will go –– public. And David Pursell, with
Pickering Energy Partners of Houston, which covers
dozens of energy industry companies, underscored
the current environment when he was quoted in the
Pittsburgh Business Times, “There is an appetite in the
public (investment) market for energy.”
IPOs generally receive a great deal of press
attention, but even more important is how a stock
performs over the long term. In that regard, financial
experts across the board are bullish on the energy
sector. A report in early January from Raymond James
said, “…we reiterate our belief that the E&P sector
represents an attractive investment for 2006 and
beyond. Strong industry fundamentals, along with
attractive valuations provide an excellent outlook for
E&P stocks, in our view.” And when Lehman Brothers
initiated coverage of Basic Energy, it estimated the
company’s earning per share “…will grow from $1.24
in 2005 to $1.70 in 2006 and $2.20 in 2007.”
With all the excitement over the share price that an
energy company commands, it is important to view
the issue through a somewhat different lens. Energy
companies are much more than equipment and
balance sheets. They are fundamentally about
people, the ones who work at the company, the
customers they serve and the public who benefits
from their efforts. And when an industry is as strong
and vital as the energy industry is currently, then the
people who work for those companies can enjoy the
fruits of their labors today and be sanguine about the
prospects in the years ahead.
This is a good time to be in the energy business.
Market report
Man versus machine
W
hile the ingenuity of man delivers the
concepts to pull the oil and gas out of the
ground and from under the sea, it is sweat, muscle,
and sinew that does the work. But getting the job
done can be dangerous. According to a 2003 report
by the U.S. Bureau of Labor Statistics, working in the
oil patch is among the most hazardous jobs in
America. That fact is easily understood after spending
time on a drilling or workover rig. So it is human
welfare, as well as good business, that drives
companies to emphasize safety in order to keep
workers out of harm’s way. Not surprisingly, a
number of companies are working day and night to
develop innovative non-human alternatives to make
rig work safer.
For decades, tools like power tongs, power torque
wrenches, pipe handling and connection systems,
elevators and kelly spinners have been commonplace on drilling and workover rigs. Names like
Weatherford International, National Oilfield Varco,
Norris, Oil Country Manufacturing and JT Oilfield
Manufacturing are just a few of the many companies
working to make these types of equipment for the oil
patch. Another interesting tool that makes life on the
rig safer is called an iron roughneck.
The idea behind iron roughnecks is to distance or
even remove humans from the most dangerous areas
of the rig floor. As any experienced rig hand will
attest, one of the greatest dangers on a rig is when
the crew is tripping the hole. Rig crews are focused
on completing the job as quickly as possible and that
atmosphere of urgency is when accidents can
happen. The iron roughneck was first developed in
the early 1970s. Norway, in an effort to promote
greater drilling rig worker safety in the North Sea,
advocated greater automation on the rig floor,
providing an incentive to develop the technology
even further. Iron roughnecks and other automated
power tools and equipment first appeared on
offshore drilling rigs. Over time, those same
innovations have made their way inland.
While the energy industry has become more open
to the use of technology in its operations, at the same
time it is cautious in adopting new technologies. That
is understandable, given the brutal environment that
controls the hands and equipment and the difficulty
in integrating new ways of doing things into the
process. But once a technology proves itself, it is
generally adopted industry wide. In addition to
assuring a higher degree of worker safety,
automation of drilling and workover tasks usually
results in greater efficiency, since work such as
tripping a hole involves a series of similar steps.
Because the initial expense of technological
advancements is generally quite high most new
developments are used in scenarios with the highest
hourly or daily cost, such as offshore and land
drilling rigs. And though iron will never completely
replace sweat, muscle and sinew on a rig, it will
become more and more common that a member of
your crew will have a chip for a brain or will be a
roughneck made of iron.
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Denver City
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Giddings
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Lovington
(505) 396-2620
Kilgore
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Circle Number 055
Greenbacks
for
plugbacks
Re-entry wells offer
the hope of new
production at only
a fraction of the
cost of drilling a
new well.
By ANDY MASLOWSKI
Photo courtesy of Andy Maslowski
P
resident Bush and his
constitutionally
equal
members of Congress
may have missed something last
year when they were crafting the
Energy Policy Act of 2005. The bill
didn’t mention looking for hydrocarbons in wells that already have
been drilled but are situated in
geologic zones not yet completed.
Why bother with this? Why,
indeed! For openers, there probably
is more oil and gas sitting behind
pipe than there is energy waiting
to be made into ethanol this year.
Or saved by extending daylight
saving time! But who needs more
domestically produced crude oil
or natural gas? Well, we do. We
all do!
Large inventory
There are in the neighborhood
of 600,000-700,000 producing oil
and gas wells in the U.S. This
number changes everyday and
is impossible to track exactly.
For example, the U.S. Energy
Information Administration (EIA)
estimated more than 35,000
new American wells were
completed in 2005. New wells are
drilled and completed daily.
Some wells are pumped only once
a week or once a month.
Hurricanes,
power
outages,
reservoir depletion, downhole
problems, changes of ownership,
bankruptcies and the like force
some to be shut-in. Thousands of
wells are plugged and put to rest
every year.
Still, the inventory of producing
wells in this country is impressive.
The industry cranks out some 5
million barrels of oil per day
(MMBOPD), plus some 50 billion
cubic feet of natural gas a day, on
average, and throws in a few
million barrels of petroleum
liquids. The fact we as a nation
use more than 20 million barrels
of oil everyday is another issue.
That’s where the re-entries
come in. Plugbacks, reopens, drill
deepers or other kinds of re-completions can give a well new life.
Already tens of thousands of such
wells are producing around the
American oilpatch. And with the
incentives of $50+ oil and $10+
natural gas, many more re-entries
are being permitted everyday.
Texas is home to more than half
of the nation’s oil and gas wells
and probably most of its
re-entries too. The Railroad
Commission of Texas (RRC) said
there were 360,130 oil and gas
wells in the Lone Star State at the
end of 2005. This consisted of
249,020 active wells and 111,110
inactive wells. Active wells made
up 141,924 producing oil wells and
70,384 producing natural gas
wells. Inactive wells included a
bag of regulatory classifications
such as compliant, non-compliant
and wells shut-in for less than one
year. There’s a good chance
many of the compliant wells and
shut-ins, totaling more than 90,000
wells, will be brought back online
someday soon to meet RRC guidelines, otherwise they will have to
be plugged and abandoned.
The RRC also said there were
7,197 natural gas well completions
reported in Texas in 2005,
including 962 re-entries or
re-completions (13 percent), plus
3,454 oil well completions,
including 647 plugbacks, reopens,
and so on (19 percent). The RRC
also issued 16,914 new “drilling
activity” permits in 2005, comprising 14,138 new drill permits, 2,277
re-completion permits and 499
re-enter permits. That means
about 16 percent of the permits
granted last year were for second
chance wells.
California is another state
reporting a high percentage of
reworks. For 2005, the California
Division of Oil, Gas and
Geothermal Resources (DOGGR)
said 3,240 drilling notices (applications) and 2,780 rework notices
were filed. The majority of these
reworks were for the heavy oil
wells in the state, especially for
moving or redrilling to new steam
injection or oil production zones
within existing wells.
According to the DOGGR, at the
end of 2004 there were 47,881
producing oil wells in California,
plus 23,179 shut-in oil wells. More
than 18,000 active injection wells
–– steam, waterflood and disposal ––
were servicing these wells. In
addition, there were also 1,272
natural gas wells and 804 shut-in
gas wells in the state.
Combining the Texas and
California totals for last year,
more than 6,000 re-entry permits
were granted in the two states. In
February, most of the regulatory
agencies for the other producing
states were still compiling 2005
statistics. Once the numbers are
in, most will show some re-entry
work, but nothing to the extent of
Texas and California.
Is re-entry work new? Not at all.
DOGGR statistics indicate more
than 4,000 rework permits were
issued in California in both 1990
and 1991. And in Texas the RRC
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showed more than 1,900 re-completions were recorded in 1997,
more than 20 percent of the
completions made that year (9,417).
New zone, new money
For some operators, whatever
state they are in, it’s sometimes
just easier or more economical to
work with an existing well. Like
just about everything in the oil
and gas business, that presents
many different challenges and
ways to do things. But for whatever kind of re-entry work is
scheduled, most states require a
new permit.
Once a productive formation
plays out, an operator may
choose to abandon a well or
possibly
consider
another
prospective pay zone. For obvious
reasons, it’s easier to move
uphole, set a plug and perforate
into another pay formation than it
is to try to drill to a deeper
section. Of course, this isn’t
always possible since there might
not be another pay zone.
Some producers commingle
production between two or more
pay formations right at the start of
a well’s life. Depending on the
regulatory requirements and
other factors, these units can be
completed with a single or dual
string of tubing or even openhole
in some states.
Most of the producing states
have multiple geologic formations
that can produce crude oil or
natural gas. So know-how kicks
in: In Texas, if the deeper
Ellenburger runs dry, move
uphole to the Caddo or Cisco
section. In the Williston Basin of
North Dakota and Montana, when
the Red River is not productive,
Plugbacks, reopens, drill deepers or other kinds of re-completions
can give a well new life.
check out the younger rocks of
the Mission Canyon or Madison.
In Michigan, if your Niagara Reef
well becomes uneconomical to
operate, perforate the Dundee or
Antrim Shale.
Sometimes when deeper objectives are non-productive, a
plugback to a shallower zone is
attempted while the drilling rig is
still on location. Or a well is
plugged-back and then deepened
directionally, bypassing whatever
kind of problem may have halted
operations. Other times, several
years can pass before a well is
re-entered to complete a new
zone or re-opened, often by a well
servicing rig. In these instances,
hole and pipe condition are
factors in whether a re-completion
can be attempted environmentally
and economically. A mechanical
integrity test or casing logs might
be necessary to check on the
condition of the well before a
re-entry is finalized.
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Many depleted or idle wells are
destined to be plugged. Some are
on waiting lists to plug, either by
companies or state governments
that have specific idle and orphan
well programs. Some of these idle
wells might be candidates to
re-enter, but someone –– like a
companyman, geologist, engineer,
drilling or service contractor ––
has to identify them for some
specific reason. Maybe someone
remembers a good oil or gas show
was recorded when the well was
drilled.
Or someone noticed
something in a nearby well or on a
suite of logs. These older wells
are not going to go anywhere or
try to get away. They are there for
the taking, so to speak. And
checking old well records might
just result in a bigger bank
account!
Big caveat: there is no sure
thing in the oilpatch. As we know,
there are many ways to screw up
a brand new well, a potentially
productive well. Bad casing. Bad
cement job. Perforating the wrong
zone. Hitting a wet zone. Bad frac
job, and such. So even if a good
re-entry candidate is found, it still
might not produce when it is
re-opened or re-completed.
Still, in many cases it is worth
the effort. How much so? That is
difficult to estimate. No one
knows how much oil and gas
production re-entry wells already
realize. It would take a nice,
lucrative
federal
grant
to
determine such a figure (the
author of this article is willing!).
But, going by permits, say 10-20
percent of the producing wells in
the U.S. are re-entry wells. That
means maybe as many as 60,000
to more than 100,000 wells are
already producing as plugbacks,
reopens, drill deepers, and related
modes. If these wells make 250,000
BOPD, that’s 91 MMBO a year,
more than our annual domestic
ethanol production.
In 2005, according to the
Renewable Fuels Association in
Washington, D.C., 81 ethanol
plants in the U.S. manufactured
about 3.64 billion gallons (about
86.7 MMB) of ethanol. So a conservative estimate of re-entry well
petroleum production beats
ethanol production, at least as
of now.
“Green energy “ usually refers to
energy not producing so-called
greenhouse gases. Technically,
ethanol is not green energy
since it is a hydrocarbon and
is blended with petroleum before
it is sold in the marketplace.
But ethanol is a renewable
resource, grown by friendly
American farmers.
For many reasons, petroleum
has that bad boy image. Even
though it is still one of the most
convenient energy sources to use
and gather in large quantities, it is
still on many people’s pooh-pooh
list. That’s a shame. There is still
a great deal of petroleum to
collect, now and in the years to
come, including tons waiting
behind cased pipe in existing
wells.
It would be nice if no well was
plugged before its time.
One more thing –– a word about
permits. With increasing drilling
permit numbers in many states,
there is a shortage of all kinds
of working rigs. For some
operators, both drilling rigs
and well servicing rigs are hard
to find. If there were more rigs
and more crews, more wells
would be drilled, completed
or serviced.
Many drilling permits wind
up being casualties, expiring
without being used. Some of these
are re-issued after they expire,
but some are not. That means
many prospective locations might
not be tested for several years,
if ever. Let’s not forget about
these sites.
Circle Number 104
Te c h n o l o g y
in the service sector
Full steam ahead: Schwarz Steam Blankets revolutionize de-icing
ith one year under its belt, Schwarz Steam Blankets
Inc., patent pending, offers customers a new and
innovative environmentally friendly de-icing,
thawing and warming blanket. The blanket is intended to
improve onsite safety, reduce wait times, decrease production
costs and increase customer revenues.
“It’s a revolution in de-icing, thawing and heating,” says
John Schwarz, Steam Blanket inventor and president of the
company.
The steam blankets easily hook up to any steam line. Then
steam is forced through the blanket by pressure and evenly
displaced through holes in the bottom of the blanket.
W
This innovation is made from F.A. rated fire resistant, mildew
resistant, waterproof vinyl which is covered with polypropylene
for extra protection and durability. The blanket is double
stitched using waterproof nylon thread to prevent fraying and
water damage. Heat-resistant nylon handles are sewn onto the
sides for easy repositioning.
“I am impressed by its versatility. It can thaw or de-ice
virtually everything from walkways, stairs, suction lines,
shaker beds, catwalks, tongs, pipe spinners and practically
every piece of equipment on the rig. “ says Linus, rig
manager, Rig 21, Lakota Drilling.
The steam blankets are now being used on oil rigs throughout Canada. Globally, businesses are making inquiries as to
the steam blankets’ applications in other industries such as
agriculture, construction, maintenance, pre-cast concrete,
shipping, rendering and transportation. Research and development are ongoing.
Schwarz Steam Blankets are available in standard sizes of
3’x5’, 3’x8’, 5’x5’ and 5’x8’. Custom blankets are also available.
More information about this product is available at
www.steamblankets.ca or by calling (403) 381-6435.
AESC SUMMER MEETING JULY 19-21
Circle Number 039
What’s in a name?
and the reputation for
QUALITYand RELIABILITY.
We lay it on the line every day!
Caterpillar® Engines
Gas Engines from: 35 bkW / 47 bhp to 6100 bkW / 8180 bhp
Diesel Engines from: 15 bkW / 20 bhp to 15,710 bkW / 21,067 bhp
Global Petroleum • 13105 Northwest Freeway
Suite 1010 • Houston • Texas • 77040-6321
Phone: 713-329-2207 • Fax: 713-895-4280
www.cat-oilandgas.com
© 2005 Caterpillar
All rights reserved.
CAT, CATERPILLAR, their respective logos and “Caterpillar Yellow,” as well as corporate and product identity used herein,
are trademarks of Caterpillar and may not be used without permission.
Circle Number 033
The host with the most ––
Choosing the right web hosting service
By PHILLIP M. PERRY
It doesn’t take a web wizard to figure out that
you can get burned if your site is hosted through
a company that fails to devote the requisite
time and effort to keep the wheels of
commerce turning.
T
hink about a successful
web
site
such
as
Amazon.com, and certain
things come to mind –– great
design and quality products. A
dynamic marketing program that
keeps customers returning time
and again.
You want the same qualities for
your site, right? But wait! None of
those things mean beans if
customers can’t get to your site
because it’s “down.” Or they’re
confronted with slow response
when they click on your hyperlinks. Or their orders don’t go
through because of a “bug” in
your online shopping cart. Or
worst of all –– a hacker steals your
customers’ credit card numbers
and the news gets splashed all
over the media, causing the public
to abandon your site in droves.
Nightmare stories, all, in this
Internet age. But common ones,
too. The moral of the story is
clear: Web sites are great adjuncts
to traditional brick and mortar
businesses, but before polishing
up your shining house of
commerce, you have to lay down
a mundane but critical technical
foundation. That means selecting
a quality web hosting company, a
decision which can obviate many
of the difficulties described above.
“A lot of small business
customers don’t always understand web hosting –– they just
know they need a web presence,”
says Susan Wade, spokesperson
at Network Solutions, a web
hoster based in Herndon, Virginia.
“We often tell them that it’s
helpful to think of your web site
hosting service as a plot of land,
and your actual web site as a
house built on that land.”
A web hosting company, or
“hoster,” performs tasks such as
these:
• Maintains computer equip
ment that stores your site and
connects it with the Internet
reliably so your online store is
almost always “open” when
surfers want to buy.
• Maintains
fast
Internet
connections with your site to
avoid customer frustration.
• Installs quality “shopping cart
software” used to gather and
process your customers’ orders.
• Sets up reliable processing for
your business e-mail.
• Efficiently
institutes
your
requested site changes.
• Keeps
security
software
patched to protect your
customers’ data from theft.
Choose the right hoster
So a hoster does lots of critical
stuff. And it doesn’t take a web
wizard to figure out that you can
get burned if your site is hosted
through a company that fails to
devote the requisite time and
effort to keep the wheels of
commerce turning.
At issue: How do you select a
good hoster out of the thousands
available? Start by assembling a
list of potential organizations.
These firms can be of any size
from small regional or local
operators to large outfits that
service national accounts. Now
assess each prospect in the light
of your particular needs and
questions.
(1) How much hand-holding do
you want?
Laura Machanic,
president of New Target, a hosting
service in Alexandria, Virginia,
suggests that some hosters offer
lots of personalized service, right
up to what is called fully managed
hosting, which takes care of
everything. But you pay more for
that. If you were to opt for this
level of service, you might have to
do nothing more than take a series
of photos of your merchandise,
then ask your hoster to post them
in appropriate positions on
your site.
At the other extreme are the
many hosters that expect you to
do all the work. Says Machanic, “If
you have a technical person on
your staff who can interface with
very little assistance from the
hoster, then one of the highly
discounted providers might be a
good solution.” As an example of
the challenge involved in using
such a hoster, you would need to
design your own web pages and
learn how to “upload” your photos
from your computer over the
telephone lines to the host
computers.
While some hosters clearly fall
into either camp, many exist along
a continuum that extends
between these two extremes.
You’ll be able to tell where they
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K ING O IL T OOLS
Perforating and
Instrument Divisions
P.O. Box 2316
Pampa, TX 79066
(800) 692-4486
P HONE : (800) 910-5464
(580) 233-6807
F AX :
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GEFCO
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E NID , OK 73702
Websites
www.gefco.com
www.kingoiltools.com
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S P E C I A LT I E S , LT D .
Energetics Division
143 HCR 4361
Milford, TX 76670
(800) 320-5110
Wireline Perforating Guns & Hardware
Tubing Conveyed Guns & Hardware
Shaped Charges & Cutters
Electronic Well Logging Tools
www.titanspecialties.com
You’ll most likely want to select a hoster who
is serving clients of your current site. Such a
company has become familiar with the
problems you are likely to encounter.
are on the incline by studying
their web sites that describe their
services.
(2) How good are their current
sites? Past performance is a good
indicator of future value. “Look at
the quality of the sites that are
currently being maintained by
your prospective hoster,” suggests
Andy Stapleton, chief information
officer at DB|Wired, a hosting
service in Berlin, Connecticut.
“Browse a few and ask if you want
your own site to operate the same
way.”
First, find out if the sites load
quickly when you access them.
This indicates that the hoster has
fast lines to the Internet. Second,
if you expect the hoster to design
your site, consider how well the
staff has done with these sites.
Are they clean looking? Easy to
navigate?
(3) What do their references
say? Now that you have narrowed
your list, ask for references from
each of the hosters that made the
cut. Then call the references and
assess their level of satisfaction.
Ask each client how long they
have been with the hoster. Longtime customers will provide more
reliable reports. Bear in mind,
though, that plain old inertia
makes many clients reluctant to
move their sites once they have
chosen a provider. Try asking this
question: Would you host with the
company now if you weren’t
already aboard?
Be especially vigilant to avoid
the kind of problem encountered
by one Iowa-based business
owner who requested anonymity
because she is still locked into a
contract with her hoster. “Making
changes to your web site can
result in hidden charges,” she cautions. “It’s frustrating because my
hoster charges me a flat rate of
$75 an hour for working on my
site, and I can never tell how
many hours it will take to make
requested changes. They keep
making mistakes and then
charging me for the time required
to correct them. One time I was
charged almost a thousand
dollars. I had to complain to get
the bill reduced.” This person has
made it a practice to impose a
ceiling on any requested change,
using words such as “I don’t want
to spend more than $75.”
One final point. You’ll most likely
want to select a hoster who is
serving clients of your current
size. Such a company has become
familiar with the problems you
are likely to encounter. One
Internet expert of a different
persuasion suggests climbing the
ladder a step or two. “If you
anticipate growing, call references
somewhat larger than you,” says
Kevin G. Coleman, president of
Pittsburgh-based Technolytics, a
technology
consulting
firm.
“When your business gets busier,
you want to be sure the hoster
will still be able to handle your
transactions.”
(4) Are they competitive in
price? While price should not be
the overriding factor in your
decision, you don’t want to overpay. Start by comparing what the
various hosters are charging for
one-time “set up fees” to get your
site operating, and the recurring
monthly fees to keep it going. Try
to anticipate hidden charges that
might surface later. Two common
parameters that can trigger extra
charges are hoster limitations on
disk space and bandwidth.
Disk space refers to the amount
of data you have posted on your
site. If you exceed this, your
monthly charge will increase.
Bandwidth, on the other hand,
refers to the amount of customer
activity at your site. “Suppose
your business gets featured on a
news program or in a magazine
and within a week you get many
thousands of people accessing
your site,” says Machanic. “You
want to know ahead of time what
charges you will be assessed, if
any.” To avoid hundreds of
dollars in unexpected charges,
ask if the hoster has software
called a “bandwidth delimiter”
which will automatically notify
you if your activity reaches 90
percent of your allotment.
Assessing the risk of exceeding
both of these parameters is very
likely beyond your capabilities if
you do not have a technical background. Seek help from someone
who does.
In all cases, get prices in writing.
And read the fine print of your
contract, which is referred to as
the service-level agreement, or
SLA. On a related note, some
hosters require a contract that
may lock you into a two-year
period. All else being equal, go for
the hoster that does not require a
contract specifying a time frame.
You want to be able to jump ship
if a situation turns bad.
(5) How is their technical
support? If you’re like most
business owners, you will have
some need for technical support.
You’ve already assessed the
potential hoster’s level of
assistance by calling their
references, but test the support
staff on your own. “Place blind
calls to the technical support
telephone number to see how
long it takes to get a human being
on the line,” suggests Machanic.
“Then try some test questions to
see if the support people are
friendly, responsive, knowledgeable and patient.”
If you are asked for a customer
reference before getting through
to a technical person, state that
you are making a pre-sales
technical call. “The idea is to
initiate the dialog, to see how
helpful and organized the staff is,
and to see if you are placed on
hold for a long time.” Also, see if
the people can explain things to
you in plain English or if they fall
into confusing “technospeak.”
(6) Do they offer a complete
e-mail service? Given the importance of e-mail to business, you’ll
want to make sure you can get the
service you need from your
hoster. For example, if your web
site is yourbusiness.com, you will
want to set up addresses such as
[email protected].
Also see if they offer an
“autoresponder.” This service
sends, at your request, an automatic e-mail response to anyone
who transmits e-mail to your
business. The response indicates
that the individual’s e-mail has
been received and that someone
from the business will be getting
back to the person shortly.
Autoresponders are especially
helpful at vacation time. If you are
away from your business for a
certain time, the automatic
response will let the customer
know when you will return.
(7) Do they offer “shopping
cart” capabilities? You may need
“shopping cart” software that
allows visitors to order merchandise online, to key in their credit
card numbers and to enter their
shipping addresses, all without
talking to a person. Shopping cart
software invariably requires
additional monthly fees. These
cover the installation of your site
on what is called a “secure
server,” which is a computer
loaded with software that
encodes your customers’ credit
card numbers so they will not
be stolen.
(8) Are they healthy financially?
The financial stability of your
hoster is critically important.
Theoretically, you can move your
site quickly to another host if your
Circle Number 107
The challenge of building your profitable
Internet business begins well before you design
your site and select products to sell. Nothing in
your carefully designed house of commerce will
work as planned if the foundation of the your
building is sinking.
current one disappears into
cyberspace. Realistically, you
may run into a number of
problems. Chief among them is
the deterioration in support in the
months just prior to the closing.
Often a company will run right up
to the last minute as it tries to get
funding to stay afloat. They end
up cutting back on their normal
maintenance and cutting their
personnel. The result is that
service degrades significantly. It’s
possible that they fail to install
the security patches and updates
required by their software.
(9) What reports do they
provide? Once your site is up and
running, you’ll want to know how
many people are accessing your
pages, where they come from,
how they navigate through your
site, and many other transaction
details that can help you redesign
your Internet presence for
maximum profit. You can get all of
that data if your hoster has
installed “web site traffic analysis”
software. Ask what kind your
hoster uses and ask for sample
reports to see what data will be
available to you.
(10) How good is their security?
Good security is vital, especially
in light of some recent headlinegrabbing thefts of customer data.
Get answers to questions like
these: Do they have security soft-
ware installed to keep out hackers?
Do they back up your site? How
often? Where is the back up if you
need to get your hands on it? Is
there a charge to do so? Do they
have “redundant” servers? This
term refers to the continual
mirroring of all of the hoster’s
data onto back-up computers. If
one computer (or server) goes
down, the Internet traffic will
automatically be routed to the failsafe one. Redundancy is required
to maintain the 99.9 percent
“uptime” that customers expect.
As you can see, the challenge of
building your profitable Internet
business begins well before you
design your site and select
products to sell. Nothing in your
carefully designed house of
commerce will work as planned if
the foundation of your building is
sinking. That foundation is
constructed from your web
hosting service. So use the tips
in this article to winnow the best
of the hosters from the thousands
of companies out there gunning
for your dollars.
Finding a hoster
You can also find hosters by searching the Internet for "website hosts." One
site that ranks hosts by size and offers a forum to exchange messages is
www.webhosting.info.
Here are some web host companies with informative sites:
Network Solutions: (www.networksolutions.com)
Earthlink (www.earthlink.net/biz/ehost)
Interland (www.interland.com)
ValueWeb (www.valueweb.net)
DB|Wired (www.dbwired.com)
New Target (www.newtarget.com)
Terms –
• Downtime: That period when a web site is unavailable to visitors.
• Shared server: A large computer which holds the web sites of many clients.
• Shopping cart software: A software program on your web site that allows
customers to browse your merchandise and place orders.
• Web hosting service, or "hoster:" A company that owns large computers
which post the web sites of clients.
Tommy Cox
Account Executive
t. 713 479 1278
f. 713 861 0609
c. 832 814 5819
main 713 861 8158
toll 800 868 4109
[email protected]
www.earthcolor.com
Earth Color Houston Division
7021 Portwest Drive
Suite 190
Houston, TX 77024
Membership That
Makes a Difference
The Association of Energy Service Companies
was founded in 1956 in response to the need for
common aims and solutions to common problems
facing all well site service providers.
Through active participation in the AESC,
you can make a difference in the industry.
Membership is open to any company that
provides services, products and/or equipment to
the oil and gas industry. Company memberships
include well servicing contractors, wireline/well
logging operators and suppliers, oil & gas
producers, oilfield trucking & fluid hauling;
plus manufacturers, suppliers, distributors and
other companies that support these energy
service providers.
AESC members play a vital role in the industry
as part of a vast international network banding
together to influence industry-related agencies and
organizations in handling regulations, technology,
safety, training and educational issues.
Why wait? If you want to have a voice and stay
informed of current issues, join the AESC today!
AESC National Office:
10200 Richmond Ave., Suite 275, Houston, Texas 77042
713-781-0758 or 1-800-692-0771 or www.aesc.net
Profit from oil is a dirty word
By JONATHAN WILLIAMS
The average effective tax rate for the major integrated oil and
gas industry is estimated to equal 38.3 percent, while the rate
for the market as a whole is estimated at 32.3 percent
R
ecently, ExxonMobil’s annual earnings
shattered U.S. annual corporate profit
records. Now some politicians and pundits
are back on the oil-bashing bandwagon that began
last fall.
In his recent response to the President’s State of
the Union Address, Virginia Governor Tim Kaine
talked about how oil companies should “share in our
sacrifice” by returning “excess profits.” Statements
like this bear a hint of irony, since the government
collects billions from U.S. oil companies and takes an
average of 45.9 cents from every gallon of gasoline
purchased.
America’s energy companies are already providing
a “windfall” of taxes –– namely, corporate income
taxes, franchise, payroll, property, severance and
excise taxes. New filings with the Securities and
Exchange Commission (SEC) show that the largest oil
and gas companies in America, (Chevron,
ConocoPhillips and ExxonMobil) are set to pay or
remit over $158 billion in worldwide taxes for 2005.
This tax burden on American “big oil” nearly equals
the total economic output of Iran and exceeds the
total GDP in 150 of the 184 countries ranked by the
World Bank.
In 2005 alone, these companies set aside more than
$44 billion to pay corporate income taxes, which is
nearly a 50 percent increase from 2004. The average
effective tax rate for the major integrated oil and gas
industry is estimated to equal 38.3 percent, while
the rate for the market as a whole is estimated at
32.3 percent.
These large corporate income tax payments by oil
companies undermine the case for a windfall profits
tax, but that does not stop some politicians from
trying anyway. Even though supporters of windfall
profits taxes seem to have been thwarted in their
latest attempt to impose a revived version of the
1980s-style tax, which consisted of a straightforward
rate hike, they cleverly found an alternative plan to
tax the domestic energy industry.
Last year, the U.S. Senate passed legislation that
contained provisions to restrict full use of foreign tax
credits and prohibit the accounting practice where
inventory is estimated on a “last in first out” (LIFO)
basis for tax purposes. These provisions target
U.S. firms and would put them at a significant
disadvantage in their competition with large foreign
firms – including the state-run oil companies of India
and China. Today, companies based in the United
States already face the highest combined state and
federal statutory corporate tax rate in the OECD ––
higher than even France or Sweden.
Eliminating the use of LIFO inventory accounting
and foreign tax credits is a back door technique to
raise taxes exclusively on the domestic energy industry
–– truly a windfall profits tax by another name.
Imagine if Congress shaped tax policy differently for
workers in different industries. That would be absurd
and unfair. Similarly, Congress should not be in the
business of adopting tax policies that treat companies
differently based on their industry –– however
politically out of favor certain industries may be.
Our experiment with windfall profits taxes in the
1980s proved to be economically devastating. When
we last tried the tax, it failed to raise a fraction of the
revenue projected and stunted domestically produced oil. Let’s hope that experience taught our
lawmakers a needed lesson.
Some pundits and politicians still consider “profit”
a dirty word. However, if politicians pass legislation
to punish the oil companies for those profits, no one
should kid themselves about who would ultimately
pay the price: We all would. The first to pay would be
the employees of oil companies here in the United
States, who would make lower wages or possibly
could lose their jobs. Next would be millions of
Americans who have investments in the oil industry;
their returns would be lessened. Finally, the principal
group to pay would be American gasoline customers,
who would pay more at the pump. In other words, the
old saying is true: Corporations don't actually pay
taxes –– people do.
ABOUT THE AUTHOR: Jonathan Williams is an
economist at the Tax Foundation, a non-partisan policy
organization in Washington, D.C.
FALL ARREST HARNESSES
FAH-3Y-2 MB
FAH-3Y
A belt with the future in mind.
Incorporates a new yellow
nylon construction, rappelling-style leg straps
and rugged field proven
Lewis hardware. D-Rings
at front and rear waist and
rear shoulder level. This
belt is designed to be the
only belt a derrick worker will need for climbing the derrick and working the boards.
Removable belly band and side
D-Rings for additional tie-off
points making it a true five
point harness for not only
working the boards but
general use applications
where fall arrest is required.
Rear D-ring at waist level provides a
well placed leverage point while working high
on a rig and a D-ring between the shoulder
blades for a shock absorption device.
HCB FAH-3Y W/T
FAH-3Y-2
Built-in HCB-1-style sling seat. Dual
D-Rings up front for equalized
climbing pressure, and a D-Ring at
waist level that provides a well
placed leverage point while working the boards. Rappelling-style leg
straps and an 11” tail which provides the user easier access to the
locking snap, on the tail rope in use.
A true “Five Point Harness”
with D-Rings at front and
rear waist, rear shoulder
and both sides. All the
D-Rings required and
rappelling-style leg
straps for even the most
demanding oilfield jobs.
Snake Grips
Flexible Steel Tail Ropes
Finest grade plasticcoated aircraft cable.
2’ through 14’
lengths in 2’ increments. One snap
hook and one 3” Dring or snap hooks
on both ends.
Expand or contract to grip different or identical
cable and/or rope sizes. Save time stringing up,
changing and unstringing, because the snake
requires no special tools. The swivel and swing
link go smoothly through blocks and prevent line
twisting. Install new cable by using old existing
cable as pulling line. Always seize the ends of
the grips by banding or taping.
Check out our website for a complete
listing of all our new belts and lanyards.
Now accepting
Visa and MasterCard.
3601 S. Byers
Okla. City, OK 73143
405.634.5401
fax 405.632.8608
e-mail [email protected]
OILFIELD, INDUSTRIAL & UTILITY PRODUCTS
®
www.lewismanufacturingco.com
Circle Number 031
What are you waiting for?
In this day, reaching your target
audience has become quite a
challenge. Well Servicing magazine
is the only publication devoted
solely to the energy service sector.
Your customers read Well Servicing
to stay informed on completing,
servicing and maintaining oil and gas
wells; production economics and
management; manpower; regulatory
and environmental issues; technology
and much more.
Call Patty Jordan for
advertising information today!! 1-800-692-0771
The official publication of the Association of Energy Service Companies
10200 Richmond Ave., Suite 275, Houston, Texas 77042
713-781-0758 or 1-800-692-0771
Emergency
planning
T
he importance of an effective workplace
safety and health program cannot be
overemphasized. There are many benefits
from such a program. Foremost of these are increased
productivity, improved employee morale, reduced
absenteeism and illness, and reduced workers’
compensation rates; however, misfortunes still
occur in spite of efforts to prevent them. Therefore,
proper planning for emergencies is necessary to
minimize employee injury and property damage. The
effectiveness of response during emergencies
depends on the amount of planning and training
performed.
The following details outline the basic steps to handle
emergencies in the workplace. These emergencies
include accidental releases of toxic gases, chemical
spills, fires, explosions and bodily harm and trauma
caused by workplace violence. This information is
intended to provide guidelines in planning for
emergencies and is not an all-inclusive safety program.
Planning elements
Companies are required by OSHA to develop an
emergency response plan that specifically and
comprehensively addresses the types of emergencies
for which the company has exposure. Emergency
action plans must be in writing, except for firms with
10 or fewer employees; the plan may be communicated
orally to employees.
The plan must include, at a minimum, the following
elements:
1. Emergency escape procedures and emergency
escape route assignments
2. Procedures to be followed by employees who
remain to perform (or shut down) critical
operations before they evacuate
3. Procedure to account for all employees after
emergency evacuation has been completed
4. Rescue and medical duties for those employees
who are to perform them
5. The preferred means for reporting fires and
other emergencies
6. Names or regular job titles of persons to be
contacted for further information or explanation
of duties under the plan.
Conduct a hazard audit
The emergency action plan should address all
potential emergencies that can be expected in the
workplace. Therefore, it will be necessary to
perform a hazard audit to determine toxic materials
in the workplace, hazards, and potentially dangerous
conditions. For information on chemicals, the manufacturer or supplier can be contacted to obtain
Material Safety Data Sheets. These forms describe
the hazards that a chemical may present; list
precautions to take when handling, storing or using
the substance; and outline emergency and first-aid
procedures.
For emergency evacuations, workplace or site
plans that clearly illustrate the emergency escape
route and safe areas should be included in the plan.
All employees need to know what actions they are to
take in the emergency situations that may occur. Rig
hands should be taught to mentally rehearse their
avenue of escape from the rig floor or wellhead area.
Derrickmen must be familiar with their escape buggy
(geronimo) and ensure that it is in proper working
order and available for use should the need arise.
For those employees who must remain behind to
care for essential operations or shut down a portion
of an operation to prevent additional loss, the
employer must list in detail the procedures to be
taken by these employees until their evacuation
becomes absolutely necessary. Rig operators might
instinctively lock down the brake handle and kill the
rig in an emergency, but these actions should be
reviewed and at least mentally rehearsed, if not
actually rehearsed. If the floorhand is to be
responsible for shutting down pumps, generators or
other auxiliary equipment engines, then this too must
be detailed.
This plan should be reviewed with employees
initially when the plan is developed, whenever the
employee’s responsibilities under the plan change or
whenever the plan is changed. Tailgate or location
safety meetings are excellent times to remind
employees of their specific actions in the event of an
emergency.
A predetermined chain of command should be
established to minimize confusion so that employees
will know who has the authority to make decisions.
This is particularly important on jobs with other
service providers or third party personnel in or near
the work site.
Communications
During a major emergency involving a fire or
explosion it may be necessary to evacuate adjacent
areas. If this involves third parties then the plan
should include procedures for contacting the proper
local authorities for assistance. Also, under these
conditions it may be necessary to have an alternate
area for employees to report and an alternate means
of communication such as radios, walkie-talkies or
cellular telephones. Field personnel should have
established procedures for relaying instructions,
directions or other emergency information to a
dispatcher or other company contact that can assist
in getting help. This contact should have a readily
available list of emergency phone numbers and the
procedures for relaying the information.
Emergency response teams
Company Emergency Response Teams are the first
line of defense in emergencies. Employees assigned
to these teams must be physically capable of
performing the duties that may be assigned to them.
Emergency Response Teams should be trained in the
types of possible emergencies and the actions to be
performed. These responders should be knowledgeable about the types of materials on site and any
special hazards that they might encounter during fire
or other emergencies. The response team should
also be astute enough to determine when not to
intervene. For example, team members must be able
to determine if a fire or chemical spill is too large for
them to handle. If there is a possibility of members of
the Emergency Response Team receiving fatal or
incapacitating injuries, they should wait for professional
firefighters or emergency response groups.
The importance of training
Training is an essential element of the effectiveness
of an emergency plan. Before implementing an
emergency action plan, employees must be trained in
each type of disaster response so that they know
what actions are required.
In addition to the specialized training for
Emergency Response Team members, all employees
should be trained in the following:
1. Evacuation plans
2. Alarm systems
3. Reporting procedures for personnel
4. Shut down procedures
5. Types of potential emergencies
Drills should be conducted, at random intervals at
least annually for all personnel, and an evaluation of
performance made immediately by the company’s
management and employees. If possible, these drills
should include groups supplying outside services
such as fire, EMS and police departments. Finally, the
emergency plan should be reviewed periodically and
updated to maintain adequate response personnel
and program efficiency.
Medical assistance
In a major emergency, time is a critical factor in
minimizing injuries. To ensure that prompt medical
attention is available when needed, employers
should take the following steps prior to any
emergency:
1. Survey medical facilities near the work sites and
make arrangements to handle routine and
emergency cases. Written emergency medical
procedures should be prepared for handling
accidents with minimum confusion.
2. For work sites not located near medical facilities
(interpreted to be more than 20 minutes away)
OSHA regulations (1910.151) require that at least
one employee be adequately trained to render
first aid (also interpreted to include CPR) and
that adequate first aid supplies be provided for
emergency use. First aid kits and emergency
medical supply needs should be determined
in consultation with a physician who has
knowledge of the potential exposures.
3. Emergency phone numbers should be immediately accessible to the dispatcher and/or other
parties who can be contacted as identified in the
emergency plan.
4. Contact emergency medical transport services
(ambulance) to ensure they become familiar
with access to work site locations and hospital
or emergency medical locations. For remote or
inaccessible areas, air ambulance services
(CareFlight/Medivac) should be contacted.
Securing the area
During an emergency, it is often necessary to secure
the area to prevent unauthorized access and to protect
vital records and equipment. Fires, explosions and
other emergencies tend to attract passers-by, curious
neighbors, media, and the like. An off-limits area
must be established by cordoning off the area with
ropes and signs. Once local law enforcement
authorities arrive they will assume the function of
security, but many times a crowd has already
gathered prior to their arrival and company
personnel should have procedures for handling this.
Chances are that sooner or later your company
is going to be faced with an emergency situation.
Proper planning for these emergencies is essential to
minimize employee injury and property damage.
Without prior planning, establishment of an emergency
response plan and proper training, the effectiveness
of your company’s response could be woefully
inadequate. Don’t get caught unprepared.
Circle Number 125
AESC Members –– Service Excellence
California
Serving the oil industry
Since 1943
•
•
•
•
•
•
•
Fred S. Holmes, President
Well Servicing Rigs
Workover Rigs
Drilling Rigs
Pumps & Tanks
Power Swivels
Foam Units
Hyper-Clean Units
P.O. BOX 1405 • 4300 MIDWAY RD • TAFT, CA 93268-1405
(661) 763-1537
Fax (661) 763-5737
E-mail: [email protected]
Four Corners
East Texas
RON SHORE
President
STEPHEN SHORE
Vice President
(903) 759-0082
YARDS
2202 E. Hwy 80
Hwy 59 S.
White Oak, TX 75693 Marshall, TX 75671
OFFICE AND
MAILING ADDRESS
2516 W. Marshall Ave.
Longview, TX 75604
PROVIDING WELL SERVICING SOLUTIONS
Gulf Coast
Roustabout, Welding
SandBlasting/Painting
Excavating
Contract Pumping
Lease Service Crews
Dependable, Experienced
Personnel
NABORS
WELL SERVICES LTD.
Hawkins Lease Service, Inc.
Roy D. Cole
General Oilfield Construction
(281) 331-CREW
www.hawkinsleaseservice.com
P.O. Box 1699
1111 Commerce Road
3205 FM 2403
Alice, Texas 78832
Alvin, Texas 77512-1699
(361) 664-4295
(281) 331-2739
(361) 664-2739 Fax
(281) 585-4295 Fax
Fully Insured and Committed to Safety
Kansas
Experienced Crews
Workover & Completions
Single & Double Drum Units
Pole Masts-Single & Double Derricks
Environmental Clean Up Services
Swab Tanks
Trailer Mounted Reverse Circulating
Pump & Equip./Power Subs
• Rental Tools
• Statewide Oilfield Hauling
• High Pressure Pump Truck
• Vacuum Trucks/Water Trucks
Direct: 281.775.5128
Fax: 281.775.4855
Mobile: 281.380.1271
[email protected]
515 West Greens Road
Suite 1170
Houston, Texas 77067-4525
Michigan
Serving South Central Kansas
Since 1946
•
•
•
•
•
•
•
Director Contracts Administration
PRATT, KANSAS
(620) 672-2531
Kenneth C. Gates, President
P.O. BOX 847
PRATT, KANSAS 67124
(620) 672-2531
Fax: (620) 672-5902
www.prattwell.com
[email protected]
AESC Members –– Safety Excellence
SE New Mexico
INVEST IN THE BEST
FOR YOUR WELL SERVICING AND
TRUCKING NEEDS
FISHING AND RENTAL TOOLS
BLOWOUT PREVENTORS
REVERSE UNITS
FOAM UNITS
505-392-1547
DWAYNE TAYLOR
OWNER/PRESIDENT
TROY TEAGUE
BUS. PHONES:
EUNICE 505-394-3155
CARLSBAD 505-234-9616
OZONA 325-392-9174
6210 LOVINGTON HWY. • HOBBS, NM
[email protected]
P.O. BOX 1500
HOBBS, NEW MEXICO 88241
ROBERT REYES
V. PRESIDENT
AMERICAN PROUD
ARMANDO TORRES
OPERATIONS MGR.
ALONZO ARANDA
SAFETY/SALES
DONALD RHINEHART
RIG SUPERVISOR
Join the AESC Today 1•800•692•0771
Hobbs, NM
EUNICE OFFICE (505) 394-2518
HOBBS OFFICE (505) 392-4595
Crane, TX
TROY TEAGUE
WELL SERVICE, INC.
Brad Roberts
P.O. Box 784
2626 W. Marland Blvd.
Hobbs, NM 88241
Charly Dixon
505-393-RIGS (7447)
Home 432-758-1773
Cell 505-369-7470
Eunice Well Servicing Co.
P.O. Box 1500
Hobbs, New Mexico 88241
AESC Members –– Technical Excellence
Mississippi
Drilling and workover services for Southeastern United States
NEW & USED TUBULARS, PRODUCTION EQUIPMENT
NEW & USED WELLHEAD EQUIPMENT, WELL ABANDONMENTS
Donald E. Wilson
Vice President/Manager, Workover Operations
e-mail: [email protected]
Office (601) 649.0760
Fax (601) 649-9431
Web Site www.rapad-oil.com
P. O. Box 4240
Laurel, MS 39441
1991 HWY. 184 EAST
P.O. BOX 454
LAUREL, MS 39441
BOB STONE, JR.
OFFICE: 601/649-4461
RES: 601/425-3830
FAX: 601/649-4468
Oklahoma
BUDDY ROW
Vice President
Mobile 541-1028
Res. 233-6298
1029 N. 54th Street
Enid, OK 73701
Office (580) 242-1140
1-800-358-8665
Power Swivels • Rotary & Cable Fishing • Drill Pipe • Drill Collars
Handling Tools • Reverse Circulating Equipment
STRIDE
Well Service Company, Inc.
A Complete Energy Services Company
RANDY STEBBINS
Executive Vice President
Office: (580) 242-7300
Mobile: (580) 541-1770 • Fax: (580) 242-7339
Residence: (580) 796-2615
Email: [email protected]
P.O. BOX 3505 • ENID, OKLAHOMA 73702
North Texas
RELIABLE WELL SERVICE
OF NORTH TEXAS L.L.C.
P.O. Box 4153
Wichita Falls, Texas 76308
PETE OWENS
Wichita Falls, TX
(940) 692-9511
Mobile (940) 733-4511
Quanah, TX
(940) 663-5990
AESC DIRECTORY
Now available
Book or Interactive CD
Call now to get your copy
800-692-0771
AESC Members –– Training Excellence
Panhandle Tri-State
JET
Terrel Hardin
President
Well Servicing & Completion
Swabbing Units
Pumps & Swivels
WELL SERVICE
Loop Rd. 143 E. • P.O. Box 701 • Perryton, Texas
(806) 435-6541
(888) JET-WELL
Home
(806) 323-5808
Web Site: www.kingwell.com
Jack E. Tregellas
Tim E. Tregellas
Mobile
(806) 323-2528
E-mail: [email protected]
AESC 50th Anniversary
“41 Years Serving the Texas
and Oklahoma
Panhandles”
Pulling Units • Swabbing Unit
Summer Meeting
Loews Coronado Bay Resort
San Diego, California
July 19-21
Rocky Mountain
COMPLETE WELL SERVICING • ROD AND TUBING
WORKOVER & COMPLETIONS
REVERSE CIRCULATING & DRILLING
CASE PULLING
AN
D
WELL
SERVICE
GILLETTE, WYO.
PHONE 682-1126
Carroll Hinsdale, General Manager
(307) 682-1126
Tim Stafford, Rig Supervisor
(307) 680-9489
Dane Aldinger, Rig Supervisor
(307) 680-9096
AESC Members –– Quality Excellence
Permian Basin
Pete Sandel, President
[email protected]
Rusty Clayton, Ops. Mgr.
Carla Helms, Office Mgr.
ANGIE SIMS
GENERAL MANAGER
BIG LAKE OFFICE
(325) 884-2581
FAX (325) 884-2684
CELL (325) 650-9434
KERMIT • MONAHANS
KERMIT, TEXAS 79745
Office (432) 586-2533
MONAHANS, TEXAS 79756
Office (432) 943-6132
Fax (432) 586-9636
2008 W. HIWAY 80
P.O. BOX 1540
MONAHANS, TX 79756
A Tradition of Safety and Service
in the Permian Basin since 1963
101 MISSISSIPPI • P.O. BOX 7
BIG LAKE, TEXAS 76932
MONAHANS (432) 943-2600
ODESSA-MIDLAND
1-800-670-DOCS (3627)
AESC 50th Anniversary
Summer Meeting
San Diego, California
July 19-21
TREVA MOORE HAWTHORNE
Mobile: 325-575-0123
AESC Members –– Support Excellence
South Louisiana
P.O. Box 52288
Lafayette, LA 70505
Office: 337-232-9582
Fax: 337-267-3482
www.moncla.com
P.O. Box 52288
Lafayette, LA 70505
Lafayette, LA (HQ)
337-232-9582
888-2MONCLA
Sandersville, MS
601-426-9600
Sourlake, TX
409-287-3516
South Texas
Workovers
Completions
C.C. FORBES COMPANY L.P.
(830) 767-2036 Office • (830) 570-9101 Mobile
(830) 769-3468 Fax • (830) 281-8221 Home
[email protected]
P.O. Box 250
Alice, Texas 78333
www.capitalwellservice.com
• Workover & Completion Rigs
• Plug & Abandonment Services
• Swabbing Units
• Oilfield Hauling
• Lease Crew Services
• Oilfield Paint & Sand Blasting
Charles Forbes, Jr.
John Crisp
Office: (361) 396-1898
Fax: (361) 396-1876
Mobile: (361) 701-5970
Your Ad Here
AESC DIRECTORY
AESC Members Only
Book your ad space now
Call Patty Jordan
800-692-0771
Now available
Book or Interactive CD
Call now to get your copy
800-692-0771
Association calendar
1
2
April
AESC
2006
Chapter
Meeting
and Event
Schedule
9
3
4
5
6
10
11
12
13
19
20
Oklahoma
Chapter Meeting
Rocky Mountain
Chapter Meeting
16
17
18
North Texas
Chapter Meeting
23
24
8
14
15
21
22
Scholarship
Applications Due
in AESC Office
from all Chapters
California
Scholarship Golf
Tournament
Permian Basin
Chapter Meeting
25
7
26
27
28
30
7
1
2
3
8
9
10
Rocky Mountain
Chapter Meeting
4
5
6
11
Permian
Basin
Scholarship Golf
Tournament
13
Oklahoma
Chapter Meeting
Mississippi
Chapter Meeting
12
14
15
16
California
Chapter Meeting
17
18
19
20
25
26
27
North Texas
Chapter Meeting
21
22
23
24
28
29
30
31
May
Oilmen’s Saltwater Fishing Tourney
Team Auction/Tournament
29
The AESC cordially invites you to join us
in celebrating 50 Years of service & support
to the oil & gas industry
2006 AESC Annual Summer Meeting
San Diego, CA
July 19-21, 2006
Hotel reservations must be made by June 17, 2006 in order
to receive the group rate of $199 single/double.
Call (800) 815-6397
Association news
By PATTY JORDAN
Golf events scheduled for local chapters
6th Annual Golf Tournament
AESC California Chapter
2006 Scholarship Golf Tourney
AESC Permian Basin Chapter
FRIDAY, APRIL 21, 2006
FRIDAY, MAY 12, 2006
To benefit the local scholarship programs
Where: the Links at Riverlakes Ranch
Club Location: 52001 Riverlakes Dr.,
Bakersfield, CA 93312
Entry Deadline: April 1 with pre-payment
First 36 Teams Only
Check In: 11:00am
Shotgun Start: 12:00 noon
Evening Meal & Awards Presentation: 6:00pm
Entry Fee: $400 per team or $100 per player
* Entry fee includes green fees, cart,
bucket of practice balls and evening meal
Format: Four Person Scramble
Sponsorships Available
Donations for Door Prizes & Goody Bags
Prizes: Closest to the Hole, Longest Drive,
Door Prizes, Trophies for 1st, 2nd & 3rd Place
Non-Golfing Volunteers Needed
For more information, contact:
Coby Hannah or Rhonda Moore at
Cavins Oil Well Tools (661) 327-7154
[email protected]; or
Greg Keeter or Jennifer Baird at
Howard Supply (661) 324-9721
[email protected]
To benefit the AESC Scholarship funds,
fun & fellowship
Where: Hogan Park Golf Course, Midland
Entry Deadline: May 1
Lunch Served: 11:30am
(Provided by Stewart & Stevenson & Buster’s Well Service)
Shotgun Start: 1:00pm
Awards Presentation: 5:30pm
Entry Fee: $450 per team;
Mulligans $20 per team
Format: Four Person Scramble
(with A, B, C, D players)
First 36 Teams Only
Sponsorships: Available with name on
Sponsor Board –– Gold $500, Silver $300,
Hole $150
For more information, contact:
Joe Pisklak, Warren CAT
(432) 571-4320 office
9TH ANNUAL CORPUS CHRISTI
OILMEN’S SALTWATER FISHING TOURNAMENT
Supporting the AESC Scholarship Fund
SATURDAY, MAY 13, 2006
Marker 37 on right, just past Intercoastal Canal, island side of bridge
Company & individual sponsorships available
ENTRY FEE: $85 Per Person
PRIZES: 1st, 2nd and 3rd Places in each species for Trout, Redfish, Flounder
and Oddest Fish $100
CALCUTTA: Friday, May 12 from 6:00-8:00pm
(Food & drink provided by Pioneer Trucking, Kennedy Wire Rope, Supply Specialty & AESC)
FISHING TIME: 5:30am
WEIGH IN: 4:00pm
(Food & drink provided by Texas Hotshot, Kennedy Wire Rope, Supply Specialty & AESC)
CHAIRMAN: Steve Macek (361) 668-1562
DOOR PRIZES: Ray Stoebner (361) 576-9081; Gil Gayaut (361) 289-1606;
Steve Macek (361) 668-1562; Alan Culberson (361) 578-3503;
Glen Pawelek (361) 664-9528; Gene Duncan (361) 289-1606
RULES & INFORMATION: All oilfield related personnel, their families and guests are
eligible. At least one team member must be employed in the oilfield. Professional guides are not
eligible to participate in the tournament. All Texas Parks and Wildlife rules govern this tournament
and will be strictly enforced. Violators will be disqualified. All fish must be caught by person or
team weighing them in. 1st, 2nd & 3rd place teams will be determined by heaviest stringers
consisting of 1 Trout, 1 Redfish, and 1 Flounder. Only one stringer per team can be weighed in.
If there are not any Flounder caught, winners will be determined by the heaviest 2 fish stringers
consisting of 1 Trout and 1 Redfish (Not over 28"). If only one 3-fish calcutta stringer is caught,
only 1st place money will be paid to that team. 2nd & 3rd place will go to the heaviest stringer of
any 2 species combination. Calcutta fish cannot be entered into individual species categories.
TEAMS: Will consist of no more than 5 members and one boat. There will be a $50 minimum bid
per team. The team captain will have the option to buy back one half of his team.
ENTRY FORM: For an entry form and complete set of rules and information,
contact Steve Macek at 361-668-1562; or [email protected]
*Polygraph exams will be given to the winners. Failure of the polygraph exam will result in disqualification.
New member profiles
Bogan, Dunlap & Wood Insurance Agency, LLC
has provided a wide variety of insurance products and services
for the Permian Basin, West Texas and the southern United
States for over 40 years. Specializing in all facets of the oil
drilling and servicing business, the agency also writes group
and life insurance, as well as personal automobile and home
insurance.
Through internal growth, mergers and acquisitions, the
agency has grown to 23 employees. Bogan, Dunlap & Wood
Insurance Agency is a member of several industry trade, civic
and charitable organizations. The agency is also a member of
several organizations that promote continuous improvement in
professionalism and excellence in the insurance industry.
Additionally, the agency is part of the Insurors Group, a professional group of insurance agents located throughout the state
of Texas who have joined together to deliver unique services
and benefits to clients.
ENSIGN Well Services Inc. is the new name of Action
Oilfield Services Inc., located in LaSalle, Colorado. ENSIGN
Well Services is a subsidiary of ENSIGN United States Drilling
Inc., whose parent company is ENSIGN Energy Services Inc.
based in Calgary, Alberta, Canada. ENSIGN Well Services
continues the 20 year history of excellence in crew performance, top notch equipment and operational safety. ENSIGN
Well Services operates 8 complete well servicing units, one
swab unit and 10 oilfield trucks in the DJ Basin. For more
information contact Guy Hass at 970-284-6006.
Mid Atlantic Well Service is an oilfield service company
established in 2005 and is a wholly owned subsidiary of Linn
Energy, LLC. Mid Atlantic has two drilling rigs, two service and
four swab rigs. In addition, Mid Atlantic has equipment for
location construction, pipelining, trucking and roustabout
work. Mid Atlantic’s facilities are located in Jane Lew, West
Virginia and is central to its areas of operation. Mid Atlantic’s
management has over 50 years of experience in the oilfield.
For more information, contact Eric Linn at 412 440-1474 or
e-mail to [email protected].
Network International is the expert at creating markets
for surplus energy equipment. Their online marketplace is
aligned with both buyers and sellers and delivers the value,
expertise, efficiency and compliance required in today's
challenging business environment. Network International was
founded in 1999 under the original name Network Oil Inc.
Based in Houston, the company's principal business is
executing Internet auctions and private sales of idle, surplus
and used energy equipment on a global basis. For more
information, visit www.Networkintl.com or 1-800-424-9111.
Striving to identify, control and/or eliminate risk are the key
objectives of Risk Management Resources, LLC (RMR).
RMR is devoted exclusively to assisting companies save money
and to secure a safe and profitable future through proactive,
comprehensive environmental, safety and health loss control
services. As companies place environmental, safety and health
as a core value, they ensure frequency reduction, severity of
losses, reduce and/or eliminate exposure to liability and
protect assets and profitability. RMR is primarily focused on
providing practical and cost efficient solutions in an honest and
professional manner. The mission of RMR is to continuously
improve and promote proactive environmental, safety and
health systems, which are integrated with the business needs
of its customers. For information, please contact Tim Wells at
832-797-9144 or via email at [email protected].
Threlkeld & Company Insurance is an independent
insurance agency based in Tyler, Texas. The company traces
its roots back to the early days of the East Texas Oilfield and
today provides insurance services throughout the state to a
variety of energy businesses such as lease operators,
production companies, drilling companies, oilfield service
companies, workover contractors, disposal operations and
manufacturing companies. At TCI we know the special
problems and needs of the oil & gas industry. For information
contact Todd Threlkeld at 800-256-6400 or e-mail
[email protected]
Well-Pro Services, L.P. was established April 1, 2000 by
Dan Mitchell, Tom Worley and Richard May. Initially, this was
just a means to have a rig available for their in-house business.
Very quickly it became apparent there was a growing demand
and an opportunity to add additional rigs, therefore diversifying
the operations. They have been steadily growing since
inception and are now operating five workover rigs with full
workover packages, mud pumps, tanks, pipe racks and
catwalks. They added their first swab rig in June 2002, and
have grown to five swab rigs presently. The last three swab
rigs were built in-house. This has kept costs low and
allowed for some design changes that improve productivity
and efficiency.
Although the company is relatively new, key employees and
supervisors have over 150 years combined experience. Their
company’s customer base has grown from one to
approximately 150 companies. For more information call
903-297-5154.
Moncla Marine expands its fleet of barge rigs
oncla Marine LLC, a provider of workover and
completion rigs to the oil and gas industry, purchased
two barge rigs from Key Energy Services Inc., bringing
Moncla’s fleet of barge rigs to six. Both The Catfish and The
Sac-a-Lait barge rigs are equipped and available to work on a
daylight or 24-hour basis.
The purchase is not only a perfect fit to bolster Moncla’s
service offering, but it will lower risks, COO Mike Moncla
explains. “Last year, seven daylight land rigs operated atop
key-way barges periodically, totaling nearly 7,800 hours.
That’s the equivalent of two-and-a-half times the working
capacity of a daylight rig over a year. By using these barge rigs
on those sites, we will decrease insurance liability of working
land rigs over the water and free our land rigs for more land jobs.”
Moncla Marine’s other rigs include a 24-hour posted barge,
two 24-hour bay barges and a daylight key-way barge.
Moncla Marine is a member of the Moncla companies, the
largest family-owned workover company, and fifth largest
overall, in the United States. With nearly 650 employees,
Moncla operates 50 workover rigs, six swab trucks, four tubing
testing units, an anchor truck and fishing tool services.
The Moncla companies include Moncla Well Service, Moncla
Marine, Brothers Oilfield Service and Supply (BOSS) and TriEnergy. Formed in 1984, Moncla is headquartered in Lafayette,
Louisiana, with offices in Sour Lake, Texas, and Sandersville,
Mississippi.
M
Take over of U.S. ports
stirs dispute
he Bush Administration might have seen this one
coming. A deal for state-owned Dubai Ports World to
take over management of six U.S. ports -- from Newark to New
Orleans -- made Capitol Hill crazy. Lawmakers railed that
security could be shot when Dubai Ports, controlled by the
United Arab Emirates, takes over key entry points for lightly
secured container cargo.
By late February, top Republicans in the House and Senate
were calling on President George W. Bush to rescind U.S.
approval. The Treasury-chaired Committee on Foreign
Investment in the U.S. okayed the takeover as part of Dubai
Ports' $6.8 billion buyout of London-based Peninsular &
Oriental Steam Navigation. Bush said he'd veto any move by
Congress to undo the deal. But that didn't keep Dubai Ports
from heeding Capitol Hill's bipartisan fury and bowing out.
In early March, the CEO of DP World authorized Senate
Armed Services Committee Chairman John Warner (R-Va.) to
read lawmakers a press release announcing that the company
"will transfer fully the U.S. operations...to a United States
entity."
T
Circle Number 002
Tools
of the Trade
BASIC DATA MANUAL
This single source reference provides tables, charts and graphs on
everything from tubing, casing and drill pipe sizes; strengths and
capacities; to weights of full or empty extended upset tubing. The
manual is filled with formulas, conversion factors, volumes,
pressures, and calibrations. One hundred seventy pages of
information. Every supervisor and operator needs this manual.
HB100
NOTE: This form contract is a suggested guide only and use of this form or any variation
thereof shall be at the sole discretion and risk of the user parties. Users of the form contract or
any portion or variation thereof are encouraged to seek the advice of counsel to ensure that their
contract reflects the complete agreement of the parties and applicable law. The Association of
Energy Service Companies disclaims any liability whatsoever for loss or damages which may
result from use of the form contract or portions or variations thereof.
ASSOCIATION OF ENERGY SERVICE COMPANIES
AESC MASTER SERVICE AGREEMENT
Why take the risk? This is a model contract that contains fair and
equitable commercial terms for both contractors and their
customers. It may be modified or revised to meet your specific
circumstance; and it is an efficient tool for negotiating risk
allocation. MSA100
MASTER SERVICE AGREEMENT
THIS AGREEMENT CONTAINS PROVISIONS RELATING TO INDEMNITY,
RELEASE OF LIABILITY, AND ALLOCATION OF RISK
THIS MASTER SERVICE AGREEMENT (the "Contract"), made and entered into this
___________ day of ____________________________, 20____, by and between the parties
herein designated as "Operator" and "Contractor".
Operator: _____________________________________________________________________
Address: _____________________________________________________________________
Contractor: ____________________________________________________________________
Address: _____________________________________________________________________
WITNESSETH: THAT,
WHEREAS, Operator is engaged in the business of drilling oil and gas wells or is engaged in
the production of oil and gas, and in the course of such operations regularly and customarily
enters into contracts with independent contractors for the performance of service relating thereto;
and
WHEREAS, Contractor represents that it has adequate equipment in good working order and
fully trained personnel capable of efficiently operating such equipment and performing services
for Operator.
OIL & GAS ENERGY SERVICES AND AMERICA’S LIFESTYLE
America’s lifestyle is built on a foundation that relies on the
petroleum industry. Without petroleum products the lifestyle we
enjoy would not be possible, since petroleum is part of everything
we do. This is an industry enhancement and recruiting tool. VHS
or CD ROM. TV309
RECOMMENDED SAFE PROCEDURES & GUIDELINES FOR OIL
& GAS WELL SERVICING
This safety handbook has become the reference source for safe
procedures in well servicing. Developed by contractors as an aid
to preventing accidents. This 7" x 9" handbook should be required
reading for every hand in the industry. This loose leaf binder is
printed on oil and grease resistant, tear-proof paper. SA400
RIG SAFETY INSPECTION FORMS
These 81/2" x 14" forms offer a complete checklist for rig
inspections to ensure that safe operating procedures are being
observed. Detailed descriptions of each checklist item and what to
look for are printed on the reverse side. A must for field supervisors,
crew chiefs and safety personnel. Each pad has 50 pages. SA402
TORQUE TONG HANDBOOK
An informational booklet on theoretical torque curves vs. hydraulic
pressure or air pressure for rod, tubing and casing tongs; also
applicable to power swivels and subs. Pressure settings needed to
achieve required torque for most brands of tongs and subs are
readily referenced in this booklet. HB102
To place your order or to get more information,
AESC National Office: • 10200 Richmond Ave. Suite 275 • Houston, Texas 77042
713-781-0758 or 1-800-692-0771 or www.aesc.net
Well Servicing March/April 2006 - Expires May 30, 2006
Membership application
Membership in AESC is comprised of Sustaining, Associate and Producer members, further defined by sub-categories.
Companies that provide more than one type of service or product are classified by their primary business line or revenues.
Independent subsidiaries, distributors and agents are required to maintain separate memberships.
SUSTAINING MEMBERS
Sustaining members include any firm or corporation whose products or services are provided for the express purpose(s) of completing,
maintaining, assessing, enhancing and/or abandoning an oil or gas well.
Class I Sustaining:
Class II Sustaining:
Members are service companies that provide various types of
Members are service companies that provide personnel and/or
rolling stock, self propelled and/or self-contained mobile equipment or
portable equipment (not defined under Class I) used to perform
units that perform well bore/well site functions. Dues are assessed
specific well site functions.
on a fixed asset operating unit basis.
Class II members include companies with Casing Crews,
Class I members include companies with Mobile Service Rigs,
Roustabouts, Pipe Testers, Location Contractors, Welders and Well
Pressure Pumping Units, Coiled Tubing Units and Rolling Units,
Testers, and Fishing and Rental Tool Companies.
Wireline (Perforating/Logging) Units, as well as DOT Regulated
Dues: $600/year minimum. Additional facilities or satellite
Trucks, including Hot Oilers, Transports, Haul, Kill, Vacuum, Rig Up,
operations: $100/location.
Anchor and other similar vehicles.
Dues: 1-3 Units: $600/year. 4-20 Units: $100/unit/year. Each unit
over 20: $50/unit/year.
1-10 Trucks: $600/year. Each truck over 10: $35/truck/year.
ASSOCIATE MEMBERS
Associate members are business entities whose focus, products or services are connected with the energy industry in support of on-site
service providers. These companies are categorized as Safety and Engineering Groups, Manufacturers/Suppliers, Insurance, Financial & Legal
entities, and Consulting companies.
Class I Associate:
Members include companies serving or doing business in more
than one geographic (chapter) area. Dues: $700/year.
Class II Associate:
Members include companies whose business is confined to a
single geographic (chapter) area. Dues: $500/year.
PRODUCER MEMBERS
Producer members are business entities whose focus, products or services are connected with the energy industry. These companies are
categorized as Exploration and Production companies, Operating Companies, Refiners, Marketers and Royalty Owners.
Class I Producer:
Members include companies serving or doing business in more
than one geographic (chapter) area. Dues: $700/year.
Class II Producer:
Members include companies whose business is confined to a
single geographic (chapter) area. Dues: $500/year.
Individual / Non-Profit / Educational / Trade Associations
Please contact the AESC Executive Director.
Date _________________________
Company Name _______________________________________________________________________________________
Address (Home Office) ______________________________________________________ City _______________________
State _______________ Zip ____________ Phone (
) ____________________Fax (
Key Contact _____________________________________
) _______________________
Title ____________________ Signature __________________
# of Field Employees __________ # of Office Employees __________ E-Mail ____________________________________
Do you wish to receive Well Servicing magazine (free subscription)?
Membership Classification
Sustaining Members
Class I: # of Units/Trucks ________
Associate Members
Producer Members
Class I
Class I
Class II
Class II
Yes No
Class II: # of Crews/Facilities _________
(Dues are annual and payable in advance.)
(Dues are annual and payable in advance.)
Describe services or products offered: ______________________________________________________________________
Method of Payment: Check Enclosed Charge to my: VISA MasterCard
American Express
(If paying by credit card) Account number _____________________________________ Expiration Date ______________
Name as it appears on card ___________________________________ Signature __________________________________
Membership Sponsored By (if a business associate or friend encouraged you to join, please provide):
Name _________________________________________
Company ___________________________________________________
AESC, 10200 Richmond Ave., #275, Houston, Texas 77042; Toll-free: (800) 692-0771, or fax: (713) 781-7542
Industry items
JetStar and Acid Services merge
JetStar Energy Services Inc. has
merged with Acid Services LLC to
create a substantially larger oilfield
services company in the Midcontinent region, offering a complete
line of pressure pumping services,
including cementing, acidizing and
fracturing.
The company, which will retain the
name JetStar Energy Services Inc., has
a significant presence in north Texas
and southern Oklahoma, with field
offices in Gainesville, Jacksboro,
Eastland, and Borger, Texas. Acid
Services, based in Wichita, Kansas,
has operations throughout Kansas,
northern Oklahoma, and northwest
Texas, with field offices in Pratt and
Liberal, Kansas, and sales offices
in Hays and Wichita, Kansas. By
combining the two companies, the
new JetStar will have greater
geographical coverage and operational
capabilities to serve oil and gas
producers.
Acid Services’ two founders, Dan
Klaus and Dave Autry, will continue
with the new company in senior
management roles. Jim Collet, who
served as JetStar’s CEO prior to the
merger, will stay on in that capacity.
S3GPS and RAPID Workforce merge
RAPID
Workforce
Systems
announced the acquisition of S3GPS,
a leader in providing GPS satellitebased field asset and manpower
tracking and management resources
for the oil and gas industry. RAPID is
a total software and hardware
integrator that delivers solutions to
help its customers improve the
efficiency, utilization and profitability
of their field resources. Using low
cost handheld computers, the
Internet and cellular or satellite
communications, RAPID creates a
“paperless” work environment and
real-time status tracking of all open
customer work tickets.
RAPID’s
Electronic
Whiteboard™
and
Electronic Job Sheet™ features
create modern versions of the paper
forms and tools that businesses have
been using for decades.
Jason Harris, S3GPS partner says,
“We couldn’t be more excited about
becoming a part of RAPID. Their work
ticket automation software completes
our offerings and allows us to bring a
total solution to the oil and gas
industry.
TETRA expands
TETRA Technologies Inc. has
acquired Beacon Resources, L.L.C., an
onshore production testing company
with headquarters in Denton, Texas,
and service centers in Benbrook and
Odessa, Texas, and Hobbs, New
Mexico. The purchase price was $15
million in cash plus a potential earnout payment, contingent on target
profitability over the next three years.
Geoffrey M. Hertel, president and
CEO, stated “This acquisition
significantly alters our domestic
footprint for this business line.
Beacon has a well developed customer
base and a fleet of new and well
maintained testing equipment –– a
substantial portion of which is
specifically suited for high pressure,
high temperature wells, including
specialized
hydraulic
choke
equipment.”
Basic acquires LeBus
Basic Energy Services, Inc. has
acquired all of the outstanding capital
stock of LeBus Oil Field Service Co.
for a total acquisition price of
approximately $26 million. LeBus,
which generated approximately $21
million in revenue in 2005, has a fleet
of 67 fluid hauling trucks and 225 frac
tanks, and six disposal facilities.
LeBus provides transportation,
storage and disposal of oilfield fluids
in the East Texas and North Louisiana
regions from its New London and
Tenaha, Texas, operating locations.
Ken Huseman, Basic’s president
and CEO stated, “We believe we now
operate the largest fluid services fleet
in the Ark-La-Tex region and look
forward to offering our combined
customer base more seamless
coverage throughout this market.”
EPA extends SPCC deadline
Facilities that fall under Spill
Prevention, Control, and Countermeasure requirements have a
reprieve until October 31, 2007, to
develop and implement revisions to
their plans. EPA Administrator
Stephen Johnson signed a final rule
extending the deadline which also
affords the agency more time to make
further changes to the controversial
July 2002 amendments to spill control
requirements. The revised deadline
applies to all regulated entities with
aboveground storage capacity of
1,320 gallons.
Parks joins AESC staff
The AESC national office is pleased
to announce the addition of
administrative assistant, Susan Parks,
to the staff as of March 1. Susan had
been working on a temporary
assignment in the office since
December 2005. Susan is married to
Chuck Parks and currently resides in
Houston.
Cudd Well Control names
Paul and Whitehead
Cudd Well Control announced
Gordon “Peanut” Paul as a technical
sales representative and John
Whitehead as senior well control
specialist.
Paul has over 30 years of technical
sales experience in all aspects of the
oilfield. His technical expertise in
working with pressure control
equipment,
manufacturing
and
leading service providers is a
welcome addition.
Whitehead has over 35 years of
oilfield experience in all aspects of
well control projects on land and
offshore. Whitehead has spent his
career working on a variety of well
control projects worldwide.
Cudd Well Control, a division of
Cudd Pressure Control, Inc. was
established more than 25 years ago
and is a worldwide leader providing
quality well control services to the
industry.
Louisiana Governor threatens to
block offshore oil leases
Gov. Kathleen Babineaux Blanco
notified Washington, D.C., that future
oil and gas leases off Louisiana's coast
are at risk. She said she has enlisted
the help of the oil and gas industry to
help Louisiana secure offshore oil and
gas revenues in a letter sent to the
Minerals Management Service of the
U.S. Department of Interior.
I am getting pressure from our
coastal parishes to consider using the
option to object to future oil and gas
lease sales off our coast, Blanco said.
This is not my preference but the
pressure is mounting to take a
stronger stand.
Industry items
API launches new web site
API has launched a new web site,
“Facts on Fuel” (www.factsonfuel.com)
Gasoline, natural gas, diesel and
heating oil are vital fuels that touch
our lives every day in countless ways.
“Facts on Fuel” provides a
comprehensive and understandable
overview of all the factors that help
determine the cost consumers pay
for gasoline and other fuels, as well as
the challenges the oil and natural gas
industry overcomes to ensure that
Americans have these vital fuels
when they need it.
All aspects of this interactive site
will be updated on a regular basis to
stay current with gasoline and other
fuel supply and demand fluctuations.
Chairman Jones selected to a
National Energy Commission
Railroad Commission of Texas
(RRC) Chairman Elizabeth Ames
Jones filed paperwork to become an
official member of the Interstate Oil
and Gas Compact Commission
(IOGCC). Chairman Jones will replace
the vacant seat on the IOGCC by
appointment from Governor Rick
Perry.
Formed in 1935, today the IOGCC
acts as a clearinghouse of information
on the energy industry. Its mission
now is to promote conservation and
efficient recovery of domestic oil and
natural
gas
resources
while
protecting health, safety and the
environment.
Norton to leave Interior
U.S. Secretary of the Interior Gale
Norton has announced her resignation.
After
serving
in
the
Bush
Administration for the past five years,
Norton will leave the Cabinet-level
post at the end of the month.
“Now I feel it is time for me to leave
this mountain you gave me to climb,
catch my breath, then set my sights
on new goals to achieve in the private
sector,” Norton said in her resignation
letter to the President.
Norton, 51, is the first woman to
serve as Interior Secretary. She is the
48th person to hold that office and
has served longer than all but six of
her predecessors.
Advertisers’ Index
ABC Rental Tool Co. ..............................67
AESC Master Service Agreement...........77
Allied North America ...............................6
Aries Well Service ..................................67
Aztec Well Servicing Co.........................66
B & H Rig and Tong Sales......................40
BOSS ........................................................71
BVM Corporation ......................................6
Basic Energy Services ............................11
Beckman Production Services ...............66
Bituminous Insurance.............................21
Bulldog Specialties .................................52
Buster’s Well Service..............................70
CC Forbes ................................................71
C & H Well Service .................................69
Capital Well Service ...............................71
Carter Tool Company.............................16
Caterpillar Inc. ........................................53
Cavins Oil Well Tools ............................84
Crown Energy..........................................23
Cudd Pressure Control............................45
Desert Energy Equipment.......................30
The Dillard Anderson Group ...................5
Doc’s Reverse Units................................70
Dragon Products Ltd. ................................4
Dragon Rig Sales & Services ...................7
DYNAenergetics ......................................25
Earth Color ..............................................58
Engines Inc. .............................................57
Eunice Well Servicing Co.......................67
GEFCO ............................................49 & 55
Gearench .................................................36
Genie Well Service .................................68
Geo-Log Inc. ............................................44
Gill Services ............................................15
Globe Well Service .................................70
H & H Rubber..........................................22
Hawkins Lease Service Inc. ...................66
Hickman Sales & Service.......................22
Hill’s Specialty ........................................42
Houston Specialty Products ...................30
Howard Supply Co. .................................35
Hubbell Exit Strategies ...........................56
J&R Well Service ....................................69
Jet Well Service ......................................69
Kemper Valve & Fittings Corp ...............42
Kennedy Wire Rope & Sling ..................12
Key Energy Services ...............................17
King Well Service ...................................69
Kirby-Smith Machinery ...........................34
L & W Diesel ...........................................44
Lewis Friction Products ..........................61
Lucky Services Inc. .................................67
Lufkin Industries .....................................47
MTU Detroit Diesel .................................13
MP& A Wireline Products ......................50
Merrimac Manufacturing........................51
Moncla Well Service .....................71 & 83
Nabors Well Services .............................66
National Oilwell Varco ...........................9
Oil States Industries................................46
Oil Tool Rentals......................................68
Oilfield Helping Hands...........................65
Oilfield Service & Supply Company......68
Patterson Motor Freight..........................66
Pete’s Weight Indicator Repair..............16
Petro Rubber Products............................12
Polymer Services ....................................15
Pratt Well Service ...................................66
R & S Well Service .................................69
RAPAD Drilling & Well Service .............68
Reeco Well Service Inc. .........................67
Reliable Well Service .............................68
RigPro Inc. ...............................................56
S.L. Pipe Testers Inc ...............................70
Scan-Pac Manufacturing................33 & 58
Stewart & Stevenson ..............................41
Stride Well Service .................................68
Sutherland Well Services .......................68
Synergy Industries LP .............................40
TEC Well Service ....................................66
Taylor Rigs Inc. .......................................27
Titan Specialties .....................................55
Upstream CIO..........................................43
Utex Industries ..........................................5
Venturetech .............................................50
WSI Cased Hole Specialist .....................70
Warren CAT ............................................31
Watson Truck & Supply .........................37
Weatherford International .....................29
Weatherford/OCM ....................................2
Well Control School................................39
Western Well Service .............................66
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Circle Number 114
Circle Number 077

- Well Servicing Magazine

Transcription

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