Ogfj201410 DL

THE EXECUTIVE PUBLICATION FOR THE OIL AND GAS INDUSTRY
OCTOBER 2014
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REASONS FOR JOAS
SELLING YOUR COMPANY
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Through continued determination and a focus on execution,
our company can only grow stronger.
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CONTENTS
V11/N O . 10 | O CTOBER 2014
THE EXECUTIVE PUBLICATION

FOR THE OIL AND GAS INDUSTRY
FEATURES
32
14
43
COVER STORY
GAS TURBINES AND

STRANDED METHANE
DENBURY RESOURCES
Denbury Resources is the only pure-play
CO2 enhanced oil recovery
player in the oil and gas space. OGFJs Don
Stowers spoke with Denbury CEO Phil
Rykhoek about the EOR process, how
the companys strategy differs from a
traditional E&P, and its focus on modest
growth, larger dividends, and good returns.
41
46
JOAS
66
FOCUS REPORT: SINGAPORE
24
C-SUITE TRANSITIONS
32
FAYETTEVILLE
The shale gale reaches Arkansas
36
66
BAKKEN UPDATE
Play is expected to produce 1.2MMboe in 2014
38
ON THE COVER
Denbury
Resources CEO
Phil Rykhoek
Photo by Brandon
Parscale
ENERGY RISK MANAGEMENT
41
HOW TO INTEGRATE E-DISCOVERY

INTO BUSINESS PROCESSES
DEPARTMENTS
6 EDITORS COMMENT
8 CAPITAL PERSPECTIVES
10 UPSTREAM NEWS
12 MIDSTREAM NEWS
50 DEAL MONITOR
52 OGFJ100P
60 INDUSTRY BRIEFS
63 ENERGY PLAYERS
84 BEYOND THE WELL
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EDITORS COMMENT
Energy regulation and economic growth

MOST PEOPLE would agree that a certain
amount of government regulation is necessary for a society to function efficiently.

However, go beyond that basic premise and
people are all over the map about what
should be regulated and how far it should
go. For instance, what is the right amount
of control that a government federal,
state, or local should exert over the marketplace? And when does a governing body
DON STOWERS
go too far?
EDITOR OGFJ
Nowhere is that more obvious than in
the energy arena. By and large, the business community wants
less regulation because compliance can cost a company a lot of
money. Excessive regulation can make certain activities uneconomical. Social activists and environmentalists, on the other
hand, typically want the government to step in and control
activities they think are detrimental to the health and well-being
of the public regardless of its impact on business.
As federal regulations on energy expand, two PhDs with the
Pacific Research Institute recently studied this geographic bias
and have written an energy study that attempts to measure attitudes toward regulation in each of the 50 US states. The 50
State Index of Energy Regulation by Wayne Winegarden and
Mark A. Miles measures the regulatory climate for energy production, distribution, and consumption and which states are
more economically efficient. Alabama, Alaska, South Dakota,
and Texas are tied for the best (#1), while California (#49) and
New York (#50) are at the bottom.
As economists, we have adopted a basic economic perspective
economic efficiency defined as allocating resources to their
most productive uses, says Winegarden. The effects of policies
are evaluated as objectively as possible, solely from that perspective. Policies that promote economic efficiency receive higher
scores; those that reduce economic efficiency receive lower scores.
Examining the regulatory variation across states determines
where in the country the regulatory environment is optimal.
This economic efficiency approach supplies a useful perspective
on state energy regulations, adds Miles. It also provides an
important contribution to uncovering what data exist for defining and measuring the relative regulatory implications across
the states.
The PRIs Index based its conclusions on seven component
indices or sets of questions that form the core of the Index scoring and rankings. The lower the score, the more economically
efficient it is. A higher score means less efficiency.
Here are the states with the top scores with respect to energy
regulation:
Alabama Rank 1
Alaska Rank 1
South Dakota Rank 1
Texas Rank 1
6
Delaware Rank 5
North Dakota Rank 6
Georgia Rank 7
Kansas Rank 7
Missouri Rank 7
The lowest-scoring states on energy regulation, according to
Winegarden and Miles:
New York Rank 50
California Rank 49
Wisconsin Rank 48
Connecticut Rank 47
Maryland Rank 46
Washington Rank 44
Michigan Rank 44
New Jersey Rank 43
Several patterns emerge from the overall index, according to
the authors. First, there is little relationship between whether a
state has substantial energy resources like oil, gas, and coal, and
whether its regulations are economically efficient. Some bigproducing states like Texas and Alaska are ranked at the very
top, yet California, another major energy-producing state, is at
the very bottom.
However, a geographic pattern is visible, as mentioned and
some regions have regulatory environments more conducive to
efficient allocation in production and consumption of energy.
The most interesting relationship is between a states ranking
and its economic growth rate. High ranked states on average
grow faster than those ranked low. Moreover, the higher rate of
economic growth is associated with faster economic growth.
Energy regulation can, therefore, be an important factor in determining the eventual prosperity of a state, say the authors.
The oil and gas industry has been fighting excessive regulation
for decades. The Independent Petroleum Producers Association
has been leading the charge in North America. Swift Energy
president Bruce Vincent recently sent out a letter on behalf of the
IPAA Wildcatters Fund, which contributes to pro-business, proindustry candidates for public office. In the letter, Vincent said,
A constant stream of ill-conceived, and often redundant, regulations continue to create an atmosphere of uncertainty across the
country. Despite the tremendous success of independent producers on private lands, regulatory uncertainty has hindered the true
economic potential of Americas energy renaissance.
PwC, in its recent Annual Global CEO Survey, found that 83%
of energy CEOs are concerned that over-regulation could put
the brakes on economic growth. Yet the same survey showed
that 88% of energy CEOs are somewhat or very confident of
growth during the next three years. Of those CEOs, 56% said
they plan to increase their employee headcount, 29% say it will
remain approximately the same, and only 15% say they expect
to lay off employees. So there appears to be optimism in the
industry despite a more challenging regulatory environment.
WWW.OGFJ.COM |
OCTOBER 2014
CAPITAL PERSPECTIVES
Selling your company

EFFECTIVELY MAXIMIZING THE VALUE OF A BUSINESS
BEGINS LONG BEFORE THE SALE PROCESS KICKS OFF
BRYAN LIVINGSTON, CAPITAL ALLIANCE CORP., DALLAS
BOOM AND BUST in the oil patch have
given way to boom and boom in the shale

era. Technology may not have created permanent prosperity in the oil and gas industry, but it may be a very long time before the
old bumper stickers reappear with the
words, Lord, if you will send us one more
boom, we promise not to (mess) it up.
As they continue to see years of steady
growth in revenues and profits, the owners
of small- to mid-size companies in oil and
gas manufacturing and services inevitably
wonder whether the time is right to sell all
or a part of their businesses.
Owners should realize that a favorable
marketplace is just one of several factors to
ponder in the decision to sell. Effectively
maximizing the value of a business begins
long before the sale process kicks off. Some
mid-range planning and an honest examination of a number of key factors, like the
owners role after the transaction, can go a
long way toward formulating an effective
exit strategy that yields a win-win transaction. Here are some real-world illustrations
of action steps that should find their way
into an exit planning program.
STEP 1: PROVIDE RELIABLE, CREDIBLE
FINANCIAL REPORTING
Three years ago the owners of a pipeline

services company wanted to know what
they could do to better position their firm
for the future. The company was based in
Arkansas and provided oilfield construction
services in the midcontinent and southeast.
At the time, it had $4 million in annual
revenues.
After examining its business practices,
we advised that the company begin annual
audits to enhance the credibility of its financial information and to give the owners the
ability to better explain its financial positioning at any point in the business cycle. The
8
reliable and trustworthy financial data that came out of these audits by a reputable accounting firm has subsequently put the company in the running for larger contracts with
several significant exploration and production companies.
Certifiably sound financial data got the attention of the large E&P firms. It also gave the
companys representatives a solid basis upon which they could negotiate more favorable
contracts. Since regular audits became routine three years ago, the companys revenue has
increased from $4 million to $30 million. Now, if the owners decide its time to sell the
company, they can command a much more favorable selling price and a faster, less difficult
sales process should they decide to monetize their business.
STEP 2: DIVERSIFY YOUR CUSTOMER BASE
The case just cited also illustrates how a diverse customer base will enhance the financial
strength of a company as well as its potential selling price. Many small entrepreneurial
concerns go through an incubation period when their revenues depend on one or a few
major customers. Continued reliance on a narrow customer base can eventually betray a
weakness. Difficult times at one of its few major customers will drag down the performance
of the entrepreneurial concern.
We recently advised a pipeline services company, which was able to diversify its customer
base by providing audited financial results. With audited results, the company qualified
for larger contracts from oil and gas majors that previously would not do business with it
because it was perceived as too small and possibly unstable.
Another company weve dealt with recently had a similar experience, but this particular
firm was an electrical engineering service provider to the oilfield. By adopting a regular
schedule of audits, the firm established its financial stability and, as a result, was able to
WWW.OGFJ.COM |
OCTOBER 2014
CAPITAL PERSPECTIVES
qualify for master service agreements (MSA) with a wider range of

drilling companies than it qualified for previously. The outcome
was a steadier and more diverse revenue stream, which made the
firm a more valuable acquisition target.
STEP 3: CONSIDER WHERE YOU ARE IN THE BUSINESS
CYCLE AND ON YOUR COMPANYS GROWTH CURVE
Most small but growing concerns are tightly focused on ongoing

operations. Analyzing their context in terms of the business cycle
and their growth curve is usually a luxury they cant afford. To do
this, executives would have to take a conscious step back from the
daily demands of running the business, demands that always seem
so very urgent and unavoidable.
Recently, we were approached by a diversified pipeline construction company specializing in pipeline construction support services,
such as clearing and pipeline integrity. The firm believed it was not
yet ready to be acquired, but it wasnt sure. First, we analyzed the
companys operations and made certain recommendations, but we
also conducted a confidential outreach to potential buyers so the
company would have an objective and unbiased evaluation of its
prospects in the merger and acquisition (M&A) marketplace, given
the business cycle and the firms corporate performance to date.
The results of this confidential outreach were very positive. Following the adoption of our operational recommendations, the firm
was eventually sold at an above market evaluation. This particular
pipeline service company needed more than raw data on market
conditions. It needed objective and confidential feedback from the
market that would either reinforce its current beliefs or reveal a
more accurate assessment of its corporate performance within the
context of the business cycle. Frequently, only outside third parties
are able to provide this kind of insight.
STEP 4: EVALUATE THE STRENGTH
OF YOUR MANAGEMENT TEAM
Qualified buyers who complete transactions in the oil and gas

services space are keen on assessing risk. Specifically, they want to
know the likelihood that a companys favorable performance will
continue into the foreseeable future.
A critical part of a firms continued success will be the strength
of management after an acquisition has taken place. Unless the
entrepreneur or group of founders has taken steps to groom the
firms second tier of executives, the founders will usually have to
stay on with the firm during a transitional period while a new
management team absorbs the nuances of running the business
successfully. The alternative is to prepare the firms second tier
managers to take over for the top executives following the sale of
the company.
The founder of a pipeline construction company recently came
to us in just such a situation. He was ready to step away from dayto-day management of the company and diversify his wealth by
selling his holdings in the firm. We analyzed the companys operations and realized that its second tier managers were quite talented
and capable executives.
OCTOBER 2014
WWW.OGFJ.COM
Effectively maximizing the value of a business

begins long before the sale process kicks off. Some
mid-range planning and an honest examination of a
number of key factors, like the owners role after the
transaction, can go a long way toward formulating an
effective exit strategy that yields a win-win
transaction.
In preparation for a corporate sale, our advice was to give these

second-tier managers greater responsibilities so they could seamlessly move into senior management positions after the sale. The
company followed our advice, but the buyer still required that the
founder remain onboard as a consultant for a brief period of time.
Nevertheless, the buyer was impressed with the management team
to the point that the sales price for the company was significantly
higher than expected.
STEP 5: BE PREPARED TO EXPLAIN
THE WORTH OF YOUR COMPANY
Its a logical question for every corporate buyer to ask of a business owner: Why are you selling your company now? And sometimes, its the question business owners are least prepared to
answer because they have not been able to step back from daily
operations in order to do the due diligence research that the
buyer will. In many cases, the owner is just too busy running the
company to worry much about what the company would be
worth to a buyer, but without this knowledge, the seller is at a
disadvantage to the buyer.
Doing this sort of due diligence research on ones own company
involves a healthy dose of brutal honesty. All of the strengths and
shortcomings must be exposed. Then, strengths can be highlighted
and shortcomings corrected before the sales process begins.
WE NEVER DO THE SAME DEAL TWICE
Every M&A deal is as different and as diverse as the parties to the

deal. We all have our own set of emotions, our own analytical skills
and our own judgmental perspectives. We look at the same thing
and see something very different. Taking these action steps will put
business owners in a favorable position for selling their companies,
but thats just the first step toward getting a deal done.
ABOUT THE AUTHOR
Bryan K. Livingston is executive vice president and a principal of

Dallas-based Capital Alliance Corp. He provides M&A advisory
services to shareholders of middle-market companies, with an
emphasis on construction and engineering services providers
throughout North America. Livingston has completed transactions
for clients in oil and gas pipeline construction, oil and gas pipeline
support services, and minerals mining and processing, among other
industries.
9
UPSTREAM NEWS
B R IE FS
UTICA PRODUCTION
Total natural gas
production in the Utica
Region, which includes
production from the
Utica and Point Pleasant
formations as well as
legacy production from
conventional reservoirs,
has increased from 155
million cubic feet per
day (MMcf/d) in January
2012 to an estimated 1.5
billion cubic feet per day
(bcf/d) in October 2014.
EIA
S&P: ONSHORE DRILLERS MAY FARE

BETTER THAN OFFSHORE IN NEAR-TERM
The industry outlook for the contract drilling industry will be mixed over the next couple of years,
with the onshore sector faring better than offshore
drillers, according to a recent report by Standard
& Poors Ratings Services. The report explores the
recentbut expectedinflux of offshore contracted rigs, which has led to decreasing day rates
across most rig classes.
The report also explores the industrys recent
heightened capital spending, debt financing, and
the impact that several new contracted and uncontracted rigs will have on the offshore sectors
financial measures. In fact, Standard & Poors has
recently changed the outlooks on three offshore
drilling companies to negative.
Companies with strong balance sheets and
younger fleets should be able to absorb any weakness in the offshore market over the next few
years; however, companies with higher debt leverage and/or older fleets could face some rating
pressure if markets materially weaken from current
levels, said Standard & Poors credit analyst Paul
Harvey. On the other hand, our rating outlook
for most land-based drillers remains stable, partly
because we believe robust Western Texas Intermediate crude oil prices will continue to drive
demand for oil-directed rigs, said Harvey.
The overall state of the global economy, in
general, and the US economy, in particular, affects
the operating environments of all participants in
the oil and gas industry. Standard & Poors expects
continued strong drilling activity based on robust
crude oil prices and day rates that might weaken
but wont collapse. In any event, Standard & Poors
expects that day rates and utilization levels will
likely begin to recover in 2017.
POWDER RIVER BASIN REVIVAL
The Powder River Basin, well known for its abundant coal supply, is experiencing a turnaround in
oil production. Production has rebounded from
a low of 38,000 barrels per day (bbl/d) in 2009 to
78,000 bbl/d during first-quarter 2014. Although
US oil production growth is occurring primarily in
the Bakken, Eagle Ford, and Permian Basins, the
Powder River Basin is among other regions of the
country that have also benefitted from the application of horizontal drilling and hydraulic
fracturing.
The increase in Powder River Basin oil production is largely attributable to production growth
10
in the Turner, Parkman, and Niobrara-Codell formations, which collectively increased from 4,700
bbl/d in 2009 to 36,300 bbl/d in first-quarter 2014,
increasing their share of total Powder River Basin
oil production from 12% to 46%. Three other
formationsthe Shannon, Sussex, and Frontier
also rose from 2009 to 2014, although to a lesser
extent, rising from 8,900 bbl/d in 2009 to 17,000
bbl/d in first-quarter 2014, maintaining their share
of total Powder River Basin oil production at
around 23%.
The Powder River Basin encompasses more
than 43,000 square miles and is located primarily
in northeast Wyoming and southeast Montana,
along with small areas of South Dakota and Nebraska. The recent resurgence is occurring predominantly in the Wyoming portion of the basin,
which is also the main source of the Basins historical oil production. Since January 2009, more than
590 oil wells have been drilled and completed in
the six select formations within the Powder River
Basin, with this activity centered in Wyomings
Converse and Campbell counties.
In the past, oil production came from the higher-permeability portions of Wyomings Turner,
Parkman, Shannon, Sussex, and Frontier formations. With the application of horizontal drilling
and hydraulic fracturing, larger portions of these
formations have become profitable for commercial
oil production. In contrast, the Niobrara-Codell
formation was not a significant oil producer in the
Powder River Basin before 2009, and oil production from this formation is entirely reliant on the
application of current petroleum technology.
SWALA AWARDED BLOCK 44 IN ZAMBIA
East Africa-focused Swala Energy Ltd. reports
that its 93%-owned subsidiary, Swala Energy
(Zambia) Ltd., has been formally awarded
hydrocarbon exploration rights over Block 44 in
the Republic of Zambia. The award of Block 44
has now been granted following ministerial
consent from the Ministry of Energy in Zambia.
Block 44 lies in the southern part of the country
and covers an area of 2,316 square miles on the
margins of the Karoo-aged Kariba Basin. During
the first contract year, Swala intends to reprocess
and reinterpret the legacy seismic data as part of
its work program. Under the provisions of the
award, Swala may withdraw after each of the first
two years of the contract should the work conducted not confirm the basins prospectivity.
WWW.OGFJ.COM |
OCTOBER 2014
UPSTREAM NEWS
ENI MAKES DISCOVERY OFFSHORE

ANGOLA, ANOTHER IN ECUADOR
Italys ENI has made two recent oil discoveries.
The first, offshore Angola, and the second in
Ecuador.
The company made an oil discovery in Block
15/06 in the Ochigufu exploration prospect offshore Angola. With its Ochigufu 1 NFW well, ENI
has made its 10th commercial oil discovery in the
block. The recent discovery is estimated to contain
300 million barrels of oil in place.
The Ochigufu 1 NFW well, noted by the company to be brought into production in record
time, is located approximately 150 kilometers
off the coast and 9.8 kilometers from the Ngoma
FPSO (West Hub). The well was drilled by the
Ocean Rig Poseidon Drilling Unit in waters 1,337
meters deep and reached a total depth of 4,470
meters.
Ochigufu 1 NFW was directionally and proved
a net oil pay of 47 meters (34 API) contained in
the Lower Miocene and Oligocene sandstones
with very good petrophysical properties, said
the company. The data acquired indicate a production capacity equal to more than 5,000 barrels
of oil per day, ENI continued.
Studies are underway in order to evaluate an
early tie-in to the Ngoma FPSO, already in location in the West Hub and designed to handle
100,000 barrels of oil production per day.
Eni serves as operator of the Block with a 35%
stake. JV partners are Sonangol (30% stake), SSI
Fifteen Ltd. (25% stake), Falcon Oil Holding Angola SA (5% stake), and Statoil Angola Block 15/06
(5% stake).
ENI has been present in Angola since 1980 with
a daily production in 2013 of about 90,000 barrels
of oil equivalent per day. In Block 15/06 the two
oil development projects West hub and East Hub
have already been sanctioned. The production
start up of the West Hub project, through FPSO
Ngoma, is expected by the end of 2014.
In Ecuador, the company has made what it calls
a significant oil discovery at the Oglan-2 exploration well located in Block 10, approximately 260
kilometers southeast of Quito. Early estimates
suggest that the Oglan discovery potentially contains about 300 million barrels of oil in place.
The well, drilled to a total depth of 6,450 feet,
encountered a 236 foot net crude oil column (16
API). During a production test, constrained by
surface facilities, the well flowed at 1,100 barrels
of oil per day. The data acquired in Oglan well
OCTOBER 2014
indicate a production capacity per well up to 2,000

barrels of oil per day.
Eni will immediately begin the studies for the
commercial exploitation of the Oglan discovery,
located just 7 kilometers from the processing
facilities of the Villano Field, also inside Block 10,
which currently produces approximately 12,500
bpd, entirely Eni equity. Eni, through its affiliate
Agip Oil Ecuador, has operated Block 10 since
February 2000.
The Oglan discovery is the outcome of Enis
new exploration campaign, which the company
is undertaking as part of its strategy to develop
Block 10 under the new service contract signed
with the Ecuadorian government in 2010.
GENIE SIGNS EXPLORATION AGREEMENT

FOR SHALE EXPLORATION IN MONGOLIA
Genie Oil Shale Mongolia LLC (GOSM), a subsidiary of Genie Energy Ltd., has signed a prospecting
agreement with the Petroleum Authority of Mongolia (PAM). The new exploration block covers
9,652 square miles in Central Mongolia southeast
of the Mongolian capital, Ulaanbaatar. The agreement, the first to be signed under recently passed
legislation, also provides a framework under which
the company can request a commercial production agreement once a specific suitable resource
and location are identified.
Yuval Bartov, chief geologist of Genie Oil and
Gas, said, Our analysis of the available geological
evidence suggests that this license area may contain world class deposits of thick and rich oil shale
well-suited for our in-situ extraction
technology.
Together with its previously signed exploration
agreement, GOSM now has exclusive rights to
explore for oil shale in approximately 23,166
square miles in Mongolia.
We are pleased that Mongolia and Genie
Energy will be working together to establish oil
shale reserves and explore for and exploit the
resource. The recently passed Petroleum Law
created a favorable environment for investment
in conventional and unconventional petroleum
sectors, increasing competition and encouraging
sustainable long term activity, said D. Gankhuyag,
the Mongolian minister of Mining.
In 2013, Genie and the PAM entered into an
exclusive, 5-year oil shale development agreement
to explore and evaluate the commercial potential
of oil shale resources on a separate 13,308 square
mile area in Central Mongolia.
WWW.OGFJ.COM
BR I E FS
MARCELLUS
PRODUCTION
Natural gas production in the Marcellus
region exceeded 15
billion cubic feet per day
(bcf/d) through July, the
first time ever recorded,
according to EIAs latest
Drilling Productivity
ReportProduction in
the Marcellus Region
surpassed winter demand for natural gas in
Pennsylvania and West
Virginia several years ago
and is now on track to be
enough to equal the demand in those states plus
New York, New Jersey,
Delaware, Maryland, and
Virginia combined.
EIAs Today in Energy
11
MIDSTREAM NEWS
B R IE FS
US ENERGY EXPORT
FORECAST
US energy exports are

expected to grow by
5% each year through
2030 thanks, in part, to
domestic unconventional oil and gas production, according to
HSBCs Global Connections Trade Forecast
released in September.
On the flipside, petroleum imports are forecast to decline from
12% in the near-term to
7% in the long-term,
the report continued.
US PIPELINE STARTUPS IN 3Q14 WILL EASE

CRUDE PRICES AND DISPLACE IMPORTS
In 3Q14, the Flanagan South and Seaway Twin
Pipeline startups will begin transporting incremental volumes of heavy sour and light sweet
crude oil to Gulf Coast refineries, putting downward pressure on US crude prices and displacing
imports, noted a GlobalData analyst.
Near completion, the $2.6 billion Flanagan
South Pipeline, an Enbridge project, will connect
to the companys existing main Canadian export
pipeline in Illinois and move approximately 600
thousand barrels per day (mbd) of Canadian and
North Dakota crude oil from Illinois to Cushing,
Oklahoma, noted Carmine Rositano, GlobalDatas
managing analyst covering downstream oil and
gas.
The Flanagan South Pipeline is designed to
increase throughput capacity to 800 mbd, with
more pumping-power enhancements, transporting steadily rising volumes of both Canadian oil
sands and US unconventional oil.
In addition, Enbridge and Enterprise Product
Partners are in a 5050% joint venture building
the Seaway Twin Oil Pipeline, which will move 400
mbd of crude oil from Cushing to Houston, where
it can be shipped to refineries along the Texas
Gulf Coast.
According to GlobalData, the increase in heavy
sour crude oil volumes from Canada, arriving via
the new pipeline connection to the Gulf Coast,
will reduce imports of heavy sour crude oil, primarily from Venezuela, Ecuador and Colombia, as
well as the Middle East.
The increase in crude volumes into the Gulf
Coast will also put price pressure on US crude oil
production, especially in offshore areas, Rositano
added.
Oil production in the Gulf of Mexico is forecast
to increase in 2015/2016, driven by a series of
projects, including LLOGs Delta House, ExxonMobils Julia, Shells Stones, and Anadarkos Heidelberg, which combined will add over an estimated 100 mbd.
BUCKEYE PARTNERS ACQUIRES
SOUTH TEXAS ASSETS FOR $860M
Buckeye Partners LP has completed its purchase
of an 80% interest in a company that will be owned
jointly with Trafigura AG for $860 million. The
company (Buckeye Texas Partners) and its subsidiaries will own and operate a vertically integrated system of midstream assets including a
12
deep-water, high volume marine terminal located

on the Corpus Christi Ship Channel, a condensate
splitter and LPG storage complex in Corpus
Christi, and three crude oil and condensate gathering facilities in the Eagle Ford shale. All of the
assets are supported by 7- to 10-year minimum
volume throughput, storage and tolling agreements with Trafigura.
Upon completion of initial development phase,
the assets will form an integrated system with
connectivity from the production in the field to
the marine terminal infrastructure in Corpus Christi. Upon completion of the initial development
phase, the facilities will offer approximately 5.6
million barrels of liquid petroleum products storage capacity along with rail and truck loading/
unloading capability. A 50,000 bpd condensate
splitter is anticipated to be completed by mid2015, after which Buckeye Texas Partners will commence operations under a 7-year fixed-fee tolling
agreement with Trafigura.
In addition, three field gathering facilities with
associated storage and pipeline connectivity will
allow Buckeye Texas Partners to move Eagle Ford
crude and condensate production directly to the
terminalling complex in Corpus Christi.
Buckeye Texas Partners is expected to invest
approximately $240-$270 million in these initiatives
through the first quarter of 2016. One hundred
percent of the cash flows associated with the assets are supported by fee-based take-or-pay revenue commitments under 7- to 10-year commercial agreements with Trafigura.
ATLAS PIPELINE STARTS PERMIAN
PROCESSING PLANT
Atlas Pipeline Partners LP has brought into service
its Edward processing plant, with capacity of 200
million cubic feet per day, in the Permian Basin.
The addition of the Edward facility increases the
name-plate processing capacity on APLs WestTX
system from 455 MMcfd to 655 MMcfd, an increase
of approximately 44%.The incremental capacity,
located in Upton county near the Benedum plant,
is fully integrated into the WestTX system and
can process producer volumes from anywhere
across APLs footprint.
The WestTX system is currently processing in
excess of 515 MMcfd, approximately 79% of the
new system-wide capacity of 655 MMcfd.
The partnership anticipates volumes to increase
throughout the remainder of 2014 and into the
first half of 2015, and is expecting the system to
WWW.OGFJ.COM |
OCTOBER 2014
MIDSTREAM NEWS
be fully utilized by mid-2015.Management expects the next processing expansion, the previously announced Buffalo plant, to be in service
in mid-2015.The addition of the Buffalo plant
would add a further 200 MMcfd of processing
capacity and would bring the WestTX system to
855 MMcfd of total name-plate processing
capacity.
Expected costs for both the Edward and Buffalo
plant are anticipated to be $100-120 million (net)
for each facility, not including field compression,
gathering pipeline, and well connection costs.The
partnership continues to anticipate adding an
incremental 200 MMcfd processing plant in each
of the next five years.
MAGNUM HUNTER, MSI ENTER
MIDSTREAM ASSET PARTNERSHIP
Magnum Hunter Resources Corp. has entered
into an agreement with Morgan Stanley Infrastructure Inc. (MSI) relating to a separate purchase
agreement between MSI and Ridgeline Midstream
Holdings LLC, an affiliate of ArcLight Capital Partners LLC, providing for the purchase by MSI of all
convertible preferred and common equity interests in Eureka Hunter Holdings LLC owned by
ArcLight. Eureka Hunter is Magnum Hunters majority owned subsidiary through which various
midstream services in West Virginia and Ohio are
conducted, including the companys Eureka Hunter Pipeline.
The Transaction Agreement includes a new
limited liability company agreement at Eureka
Hunter to be entered into by Magnum Hunter,
MSI and the minority interest members of Eureka
Hunter contemporaneously with the closing of
MSIs purchase of ArcLights equity interests in
Eureka Hunter. Such closing is expected to occur
in early October 2014. In connection with such
closing, all the preferred equity interests in Eureka
Hunter acquired by MSI from ArcLight (approximately 41% of the total equity interests in Eureka
Hunter) will be converted from preferred equity
interests into common equity interests of Eureka
Hunter, and all common equity owned by MSI will
have a liquidation preference.
Additionally, Magnum Hunter will sell to MSI
in a second closing, anticipated in mid-January
2015, an additional common equity interest in
Eureka Hunter of approximately 6.5% of the total
common equity interests in Eureka Hunter for $65
million, representing an implied equity value of
Eureka Hunter of $1.0 billion. Such closing, toOCTOBER 2014
gether with follow on capital contributions expected to be made by MSI in 2014, will result in
Magnum Hunter and MSI owning equal equity
interests (approximately) in Eureka Hunter.
Magnum Hunter will have the right to defer its
portion of certain required future capital contributions to Eureka Hunter, and, if Magnum Hunter
elects to do so, MSI will make the capital contributions which otherwise would be made by Magnum
Hunter, with Magnum Hunter having the right to
make capital contributions within 180 days that
will bring Magnum Hunters ownership interest
back to the level prior to the capital call. This
catch-up feature will be at no cost to Magnum
Hunter but will be subject to a maximum of $40
million for each 180-day period.
CAMERON LNG RECEIVES REGULATORY

APPROVAL FOR LIQUEFACTION-EXPORT
Sempra Energy subsidiary Cameron LNG received
final authorization from the US DOE to export
domestically produced liquefied natural gas (LNG)
from its proposed liquefaction facilities in Hackberry, La., to countries that do not have a freetrade agreement (FTA) with the US.
Todays decision marks the last major regulatory hurdle for our Cameron LNG liquefactionexport project, clearing the way for execution of
the largest capital project in Sempra Energys
history, said Debra L. Reed, chairman and CEO
of Sempra Energy.
The liquefaction-export project is expected to
create approximately 3,000 on-site jobs, as well
as several hundred jobs in Louisiana in support
of the project, including fabrication, engineering
and operational jobs. Nearly 200 full-time jobs
will be added to the operations of Cameron LNG.
When fully completed, the project will have
export capabilities of 12 million tonnes per annum
of LNG, or approximately 1.7 bcfpd.
Subject to other conditions to the equity and
debt financing, Sempra Energy will have an indirect 50.2% ownership interest in Cameron LNG
and the related liquefaction project, and the remaining portion will be owned by affiliates of GDF
SUEZ, Mitsubishi (through a related company
jointly established with NYK) and Mitsui, each with
16.6% stakes.
The total project cost is expected to reach $10
billion, including contribution of the existing Cameron LNG facilities, construction of the new facilities, and financing cost.
WWW.OGFJ.COM
BR I E FS
CARIB TO EXPORT LNG
TO NFTA COUNTRIES
Crowley Maritime Corp.
subsidiary Carib Energy
LLC has been granted a
20-year, small-scale US
DOE export license for
the supply, transportation, and distribution of
US-sourced LNG into
Non-Free Trade Agreement (NTFA) countries in
the Caribbean, Central
and South America.
The licensing permits Crowley to now
export 14.6 bcf of LNG
roughly the equivalent
of 480,000 gallons per
day via 10,700 gallon ISO
tanks to these regions.
13
INTERVIEW | PHIL RYKHOEK, PRESIDENT AND CEO OF DENBURY RESOURCES
Denbury champions sustainability

COMPANY FOCUSES ON MODEST GROWTH, LARGER DIVIDENDS, GOOD RETURNS
DON STOWERS, EDITOR OGFJ
OIL & GAS FINANCIAL JOURNAL: Denbury Resources is the

only pure-play CO2 enhanced oil recovery (CO2 EOR) player
in the oil and gas space. Can you explain to our readers how
the process works and how your strategy differs from a traditional E&P company?
RYKHOEK: Our strategy, process, production, and asset cash
flow profile is substantially different from the rest of the oil and
gas industry. In brief, we purchase mature oil fields, inject carbon
dioxide (CO2) into them, and recover as much as 50% more oil
than what has been produced to date. Since we are working with
oil fields that have previously produced millions of barrels of oil,
we know that the oil is there, thereby eliminating one of the
bigger risks in the industry.
Due to the extensive number of old oil fields in the United
States today, this is a very repeatable and sustainable process,
limited only by access to significant volumes of CO2 and the
ability to get the CO2 from the sources to the oil field via pipeline.
We have competitive economics, and we are even environmentally friendly to the extent that we use anthropogenic (man-made)
CO2 as the CO2 will remain in the ground at the conclusion of
the flood. Since this process requires significant sources of CO2
and CO2 pipelines, our ownership and control of most of the
current CO2 sources in our two operating regions and control
of over 1,100 miles of CO2 pipelines (and growing), give us a
significant strategic advantage.
Once delivered to the field the CO2 is injected into the oilbearing reservoir. As the CO2 moves through the reservoir, it
alters the chemical properties of the remaining oil in place and
acts to separate the residual oil from the reservoir rock, increasing its mobility. The combined CO2 and oil mixture can then be
more effectively driven towards the producing wellbore thereby
recovering additional oil over and beyond what could be produced without the CO2.
: What are the absolute necessities for your EOR projects?
You have previously noted that you must find and acquire
ample CO2 supplies, but what else do you need?
RYKHOEK: There are many components necessary to carry out

an efficient and successful CO2 EOR project. As you noted in
your question and as mentioned previously, the first (and possibly most critical) step in implementing a CO2 EOR project is
to secure access to substantial volumes of CO2. We source our
CO2 from both naturally occurring underground reservoirs and
anthropogenic sources. In addition to securing access to CO2,
14
the EOR process requires an inventory of oil fields, pipelines to

transport CO2 from the sources to the fields, and the proven
technical and operational ability to install and operate a CO2
flood. While the EOR process has been used in the industry since
the 70s, its application has been limited to areas near substantial
CO2 supplies.
: Where are your CO2 EOR operations, and how successful have your EOR efforts been to date?
RYKHOEK: Our CO2 EOR operations are currently located in
two areas the Gulf Coast and Rocky Mountain regions of the
United States. We have successfully grown our CO2 EOR production from less than 1,500 bbls/d when we started in 1999 to over
40,000 bbls/d of EOR production as of the second quarter of
2014. Based on the performance of our tertiary floods and the
results of floods operated by others, we estimate we can recover
between 10% to 20% or more of an oil fields original oil in place
with CO2 EOR, which is often about as much production as each
of the primary and secondary (waterflood) recovery phases.
: Sounds like Denbury Resources has been tremendously
successful. How could it be that you are the only CO2 pureplay in the space?
RYKHOEK: Quite simply, the large quantities of CO2 needed to

implement a CO2 flood are not readily available and since CO2
is not economically transportable except via pipeline, the construction of pipelines needed to transport CO2 from source to
oilfield can be difficult to justify unless a company has a large
enough supply of CO2 and a big enough concentration of suitable
oilfields in a particular area. As a result, most companies do not
have the ability to implement a CO2 flood at one of their oil fields,
let alone become a pure play.
: Are you seeing any increase in competition? If not, why
not what are the barriers to entry?
RYKHOEK: We are starting to see some limited competition

for CO2 supply, primarily CO2 being captured from man-made
sources. However, there are few anthropogenic sources today
that are large enough, or close enough to an oil field to justify a
pipeline between the CO2 source and the oil field, so the availability of CO2 and the ability to transport the CO2 are significant
barriers to entry. In addition, while the technology is not new,
there is a significant learning curve for the process, so an adWWW.OGFJ.COM |
OCTOBER 2014
PHIL RYKHOEK, PRESIDENT AND CEO OF DENBURY RESOURCES | INTERVIEW
We have the somewhat unique ability to keep our

capital spending constant within a relatively tight
range and still grow production, thereby increasing
free cash flow and dividends, assuming relatively
consistent or increasing oil prices. This is possible
due to the relatively low-decline production profile
of an EOR flood and the significantly higher dollars
returned from each dollar invested.
OCTOBER
OIL &Parscale
GAS FINANCIAL JOURNAL
Photo
by2014
Brandon
WWW.OGFJ.COM
15
Solar powered control system and production

well heads at Hastings Field in Alvin, TX.
Photo courtesy of Denbury Resources
ditional barrier to entry is the lack of EOR technical expertise.

Lastly, since the pipelines to, and facilities at, the oil field can be
costly and must be built before the oil is produced, it does require
a strong financial position. While we dont expect to secure all
new man-made supplies, our strong financial position, long
operating history, large inventory of floodable oil fields and
extensive pipeline infrastructure make us an attractive partner
for the industrial facilities that plan to capture CO2.
On the acquisition front, there has always been, and we expect
always will be, competition for the long-lived, low-decline rate
oil producing properties that are well suited for CO2 flooding.
However, weve been able to opportunistically acquire assets to
build our deep inventory of CO2 EOR projects, and we expect to
continue to have success in the future.
One option we evaluated last year was the creation of a midstream

or upstream MLP. We concluded that for our specific financial
and tax situation and integrated CO2, pipeline and oil field assets,
we could create more long-term value for our shareholders, by
remaining a C-corp and using the growing amount of free cash
flow we expect to generate to initiate and grow cash dividends
and ultimately create what we believe will be a very unique
growth and income story in the E&P space. As for publicly-traded
MLPs, the long history and sheer size of the sector indicates the
structure is attractive for certain entities and asset types.
: Last year you chose not to create a master limited

partnership (MLP) with some of your assets.What drove this
decision and do you think Kinder Morgans recently announced
plans to transform its MLPs into a C-corp indicate the MLP
structure will be less attractive going forward?
RYKHOEK: We have the somewhat unique ability to keep our

capital spending constant within a relatively tight range and still
grow production, thereby increasing free cash flow and dividends,
assuming relatively consistent or increasing oil prices. This is
made possible due to the relatively low-decline production profile
of an EOR flood and the significantly higher dollars returned
from each dollar invested.
Our new focus on income, further amplifies our internal
RYKHOEK: Our management team and board of directors are

constantly looking for ways to create value for our shareholders.
16
: Growth & Income is Denburys tagline. Why is your

operational strategy so conducive to support both production
growth and returning free cash back to shareholders?
WWW.OGFJ.COM |
OCTOBER 2014
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emphasis on value creation, making sure

that each investment generates a good
rate of return and adds value to the Denbury shareholder. Due to the integrated
nature of our CO2 supply, CO2 pipelines
and CO2 facilities at each of our oil fields,
it is difficult for us to grow at a competitive
pace with many others in the industry.
However, we can generate good returns,
grow at a modest and consistent pace, and
generate free cash, a combination that
most of the industry would find difficult
to duplicate.
: What is your current production
and dividend growth outlook and how
do you foresee those changing over the
long-term?
RYKHOEK: We have stated that we will
grow production at a 4% to 8% annual rate
through the end of the decade. We expect
to accomplish this without significant
increases to our capital expenditures and
without spending a material amount more
than we make. We plan to double our dividend in 2015, from our current annualized
rate of $0.25 to $0.50 to $0.60. Assuming
relatively constant crude oil prices, we
believe that over the long term we can
grow our dividend at a rate in excess of
our annual production growth rates.
: Many E&P companies your size
look at production growth as their key
metric. How does Denbury measure its
success and what metrics do you focus
on?
RYKHOEK: We are more focused on value

creation than on production growth, even
though we do, as stated above, anticipate
long-term production growth. We are also
focused on our free cash flow generation
as those funds are then available for dividends or other cash uses. Internally, we
focus on our rates of return, but externally
one metric we like to use is the capital
efficiency ratio, which measures how
much cash flow we generate from the dollars we invest to develop our reserves.
18
WWW.OGFJ.COM |
OCTOBER 2014
PHIL RYKHOEK, PRESIDENT AND CEO OF DENBURY RESOURCES | INTERVIEW
We have successfully grown our CO2 EOR

production from less than 1500 Bbls/d when we
started in 1999 to over 40,000 Bbls/d of EOR
production as of the second quarter of 2014. Based
on the performance of our tertiary floods and the
results of floods operated by others, we estimate we
can recover between 10% to 20% or more of an oil
fields original oil in place with CO2 EOR.
Denbury employees at CO2 EOR

facility at Hastings Field in Alvin, TX.
OCTOBER 2014
WWW.OGFJ.COM
19
Production storage tanks at Lockhart

Crossing in Livingston Parish, LA.
: I have to ask, why focus on CO2 EOR in the middle of a

shale revolution? And as a follow on, why should investors
buy Denbury (DNR) rather than a shale player?
RYKHOEK: I think one of the biggest advantages is that we
generally control our own destiny due to limited competition.
As you know, it is difficult to obtain and maintain a strategic
advantage in anything in todays competitive business world. Of
course, that would not mean anything if we werent able to
generate good returns, growth, etc., but as generally discussed
previously, I believe our positive results are self-evident. Since
our production profile is so different than the shale players, I
dont think we usually compete for the same shareholder, as
about the only relevant similarity is that we both produce oil. If
an investor wants modest growth, growing dividends, and good
returns, then they will be interested in Denbury. If they are solely
focused on high growth rates, we are likely not the stock for them
to buy.
: What are the biggest operational challenges you face

as a CO2 EOR company?
RYKHOEK: As with any business, we must keep our cost structure competitive and must also manage our projects to ensure
20
we meet our completion targets, closely monitor the floods for

conformance issues (i.e. is the CO2 properly touching and combining with the oil), and continually develop innovative new
ways to increase the efficiency of our CO2 floods. Additionally,
it is more difficult to accurately forecast the timing and magnitude of a production response to the CO2 injections than it is to
forecast the production response from a shale well, which makes
it difficult to manage Wall Street expectations.
: In closing, can you talk to our readers about how sustainable the Growth & Income strategy is for Denbury and
its investors?
RYKHOEK: We believe our strategy is highly sustainable and
truly is the ideal strategy for a company purely focused on CO2
EOR. In our operating areas it has been estimated that there are
up to 10 billion barrels of oil recoverable with CO2 EOR, of which
over one billion barrels are located in oil fields we operate. With
the competitive advantage our access to CO2 supplies and pipelines provides, we expect to be involved in the development of
a large portion of these resources for many, many years to come.
: Thanks very much for your time today.
WWW.OGFJ.COM |
OCTOBER 2014
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A new breed of CEO in the C-suite

INTERVIEWS WITH SEVERAL RECENTLY APPOINTED CHIEF EXECUTIVES
ANTHONY ANDORA, EDGE CONSULTING, SANTA MONICA, CA
THINK BACK a few short years ago. Oil prices were at $147 per
barrel. Natural gas prices surged to more than $13 per million
cubic feet. And the United States was largely dependent on
foreign governments for our resource needs.
Fast-forward to today and all of that has changed. The advent
of horizontal drilling and fracture simulation has brought about
a renaissance in the oil and gas industry. The once untapped
Bakken shale now produces more than one million barrels of oil
per day. The Marcellus shale recently surpassed the Barnett shale
to become the largest natural gas producing region in the United
States. And the US Energy Information Administration now
predicts that the US will become energy independent by the
year 2020.
While all these changes are quite visible to the American public,
another more subtle, less visible change has also taken place during that same time period. This change, however, doesnt involve
technology or multi-billion-dollar oil and natural gas investments.
It involves a new breed of CEOs entering the C-Level suite.
While the responsibilities and duties of yesterdays CEO should
in no way be minimized, todays CEO has additional obligations
and commitments that previously did not rise to the attention
of todays corner office executive. In fact, rare is the CEO who
succeeds in todays competitive environment who does not pay
heed to his/her capital markets, environmental, or institutional
needs. In the past 24 months there have been more than a dozen
CEO transitions at publicly-traded oil and natural gas companies,
some prompted by activist shareholders, others not.
To learn more about the issues behind these changes and
what requirements are needed for todays CEO, I sat down with
several recently appointed CEOs to gain their insight and vision
as to what it takes to succeed as a CEO in todays competitive,
fast-moving environment.
WPX CEO RICK MUNCRIEF
Look back on Rick Muncrief s career and youll see a list of

household names in the oil and natural gas industry; names
ranging from Conoco Phillips, Burlington Resources, and most
recently Continental Resources. But ask Rick about his focal
point on his first day on the job. You wont hear words like drillbit, estimated ultimate recovery, or other industry terms. Youll
hear three primary words/concepts (1) integrity, (2) scalability,
and (3) identity.
While each of these words and concepts build-in the successful aspects of oil and gas development, Muncrief s intent appears
to focus on developing a new culture at WPX, a culture that in
no uncertain terms says: When we say we are going to do some24
thing both our internal folks and external shareholders can rely
on it.
It is on this type of culture and mindset that more corner
office executives are turning their focus, both internally and
externally.
Muncrief notes however, that in order to successfully deliver
on the integrity component, a company must have a successful
oil and natural gas portfolio. To this extent, Muncrief points
toward the scale of WPXs properties. Muncrief explained: The
resource plays were seeing today have really changed the landscape of the US energy industry. Todays E&P company operates
in a complex environment in which scale and size really do
matter. At WPX we have a vast, scalable land position that enables
us to lower costs, achieve efficiencies, and generate above average returns. You need a scalable portfolio of properties to ensure
that youre able to capture those attributes.
Muncrief s third tenant, identity, is a tenant that strongly
resonated with WPX employees during his first day in office. In
fact, companies in todays oil and natural gas industry are allocating an increasing percentage of their budget toward building
their own personal identity or brand. The concept of identity or
brand holds a particularly strong place in Muncrief s heart as
well as the hearts of many of WPXs employees.
Muncrief commented, There was a sense early on that creating our own identity at WPX Energy was going to be very important. For example, ever since WPX was spun off from Williams
theres been a sense that were still part of the Williams legacy.
Dont get me wrong, Williams has a tremendous legacy. But at
the end of the day the people who came here from Williams
wanted something different. They wanted their own identity.
And thats what were creating here at WPX an identity and
brand that positions us as expert risk-takers in the E&P industry
with a scalable portfolio that generates strong returns.
As I dove deeper into the concept of identity and brand with
Rick, I saw how it translated into the companys culture and
action plan. For example, a few weeks ago, on August 18, WPX
Energy announced that it would divest its mature coalbed
methane holdings and bolster high-growth San Juan oil acreage
by more than 50%. The executed multiple agreements were
designed to deepen the companys investment opportunities as
it focuses on margin improvement.
In the August 18 press release Muncrief noted: Were moving
quickly to build scale and create additional shareholder value.
These transactions largely offset and demonstrate our commitment to deploy capital where we can generate the highest
returns.
WWW.OGFJ.COM |
OCTOBER 2014
Clockwise from top left:

Rick Muncrief, WPX Energy;
Ian Dundas, Enerplus;
James Trimble, PDC Energy ;
Bart Brookman, PDC Energy
OCTOBER 2014
WWW.OGFJ.COM
25
have to truthfully communicate that strategy. And you have to

understand that youre going to have folks who will roll-in and
roll-out of your stock, and its nothing personal. At the end of
day, you focus on your story and your plan. Then you execute
that plan.
Whether Muncrief is working on a capital markets transaction, speaking with his employees or investing time with shareholders, or other stakeholders, theres no hiding his appreciation
for the CEO title he now holds. In fact, when asked what he is
most proud of during his first 100 days in the corner office,
Muncrief concluded: Instead of saying what Im most proud of
Looking back to WPXs second quarter results, similar progress Id rather phrase it as what I am most humbled by. Ive been
can be noted. For the second quarter ending June 30, WPX re- humbled by how well Ive been accepted here at WPX Energy.
ported a 57% surge in oil production. And if that werent enough, Im humbled by how well the market has accepted our vision. I
WPX proceeded to
hear a lot of invesraise its full-year oil
tors saying, Its nice
Fig. 1: WPX STOCK PERFORMANCE: SUMMER 2014
production guidance
to finally start realfrom 40% to 55%
izing the value that
growth.
we all knew was
Since coming to
here. And Ive heard
27
office a little more
other investors say,
26
than 100 days ago (at
Why didnt we know
this writing), Munabout the high-qual25
crief s mantra of
ity assets in the WPX
24
bring on the heat
portfolio or the reappears to have paid
turns that they are
23
off as oil production
capable of generat22
has soared since he
ing? Whatever the
was appointed CEO,
reason, Im glad I
21
and WPXs stock
know about them
20
price has increased
now. When I hear
May 15*
July
August
September
by more than 22%
those kinds of reduring that same pesponses Im truly
*CEO Rick Muncrief started at WPX on May 15, 2014
riod (see Figure 1).
humbled.
Muncrief describes his new role as CEO as exciting and an outstanding ENERPLUS CEO IAN DUNDAS
opportunity, but hes also aware of the environment in which Technical advancements in the oil and natural gas industry have
he operates. He understands how the job of CEO has evolved unlocked enormous resource potential across North America. We
and changed since his early days at Conoco, Burlington Resources, all know that. The Bakken and the Marcellus are just two of the
and most recently with Continental Resources.
formations that have contributed to this success. But not all E&P
Todays CEO must wear a lot of different hats, he said. You companies in North America are US-based companies.
have to be an effective communicator both internally and exTake Calgary-based Enerplus for example. Enerplus is a successful
ternally. You have to be more strategic, and you have to work E&P company with best-of-breed properties on both sides of the
closely with the investment community. Thats one of the biggest border. Its former CEO of 12 years, Gordon Kerr, successfully guided
changes.
the company through its restructuring process when Enerplus
Muncrief continued, When you look at shareholders today, transitioned from a Canadian oil and gas trust to a traditional E&P
youve got long-term holders, short-term holders, and no-term company. About 18 months ago however, Kerr made the decision
holders. You have to be well versed in all markets, aware of the to step down as CEO and president. Enter Ian Dundas, Enerplus
opportunities and pitfalls. And you have to build a good team new CEO and president, and formerly the companys COO and
around you.
executive vice president.
When asked to expand upon his communication with shareHaving worked for Enerplus since 2002, Dundas had the advanholders, especially activist shareholders, he noted, Youre never tage of knowing the companys culture and portfolio of properties
going to please everyone. You have to define your strategy. You from the inside. He held positions ranging from vice-president of
Stock price in US$
Todays E&P company operates in a complex

environment in which scale and size really do
matter. At WPX we have a vast, scalable land position that enables us to lower costs, achieve efficiencies, and generate above-average returns.
You need a scalable portfolio of properties to
ensure that youre able to capture those attributes. Rick Muncrief, WPX Energy
26
WWW.OGFJ.COM |
OCTOBER 2014
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Theres more complexity to the role of CEO than

theres ever been. Capital market demands, environmental issues, active community participation, are all competing for a larger share of a
CEOs timeIf you arent comfortable communicating, youd better get comfortable quick or
the challenges of this position can quickly overwhelm you. Ian Dundas, Enerplus
business development, where he was responsible for acquisitions

and divestment strategies, to COO and EVP, where he oversaw the
development and execution of Enerpluss operational strategies and
strategic planning.
However, ask Dundas about how he has seen the role of CEO
evolve since he started at Enerplus in 2002, and hell tell you: I
believe theres more complexity to the role of CEO than theres ever
been. Capital market demands, environmental issues, active community participation, are all competing for a larger share of a CEOs
time. And theres more communication both internally and externally
than I ever realized. So if you arent comfortable communicating
youd better get comfortable quick or the challenges of this position
can quickly overwhelm you.
Communication at Enerplus, both internally and externally,
played a particularly important role during Dundas CEO appointment. The company was engaged in one of its most strategic transactions, the repositioning of the Enerplus portfolio from low-margin,
shallow Canadian gas to higher margin resource potential with a
focus on organic growth.
Dundas explained, We started looking at our portfolio and the
changing landscape of our resource potential, and quite frankly we
didnt like what we saw. We were too scattered. We were too focused
on low-margin business. We therefore made the decision to divest
our low-margin shallow gas properties. And we redeployed capital
toward higher-margin oil and natural gas properties, focusing on
organic growth.
The portfolio repositioning, clearly the correct decision, required
constant communication with employees, shareholders, and community officials. And, as Dundas simultaneously communicated
the benefits of the repositioning and navigated the company through
a series of complex A&D transactions designed to make the company
more profitable, his responsibilities continued to grow. From chief
decision-maker to chief communicator to chief operations overseer,
Dundas donned a new hat each day with new responsibilities.
The hard work, however, started to pay strong dividends as
Enerpluss portfolio transitioned from a low-margin, shallow Canadian gas portfolio to a high-margin, resource- rich portfolio focused
on organic growth.
Before long, Enerplus relatively small production profile in the
Bakken had grown from 10% of daily production to more than 25%
of the companys daily production. As for the Marcellus, the results
were even more astounding. Enerplus had grown from virtually no
28
production in the play to exploitation efforts that were now contributing more than 50% of the companys daily natural gas
production.
While the repositioning of the portfolio has been a significant
accomplishment for Dundas, it is hardly his only task. Enerplus has
long paid a dividend to its shareholders, a dividend that most have
grown largely accustomed to.
Few shareholders can forget the day that Enerplus was forced
to cut its dividend by 50%. It was the afternoon of June 12, 2012. The
markets had already closed, and it was almost a full year before
Dundas had even been appointed to the position of CEO. Nonetheless, anticipation of the oncoming dividend cut had a negative
impact on Enerplus valuation. The company was forced to take a
long, hard look at the dividend program and adopt growth strategies
that would support a sustainable plan. And thats exactly what
Enerplus did.
Dundas explained: The dividend has always been an important
component of the Enerplus story. But it has to be smartly aligned
with our growth strategy. We have to assure our shareholders that
we can sustain a dividend without sacrificing production growth.
Today, our dividend is based on a model that allows us to grow
production, cash flow or EBITDA, and reserves all on a per-share
basis without having to sacrifice the company. This is the way we
have created a successful, sustainable dividend at Enerplus.
CEOS IN AND OUT IN THE PAST 24 MONTHS
Company
Resignation
Date
Departing
CEO
Incoming
CEO
Anadarko
Petroleum
February 21,
2012
Jim Hackett
Al Walker1
BG Group
April 28, 2014
Chris Finlayson
Andrew Gould2
Bonanza Creek
Energy
February 3, 2014
Michael Starzer
Marvin M.
Chronister3
Chesapeake
January 29, 2013
Aubrey
McClendon
Robert Douglas
Lawler
Encana
January 11, 2013
Randall K.
Eresman
Doug Suttles
Enerplus
March 21, 2013
Gordon Kerr
Ian Dundas
Gulfport Energy
January 29, 2014
James Palm
Michael G.
Moore
InterOil
April 23, 2013
Phil Mulacek
Dr. Michael
Hession
Noble Energy
April 15, 2014
Charles D.
Davidson
David L. Stover
PDC Energy
June 18, 2014
James M.
Trimble
Barton
Brookman
Rosetta
Resources
February 26,
2013
Randy L.
Limbacher
James E.
Craddock
Sandridge
June 19, 2013
Tom Ward
James Bennet
SM Energy
April 2, 2014
Anthony J. Best
Javan D.
Ottoson
WPX Energy
December 17,
2013
Ralph A. Hill
Rick E. Muncrief
Appointed February 21, 2012; 2Interim Executive Chairman; 3Interim CE0
WWW.OGFJ.COM |
OCTOBER 2014
Bart [Brookman] and I share common goals. We

believe in profitable growth. We believe in a communication policy that is clear, consistent and transparent. And we believe in developing opportunities
that will allow us to grow production, reserves, and
cash-flow 30% to 40% per year. James Trimble,
PDC Energy (outgoing CEO)
The sustainable dividend policies initiated since July 2012 have

clearly taken root as a large number of institutional shareholders
have come charging back into the stock, significantly raising Enerpluss valuation.
For all the tasks, challenges, and requirements that todays CEO
faces, perhaps none is more taxing than managing a complex
shareholder base and activist investor. In recent years, shareholders,
particularly activist shareholders, have played a pivotal role in rearranging board rooms, guiding management decisions, and in some
cases, casting aside once-powerful corner office executives, most
notably Aubrey McClendon, co-founder and former chairman and
CEO of Chesapeake Energy, and Tom Ward, founder and former
chairman and CEO of SandRidge Energy, and also a co-founder of
Chesapeake Energy. Although neither McClendon nor Ward were
sidelined for long, their respective departures from the companies
they founded has resonated loudly in corporate board rooms along
with the voice of activist investors.
That said, CEOs with a strong penchant for transparency and
communication often steer clear of shareholder conflicts. Or as Ian
Dundas puts it: We work hard to provide transparency to all our
stakeholders. We communicate in a manner that is clear, consistent,
and open. And we make ourselves available to our constituents. But
none of that really matters unless you also execute. If you are not
walking the talk, communication will not help you.
Enerpluss hard work in shareholder relations did not go unnoticed
as both the companys stock performance and institutional shareholder base has risen dramatically since Dundas took office.
As our conversation drew to a close, I took note of Ians calm and
collected demeanor. For all the complex decisions, challenges, and
moving parts within the Enerplus machine, Enerpluss CEO remains
composed and unruffled. His vision for the company is quite simple:
profitable North American growth and income for investors.
And like WPX Energys Rick Muncrief, Dundas believes that size
and scale play an important role in an E&Ps success. To Dundass
credit, the repositioning of the portfolio has enabled Enerplus to
achieve a size and scale that provides the company with increased
efficiencies, economies of scale, and a sustainable dividend. The
company has also delivered a total return of more than 50% since
Dundas took the helm.
Yet for all of Enerpluss success and accomplishments, Dundas
refuses to accept credit. Like many experienced and confident CEOs,
Dundas attributes the companys success to the people around him.
OCTOBER 2014
WWW.OGFJ.COM
PDC ENERGYS CEO JAMES TRIMBLE

AND INCOMING CEO BART BROOKMAN
Ask any board of directors member and theyll tell you that few
tasks are more important than ensuring the successful transition
from one chief executive to the next. Incoming executives must
successfully manage complex drilling programs, capital budgets
worth hundreds of millions, and in many cases billions of dollars,
as well as lead a team of individuals all of whom have very different
lives and personalities. The skill sets required from todays CEO can
often be mind-boggling.
PDC Energy, a successful E&P company currently headed up by
CEO James Trimble, has a firm understanding of this task even as
Trimble plans to step down at the end of December and pass the
torch to incoming CEO Bart Brookman.
Trimble explained: In June 2011, when I was appointed CEO, I
was tasked with repositioning our portfolio. We wanted a greater
focus on an oil and liquids-rich production stream and to transition
away from vertical drilling in multiple basins to focus on horizontal
drilling in core basins. And we wanted to strengthen our balance
sheet. This focus has not changed much since I was appointed but
it certainly has grown more complex.
Trimble continued: Implementing a seamless management
succession plan that continues to deliver value for our shareholders
was critical. We identified Bart early on as an ideal candidate. His
familiarity with PDCs assets, financial structure and corporate
culture were all strong positives. Weve promoted Bart from vice
president of operations to COO to president over the past few years.
Hes further honed his management and financial skills over that
time. And in a few short months, Im happy to report, Bart will be
ready to take the reins.
The decision to promote Brookman as chief executive however,
was only part of the PDC Energy succession plan. PDC also wanted
clear, consistent communication of the succession plan with its
external audiences and shareholders. The company wanted to
publicly announce Brookmans promotion early on in the process,
giving its stakeholders a chance to see a seamless transition. Moreover, PDC wanted its external audiences to see Trimble and Brookman working side-by-side as the PDC brand was passed from one
CEO to the next.
Trimble commented: Bart and I share common goals. We believe
in profitable growth. We believe in a communication policy that is
clear, consistent and transparent. And we believe in developing
opportunities that will allow us to grow production, reserves and
cash-flow 30% to 40% per year. We wanted both our employees and
our shareholders to see this commonality first-hand.
That said, we also have very different personalities and styles,
and thats okay. Its the common goals and vision that we share for
our internal employees, external shareholders, and the residents of
the communities in which we operate that matters.
Brookman, who started his career in 1988 with Snyder Oil & Gas,
which was subsequently acquired by Patina Oil, has seen the industry
evolve and change. From his earlier days when vertical drilling
programs were the only applications used in the Wattenberg to days
29
environment. Its your companys brand that is at stake, and that

includes your people, your shareholders, and the residents of the
community in which you operate. Managing through the complex
maze of regulatory issues is a focal point that demands the attention of every CEO.
Much like its industry peers, PDC Energy doesnt just talk about
the regulatory environment and government affairs, it actively
participates in the process. PDC has a staff of experts inside the
organization that deal with specific local, state, and federal issues
on a daily basis. Time, money, and effort are dedicated to working
with communities and government entities to always ensure the
when the Barnett shale was the largest natural gas producing play highest standards of compliance are met.
in the country, Brookman knows and understands the industry
It was a little more than two months ago that PDC announced
well.
the passing of the torch from Trimble to Brookman. However,
But ask Brookman what the biggest change is for a CEO in the neither Trimble nor Brookman can hide the excitement that one
industry today and hell tell you, Its the time a CEO invests with has for the other, or for that matter, the opportunity for growth in
current and prospective shareholders. Ive observed first-hand the the PDC portfolio. Since 2010, PDCs production stream has trantime Jim spends with anasitioned from one that was
lysts, money managers, and
about 24% oil and natural
investment community
gas liquids to 54% oil and
professionals. Probably 40%
natural gas liquids in 2013
of Jims time is devoted to
to an estimated 60% oil and
communicating the advannatural gas liquids in 2014.
tages of investing in the
And as the company
PDC story. Whether its
increased its focus on oil
communicating those adand natural liquids, so too
vantages via non-deal roaddid investor participation
shows, analysts bus tours,
as PDCs stock price soared
or participating in one-onmore than 85% from apone investor meetings, the
proximately $30 per share
time commitment is
in January 2012 to approxisignificant.
mately $56 per share
A get-acquainted lunch with Rick Muncrief
When asked if shorttoday.
and WPX Energy employees.
term investors like hedge
But Brookmans vision
Photo courtesy of WPX Energy
funds have any impact on
for PDCs future does not
how PDC communicates
stop with a $56 stock price
its story, Brookman replied,
or a $2 billion market capiWe dont alter or change the PDC story based on a shareholders talization. Both Brookman and Trimble believe that the PDC Energy
time horizon. We dont tailor our business plan or strategies to suit portfolio, combined with the most talented people in the industry,
any specific investor. I believe it is our job to execute the PDC busi- has the capacity to grow market capitalization three-, four-, or even
ness plan and then to communicate the results of that plan with five-fold.
our employees, our shareholders, and our stakeholders. Whether
Jim is playing that role today or Im communicating the story to- ABOUT THE AUTHOR
morrow, thats what well do communicate the strength of the Anthony D. Andora is pesident of Edge Consulting, a
PDC brand.
communications and branding firm that serves the
While the time commitment invested with Wall Street profes- oil and gas industry. With more than 15 yearsexperience,
sionals is significant, it does not mitigate or diminish other new Andora has consulted, advised, and represented small-,
responsibilities that todays CEO must manage. Among the most mid-, and large-cap companies on a variety of issues
important of those new responsibilities is managing the complex ranging from detailed focus groups, advertising initiaregulatory environment.
tives, investor relations, and national media campaigns. He has
As Brookman notes, While weve always operated in a regula- co-produced, developed, and placed content in/on CNBC, FOX
tory environment, it has grown to new levels in recent years. Todays Business News, Bloomberg television, The Wall Street Journal,
CEO has to be very cognizant of the pitfalls and challenges of this Barrons, and OGFJ. Anthony@EdgeConsultingSolutions.com
We dont alter or change the PDC story based
on a shareholders time horizon. We dont tailor
our business plan or strategies to suit any specific investor. I believe it is our job to execute
the PDC business plan and then to communicate the results of that plan with our employees,
our shareholders, and our stakeholders. Bart
Brookman, PDC Energy (incoming CEO)
30
WWW.OGFJ.COM |
OCTOBER 2014
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Fayetteville
THE SHALE GALE REACHES ARKANSAS
FRED LAWRENCE, IPAA
WASHINGTON, D.C. Arkansas Fayetteville shale gas play has
carved itself a significant role in the turnaround of US natural gas

production. The Fayetteville still touches the same immense order
of magnitude of the very largest US natural gas shale plays, such as
the Marcellus, which produced 4.2 trillion cubic feet in 2013, and
the Haynesville, which produced 2.8 trillion cubic feet that year.
The Fayetteville has continued to produce roughly one trillion
cubic feet in 2013 contrasting with just 0.007 trillion cubic feet
in 2005 despite reduced activity for plays (like this) that are heavily
weighted towards natural gas with little liquids content. It stands
as a testament to the efforts of producers focusing on increasing
rig efficiency, reducing costs, as well as making intelligent choices
for drilling sites and well treatments in order to maximize well
productivity.
Fig. 1: FAYETTEVILLE SHALE

Missouri
Oklahoma
Arkansas
Mississippi
Texas
HISTORY AND GEOLOGY
Natural gas was first discovered in Arkansas in 1887 towards the

northwestern edge of the state in the Arkoma Basin, and commercial development began in 1902. The Arkoma Basin, in which
the Fayetteville play is located, straddles Oklahoma and Arkansas.
32
asinFayetteville Shale
aB
m
rko
Source: EIA
WWW.OGFJ.COM |
OCTOBER 2014
OCTOBER 2014
Assessment of the Fayettevilles potential has evolved as well. In a 2010 report, the US
Geological Survey estimated undiscovered technically recoverable natural gas in the
Fayetteville shale at a mean of 13.2 trillion cubic feet (and with no appreciable liquids
reserves). However, by the end of 2011, EIA put proved reserves (a much more conservative measure) in the Fayetteville at nearly 15 trillion cubic feet. Even though EIA revised
that figure down to 9.7 trillion cubic feet for 2012, it was still well above the 2004 prehorizontal drilling figure for proved reserves of just 1.8 trillion cubic feet.
IMPROVING EFFICIENCY, REDUCING COSTS
Natural gas prices dropped sharply following their peak in 2008 when spot prices reached
an annual average of $8.86 per million BTU. In 2012, spot prices averaged just $2.75, with
an uptick in 2013 to $3.73 in 2013 per million BTU, according to EIA data. Thus, especially
in plays that produce primarily natural gas, it became especially important to focus on
drilling efficiency, well planning, and overall management of costs. This has been particu-
Fig. 2: ARKANSAS RIG COUNT AND ANNUAL MARKETED

PRODUCTION OF NATURAL GAS
60
1,400,000
Rig count
1,000,000
40
800,000
30
600,000
20
400,000
10
Million cubic feet
1,200,000
50
Active rigs
Over the years, the Arkomas conventional

natural gas production has typically been
from sandstones in the Atoka formation.
The Fayetteville shale lies deeper, and although the rock formation extends into
neighboring states, the play itself centers
on the northern part of Arkansas (Fig. 1),
particularly the middle and western sections, on the eastern side of the Arkoma
Basin. Activity in the Oklahoma portion of
the Arkoma Basin has focused on the Woodford shale play, a geologically older and
deeper formation.
The Fayetteville shale was formed from
sediments deposited in shallow seas in the
Mississippian age, roughly 350 million years
ago. The shale is found at depths anywhere
from a few hundred feet to perhaps 7,000
feet, with thickness ranging from roughly
50 to 500 feet. For the most part, surface
outcrops occur in the counties north of the
Play region; specifically Washington, Madison, Newton, Carroll, Boone, Searcy, Stone,
and northern Independence counties. Geologic processes have made this a natural
gas only formation, with little if any liquids
content. The Fayetteville shale has been
known for a century or more and interest
in its hydrocarbon potential goes back to at
least the 1930s, but traditional wells were
not prolific producers because the shale was
too dense to allow natural gas to flow
easily.
With the development of horizontal drilling and hydraulic fracturing, the prospects
for the Fayetteville changed markedly. This
became apparent when news of the prolific
Thomas 1-9 well in Conway County, drilled
in 2004 by Southwestern Energy, became
widely known, and interest in the Fayetteville surged. There had been only two active
rigs in Arkansas in 2003. By 2008 there were
over 50 (Fig. 2). Natural gas production in
Arkansas, which had never risen much beyond 0.2 trillion cubic feet per year in prior
decades, more than doubled by 2008 and
again by 2010. Since then, production has
continued at about one trillion cubic feet
per year. As recently as 2004, Arkansas
trailed behind 14 other states in natural gas
production. By 2013 it had jumped to eighth
place, according to data from Energy Information Administration (EIA).
200,000
0
0
2000
2002
2004
2006
2008
2010
2012
Source: Baker Hughes, EIA, Arkansas OIl and Gas Commission
Fig. 3: CHANGE IN ARKANSAS GDP 2004-2012

Sector
Millions of 2009 dollars
Percent change
Information
Finance, insurance, real estate
Professional and business services
Education, health care, social assistance
Government
Oil and gas extraction
Wholesale trade
Utilities
Retail trade
Entertainment, rec, accommodation, food svc.
Transportation and warehousing
Construction
Agriculture, forestry, fshing
Manufacturing
-4,000 -2,000
2,000 4,000 6,000 8,000
-200%
200
400
Source: Bureau of Economic Analysis
WWW.OGFJ.COM
33
34
Fig. 4: ARKANSAS EMPLOYMENT TRENDS

12,000
10,000
Number of Jobs
larly true of dry natural gas plays such as

the Fayetteville. Currently, one of the attractions of wet natural gas plays is the value
of their liquids content which can boost the
prospects economic attractiveness, an advantage not available in dry natural gas
plays.
However, one potential cost efficiency
offered by the Fayetteville is that the formation is not as deep as some of the other
major plays. The average depth drilled in
the Fayetteville is in the neighborhood of
5,000 feet, contrasting with a roughly 7,000
8,000 foot range for the Barnett, the Arkoma Woodford, and the Marcellus, and
11,000 to 12,000 feet for the Haynesville.
Further, many incremental operational
improvements can add up to sizeable gains.
With experience, operators have learned
which techniques work best in different
geographic areas of the Fayetteville. For example, in high pressured areas, letting the
completion rest for 10 to 30 days has improved production. In other areas, altering
the proppant proportions has been the key
to enhanced outcomes. Some operators
have gained efficiencies by moving equipment and services in house to gain tighter
logistical coordination and to benefit from
economies of scale. Drilling several wells
from one drilling pad has reduced rig setup
and takedown time. Given the shallower
nature of the Fayetteville compared with
some other plays, purposing compact rigs
for the job can help manage equipment
costs and as well as reduce downtime for
moving a rig to the next site. Water recycling
has not only reduced total water requirements but has also reduced transport costs
and truck traffic.
The results of these efforts have been
dramatic. Evidence for this can be seen in
publicly reported results for Southwestern
Energy, which maintains that the time to
drill a well in 2013 was cut to one third of
the time required in 2007. This was even
though the horizontal length drilled about
doubled from 2,700 feet to nearly 5,400 feet,
and with the average number of fracture
stages increasing to 12 in 2012 and to 18
stages in 2013. The company reports that
the cost per well over the period declined
17%.
8,000
Natural gas distribution

Oil and gas pipeline construction
Pipeline transportation
Geophysical surveying and mapping services
Support activities for oil and gas operations
Drilling oil and gas wells
Oil and gas extraction
6,000
4,000
2,000
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Bureau of Labor Statistics
ECONOMIC IMPACT
According to a study by the Center for Business and Economic Research at the University
of Arkansas, the sector of the states economy containing the oil and gas industry saw
employment double between 2001 and 2010. In fact, it has been the fastest growing sector
of the states economy (Fig. 3). Average annual pay in the oil and gas industry in 2010 was
twice that the all-industry average within the state. This was particularly beneficial for
Arkansas, since, as the report notes, High paying jobs are essential for the economic
development of the state because Arkansas consistently ranks in the lowest quintile
among all states in terms of annual per capita personal income. The report states that
shale activity in the state increased personal incomes and personal expenditures, which
in turn led to increased sales tax revenue. It also spurred additional investments in the
state, including pipelines and other infrastructure, and increased royalty payments to
mineral rights holders living in every county of the state. From 2008 to 2011, total economic activity of more than $18.5 billion was generated as a result of Fayetteville Shale
activities in the state. Despite some slippage in industry-related employment in 2013,
according to recent Bureau of Labor Statistics data, industry employment remains at a
level still easily double what it was in 2005 (Fig. 4).
According to data collected by the Independent Petroleum Association of America,
the states severance tax revenues have grown from less than $10 million in 2004 to nearly
$80 million in 2011, and according to IHS estimates, the state in 2012 received $530 million
in state and local taxes from unconventional oil and gas activity. IHS also estimates that
unconventional oil and gas activity contributed $3.8 billion of value-added economic activity in the state in 2012 and supported, directly and indirectly, over 33,000 jobs in the state.
A BRIGHT FUTURE
The strong employment and revenue impacts of the Fayetteville shale illustrate the role
that just one shale play can have on a states economy, particularly in a state that relies
on oil and natural gas for more than 55% of its energy needs. Companies active there are
showing the impressive efficiencies that can be realized from such geographic and geological focus.
As the number of shale/tight oil plays grows, it is equally important to provide a running historical and economic update of some of the earliest plays that continue to accelerate their value creation in states that rely increasingly on the oil and gas industry. Thanks
to the efforts of Americas independent producers, Arkansas oil and gas history has more
chapters to unfold 125 years after the first discovery.
WWW.OGFJ.COM |
OCTOBER 2014
THE OIL & SERVICES

CONFERENCE 13
www.enercominc.com
Save the Date:
February 18-19, 2015

San Francisco
Continental
Resources
operation in
Divide County,
North Dakota.
Photo courtesy
of Continental
Resources.
Bakken update
PLAY IS EXPECTED TO PRODUCE 1.2MMBOE IN 2014
THE BAKKEN SHALE is a late Devonian/Mississippian
PER MAGNUS
NYSVEEN, RYSTAD
ENERGY
36
drocarbon content. The production is given both for the

aged play, while Three Forks is Devonian. The Bakken/ reported 2013 and the estimated 2014 values. After acquirThree Forks play is located in the Williston Basin in ing Kodiak, Whiting became the company with the highest
northeastern Montana and northwestern North production rate in 2013 and for 2014 the level is expected
Dakota.
to grow to 115 kboe/d, up 22 kboe/d compared to 2013. In
Bakken/Three Forks is a
multistacked system composed Fig. 1: NET ACREAGE BY AREA TYPE
of the upper, middle, and lower
Continental
Bakken members and the underResources
Whiting
lying Three Forks formation.
Petroleum
Pronghorn Sands exists between
Hess
Lower Bakken and Three Forks
ConocoPhillips
in some areas of the play.
EOG Resources
Figure 1 depicts the acreage
ExxonMobil
position for the top 10 landholdOasis Petroleum
ers in the Bakken. Continental
Resources is the largest acreage
Marathon Oil
holder in the play with 1,200,000
North Dakota
Oxy
Montana
net acres, followed by Whiting
Apache
Petroleum with 850,000 net acres.
0
200
400
600
800
1,000 1,200 1,400
Figure 2 shows the net producThousand acres
tion for the five largest companies
Source: NASCube
in Bakken, split between the hyWWW.OGFJ.COM |
OCTOBER 2014
total, the Bakken is expected to produce ~ 1.2 million boe in 2014 (90% light oil), compared to 1.0 million boe in 2013.
In Figure 3 the 30-day average production rate is given for the Bakken counties in
North Dakota and split between light oil and rich gas. The values are based on wells
started up from 2012 until the second quarter of 2014. McKenzie, Dunn, and Mountrail
show the best well results.
Close only counts

in horseshoes and
han
hand
and
nd ggrenades
grenades.
ad
deeess
des
d
ExxonMobil
EOG
Hess
Continental
Whiting
Fig. 2: NET PRODUCTION FOR THE LARGEST BAKKEN COMPANIES

2014
Knowing whats
happening before its
too late is the name of
the game when making
investment decisions.
Thats why Oil & Gas
Financial Journal works
closely with industry
experts to provide timely
reports on oil and gas
activity.
2013
2014
2013
2014
2013
2014
2013
Light oil
NGL
Gas
2014
2013
0
20
40
60
80
100
120
140
Thousand boepd
Source: NASCube
Fig. 3: AVERAGE 30-DAY INITIAL PRODUCTION RATE PER COUNTIES

900
Rich gas
Light oil
800
700
OGFJthe difference
between those who
come close and those
who close deals.
600
Boepd
From shale plays

to mergers and
acquisitions, OGFJ offers
vital information to keep
you in the know rather
than reading about
missed opportunities
after the fact. As an OGFJ
subscriber, youll be the
rst to know and the rst
to act.
500
400
300
200
100
Billings
Burke
Divide
McLean
Golden Valley
Stark
Williams
Mountrail
Dunn
McKenzie
www.ogfj.com
Counties
Source: NASWellData
OCTOBER 2014
WWW.OGFJ.COM
37
ETRM in todays market environment

SYSTEMS STILL FALL SHORT IN PRESCRIPTIVE ANALYTICS
CARLOS BLANCO, THE OXFORD PRINCETON PROGRAMME, SAN FRANCISCO BAY AREA, CA
IN THIS PIECE we discuss the increasing importance of optimi-
zation, risk and trading analytics in energy trading and risk

management systems (ETRM).
OPTIMIZATION OF PHYSICAL ASSETS, AND LONG-TERM
CONTRACTS
ETRM systems have traditionally been used primarily for trade

capture and data repository providing operational, control,
compliance, and limited risk management functionality. To meet
users needs, these systems were designed to excel at performing
tasks such as scheduling, nominations, settlements, invoices, or
accounting for physical and financial trades.
However, the key requirements from ETRM systems for of oil,
gas, and power market participants have changed dramatically
in recent years. In a recent study conducted by SunGard1 among
more than 100 firms active in North American natural gas markets, 43% indicated that their primary concern is operational
and asset optimization.
Their second concern was financial operations, risk management, and regulatory compliance (34%). In other words, firms
are lacking prescriptive analytics in their systems in order to
optimize their assets and long term contracts. The role of descriptive, predictive and prescriptive analytics in the main functions performed by ETRM systems is shown in Figure 1.
To overcome the limited optimization functionality in ETRM
systems, many firms conduct their asset optimization using
sophisticated spreadsheets or stand-alone applications developed
in mathematical and statistical languages such as Matlab or R.
The development, maintenance, and support of multiple
systems and applications often introduce material data and
model risks for those firms. In addition, when the traders or
developers of those models move to another company, many of
FIG. 1: TRADITIONAL FUNCTIONS AND FUTURE
DIRECTION OF ETRM SYSTEMS
Trade ca
ptu
Valuatio
accounti re,
n, b
n
settleme g and projectio udget
n
nts
measure s and risk
ment
Descrip
tive
Predicti
ve
Source: Black Swan Risk Advisors
Operatio
n
and asse al
t
optimiza
tion
Prescrip
tive
those applications are eventually abandoned due to limited

scalability and poor documentation, which results in a loss of
know-how for the firm.
PHYSICAL ASSETS AS REAL OPTIONS
The main reason behind increased importance for operational

and asset optimization analytics supporting decision making is
the need to extract maximum value from assets as well as the
operational flexibility in long term purchase and sale
contracts.
Traditionally, physical assets such as storage facilities, pipelines, transmission networks, refineries, and power plants were
operated by engineers rather than trading groups, resulting in
suboptimal performance from a profit maximization perspective.
Fortunately, one of the more relevant developments in recent
years in financial engineering and energy risk modeling is the
pricing, modeling, and hedging of physical assets and asset-based
strategies for power, oil, and gas portfolios.
Many energy and commodity firms have established assetbacked trading groups whose objective is to enhance the risk
adjusted profitability of its physical assets based on observable
market spreads, their potential variability, as well as the specific
asset operating constraints. Some of the main benefits of modeling and operating assets as real options are shown in Figure 2.
DECISION-SUPPORT ANALYTICS FOR
OPERATIONAL DECISIONS
Quantitative models can incorporate the key objective functions,

operational, policy, and financial constraints to find the optimal
FIG. 2: BENEFITS OF MODELLING ASSETS AS
REAL OPTIONS
Operational
decisions
Valuation
and hedging
Risk
measures
Performance
measurement
Short-term
optimization
Asset
purchases/
sales
Greeks
Budget
forecasts
Backtesting
of trading
strategies
Mark to
market
EaR, CFaR,
PFE
Risk
adjusted
performance
Asset
management
Hedge
strategy
Stress tests
and
scenarios
Benchmarking
1Managing optimization, efficiency and regulatory compliance in the natural gas market (2014) White Paper. SunGard
38
WWW.OGFJ.COM |
OCTOBER 2014
operating decisions (see Figure 3).

These models often require large
scale simulation and dynamic programming techniques, but computational advances such as leastsquares Monte Carlo simulation are
making that analysis feasible and
relatively cost effective. Asset-based
optimization leverage with proprietary data can create an important
competitive advantage for firms
that develop those capabilities.
Due to its complexity, optimization-based decision-support tools
for physical asset and long-term
contract management need to
strike a balance between flexibility
and integration into existing systems. ETRM have data connectivity
tools that allow them to take multiple inputs coming from different
systems, but their performance
often falls short when performing
a large number of computations in
simulation-based environments.
For example, simulation-based
real option models can provide optimal dispatch schedules based on
expected market conditions for
power plants, injection and withdrawal plans for storage facilities or
schedule cargo deliveries for LNG
long-term contracts. Those models
can also allow for the evaluation of
alternative trading and asset management strategies.
Some of the key benefits from
optimization-based models is that
they can help asset and contract
owners improve margins without
taking additional risk, reduce operational risk ensuring all constraints are satisfied and improve
internal coordination across trading
and operational units (scheduling,
nomination, etc.).
From a portfolio perspective, the
aggregation and integration of the
exposures from multiple contractual exposures and physical assets
can also uncover hidden opportunities to improve operating plans. For
example, a gas marketer that buys
and sells gas from multiple clients and locations and owns storage assets as well as transportation capacity can find optimal ways to serve its clients using prescriptive analytics that
combine the various contract flexibilities.
OCTOBER 2014
Extraordinary depth in
energy
g transactions
THE PROOF
IS IN THE
NUMBERS
$6.2B in recent, complex energy transactions

One of the largest due diligence teams nationwide
300 attorneys, 200 devoted to the energy industry
More than 100 years of experience in energy law
11 energy transactional attorneys with in-house experience
Top-ranked in energy law by Chambers USA, The Best
Lawyers in America, and AV rated by Martindale-Hubbell
Sharon O. Flanery
CHAIR, ENERGY AND NATURAL
RESOURCES DEPARTMENT
Dedicated to shaping energy law for the future

www.steptoe-johnson.com
THIS IS AN ADVERTISEMENT
WWW.OGFJ.COM
39
FIG. 3: FEASIBLE VS. OPTIMAL OPERATING PLANS
FIG. 4:
Building Blocks of asset-based optimization models

Optimal operating plan meets all constraints,
and maximizes objective
Realistic multi-step spot, forward curve,

spread and asset operational scenarios
Asset, policy and trading constraints explicitly

captured and modeled
Set of all possible operating

plans (including infeasible)
Subset of operating plans that

meet all constraints - but with
different proft outcomes
Integration of market liquidity, hedging and

transaction costs
Backtesting performance of pre-defned

asset-based trading strategies
VALUATION AND HEDGING
Due to the complex nature and embedded option clauses in

contracts and operational flexibilities associated with physical
assets, a rigorous quantitative framework can be the cornerstone
of valuation and hedging strategies around those exposures and
provide a competitive advantage. Figure 4 shows the key building
blocks for the design of decision support analytics for asset-based
strategies. Asset based models should accurately capture the
market and asset dynamics and operational and contractual
constraints. The valuation, risk metrics, and hedge ratios calculated from models that do not fit the criteria outlined above are
not just likely to be inaccurate and result in over or under valuation of those contracts, but also likely to lead to suboptimal
decisions that would impact the asset-based strategys
profitability.
RISK MANAGEMENT
Risk management for physical assets and long-term contracts

requires a dynamic simulation framework with ability to handle
multiple risk factors (e.g. commodities, credit events, operational
issues), multiple instruments (e.g., physical contracts, derivatives),
and operational events taking place at multiple steps in time.
Once a dynamic risk simulation framework is in place, risk
managers can estimate the potential variability of one or more
metrics (e.g., cash flow, earnings, Mark-to-Market, liquidity, etc.)
based on realistic potential changes in a set of key state variables,
as well as the firms response to those changes (e.g., operating,
hedging and trading strategies).
ETRM systems with the ability to store data using a common
definition across the enterprise can achieve consistency of risk
information across different business units and allow for the
calculation of portfolio and enterprise wide metrics. For example,
contract, market and counterparty information that often resides
in different systems used by market and credit risk groups needs
to be integrated in order to perform Earnings at Risk (EaR) and
Cash Flow at Risk (CFaR) analysis
40
PERFORMANCE MEASUREMENT
Another area where energy firms can reap tangible benefits from
deploying optimization analytics for asset-based strategies is in
the process of setting up performance benchmarks. Those benchmarks can be used to set profit targets based on realistic assumptions about the expected profitability of the contracts, and
ensure that compensation schemes do not reward simple market
exposures (e.g., beta), but traders skills (e.g., alpha).
For example, storage assets can be dynamically hedged by
optimizing the intrinsic value of the asset over time. Performance
remuneration schemes that use overall results fail to take into
account that the expected value of an asset may be very high
(or low). In our storage example, the intrinsic value could be the
baseline profit to measure the marginal contribution from traders
decisions.
SUMMARY
ETRM systems have traditionally served as trade capture and

repository system providing operational, control, compliance,
and limited risk management functionality. However, in order
to assist users to compete in the current market environment,
ETRM systems should support asset management decisions
combining not only descriptive and predictive, but also prescriptive operational and asset optimization analytics.
ABOUT THE AUTHOR
Carlos Blanco is a faculty member of The Oxford-Princeton

Programme, where he teaches a wide range of courses on energy
derivatives hedging, pricing and risk management, real options,
simulation, and oil, gas and power trading and hedging. He is
also the managing director of Black Swan Risk Advisors. (carlos@
blackswanrisk.com)
WWW.OGFJ.COM |
OCTOBER 2014
When compliance knocks

HOW TO INTEGRATE E-DISCOVERY INTO BUSINESS PROCESSES
Sheila Mackay, Xerox Litigation Services, San Francisco, CA
WITH LITTLE NOTICE, corporate compli-
ance officers, in-house counsel, and other

legal professionals for organizations in the
oil and gas industry may be required to
hand over sensitive files in response to
compliance, regulatory, or investigative
requests. Most of these files are likely to be
in electronic format, which can create a
host of challenges. The continual increase
in volumes and types of electronically
stored information (ESI), including e-mail,
social media, cloud-based applications, and
the like, coupled with heightened government oversight and intervention, means
the stakes and costs of complying with
these requests have never been higher.
When managed inconsistently, these requests pose a great risk to oil and gas
corporations.
Therefore, as e-discoverywhich involves identifying, collecting, reviewing,
and producing potentially relevant data in
an investigation or litigationconverges
with compliance, oil and gas corporations
must understand how to manage these
processes to minimize exposure to extensive costs and risks while maximizing the
value of their data for business purposes.
The best methodology for doing so consists
of five key steps that will incorporate ediscovery as a repeatable business process
into the larger corporate compliance
program.
STEP 1: BUILD AN E-DISCOVERY
RESPONSE TEAM
An initial step in merging e-discovery with

business practices is forming a multifunctional team. To imbed e-discovery in the
organizations culture, executives must buy
in to the value of the process. Therefore,
the team not only should include seniorlevel managers, but also a high-level champion or advocate. In addition, to maximize
transparency and facilitate communication,
the legal and IT departments should be
OCTOBER 2014
represented, along with members of any other departments involved in compliance.

Thoughtful collaboration between a cross-functional team of representatives can ensure
that the policies they implement are balanced and comprehensive. Finally, to manage
any gaps in knowledge, expertise and/or technology, the team should recruit outside
specialists, including consultants and e-discovery service providers. The best time to
thoroughly vet potential partners and determine whether the scope of their services
matches organizational needs is before a lawsuit is filed or before an investigation
commences.
STEP 2: CREATE A CULTURE OF INFORMATION GOVERNANCE
Given the various urgent priorities that they must juggle, organizations often ignore their
information stores until a crisis arises. And when it does, a myopic focus on individual
discovery requests can mire organizations in the weeds and prevent them from taking
a holistic view of better ways to manage their information.
Instead, organizations should take a proactive, universal approach to their data and
create an overarching information governance program. At a minimum, this type of
program consists of two elements: a records inventory and a records retention program.
An inventory is a map of where the organizations data resides, identifying it by custodian,
content, type, and location, so that it can be immediately pinpointed in the event of an
emergent data request. A records retention program includes a schedule for retaining
and disposing ofvarious categories of online and hard copy documents according to
legal, fiscal, or administrative requirements.
By creating a culture of information governance, organizations can move from a reactive viewpoint of merely managing requests for their data on a day-to-day basis to a more
proactive stance that governs how the organization as a whole will organize and control
WWW.OGFJ.COM
41
The continual increase in volumes and types of

electronically stored information (ESI), including email, social media, cloud-based applications, and
the like, coupled with heightened government
oversight and intervention means the stakes and
costs of complying with [legal] requests have never
been higher.
its data. By considering the entire universe of their data, organizations can develop a coordinated system that ensures that they
can retainand easily findcritical data. Keeping unnecessary
data is costly in the short- and long-term; organizations should
curtail the amount of data they store that no longer serves a business purpose and shed the burdens of following a seemingly easier
but much more burdensome and risky policy of keeping everything.
In short, by building an enterprise-wide information governance
program, anchored in reasonable record retention policies, they
can transform their data from a liability into an asset.
The final step in this process is disseminating the information
governance policies and procedures to all employees. But in addition to giving employees access to the policies, the team should
find opportunities to train employees routinely on the policies
and explain the consequences of violating their terms for both
the employees and the organization itself. By doing so, custodians
will be encouraged to prevent the destruction of data and to use
data responsibly.
STEP 3: CREATE A LITIGATION READINESS PLAN
After corralling the organizations data, the team should turn to

developing a litigation readiness plan. This plans goal should be
to accelerate the organizations ability to meet its legal duties
under the stress of short deadlines while limiting legal exposure
in a reasonable, cost-effective manner. An important aspect of the
plan is to enable the organization to avoid overly broad data collection by targeting only potentially relevant data.
One of the most critical aspects of these plansand one that
is often litigatedis what will serve as a trigger for the duty to
preserve. Currently, organizations are required to preserve evidence
as soon as they reasonably anticipate litigation. This vague
standard is difficult to define, so organizations should consider
the various circumstances that may give rise to their duty. The
plan should also include procedures for implementing a litigation
hold notice, which is a mandate informing all affected employees
to preserve pertinent data, assign the responsibility for issuing
that notice, and set a schedule for reminding custodians of their
continuing obligation to preserve data.
STEP 4: INVEST IN TECHNOLOGY
To maximize the defensibility and cost-effectiveness of litigation

readiness and information governance protocols, organizations
must look to technology since manual search and review is no
42
longer a feasible option when facing time-sensitive data and document requests. Moreover, delegating various decisions to employees, such as when the duty to preserve arises, when to notify and
remind employees of their duty to preserve, and how to search
their own documents for responsive information. Inconsistent
interpretations and compliance by individual employees can
thwart even the best-intended e-discovery efforts.
To facilitate carrying out these duties, the team should consider
whether to acquire an e-discovery software platform that can
automate a number of e-discovery-related functions, whether this
technology is brought in-house or managed by a third-party service
provider as a hosted model. For instance, todays software can
send, manage, and track the requisite litigation hold notifications
to custodians. Furthermore, advanced e-discovery tools can speed
the location and review of pertinent information. As an example,
using keyword search and advanced analytical tools to mine for
responsive data and employing techniques such as technologyassisted review to prioritize documents can expedite review, saving
time and reducing costs. Moreover, these tools can enhance the
accuracy of a review, creating greater defensibility for a companys
e-discovery process. Finally, they can add a layer of protection for
sensitive information, such as privileged material or proprietary
trade secrets, by flagging documents that contain certain keywords
for a higher level of review or leveraging tools that automate the
detection and redaction of sensitive information such as PII or
NPI.
STEP 5: CREATE AN AUDIT TRAIL
Even the best processes and most effective technology are not a
silver bullet. Therefore, it is imperative for organizations to create
a thorough audit trail. If a court or regulatory agency questions
an organizations discovery processes and decisions, a detailed
log of the steps the organization took to preserve, collect, review,
and produce its data can demonstrate good faith compliance with
the organizations documented procedures and discovery duties.
By taking these five proactive steps, oil and gas organizations can
integrate e-discovery into their existing business and compliance
practices, facilitate their access to critical data, and protect themselves from potential liability and sanctions well in advance of any
litigation or regulatory investigation. Moreover, they will align
their e-discovery initiatives with their overall corporate compliance mandates, which can limit their costs and risk exposure in
the short and long term.
ABOUT THE AUTHOR
Sheila Mackay serves as senior director at Xerox

Litigation Services and the electronic discovery consulting group. The group advises corporate clients
and law firms on all aspects of the e-discovery process,
including litigation readiness, data preservation, data
collection and collection strategies, defensible data
reduction, and strategic search and search consulting.
WWW.OGFJ.COM |
OCTOBER 2014
Enerplus Resources is one

of many companies
with operations in the
Marcellus shale.
Photo courtesy of
Enerplus Resources.
Stranded ethane can power gas turbines

USING ETHANE ON SITE CAN AVOID POOR TRANSPORT OPTIONS
EDWARD WOODS, CONSULTANT
MANY OPERATORS OF GAS processing facilities that strip
natural gas liquids (NGLs) from wet gas are finding themselves
unsure of what to do with stranded ethane as a result of an increasing glut, minimal growth in market demand and no costeffective transport options. Gas processing operators are looking
at the possibility of holding stranded ethane, limiting their ability
to process gas. By extension, their customers face an unattractive
prospect of shutting in production and/or curtailing drilling
programs. Combustion turbines, located onsite, can consume
ethane, power gas processing facilities, provide heat to gas fracturing towers and allow continued gas production.
SITUATION
Growth in shale gas fields and unconventional plays has significantly contributed to our nations natural gas reserves. The MarOCTOBER 2014
WWW.OGFJ.COM
cellus Shale is one example of this booming market.

In the western Marcellus, gas coming out of the ground is wet
having a mix of natural gas and NGLs. Constituents within NGLs
include ethane, propane, butane, and pentanes. To meet market
requirements, the NGLs need to be separated, or stripped, from
the methane to ensure the natural gas sent to consumers has a
consistent BTU content. This stripping process requires heat
to crack the gas and electricity to drive circulation pumps and
compressors.
The majority component of the NGLs is ethane, which is used
in the manufacture of plastics, anti-freeze, and detergents, to
name a few. Development in the Marcellus and other fields has
led to an oversupply of ethane in the market, depressing prices
to as low as $0.23/gallon ($3.45/MMBTU).
Transport of ethane is costly and can exceed the value of the
43
The glut of ethane for the foreseeable future will

place continued price pressure on the product...
Using ethane as fuel in combustion turbines at
the point of extraction from the gas stream is a viable solution and supports upstream development
activities.
product if it needs to be moved more than a couple hundred miles
to market. As a result, operators of stripping plants are rejecting
as much ethane as possible back into the pipeline as one alternative to manage the oversupply. Limits on BTU content of pipeline
gas restrict the amount of rejected ethane.
COMPLICATION
Expanded drilling programs and no new demand for ethane are

on the horizon. It is predicted that an additional 200,000 bbls of
ethane per day will be entering the market next year, putting
additional downward price pressure on the commodity for the
foreseeable future. If the ethane distribution system is maxed out
and there is no home for sub-spec gas or excess ethane, operators
will not be able to dispose of the commodity and be forced to
limit gas production.
Stripper plants located any distance from a market have to
deal with stranded ethane. These facilities, due to their location,
have high electricity costs and frequent power outages due to
storms and high demand on the grid.
Faced with not being able to transport ethane into the market
has the knock-on effect of the stripping facilities not being able to
process gas, leading to shut-in wells and reduced drilling programs.
As a result, owners of stripping plants are looking at new ways to
utilize ethane and in the process, optimize their operations.
OPTIONS AND CONSIDERATIONS
With a market price of ethane at $0.23/gallon ($3.45/MMBTU),

it is on par with that of natural gas, making it attractive as a fuel.
Use it as a fuel at the point of stripping from the gas stream for
onsite power generation and the benefits multiply. The ability to
operate without being impacted by restrictions in the ethane
disposal market, allows customers to continue with gas field
development activities and it becomes a very attractive
proposition.
Ethane is a hot gas, with an energy content of 1,783 BTU/scf.
It has a fast flame front and produces high exhaust temperatures.
Reviewing prime movers, and their ability to burn ethane to
produce power and heat finds few available options:
Reciprocating engines Gaseous-fueled reciprocating engines
are built in a wide range of power outputs, making them easy to
size for the power demand. High compression ratios of reciprocating engines and internal components such as pistons, valves and
heads would rapidly wear due to high combustion and exhaust
gas temperatures associated with using ethane as a fuel. One
project to fuel engines at a gas processing plant with up to 88%
44
ethane was initiated in 2011, but there is no other mention of the

project that would indicate success.
Combustion turbines Combustion turbines are ideally
suited for powering gas processing plants. Both are designed for
continuous operation with minimal intervention and low maintenance. The majority of combustion turbines configured for oil
and gas applications are simple-cycle machines with high pressure
ratios between incoming air and the combustion stage. The high
pressure ratio of approximately 14:1 found in most simple-cycle
turbines is to reduce emissions and increase thermal efficiency.
This pressure ratio limits the BTU range of fuels used in the turbine
to pipeline gas and wellhead gas (900-1400 BTU/scf). Use of highenergy fuels, such as ethane, can rapidly damage combustion
components within the turbine.
Developments in combustion turbine technology Low
pressure ratio turbines are able to operate on a wide range of fuels
up to 1,900 BTU/scf, but have not been widely accepted due to
their poor efficiency. Recent developments with low pressure
ratio turbines include the use of a recuperator to improve thermal
efficiency. A recuperator is a heat exchanger mounted in the
exhaust stream that transfers heat energy to combustion intake
air. Efficiencies of low pressure ratio turbines with recuperators
rival that of high pressure ratio turbines and are considered a
proven technology. These technological developments result in
a low pressure ratio turbine with a recuperator can operate on
ethane or natural gas, whichever is more economical with the
efficiency of their high pressure ratio counterparts. These turbines
can be fueled with ethane, allowing them to be a power source
at gas processing facilities. Two turbine platforms that utilize
these technologies are the FlexEnergy MT and Dresser-Rand KG2.
SOLUTION
The glut of ethane for the foreseeable future will place continued
price pressure on the product. Transportation costs of moving
the product to market, if there is one, will rapidly negate any
expectation of revenue when it is sold. Using ethane as a fuel in
combustion turbines at the point of extraction from the gas stream
is a viable solution and supports upstream development activities.
Combustion turbines with an integrated heat recovery system
using onsite fuel can reduce operational costs and has the potential
to reduce emissions when replacing older on-site boilers. With
that being said, one now would need to determine how to maximize this opportunity.
To take advantage of the onsite fuel and reap the economic
benefits, the combustion turbine package(s) will need to be sized
to power requirements of the facility, have acceptable installation
costs, connect to the fuel supply, and interface with the grid.
Overall, these items may seem complicated, but when looking at
the details, they are not.
Sizing for power requirements To improve reliability and
be able to rotate turbines during annual maintenance, it is recommended that at least two turbines be used to power a gas processing facility.
WWW.OGFJ.COM |
OCTOBER 2014
Turbine installation Installation costs can vary from site

to site. For this reason, it is recommended that the turbine package be designed for outdoor operation and skid-mounted. A
skid-mounted turbine package will allow for placement on a level
gravel pad. Should operational requirements change, the skidded
turbine can be hoisted onto a trailer and transported
elsewhere.
Fuel supply connections Temperature and pressure of
ethane can vary, depending on the fractionation process and
where in the system it is tapped to fuel the turbine. One needs to
identify these parameters when selecting a fuel gas pressure
regulator for the turbine. In extreme instances, a fuel heater may
be required to bring the fuel temperature above minimum turbine
requirements.
Hot fluid circuit connections Hot fluid systems used at
gas fractionating facilities can benefit from utilizing exhaust heat
from the turbine. On a turbine with an integrate hot water system,
connections to the existing facility hot water loop are completed
by incorporating the turbine hot water with the facility hot water
loop. In some instances, a heat exchanger may need to be used
to isolate systems.
Electric system connections Most utilities, and the state
public utilities commission they operate under have net metering rules. These are regulations and guidance for interfacing with
the grid. Should a stripping plant operator choose to export excess
power to the grid, the rules and regulations are designed to prevent
damage and risk to health of maintenance personnel working on
power lines. To properly interface with the grid, a utility paralleling
switchgear will be required. A switchgear in this configuration
will allow the turbines to power the facility and if needed, draw
any additional from the grid. In the event of excess power and a
resell agreement is in place, it can be configured to allow export
to the grid.
Renewable energy Some states offer incentives for distributed power generation and CHP. Depending on the state, the
turbine and its configuration, the CHP system may qualify for tax
credits, renewable energy credits or both.
What would an ideal system look like? To maximize ethane
consumption, combined output power of the turbines would
match the maximum electrical load of the facility. Heat recovered
from the turbine exhaust will generally equal or exceed heat requirements for the gas fractionation process.
Placement of the skid-mounted turbine packages will be in
close proximity to the electrical distribution system and facility
boilers. A packed, level gravel pad is sufficient for turbine placement. A concrete foundation will suffice as well.
Upon connecting fuel lines, electrical cables and communications, the turbines undergo commissioning to confirm performance. After start-up, the system can be monitored for service
needs and operational abnormalities. Factory Certified Technicians will be readily dispatched should the need arise. Normal
turbine maintenance is 1x/year to change air filters and gearbox
oil.
OCTOBER 2014
WWW.OGFJ.COM
SUMMARY
Stranded ethane can be used in select turbines as a fuel to provide

power and heat to stripper plant operations. When properly
configured, combustion turbines are cost-effective, add value
and provide multiple benefits.
ABOUT THE AUTHOR
Edward Woods has over 20 years experience in business development, marketing, product development,
product management, and value creation in power
generation and emissions technologies in the oil and
gas and power generation industries. He earned a
bachelors degree in mechanical engineering technology and a master of science in management from Purdue University and an MBA from Tilburg University in Holland. Woods
is a member of the Purdue University College of Technology Industrial Advisory Committee and has been awarded numerous
patents for power generation and emissions reduction technologies. This paper was written under contract to Keystone Drill
Services, Somerset, PA.
PROFESSIONALS: ENERGY INDUSTRY

CONSULTANTS IN AREAS OF
RESERVOIR ENGINEERING, GEOSCIENCE &
ECONOMIC ANALYSIS
Since the 1920s
www.ralphedavis.com
Since 1924 the Ralph E. Davis firm has provided independent consulting
services in the evaluation of oil and gas reserves to the international energy
industry. Evaluations are based upon the latest technical applications tempered
by a knowledge gained through experience and a professional integrity reflected
in the firms acceptance by the regulatory and financial institutions throughout
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The Davis firm will work with its clients to complete a timely, reliable and fact
based analysis of the available data.
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Chevron, through its

subsidiary Cabinda Gulf
Oil Company Ltd., holds
a 39.2% interest in the
Mafumeira Norte project
located offshore Angola,
shown here. Chevron
serves as operator of
the group, which also
comprises SONANGOL,
Total, and ENI.
Joint operating agreements

HISTORY AND DEVELOPMENT OF JOAS IN THE OIL AND GAS INDUSTRY
MUHAMMAD WAQAS, MECHANICAL ENGINEER, UNITED ARAB EMIRATES
IF THE JOINT OPERATING AGREEMENT forms an alliance
similar to a marriage, it is likely to have 16 parties: four richer,

four poor, four better, and four worse. Operating committee meetings are likely to be more like a nightmare than a honeymoon.
D. Martyn, Upstream Oil and Gas Agreements (1996).
The Joint Operating Agreement ( JOA) in oil and gas industry
is an underlying contractual framework of a Joint Venture ( JV).
The JOA is a contract where two or more parties agree to
undertake a common task to explore and exploit an area for
hydrocarbons. The parties to the agreement can be broadly
classified as operators and non-operators.
The operator is the one who is responsible for the day-today management and operation of the field. It is usually a
single party with the highest interest in the agreement. But it
is not uncommon to have a designated operator who is a
46
minority to the agreement. Though the operator is entitled to

full control over the operations, it usually does not receive any
remuneration. The main duty of the operator is to carefully
plan the activities in order to increase the profitability of the
operations. But it is not liable for any loss of production or
revenues as a result of its decisions except in cases of gross
negligence and/or willful misconduct.
As the name suggests, parties other than the operator are
designated as non-operator(s). The most important duty of
non-operator is to answer any cash-calls as the operation
requires. Non- operators form part of the joint operating committee ( JOC) which oversees the activities of operator. The
voting rights of operators and non-operators in the JOC are
as per the interest they hold in the JOA.
There are a lot of model JOAs like that of the American
WWW.OGFJ.COM |
OCTOBER 2014
Association of Petroleum Landmen 610 (AAPL), Association

of International Petroleum Negotiators 2002 (AIPN), Canadian
Association of Petroleum Landmen 2007 (CAPL), and Oil and
Gas UK Standard JOA 2007 (OGUK) which specifies and details
different features of the JOA. A typical JOA will include the
following:
1. Duration of the Agreement
2. Parties to the Agreement
3. Parties participating Interests
4. Scope of Work
5. Exclusive Operations
6. Designated Operator
7. The Joint Operating Committee
8. Cost Control and Contracting
9. Hydrocarbon Allocation
10. Hydrocarbon Lifting and Disposal
11. Transfer of Interests
12. Withdrawal from JOA
13. Liabilities
14. Decommissioning
15. Default
16. Dispute resolution
17. Accounting procedure
A JOA also specifies the structure of the organization while
mentioning the balance between the three main variables for
the underlying hydrocarbon asset, i.e. ownership, control, and
risk.
Statistics reveal that 37% of oil and gas companies have
considered or are considering a JOA. And, while JOAs are an
integral part of the current day oil and gas industry, it has been
estimated that 60% of them fail to start or fade away within
five years of their existence. There are many reasons for these
failures, but a majority of agreements fail when one party tries
to command control.
It is not uncommon to have conflicts within the JOA between
the operator and non-operators for control and decisionmaking powers. The job of the JOC is then to ease the tension
and use the voting rights to make decisions and keep the
peace. Still, disputes arise that contribute to the nearly twothirds of failed JOAs.
Even with failures, JOAs remain integral to the industry
today. Looking at the reasons behind the popularity of JOAs,
this article first discusses the historical factors that led to the
acceptance of JOAs and then highlights the present-day economical and strategic decisions that make the JOA an essential
part of the modern oil and gas industry.
HISTORICAL PERSPECTIVE
After the First World War, many international oil companies

(IOCs) entered into concessionary agreements (CAs) with
oil-rich countries to explore and exploit their oil wealth. As
many of these countries belonged to the Third World, they
were unaware of their oil potential and did not possess the
OCTOBER 2014
WWW.OGFJ.COM
technical know-how to extract their vast reserves. IOCs, realizing this void, entered such territories and CAs (biased based
on the following factors) were rolled out.
1. The range of the CAs spanned long periods of time. For
example, Standard Oil Company had a CA to explore and
exploit hydrocarbons in the eastern side of the Saudi Kingdom for a period of 60 years.
2. The host country court and jurisdiction did not apply on
CAs. Additionally, the government had no involvement in
the day-to-day operations or policy-making, leading to the
undermining of the host countrys authority.
3. It was common for a CA to cover vast areas of land. For
example, only three CAs covered the whole of Iraq.
4. The host country had no rights over the concession area
except to receive a payment meager compared to the hydrocarbons extracted. For example, Bahrain was paid 2,250
pa, Kuwait 38,000 pa and Qatar 30,000 pa.
These biases, coupled with the growing popularity of hydrocarbons and domestic political pressures, forced host
countries to seek attractive alternatives to CAs. Negotiating
CAs with IOCs was impossible until the end of the Second
World War as host countries had no bargaining power.
The breakthroughs, though, started in the 1950s when a
series of events led to oil-rich countries bargaining and renegotiating alternatives to CAs with IOCs.
1. Iran became the first Middle Eastern country to nationalize
its oil industry in 1951, which gave a lot of confidence to
host countries that wanted to copy the same working model.
This, though, sent shockwaves to IOCs that, along with
some western powers, tried to deter Irans plans in order to
avoid the precedent of nationalization.
2. The first joint venture in the Middle East took place in 1957
when ENI, through its subsidiary AGIP, signed joint venture
contracts in Egypt and Iran. This led many host countries
to study JVs as potential successors to CAs.
3. Newcomers emerged in the oil arena in the form of ENI
of Italy, ERPA-ELF of France, and Amoco of the United
States. These new oil companies began to compete directly
with established concessionary IOCs, giving host countries
increased leverage to negotiate their own CAs.
4. The United Nations passed Resolution No. 1803 (XVIII) on
the Permanent Sovereignty over Natural Resources allowing all nations to have complete and sovereign control over
their own hydrocarbon reserves. In the long run, this resolution became the catalyst host countries needed to renegotiate their CAs.
5. Major oil and gas producing countries gathered at a common platform in 1960 to form the Organization of Petroleum
Exporting Countries (OPEC) and began strengthening the
oil cartel to unshackle the oil production and pricing monopoly formed by IOCs.
6. Venezuela became the first oil and gas country to introduce
a Profit Sharing Formula that amended its CA into 50:50,
47
Participation agreements were the ancestors of

todays JOAs. Many oil-rich countries were successful in negotiating their CAs and converting
them into PAs. Still, they fell short of host countries
desire to have complete sovereignty over their resources and to possess the technical knowledge
and competency to expand their national oil companies (NOCs). The precedent of PA, set in the 70s,
mutated to take the shape of the modern day JOA.
later increasing to 70:30 in 1958.

These events had a direct impact on negotiation with IOCs
but favorable conditions for host countries could not be
reached as they still lacked the knowledge and skills to exploit
their underground reserves. A great boost to negotiation was
received when the idea of participation agreements (PAs)
was floated in order to reach a middle ground. These PAs can
be seen as predecessors of modern day Joint Operating Agreements as they had the same elements as JOAs.
It catered for the formation of a Joint Management Committee charged with the responsibility for, inter alia, capital
expenditures, operational expenses, and controlling and monitoring the activities of exploration and development. This is
largely similar to the Executive Management Committee found
in JVCs (or to the Operating Committee in JOAs). Second, PAs
also called for the establishment of an Operating Committee
charged with the responsibility for conducting and coordinating petroleum operations. The Operating Committees responsibility in the PAs is similar to that of the Operator in JVCs
and JOAs.
Thus, PAs became the ancestors of JOAs and many oil rich
countries in general, and Middle Eastern countries in particular, were successful in negotiating their CAs and converting
them into PAs. Still, they fell short of host countries desire to
have complete sovereignty over their own resources and to
possess the technical knowledge and competency to expand
their own national oil companies (NOCs).
The precedent of PA, which was set in 1970s, mutated its
DNA over the years to take the shape of the modern day JOA.
Historically, these events helped mold JOAs into the modern
day agreements used in the oil and gas industry today.
ECONOMICAL AND STRATEGIC PERSPECTIVE
In addition to historical factors, economic and strategic factors

come into play when discussing the role that JOAs play in
todays oil and gas industry.
1. CAPITAL INTENSIVE: All oil and gas projects are capital

intensive in nature. They require a lot of money at the project
onset for development. Upstream activities carry the biggest
48
burden. It is not unusual to have drilling activity of a single

well cost upwards of US$100 million. Midstream and downstream projects are also capital intensive as infrastructure
must be built to transport drilled oil to refineries. Additionally,
oil and gas companies must comply with international and
domestic regulations.
And, now that the days of easy oil are over and onshore oil
and gas activities have matured, oil and gas companies across
the world are looking to explore for oil in more demanding
and unconventional areas such as deepwater and Arctic regions. These regions, along with being more challenging and
unorthodox, require more capital for exploration and
production.
All these elements make the oil and gas business a capital
intensive one. A failure in even one segment can take a toll on
companies.
2. RISK MITIGATION: The oil industry, along with being

capital intensive and daunting in terms of day-to-day operations, carries a lot of risk both to infrastructure and to human
lives. A failure in any infrastructure development or operational
activity can virtually bankrupt a company. The world saw the
fallout from the tragic Macondo blowout in the Gulf of Mexico
in 2010. Eleven lives were lost and more than 4.9 million barrels of oil were discharged in the sea leading to irreparable
environmental effects. The resulting loss to BP, not counting
the loss in production and infrastructure, was approximately
$42.2 billion in financial settlements. Thus, in order to mitigate
the infrastructure and operational risk, companies tend to bid
jointly to have a better chance of surviving in case of failed
exploration or operational activities.
3. TECHNOLOGY LIMITATIONS: As mentioned previously,
the world is slowly drifting away from traditional onshore oil
and gas areas towards harsher regions like deepwater, which
stretches the limits of technology. Thus, new companies with
more aggressive and focused R&D have developed advanced
technologies to explore these challenging regionsexploration
that was not possible with previous technology. It is common
for a capital rich company to strategically and jointly enter
into agreements with companies, making use of the companys
advanced technology to explore new frontiers.
4. RESOURCE LIMITATIONS: The participating companies
in a JOA might come from different geographical locations
and one of them might face resource constraints, thus allowing
others to make amends to resource gaps. In many countries,
it is common for an NOC to make available all resources to
an IOC to explore and exploit hydrocarbons. Thus, the NOC
makes use of the superior technology and skills of IOC while
the IOC makes use of the NOCs capital and resource
availability.
WWW.OGFJ.COM |
OCTOBER 2014
5. COMBINING SUBSECTORS: The JOA might be a product

of optimizing the supply chain of the oil and gas industry.
Participants may come from different subsectors, joining
forces for a common output. An upstream company may be
tempted to form a JOA with a midstream company and a
downstream company in order to optimize the supply chain.
6. LEGAL REGULATIONS: Many oil and gas rich countries
do not allow IOCs to directly explore and produce oil and gas
on their own in their jurisdiction. In this case, IOCs are forced
to form JOAs with an NOC. In the long-run, this partnership
helps host countries acquire the skills, expertise, and trained
manpower to explore and manage their own oil and gas assets
later.
7. FUTURE ACQUISITIONS: It is also possible that a capital

rich company may enter into a joint agreement with a company
in a lesser market position. The goal is to gain in-depth knowledge about its capability and technology for future mergers
and acquisitions.
8. STRATEGIC DECISION: In todays world, companies are

fighting over market position in order to enhance their profitability. A cash-rich company is lured to form a JOA in an asset
it deems strategic both economically and politically.
9. LOW-PROFILE ASSETS: It is also common for small companies to enter into a JOA for assets left by large corporations.
Often, the large corporations deem the lower-producing assets
unprofitable in relation to the size and setup of the
company.
These scenarios, along with historical rationale, not only
make JOAs alluring to many oil and gas companies, but more
and more, an integral part of todays oil and gas industry.
ABOUT THE AUTHOR
Muhammad Waqas is a mechanical engineer

curently pursuing a degree in energy law. He resides in the United Arab Emirates where he has
gained experience in the oil and gas sector. His
areas of expertise include energy politics in the
Middle East and European regions.
AUGUST 18 -20, 2015

GREATER COLUMBUS CONVENTION CENTER
COLUMBUS, OHIO
power-gennaturalgas.com
CALL FOR ABSTRACTS

POWER-GEN Natural Gas is accepting
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Please visit www.power-gennaturalgas.com
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OCTOBER 2014
OWNED & PRODUCED BY:
WWW.OGFJ.COM
49
DEAL MONITOR
US companies consolidate core areas

while North Sea sales gain traction
DAVID MICHAEL COHEN, PLS INC., HOUSTON
PLS REPORTS that after four straight months with deal totals
in the $6-12 billion range, US upstream markets took a late-Q3

breather during August 17 to September 16, 2014 with $2.2 billion
transacted in 25 deals. Conspicuously absent were any billiondollar acquisitions after an average of 2.75 for each of the previous
four months.
The primary driver during the period was US unconventional
explorers either consolidating their positions in premier resource
plays or selling off legacy conventional assets to fund development of those plays. A case in point is Bill Barrett, which signed
agreements to sell its remaining conventional Piceance Basin
gas and most of its Powder River Basin oil assets for $688 million
while boosting its working interest in core Niobrara assets in
Colorados northeast Wattenberg field. The Wattenberg assets

acquired include 390 boepd of net production on 7,856 net acres
and are valued by Barrett at $69 million. CEO Scot Woodall
called the deals significant steps in meeting strategic objectives
to simplify our portfolio, focus on our highest return assets, and
strengthen the balance sheet. Resource play consolidation also
continues in West Texas Midland Basin, where pure-plays Callon
Petroleum and Parsley Energy both announced bolt-on deals
exceeding $200 million. Both acquisitions include significant
existing oily production plus considerable multi-zone inventory
of horizontal locations including multiple Wolfcamp benches
and other horizons.
The Parsley buy highlights a growing evaluation trend in
PLS INC. MONTHLY DEAL MONITOR - 08/17/14 - 09/16/14

US TRANSACTIONS
Date Announced
Buyer
Seller
Asset Location
16-Sep-14
Anschutz; Ballard; SM Energy et al
Bill Barrett Corp
Rockies: Wyoming
Colorado: Niobrara
16-Sep-14
Bill Barrett Corp
Anschutz Exploration
15Sep-14
Vanguard Natural Resources
Bill Barrett Corp
Rockies: Colorado
15-Sep-14
Eagle Energy Exploration
Fairway Resources Partners II
Oklahoma: Mississippian Lime
29-Aug-14
Callon
Undisclosed
West TX (#8): Permian
29-Aug-14
LRR Energy
Juno Energy II
Midcontinent: Oklahoma
19-Aug-14
Parsley Energy
Cimarex; Undisclosed
West TX (#7C): Permian
18-Aug-14
Oxy
Venoco
West Coast: California
18-Aug-14
E&B Natural Resources
WPX Energy
Wyoming: CBM
INTERNATIONAL TRANSACTIONS
Date Announced
Buyer
Seller
Asset Location
12-Sep-14
Wintershall
Statoil
Norway
9-Sep-14
SacOil Holdings
MENA Hydrocarbons
Egypt
5-Sep-14
Mercuria Energy Group
Tullow Oil
Netherlands
3-Sep-14
Tamarack Valley Energy
Suncor Energy
Canada: Cardium
2-Sep-14
Crescent
Lightstream Resources
Canada: Saskatchewan
2-Sep-14
Cardinal Energy
Undisclosed
Canada: Alberta
1-Sep-14
Empire Oil & Gas
ERM Power
Australia
28-Aug-14
Undisclosed
Crew Energy
Canada: Alberta
20-Aug-14
China Oil HBP Science & Technology
MIE Holdings
China
20-Aug-14
Whitecap Resources
Undisclosed
Canada: Alberta
PLS Inc. Validity of data is not guaranteed and is based on information available at time of publication.
Prepared by PLS Inc. Source: PLS Derrick Global M&A Database. For more information, email memberservices@plsx.com
50
W W W.O GF J. C OM |
OI L & G AS FI NA N CI AL J OU RN A L
OCTOBER 2014
DEAL MONITOR
multi-zone horizontal plays. In its discussion of the 5,472-netacre acquisition, Parsley estimated the leasehold to have an
effective acreage of 27,020 net acres accounting for the stacked
potential in the Wolfcamp A, B, C and D (Cline) as well as the
Atoka. The company also gave an estimate of 327,480 effective
net acres for its overall pro-forma position of 121,211 surface
net acres. We expect to see more discussion of effective acreage
as development continues to de-risk the stacked pay in resources
plays like the Bakken/Three-Forks and the various stacked MidContinent plays.
Internationally, PLS reports 27 upstream transactions totaling
$5.5 billion during the period, keeping pace with recent deal flow.
Encanas $2.3 billion sale of its remaining 54% equity in Canadian
royalty spinoff PrairieSky via a secondary offering chalked 40%
of the total value.Encana launched PrairieSky in May with Canadas biggest IPO in 14 years, capitalizing on growing investor
interest in the oil and gas royalty business. Diamondback successfully spun off its own royalty sub Viper Energy Partners south
of the border and others like Anadarko and CNRL have expressed
interest in similar moves to monetize royalty assets.
Overseas, established North Sea producers are beginning to
gain traction in their efforts to reduce their footprint in the
Category
Deal Type
Hydrocarbon
Deal Value
($MM)
mature petroleum province in search of greener pastures. Most

notably, Norways state-controlled Statoil sold non-core producing fields and farmed out exploration and development projects
to emerging North Sea powerhouse Wintershall for $1.3 billion.
The deal high-grades Statoils Norwegian portfolio while reducing its capital commitments through 2020 by $1.8 billion. For
Wintershall, the deal continues a Norwegian growth strategy
embarked upon in earnest less than two years ago via a $1.45
billion acquisition, also from Statoil. That deal had catapulted
Wintershalls Norwegian production from 3,000 boepd to 39,000
boepd; this one boosts it by 50% to 60,000 boepd.
The North Sea is also catching the eye of non-traditional
upstream buyers, as witnessed by commodities trader Mercuria
Energy Groups $81 million acquisition of gas fields and licenses
off the Netherlands from Tullow Oil. Private equity is also getting
in the game, with Riverstone Holdings, Barclays Natural Resource
Investments and Singapore-based Temasek announcing the
launch of North Sea E&P firm Origo Exploration with $525 million of startup funding. These new entrants provide fresh capital
for companies looking to reduce or eliminate their exposure to
the maturing region, including Talisman, Apache and BG.
Proved Reserve
Value ($MM)
Non Proved
Reserve Value
($MM)
Proved
Reserves
(MMBoe)
Production
(Boe/D)
1,479
Conventional
Property
Oil
$112
$112
4.2
Unconventional
Property
Oil
$69
$31
$38
NA
390
Conventional
Property
Gas
$561
$561
64.8
11,167
Unconventional
Property
Oil + Gas
$195
$195
18.7
4,000
Unconventional
Property
Oil
$213
$117
$95
4.0
1,465
Conventional
Property
Oil
$38
$38
NA
275
Unconventional
Property
Oil
$252
$150
$102
3.0
1,800
Conventional
Property
Oil
$200
$200
7.3
1,458
Unconventional
Property
CBM
$155
$155
37.0
25,667
$1,795
9
$1,560
$235
139.1
47,701
Total Transaction value

Number of Transactions
Deal Type
Hydrocarbon
Deal Value
($MM)
2P Reserve
Value ($MM)
Conventional
Property
Oil + Gas
$1,300
$1,162
$138
121.9
Conventional
Development
Oil
$14
$14
2.4
NA
Conventional
Property
Gas
$81
$81
NA
1,500
Unconventional
Property
Oil + Gas
$155
$134
$21
8.4
1,362
Conventional
Property
Oil
$348
$223
$125
10.6
2,640
Conventional
Property
Oil
$222
$215
$6
10.8
2,175
Conventional
Property
Gas
$15
$15
NA
NA
Conventional
Property
Oil
$138
$138
18.2
2,920
Conventional
Property
Oil
$90
$90
5.1
1,187
Conventional
Property
Oil
$245
$245
10.9
2,010
$2,607
10
$2,317
$291
188.3
33,794
Category
Total Transaction value

Number of Transactions
Non 2P Reserve 2P Reserves

Value ($MM)
(MMBoe)
Production
(Boe/D)
20,000
Note: Canada transactions assume 20% royalty, unless disclosed.
OCTOBER 2014
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51
OGFJ100P
Private company update

MIKAILA ADAMS, SENIOR ASSOCIATE EDITOR OGFJ
INDEPENDENT RESEARCH firm IHS has provided OGFJ with
updated production data for our periodic ranking of US-based

private E&P companies. The rankings are based on operated
production only within the US.
As we move from end-of-year 2013 data in the July installment
of the OGFJ100P to this, the start of 2014 production data, companies listed in the Top 10 rankings move, as well. Falling out of
the Top 10 list of privately-held gas producers for this installment
are Chief Oil & Gas, J-W Operating, and Castex Energy. Moving
in are Bass Companies, Valence Operating, and Indigo Minerals.
Changes to the companies named as a Top 10 privately-held
liquids producer were fewer. Bass Companies dropped out of
the list, and Petro-Hunt moved in. Production totals are based
on latest year-to-date figures as reported to and recorded by
individual state agencies and tabulated at the time of publication. As some agencies were delayed in releasing data, rankings
were potentially impacted.
Liberty will acquire approximately 4,175 net acres in Williams

County, ND which will add an estimated 30 operated drilling
locations to the companys portfolio. As part of the transaction,
Liberty will divest approximately 31,500 non-core acres in McKenzie County, ND with current net production of approximately
400 boepd.Denver, CO-based Liberty Resources II LLC was
founded in 2013 and is funded through equity investments from
funds managed by Riverstone Holdings LLC.
Also in early August, privately-held Hunt Oil Co. closed a deal
to sell natural gas, oil, and natural gas liquids assets in North
Louisiana and East Texas to Vanguard Natural Resources for
$274.7 million. The properties consist of approximately 23,000
net acres that are currently producing approximately 17.5 MMcfe
per day with approximately 67% natural gas and 33% oil and
NGLs. With the acquisition, Vanguard gains working interest in
more than 290 producing wells and 78 proved undeveloped
vertical drilling locations. Hunt Oil Co., ranked No. 11 in this
OGFJ100P list, got its start in the East Texas field in 1934.
M&A
In early August, privately-held Liberty Resources II LLC agreed

to a Bakken asset exchange with Emerald Oil Inc.Liberty will
exchange a portion of its holdings in North Dakotas Williston
Basin for additional acreage in the Williston Basin and approximately $78.4 million in cash. In addition to the cash received,
TOP 10 PRIVATE GAS PRODUCERS
Rank
100P
Rank
MANAGEMENT CHANGES
In August, privately-held Sabine Oil & Gas LLC reported that

Shane M. Bayless, the companys executive vice president and
CFO, will leave Sabine to pursue other opportunities. Bayless
will step down upon closing of the previously announced merger
TOP 10 PRIVATE LIQUIDS PRODUCERS PRIVATE LIQUID
Company
Gas (Mcf)
Rank
100P
Rank
Samson Investment Co.
94,093,378
LLOG Exploration Co. LLC
6,793,756
Merit Energy Co.
81,341,902
10
Slawson Exploration Co. Inc.
5,702,315
Hilcorp Energy Co.
63,164,951
Petro-Hunt Group
5,166,614
Mewbourne Oil Co.
41,149,161
Mewbourne Oil Co.
5,136,157
Yates Petroleum Corp.
37,781,264
Hilcorp Energy Co.
5,005,042
16
WildHorse Resources LLC
25,651,639
Endeavor Energy Resources LP
4,985,216
13
Walter Oil & Gas Corp.
20,819,324
14
Citation Oil & Gas Corp.
4,785,012
12
Bass Companies
17,982,556
11
Hunt Oil Co.
4,717,579
17
Valence Operating Co.
17,940,400
Merit Energy Co.
4,619,717
10
18
Indigo Minerals LLC
17,903,774
10
Sheridan Production Co. LLC
4,276,383
Source: IHS
Company
Liquid (bbl)
Source: IHS
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OGFJ100P
between Sabine and Forest Oil Corp. The deal, announced in
May, is expected to create one of the largest East Texas players.
Bayless has served as Sabines CFO since its inception in 2007.
Sabines current operations are principally located in the Cotton
Valley Sand and Haynesville shale plays in East Texas, the Eagle
Ford shale play in South Texas, and the Granite Wash shale play
in the Texas Panhandle.
Covington, LA-based LLOG Exploration Co., currently ranked
No. 6 on the OGFJ100P list, has promoted Philip S. LeJeune to
CFO to replace John Newman, who retired after serving as LLOGs
CFO for the last 11 years. LeJeune brings nearly 20 years of experience to his position at the privately-held company. LeJeune
has spent 17 years at LLOG, most recently as vice president,
planning & budgeting. He received his Bachelor of Science degree
in Accounting from Louisiana State University and his MBA
from Loyola University.
FINANCING
In late August, Tug Hill Inc. formed a partnership with private

equity firm Quantum Energy Partners to engage in the acquisition, development, and exploitation of conventional and unconventional oil and gas assets in certain North American basins.
The partnership is supported by an initial $450 million equity

commitment from Quantum and Tug Hill. Founded in 2007, Tug
Hill is a privately-held oil and gas operating company based in
Fort Worth, TX, with offices in Pittsburg, PA, and Boulder, CO.
In 2007, Tug Hill partnered with Chief Oil & Gas and collectively
built a land position in excess of 600,000 acres in the Marcellus
shale. Tug Hill has participated in over 750 Marcellus shale wells
to date and plans to continue to participate in the drilling and
development of its Marcellus assets. The company will continue
to manage its existing Marcellus and legacy properties outside
of the partnership.
In mid-September, Englewood, CO-based Vantage Energy
Inc. launched an initial public offering of 23,550,000 shares of its
common stock, at an anticipated IPO price between $24.00 and
$27.00 per share. When the Marcellus- and Barnett-focused
company filed with US regulators in July, it reported plans to
raise approximately $400 million through its IPO. Vantage Energy,
ranked No. 36 in this installment, has been approved to list its
common stock on the New York Stock Exchange under the
symbol VEI. Barclays; Goldman, Sachs & Co.; Citigroup; Credit
Suisse; Tudor, Pickering, Holt & Co.; and Wells Fargo Securities
will act as joint book-running managers of the offering.
2014 YEAR-TO-DATE PRODUCTION RANKED BY BOE

Rank
BOE
Total wells
Company
18,999,953
3,473
Largest field
Ignacio-Blanco
Merit Energy Co.
18,176,701
4,678
Painter Reservoir East
Hilcorp Energy Co.
15,532,534
2,404
Caillou Island
Mewbourne Oil Co.
11,994,351
1,649
Pan Petro
10,136,440
3,133
Powder River Basin Coal Bed
8,666,796
22
Endeavor Energy Resources LP
7,631,409
5,024
Spraberry
6,623,330
3,941
Fuhrman-Mascho
Mississippi Canyon Block 0546
Petro-Hunt Group
6,472,332
402
Clear Creek
10
6,451,652
389
Big Bend
11
Hunt Oil Co.
6,447,350
966
Eaglevillle
12
Bass Companies
6,123,285
991
Wildcat
13
5,989,693
57
Ship Shoal Block 0189
14
5,649,413
2,514
Sho-Vel-Tum
15
Fasken Oil and Ranch Ltd.
5,595,793
1,097
Spraberry
16
4,626,398
781
Terryville
17
3,420,659
610
Carthage
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OGFJ100P
Rank
Company
BOE
Total wells
Largest field
18
Indigo Minerals LLC
3,193,805
549
Bethany Longstreet
19
CrownQuest Operating LLC
3,056,958
367
Spraberry
20
Kaiser-Francis Oil Co.
3,046,259
1,289
21
Reliance Energy Inc.
2,980,565
286
Spraberry
22
FIML Natural Resources LLC
2,961,990
1,080
Spraberry
23
Texas Petroleum Investment Co.
2,861,256
1,387
Breton Sound Block 0020
24
J-W Operating Co.
2,797,861
678
Caspiana
25
Templar Energy LLC
2,773,612
529
Buffalo Wallow
26
Castex Energy Inc.
2,709,631
46
Atchafalaya Bay
27
Ballard Exploration Co. Inc.
2,660,442
66
Sublime West
28
Red Willow Production Co.
2,624,676
411
Ignacio-Blanco
29
Ankor Energy LLC
2,414,888
120
30
Summit Petroleum LLC
2,103,732
426
Spraberry
31
Jetta Operating Co. Inc.
2,070,493
388
Two Georges
32
BASA Resources Inc.
2,066,092
2,913
33
Murex Petroleum Corp.
1,989,875
193
Stanley
34
GeoSouthern Energy Corp.
1,869,302
119
Eaglevillle
35
Square Mile Energy
1,860,647
32
Glasscock
36
Vantage Energy LLC
1,818,080
198
Newark East
37
Stephens Production Co.
1,802,478
769
Gragg
38
Alta Mesa Holdings LP
1,793,013
190
Weeks Island
39
MacPherson Oil Co.
1,755,657
444
Round Mountain
40
Tidelands Oil Production Co.
1,736,713
496
Wilmington
41
Border To Border Exploration LLC
1,713,234
58
Beech Grove
42
Laredo Energy IV
1,688,741
66
Owen
43
Burnett Oil Co. Inc.
1,580,102
363
Cedar Lake
44
DCOR LLC
1,572,698
243
Dos Cuadras
45
Berexco Inc.
1,510,114
1,531
Burntwood Canyon
46
E&B Natural Resources Management Corp.
1,456,873
1,082
Poso Creek
47
Killam Oil Co. Ltd.
1,448,301
439
Cuba Libre
48
Treadstone Energy Partners
1,435,484
57
Fort Trinidad East
49
Sanguine Gas Exploration LLC
1,407,458
129
Mills Ranch
50
Enduring Resources LLC
1,377,463
114
Lin
51
Black Elk Energy LLC
1,373,848
86
52
Stonegate Production Co. LLC
1,373,769
26
Eaglevillle
53
CML Exploration LLC
1,371,960
263
Madisonville West
54
Milagro Oil & Gas Inc.
1,362,715
498
Magnet Withers
55
J. Cleo Thompson & James Cleo Thompson, Jr.
1,336,637
1,091
56
Petro Harvester Oil & Gas LLC
1,311,298
370
Silo
East Texas
Wolfbone
Laurel
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Rank
Company
BOE
Total wells
Largest field
57
White Oak Energy LP
1,306,651
472
Beccero Creek
58
Pruet Production Co.
1,301,559
218
Brooklyn
59
Cheyenne Petroleum Co.
1,290,903
57
Eaglevillle
60
Henry Resources LLC
1,287,386
245
Spraberry
61
Tellus Operating Group LLC
1,287,225
374
Baxterville
62
Tana Exploration Co.
1,239,091
163
Timbalier Bay
63
Aruba Petroleum Inc.
1,238,445
227
Newark East
64
Murfin Drilling Co.
1,237,500
971
Scoda
65
New Dominion LLC
1,217,551
313
Sylvian NorthEast
66
Finley Resources Inc.
1,186,770
559
Ford West
67
Venture Oil & Gas Inc. (Laurel, Mississippi)
1,178,513
104
Winchester South
68
Texland Petroleum LP
1,173,453
681
Fullterton
69
Wagner Oil Co.
1,143,530
449
La Sal Vieja Dist 4
70
Vess Oil Corp.
1,141,170
1,292
Madisonville West
71
Enduro Resource Partners LLC
1,117,786
663
Cottonwood Creek
72
Murchison Oil & Gas Inc.
1,101,538
190
Triple X West
73
Vernon E. Faulconer Inc.
1,089,119
516
Watonga-Chickasha Trend
74
Texas American Resources Co.
1,070,834
216
Pearsall
75
Legend Natural Gas LP
1,057,844
347
Garcias Ridge
76
Renaissance Offshore LLC
1,043,905
59
West Delta Block 0152
77
Stephens & Johnson Operating Co.
1,008,376
708
Oklahoma City
78
West Bay Exploration Co.
989,947
93
Napoleon
79
Battalion Resources Holdings LLC
893,826
1,127
80
Burk Royalty Co. Ltd.
850,415
252
Fort Trinidad
81
Wolverine Gas and Oil Corp.
816,981
23
Covenant
82
R. Lacy Inc.
811,952
254
Carthage
83
Cobra Oil & Gas Corp.
780,786
162
Spraberry
84
Ricochet Energy Inc.
772,718
38
Phase Four
85
Intermountain Industries Inc.
756,526
205
Antelope Creek
86
Choice Exploration Inc.
755,175
21
Cottonwood North
87
Crawley Petroleum Corp.
745,678
417
Strong City Dist
88
Davis Petroleum Corp.
739,801
67
Lac Blanc
89
McGowan Working Partners
715,389
304
Shuler
90
Nearburg Producing Co.
686,505
188
Lea South
91
Cinco Resources Inc.
675,468
31
Eaglevillle
92
JMA Energy Co. LLC
668,398
180
Broxton North
93
JM Cox Resources LP
665,080
733
Spraberry
94
Mack Energy Corp.
663,526
246
Vacuum
95
Courson Oil & Gas Inc.
646,964
244
Pan Petro
Powder River Basin Coal Bed
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OGFJ100P
Rank
Company
BOE
96
Dugan Production Corp.
640,529
Total wells
899
Largest field
97
Muskegon Development Co.
635,462
1,257
98
Pantera Energy Co.
627,428
560
Panhandle West
99
Gary, Samuel Jr & Associates Inc.
624,151
168
Marceaux Island
100
Strat Land Exploration Co.
620,030
300
Lipscomb
Basin
Antrim
Source: IHS; For more information on the Private Company Database visit www.IHS.com
Production totals based on latest year-to-date figures as reported to and recorded by individual state agencies and tabulated by IHS at the time of publication. Some agencies are
delayed by as many as several months in releasing data which may impact company rankings.
2014 YEAR-TO-DATE PRODUCTION ALPHABETICAL LISTING

Rank
38
Company
Alta Mesa Holdings LP
BOE
City
State
Top executive officials
1,793,013
Houston
TX
Michael McCabe, VP, CFO; Mike Ellis, chair, COO; Hal Chappelle, pres, CEO
LA
Denton Copeland, pres, CEO; Michael Anderson, exp mgr; W. Folsom, ops mgr
James Poston, CEO; Jim Lovett, CFO; Ole Sandal, COO
29
Ankor Energy LLC
2,414,888
New
Orleans
63
Aruba Petroleum Inc.
1,238,445
Plano
TX
27
Ballard Exploration Co. Inc.
2,660,442
Houston
TX
Dana Roy, exp geo; A. Ballard, pres, CEO, owner
32
BASA Resources Inc.
2,066,092
Dallas
TX
Robert Marshall, VP ops; Sandra Wallace, CFO; Lary Knowlton, co-founder, EVP;
Michael Foster, pres, co-founder
12
Bass Companies
6,123,285
Fort Worth
TX
Mitchell Roper, pres; W. McCreight, VP land; H. Muncy, VP exp; John

Smitherman, VP prod
79
Battalion Resources Holdings

LLC
893,826
Denver
CO
Keith Knapstad, pres, COO
45
Berexco Inc.
1,510,114
Wichita
KS
Adam Beren, pres, chair
51
Black Elk Energy LLC
1,373,848
Houston
TX
Larry Combs, VP, ops; John Hoffman, pres, CEO; James Hagemeier, CFO
41
Border To Border Exploration

LLC
1,713,234
Austin
TX
John Gaines, CFO; Sam Allen-Boulder, exp mgr; Matthew Telfer, CEO
80
Burk Royalty Co. Ltd.
Wichita Falls
TX
Steven Stults, VP ops; David Kimbell, chair, pres, CEO; Michael Elyea, VP finance,
treas
43
Burnett Oil Co. Inc.
1,580,102
Fort Worth
TX
Philip Boschetti, VP, CFO; Anne Marion, chair, owner; William Pollaru, pres
26
Castex Energy Inc.
2,709,631
Houston
TX
Kevin Ikel, business dev mgr; John Stoika, pres
1,290,903
Oklahoma
City
OK
Stephen Ives, pres; Tom Henthorn, VP finance
Arlington
TX
Jon Martin, pres; David Brooks, founder, COO, VP ops
Dallas
TX
Jon Glass, chair, pres, CEO; Edward Travis, SVP, COO; Craig Pollard, VP exp;
Wayne Stoltenberg, SVP, CFO
59
Cheyenne Petroleum Co.
86
Choice Exploration Inc.
850,415
755,175
91
Cinco Resources Inc.
14
5,649,413
Houston
TX
Curtis Harrell, pres, CEO; Robert Kennedy, SVP bus dev, land; Christopher
Phelps, SVP, CFO; Steven Pearson, SVP ops
53
CML Exploration LLC
1,371,960
Kingwood
TX
William Temple, prod mgr; Lee Staiger, ops mgr; Kenneth Nelson, mgr
83
Cobra Oil & Gas Corp.
780,786
Wichita Falls
TX
Jeff Dillard, pres; Robert Osborne, VP, co-owner; Richard Haskin, CFO
95
Courson Oil & Gas Inc.
646,964
Perryton
TX
Kirk Courson, VP; Harold Courson, pres, chair, founder, owner
745,678
Oklahoma
City
OK
Stephen Hatfield, pres; James Crawley, chair, founder; James Drennen, VP
87
Crawley Petroleum Corp.
675,468
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Rank
Company
19
CrownQuest Operating LLC
88
Davis Petroleum Corp.
44
DCOR LLC
96
Dugan Production Corp.
46
BOE
City
State
3,056,958
Midland
TX
Robert Floyd, pres; Timothy Dunn, principal, CEO; Ken Beattie, COO, SVP;
Charles Wetzel, CFO
739,801
Houston
TX
Thomas Hardisty, VP land, bus dev; Daniel Hawk, EVP, CFO; Michael Reddin,
pres, CEO, chair
1,572,698
Ventura
CA
Jeffrey Warren, VP; William Templeton, pres, managing member, principal
640,529
Farmington
NM
Thomas Dugan, pres; John Alexander, VP ops
E&B Natural Resources

Management Corp.
1,456,873
Bakersfield
CA
Jeff Blesener, SVP, LA Basin div, mid div; Jeff Jones, VP, Eastern San Joaquin div;
Bill Moody, SVP, Gulf Coast; James Tague, SVP, finance, corp planning; Stephen
Layton, pres; Joyce Holtzclaw, VP, Western San Joaquin div
Endeavor Energy Resources

LP
7,631,409
Midland
TX
Autry Stephens, CEO, founder, partner
50
Enduring Resources LLC
1,377,463
Denver
CO
Barth Whitham, pres, CEO
71
Enduro Resource Partners

LLC
1,117,786
Fort Worth
TX
Jonny Brumley, pres, CEO, mgr; John Arms, co-founder, mgr; Kimberly Weimer,
CFO
15
Fasken Oil and Ranch Ltd.
5,595,793
Midland
TX
Norbert Dickman, VP, GM
22
FIML Natural Resources LLC
2,961,990
Denver
CO
Joe Hurliman, pres
66
Finley Resources Inc.
1,186,770
Fort Worth
TX
Clinton Koerth, VP acq, land; James Finley, CEO, owner; Stephen Clark, CFO;
Brent Talbot, pres
99
Gary, Samuel Jr & Associates

Inc.
Denver
CO
Samuel Gary, pres, treas, founder; Jeff Lang, VP ops; Craig Ambler, COO,
partner; Lonnie Brock, CFO
34
GeoSouthern Energy Corp.
1,869,302
The
Woodlands
TX
George Bishop, pres, owner
60
Henry Resources LLC
1,287,386
Midland
TX
Jim Henry, CEO
Hilcorp Energy Co.
15,532,534
Houston
TX
Jeffery Hildebrand, CEO, chair; Greg Lalicker, pres; Jason Rebrook, EVP A&D;
Lee Beckelman, EVP, CFO; Greg Hoffman, VP bus dev
11
Hunt Oil Co.
6,447,350
Dallas
TX
Steve Suellentrop, pres; Thomas Cwikla, EVP exp; Paul Habenicht, EVP ops, dev;
Travis Armayor, VP corp dev; Dennis Grindinger, CFO; Jess Nunnelee, VP prod
18
Indigo Minerals LLC
3,193,805
85
Intermountain Industries Inc.
55
624,151
Houston
TX
Becky Bayless, CFO, EVP; Keith Jordan, pres; William Pritchard, chair, CEO
756,526
Boise
ID
Richard Hokin, chair; William Glynn, pres
J. Cleo Thompson & James

Cleo Thompson, Jr.
1,336,637
Dallas
TX
James Thompson; Christy Thompson, dir; Linda Fordon, dir
31
Jetta Operating Co. Inc.
2,070,493
Fort Worth
TX
Greg Bird, pres, owner; Jeanette Clark, VP controller, treas; Rick Cornelius, VP
contracts; John Jarrett, CFO, VP; Shannon Nichols, VP land; Mike Richardson,
EVP; Gordon Roberts,VP bus dev
93
JM Cox Resources LP
665,080
Midland
TX
John Cox, pres, CEO
668,398
Oklahoma
City
OK
Jeffrey McDougall, pres; Richard Bross, VP bus dev; Chad McDougall, VP
92
JMA Energy Co. LLC
24
J-W Operating Co.
2,797,861
Addison
TX
Tony Meyer, pres
20
Kaiser-Francis Oil Co.
3,046,259
Tulsa
OK
Henry Kleemeier, EVP, COO; Don Millican, CFO, VP; George Kaiser, pres, CEO
47
Killam Oil Co. Ltd.
1,448,301
Laredo
TX
David Killam, partner, mgr; Radcliffe Killam, CEO
42
Laredo Energy IV
1,688,741
Houston
TX
Glenn Hart, pres, CEO; Scott Stevenson, VP acq
75
Legend Natural Gas LP
1,057,844
Houston
TX
Christopher Hammack, pres, CEO; John Steveson, CFO
8,666,796
Houston
TX
Scott Gutterman, pres, CEO; Mitch Ackal, VP, bus dev; Tim Lindsey, SVP, prod/
ops; John Newman, CFO, treas; Randy Pick, managing director, A&D
Quorum PGAS
Liquid / Gas Measurement

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OCTOBER 2014
WWW.OGFJ.COM
Quorum Hosti
o ng / SaaS
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OGFJ100P
Rank
Company
94
Mack Energy Corp.
39
MacPherson Oil Co.
89
McGowan Working Partners
Merit Energy Co.
Mewbourne Oil Co.
54
Milagro Oil & Gas Inc.
72
BOE
City
State
663,526
Artesia
NM
Brad Bartek, CFO; Mack Chase, pres
1,755,657
Santa
Monica
CA
Donald MacPherson, pres, CEO; Scott MacPherson, SVP, COO; Steve Wilson,
CFO
715,389
Jackson
MS
Joseph McGowan, VP; James Phyler, VP; David McGowan, partner; John
McGowan, managing GP; David Russell, pres, CEO
18,176,701
Dallas
TX
Meghan Cuddihy, director, IR; Kevin Ryan, CFO, SVP; William Gayden, pres,
CEO, chair, founder
11,994,351
Tyler
TX
Kenneth Waits, COO, EVP; J. Roe Buckley, CFO, EVP; Curtis Mewbourne, pres,
CEO, owner
1,362,715
Houston
TX
Gary Mabie, pres, COO; Marshall Munsell, Sr. VP bus dev; Robert LaRocque,
CFO, treas
Murchison Oil & Gas Inc.
1,101,538
Plano
TX
John Murchison, chair, CEO; Shannon Hall, CFO; JD Murchison, VP acq; R.

Tazewell Speer, pres; Michael Daugherty, EVP, COO
33
Murex Petroleum Corp.
1,989,875
Houston
TX
Waldo Ackerman, founder, pres
64
Murfin Drilling Co.
1,237,500
Wichita
KS
Robert Young, CFO, sec, treas; William Murfin, chair; David Murfin, pres; Leon
Rodak, VP prod
97
Muskegon Development Co.
635,462
Mount
Pleasant
MI
William Myler, pres, CEO
90
Nearburg Producing Co.
686,505
Dallas
TX
Duane Davis, COO, CFO; Charles Nearburg, pres, owner
65
New Dominion LLC
1,217,551
Tulsa
OK
Jean Antonides, VP, exp; Susan Keary, CFO; Kevin Easley, pres, CEO
98
Pantera Energy Co.
627,428
Amarillo
TX
Scott Herrick, VP; Jason Herrick, pres
56
Petro Harvester Oil & Gas

LLC
1,311,298
Plano
TX
Dennis Justus, CFO; Gareth Roberts, chair; Scott King, VP exp, dev; Randy Holt,
VP ops; William Griffin, pres, CEO
Petro-Hunt Group
6,472,332
Denver
CO
Tom Nelson, VP, finance; Douglas Hunt, dir, acq; Charles Rigdon, VP ops; Bruce
Hunt, pres
58
Pruet Production Co.
1,301,559
82
R. Lacy Inc.
28
Red Willow Production Co.
21
Reliance Energy Inc.
76
Renaissance Offshore LLC
84
Ricochet Energy Inc.
49
Jackson
MS
J. Hilton, VP, prod; Randy James, pres; Rick Calhoon, VP, sec
Longview
TX
Ann Crain, VP; Bluford Crain, VP; Rogers Crain, VP; Ann Crain, pres
2,624,676
Ignacio
CO
Robert Voorhees, pres, COO; Bill McFie, VP, ops; Stephen Goff, CFO
2,980,565
Midland
TX
B. Jack Reed, CFO; Gary McKinney, pres, CEO, owner
1,043,905
Houston
TX
Jeff Durrant, VP exp, dev; Skip Ward, VP ops; Mike Koenig, VP land, bus dev;
Jeffrey Soine, CEO; Brian Romere, CFO
811,952
San Antonio
TX
Jerry Hamblin, pres; Chris Maier, VP; Raymond Gallaway, VP
18,999,953
772,718
Tulsa
OK
Philip Cook, EVP, CFO; Randy Limbacher, CEO
Sanguine Gas Exploration

LLC
1,407,458
Tulsa
OK
Randolph Nelson, pres; Thomas Fuller, VP-finance, treas
6,623,330
Houston
TX
Matt Assiff, EVP, CFO; Jim Bass, EVP, COO; Lisa Stewart, CEO; Mark Miertschin,
bus dev
10
6,451,652
Wichita
KS
Donald Slawson, pres, CEO
35
Square Mile Energy
1,860,647
Houston
TX
Gary Loveless, chair, CEO
77
Stephens & Johnson

Operating Co.
1,008,376
Wichita Falls
TX
Fred Stephens, pres
37
Stephens Production Co.
1,802,478
Fort Smith
AR
WR Stephens, pres, CEO
52
Stonegate Production Co.

LLC
1,373,769
Houston
TX
Ed Butler, VP, CFO; Lance Moore, VP exp; Michael Harvey, chair, CEO
Quorum Pipeline
Transaction Management
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OCTOBER 2014
OGFJ100P
Rank
Company
City
State
Tulsa
OK
Larry Darden, pres, CEO, owner; Russell McGhee, CFO
2,103,732
Midland
TX
Matthew Johnson, EVP ops, finance; Dennis Johnson, pres, CEO; Thomas Fago,
VP exp
Tana Exploration Co.
1,239,091
The
Woodlands
TX
Kevin Talley, pres; Carl Comstock, VP land, bus dev
Tellus Operating Group LLC
1,287,225
Ridgeland
MS
Richard Mills, pres, mgr; Thomas Wofford, CFO
OK
David Le Norman, pres, owner
100
Strat Land Exploration Co.
30
Summit Petroleum LLC
62
61
BOE
620,030
25
Templar Energy LLC
2,773,612
Oklahoma
City
74
Texas American Resources

Co.
1,070,834
Austin
TX
Julian Bott, CFO; David Honeycutt, pres, CEO
23
Texas Petroleum Investment

Co.
2,861,256
Houston
TX
H. Sallee, pres, co-founder; Wiliam Crawford, co-owner, principal
68
Texland Petroleum LP
1,173,453
Fort Worth
TX
Frank Kyle, CFO; Gregory Mendenhall, VP ops; Jerry Namy, co-owner; James
Wilkes, pres, co-owner; Bryan Lee, VP exp
40
Tidelands Oil Production Co.
1,736,713
Long Beach
CA
Michael Domanski, pres, CEO, GM; Mark Kapelke, VP ops, eng

Frank McCorkle, pres, CEO, co-founder; H. Sanford, VP land, bus dev, cofounder; Gene Roberts, VP eng, co-founder
48
Treadstone Energy Partners
1,435,484
Houston
TX
17
3,420,659
Kingwood
TX
Steve Manning, pres; Douglas Scherr, CFO, sec; Walter Scherr, CEO
36
Vantage Energy LLC
1,818,080
Englewood
CO
Roger Biemans, co-founder, chair, CEO; Thomas Tyree, co-founder, pres, CFO;
Mike Kennedy, EVP, COO
67
Venture Oil & Gas Inc.

(Laurel, Mississippi)
1,178,513
Laurel
MS
Jay Fenton, pres; Jarvis Hensley, VP ops
73
Vernon E. Faulconer Inc.
1,089,119
Tyler
TX
Tom Markel, VP, acct, CFO; Vernon Faulconer, CEO; Jean Crawley, VP, land,
admin; David Enright, pres
70
Vess Oil Corp.
1,141,170
Wichita
KS
Barry Hill, CEO; Ronnie Nutt, COO; J. Michael Vess, chair; Brian Gaudreau, VP,
land, acq
69
Wagner Oil Co.
1,143,530
Fort Worth
TX
Bryan Wagner, pres, owner; William Lesikar, VP, CFO; HE Patterson, COO, SVP
13
5,989,693
Houston
TX
Joseph Walter, pres, chair, CEO; Ron Wilson, VP; CJ Looke, VP, eng
78
West Bay Exploration Co.
989,947
Traverse
City
MI
Harry Graham, VP exp; Robert Tucker, pres, owner; David Rataj, VP finance, treas
57
White Oak Energy LP
1,306,651
Houston
TX
Scott Nonhof, VP bus dev; Mark Etheredge, VP exploitation; Mike Rayburn, EVP;
Thomas Isler, pres
16
4,626,398
Houston
TX
Jay Graham, pres; Anthony Bahr, CEO
81
Wolverine Gas and Oil Corp.
816,981
Grand
Rapids
MI
Gary Bleeker, VP; Sidney Jansma, pres, CEO
10,136,440
Artesia
NM
John Yates, Sr. chairman emeritus; John Yates, Jr., pres, chair; John Perini, EVP,
CFO; James Brown, COO
Source: IHS; For more information about the Private Company Database, visit www.IHS.com
Production totals based on latest year-to-date figures as reported to and recorded by individual state agencies and tabulated by IHS at the time of publication. Some agencies are
delayed by as many as several months in releasing data which may impact company rankings.
NEW
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INDUSTRY BRIEFS
BILL BARRETT SIGNS $757M

DIVESTITURE DEAL
In what one analyst called a game-changing
event, Bill Barrett Corp. has signed agreements for $757 million in divestitures that
comprised of a combination of cash, added
Niobrara properties, and reduced liabilities,
setting the company up as a majority oilweighted company poised to focus its efforts
on its DJ Basin assets. Bill Barrett signed
agreements with several undisclosed purchasers to sell the majority of its Powder River
Basin acreage and its remaining position in
the Gibson Gulch natural gas program in the
Piceance Basin. The deals include an acreage
exchange whereby Bill Barrett will gain 7,856
net acres and 390 boe/d net production
within the southern block of its operated
Northeast Wattenberg area in exchange for
acreage in the Powder River Basin. The expanded Niobrara position boosts the companys position by 20% to over 48,000 net
acres. The assets sold include 46,510 net
acres in the Powder River Basin and 12,000
net acres in the Piceance Basin. While Bill
Barrett noted undisclosed purchasers,
Vanguard Natural Resources LLC said in a
statement that it has agreed to acquire 12,000
net acres in Colorados Piceance Basin from
Bill Barrett for $525 million. The properties
are currently producing approximately 67
MMcfe per day, after consideration of ethane
rejection, with approximately 76% natural
gas, 5% oil and 19% NGLs. Bill Barrett is set
to receive $568 million in cash proceeds, $69
million in acquired Niobrara assets (the exchange), $36 million for the assumption by a
purchaser of a lease financing obligation and
$84 million in future commitments assumed
by a purchaser for natural gas firm gathering
and transportation obligations, redefining
the companys balance sheet and portfolio.
The transactions produce a cash influx set to
reduce the companys net debt from $1.1
billion to approximately $450 million and
truly define a game-changing event for Barrett, said Wunderlich Securities analyst Jason
Wangler, as now the company will be solely
focused on its DJ and Uinta assets, has a
strong balance sheet with ample cash to
develop its plays, and can be considered an
oily name with a 70% oil weighting by yearend. Going forward, Bill Barrett plans to sell
60
its remaining Powder River Basin position.

Citigroup Global Markets, Inc. acted as financial advisor to the Company on the Gibson Gulch sale and BMO Capital Markets
acted as financial advisor on the Powder River
Basin transactions.
VITESSE ENERGY MAKES $186M
WILLISTON BASIN ACQUISITION
Centennial, CO-based Vitesse Energy LLC,
a privately-held subsidiary of Leucadia National Corp., has acquired non-operated oil
and gas assets in the Williston Basin from
EnerVest Operating LLC. The assets include
a working interest in approximately 600 wells
and over 19,000 net acres primarily in Williams, McKenzie, and Mountrail counties for
a preliminary purchase price of $186.5 million,
subject to customary post-closing adjustments. Bob Gerrity, CEO, remarked, This
acquisition represents a synergistic addition
to our existing high-quality acreage in the
core area of the Bakken and Three Forks play,
and also provides new growth opportunities
in developing areas of the field where technology continues to enhance returns.
REISA CHANGES NAME TO ADISA
REISA, the nations leading trade association
serving the alternative investment and securities industry, will change its name to the Alternative and Direct Investment Securities
Association (ADISA). Founded in 2003 as
TICA, the organization grew beyond a single
investment product type (tenant-in-common
programs) to broader real estate based products, and was given the name REISA. REISAs
new name, ADISA, shows the evolution to
handling even more areas of investment
products, said ADISA executive director/
CEO, John Harrison. ADISA influences more
than 20,000 professionals who offer and manage alternative investments, such as nontraded REITs, private placement programs,
oil and gas interests, securitized real estate
investments, BDCs and more. Members include sponsors/issuers, broker-dealers, registered representatives, investment advisers,
registered investment advisers, due diligence
officers, accountants, mortgage bankers,
institutional lenders and others. The organization promotes education, networking and
advocacy, and connects members directly to
key industry experts through intimate forums

providing timely trends and education that
help create a diversified portfolio for members clients.
ENXP FILES REGISTRATION
STATEMENT FOR PROPOSED IPO
Energy & Exploration Partners Inc. has filed
a registration statement on Form S-1 with
the Securities and Exchange Commission
relating to a proposed initial public offering
of its common stock.The number of shares
to be offered and the price range for the
proposed offering have not yet been determined. A portion of the shares will be issued
and sold by ENXP and a portion will be sold
by certain stockholders of ENXP. Citigroup,
Credit Suisse, and RBC Capital Markets are
acting as joint book-running managers and
as representatives of the underwriters for the
proposed offering. ENXP is an independent
exploration and production company based
in Fort Worth, Texas, focused on the acquisition, exploration, development, and exploitation of conventional and unconventional oil
and gas resources.
PIONEER NATURAL RESOURCES
SELLS HUGOTON ASSETS IN KS
Pioneer Natural Resources Co. has closed
the sale of its assets in the Hugoton field in
Kansas to LINN Energy LLC for cash proceeds of $340 million. The assets being sold
represent all of Pioneers interests in the field,
including its producing oil and gas wells,
along with its interest in the Satanta gas processing plant and other associated
infrastructure.
SEA TRUCKS SECURES $130M FACILITY
TO COMPLETE JASCON 18
Sea Trucks Group Ltd., an international oil
and gas marine contractor, has secured a
$130 million facility to finance the completion
of its Jascon 18 multipurpose construction
support vessel. Jascon 18 will continue the
final stages of outfitting at the Kwong-Soon
shipyard in Singapore, where work on the
accommodation blocks, cabling, piping, and
installation of an 1,800-ton main crane has
already begun. The vessel is expected to be
delivered in the third quarter of 2015.
WWW.OGFJ.COM |
OCTOBER 2014
INDUSTRY BRIEFS
SENEX TO SWAP SURAT BASIN

GAS ASSETS WITH QGC JV
Senex Energy Ltd. has agreed a Surat Basin
gas asset swap in Queensland, Australia,
with the PL 171 and ATP 574P joint venture
partners (QGC JV). Under the terms of the
tenement transfer agreement, Senex will
transfer its minority interest in eastern Surat
Basin permits PL 171 and ATP 574P (Senex
permits) to the QGC JV, and the QGC JV
will transfer its 100% interest in, and operatorship of, western Surat Basin permits ATP 795,
ATP 767 and ATP 8892 (QGC JV permits) to
Senex. No cash consideration is payable by
any party in respect of the tenement transfers. The QGC JV permits are adjacent to
Senexs existing western Surat Basin assets
ATP 771P and ATP 593P and form the basis
of the Western Surat Gas Project. On completion of the transaction, Senex will hold
net 2P gas reserves of 488 petajoules (PJ).
Senex will invest up to $37 million (AUD 40
million) from existing financial resources in
the Western Surat Gas Project over the next
three years, targeting commencement of
pilot testing in 2015/16 and moving to an
investment decision on commercial production as soon as appraisal results support it.
Completion of the transaction is expected
by Dec. 14 and is conditional on Foreign
Investment Review Board, Queensland government, and other regulatory approvals.
WORLEYPARSONS AGREES
TO ACQUIRE MTG
WorleyParsons has an agreement to
acquire MTG Ltd., a US-based
management consulting firm in the oil and
gas, petrochemicals, and chemicals
industries with operations in North
America, the UK, and Australia. The
acquisition should be completed by the
end of October. MTG specializes in
improving operational performance across
every aspect of the exploration and
production, midstream, refining and
marketing, petrochemicals and chemicals
industries. The company has a 30-year
history of providing strategic management
advice and will provide Advisian,
WorleyParsons advisory business, with
strategic skills in business transformation.
OCTOBER 2014
Esmark to convert
former Ohio
mill into trimodal logistics,
transportation
hub to support
Marcellus, Utica
production.
STATOIL UPDATES ON
NCS TRANSACTIONS
Statoil ASA has farmed down in Aasta
Hansteen, Asterix, and Polarled and has
exited two assets on the Norwegian
Continental Shelf (NCS) for a
consideration of $1.3 billion, including
contingent payment. Through this
transaction, Statoil monetizes on the Aasta
Hansteen field development project, while
retaining the operatorship and a 51%
equity share. In addition, Statoil exits the
non-core Vega and Gja fields. The
transaction includes a farm down in four
exploration licenses in the Vring area.
The buyer is Wintershall, a Germanybased energy company. The effective date
for the transaction is Jan. 1. Closing is
expected around years end, pending
government approval.
tion in the Marcellus and Utica shale plays.

Esmark will repurpose the 1 million-squarefoot mill facility into the newly named Yorkville Energy Services Terminal, a tri-modal
(rail/truck/barge) logistics and transportation
hub serving the Ohio, Pennsylvania, and
West Virginia shale plays. Conversion and
initial retrofitting of the facility is underway.
BLUEKNIGHT ENERGY
MAKES PUBLIC OFFERING
Blueknight Energy Partners LP started an
underwritten public offering of 8,500,000
common units representing limited partner
interests of the partnership. The partnership
intends to use the net proceeds from the
offering, including any net proceeds from
the underwriters exercise of their option to
purchase additional common units, for general partnership purposes, including the
repayment of a portion of the outstanding
borrowings under the partnerships credit
facility and partially funding the Partnerships
Eaglebine pipeline project. Wells Fargo Securities, RBC Capital Markets, and BofA
Merrill Lynch will act as joint book-running
managers for the offering. Stephens Inc. and
SunTrust Robinson Humphrey will act as
co-managers for the offering.
EMPEIRIA ACQUIRES OILFIELD

EQUIPMENT MANUFACTURERS
Empeiria Capital Partners LLC, a New Yorkbased private equity firm, through its affiliate
Tank Partners Holdings LLC, has completed
the acquisitions of JL Bryan Equipment &
Lease Services Inc. and Tank Partners LLC.
Based in Perryton, Texas, JL Bryan manufactures and distributes a range of storage tanks
and pressure vessels used to separate and
store oil and water at oil and gas wellheads.
Based in Seguin, Texas, Tank Partners manufactures steel storage tanks and pressure
vessels primarily for oil and gas producers
operating in the Eagle Ford shale and the
Permian Basin. Both companies will continue
to be managed by their existing senior executives, who have become investors in the
new platform. Miller, Egan, Molter & Nelson
LLP acted as legal advisor to Empeiria.
ESMARK TO CONVERT OHIO MILL

TO SUPPORT MARCELLUS AND
UTICA SHALE PRODUCTION
Esmark Inc., a holding company with interests
in steel manufacturing and distribution, oil
and gas exploration and production, and
real estate services, is converting the former
Ohio Cold Rolling Co. steel finishing mill in
Yorkville, Ohio, into a tri-modal industrial
services terminal to support companies engaged in oil and gas exploration and produc-
STW RESOURCES TO ACQUIRE

BLACK PEARL ENERGY
STW Resources Holding Corp. plans to
acquire Midland, Texas-based Black Pearl
Energy LLC. Black Pearl installs liners and
has introduced floating evaporation covers
for freshwater frac pits to the oil industry.
The company operates primarily in the
Permian Basin. STW Resources plans to
operate Black Pearl as a wholly owned
subsidiary. Pursuant to a nonbinding
WWW.OGFJ.COM
61
INDUSTRY BRIEFS
agreement, STW will pay $1.95 million for

100% of Black Pearl. The parties are working on a definitive agreement.
REX ENERGY COMPLETES BUTLER

OPERATED AREA ACQUISITION
Rex Energy Corp. has closed its Butler Operated Area acquisition from SWEPI LP, an
affiliate of Royal Dutch Shell plc. Total consideration paid was $120 million and the
transaction has an effective date of July 1.
The company funded the transaction primarily from the net proceeds of its recent
offering of convertible perpetual preferred
stock.
BASIC ACQUIRES PIONEER
FISHING AND RENTAL
Basic Energy Services Inc. has completed
the acquisition of substantially all of the
assets of Pioneer Fishing and Rental (PFR),
a division of Pioneer Energy Services, for
a total cash consideration of $16 million.
PFR operates its rental and fishing tool
business from locations in Woodward,
Oklahoma; Pampa, Texas; and Springtown,
Texas. Basic expects this acquisition to be
immediately accretive to earnings and to
contribute revenue of $14 million in 2015.
WOODSIDE SELECTS LLOYDS
AS GLOBAL INSPECTION PROVIDER
Woodside, the largest independent oil and
gas company in Australia, has chosen Lloyds
Register Energy as one of its global inspection providers. The new contract will help
to ensure that the components and equipment Woodside procures globally meet
quality expectations. Under the three-year
contract, Lloyds Register Energy will provide
surveillance inspection, expediting, and
auditing services.The contract also includes
two one-year extension options. For more
than 25 years, Lloyds Register Energy has
been providing ongoing compliance and
risk consulting services to Woodside.
BLUEKNIGHT ENERGY
MAKES PUBLIC OFFERING
Blueknight Energy Partners LP started an
underwritten public offering of 8,500,000
common units representing limited partner
62
interests of the partnership. The partnership

intends to use the net proceeds from the
offering, including any net proceeds from
the underwriters exercise of their option to
purchase additional common units, for general partnership purposes, including the
repayment of a portion of the outstanding
borrowings under the partnerships credit
facility and partially funding the Partnerships
Eaglebine pipeline project. Wells Fargo
Securities, RBC Capital Markets, and BofA
Merrill Lynch will act as joint book-running
managers for the offering. Stephens Inc.
and SunTrust Robinson Humphrey will act
as co-managers for the offering.
BLACK RIDGE INCREASES

CREDIT FACILITY BORROWING BASE
Black Ridge Oil & Gas Inc. has reported an
increase to the Cadence Bank NA senior
secured credit facility borrowing base to
$35 million, a 75% increase from the previous borrowing base of $20 million. The
Cadence credit facility is the least expensive
tranche of capital currently available to the
company, carrying annual interest rates from
3.0% to 3.5% above LIBOR. In connection
with the increase in the senior secured credit
facility, and in consideration of the companys projected cash needs, the company
and Chambers Energy Management LP
reduced the current availability under the
Chambers subordinated credit facility by
$5 million to $30 million with additional
availability to be approved by the lender
on an as needed basis for acquisitions. Total
availability to the company under the two
facilities is $65 million, with $44 million drawn
as of June 30. Black Ridges focus is exclusive
to the Williston Basin Bakken and Three
Forks trend in North Dakota and
Montana.
NORWEST EQUITY PARTNERS
ACQUIRES UELS
Norwest Equity Partners has acquired Uintah
Engineering & Land Surveying (UELS) for
an undisclosed sum. Headquartered in Vernal, Utah, UELS is a provider of surveying,
drafting, and engineering services for the
American onshore oil and gas industry. UELS
serves eight basins across 12 western states,
with offices in the Rocky Mountain, Great

Plains, Southwest, and Texas regions. GE
Antares, a unit of GE Capital, is serving as
administrative agent on a senior secured
credit facility to support the acquisition. GE
Capital Markets served as joint lead arranger
and joint bookrunner on this facility.
ENCANA, PRAIRIESKY REPORT $2.6B
SECONDARY OFFERING
Encana Corp. and PrairieSky Royalty Ltd.
have entered into an agreement with a syndicate of underwriters, pursuant to which
the underwriters will purchase from Encana,
on a bought deal basis, 70,200,000 common
shares of PrairieSky at a price of $36.50 per
share, for aggregate gross proceeds to Encana of C$2.6 billion ($2.37 billion). All proceeds will be payable to Encana. Following
closing of the offering, Encana will no longer
hold an interest in PrairieSky.
SANCHEZ UPSIZES, PRICES PRIVATE
$300M SENIOR NOTES OFFERING
Sanchez Energy Corp. has priced its private
offering to eligible purchasers of $300 million in aggregate principal amount of
6.125% senior notes due 2023 at an issue
price of 100.75% of the principal amount of
the notes. The offering was upsized from
the previously announced $250 million aggregate principal amount. The notes will
be issued under the indenture governing
Sanchez Energys outstanding 6.125% senior
notes due 2023 and will become part of the
same series as such outstanding notes.
Sanchez Energy intends to use the net proceeds from this offering for general corporate purposes, including working capital.
ZAZA REGAINS NASDAQ
COMPLIANCE
ZaZa Energy Corp. received a letter from
the NASDAQ Stock Market on Sept. 5, advising that the company has regained compliance with Listing Rule 5550(a)(2), which
requires the company to maintain a minimum closing bid price of $1.00 per share.
NASDAQ made this determination of compliance after ZaZas bid price closed above
$1.00 per share for 10 consecutive business
days following its reverse stock split.
WWW.OGFJ.COM |
OCTOBER 2014
ENERGY PLAYERS
STARK SUCCEEDS BOTT AS PRESIDENT, COO

OF CONTINENTAL RESOURCES
Continental Resources Inc. has appointed Jack Stark
as president and COO. Stark joined the Oklahoma City,
OK-based company in 1992 and has served as Continentals senior vice president of exploration since 1998.
Stark succeeds W.F. Rick Bott, who resigned from
the president and COO postitions just one week earlier.
Stark has 30 years of industry experience and holds a
masters degree in geology from Colorado State
University.
SANDRIDGE MAKES EXECUTIVE
MANAGEMENT CHANGES
David C. Lawler, former executive vice president and
COO of SandRidge Energy Inc., resigned in late August
to become CEO of BPs US Lower 48 Onshore business.
SandRidge has initiated a search for a new COO. Additionally, the company has promoted Craig A. Johnson,
former senior vice president of development for Oklahoma, to executive vice president of operations. Johnson joined the company in July 2007 as vice president
of operations and has served as a senior vice president
in operational roles since June 2011. Before joining
SandRidge, Johnson was operations manager for the
Eastern Division of Samson Resources, having also
served in various engineering and asset management
positions in the US Gulf Coast, Mid-Continent and
Southeastern regions. He graduated from Texas A&M
University with a Bachelor of Science degree in petroleum engineering.
CAMERON ELECTS PRESIDENT, COO
Scott Rowe has assumed the newly created position of
president and COO at Cameron. He reports directly
to Jack Moore, who remains chairman and CEO. Rowe
has served with Cameron for 12 years, most recently
as CEO of OneSubsea. Previously he served as president
of the companys subsea systems division and before
that as president of engineered and process valves
business in the companys valves and measurement
segment. He is an engineering management graduate
from the US Military Academy at West Point and holds
an MBA from Harvard Business School. Rower is replaced in his role of CEO of OneSubsea by Mike Garding, who most recently served as Schlumbergers president of completions. Additionally, effective January
2015, Jim Wright has elected to retire from his role as
president of the valves and measurement group following 35 years of leadership. He will be succeeded by
Doug Meikle. Meikle currently serves as vice president,
operational excellence on Camerons executive leadership team. Previously, he served as CEO of Stork TechniOCTOBER 2014
WWW.OGFJ.COM
cal Services and regional vice president for Europe &

Eurasia for Halliburton.
WILLBROS GROUP CEO TO RETIRE
Robert R. Harl will retire as CEO of Willbros Group Inc.
when his current employment agreement expires on
Jan. 2, 2015. Harl, who joined Willbros in 2006, has
served as CEO of the company since January 2007.
John T. McNabb II, non-executive chairman of the
board, has been elected as executive chairman of the
board on an interim basis, effective immediately. Additionally, S. Miller Williams has been elected as lead
independent director. The Willbros board of directors
is continuing its search to identify a successor to Harl.
It is anticipated that McNabb will step down as executive chairman of the board and will continue to serve
as a director, once a successor has been selected and
is in place.
ENLINK MIDSTREAM APPOINTS BROOKS
TO SVP, GENERAL COUNSEL
EnLink Midstream LLC and EnLink Midstream Partners
LP have selected Alaina K. Brooks to succeed Joe A.
Davis as senior vice president, general counsel, and
secretary, pending approval by the boards of directors.
Davis is resigning following nine years of service to
EnLink Midstream. Brooks has served in several legal
roles within EnLink Midstream since joining the company
in 2008, most recently as deputy general counsel. In
her new role, she will serve on EnLink Midstreams senior
leadership team, as well as lead the companys legal
and regulatory functions. Before joining the company
in 2008, Brooks practiced law at Weil, Gotshal & Manges
LLP and Baker Botts LLP, where she counseled clients
on matters of complex commercial litigation, risk management, and taxation. She is a Certified Public Accountant and holds a Juris Doctor degree from Duke
University School of Law and Bachelor of Science and
Master of Science degrees in accounting from Oklahoma State University.
Stark
Lawler
Brooks
ELAND OIL & GAS RESHAPES

SENIOR MANAGEMENT TEAM
Eland Oil & Gas, an oil and gas exploration, development, and production company with an initial focus on
Nigeria and West Africa, has made several changes to
its senior management team. George Maxwell has been
appointed as CEO. Maxwell was formerly CFO of Eland
and is a founding director of the company.Prior, he
was general manager of Addax in Nigeria. Les Blair will
step down from the board and from his role as CEO to
assume the new role of strategic advisor.The role,
reporting to the CEO, will be to promote the company
63
ENERGY PLAYERS
Douglass
Sloop
Cauthen
Snow
within Nigeria, to undertake certain partner and government-related tasks on behalf of the company, and
to support the CEO in specific strategic objectives. The
board has also appointed Louis Castro as CFO of the
company.Prior, Castro was a non-executive director of
Eland and chair of the audit committee. He has been
a director of the company since August 2012. He has
over 25 years of experience of investment banking with
a focus on advising companies worldwide in the oil and
gas and mining sectors. Most recently, he was the
managing director of Northland Capital Partners. As
part of the transition, Harry Wilson has assumed the
role of executive chairman.
EMLF ELECTS DOUGLASS BOARD PRESIDENT
Kevin K. Douglass, a shareholder and litigation attorney
at Babst Calland, has been appointed president of the
Energy & Mineral Law Foundation (EMLF), a national
nonprofit educational organization which fosters the
study of the laws and regulations related to natural
resource development and energy use. In this capacity,
Douglass will work closely with the foundations executive committee and executive director in implementing
its three-year strategic plan, as well as assisting with
program planning and governance. Douglass has more
than 25 years of experience litigating complex commercial matters in a variety of forums, including federal,
state and bankruptcy courts. He is admitted to practice
in both Pennsylvania and West Virginia, as well as in
the United States District Court for the Western District
of Pennsylvania and the United States Court of Appeals
for the Third Circuit. Douglasss father, attorney Samuel
Douglass, founded EMLF in 1979 with University of
Pittsburgh Law Professor Cy Fox.
SLOOP NAMED MANAGING DIRECTOR
AT DELOITTE CORPORATE FINANCE
Deloitte Corporate Finance LLC recently named Thomas
W. Sloop as managing director in its Houston office.
In connection with his new role, Sloop will lead the
development of the DCF oil & gas investment banking
practice. He will be responsible for the origination of
financial advisory services for oil & gas clients in the US
and will assist member firms serving clients globally
providing C-Suite, board, and operational level strategic
advisory, commercial development, transaction leadership, and deal facilitation support across the sector.
Prior to DCF, Sloop led the midstream M&A advisory
practice for Pace Global Energy. Prior to Siemens, Sloop
ran his own advisory and principal investment firm focused on international energy development. He holds
a Bachelor of Science in Economics from the Wharton
School of the University of Pennsylvania.
64
HOLLYFRONTIER NAMES COO

Dallas, TX-based independent petroleum refiner and
marketer HollyFrontier Corp. has promoted George
Damiris to the position of executive vice president and
COO. Damiris has been senior vice president, supply
and marketing since January 2008. He joined the company in 2007 as vice president, corporate development
after an 18-year career with Koch Industries where he
was responsible for managing various refining, chemical, trading and financial businesses. Damiris holds
both a BS in Chemical Engineering and an MBA from
Case Western Reserve University.
PINNERGY NAMES VPS
Austin, TX-based Pinnergy, a provider of fluid handling
services and drilling services throughout Texas and
Louisiana, promoted Lance Cauthen to vice president
of operations - drilling services and Andy Snow to vice
president of drilling. Cauthen joined Pinnergy in 2007
as a field sales representative and was promoted to
regional sales manager for the companys South Texas
district in 2011. In his new role, Cauthen will be responsible for the operations of Pinnergys drilling services
in the companys South Texas and West Texas districts.
In 2007, Snow also started with Pinnergy as a field sales
representative in the companys North Texas district.
For the past five years, hes served as the district sales
manager of the surface casing division. Snow will continue to support the growth of this division in his new
role by overseeing the sales, marketing, contracts and
administration. Additionally, Brent Coley was promoted
to director of finance and accounting.
H&P NAMES NEW VP, GENERAL COUNSEL
Effective March 4, 2015, executive vice president, general counsel and chief administrative officer, Steven R.
Mackey, will retire as part of a planned succession after
29 years of service with the Helmerich & Payne Inc. At
that time, Cara M. Hair will be promoted to vice president and general counsel. Mackey began his career
with H&P in 1986 as associate general counsel. In 1988,
he was elected vice president and general counsel, and
was promoted to executive vice president in 2008 and
chief administrative officer in 2010. After several years
in private practice, Hair began her H&P career in 2006
as a corporate attorney. She has since served as senior
attorney and currently serves as deputy general counsel.
Hair is a graduate of Oklahoma State University and
the University of Oklahoma School of Law.
KELLEY NAMED CEO OF ANTELOPE OIL TOOL
Antelope Oil Tool & Mfg. Co. LLC has promoted Bill
Kelley to CEO. He previously served as Antelopes vice
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OCTOBER 2014
ENERGY PLAYERS
president of sales and operations, and has more than

35 years of casing and cementing equipment experience in the oil and gas industry. Kelley will be based
at the companys headquarters in Houston, Texas. Prior
to joining Antelope in 2013, Kelley worked at DavisLynch Inc., holding positions of varying responsibilities
over his 26 year tenure, including his final position as
vice president of operations. He succeeds George
Ribble, who is retiring.
BAKER HUGHES NAMES ROSS AS CFO
Baker Hughes Inc. has appointed Kimberly A. Ross as
senior vice president and CFO, effective Oct. 22. Ross
currently serves as executive vice president and CFO
of Avon Products Inc. She served as executive vice
president and CFO of Royal Ahold NV from 2007 to
2011, and held various other finance positions at Royal
Ahold from 2001 to 2007. Ross earned a Bachelor of
Arts degree in accounting from the University of South
Florida, and is a certified public accountant.
MCMAHON JOINS ENERGY
PRACTICE OF BAKERHOSTETLER
BakerHostetler has expanded its business and energy
practices with the addition of Laura J. McMahon as a
partner in the corporate and energy practices, resident
in the Houston office. McMahon previously served as
co-chair of the Latin America Practice Group at Norton
Rose Fulbright. McMahon brings more than 20 years
of experience counseling global clients, headquartered
in and outside the US, on smatters including capital
markets, securities compliance, corporate governance,
mergers and acquisitions and joint ventures, particularly
in the MLP and oilfield services areas. She represents
clients in the energy, infrastructure, mining and commodities sectors, as well as other industries. McMahons
fluency in Spanish and Portuguese has allowed her to
serve multinational clients in cross-border transactions
in Latin America. McMahon earned her JD from the
University of Houston in 1991. She received her BA
with distinction in the curriculum in Spanish, from the
University of Illinois in 1977.
ATHABASCA OIL MAKES BOARD,
EXECUTIVE CHANGES
Athabasca Oil Corp. has made changes to its executive
lineup and its board of directors. Effective September
30, Sveinung Svarte retired his position as president
and CEO. Svarte will remain on the board as vice chairman and will continue to support the companys business development initiatives. Tom Buchanan, current
chairman of the board, has assumed the added responsibilities of president and CEO. Buchanan has
OCTOBER 2014
WWW.OGFJ.COM
over 30 years of experience in the oil and natural gas

sector, most recently as CEO of Spyglass Resources
Corp. In 1993, he founded Founders Energy Ltd., the
predecessor to Provident Energy Trust and was the
CEO of Provident until 2010. Ron Eckhardt will assume
the role of lead director of the board and will replace
Buchanan on the compensation and governance committee of the board. Additionally, Peter Sametz will
replace Buchanan on the audit committee of the companys board.
DIAMOND OFFSHORE APPOINTS ROLAND SVP
Diamond Offshore Drilling Inc. has appointed David
L. Roland senior vice president, general counsel, and
secretary. Roland joins Diamond Offshore with over 20
years of corporate legal experience in the energy industry, including the last ten years as senior vice president, general counsel, and corporate secretary at ION
Geophysical Corp. Prior to joining ION in 2004, Roland
worked for seven years as a corporate and securities
lawyer with a major law firm and ten years as a corporate
lawyer with international energy and oilfield services
companies. He holds a BBA from the University of
Houston and a Juris Doctorate degree with Distinction
from St. Marys University.
Ross
McMahon
Mulvehill
STRH EXPANDS ENERGY RESEARCH

SunTrust Robinson Humphrey (STRH) has named Chase
Mulvehill to its equity research team. Mulvehill joins
STRH as a director on the energy team covering the
oilfield service industry. He previously served as a buyside analyst at Carlson Capital and Millennium. Previously, Mulvehill gained experience on the sell-side as
part of Jefferies energy team. Before making the transition to the sell-side, he was an aeronautical engineer
at Lockheed Martin. Mulvehill earned a bachelors in
aeronautical engineering from Auburn University and
a masters of business administration from Southern
Methodist University.
BIRO TO SERVE AS EXTERRAN CFO
Exterran Holdings Inc. has appointed Jon C. Biro as
senior vice president and CFO. Biro most recently
served as executive vice president and CFO of Consolidated Graphics Inc. until its acquisition by R.R.
Donnelley & Sons Co. earlier this year. Prior, Biro held
several executive positions with ICO Inc., an international oilfield services and specialty polymers business.
He was CFO and treasurer of ICO from 2002 to 2008,
and served as its interim CEO from July 2003 to February 2004. He was a member of the ICO board of directors from 2003 to 2008.
65
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Level 17, Singapore 018982
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PART III
SINGAPORE
KNOWLEDGE AND NETWORK
estled at the southeastern end of the 500 mile-long Strait of

Malacca, Singapore is a natural trade haven. The waterway
connects the Pacific to the Indian Ocean, and the tankers
running up and down it carry around a quarter of the worlds oil moved
by sea. The narrowest point of the strait, just to the south of Singapore, is the Phillips Channel, which at its widest is just 1.5 nautical
miles across. It is a bottleneck, but also a tap, from which wealth
continues to flow in abundance. Traditional maritime industries, fat
from the business generated by vessels snaking through the narrows,
have been joined by more and more construction, supply and service
companies. From this financial font, Singapore sprang forth.
THIS SPONSORED SUPPLEMENT WAS

PRODUCED BY FOCUS REPORTS.
Publisher: Ines Nandin
Editorial: Fraser Wallace
Project Coordinator: Marie Kummerlowe
Project Director: Roslan J Khasawneh
For exclusive interviews and more info,
plus log onto energyboardroom.com or
write to contact@focusreports.net
Photo courtesy of Matt Paish, Gardens
by the bay, Singapore
OCTOBER 2014
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67
This maritime trade route explains exactly why
economic diversity and spin-offs. Southeast Asia is
the worlds leading oil and gas players have been
growing rapidly and turning into a manufacturing
present in Singapore for such a long time. Exxon-
hub. We want to position ourselves to capture the
Mobil has had a presence in Singapore for over 120
market potential in not only Singapore but in the
years, reveals Matthew J. Aguiar, chairman and
wider burgeoning region.
managing director of ExxonMobil Asia Pacific. But
it is only over the last decade that Singapore has
developed a truly prestigious reputation for producing high quality oil and gas equipment. The country
started by manufacturing subsea applications and
Matthew
J. Aguiar,
Chairman &
Managing
Director,
Asia Pacific,
ExxonMobil
Lim Kok Kiang,

Executive
Director,
Industry Cluster
at the Economic
Development
Board
It is not just good fortune that continues to draw

major oil and gas companies to Singapore: the city-
state is actively pursuing policies to secure key players. Singapore is channeling a lot of effort into
building its R&D capabilities, whether through ship
has made significant gains in manufacturing, technol-
design engineering or through our offshore and
ogy and engineering, explains Lim Kok Kiang, ex-
subsea equipment players. We want to harness the
ecutive director of the industry cluster at Singapores
synergies between sectors and translate these tech-
Economic Development Board (EDB). Such progress
nologies to the maritime and offshore industries,
is attested by many international oil field service
says Kiang.
companies establishing bases here; expanding their
reach into Asia. For instance, Halliburton just opened

a brand new, flagship manufacturing and technology
The city-state has cultivated a transparent and

John Ng, CEO,
Singapore LNG
Corporation
facility.
As demand for LNG grows in Southeast Asia, Singapores significant
Andy Milnes,
CEO, Integrated
Supply &
Trading, Eastern
Hemisphere, BP
stable pro-business environment, backed by a strong
government philosophy, states ExxonMobils Aguiar.

The efforts of the Singaporean authorities have
resulted in an ecosystem that encourages and attracts
location only stands to benefit. Singapore is geographically very
business, while not limiting the scope of risk manage-
well-located at the center of major LNG demand and supply routes
ment activities, furthers Andy Milnes, CE of Integrated Supply &
and is already a world-class port, trusted financial center and major oil
Trading, Eastern Hemisphere, BP. Although it is limited in land area,
trading hub, says John Ng, CEO of Singapore LNG. We also have
Singapore is effectively utilizing the space it has and is maintaining
an LNG terminal that is built with the future in mind with the capability
investments in upgrading its infrastructure in terms of pipelines, jetties
to efficiently unload, store and reload LNG cargo for import and ex-
and terminals as well as increased capacity, he adds. This enables
port. However, the citys advantages extend to industries beyond just
Singapore to bring large parcels of energy products.
LNG: It is also recognized worldwide for its business-friendly infra-
Whilst Singapore is famed for its business environment, its neighbors
structure and policies, as well as its quality workforce, Ng explains.
are definitely seeking to forward their oil and gas industries too. Some
LNG is the major energy source for the future, and Singapore has the
see the growth in Singapores neighbors as a sign of the rise of rivals;
physical and financial infrastructure to be a regional powerhouse in
this is not necessarily the case. Business interests are intertwined across
this field, adds Paul Cornelius, partner of corporate and international
the region, and Singapores long developing specializations allow the
tax at PwC Singapore.
city to take advantage of the direct commercial opportunities arising,
Singapore knows its strengths and so does the EDB. Manufacturing
whilst also consolidating its position as a regional financial hub through
in Singapore is a key industry, says Kiang. It manifests job creation,
the development of the Singapore stock exchange, the SGX.
SLNG Terminal 1, Image courtesy of Singapore LNG Corporation
SLNG Terminal 2, Image courtesy of Singapore LNG Corporation
68
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OCTOBER 2014
HOW TO SEXY UP THE INDUSTRY FOR SINGAPOREANS
The majority of the younger generations have looked
rigs. In this next wave of equipment improvements, automation will be key,
increasingly towards the business and technol-
and thus another core competency of Singapores engineering and manu-
ogy industries for professional development says the
facturing arsenal can enhance the value generation in rig building. As an
president of Singapore Maritime Foundation, Michael
added bonus, a large percentage of rig crews operating in southeast Asia
Chia. We caught up with Paul Carsten Pedersen, CEO
are from the region, but many of them do not get their training here. If they
of Jasper Invests Limited, to discuss how Singapore can

revert the local perception by showing that offshore engineering and operation provides a sexy career path.
Paul Carsten
Pedersen, CEO,
Jasper Offshore
would come to Singapore and train at the center, they can receive certified
training which has Singapores stamp of quality attached to it. This acts as a
further revenue stream for the center.
With Singapore engineering potential hamstrung by a dwindling talent pool,
Underlying Chinas manufacturing competitive advantage is a vast
Pedersen based upon his diverse management career - lays out a cohesive
amount of state capital. Equally, one of Singapores competitive disadvan-
national blueprint to abate and ultimately help solve this potent issue.
tages is the fact that Singaporeans are reluctant to work abroad, particularly
Taking the lead from the aeronautic industry, Singapore should take the
if there is no second career opportunity in Singapore after experiencing an
easy step and invest in a simulator-based training center, which will act as
offshore life. Consequently, similar to what Petronas has done in Malay-
the nucleus for drilling activities. The focus will be on developing candidates
sia, Singapore needs to engender a Singaporean state company that can
for top jobs in operations, but with candidates spilling into rig building and
create such comfort for Singaporeans second career. It would be energy
equipment engineering industries. It needs to be attached to one of Sin-
services focused as Singapore has no hydrocarbon reserves. Through such
gapores principle polytechnics, which can foster a pipeline of young and
a national drilling vehicle, Singapore can foster an enduring link between its
aspiring engineering talent. A simulator-focused training center will appeal
nationals and the oil service industry. The sovereign fund Temasek already
to students as the curriculum is innovative and aligns with current youth
investing in drilling rigs outside Singapore would be well placed to absorb
attractions such as travel and computer gaming. Incorporating periods of
a role of main investor in an SGX-listed company. If any one country could
practical and well-paid work offshore, the curriculum will help to reshape
pull this off, it would be Singapore, being a forward thinking, constantly
the image of offshore activities, which has incorrectly connotations of being
evolving nation that is always looking to be one step ahead of the game
mundane, rather than cutting edge.
and prepared to invest public funds to create work places with long-term
Singapores rig producing industry is facing more competition from Chi-
value for the country.
na. The attraction of contracting new rigs in Singapore would be enhanced

if a training center - next door to the shipyards - churns out regularly a
Pedersen started in the Maersk Group in 1981 after finishing university with
highly capable, trained and modern offshore rig workforce. Furthermore,
a Masters Degree in Engineering. On completing the companys widely-
training centers develop an environment of interest. When placed within
acclaimed training scheme which forms the framework of Pedersens Sin-
a university or polytechnic, Singapore will start to see masters students in
gapore talent solution proposal he has gone on to enjoy a diverse career
drilling technology who will look to developing the equipment for the new
spanning three decades in the oil and gas industry.
NAVIGATING
THE REGION
Singapores Economic Development
Board (EDB) reported in 2013 that

Singapore is the worlds largest manufacturer of jack-up rigs, responsible
for 70 percent of global production.
Singapore also delivers 70 percent of

floating production storage and
offloading (FPSO) conversion services. The renowned Keppel and
Sembawang shipyards (amongst others) are highly capable, handling a
OCTOBER 2014
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ENERGYBOARDROOM.COM
69
fifth of the worlds ship repair operations as well as construction
Singapore might start creating economic strains,
projects.
given the finite population that the island can
Sembcorp Marine is one of the worlds largest marine and offshore
house. Singapore is a place where it is relatively
engineering companies. It is the proprietor of Sembawang Shipyard
easy to attract highly skilled expats, but the tight
and reported a 27 percent jump in year-on-year turnover in the first
supply of local and talented people able to work
quarter of 2014, growing from SGD 1.05 billion to SGD 1.34 billion
(USD 872 million to USD 1.11 billion). Whilst figures like this paint
a rosy picture, the full story is less positive, with gross margins
Mark Beretta,
COO, KTL
Offshore
within and service the offshore industry is fast

becoming the citys Achilles heel, he adds.The
country must do more to abate this acute issue.
shrinking by two percent to 12.8 percent in the same period. This
If Singapore wants to ensure longevity in the off-
is in part due to solid competition from other shipyards in the region.
shore products value chain, then it must find solutions to this
In some rival ports, the quality of the product delivered is increasing,
issue.
and, in others, assets are available at a lower cost.
Some worry that there are weak links in the chain that connects
It might seem as if Singapores maritime construction industries
Singapore to its prosperity. A conspicuous challenge that is threat-
are under siege: neighboring countries are clearly eager to take a
ening to derail Singapores offshore and marine status is the sheer
share of the wealth that comes from courting the oil and gas sector.
annual cost of hiring people, admits Steffen Tunge, managing
Singapores rig building industry is facing colossal competition
director, OSM Ship Management, a global independent provider
from neighboring markets such as China and Korea, says Paul
of offshore management services. There is an acute talent issue
Carsten Pedersen, CEO of Jasper Offshore, which owns and oper-
here, and this has been compounded by recent changes in labor
ates oil rigs for deep sea drilling that are contracted out to oil and
laws.
gas exploration and production companies. These markets are now
We are opening a new facility in the bordering regions of Ma-
taking as many orders as Singapore, and, ultimately, Singapore has
laysia that is nearly as large as our current one here, says Mark
to develop much deeper engagement in this industry.
Beretta, COO of KTL Offshore, one of the largest rigging outfits in
Pedersen suspects that the sheer abundance of companies in
70
the world. Despite its obvious and fantastic advantages, Singapore
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OCTOBER 2014
is becoming an increasingly expensive place to
apply their collective endeavors to a task, they do it very well and
operate. By gradually shifting some 60 percent of
craft the finished result very carefully. The Singaporean government
our production capacity, we are keen to reduce
has a deeply ingrained desire to succeed and will supply the neces-
our cost base but also explore the opportunities
sary resources to ensure the city does.
present in Malaysia. Nevertheless, our headquar-
Singapore will continue to be a major petrochemicals and refin-
ters will always remain in Singapore. Clearly,
ing hub; there is simply too much invested here for that to change,
Singapores high costs are pressuring some businesses into seeking less fiscally strenuous
surroundings.
Paul Cornelius,
Partner,
Corporate and
International
Tax, PwC
Everyone has a planuntil they get punched
says Paul Cornelius from PwC. However, in the trading sphere,

Malaysia is not only competing but in some ways surpassing Singapores fiscal incentive package. However, this may not be as much
of a threat as it seems. The Malaysian trading industry struggles
in the face, boxer Mike Tyson once famously stated. However,
to gain traction because the market and network have been and
economic competition lasts longer than the 12 rounds of a boxing
remain firmly rooted in Singapore, Cornelius continues. Market
match, and a number of Singapores innate qualities make the city
intelligence is critical for trading entities, and there is no place bet-
a robust player that will not tumble easily. Arguably, much of the
ter than Singapore to gather that. Moreover, the trading activity
speculation over regional competition makes too much of high GDP
comes off the back of a gargantuan amount of bunker sales coming
growth rates in these countries, ignoring the fact that Singapore is
out of Singapore. It would appear that, simply, Singapore will
simply a more mature economic unit. This city runs against the
naturally gain some industries and lose others, as the forces of
mantra of the oil and gas industry: that risk begets reward. Instead,
economic selection pull some businesses to neighboring countries
Singapores success is built on its stability, but the cost of this stabil-
and encourage others to move towards the center of Southeast
ity is following the governments economic vision.
Asias economic activity- Singapore.
Singapore is a special nation that in essence operates like a
Many Singaporean companies are contributing towards extracting
successful business: it is always looking to hone and enhance its
resources in other territories, but this activity serves to bring revenues
competitive advantages, says Tunge. When the Singaporeans
from these countries back to Singapore. The traditional hydrocarbon
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71
MAKING WAVES IN THE OFFSHORE INDUSTRY
n 2012, regional conglomerate Jebsen & Jessen (SEA) completed the pur-
other opportunities for service points in international
chase of Singapore-based Halcyon Offshore, in an expansion move that
vessel accumulation points including West Africa and
extends the multi-disciplinary company into the service of offshore marine
Europe. Jebsen & Jessen (SEA)s recent acquisition of
vessels and shipyards.
a 35 percent stake in Norwegian offshore technology
As new as the offshore and marine sectors might be for the group,
firm Scantrol, also supports the growth of the unit en-
there is still a strong degree of complementarity in its growing business.
suring it remains connected to the cutting edge know-
Originally a trading company founded in Hong Kong in 1895, the Jebsen &
how, expertise and R&D offered by this global player
Jessen family enterprise is now a global conglomerate with four indepen-
in anti-heave compensation (AHC).
dent groups operating from Hong Kong, Singapore, Hamburg and Perth.
Aw Chin Leng, an offshore industry veteran and
Established in 1963, the Southeast Asian part Jebsen & Jessen (SEA) is one
newly appointed Jebsen & Jessen Offshore Regional
of Singapores most successful family-owned groups composed of eight
Managing Director, points out that 2014 will be a year
independent business units with manufacturing, engineering and distribu-
of consolidation of the offshore unit into the Group
tion capabilities in sectors such as material-handling, cable-technology and
as it completes a major upgrade of its Singapore pro-
chemicals.
duction facility and fine-tunes the integration of its
Heinrich Jessen,
Chairman,
Jebsen & Jessen
SEA
By leveraging its existing capabilities in industrial cables; cranes, hoists
back-office functions into Jebsen & Jessens regional
and technical service; as well as its established regional infrastructure and
platform. This will set the course for subsequent sub-
back-office excellence, Group Chairman Heinrich Jessen, has big plans for
stantial growth and expansion of the topline and bot-
the new unit. Unlike most of its business units that focus on ASEAN markets,
tom line of the business unit starting 2015 onwards,
Heinrich Jessen explains that Jebsen & Jessen Offshore is one of the busi-
says Aw. Ultimately, our goal is to mold Jebsen & Jes-
nesses that we have global ambitions for, beyond the region. The unit re-
sen Offshore into a reliable and trusted supplier of tier one products and
cently established a service center in Dubai, UAE and continues to explore
services.
Aw Chin Leng,
Regional
Managing
Director, Jebsen
& Jessen
titan Indonesia remains a country of considerable potential and a perfect market for a
continues. We are also
company of our size, though uncertain political and fiscal policies have resulted in a lot of
particularly interested in
missed opportunities in that country, says Francis Chang, CEO of RH Petrogas, an explora-
Myanmars onshore capac-
tion and production company, referring to the countrys proven oil and gas reserves, which
ity, and last year we sub-
currently stand at 3.7 billion barrels of oil and 101.54 Tcf of gas.
mitted three bids to par-
Malaysia is another country which has good hydrocarbon potential. We will continue
ticipate in the second
to explore new opportunities, including marginal field development, in the country, Chang
onshore bid round. Even
though we were not suc-
Fig. 1: ASEAN-6 COUNTRIES-GDP CHANGE
Francis Chang,
CEO, RH
Petrogas
cessful in securing new blocks, Myanmar
continues to be our strategic focus in the

7
6.8
Real GDP Growth of

Southeast Asia (% changes)
6.2
6.4
6.0 6.1
5.8 5.9
5.5 5.6
5.1
near future, he concludes. The volumes of
6.5
5.1
oil around the Asia Pacific region will con-
5.3
5.1
4.9
5.3
4.9
tinue to attract the attention of exploration

and production companies- and clearly they
4
3.3
will require full access to engineering and

3.1
support services in order to achieve their
2.3 2.4
targets.
2
1.3
1
0
Southeast Asia is a complex market. In-
donesia and Malaysia have implemented a

Brunei
Darussalam
Indonesia
Malaysia
Philippines
Singapore
Thailand
cabotage regime, and there are risks to foreign owners associated with such policy that
2000-07 (avg.)
2012
2014-18 (predicted avg.)
2018
have to be managed, explains Andrew Coc-
72
ENERGYBOARDROOM.COM
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OCTOBER 2014
coli, general manager of Farstad Shipping. This
ing states. It is amazing how supportive agencies such as the Maritime
means that businesses frequently have to deal
Port Authority are to ship-owners and the marine community gener-
locally with such regulations in order to do
ally, he concludes. Currently, Farstad uses Singapore as a ship
business.
repair hub, with the majority of the companys dry docks and upgrade
projects taking place in the country. We have considered Batam
To mitigate the risk factors, it is crucial to find
trustworthy partners, build enduring relationships

to establish local representation and a solid man-
agement structure, expands Coccoli. One should
Andrew Coccoli,
General
Manager,
Farstad Shipping
and elsewhere, but we are more comfortable with the extensive

engineering support and reliability of the shipyards in Singapore,
he explains.
hold ownership within such a country, sail under

the local flag and compete on a more level playing field. If you are
INTERTWINED INTERESTS
operating as a foreign ship-owner under a foreign flag, you face a
A good analogy for interacting with competitors
myriad of uphill battles, namely not being able to qualify or partici-
would be that of a fishing boat, in an immense
pate in a lot of activity.
sea, says Thana Balan P Jaganathan, Group Ex-
Despite neighboring nations policies frequently aiming to attract
ecutive Chairman of Global Oil 57, an international
business from Singapore, the city-state is more than able to retain
trading company. There are sufficient resources
business. Although slightly more expensive than their neighbors,
to go around if one has the ability to pull the fish
the superior planning and efficiency of the Singapore-based shipyards
out of the water. Bigger fish are worth more, how-
gives the owner more certainty, Coccoli explains. Supplementing
ever, so rather than seeing other oil and gas com-
this is an array of incentives offered by the government and its
panies as rivals, I see them as companions that
regulators to set up shop and stay in the country, which, whether
can help me better haul in my nets- and catch
in technology, R&D or fiscally, go a step further than the neighbor-
bigger fish.
Jaganathan,
Group Executive
Chairman,
Global Oil 57
Cape is an international
leader in the provision
of critical industrial
services principally to
the energy and natural
resources sectors.
Our multi-disciplinary service offering
includes access systems, insulation,
specialist coatings, refractory linings and
a range of specialist services including
environmental services, tank storage and
thermal equipment. Cape employs over
18,000 people working across 21 countries.
www.capeplc.com
OCTOBER 2014
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ENERGYBOARDROOM.COM
73
Viewing other players in the market as com-
level usually from a domestic to a regional player.
petitors is myopic and unconstructive, continues
There are a stream of companies in the region
Jaganathan. Making deals, working cooperatively;
that have reached a growth ceiling and need
this is constructive and as long as another player
guidance and capital to facilitate their next phase
has this same attitude, I can do business with
of growth. We can help them achieve this.
them.
Policymakers are aware of the importance of
constructive cooperation too: the OECDs Economic Outlook for Southeast Asia, India and China
2014 notes that one of Singapores strategic ob-
Paul Kang,
Senior Partner,
Head of
Southeast
Asia, Headland
Capital Partners
Hendrik
ten Hoeve,
Managing
Director,
Compass Energy
Singapore-based businesses reach round the
planet to complete operations. In Indonesia, we

undertake work for ConocoPhillips, and in Thailand business is relatively simple, says Hendrik
ten Hoeve, managing director of Compass Energy,
jectives ought to be to strengthen companies abilities to seize
an engineering service company. Our work in
business opportunities in Asia.
Malaysia often sees us act as a subcontractor to
Jaganathan describes how being located in Singapore benefits
avoid a heavy bureaucratic burden there. We
his company: Singapore is a great location from where one can
outsource what work we can to India or Thailand
access the gatekeepers between East and West. These gatekeepers
to reduce costs. Whilst we undertake work there,
are essential for one to be able to penetrate any market. One has
to be able to recognize these key figures, and connecting with them
is vital to achieve success in international trading and access to the
we utilize Singaporean standards and knowledge

Gina Fyffe,
Executive
Director, Integra
resources one needs, he explains.
to ensure that quality is kept high. The business
is very conscious of keeping quality high,and part

of our strategy to ensure this is the case is to have
The practical implications of this attitude have created notable
engineers at the clients desk.
successes for Global Oil 57. This enterprise started as a very small
Another company with investments across the region is Integra,
company but can now sign multi-billion dollar contracts because
a leading global petrochemical trading and logistics supply solution
the company has built rapport with its partners, says the chairman.
provider. Investments in Malaysia, Indonesia and Singapore are
Performance is performance, regardless of whether it is on a small
part of its portfolio. Integra views these developments as a triangle
scale or a large one. Our partners see we can consistently deliver
of petrochemical capacity that benefits all involved parties, says
on a scalable level, and, thus, they trust us.
Gina Fyffe, executive director of the business. Although national
A trait I like about Southeast Asia is the pragmatic attitude
interests are clearly at play, not everyone will produce the same
towards Headlands investment approach, says Paul Kang, senior
products. Furthermore, companies from a country on one leg of
partner and head of Southeast Asia for Headland Capital Partners.
the triangle stand a very good chance of being able to upgrade
It is a region open to new ideas and robust partnerships. Family
value by exporting to a neighboring country, who will then be able
business are prevalent in Southeast Asia -we have sat down with
to turn that mid-grade product into something better, which can
many such entities and seek to help them in meeting their goals
finally move on to the final leg of the triangle to be exported. Such
and manifest creative ways to elevate these companies to the next
triangle dynamics are truly fascinating, and they ensure that by

2020, Malaysia, Singapore and Indonesia will add value to each
others economies. Fyffe believes that the primary bottleneck to

the execution of this strategy is the lack of logistics capacity to
support the increase in trade. Integra can help to fill this logistics
gap that has developed within the commercial network, she

explains.
Other players agree that Singaporean standards allow them to
capitalize on advantages in other countries which often means
lower production costs. We have developed greater traction in
China than in other markets: ultimately, it is a country that we could

not ignore, says Dorcas Teo, CEO of Nordic Flow Control, a
manufacturer of marine and offshore control systems. Indeed,
Marine equipment fabrication must be fully overseen to ensure the owner
gains best value. Courtesy Aqualis Offshore
74
today we have a strong local presence in China with two production

facilities located in Suzhou. The fact that we are a Singaporean
ENERGYBOARDROOM.COM
WWW.OGFJ.COM |
OCTOBER 2014
company and have a superb track record with the
domestic yards allowed us to leverage the stamp

of quality that is associated with Singapore and
take that into China.
As a locally-based entity, Singapore is of sigDorcas Teo,
CEO, Nordic
Flow Control
nificant importance to Jebsen & Jessen (SEA) as
its regional headquarters, says Jebsen and Jessen
Your trading
partner around
the world
SEAs chairman Heinrich Jessen. In terms of
group-wide business activity, although Singapore
is amongst our larger markets, across the region

Thailand and Malaysia are our main markets and
Indonesia is on track to becoming a significant

source of business for the group, he explains.
Yves J.G.
De Leeneer,
Managing
Director,
Deepblue
However, in terms of the offshore market, it
comes as no surprise that the city-state is of paramount importance given the nations international
leadership in the segment and the concentration
of offshore businesses here.

Owing in part to Singapores unique geographical positioning
at the crossroads between East and West, the country has evolved
into an internationally recognized offshore and marine hub, notes
Aw Chin Leng, regional managing director at Jebsen & Jessen
Integra Petrochemicals
Pte Ltd
2 Battery Road
22-01 Maybank Tower
Singapore 049907
+65 6220 9895
Integra SA
133 Chaussee de
Tervuren
1410 Waterloo
Brussels
Belgium
+32 2 354 6862
Offshore. Singapore has become a critical node for the mainte-
nance and repair of offshore and marine vessels, as well as the

worlds largest bunkering hub. Furthermore, Singapore is home to
two of the worlds largest jack-up rig manufacturers and commands
a leading position in the FPSO conversion industry. This has had

implications for the industry. Naturally, this created a pull in the
market and attracted a slew of both clients and suppliers that now
compromise the island-states rich offshore cluster. That dense
ecosystem of offshore and marine industries makes Singapore an
Integra US Marketing
LLC
Galleria Financial Center
5075 Westheimer Road
Houston
Texas 77056
USA
+1 713 224 2044
China
3-6 Ju Jun
28 Li Tang Road
Changping District
Beijing 102211
China
+86 10 617 93262
Korea
10th Backsang Bldg
197-28
Kwanhoon-Dong
Chongno-Gu
Seoul 110-718
South Korea
+82 2 725 9007
Integra Riyadh
P.O Box No 25196
Riyadh 11466
Kingdom of Saudi Arabia
+96 61 242 1093
important oil and gas hub for players across the value chain.
Despite increasing overheads, Singapore has an assortment of

positive attributes, says Yves J.G. De Leeneer, managing director
of Deepblue, which provides quality-engineering support for the
offshore oil & gas industry throughout Asia.Singapore also provides a brand synonymous with legitimacy, transparency and quality
www.integra-global.com
and, therefore, being associated with such a country generates a

positive image for Deepblue. He describes Singapore as a launch
pad to wider Asia for his business. A number of people champion

Kuala Lumpur as a preferable destination to spearhead an offshore
oriented company. However, we started here and will stay here and
might expand to Kuala Lumpur in the near future. There is an
abundance of activity occurring in Singapore: new mega-shipyards
are being built, and regional business decisions are conjured and
negotiated here.
Business decisions are made in Singapore, planning how best
OCTOBER 2014
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ENERGYBOARDROOM.COM
75
AGED HEADS; NEW SOLUTIONS
The wave of experienced industry experts going
but has evolved into the petrochemical and more re-
into retirement exposes all sorts of energy players
cently the upstream processes by incorporating added
to talent shortages, posing challenges for the develop-
on modules for refining and production processes.
ment of any organization and the industry as a whole,
Simply, downstream users can optimize refinery-wide
says Tom Kers, partner at KBC Advanced Technologies.
operations, minimizing energy intensity across all pro-
It is clear that in many ways, the retirement of experienced, knowledgeable staff can be as significant
a problem as repair of aged platforms. KBC seeks to
Tom Kers,
partner, KBC
Advanced
Technologies
help alleviate the loss of skills in part caused by a shortage of talent. our Petro-SIM 5 software is the only purpose-built rigorous
Steven
Kantorowicz,
Vice President
Petrochemicals,
KBC Advanced
Technologies
process simulator that combines process simulation and extensive thermo

physical properties, states Kers.
cess units, while upstream, users can maximize facility

performance throughout the life cycle of the reservoir
and optimize gas production throughput and balance
power generation.
We have identified opportunities that enabled our
clients to reduce operating costs of their ethylene pro-
duction processes by USD 10-20 per ton with little capital cost, highlights
He expands on what this has meant for the business products: Tra-
Steven Kantorowicz, VP of petrochemicals at KBC.
ditionally, this package has been developed for refining-based processes
to harness the resources of the wider region. OSM sources crews
the buoyant offshore industry.
from across the world. Tunge of OSM Ship Management states that
Companies are also seeking to engage with the demand for a
many of [these recruitment locations] are in frontier markets:
broader range of services by diversifying and expanding their own
Myanmar, Mexico and Africa. In particular, we use the Philippines
offering internally to capture a broader section of the market.
as a source for offshore and marine talent. Reflecting on what this
We have come to the realization that clients seek and prefer a
means for OSM in Singapore, he continues, in Singapore, there
fully integrated product and services package, says Tom Kers,
is a shortage of qualified people, and the cost is perennially rising,
partner, at KBC Advanced Technologies, an independent provider
which makes it a challenging place to hire from. Consequently, the
of consulting and software services to energy and other process
company is trying to leverage office synergies between different
industries. Traditionally, when we are approached by clients, we
global branches. OSM is boosting its business in Singapore by
examine the various inputs and metrics and return to the client with
capitalizing on resources from the wider region.
our recommendations. However, we have found that although our
suggestions would likely ensure our clients a certain increase in
OIL AND GAS DRIVE-THRU
profitability, problems tend to arise in the execution of the project.
Singapore-based enterprises can capitalize on the regional dynamism
According to Kers, this usually stems from suboptimal client-side
of the oil and gas industry thanks to the city-states level of economic
organizational structures related to accountability and reliability
development. Whilst much of the region is seeing fast rates of
concerns. We intend to extend service offering to clients to go
economic growthquantitative increasesSingapore has spear-
beyond providing premium advisory services, he continues. Doing
headed the route towards developmentqualitative expansion
so will position KBC as an integrated services provider that enables
seeing more variations, types, forms and categories of business
clients to implement recommendations we provide and effectively
emerge here. One company that has taken advantage of this is
realize their benefits. This holistic approach takes into consideration
Headland Capital Partners. It has seized on the opportunities avail-
the technical elements to ensure operative implementation.
able in Singapore, principally by investing in Kreuz Subsea, a subsea
Even in the lifting and rigging business, the need for diversity is
services company, and Miclyn Express Offshore, an offshore services
apparent. One clear trend in the lift industry is the transition into
business. We have more than USD 200 million invested in Miclyn
ever-heavier lifting and rigging with increasingly large vessels and
and almost USD 200 million invested in Kreuz, and, for Headland,
cranes, says Beretta of KTL Offshore Gone are the days where a
these are the largest investments ever, says Kang. I believe that
standard one-size-fits-all solution will do. Each project requires a
in the offshore space, these two businesses are best in class. Such
thorough technical analysis and input from our side before we can
investments attest to our commitment and interest in the oil and
begin to supply our customers. We sell a total solutions
gas space. I am absolutely interested in deploying more capital into
approach.
76
ENERGYBOARDROOM.COM
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OCTOBER 2014
Companies cannot rest on their laurels in competitive Singapore.
THE HUMAN ELEMENT

THREE EXECUTIVES SPEAK ON HOW THEY SEEK TO DELIVER THE
Technology and quality are the cornerstone principals of our organization, says Beretta, reflecting values that could be said to be
OPTIMAL HUMAN POWER TO THEIR CLIENTS PROJECTS:
embodied by Singapore itself. We conduct a good deal of our own

VINCENT TAN, MANAGING DIRECTOR - MTQ
R&D and testing before bringing products to market. That philosophy
We are always looking at how best to retain the soft
has endowed KTL with an excellent reputation in the market, par-
skills of our staff. Many companies have tried to
ticularly in Asia. One of theworlds largest heavy lift contractorsbased
emulate what MTQ has achieved. They often invest
in theNetherlands has been a frequent client of ours, demonstrating
in hardware in an attempt to copy us- and there is
the reputation and trust we have earned.
Across Singapore, a proactive spirit is what drives business forward.
plenty of money in Singapore to fuel that invest-
In terms of the business in Singapore, we have sought a more co-
ment. However, it is the soft skills that differentiate

MTQ from its competitors.
Not only is MTQ aware of the need to retain
Vincent Tan,
Managing
Director, MTQ
hesive and focused approach to operations, says Steve Connolly,

COO of Cape PLC. This involved some quite drastic, but necessary,
workers with these skills, the company also under-
changes and required a shift in company culture. This has already
stands the necessity of being able to transfer these skills through con-
had a significant impact on the company, and, along with a new,
secutive generations of workers. This is the key to our success- MTQ
more integrated management structure, has brought about a really
nurtures these skills.
positive improvement in culture and staff attitudes; our business is

all about people and, importantly, the right people.
STEVE CONNOLLY, COO, CAPE PLC
In order to deliver on these projects, Cape has
Geographically, Cape focuses on the APAC region,
expanded its offering, including by acquiring in
rather than the individual constituent countries
early 2014 Motherwell Bridge, a Scottish firm rec-
here. This greater visibility creates improved effi-
ognized as a leader in the specialist storage tank
ciencies and we have brought the best human re-
market. Connolly explains that the acquisition has
sources our global organization has access to here
expanded the range of critical services [Cape] can
in order to drive forward growth.

We have also been able to attract some qual-
Steve Connolly,
COO, Cape PLC
now offer, and we are assessing a number of opportunities at the moment in the region. The stor-
Gary McLean,
Business
Development
Director, Cape
PLC
ity human resources from our competitors. This is
age facilities in Singapore, Malaysia and Indonesia
particularly interesting as this represents the confidence of these staff in
are significant, and the blend of Motherwell
Capes future- the business has a small order book here at the moment,
Bridges tank management experience, Cape Environmental Services
but the future and Capes prospects are already clear.
Tank cleaning technology and also the traditional Cape core trades
of access, insulation and coatings are a fantastic and unique combined

CHARLES PFAUWADEL; SWIFT WORLDWIDE RESOURCES
offering. Again, this is an example of qualitative change; synergies
There is one discipline at the moment which is par-
morphing the range of services businesses offer, as they use Singa-
ticularly valuable that of subsea skills. This is a
pore as a platform to reach the market. The city collectively offers
wide area of activity, but with many fields being de-
a myriad of solutions- it is an urban one-stop shop.
veloped and more complex and challenging projects moving forwards to secure marginal resources,
individuals able to deliver success in these projects
are ever more valuable.
The shortage of staff in this area is something
that Swift is seeking to address for its clients. Each
Charles
Pfauwadel,
Managing
Director, Swift
Singapore
of our recruiters has a target to build a pool of

subsea candidates. Once a month we have meetings to re-evaluate our
progress on this front and to review the status of progress in the subsea
ExxonMobil Singapore
Parallel Train (SPT)
project, Jorong Island,
Courtesy of Cape PLC
sector.
78
ENERGYBOARDROOM.COM
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OCTOBER 2014
For every lock there is a specific key, and

the congregation of companies in Singapore
the tiers of clients need for equipment. In expanding our offering, the
business is also building a deeper relationship with its clients.
is able to provide a solution to every require-
shore explains how Jasper Offshore allows
FINANCE: THE GLUE THAT BINDS

A CITY TOGETHER
cost-effective access to hydrocarbon resourc-
Since Singapores stock exchange, the SGX, was founded in 1999, the number
es by filling a gap other companies have not
of mineral, oil and gas companies (MOG) has increased steadily. The prolif-
yet occupied. Generally the global rig mar-
eration of MOG companies on the SGX is simply a question of time, ac-
ket is very competitive, and there is currently
cording to Lawrence Wong, executive vice president and head of listings at
excess supply in many areas; nonetheless,
the SGX. Linc Energy, a diversified energy companys move to list in Singapore
there are niche areas requiring special rigs.
from the ASX in Sydney in December 2013 was indicative of the growing
For instance: in countries with high local con-
interest in Singapore as a key location in Asia for oil and gas companies to
tent requirements, technology must be kept
access share capital.
ment. Paul Carsten Pedersen of Jasper Off-
at a manageable level, which complements
I believe that the so-called tipping point is an arbitrary concept; it is far
the characteristics of an older rig. The Jasper
more important what a given market denotes for a company. MOG companies
Explorer addresses this and, another very
are attracted to list on the SGX because of the matching industry clusters
important niche, namely the mid-water rigs
we have here and because we are perceived as a far more international and
where jack-ups are not readily used and the
independent center, states Wong.
JK Low , CFO,
Viking Offshore
Marine
Lawrence Wong,
Executive Vice
President &
Head of Listings,
SGX
fifth and sixth generation drill ships are too
Kris Energys listing in 2013 saw the exchange begin to formalize the rules that impact
expensive. The work can easily be done by
energy and resource companies whose shares are held on the main board of the exchange.
a less advanced rig than the sixth generation
These had previously not been fully matured due to the relatively recent maturing of the ex-
new builds at an attractive commercial rate.
change but will now add to the supportive regulatory framework that facilitates business here.
The broad desire for low day rates is one area
now working well for Jasper.

Ultimately, oil and gas companies have
to focus on their bottom line and will seek
to save costs on rig rates if they can, he

concludes, mulling the consequences rig rates
have on his business. Consequently, it is not
always the most shining piece of equipment
JASPER EX PLOR ER
DP2 DRILLSHIP
Wells campaign
Completed
with success...
or cutting edge rig that is awarded the job,

so there is room for a well performing older
rig like Jasper Explorer in the right
markets.
Viking Offshore and Marine has a bolt-on

strategy, which has seen the business take
...And going
to commence
the next well
campaign
over a sequence of companies, allowing Vi-
king to now provide heating, ventilation and

air conditioning (HVAC) technologies, winch
systems and instrumentation equipment.
Speaking with customers, the business
knows that clients appreciate our aim of becoming a truly one stop shop suppliermeaning far less organizational hassle for
them, says JK Low, CFO of Viking. Viking

is seeking to approach its expansion from a
value-chain perspective, adding value through
OCTOBER 2014
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ENERGYBOARDROOM.COM
79
There are world

class discoveries
waiting to be made
in Asia Pacic
REGIONAL (NOC) ECTIONS
ccess to key business decision makers is one

of the key motivations for many companies to
locate themselves in Singapore. It provides a route

into eastern markets for western companies and
vice versa.
Prior to moving to Singapore, Nathan Oliver,
Regional President, Asia Pacific MultiClient, PGS,
the seismic exploration company, had invested
over five years into seeking engagement with the
Nathan Oliver,
Regional
President,
Asia Pacific
MultiClient, PGS
Chinese NOCs and Japanese E&Ps. The NOCs are

driven by a very different agenda to the traditional IOCs: where shareholder value creation is the key for the latter, resource security is the
focus for the former. The establishment of relationships with the Asia
Pacific NOCs was driven by the variable resource density found in their
own backyard. Put simply, delivering resource security has required an
increasing focus on an international growth agenda which has seen expansion by the Chinese NOCs in areas such as Brazil, for example. I readily recognized this customer segment as a valuable business relation.
PGS international operations required them to meet the NOCs on their
doorstep in order to create a relationship that would exist the world
over. Singapore was the logical place to locatethe location where
these enterprises congregate.
Global Technology with

Local Expertise
PGS is committed to delivering leading edge
technology to help support your exploration success.
PGS has invested heavily in providing a full seismic
service. From 4D to Full Azimuth acquisition,
Imaging, Electromagnetics, Reservoir Studies, and a
comprehensive MultiClient data library, the company
uses its Flagship Ramform and GeoStreamer
technology to provide the highest quality solutions to
ensure your success.
PGS Ramform vessel
Singapore is one of the most important financial centers in the

greater Asian region, according to Wong at the SGX. Being the
asset and wealth management center of Asia, with a sovereign wealth
fund alone which exceeds USD 2 trillion, Singapore is most certainly

the regional hub for financial investors of all types.
The new dynamic of the SGX also offers advantages to energy
A Clearer Image
companies beyond that of the larger, more established exchanges.
Explore the science behind the technology at

www.pgs.com
Compared to the global exchanges, the SGX is a minnow. Yet, I see

this as an advantage, says Simon Crellin, director of Deloitte Petroleum
Services in Singapore. For instance, on the ASX, TSX and AIM, smaller

independents have been drilling wells and indeed
house. Whilst Headland itself focuses on investing
have a good story to tell. Yet their share price is
in small to medium sized enterprises, these qualities
flat-lining because there are simply too many com-
equally benefit both listed and unlisted
panies listed: each one is like a tree in a forest, unable
companies.
to stand out! To be recognized and generate value
There is a confidence in the citys ability to attract
on these markets, says Crellin, smaller independents
the companies that will build up the SGX. The
need to consolidate. By contrast, the SGX has a

concentrated list of oil and gas E&P companies, and,
because of this, a good story will get a lot more
Simon Crellin,
Director,
Deloitte
Petroleum
Services
Mans Lidgren,
CEO, Rex
Energy
city-state has a fantastic business ecosystem, says

RH Petrogas Chang. In the past year, we have seen
several new oil and gas companies come to the
traction than on the bigger exchanges. As investor
market. Despite a surge in IPOs from this sector to the SGX, the ex-
appetite in Asia is voracious, the regional energy industry is buoyant
change for listed O&G companies is still a fledgling and rather immature
and Singapore is fast becoming a wealth management hub, I can see
home. I would like there to be more proper, two way dialogue between
the number of E&P companies gravitating towards the SGX
the SGX and listed O&G companies.
expanding.
Chang anticipates the emergence of Singapore as a fully established
Mans Lidgren, CEO of Rex Energy, an independent upstream oil
exchange as taking a little longer. Return on investment may take
and gas company, concurs: Exploration and production companies
years from discovery to first production. Patience and sector under-
naturally gravitate to London for their IPOs as it has one of the largest
standing are traits that competent oil investors should embrace, and
energy exchange markets. Nonetheless, the Singapore exchange only
we are trying to educate our stakeholders to be with us for the long-
has eight listed companies, and we prefer to be one of the few than
term. That is the challenge we face in Singapore: educating the investor
one of the many. Additionally, there is a need for foreign and local
market.
investors to invest locally to help Singapores future inflow. We have
This progression, from cauldron of technical capabilities to launch
very ambitious plans to grow in Southeast Asia, and this is why we
pad for fully listed companies, did not happen instantly, and this is
listed in Singapore.
reflected in the companies that have built themselves up in Singapore
This gravitation of companies is building up the SGX, step by step.
over the years. Established in 1998, we have leapt from a mere service
When asked what it will take for Singapore to become a key invest-
agent to a fully integrated automation solutions provider, explains
ment center, PwCs Cornelius replies: The government is putting in
Teo, the CEO of Nordic Flow Control. In 1998, we were a tiny company
a lot of effort to educate the mining and oil and gas community.
consisting of five people and two desks. Over time, we have established
However, I am still somewhat skeptical over the SGXs ability to com-
a manufacturing capability and a large-scale marketing team. In 2010,
pete against the major international exchanges. Specifically, for alter-
the progress of the company reached a new peak when it listed on
native areas of energy, a number of clients still come to me and state
the SGX. Through unwavering energy, commitment and determination,
it is easier to raise money in London and Hong Kong. Their perception
we have secured our place as one of Singapores premier automation
is that the market is more attuned to the risks associated with the
service companies.
energy industry and are drawn by the established track records of

raising capital in these markets. Nonetheless, Kris Energy has had a
very smooth and successful listing, and, if it can develop a good track
record, it can be the flag bearer for the SGXs oil and gas sector. We
need another three or four companies like Kris Energy to come through
onto the SGX to really evolve the exchange into a sector powerhouse.
A further development in Singapores capital markets has been the
growth of the analyst community, which I view as essential. They are
partly responsible for making recommendations on companiess and
have thecapacity to stir the investment community to invest.
Singapore is critical to the companys holistic development and
to the future of our assets here, says Kang of Headland Capital Partners. Being based in Singapore is very important because it allows
us to operate in a business ecosystem that is transparent, stable and
business friendly all traits that are instrumental for a private equity
82
The SGX is seeing increasing MOG activity.
ENERGYBOARDROOM.COM
WWW.OGFJ.COM |
OCTOBER 2014
Companies mentioned in this issue of Oil & Gas Financial Journal are listed in
alphabetical order with advertisers in boldface type. The index is provided as
a service. The publisher does not assume any liability for errors or omission.
COMPANY
PAGE
COMPANY/ADVERTISER INDEX
COMPANY
PAGE
COMPANY
PAGE
COMPANY
PAGE
JEBSEN & JESSEN OFFSHORE
70-71
Ridgeline Midstream Holdings LLC
AAPL
47
Consolidated Graphics Inc.
65
Addax
65
Continental Resources Inc.
24,63
JL Bryan Equipment & Lease Services
61
Riverstone Holdings LLC
Agip Oil
11
Credit Suisse
53,60
J-W Operating
52
Sabine Oil & Gas LLC
AIPN
47
Crosstex Energy
52
KBC ADVANCED TECHNOLOGIES 77
Sanchez Energy Corp.
62
Amoco
47
DavisLynch Inc.
65
SandRidge Energy Inc.
29,63
Anadarko
12,51
PLC
12
51,52
52
Deloitte Corporate Finance LLC
64
Keystone Drill Services
45
Sea Trucks Group Ltd.
60
Antelope Oil Tool & Mfg. Co. LLC
64
Denbury Resources
14
Koch Industries
64
SEC
60
Apache
51
Diamond Offshore Drilling
65
KTL OFFSHORE PTE LTD.
73
Sempra LNG
12
ArcLight Capital Partners LLC
12
Diamondback
51
Liberty Resources II LLC
52
Senex Energy Ltd.
61
Arkansas Oil and Gas Commission
33
DRILLINGINFO
LINN Energy LLC
60
Shell
12
Athabasca Oil Corp.
64
Edge Consulting Solutions
Siemens
64
Atlas Pipeline Partners LP
12
EIA
Lloyds Register Energy
62
Snyder Oil & Gas
29
Avon Products Inc.
64
Eland Oil & Gas
63
Lockheed Martin
65
SONANGOL
46
Babst Calland
64
ELF
47
MACQUARIE GROUP LTD.
Sonangol
11
Baker Botts LLP
63
Emerald Oil Inc.
52
MAGNUM HUNTER
Southwestern Energy
34
Empeiria Capital Partners LLC
61
RESOURCES CORP.
Spyglass Resources Corp.
64
Enbridge
12
Mercuria Energy Group
51
SSI Fifteen Ltd.
11
Encana
51
Miller, Egan, Molter & Nelson LLP
61
Standard & Poors Ratings Services
10
62
Mitsui & Co. Ltd.
12
Standard Oil Company
47
Morgan Stanley Infrastructure
12
Statoil
Baker Hughes Inc.
33,65
BakerHostetler
65
Barclays
51,53
21-23
24
10,24,33
LLOG Exploration Co.
12,53
1
12,BC
Basic Energy Services Inc.
62
Encana Corp.
Bass Companies
52
ENERCOM
BG
51
Energy & Exploration Partners Inc.
60
MTG Ltd.
61
Stephens Inc.
62
BHP Billiton
84
Energy & Mineral Law Foundation
64
NASDAQ
62
STEPTOE & JOHNSON
39
Enerplus Resources
25
New York Stock Exchange
53
STW Resources Holding Corp.
61
Nippon Yusen Kabushiki Kaisha
12
SunTrust Robinson Humphrey
62
Bill Barrett Corp.
50,60
35, IBC
11,51,61
Black Pearl Energy LLC
61
ENERTIA SOFTWARE
Black Ridge Oil & Gas Inc.
62
EnerVest Operating LLC
60
Northland Capital Partners
65
Swala Energy Ltd.
11
Black Swan Risk Advisors
38
Engineers Without Borders
84
Norton Rose Fulbright
65
SWEPI
61
Blueknight Energy Partners LP
61
ENI
Norwest Equity Partners
62
Swift Energy
BMO Capital Markets
60
EnLink Midstream LLC
63
OGUK
47
Talisman
51
BofA Merrill Lynch
62
Enterprise Product Partners
12
Ohio Cold Rolling Co.
61
Tank Partners Holdings LLC
61
BOK FINANCIAL
31
Esmark Inc.
61
OPEC
47
Temasek
51
Eureka Hunter Holdings LLC
12
Origo Exploration
51
The Oxford Princeton Programme
38
64
Total
46
Trafigura AG
12
BP
48,63
11,46
Buckeye Partners LP
12
Exterran Holdings Inc.
65
Pace Global Energy
Bureau of Economic Analysis
33
ExxonMobil
12
Pacific Research Institute
Bureau of Labor Statistics
34
FAIRMOUNT SANTROL
27
Parsley Energy
51
Tudor, Pickering, Holt & Co.
53
Burlington Resources
24
Falcon Oil Holding Angola SA
11
Patina Oil
29
Tug Hill Inc.
53
Cabinda Gulf Oil Company Ltd.
46
FOCUS REPORTS
PDC Energy
29
Tullow Oil
51
Cadence Bank NA
62
Forest Oil Corp.
53
Petro-Hunt
52
Uintah Engineering & Land Surveying
62
Callon Petroleum
50
Founders Energy Ltd.
64
Petroleum Authority of Mongolia
11
University of Arkansas
34
Cameron
63
GDF Suez
12
PGS
80
US DOE
12
Cameron LNG
12
GE Capital Markets
62
Pinnergy
64
US Geological Survey
CAPE PLC
73
Genie Energy Ltd.
11
Pioneer Fishing and Rental
62
Vanguard Natural Resources
66-82
34
52,60
GLOBAL OIL 57
66
Pioneer Natural Resources Co.
60
Vantage Energy Inc.
53
CAPITAL ONE SOUTHCOAST
17
GlobalData
12
PLS Inc.
50
Viper Energy Partners
51
CAPL
47
Goldman, Sachs & Co.
53
PNC FINANCIAL
Vitesse Energy LLC
60
HEADLAND CAPITAL PARTNERS
81
PrairieSky Royalty Ltd.
Capital Alliance Corp.
CARHARTT
Carib Energy LLC
12
Helmerich & Payne Inc.
64
Provident Energy Trust
Carlson Capital
65
HollyFrontier Corp.
64
PwC
Chambers Energy Management LP
62
HSBC
12
Quantum Energy Partners
Chesapeake Energy
29
Hunt Oil Co.
52
QUORUM BUSINESS
Chevron
46
ICO Inc.
65
SOLUTIONS INC.
Chief Oil & Gas
52
IHS
Citi Group
53
INTEGRA
Citigroup Global Markets
60
ION Geophysical Corp.
CNRL
51
IPAA
Conoco Phillips
24
JASPER OFFSHORE
OCTOBER 2014
64
Wells Fargo Securities
63
53,62
63
24
Woodside
62
WorleyParsons
61
RALPH E. DAVIS ASSOCIATES INC. 45
Wunderlich Securities
60
75
RANGE RESOURCES CORP.
Xerox Litigation Services
41
65
RBC Capital Markets
60
ZaZa Energy Corp.
62
REISA
60
Rex Energy Corp.
62
79
Weil, Gotshal & Manges LLP
Williams
6,32
WWW.OGFJ.COM
51,62
Willbros Group Inc.
34,52
53
52-59
IFC
83
BEYOND THE WELL
Commitment to sustainability
BHP BILLITON, EWB SUPPORT STUDENTS IN SUSTAINABLE DEVELOPMENT
UNIVERSITY STUDENTS across Australia and New
MIKAILA ADAMS
SENIOR ASSOCIATE
EDITOR OGFJ
84
approximately 10,000 students across 52 universities

Zealand have been given the opportunity to learn where students are challenged to develop engineering
more about sustainable development and the con- solutions to real-life issues facing the developing world.
Common issues facing communities aided by EWB
cepts of humanitarian engineering thanks to support
programs include access to drinking water, sanitation,
from global resources company BHP Billiton.
BHP Billiton Sustainable Communities (BSC), a energy, basic infrastructure, waste systems, informacharity established by BHP Billiton as part of its vast tion communication technology and engineering
community investment program, has teamed up with education.
Since its establishment in 2007, the EWB Challenge
Engineers Without Borders (EWB), sponsoring the
EWB Challenge program since 2008. The support of has inspired students to work on designs for comBHP Billiton Sustainable Communities enables the munities in India, Cambodia, Vietnam, rural Australia,
extensive implementation of the EWB Challenge to Timor Leste and Nepal.
Olivia McCombe, a RMIT
first-year university courses
Electrical Engineering student
across Australia and New
and recipient of one of five
Zealand, helps supports EWB
winners of the EWB Challenge
Challenge showcase events
Scholarship, said she had dein the region, and provides
veloped a keen interest in the
funding for the EWB Chalissue of energy poverty and
lenge Scholarship Program.
looked forward to furthering
The scholarship program
her studies in the area with the
provides development opporhelp of the scholarship.
tunities, internships, and reI used to romanticize the
search projects to the value
idea of life off the grid but it
of A$10,000 for emerging lead- Scholarship recipient and RMIT Electrical
eventually dawned on me that
ers in the field of sustainable Engineering student Olivia McCombe
electricity is about more than
development so that they Photo courtesy of BHP Billiton
flickering fluorescent tube
may create positive change
through humanitarian engineering. The scholarship lights; the history of its distribution has been about
program is specifically designed to recognize high lifting generations out of abject poverty, enabling the
achieving and values driven students who are pas- exchange of ideas, and keeping warm, among other
sionate about applying their engineering skills to the things, McCombe said.
For BHP Billiton, the partnership is reflective of the
objectives of community development and poverty
companys commitment to sustainability. The projeradication.
The program supports students through their ects that students develop through the EWB Challenge
final three years of university study. The scholars are are truly remarkable and were proud to support our
all highly motivated and very passionate about ensur- next generation of engineers in making a difference
ing that their careers will have a social benefit. It is to the lives of people in developing countries, said
inspiring to think about what the future holds with Tony Cudmore, BHP Billitons president of corporate
these young people in leadership positions, said Lizzy affairs.
As the worlds largest diversified resource company
Brown, CEO of Engineers Without Borders
we count a large number of engineers among our
Australia.
In addition to the scholarship program, the part- workforce. Many of these employees put their own
nership between EWB and the BSC offers the EWB time and effort toward making a difference for disadChallenge, a first-year university design program vantaged people and this is exactly the type of comaimed at introducing students to concepts of humani- munity involvement the partnership with EWB protarian engineering. Each year the program reaches motes, he continued.
WWW.OGFJ.COM |
OCTOBER 2014
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303.296.8834
MAGNUM HUNTER RESOURCES CORPORATION

NYSE: MHR
NYSE MKT: MHR-PrC, MHR-PrD, and MHR-PrE
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Contact: Cham King

(832) 203-4560
www.magnumhunterresources.com

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