American Oil and Gas Reporter - October 2017 - 92

ConventionSection: Permian Basin Petroleum Association

Permian Shares, Imports Technologies
MIDLAND-Secure in its position as
the nation's leading oil-producing region,
the Permian Basin takes a balanced approach to technology, judges Clint Walker,
chairman of the Permian Basin Petroleum
Association: the region's operators learn
from the rest of the nation while providing
a cutting-edge laboratory for maximizing
resource extraction.
"The Permian Basin is so unique with
its geology and lithology, and because of
its many reservoirs," says Walker, general
manager of Cudd Energy Services in
Midland. "In some areas, you can have
20 different horizons. Some operators
are bringing in technology that was learned
in other shale plays, or are using offshore
technology for onshore completions. As
far as hydraulic fracturing, those are
driving efficiencies in what we do."
He adds that Permian companies also
have benefitted from pad well drilling,
moving from single horizontal wells to
multiple wells, and now three or four
wells completed simultaneously with zipper fracs. "Basically, the service crews
never stop pumping, and the amount of
pumping time is going up exponentially
on these pads," Walker reports.
With that continued activity across
the Permian, Walker says the challenge
for industry remains the same: ensuring
trained and qualified personnel are on
location and operating equipment in a
safe manner.
As commodity prices begin to stabilize
out of this downturn, he says oil and gas
operators are turning from worrying about
markets to concerns about increased industry activity and its impacts on crews
and equipment. "When things kicked back
off, it was hard to get some of the equipment crewed," Walker recalls. "On the
service side, the intensity of the work
that we do today is way up. It was not too
long ago that a four-hour pump time was
a long day. On a multiwell pad, we recently
averaged 22 hours of pumping a day."
The service industry bases equipment
use on hours run, not by calendar time,
he points out. "Consequently, the equipment that we are putting to work out
there will wear out quicker. We will have
to replace the components quicker. That
is a challenge, because we are taking
equipment that is based on intermittent
duty and putting it into continuous duty,"
he predicts.
92 THE AMERICAN OIL & GAS REPORTER

Seismicity
The public demonstrates significant
interest in seismic activity, and PBPA
Executive Vice President Stephen Robertson predicts that interest will remain
high even while state-funded research
continues.
In the 2017 session, the Texas legislature agreed to provide $4.4 million to
fund the TexNet earthquake monitoring
system to be operated by the Bureau of
Economic Geology at the University of
Texas. According to the bureau, the TexNet
system eventually will consist of at least
22 permanent seismic monitoring stations
across the state, as well as 36 portable
seismometers to be deployed to study
future seismic events.
"With seismicity, you don't hear much
of the low-level activity if you aren't listening, but now we all are listening a lot
more intently, we are going to hear a lot
more activity," Robertson says.
"How much of that activity is unnatural
or abnormal?" he asks. "To understand
when there might be seismic activity that
isn't normal, you first need to determine
what normal is. And, what is normal in
one geographic area or even for one particular fault, won't be what is normal for
another. The TexNet system, however,
will allow the scientific community in
Texas the ability to establish a base line
for traditional or normal seismicity all
across the state, including regions with
oil and gas operations. These base lines

are absolutely necessary data points that
need to be established for the scientific
and regulatory communities. Establishing
these data, however, is going to take time."
Robertson allows that many state residents don't want to postpone further regulatory action before more seismic research
is completed, but installing the monitoring
system and collecting a solid base set of
data is the necessary next step.
"It behooves us as an industry to pay
attention to this, and we are," he offers.
"The oil and gas industry, by its very nature, is a ground-moving industry. That
is the reality. But, producers want to
make sure they operate in the most environmentally conscious and community
minded way they can, including when it
comes to seismicity. In the Permian Basin,
we not only work in the communities we
benefit and affect, we live in them. Our
families live in them."
A decrease in seismic activity in North
Texas, especially around the Dallas-Fort
Worth area, appears to have quelled a lot
of the statewide concern about seismicity,
he says. However, in certain communities,
including those in the Delaware Basin,
seismic events still are front-page news.
Robertson indicates those residents remain
very seismically aware.
He adds that it is part of PBPA's responsibilities as a trade group to continue
its public education efforts, and keep on
talking with community leaders.
"PBPA has to try to make sure that

Oryx Midstream Pipeline To Serve Delaware Basin
MIDLAND-Oryx Midstream Services
II LLC announces plans to build a regional
crude oil pipeline serving the Delaware
Basin. It says the 220-mile line will have
an initial capacity of 400,000 barrels a
day.
The pipeline will provide receipt points
in the Carlsbad, Stateline, Pecos and
Pyote areas, and deliver crude to Midland
and Crane, Tx. It is expected to be in full
service by the end of 2018.
According to the company, the pipeline
will serve every producing county in the
Delaware Basin, including Lea and Eddy
counties in New Mexico, and Loving,
Reeves, Ward, Pecos, Winkler and Culberson counties in Texas.
"As ongoing improvements are made
in drilling technologies and rig counts

in the Delaware Basin increase, production growth from Oryx's customer
base continues to be strong. With this
strong production growth comes transportation bottlenecks, an issue that this
new pipeline will address, providing
much needed take-away capacity in the
area," says Oryx Chief Executive Officer
Brett Wiggs.
Oryx I was launched in 2014 by an
initial equity commitment totaling as
much as $300 million from Quantum
Energy Partners, Post Oak Energy Capital,
Wells Fargo Capital, Oryx management
and other private investors, the company
describes. In March, Oryx II closed on
an equity commitment of $340 million
from the same sponsor group.
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American Oil and Gas Reporter - October 2017

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