the northeast ong marketplace - january 2015

PRSRT STDU.S. POSTAGE PAIDBECKLEY, WV 25801

PERMIT NO.19

JANUARY 2015P.O. BOX 1441 • OAK HILL, WV 25901 | WWW.ONGMARKETPLACE.COM

HEALTH & SAFETY - 0 The Importance of Women’s FR Garments in the Oil & Gas Industry

INDUSTRY INSIGHT - Pages 20-23 Shale Oil and Gas 2014 Top Five

ONG SPOTLIGHT - p 3

WATER MANAGEMENT - p 6-7

ENVIRONMENTAL MANAGEMENT - p 14

NEW TECHNOLOGY - p 26

LEGAL & FINANCE - p 28

STEEL NATION STEEL BUILDINGSSet To Expand Services In 2015

S T E E L B U I L D I N G S • E N G I N E E R I N G • L A N D S C A P E S U P P L Y724.225.2202 | www.steelnationbuildings.com

The Northeast ONG Marketplace

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A Message from Mark Caskey, President, Steel Nation

From all of us at Steel Nation, we want to wish our clients, vendors, contractors, partners and all of our Brothers & Sisters in the Oil/Gas Industry a very safe and prosperous New Year! 2014 was a productive year

for Steel Nation, and 2015 is starting with exciting new changes that will benefit our clients and vendors as we continue our pursuit of excellence in designing and building the absolute Safest, Coolest and Quietest Compressor Stations in the energy sector.

Headquartered in the center of the Marcellus & Utica Shale plays in Washington, Pennsylvania, Steel Nation has quickly become the go to Design-Builder for all buildings needed for successful natural gas Compressor, Fractionator, Metering, Storage and Transmission Stations. In 2014, Steel Nation completed 57 projects in Pennsylvania, Ohio, West Virginia and Texas. Steel Nation was also awarded 49 new projects, with most scheduled to be completed by the 3rd quarter of 2015. Our main goal is “Safety First – For Life” and we are very proud that we did not have any safety violations or incidents in 2014, and our EMR Rates continue to among be the lowest of any supplier in the O&G industry.

We are pleased to announce many new changes for 2015, and beyond:

1. Steel Nation - Engineering:Steel Nation has brought most of our Engineering “In House” to quickly serve our client’s needs. In 2014, Mr. Ed Hirzel, P.E. joined Steel Nation as the Director of Engineering. Ed is an Army Veteran, a graduate of Carnegie Mellon University and has nearly 20 years of experience in Civil Engineering, and has the capability of stamping in all Shale Play states. Ed is building a team of Autocad designers to focus on Foundations, HVAC, Process Flow, Local Permitting, Electrical, Sound Mitigation, Air Handling and other critical disciplines that are crucial to designing safe and effective natural gas facilities.

2. Steel Nation – Tank InspectionsAfter the January 2014 Elk River chemical spill, the West Virginia DEP implemented state-wide annual inspections for all storage tanks throughout the state. Steel Nation was quick to respond, and to date, we have inspected and certified over 500 tanks, with over 50 contracted to be inspected in the first quarter of 2015. Tanks inspected represent chemical, coal, oil & gas, petroleum and other industry sectors.

3. Blast Resistive, Control and Administration ProjectsAs Compressor Stations mature, the next phase is to build safe control and administration office buildings for operations to effectively manage stations in a more comfortable environment. Steel Nation has designed proprietary Blast Resistant Control, Admin, PDC and MCC steel buildings that are rated up to 5 psig to ensure operators and equipment are protected in case of an explosion or fire. From full design of foundations, blast resistant exteriors, offices, locker rooms, kitchens and conference rooms, Steel Nation continues to provide turn-key solutions to ensure the safety of all operators at these important infrastructure facilities.

4. Steel Nation – Site Landscaping SupplyIn late 2014, Steel Nation acquired Galati Bros. Landscape Supply to extend products and services to our core business. Starting in January, Steel Nation will be supplying Aggregates, Gravel, Stone, Sand, Soil, Retaining Wall Systems, Railroad Ties, Grass Seed Blankets, Rainwater Control Piping, Erosion Control Tubes and other timesaving products used at drilling sites and compression stations. Landscape products will ship fast-tract to all Marcellus and Utica Shale projects throughout Pennsylvania, Ohio and West Virginia.

5. Pennsylvania DEP – Appoints Mark Caskey to the CAC (Citizens Advisory Council)At the end of 2014, I was nominated, and appointed to the Pennsylvania DEP’s Citizen Advisory Council based on Steel Nation’s experience in Coal and Natural Gas resources. I was nominated by Pennsylvania State Representative Brandon P. Neuman (D-Washington County) and appointed by Speaker, Samuel H. Smith (R-66th District) for the 2015-2018 term. The Citizen Advisory Council’s is made up of 18 geographically, politically, and professionally diverse members. Its mission is to “ensure that all people of the Commonwealth enjoy the benefits included in Article 1, Section 27 of the Pennsylvania Constitution” which states “the people have a right to clean air, pure water, and to the preservation of the natural scenic, historic, and esthetic values of the environment.” The volunteer members of the CAC meet eleven times a year in Harrisburg to discuss the state’s environmental laws and make improvement recommendations to the DEP. The Council strives to represent all people of the Commonwealth and endeavors to bring a collective view of the public interest in environmental protection and natural resources, forged from the Council’s own diversity of personal experiences and perspectives.

With all of these new products and services, Steel Nation continues to focus on our pursuit of excellence in designing the absolute safest compressor stations in the world. Other systems that are part of our turn-key scope of compression work include: Fire Detectors, Gas Detectors, Winter Heating (electrical & fuel gas), Combustion Air Intakes, and new Air Handing systems.

Finally, I would like to thank all of our clients for their continued trust in Steel Nation. And to all of our clients, vendors and partners, best wishes for a safe, productive and prosperous New Year!

All The Best,

Mark CaskeyPresident

January 2015

THE ONG SPOTLIGHT


ARTICLESTHE ONG SPOTLIGHT: A Message from Mark Caskey,President, Steel Nation .............................. 3

WATER MANAGEMENT: Green Chemistry for Cleaning Water that Otherwaise Might ............... 6-7

HEALTH & SAFETY: The Importance of Women’s FR Garments in the Oil & Gas Industry ................ 10

ENVIRONMENTAL MANAGEMENT: Going to Extremes ......................................................... 14-15

INDUSTRY INSIGHT: Marcellus, Utica Shales Take the Spotlight ........................................................ 18

INDUSTRY INSIGHT: Shale Oil & Gas 2014 Top Five ................................................................. 20-23

NEW TECHNOLOGY: MVP FracTM Same Proppant, Greater Distribution ............................................. 26

LEGAL & FINANCE: Patents: Increase Sellling Price, Open New Markets, and Reduce Liability ... 28

ADVERTISER INDEXAIR & TEK ............................................................. 9ALPINE ELECTRIC ................................................ 9BRAWLER INDUSTRIES, LLC ............................ 30BRI-CHEM ............................................................. 4CALU ................................................................... 11CATS .................................................................... 17CHANCELLOR INSURANCE ............................... 17CPI SERVICE ....................................................... 12DA LUBRICANTS ................................................ 11D&S INDUSTRIAL PRODUCTS .......................... 16E-FINITY.............................................................. 19ERNST SEED ....................................................... 29ETC ........................................................................ 9EXTERRAN ............................................................ 5FAIRMONT SUPPLY ............................................ 15GOODWIN PUMPS - XYLEM .............................. 19HETRICK MFG, INC ............................................ 19HUNTER TRUCK SALES ..................................... 15JH TOMBLIN FENCE CO ..................................... 17JM MILLER .......................................................... 11L&L BOILER MAINTENANCE .............................. 9LEE REGER BUILDS ........................................... 19LEE SUPPLY .......................................................... 7LYDEN OIL COMPANY .......................................... 8MACHINERY STREET ......................................... 16MAC SAFETY INC ............................................... 12MCCLUSKEY & ASSOCIATES, INC .................... 11MID-ATLANTIC STORAGE ................................. 17MIDSTREAMPHOTO.COM ................................. 19MJ PAINTING CONTRACTOR ............................. 11NORTH AMERICAN FIELD SERVICES ................. 9ONG LIST ............................................................ 11ONG ONE CALL .................................................. 25PREMIER SAFETY & SERVICE INC ................... 29PSB ...................................................................... 11

RIGMAIDS ............................................................. 9RJR SAFETY INC ................................................. 17SHALE ENERGY BUSINESS BRIEFING ............. 19SHALE MARKETS ................................................. 9SHALE MEDIA GROUP ....................................... 12SHANNON SAFETY ............................................ 19STEEL NATION ..................................................... 1TANK CONNECTION ........................................... 25TOTAL EQUIPMENT COMPANY ......................... 11TRI TOOL .............................................................. 2UNIT LINER ........................................................... 5VULCAN OILFIELD SERVICES ........................... 17WEAVERTOWN ENVIRONMENTAL ................... 11

CALENDARSASSOCIATION MEETINGS ................................... 4NETWORKING EVENTS ..................................... 15TRAINING & WORKSHOPS ............................... 17UPCOMING EVENTS .......................................... 24

EVENTSALTERNATIVE FUELING EXPO ......................... 13NAPE .................................................................. 27MARCELLUS-UTICA MIDSTREAM ..................... 32SHOWCASE ONTARIO 2015 .............................. 7

CONTACT US FOR ADVERTISING,INFORMATION OR MAILING LIST CHANGES:


P. O. Box 1441 • Oak Hill, WV 25901855-269-1188

Fax: 304-465-5065E-mail: [email protected]

The Northeast ONG Marketplace will not be liable for any misprint in advertising copy which is not the fault of The Northeast ONG Marketplace. If a misprint should occur, the limits of our liability will be the amount charged for the advertisement.

We do not assume responsibility for the content of advertising or articles herein. Any warranties or representations made in the advertisements are those of the advertisers and not The Northeast ONG Marketplace.

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OGIS New York | April 20-22, 2015New York, NY - www.ipaa.org

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January 2015

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By: Timothy J. Drake, Ph.D., Vice President of Marketing and Product Development, Zinkan Enterprises, Inc. &Greg Conrad, Global Segment Manager, PeroxyChem

The Rise of Hydraulic FracturingOver the last 10 years, hydraulic fracturing has reached extraordinary levels and resulted in significant improvements in technology and economic benefits. One of the largest consumed materials in the process of converting a potential well into and producing well is water. Being one of the world’s most precious resources, it is often a concern to the industry on water availability when planning a new well-site. In addition, after the well is producing, water flow back must be captured and removed. One of the main options for operators is injection wells. An injection well is a device that places fluid deep underground into porous rock formations, such as sandstone or limestone, or into or below the shallow soil layer. These fluids may be water, wastewater, brine (salt water), or water mixed with chemicals. The use of these injection wells can be costly for operators so alternatives to disposal have become important to the industry. One such option that recently has gained traction is the treatment of the water so that it can be repurposed. Unfortunately, not all treatment processes are cost effective or offer environmentally friendly chemicals.

Water Management, SimplifiedPeracetic acid (PAA) is a liquid biocide designed to be added “on-the-fly” in the hydraulic fracturing process for use with fresh water up to very heavy brines. PAA is a versatile oxidizing biocide approved for decades by the U.S. Food and Drug Administration for use as a no-rinse antimicrobial agent for red meat and poultry. In addition, PAA has proved its value as a multifaceted water-management tool at hundreds of unconventional well sites in the U.S. Producers operating wells in several states, including all of the major U.S. shale plays such as the Permian

basin, are incorporating PAA into integrated chemical treatment programs as a biocide to control planktonic and sessile bacteria.

The chemistry is delivered to the site ready for deployment using procedures and handling methods

perfected by Zinkan/PeroxyChem and utilizes decades of knowledge accumulated in other industries in addition to the oil and gas industry. The product can be deployed to treat surface water in ponds and pits in addition to treating water on the fly during hydraulic fracturing operations using a mobile manifold design uniquely suited for PAA. PAA also can cut through organic and inorganic contaminants to eradicate living species in the complex microbiomes of flowback and other produced wastewater to condition it for recycling or disposal. VigorOx® Proven TechnologyVigorOx® Oil&Gas, PAA, an equilibrium product of hydrogen peroxide and glacial acetic acid, has moderate oxidizing properties. PAA reacts with sulfides and amine sites in proteins in addition to inorganic materials. PAA is an oxidizing biocide that breaks down to water and acetic acid (vinegar) which in turn allows the product to

be considered “GREEN”. Often water that appears unusable, after treatment clears within hours and can be repurposed quickly.

Post-Treatment Pre-TreatmentAs an oxidizing biocide, PAA reacts with microbial cell proteins to provide its biocidal effect. PAA is considered a “cell wall membrane disrupter” instead of the more traditional biocides labeled as “metabolic poisons”. Unlike stronger oxidizers, PAA does not interact with hydrocarbons, which permits it to provide effective biocidal activity in a system with a high organic load.

For oilfield fluids, PAA oxidizes hydrogen sulfide (H2S) breaking it down into elemental sulfurs. The pH of the water determines whether it is broken down into a sulfate or sulfite. This provides odor control, safer work environment plus enhances oil and gas products with sulfur contaminant issues. PAA will also clean up and prevent iron sulfide (FeS) emulsions and FeS oilfield equipment scale.Recycling Produced Water for Hydraulic Fracturing

To date, PAA has been deployed by many oil and gas producers using PeroxyChem’s proven techniques that allow the recycling of up to 100% of produced and flowback water for new hydraulic fracturing operations. The produced and flowback water is coming back with lower microbes, iron, and H2S levels than observed prior to starting the PAA program, demonstrating a positive effect on the entire formation.

PAA has been applied as part of a successful produced water recycling program to support hydraulic fracturing operations in a field in which wells experienced H2S souring and iron buildup.

In an example field application, produced water enters a frac water tank battery from many sites, so water quality can vary considerably. These tanks are connected in series to permit solids to settle before being delivered to the horse power for injection. PeroxyChem’s patented chemical and process utilizes specialized mixing equipment incorporated in the water transfer manifold ahead of the frac tanks allowing the PAA to react with the microbes, iron and hydrocarbons allowing them to settle and flock out in the tanks. This method delivers a homogeneous, clean, microbe free water to the horsepower that results in a reduced friction reduction chemical demand lowering the operators overall cost.

After more than a year of treatment, levels of microbiological contamination, iron concentrations, and H2S souring in new produced waters are noticeably lower, ensuring a higher quality final product and easier water recycling.

Where retaining ponds and pits are in use, the performance of PAA has also been compared with that of sodium hypochlorite (bleach), another oxidative biocide

GREEN CHEMISTRY FOR CLEANING WATER THAT OTHERWISE MIGHT BE DISPOSED

Post-Treatment Pre-Treatment

WATERMANAGEMENT

January 2015

used in the treatment of freshwater pits for fracturing operations. Initial chemical treatments were applied to knock down microbiological contamination already present in the pits, followed by regular periodic doses of each treatment.

The tests showed that PAA had biocidal effects within established biological mats (sessile bacteria) on pond bottoms that were not touched by hypochlorite. The better light and temperature stability of PAA over hypochlorite also enhanced its relative biocidal effect. In addition the bleach contributed to the formation of Halogenated Organic Compounds and THM’s which PAA will not. Trihalomethanes (THMs) are chemical compounds in which three of the four hydrogen atoms of methane (CH4) are replaced by halogen atoms. THMs are also environmental pollutants, and many are considered carcinogenic.

VigorOx® Oil & Gas Residual BenefitsPAA is shown to effectively remove microbial contamination; to significantly reduce or eliminate H2S in water, oil, or gas in addition to removing oil-wet FeS emulsions and scale from production equipment and well structures. Unlike bleach, PAA at a 6 ppm residual improves longevity and assures combatting SRB and APB in water used in all aspects of the oil and gas industry.

• On-site loading is determined before the frac• Fresh water needs <75 to 150 ppm VigorOx®• Produced water may need up to 650 ppm VigorOx®Several years of use in the oil and gas industry plus decades of safe and effective usage in other industries are proof-positive that when handled properly, PAA proving to be a valuable new water management tool in the oil and gas industry.

VigorOx® Oil&Gas is the safest biocide, algaecide or fungicide available, and it breaks down into environmentally benign biproducts. Although it must be handled with care as with any chemical the proper training and PPE has been made available. PAA is used in our process in small quantities as compared to other bactericides.

For more information, please contact Timothy Drake, Vice-President of Marketing and Product Development and Zinkan Enterprises, 800.229.6801 [email protected]

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By: Sherryl Stoner, TECGEN® FR Garments

The number of women working in the oil and gas industry continues to increase each year. Just this past June (2014), it was reported by the Bureau of Labor Statistics that there are nearly 34,000 female employees in the industry. And, according to a 2014 study from the global information company IHS Reports, 185,000 women could be in oil and gas related jobs by 2030.

To accommodate this industry growth, companies need to evolve personal protection programs and take the steps necessary to ensure female workers are outfitted properly for a safe work environment. Specifically, flame-resistant (FR) garments are traditionally designed in two ways: for a man’s proportions or for unisex proportions. However, in today’s oil and gas industry, women are taking on jobs that require constant FR wear. Unfortunately, garments that fit the demands of the job from a body shape and comfort standpoint are not readily available for women.

When specifying women’s FR garments, keep the following guidelines in mind.

1. Safety is Key. Rosie the riveter may have rocked the look, but rolling up your sleeves in a workplace where FR apparel is required is not an option due to the safety hazards it presents. When women wear unisex or men’s FR garments, personal modifications like this are often made for a better fit. However, this can increase the likelihood of an accident in the workplace because skin may be exposed in the process. Additionally, oversized clothing can get caught in machinery; coveralls with long bodies could cause women to trip and fall and ultimately, cause problems for performing everyday tasks.

These hazards can be avoided by selecting women’s FR garments that are designed in a range of sizes to accommodate different body types. From extra-small to plus size, options should be available for all sizes. Then, ensure the fit of the shirts, pants and coveralls on your employees. For an optimal fit:

• Shirtsleeves should be short enough that they do not need be rolled or cuffed.• Shirttails should be long enough that they can be tucked in, but short enough in the body to eliminate bunching when tucked into pants.• Coveralls should be fitted for woman’s hip and waist sizes so excess fabric does not get caught on equipment handles or affect mobility. • The body of the coverall should fit the wearer, not just the sleeve and pant-length. • Select a shirt that has adjustable cuffs. Women’s wrist sizes can vary, so an adjustable cuff can help with keeping shirtsleeves from riding up.

2. Comfort Means Productivity. Discomfort Could Mean Hazards. An uncomfortable worker may have discomfort on their mind rather than the job at hand, and a distracted worker can be hazardous as well. And, a misfit uniform could preclude workers from bending, lifting or moving fluidly. Women need the right tools for the job – and that means FR garments that are fitted appropriately.

These attributes for safety are also attributes of comfort. But in addition to size and cut, take into consideration a garment that is suitable for temperature to ensure

comfort. In fact, a recent study found FR garment wearers consider light weight and breathability two of the most important aspects of comfort in FR garments.

• Examine the fabric quality and traits of the FR garment to ensure it is engineered for moisture-wicking and breathability. This is important for all seasons.• Consider a garment where the FR technology is inherent (woven into the fabric). This eliminates any heavy FR coatings that could make the garment uncomfortable or stiff.• Provide specific instructions as to what is acceptable on-site for extreme temperatures. Hot conditions should not permit rolled-up sleeves and cold temperatures should not introduce non-FR hoodies or other flammable street wear.

3. Uniformity: Select Manufacturers with Garments for Both Men and Women. To enhance the safety of all workers, today’s FR garment programs must include options for both men and women. The women’s garment options should align with the garments selected for men. When sourcing FR clothing, ensure the manufacturer offers the same fabric and features in garments for both women and men.

Women’s garments may differ from men’s in the sizing, cut and small details like button dimensions, but ensuring that logos, colors and styles remain consistent on all garments creates brand uniformity in the workplace.

A women’s FR program is about equipping female employees with the right tools to help improve performance, comfort and safety on the job. To provide an optimal environment for oil and gas workers, everyone should be comfortable, functional and safe from head-to-toe.

1FR Market Research Study – Bainbridge Strategy Consulting. June 2014.

Sherryl Stoner started her career in FR garments in 1996 with a uniform rental company. During her time there, Stone worked in customer service inside sales, outside sales and outside sales specializing in fitting new customers in garment programs. Stoner has been with TECGEN® for two years and currently serves as the Customer Service Manager for Inside Sales and Quality Assurance. To learn more about TECGEN® and FR garments, visit http://industrial.tecgen.com/. PHOTO: TG_Womens FR Coverall; TG_Womens FR ShirtCREDIT: TECGEN® FR Garments

THE IMPORTANCE OF WOMEN’S FR GARMENTS IN THE OIL AND GAS INDUSTRY

HEALTH& SAFETY

January 2015

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By: Nicole Andrews, National Sales Manager, Matrax Inc.

When a thermoplastic matting system is chosen as the best solution for a project it is important to consider the effects extreme temperatures will have on the system’s performance. All thermoplastic materials will soften when exposed to high heat and will become brittle when the temperature is cold. Although having a density only slightly higher than low-density polyethylene (LDPE), HPDE has stronger intermolecular forces and tensile strength than LDPE. HPDE can also withstand higher temperatures (120oC/248oF for short periods, 110oC/230oF continuously). HDPE maintains its physical properties over a wider range of temperatures than other thermoplastic materials.

Without modifications, on the high temperature end the HDPE will soften and lose its strength around 230°F and on the low end become brittle as the temperature approaches its “glass” transition temperature of -80oC (-112oF). The load bearing capacity and resistance to cracking will vary throughout this temperature range as it becomes softer at high temperatures and less ductile or brittle at lower temperatures. A primary attribute important to the end-user is the behavior of

the HDPE matting system as daily temperature swings cause expansion and contraction. Matrax products are designed with a unique “shiplap” connection that incorporates the expansion/contraction of the panel within the useable range without buckling, warping, disconnecting or otherwise suffering degradation and loss of or a reduction in use or serviceability.

Matrax, Inc. is a solution-based design, engineering, manufacturing and distribution company specializing in a range of matting products including plastic, timber and steel. Matrax products are designed to withstand a wide range of environmental conditions including variations in temperature, strong winds, variable moisture conditions, and chemical spillage. Our

products are also durable and can serve as temporary flooring that can easily hold palletized freight and permit the safe movement of fork lifts without buckling, bowing, or cracking. Other applications include temporary ground covers to reduce turf disturbance, temporary access/construction roads, and temporary construction platforms replacing concrete, an expensive alternative to place and remove.

Two recent plastic matting applications presented challenging tests of our products in extreme conditions. In both cases Matrax demonstrated the flexibility of our products design and application in responding to the needs of our customers.

Matrax worked with the Chilean port of Puerto Chacabuco to upgrade the existing infrastructure by installing our plastic matting system as part of a modernization of its port facilities in accordance with the National Fishing Services of Chile (known as “SERNAPESCA). The requirements for the Matrax matting used in this application were that it be non-porous, capable of handling vehicles, have the ability to withstand high levels of moisture temperatures, ranging between 93oF (33.9oC) and of 18oF (-7.8oC), and strong winds reaching gale force during the winter months of July and August. Puerto Chacabuco was awarded the official “Biosafety Certification” and the facilities are now being used regularly. The Matrax plastic matting solution has become the new standard for facilities in Chile trying to achieve certification under the new legislation.

In contrast to the Chilean project conditions, Matrax, worked with its partner, Tegra Structures, to supply Suncor Energy with the same Matrax matting system as a solution for flooring requirements in temporary fabric buildings located in the very harsh and cold climate of Fort McMurray, Alberta, Canada.

Given the extreme cold temperatures experienced in northwestern Canada, extending to typical winter temperatures of – 6°F or below, the load bearing capacity and durability of Matrax products under vehicular loading needed to be considered. The alternative under consideration was to construct an expensive concrete floor that would have required a prepared subgrade, placement of an open-graded stone a minimum of six inches in thickness, a plastic vapor barrier, and likely 4-6 inches of at least 4,000 psi steel reinforced concrete. The plastic Matrax matting system is a perfect solution to solve this problem. The extremely low temperatures were beyond the capabilities of the standard plastic products so Matrax added “plastomers” (materials designed to alter the crystallinity of the HPDE) to the formula and manufactured flooring panels specifically for this Suncor Energy application. These modifications resulted in a significant savings and a product with excellent ductility, resistance to cracking and higher impact

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ENVIRONMENTALMANAGEMENT

January 2015

resistance; all important considerations for a floor supporting heavy freight moving on forklifts.

Our experience in this harsh climate and the success of our design and engineering team in making modifications to suit this cold weather application, is an example of Matrax’s ability to supply products that can withstand usage in cold weather climates such as those routinely in Michigan, Pennsylvania, West Virginia and Ohio, for use as temporary flooring, access roads, stable construction platforms and pads and plates for cranes and heavy equipment.

From our distribution points in New Jersey, Maryland, Pennsylvania, Ohio, and Indiana, Matrax is positioned to move our products to cold weather sites in a short period of time.

These project examples illustrate the depth of knowledge, flexibility and adaptability of the Matrax organization. Matrax excels because it analyzes a client’s operations carefully and develops ideal solutions for the specific application. Many years of combined material, manufacturing, design and field experience allow Matrax to develop products for extreme conditions. With a flexible approach to each project and a willingness to listen very well, Matrax takes a leadership position in the manufacturing and supplying of quality matting products. Our slogan “One Size Does Not Fit All” signifies our commitment to understanding the different needs of each client and responding to those needs on time and with the product most suitable for the application at hand.

If you would like more information about this topic, please contact Nicole Andrews at 855-575-7512 ext. 702 or email at [email protected].

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By: Frank Nieto, Senior Editor, Hart Energy

The Northeast oil and gas industries have been transformed in a way usually reserved for the movies, but more hard work is necessary to achieve full stardom.

You could be forgiven for thinking the development of the Marcellus and Utica shales sounds like something out of a Hollywood movie. The setup is pretty irresistible: a down-on-its-luck region in desperate need of new industry combined with a nation requiring more energy supplies and economic growth. Just as it seems that all hope is lost, an industry booms in the down-on-its-luck region and creates new jobs that are helping to revitalize not just the region, but the country, all while changing the global energy landscape.

And yet, that is what happened in the past decade in the Appalachian Basin. The Marcellus and Utica shales have turned around the local economies of Pennsylvania, Ohio and West Virginia by bringing in new jobs and new workers, many of whom are returning to their home states after having to leave to find work in other states. The development of these plays, as well as other shales around the country, is helping to transform the U.S. from an energy importer to an energy exporter.

According to data from the Pennsylvania Department of Community & Economic Development, Pennsylvania currently stands as the second-largest generator of electricity and producer of natural gas in the country. In addition, the state is the 19th largest producer of crude oil. This production has helped Pennsylvania add more than 43,000 new jobs over the last three years.

The notion that the U.S. could once again be an energy superpower was an absurd one at the start of this century. Less than ten years ago the conversation surrounding U.S. energy wasn’t about self-sufficiency, but about how many of our ideals we would have to relinquish to maintain our lifestyles. We were expecting to make a deal with a devil of some sort whether they

were Venezuelan, Russian or Middle Eastern, that had the potential to pose risks to national security while also further mortgaging our economic future.

Compare that to the current situation: Not only is the U.S. producing vast amounts of natural gas from shale plays—we’re about to export it to both free trade agreement (FTA) and non-FTA countries; not only are we producing so much crude that we are backing out imports, but there are discussions in Washington to decide if we could actually export crude.

During the latter stages of Bill Clinton’s presidency, many pundits were discussing whether the U.S. had entered a post-industrial economy based not on the production of goods and services, but brands, entertainment and logistics. Now U.S. companies are not only restarting domestically located factories, but foreign companies are building new manufacturing plants in the U.S. Even with the higher wages that American workers make, it is more economic for manufacturing plants to be close to the source of petrochemical production.

The Marcellus and Utica shales are also close to demand centers in the Northeast—including major cities like New York, Philadelphia, Pittsburgh, Boston and the rest of the New England states—as well as the emerging markets in the Southeast.

There are pipelines in place that were originally designed to move oil and gas from the Gulf Coast to some of these demand centers that are now being rerouted to account for the new reality in the gas industry. The U.S. Energy Information Administration (EIA) announced that natural gas pipeline systems are being renovated to allow bidirectional flow of up to 8.3 billion cubic feet per day out of the Northeast.

Much of the gas from the Marcellus and Utica shales will be used by utilities in New England and New York. In 2013, natural gas represented 46% of electric generation in New England and is expected to increase to 55% by 2022. This past winter gave a real indication to how much increased transportation capacity is needed in these markets.

As temperatures got extremely cold, spot prices spiked around the country, moving from around $3 to $4 per million Btu (MMBtu) to double digits. The New York and New England markets saw the largest increases as prices approached $100/MMBtu primarily due to the limited access routes.

The biggest change for utilities is the need to make long-term purchasing agreements in order to support the construction of new pipelines. New England utilities aren’t allowed to recover long-term firm transportation charges in their rates. This means that the traditional contracts used by midstream operators are difficult to implement as there is no guarantee that costs can be recovered without a 10- to 20-year firm commitment from local distribution companies.

In an effort to meet New England gas demand, an alliance was formed between Iroquois Gas Transmission System LP and Spectra Energy and Northeast Utilities’ Access Northeast Project. The alliance will aim to provide the region with additional access to Appalachian gas supplies.

During the project’s open season, shippers will be able to select from multiple receipt point options along the Algonquin pipeline system, including the Iroquois pipeline system at Wright, N.Y. Additionally, shippers will have the opportunity to choose from Algonquin’s receipt points with other existing interconnecting pipelines.

In many ways, the full-fledged return of the oil and gas industries to the Appalachian Basin is similar to a homecoming that happened in the same region this summer: the return of LeBron James to the Cleveland Cavaliers. After famously “taking his talents to South Beach” and winning two NBA titles with the Miami Heat, James decided to come back to play for the team he’d started his career with as a teenager. This return guarantees a certain level of success: The Cavaliers will almost certainly return to the playoffs for the first time since James left for Miami, but a lot of work is still to be done to make them title contenders. The same holds true for the development of the Marcellus and Utica shales: The region is guaranteed a certain level of success, but to truly become a world-class production center more infrastructure expansion will be necessary in the coming years.

The challenges and opportunities that these two plays present will be discussed in-depth at Hart Energy’s 6th annual Marcellus-Utica Midstream conference and exhibition that will be held Jan. 27-29, 2015 at the David L. Lawrence Convention Center in Pittsburgh, Pa. Visit www.marcellusmidstream.com to register and view the full conference agenda.

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INDUSTRYINSIGHT

By: Rick Stouffer, Senior Energy Editor, Shale Energy Business Briefing; & Kristie Kubovic, Director of Communications, Shale Media Group Edited By: Mindy Gattner, Editor, Shale Media Group

With 2014 behind us, it’s time to take one last look back on the year that was. Some of 2014’s most newsworthy stories included: the Ebola epidemic in Africa; the rise of the new terror threat, ISIS; the disappearance of the Malaysia Airlines plane; the protests in Ferguson, Missouri; and the rise of unconventional shale oil and gas industry in the United States.

That last one may not have made the mainstream media; however, we, here at the ONG Marketplace, Shale Media Group, and Shale Energy Business Briefing recognize the impact hydraulic fracturing and horizontal drilling has had on the region, the United States and the world this past year. As a result, here are our Shale Oil and Gas 2014 Top Five stories for the industry:

#1: Ethane Cracker Takes Major Step Forward by Shell Exercising Property Option

For nearly three years, Shell Chemical has methodically plodded along concerning its proposed “world-class” ethane cracker, which has never progressed past the “may be built on land in Beaver County, PA, near Monaca,” stage.

Permits have been applied for, discussions with state Department of Transportation officials concerning possibly relocating roads to a more cracker-friendly location have been held, numerous public forums have taken place, and ethane suppliers have been secured. The list of preliminary steps taken by the Royal Dutch Shell unit is long and as one would think, expensive.

Still, no decision to break out the gold-painted ceremonial shovels for photos has been made – at least publicly.

Shell is considering construction of a cracker, which would take ethane supplied from the Marcellus and Utica Shale plays, and break it into primarily ethylene, a building block for numerous plastics.

One estimate places the need for construction workers for the complex at 20,000, with the process taking years to complete.

However, in early November, Shell took what many considered a huge step on the road to a cracker when it said it’s exercising its option on the Horsehead Corp property near Monaca.

“Shell can confirm the statement by Horsehead Corp that we are exercising our land option to purchase Horsehead’s property in Beaver County, PA, having determined the site is suitable for the potential development of our proposed facility,” Shell said, in a statement. “However, we have not made a final decision to build the project; we will make that decision when our full project evaluation is complete.”

“The land purchase is a necessary step for Shell to advance the permitting process and allows us to proceed with some preliminary site development work,” according to the Shell statement.

Several hurdles must be crossed before Shell can make a final investment decision. The company is in the engineering and design phase for the project, which also would include more than one polyethylene facility onsite.

Major regulatory permits, such as a state air permit, must also be green-lighted. Many of the permits Shell is seeking require it to be the owner of the property, officials said, explaining the timing of the land purchase.

The entire evaluation process has been slowly moving forward since spring 2012, when Shell signed the option with Horsehead on the 340-acre property. The company extended the option three times, paying $3.9 million for the extensions.

Last January, Horsehead began demolition on the former smelter site, with Shell paying for the work, slated to be completed early next year.

#2: Lower Crude Oil Prices a Stepping Stone to Idled Rigs, Possible Layoffs

This past June, the price of crude worldwide began to dip from the roughly $107/Bbl price point it had become embedded in.

Not a tremendous amount of attention was paid to what was seen by most inside and outside the industry as a slight, very temporary, blip.

Six months later, the slight blip has become a living nightmare not only for oil producers, drillers, and anciliary services providers, but soon could negatively impact businesses whose only contact with the industry are the workers who frequent their grocery stores, restaurants, and beauty salons.

The pace of issuing new permits to drill new wells has plummeted, right along with cuts in producers’ capital expenditure (CAPEX) budgets for 2015.

The next step is expected to be pulling drill bits out of the ground, aka, laying rigs down.

“We believe permitting trends are the first step in watching drilling rig/completion crew activity as CAPEX budgets in 2015 begin to take effect; this should quickly show up in the numbers of OFS [oilfield services] companies, depending on their basin exposure before impacting company, regional, and US production in late-2015/early-2016,” Irene Haas, Managing Director, and Jason Wangler, Analyst, with

SHALE OIL AND GAS 2014 TOP FIVE

January 2015

Wunderlich Securities, wrote in a Dec 22 research note.

“The hardest hit basin on the permitting side so far has been the Williston, with permits really showing the effect of low oil prices in the partial month of December,” Haas and Wangler wrote.

US producers haven’t begun laying down drilling rigs yet, but experts say 2015 capital expenditure budgets must be cut or chopped, depending on the company.

“Lower oil prices mean an individual well will turn cash flow positive much later in its life,” Kathryn Downey Miller, a Partner with the Lakewood, CO-based consulting/analytics firm BTU Analytics, said in a blog post in December.

“Why does this matter?” Miller continued. “Because the primary source of capital for new drilling is cash flow from operations. And the most difficult time to obtain capital from banks and the capital markets is when the market becomes anxious about commodity prices.”

Miller told SEBB the full impact of lower crude price is being delayed for some producers due to hedging, but smaller, more leveraged producers are already feeling the impact and announcing lower capital budgets for 2015, including on average 20% to 40% cuts.

The number of permits let falling, CAPEX plummeting, producers contemplating laying rigs on the ground – don’t forget the impact of low oil prices on the junk bond market – where many cash-starved companies went to finance their operations over the last half-decade.

Producers, midstreamers, and oilfield services firms levered up over the last few years, as money was readily available at great rates and, when drilling $8 million, $9 million, $10 million wells, cash flow assistance is a way of life.

The oil price plunge is deepening concern among bond investors that the least creditworthy oil players will have a difficult time staying current with their obligations, and prompting bankers to pull in the credit reins as revenue slumps.

“We’ve already reached the point where the public debt markets are closed to low-rated companies,” Ben Tsochanos, a New York-based Analyst with Standard & Poor’s, told SEBB.

With the market oversupplied, growth in higher-cost plays is expected to slow, resulting in lower demand for oilfield services, including rigs and completion services.

Lower demand for services and equipment will lead to cutbacks in personnel, experts say.

#3: Marcellus/Utica Production Projections Up – But Tracking can be Tricky

Natural gas production in the Marcellus Shale play can be illustrated with what some industry watchers say are whacky numbers, but all data continue trending just one way: upward.

The amount of gas pulled from the ground in the Marcellus went from near zero in 2005, to an average in 2007 of 760.06 million cubic feet per day (MMcf/d), 1.12 billion cubic feet per day (Bcf/d) in 2009, to 2.20 Bcf/d one year later, according to Denver-based consulting firm BTU Analytics.

From 2011 through 2014, average Marcellus production jumped from 4.31 Bcf/d, to a whopping 14.42 Bcf/d, BTU Analytics told Shale Energy Business Briefing (SEBB).

Where does production go from here? Speakers at two recent conferences, one held in Canton, Ohio, the other in Pittsburgh, said the Marcellus/Utica combined will be flowing 30 to 32 Bcf/d by roughly 2020.

“I have no doubt the 30-32 Bcf/d production total can be accomplished with intensive drilling over the next five years,” Penn State Professor Terry Engelder told SEBB.

Before the Tri-State area breaks into a collective “Happy Days Are Here Again,” experts say there are potentially numerous potholes that have slowed or could even stop the Bcf production march.

“Currently, it is only a lack of takeaway infrastructure that is constraining production growth and creating a large backlog of wells waiting to come online,” Erika Coombs, Senior Energy Analyst for BTU Analytics, told SEBB. “In fact, BTU Analytics estimates that in December, there are more than 1,500 wells that have been drilled, but are awaiting infrastructure build-out to begin producing at capacity.”

Cleveland State University Professor Iryna Lendel said at the recent Utica Summit II conference in Canton the Utica alone needs $30 billion in additional infrastructure to handle production needs.

Coombs said the well backlog, paired with what she called the “extremely favorable economics in the region,” support the firm’s outlook that production in the Marcellus will not be significantly impacted by the current weak oil price environment “and will grow by over 10 Bcf/d between now and the end of 2020.”

“Next year alone, we expect over 2.5 Bcf/d of growth due to continued drilling activity and the completion of several pipeline projects which will add over 3 Bcf/d of new pipeline takeaway capacity to the region,” Coombs told SEBB.


“Four potential stumbling blocks [to reaching the 30-32 Bcf/d production mark] would be new, restrictive regulations, a significant change in political support in

PA/WV/OH, taxation implications and/or social license issues,” Tom Murphy, Co-Director of Penn State University’s Marcellus Center for Outreach and Research, told SEBB.

#4: US Becomes World’s Largest Oil Producer – But Keep an Eye on Prices

Sometime during 2014, the exact date argued over by experts, the United States recaptured a title it hasn’t held in decades: world’s largest crude oil producer.

America’s production by one estimate has climbed more than 4 million barrels per day (MMBPD) since 2008 and, at least for now, is not falling in relation to the off-the-table drop in crude oil prices worldwide within the last six months.

Since 2008, domestic crude production has jumped nearly 49%, from 5 MMBPD, to 7.44 MMBPD in 2013 and, through the first nine months of 2014, to an average 8.45 MMBPD, according to Energy Information Administration (EIA) data.

However, most of the huge production increase in the US – which should have caused crude prices to fall -- was swallowed by what was happening in other parts of the world, summed up in one word: unrest.

Since 2008, issues, including a civil war in Libya, US and European oil sanctions on Iran, and just the usual helter skelter economy in Iraq, forced crude production in those countries down.

The 4 MMBPD of crude production the US added to the world market since 2008, plus production increases in Canada and Russia, had minimal impact on global prices because the above problems took 75% of the increase off the market, Kent Moors, Founder and Editor, “Oil and Energy Investor,” told Shale Energy Business Briefing (SEBB).

The impact of the huge increase in drilling, specifically horizontal drilling and the use of hydraulic fracturing to pry the crude from its cozy stone bed, in the US has been staggering, in terms of economic impact and more specifically, employment.

Drilling proponents say hydraulic fracturing brings good jobs and prosperity. The drilling industry supported 2.1 million jobs in 2012, across all 50 states, and could support 3.9 million by 2025, according to one study.

Another study places total shale oil and gas industry-related employment in the 10-million-employee range.

So-called unconventional drilling has led to a virtual manufacturing renaissance in the US, with companies actually bringing manufacturing back to this country from overseas due to the inexpensive oil and natural gas here.

The chemical industry alone has announced more than 100 projects worth tens of billions of dollars under construction or planned due to low-cost natural gas.Since June, crude prices have sunk by more than 40%, to roughly $60/Bbl, causing much gnashing of teeth inside and outside the industry.

The recent drop in crude prices won’t kill off the US shale oil industry, experts say, it’ll just make it more efficient.

“The party the shale plays have been having is gridning to a halt,” Irene Haas, an energy Analyst in Houston with Wunderlich Securities, told Shale Energy Business Briefing (SEBB). “Numerous companies are cutting CAPEX because they have to. Production will drop in the second half of 2015.”

Profit margins and break-even points are relative not only to the price of oil, but also to the cost of doing business, experts said. As oil prices drop, producers will renegotiate expensive oil service contracts, slash wages for their workforce, and cut perks to bring their costs in line with the depressed price for crude.

The demand for oil remains strong, which should provide an adequate floor for producers in the long run, but only after they get their finances in order, industry experts said.

#5: MLPs End 2014 with Flourish; Kinder Morgan Taking a ‘Breather’

Publicly-held master limited partnerships (MLPs) solidified their hold on the US energy industry, as more and more companies saw the financial pluses associated with the 33-year-old investment vehicle.

Shale oil and gas industry players such as Consol Energy, EQT, Rice Energy, Shell, and Antero Resources, to name just a few, sold units (as opposed to shares in a C corporation) earlier in 2014.

A total of 18 MLPs offered shares via initial public offerings this year, with more than a dozen more filing the necessary paperwork with the US Securities and Exchange Commission, waiting on better economic conditions to pull the proverbial trigger. In 2013, 21 energy-related MLPs went public. MLPs aren’t a new investment vehicle – the first MLP, Apache Oil, was launched in 1981 – but they do represent a different investment type to many investors and financial advisors.

Basically, a MLP is a publicly-traded limited partnership, recognized for their tax benefits since they are pass-through entities that generally avoid corporate income tax at both the state and federal levels since they’re classified as partnerships. MLPs must derive at least 90% of their income comes from “qualified sources” as per Internal Revenue Service guidelines.

MLP unitholders receive income distributions which are taxed at his or her tax rate.

MLPs are controlled by a general partner, which typically holds a 2% general partner interest in the MLP, plus additional partnership units. The general partner

January 2015

generally receives a percentage of the MLP’s cash flow off the top. Called incentive distribution rights, or IDRs, the percentage varies and may start low, but can quickly increase as distributable cash flow grows.

Today, there are roughly 90 oil and gas-related MLPs traded on public stock exchanges.

With interest continuing to grow in MLPs, a very unexpected turn of events occurred this past August, which caught many MLP-interested investors by surprise.

Richard Kinder, one of the pioneers in the MLP movement, CEO of MLP general partner Kinder Morgan Inc, and head of two of two huge MLPs, Kinder Morgan Energy Partners and El Paso Pipeline Partners, announced the master limited partnership format no longer fit Kinder Morgan’s purposes.

The former Enron executive said he wanted to buy the two publicly-trade partnerships that Kinder Morgan Inc had been managing – for $70 billion.

Kinder saw the future and the future was, in a GP-MLP arrangement, in which the general partner is offered unlimited units as compensation, the general partner can virtually suck the economic life out of its charges.

In Kinder Morgan’s case, after 17 years, the GP was getting 45% of the MLPs’ income. Kinder and his executives realized the structure had to change to lower the cost of capital and allow the MLPs to invest in more projects.

While Kinder appears to have left the MLP structure, at least one MLP expert says

that’s not exactly the case.

“Rich Kinder didn’t exit MLPs, he took a detour,” Ethan Bellamy, Managing Director at RW Baird & Co, told Shale Energy Business Briefing (SEBB). “I expect he will remain a key player in the MLP sector, either through a carve out of a new MLP from the new Kinder Morgan Inc, or the acquisition of an existing MLP’s general partner that would allow him to drop in assets over time.”Bellamy expects MLPs to be challenged in 2015 by what he called a “flagging oil price and overall lackluster performance from the energy complex.” “Think of them as the best house in a bad neighborhood,” he told SEBB.

Looking Toward 2015

While cracker plants, dropping crude oil prices, Marcellus production, US becoming the world’s largest oil producer, and MLPs may have taken the top spots for the shale oil and gas industry in 2014, only time will tell what 2015 will bring. Politics and short term oil and gas prices will surely play pivotal roles in 2015, along with the accelerated midstream construction and the increased talk of exporting. Whatever the case, the shale oil and gas industry has altered the regional and national outlook in just a few short years and looks to continue doing so in 2015.

Shale Media Group (SMG) is the news, information, and education resource dedicated to the shale oil and gas industries by messaging across video, Internet, publications, events, and radio. For more, check out ShaleMediaGroup.com to access all platforms, including SMG’s latest news delivery system - Shale Energy Business Briefing (SEBB), an ad-free subscription based service, where subscribers receive a real-time, daily email, featuring concise, hard hitting shale news 7 days/week, 365 days/year. To sign up, go to sebb.us. In addition, join us on January 22 for our next Elite Energy Event in at the Holiday Inn in Monroeville, PA from 5-8pm. Rick Stouffer is the Senior Energy Editor at Shale Media Group. Contact him at [email protected]. Kristie Kubovic is the Director of Communications at Shale Media Group. Contact her at [email protected].


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JANUARY13-14A&WMA P2: Increase Profits Reduce PollutionCincinnati, OH | www.awma.org

27-29Marcellus-Utica MidstreamPittsburgh, PA | www.marcellusmidstream.com

3-5SPE Hydraulic Fracturing Technology ConferenceWoodlands, TX | www.spe.org

3-5IADC Health, Safety, Environment & TrainingHouston, TX | www.iadc.org

11-13NAPE SummitHouston, TX | www.napeexpo.com

17-18Ohio Energy Management ConferenceColumbus, OH | www.mecseminars.com

23-25Water and Wastewater Equipment Treatment and Transport ShowIndianapolis, IN | www.wwett.com

24-26Alternative Fueling Expo & ConferenceMonroeville, PA | www.alternativefuelingexpo.com

1-5SPE Production and Operations SymposiumOklahoma City, OK | www.spe.org

3-5SPE Digital Energy ConferenceWoodlands, TX | www.spe.org

22-26SAGEEPAustin, TX | www.eegs.org

24-25SPE Coiled Tubing and Well Intervention ConferenceWoodlands, TX | www.spe.org

25-26WVMA Marcellus to ManufacturingCharleston, WV | www.wvma.com

8-9AADE National Technical ConferenceSan Antonio, TX | www.aade.org

8-10Showcase OntarioWindsor, ON | www.showcaseontario2015.com

14Michigan Petroleum ConferenceTraverse City, MI | www.michiganoilandgas.org

15-17NAPE PittsburghPittsburgh, PA | www.napeexpo.com

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By: Benjamin Carlier, Trican

Efforts to improve proppant transportation have always focused on modifying the fluid system. Trican has turned this on its head and looked at modifying the proppant itself.

In tight oil and gas formations, it is common to use low-viscosity water-based fluid and proppant combinations pumped at a high rate. These slick water treatments are effective, but do present some challenges. The lack of viscosity can result in poor proppant transportation, leading to increased settling or duning, and less effective proppant placement. Modifying the design of a traditional slick water treatment by adding a novel chemical to the proppant and 5%-20% nitrogen, the limitations of this type of stimulation fluid can be reduced.

The MVP Frac™ (Maximum Volume Placement) process consists of a non-energized component (Trican’s FlowRider® additive) and an energized component. MVP Frac transmits a hydrophobic coating onto the proppant surface, creating an attraction to gaseous phases present in the fluid, making proppant more buoyant without increasing fluid viscosity. This easily fluidized proppant has enhanced transportation characteristics, allowing for greater propped fracture height and length, and greater overall conductivity.

Both components help to dramatically reduce the settling of proppant that occurs during slick water fracture treatments, without affecting the viscosity of the fluid. MVP Frac also enables the customer to reduce the volume of water required to pump the treatment - by pumping higher sand concentrations made possible with enhanced proppant transportation.

Improving the performance of the slick water treatment is achieved by modifying the proppant’s surface properties. A novel surfactant preferentially coats the surface of the proppant (including ceramics and resin coated proppants), causing the surface to be hydrophobically modified. The enhanced surface properties of the proppant creates an attraction between the proppant surface and nitrogen gas, in effect, surrounding the particle with a thin layer of gas and thus increasing the buoyancy of the proppant in water. These enhanced properties allow for improved proppant distribution, deeper proppant penetration within the complex fracture network, increased proppant pack volume, and increased maximum proppant concentration that can be placed. Improving proppant placement and increasing the volume that the proppant occupies within the fracture enhances the fracture network conductivity, improving the productivity of the well.

By way of example, Trican used MVP Frac in the Montney formation in Canada. Production data was collected from an operator’s wells completed during 2012 and 2013, making use of three different fluid systems: nitrogen foamed surfactant water, slick water, and MVP Frac. In 2012, slick water replaced foamed surfactant as the preferred fluid system due to logistical constraints handling large volumes of nitrogen gas, and a desire to create a longer, more complex fracture network. The lack of viscosity in the slick water design is thought to have yielded less propped fracture height. In 2013, MVP Frac was incorporated to address this issue. This created a long, complex fracture network with greater propped fracture height. All of the operator’s wells were equipped with comparable multistage, ball actuated liners with open hole packer isolation. A total of 33 wells were evaluated using publically available completion and production data.

Of the 33 wells, 11 were stimulated with nitrified foamed water, 10 completed with slick water, and 12 using slick water with MVP Frac.

The wells stimulated with nitrified foam and slick water include more than a full year of production data. The MVP wells, completed more recently, include six months of data. Production has been averaged based on fluid system used and compared on time scales with all down time eliminated. After six months, the average gas production shows a 30% increase when using MVP Frac. MVP Frac continues to be a success for Trican and its customers. In 2014 so far, MVP Frac has helped 19 Canadian customers achieve greater proppant placement in their slick water fracture treatments. Representing more than 3000 stages over 170 wellbores, MVP Frac has proven effective in creating a more conductive pathway from the reservoir into the wellbore by distributing the proppant more evenly and deeper into the fracture network. Jeff Boyer, Technical Specialist – Fracturing with Trican says, ““MVP Frac has significantly improved fracture placement success while reducing water requirements. Customers are reporting enhanced production in both oil and gas formations.” The figures below show lab samples of conventional slick water (left) and MVP Frac slick water (right). The MVP proppant pack clearly displays an increased volume compared to the densely packed sand of the conventional slick water.

For more information about Trican’s MVP Frac, contact Jeff Boyer, Technical Specialist Fracturing, [email protected].

MVP FRAC™ SAME PROPPANT, GREATER DISTRIBUTION

NEWTECHNOLOGY

settled MVP Frac 2.5 ppg 40/70 sandsettled slick water 2.5 ppg 40/70 sand

January 2015Project1_Layout 1 12/29/14 12:19 PM Page 1


By: Zale Patent Law, Inc.

The number of US Patents granted has been increasing since 2007 as evidenced by the attached graph of data from the US Patent and Trademark Office, reflecting their increased importance.

There are many innovative companies now working in the Marcellus Shale region. Many of these develop their own methods, devices and improvements on existing devices in the course of performing their functions. If small businesses in the oil and gas industry would protect their ideas with patents and employ other Intellectual Property (IP) such as, trademarks, copyrights and trade secrets, they would reap immediate and measurable benefits. Below are questions and answers relating to various ways that these small businesses can use IP to capitalize on their improvements and innovations.

IP can:• Provide a 20-year monopoly on your idea• Make your products/services unique• Allow you to charge a premium for your unique products/services• Reduce your liability• Protect your corporate identity• Add considerable value (IP assets) to your balance sheet• Allow your company leverage if cited with infringement• Bring your company from a manufacturing company to a design and licensing company• Bring in royalty income

Each of the above is described in more detail below:

Provide a 20-year monopoly on your ideaThis is the nature of a patent. A patent prevents others from making, using, selling or importing into the United States a unique device, system or process that is covered by the claims of your patent, effectively giving you a monopoly on that specific product. These last 20 years from the filing of the patent application.

Make your products/services uniqueSince there cannot be products on the market which are the same as your products, yours are by definition unique.

Allow you to charge a premium for your unique products/servicesSince your product is unique, it can command a higher premium. There can be no equal due to the patent. Reduce your liabilityIP training can be provided to your staff and employees on Intellectual Property rights and how they function. Your staff and employees will then easily recognize what they can and cannot do. This reduces the probability of copyright, patent, trademark and other types of IP infringement.

Protect your corporate identityHaving an internal corporate process that requires proper use and registration of trademarks and tradenames results in a strong corporate identity that can be enforced against those trying to use similar trademarks.

Add considerable value (IP assets) to your balance sheetProperly protected trade secrets, inventions, improvements, tradenames and authored material have significant value. Many corporations indicate an estimated value for their “intangible assets” on their balance sheet. Many times, the IP portfolio is one of the most valuable assets of a company.

Allow your company leverage if cited with infringementWhen named as a Defendant in an infringement lawsuit, if you have IP covering at least one feature of the other Party’s products, a defense would be to assert this IP against the other Party. Your company may also have trademarks or copyrights infringed by the other Party. Any of these may be used to get some leverage in the lawsuit and allow more favorable terms. Bring your company from a manufacturing company to a design and licensing companySince it is less difficult to make copies of devices that have been invented than to come up with the original concept, it is more common to have these ‘workshop’ type of companies than it is to have the innovative companies. Since there are many workshop companies here and in countries such as China, the fees charged by these companies are significantly less than those charged by the innovative companies. If a workshop company develops a unique process for making a product and does not protect it, it is a matter of time before the industry is using it. However, if a workshop company protects the idea, then it is only available to them. They now have the right to license it to other workshop companies for a fee. Many times, the profit margins for licensing technology exceed the profit margins for manufacturing, causing increased profits.

PATENTS: INCREASE SELLING PRICE, OPEN NEW MARKETS, AND REDUCE LIABILITY

LEGAL & FINANCE

January 2015

Bring in royalty incomeAs indicated above, protected IP can be licensed to those in markets which you would not be able to reach. Therefore, there is no additional competition to your products, however, there is now additional income from royalties.

What is the most cost-effective means for protecting an invention?File a U.S. Provisional Patent Application (which is less than half of the cost of a full US application) and you will have one year to see and gauge the public’s interest in the idea. After one year, a full US, international or foreign application must be filed. This filing strategy gives the small company a chance to meet with corporations to commercialize their idea without the risk of losing rights.

Aren’t patents only for the big companies?On the contrary, if you have an idea and a large company likes your product and wants to make the same product, without a patent, they are free to do so. There is very little chance of your company out marketing the large company.

Does IP ownership increase a small business’s chances of being acquired?One method is to determine how much it would cost to license the patent if you did not own it. Assuming that a typical licensing fee is 3-5% of sales, a small business making $1M in annual sales that is covered by the patent will have a value of 3% x $1M per year until the patent expires. If the small business is acquired by a larger company that now sells $100M of a product covered by the patent, the value is now 3% x $100M per year. This means that the same patent is now 100 times more valuable in the hands of this larger company. Therefore, when a large company is looking for small businesses to acquire, those with patents (a 20-year monopoly in the largest market in the world) are much more valuable due to their IP.

(Provided by Zale Patent Law, Inc. 570-878-5000, zalelaw.com, 310 Adams Avenue, Suite 200, Scranton, PA specializing in patent, trademark, copyright trade secret, and other Intellectual Property Law.)

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January 27-29, 2015David L. Lawrence Convention CenterPittsburgh, PAFrom the producers of

Extending the Reach: Meeting Global Demand

Last Year’s Conference Stats:

Sponsors21

Speakers22Attendees1,803

Exhibitors146

Hours of Dedicated Networking Opportunities9+

Surging production from the Marcellus and Utica shale plays is nothing short of staggering, and virtually every expert predicts continued growth. By 2018, Marcellus production is expected to reach 20 Bcf/d. Analysts predict the Utica could be even larger than the Marcellus. Operators are spending $18 billion in CAPEX for Northeast shale production growth in 2014 alone.

Billions of dollars are being invested on new gathering, processing, storage and transportation capacity for the region. And major pipelines like the Rockies Express (REX) are reversing course to carry natural gas from the Northeast to new markets across the country and around the world.

The Marcellus-Utica Midstream conference and exhibition puts you at the center of the action this January. Attend to hear directly from top midstream analysts and executives about the latest production estimates from the Marcellus and Utica and learn about major midstream projects in the works. Secure your seat today!

To ATTEND, SPONSOR or EXHIBIT, visit MarcellusMidstream.com

Barry DavisCEO

EnLink Midstream Partners LP

Darrell BullVice President,

Business DevelopmentCrestwood Midstream

Partners

Craig PiersonPresident

Marathon Pipe Line LLC

Karen KabinVice President,

Business Development Kinder Morgan

Energy Partners, L.P.

John Mollenkopf COO

MarkWest Energy Partners

Richard Hoffman Executive Director INGAA Foundation

MARCELLUS

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