Feeds:
Posts
Comments

Archive for the ‘oil’ Category

Vortex Tools covers how low prices are shaping the budgets, workforce, and operations of oil and gas companies.

Even if you don’t know the specifics of the steep 2014 decline in oil prices, if you’re on social media, you’ve likely seen a pic or 10 of low prices at the gas pump. But there’s also a sense of wondering how long these low oil and gas prices will last. Depending on which talking head you listen to, some believe oil prices will stay low until the end of 2016, while others think oil could hit $200/barrel in the next few years.

However it goes, this is what’s currently happening in the oil and gas industry:

Large Budget Cuts: Typically budgets for the New Year are finalized by the end of January at the latest, but in 2015, many company budgets have been delayed. Right away this means that budgets are ~10% lower, as parts of January and February were put on hold expenditure-wise. Then, as budgets have come out, a lot of them are 40-50% lower than the year before (Pioneer Natural Resources’ capital expenditures dropped by 45%, Apache gutted $3.5 billion from the year previous). This means:

Layoffs: With companies losing billions in the fourth quarter of 2014, employee cuts have followed. BP laid off 300 Scottish workers in January and Halliburton plans to lay off 5,000-6,500 of their 80,000 workers. (As the VP Marketing for Vortex Tools, my inbox has seen a spike in job applications, too.) According to Fuel Fix, “Halliburton’s move brings the number of layoffs announced by the world’s four biggest oil field services in recent weeks to more than 30,000 workers around the world. That’s about 9.4 percent of their combined workforce.” Even with layoffs attempting to balance out costs and stock prices, there are still:

Equipment Cost Pains: Oil and gas prices may be down, the amount of workers may have dropped to meet the work pace, but it still costs about the same to complete a new well or work over an existing well.  In dealing with steep, hyperbolic decline shale wells—oil and gas wells that start with high, valuable production, but quickly reduce to lower rates—operators have to keep drilling to stay profitable, so there’s a lot of unavoidable cost.

These pain points mean that some companies won’t survive, whereas others are using this as an opportunity to lean up their business model and pursue a more efficient direction. One member of the Vortex team, Richard Haas, was an oil and gas operator for 36 years. He started when oil was worth $11 a barrel and gas 16 cents an MCF (adjusted prices still lower than today). In addition, gas value was not adjusted based on its BTU (or energy) equivalent—it all got valued the same no matter how much it fueled. Because of this, Richard knew how to wring every bit of oil or condensate from the production stream. Now that oil is at less than half the value of where it was eight months ago, it’s going to take that kind of efficiency thinking for companies to thrive at low oil prices.

With Vortex tools increasing production efficiency, reducing chemical/surfactant costs, and eliminating pollution fines, that type of required efficiency is available now.

*     *     *

Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home), industrial water purification (biofilm removal), and reduced water pumping costs.

Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

Ecotech for cost-effective non-thermal drying (for coal, biosolids, sugar beets, dairy waste, etc.) and safe movement of materials (including potash and soda ash).

Read Full Post »

Vortex Tools discusses why oil prices (and gasoline prices) have declined, the inefficiency of U.S. oil and gas, and what can be done to make a profit at low crude prices.  

If you haven’t kept track of the recent changes in oil and gas prices, here are the basics:

  • People are happy at the pump: Gasoline prices are at a four-year low (down 40% from six months ago). Eight states are expected to have gas below $2/gallon, and the 2015 nationwide average is projected to stay lower than 2014 average.
  • Oil and gas companies are scaling back: In addition to gasoline prices sitting at a four-year low, crude oil prices just hit a five-year low. Currently, they’re at the low-to-mid-$60s/barrel range. There are projections that the slump is not over, that these low prices could hold through 2016, and that oil may not get above $100/barrel again for a long time.

While there are natural ups and downs with commodity prices, this rapid decline was unforeseen by most, and the timing is bad for the industry. The Organization of Petroleum Countries (OPEC) reduced the oil estimates needed in 2015 by 300,000 barrels down to 28.9 million. Doesn’t seem like a lot percentage wise, but it’s the lowest in 12 years. With lower demand, drilling rig counts are down, 2015 budgets are getting slashed, and oil company stocks are falling.

Even with low prices, the Middle East has no plans to slow down their production. Some say this is a way to root out terrorist influence, others say it’s a way of protecting market share, but whatever the case, the success or failure of the U.S. oil and gas industry doesn’t majorly play into their plans.

What this has done is highlight the inefficiency of U.S oil and gas.

The Middle East claims that their costs per barrel are at about half of U.S. costs (and significantly lower than the average cost of all other countries), so $60/barrel oil may cut into their profits, but in the U.S., where $60-$64/barrel is considered break-even price for shale production, $60/barrel can be a breaking point.

Probably doesn’t hurt that Saudi Arabia has $700 billion in foreign currency reserves thanks to higher oil prices.

From: https://i1.wp.com/cdn.na16.netdna-cdn.com/wp-content/uploads/2012/06/scrooge-mcduck.jpg

Pretty much what I think of, head-into-coin injuries be damned

You can debate the profit mark—which will also fluctuate due to legislation, available technology, and world issues—but generally speaking, the U.S. oil and gas industry has two modes, both of which avoid efficiency:

  • When oil prices are high, they’re too busy to invest in innovation/efficiency and it’s full on drill, baby, drill!
  • When oil prices are low they don’t have any money to invest in innovation/efficiency.

These maxims hold true until legislation requires oil and gas companies to change, and 2015 is a year of legislation when it comes to making companies deal with flared gas, vented vapors, and the volatility of oil.

It also doesn’t help that U.S. companies largely focus on what will boost their stocks this quarter, even if it’s to the detriment of say, next quarter. Oil and gas companies care about their bottom line (which is good—you should make a profit in business), but they often don’t have the ability (read: time and/or money) to care about efficiency in their processes, even if doing so would greatly increase their bottom line.

I recently met with a customer that had posters everywhere that said something like, “Safety first, environment second, profit third.” I joked that the reality is actually, “Profit, profit, profit… and don’t get me fined while you’re at it.” This doesn’t make them villains. The reality is I’ve worked in enough green industries to know that the way you get people—individuals or business groups—to care about environmental issues is to make them money while doing good.

To be blunt: No company primarily cares about environmental issues when they’re facing heavy losses and/or going out of business.

Given that Vortex tools improve oil and gas efficiency and gives an environmental benefit, here’s some of what we can do (and are expecting to grow into more in the coming year):

2015 is set to be a rocky year for oil and gas producers/operators. It’s time to squeeze every bit of efficiency and value from production.

*     *     *

*Sources and image credit listed in the comments.

Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home), industrial water purification (biofilm removal), and reduced water pumping costs.

Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

Ecotech for cost-effective non-thermal drying (for biosolids, sugar beets, dairy waste, etc.) and safe movement of materials (including potash and soda ash).

Read Full Post »

Vortex Tools explores changes in international business, how oil and gas valuations are changing globally, a recent publication on increasing well efficiency/profitability, and how to find the best Chinese dumplings.  

I have a confession:

I no longer eat Chinese food in the United States.

Not because I’m some food snob, but because in the last couple of years, we started stepping up our international sales. Before, Vortex Tools sold internationally to Australia, Canada, and Mexico (among others), but now we also sell into China, India, and the Middle East. Naturally, international sales often involve a degree of international travel.

In traveling to China every 12-18 months, I eat nothing but Chinese food for a week straight. Oh, and the stuff they consider breakfast food is what the average American considers dinner food, so being a guy that typically likes Chinese food once or twice a month, eating it 20+ times in one week pretty much kills my desire to have it stateside.

(Which isn’t to say I don’t thoroughly enjoy the food there. One of our contractors speaks fluent Mandarin and walked around looking for a restaurant identified only by a doorway. “We’re looking for a doorway?” I said. “In China? Oh, I’m sure we’ll find this place any year now.” Sure enough, the contractor asked around for the door that led to great dumplings and people knew what he was talking about. We walked through a doorway that led to stairs to a basement restaurant serving the best dumplings you’ve ever had.)

Anyway, international business is changing. Overall, the global oil and gas industry is changing, too. The price of natural gas has gone up in India; while in the States the price of oil fell below $80 a barrel for the first time in a year (October 2014). Both of these led to oil and gas operators valuing efficiency more.

oil 80bbl

When natural gas prices are low, no one wants to build the pipelines to recover these low values, so the gas typically gets flared. Gas needs to hit a decent enough value to get recovered and sold. For oil, however, if the price is high, it’s full on drill, baby, drill with no time to consider efficiency. As prices drop and budgets get tighter, operators slow down enough to consider how to squeeze out more value from the well.

$80/barrel for oil is actually a frightful marker for many larger companies—especially those drilling shale wells, where the production rates decline fast enough that they need to keep drilling to keep the profits flowing. Larger companies have larger costs, and some believe they can’t turn a profit at $80/barrel.

So that’s where we’ve gotten more traction with Vortex tools in oil and gas efficiency. After extensive testing in the Austin Chalk and Eagle Ford formations (Texas), data noted that Vortex tools recover up to 10 times more natural gas liquids than conventional methods like pigging (read: shoving a brush down the pipeline). The NGLs are valuable, so greater efficiency = greater profit.

A recent ONG Marketplace article on Vortex Tools’ value in the Utica (Ohio/Pennsylvania) and Marcellus formations (same as before plus New York and West Virginia)—including increasing NGL/condensate recovery, preventing line freezing, and keeping wells in air quality compliance—is available here.

I can’t tell you what country I’ll be in three months from now, but one thing’s for sure: I’ll decline the offer for Chinese food.

*     *     *

Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home), industrial water purification (biofilm removal), and reduced water pumping costs.

Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

Ecotech for cost-effective non-thermal drying (for biosolids, sugar beets, dairy waste, etc.) and safe movement of materials (including potash and soda ash).

Read Full Post »

Vortex Tools discusses Denver Startup Week, how much sand is used in fracking operations, and how jobs in the oil and gas industry are changing.

Denver Startup Week was this month. We’ve participated before, but this year we attended their “oil and tech” presentation by RockPile Energy Services‘ VP Marketing and Sales, Howard Rough. Rough worked for Schlumberger for 30 years before starting RockPile—they provide services to the oil and gas industry.

Sounds pretty generic, yeah?

Okay, let’s chat specifics: In 2015, RockPile will provide a billion pounds of fracking sand to the Bakken formation in North Dakota. That’s the size of Santa Barbara beach.

Shove it down a well!

It sounds like a lot, but they’re maybe 5-6% of the frack sand market in North Dakota. One well uses about 10 million pounds of sand (along with a lot of water and a bit of gar gum [hydroxyethyl cellulose] to suspend the sand in the liquid). It’s not just any sand either. We’re talking white, clean sand from Minnesota that’s a specific size. You can use other sand, but in the opinion of many, it’s not as good.

And that’s where a current pain point of the oil and gas industry lies: It’s really difficult to logistically transport and store all that sand and water with minimal environmental impact.

Overall, there’s a push for greener fracking approaches. As a company that works with oil and gas operators to increase their energy efficiency (recovering more natural gas liquids and condensates) and to keep their wells in EPA air quality compliance, we know some of the struggles they face. Fracking is perceived as a huge water waste (when it’s less than 1% of Colorado’s water use). While I’m happy to see companies reusing fracking water, agriculture is still the water monster to slay in these drought years (using 69% of the state’s water).

On the sand side of things, they don’t have great logistics, and rail is an entirely separate issue. Finally, the massive silos required to store sand lead to storage issues, too.

Overall, there are many pain points with fracking logistics that Rough would like to see addressed. The second is addressing employee retention in oil and gas. There are two problems here:

  • In the oil and gas industry, you have Baby Boomers with 30+ years of experience getting ready to retire. The next rung down is those with 10 years of experience. Most of the oil and gas industry workers have 3-4 years’ worth of experience, so there’s a huge changing of the guard going on.
  • With most people having little experience, a huge chunk of the problem is employee retention.

Unless you’re working at the downtown corporate offices, you can get shoved off to some mighty obscure places. Oil and gas fields are often in the middle of nowhere, thus oil and gas jobs can be in the middle of nowhere, too. Plus, right when you get adjusted to your living arrangements, you get transferred to the next less-than-ideal place. After 3-4 years of repeating that cycle, you can get burned out and move on to a different line of work.

But wait, your brain says, don’t oil and gas people make six-figure salaries?

Some do, but it’s long hours and less-than-ideal work conditions. Parts of North Dakota freeze for four months and get 100 mph winds; you can work outside in Alaska when it’s 62 degrees below zero. Then after that, you return to the trailer with a dozen other dudes and sleep in the sweaty bed that the last guy just left. There’s no going home for days or weeks on end; the well site is in the middle of nowhere. One of our engineers worked a similar set up and kept getting his electric razor stolen… by someone else also making six figures.

You can understand why all this might get tiresome. With these issues, there’s not enough experience and huge companies have a big turnover rate (40% annually). That’s a lot of money wasted on training for people who don’t stick around that long.

So there’s also a need for oil and gas companies to connect with qualified, talented individuals. Rough thinks the future may be a LinkedIn for oil and gas professionals—maybe even something that helps give people a virtual tour of an oil and gas field. That way they know what to expect. What Rough has found is that military are often a great fit for the oil and gas industry. As one man put it: “It’s twice the pay and you don’t get shot at.”

If you think you can address the problems covered here, there’s demand, and if you’re military personnel looking for your next gig, come get more pay and less bullets (unless you work in Texas—no guarantee there).

*     *     *

Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home), industrial water purification (biofilm removal), and reduced water pumping costs.

Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

Ecotech for cost-effective non-thermal drying (for biosolids, sugar beets, dairy waste, etc.) and safe movement of materials (including potash and soda ash).

Read Full Post »

Vortex Tools shares some insight into the current Chinese market and how air quality is affected, leading to people taking pictures of themselves by a picture of the skyline

Last year, we signed a distribution deal to sell our oil & gas optimization tools into China. As a result of this, we naturally make trips out there to connect with customers and grow the relationships.

If you haven’t got the memo, China is changing:

If someone went to the big cities 10-15 years ago, they’d tell you of bikes everywhere. These days, it’s lots of fancy cars—Mercedes, Audis, BMWS—and like many parts of the world, where there are four lanes, they make six and all honk at each other. They want quality for themselves and they’re selling the junky stuff to tourists (like how if you believe you can get a Gucci purse for $20, there are about 10,000 of them for you to haggle over with the street vendors of New York City).

It’s not uncommon to see a 30-story tall apartment complexes—30 of them together: three rows by 10. One of our Chinese customers joked that the construction crane is now their national animal because you see them everywhere these days.

Probably won’t bite you. Probably…

He also told us that a quarter-million people are moving to Beijing every month.

That’s all of the Denver Metro area (some 3.27 million people) getting crammed into Beijing in a little more than a year.

Naturally, this has had some impact:

  • For starters, they can’t stop the westernization of their culture. It’s odd to mosey around town and see modern buildings surrounding an encased artifact from the fifth century. In many ways, they’re losing their traditions—ask to see my happiness ball sometime (no, that’s not inviting a felony)—but given the discrepancy between city life and country life, I can’t blame any of the 250,000 a month making the move for a better life.
  • The second thing, however, is this: All those people, all that construction—it comes with an environmental cost—and parts of China are struggling with poor air quality (many believe they’re at the level where the US was in the 1970s).

The best pic of this I’ve seen is actually from Hong Kong (a Special Administrative Region of the People’s Republic of China) where people take pictures in front of a fake skyline… as long as they focus low enough. While this picture is of a particularly smoggy day in a particularly smoggy period, it still gets the point across that there’s a lot of work to be done:

Credit: Alex Hofford / EPA / Landov

Credit: Alex Hofford / EPA / Landov

*     *     *

Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home), industrial water purification (biofilm removal), and reduced water pumping costs.

Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

Ecotech for cost-effective non-thermal drying (for biosolids, sugar beets, dairy waste, etc.) and safe movement of materials (including potash and soda ash).

Read Full Post »

Boom CoverEver wanted to ask a fracking expert a question? Now’s your chance. As in: right now.

Today, Wall Street Journal senior energy reporter and author of The Boom: How Fracking Ignited the American Energy Revolution and Changed the World Russell Gold is hosting an ‘Ask Me Anything’ on Reddit. You can connect with him here.

While the archive should remain active for a little while, these ‘Ask Me Anything” opportunities only last for a day… or until the participant gets fried by e-wave upon e-wave of questioning — note: it’s usually the latter.

*     *     *

Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home), industrial water purification (biofilm removal), and reduced water pumping costs.

Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

Ecotech for cost-effective non-thermal drying (for biosolids, sugar beets, dairy waste, etc.) and safe movement of materials (including potash and soda ash).

Read Full Post »

SpiroFlo looks at Gallup polling on how Americans view President Obama’s handling of the nation’s environment, energy policy, and prosperity.

Each year Gallup asks Americans if they think the President is doing a good job or a poor job at handling three key issues, and over the course of a President’s term, you can usually watch the that approval rating slide on down. Here’s how President Obama is faring since 2009:

Gallup polling Obama env good job

Although it’s not surprising that he ranks highest in protecting the U.S. environment, his 79% “good job” rating took a large fall in just one year (along with everything else) to just above 50% and has not recovered. Not surprisingly, President Obama has far greater approval with Democrats than Republicans (with independents leaning towards the Republican view of things):

Gallup polling Obama env good job by party However, as you can see, President Obama’s initial (2009) “good job” numbers were 10-15 points higher than where former President George W. Bush was in his first year (2001):

Gallup polling Bush env good job

Given the current trends, it is likely that, in his final year, President Obama will not dip below where President Bush was in his final year—especially given the financial pain of 2008 and how that affected Bush’s “good job” rating in prosperity. However, President Obama’s “good job” ratings plummeted more in that single 2009 to 2010 year than any of Bush’s single-year drops (likely due to the hope and change campaign message that encouraged his election).

If there is one thing that surprises me, it’s the contrast between President Bush’s “good job” rating in improving the nation’s energy policy versus President Obama’s. Taken at the six-year mark—2006 for Bush, 2014 for Obama—you can see that Obama is 17 points higher than where Bush was (42% to 25% respectively). While neither sees much success in this area, Gallup gives no indication as to the criteria in answering this question. Your political affiliation, coupled with your view of oil and gas, clean energy, and world politics, can shift your interpretation of that question dramatically. Regardless, overall, former President Bush settled out far lower than President Obama in this area.

Still, however you view it, the bottom line of presidential ratings sliding down over the years holds true.

*     *     *

Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home), industrial water purification (biofilm removal), and reduced water pumping costs.

Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

Ecotech for cost-effective non-thermal drying (for biosolids, sugar beets, dairy waste, etc.) and safe movement of materials (including potash and soda ash).

Read Full Post »

« Newer Posts - Older Posts »