American Oil and Gas Reporter - October 2020 - 23

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Universities Help
Operators Cope With
Myriad Challenges
I have been working to identify the major pain points being experienced by small to midsized independent operators. While
2020 has had more than its share of pain points for everyone in the
industry, a few jumped out that I found particularly interesting.
As one may imagine, access to capital and getting the bills
paid carried the day for most of the operations I spoke with. In a
Wichita Business Journal article, Alan Banta, president of Trans
Pacific Oil Corporation, discusses how the price of oil has made
it hard for many smaller operators to do anything but survive.
Noting that many aging company owners have weathered
multiple market cycles, Banta says he anticipates an uptick in
consolidations in coming months as operators begin to think
about succession planning and retirement. At the same time,
Banta notes that new activity has slowed dramatically as tight
financing makes it hard for smaller operators to secure dollars
for new projects.
This issue is compounded by the many operations that have
had to transition from in-office operations to digital workflows,
which has forced them to update their accounting practices
virtually overnight. Paper-based processes have been the norm
for many operations, and today's "new normal" has made it
difficult to pay invoices, distribute revenue statements, generate
departmental reports and conduct cash flow analyses. Difficulty
accessing essential information on service tickets, run tickets
and invoices has made it hard to keep production moving
forward while companies cobble together back-office operations
in a digital environment. These challenges have resulted in
backed-up payables for many smaller operations.
Politics continue to be a challenge for operators as well, especially during this election year. In an advertising campaign
targeting swing states earlier this year, Democratic candidates
promised to stop drilling on public lands and even outlaw
hydraulic fracturing. While this seems very unlikely, it would
eliminate more than 7 million jobs and cost the economy more
than $7 trillion by 2030, according to a Reuters article.
While these initiatives seem drastic, there has been no
shortage of new regulations put in place that make it more
difficult and expensive for smaller operations to function.
Colorado has become one of the new centers for oil and gas
activity, but at the same time it has become one of the most
difficult areas to operate in the country. Colorado has been
overhauling its drilling regulations, and most recently called for
a minimum setback of 2,000 feet from a school and 1,500 feet
from more than 10 residential buildings or multiunit residences.
Finally, smaller operators continue to face challenges accessing
technology. This issue has been a common theme for smaller
operators for many years. However, with the combined challenges
of capital, regulations and an unstable market, it is more difficult
than ever to adopt new technology and best practices, even if
they do provide cost savings.
To address these difficulties, universities are setting up service
laboratories to help operators gain access to industry-leading
technology and processes aimed at helping them continue to

"I am looking forward to seeing talented
folks rise to the occasion once again and
move our industry forward in spite of
ongoing difficulties.

produce effectively and efficiently. The University of Kansas
TORP has unveiled capabilities that include core laboratory
services, laboratory support, and field and technical services.
Among its offerings, KUTORP is helping operators with acidizing,
chemical- and gas-enhanced recovery, waterflooding optimization
and analysis, proppant testing, and unconventional EOR.
Additionally, TORP is providing access to its machine shop,
which includes mill and lathe operations for both lab and field
support, equipment repair and modification, laboratory equipment
setup, build fixtures, high pressure plumbing, and both analog
and digital data acquisition.
In the field, TORP is providing tracer testing in which a
tracer solution is pumped down hole and displaced with brine,
shut in, and then produced back to provide data that can be analyzed to help operators optimize their wells and enhance production. The hope is to continue the long tradition of TORP's
relationship with operators by providing "right now" services
that they can apply in the field.
Oil and gas always has provided its share of challenges, and
2020 has been a more difficult year than most. As operators
continue to rise to the ongoing challenges of fluctuating markets,
everchanging politics and regulations, tight budgets and difficulty
accessing technology, I am encouraged at the inventiveness our
industry has demonstrated in finding ways to keep going, even
in the face of adversity.
Oil and gas is the only industry that most of the world
depends on, but couples that dependency with making it more
and more difficult to provide the resource. As we navigate the
rest of 2020, I am looking forward to seeing talented folks rise
to the occasion once again and move our industry forward in
spite of ongoing difficulties.
❒

JEREMY VISCOMI is a strategic

marketing expert for the oil and
gas industry. Among his many
roles, he serves as the MidContinent regional lead for the
Petroleum Technology Transfer
Council, providing independent
operators with access to emerging technology aimed at reducing
risk and growing profits.
OCTOBER 2020 23

American Oil and Gas Reporter - October 2020

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