SIPES HOUSTON CHAPTER
3242 Summerland Drive
Manvel, Texas, 77578
Chapter Officers 2020
Steve M Smith
Technical Program Chair
Public Relations Chair
Deal Buyers List Chair
Continuing Education Chair
In this issue
Letter From The Editor
Kaitlyn Allen & Kareemah Mohamed
Geology and Coﬀee
Oil Money Podcast
Crawfsh Boil Event
USA LNG Exports = Global Dominance
SIPES Houston TWITTER
SIPES LinkedIn Page
Are You An Oil Man? HAT!
Oil Price Outlook
West Berkow Prospect
SIPES 2021 Conventon
LETTER FROM THE EDITOR
The world is getting back to normal with an incredible efforts to get vaccines out. America is leading the world in vaccine distribution.
The April luncheon will be educational for many that do not know what ESG is aside from headlines and media attention.
We have two young women leading the charge in the ESG sector of our industry. See the next page to register.
SIPES Houston is selling a hat for $50. Wear it with pride! See page 12 for details.
Last month I took an online Harvard Business class focused on global economics and covid. In short, every Country is hurting
economically, and even with the problems in the USA, it is still doing the best compared to any other country, even China.
SIPES Houston will be hosting an invite-only prospect show in March. Prospects will be reviewed by the Houston Board before
allowed to be presented at the event. If you have a prospect please send it to me to be added to the list.
If you have a prospect, you can put it in this Newsletter for $250. See page 16 for an example.
Stay lean, stay hungry,
THIS EVENT WILL BE IN PERSON AT THE PETROLEUM CLUB MASKS ARE REQUIRED
SIPES LUNCHEON EVENT APRIL 15, 2021 @ 11:30 AM
CLICK HERE to sign up and attend IN PERSON
Kaitlyn Allen is a sustainability-focused entrepreneur, business owner, and CEO. Kaitlyn founded Global Affairs Associates, a boutique corporate sustainability consultancy, in 2013. She and her team believe that business-centered approaches are crucial for creating long-lasting value. As CEO, Kaitlyn has grown Global Affairs Associates from an individual consulting practice to a well-respected boutique firm in Houston, serving clients across the U.S. As principal consultant, Kaitlyn has consulted on sustainability and ESG issues, including strategy, risk, communications, and transparency, for a variety of industries, including oil and gas upstream, drilling, construction, midstream, and manufacturing. Kaitlyn speaks frequently on the drivers behind the ESG investing trend, the differences in approaches to “responsible investment,” and how companies can improve and articulate their ESG/sustainability value propositions. In early 2021, Global Affairs Associates launched the ESG Decoded podcast to provide thoughtful, nuanced content that goes beyond the headlines into practice. Kaitlyn is also the founder of a tech startup, Mend It, Inc., which will be doing a capital raise in 2021. A proud alumna of Georgetown University and Trinity University, Kaitlyn is a native Houstonian and currently resides in Houston.
Kareemah is leading Americas market development for KBR’s net-zero initiatives – at the nexus of public policy, blue/ green hydrogen advisory and financing avenues. She is an advocate for energy equity and economic growth through energy source diversification.
Ms. Mohamed is also the founder of a growth accelerator, LARK Strategy Partners focused on the “how-do” for adapting business models in the digital age, with an emphasis on the circular economy.
A Geoscientist by background, she has worked in both R&D and business development capacities at Marathon Oil and ConocoPhillips in domestic and international roles throughout her career. She was also previously Managing Director of a consulting firm specializing in oil and gas acquisition and divestiture strategy globally.
Kareemah has previously led consulting teams at IHS Markit focused on business transformation in energy markets including sustainable exploration and digitalization impact on emissions management.
She is active in the start-up communities in Houston, Calgary and Oslo and is pursuing a Master of Sommelier certification as a hobby. LinkedIn
Geology and Coffee?!
East Wade City Prospect, Scott Leaseburge
The East Wade City Prospect is a horst block prospect located in Jim Wells county. The well site is located near the small farming community of Orange Grove, Texas. The Wade City Field produced from multiple Frio sands with a cumulative production of 10.1 MMBO and 84 BCFG. Potential targets include the Pundt, Bierstadt, 1st & 2nd McNeill, the Alice Series, Lou Ella and the Stillwell. The 1st McNeil has been the primary producer in the field. The East Wade City Prospect is a test of an anticlinal closure anticipated to be up dip to existing production. Abundant faulting is common in the area which has the effect of compartmentalizing reservoirs. This can allow for virgin reservoirs to exist adjacent to production but may limit the areal extent of hydrocarbon drainage.
During the mudlogging of the well, the Pundt and McNiell sands both had gas shows with fluorescence in the cuttings. Gas shows were minor due to the relatively high 10.1 lb/gal mud weight used. While using a higher mud weight has the added “insurance” that minimizes hole stability issues, the increased pressure will suppress gas shows during the mudlogging. There were also electric log shows in the Lou Ella and Stillwell, with the Lou Ella showing a significant neutron porosity and density porosity cross over indicating the presence of gas. Formation tests of the Pundit and McNiell seemed to indicate that these zones do not have economic accumulations of hydrocarbons. Core results though seem to indicate that oil is present in the McNeill above where the formation test was conducted giving the main target zone a second chance of being productive after all. Looks like we will have to perf it to know for sure! The Lou Ella Formation Test resulted in 25 CFG and 200 CC of condensate along with virgin pressure. This proved the existence of the gas the neutron/density cross over suggested.
As often happens when drilling in Frio formations, intervals that were not the main intended target can appear to be productive and even save you from having to tell your investors you spent their hard-earned money and have nothing to show but salt water. Considering we have whole oceans of salt water you can imagine investors are not going to be happy with you. Unless you are trying to brine your Thanksgiving turkey before the deep frier, nobody wants salt water! Thankfully drilling in the Frio is like a box of chocolates, you never know what you are going to get! Formations that you were not expecting to be productive surprise you and turn out to produce that much sought-after Texas Tea. In our case the regionally productive Hollow Tree sand has resistivity on the log and oil present in the core. While I am currently sitting in Core Labs in Corpus Christi, TX, remapping the area with our core results fresh off the printer, there is a positive vibe in the air. Let’s make conventional great again!
“Electrify Everything” is Regressive
On Wednesday, a short item in the Federal Register underscored the regressive nature of the “electrify everything” effort that is being promoted by some of America’s highest-profile environmental groups, climate-change activists, politicians, and academics. The item, published by the Office of Energy Efficiency and Renewable Energy at the Department of Energy, forecasts the “representative average unit costs of five residential energy sources for the year 2021.”
The forecast shows that on an energy-equivalent basis, electricity will cost about $39 per million Btu. It also projects that one million Btu in the form of natural gas will cost about $11, propane will cost about $19, No. 2 heating oil will cost $20, and kerosene will cost $23. Thus, electricity will cost nearly four times as much as natural gas and twice as much as propane, a fuel that is commonly used by rural Americans in their homes, and on their farms and ranches.
As I wrote in these pages last month during the deadly blizzard that paralyzed Texas for almost a week, there are a myriad of problems with attempting to electrify all of our transportation, industrial and residential energy systems. I wrote, “attempting to electrify everything would be the opposite of anti-fragile. Rather than make our networks and critical systems more resilient and less vulnerable to disruptions caused by extreme weather, bad actors, falling trees, or simple negligence, electrifying everything would concentrate our dependence on a single network, the electric grid, and in doing so make nearly every aspect of our society prone to catastrophic failure if — or rather, when — a widespread or extended blackout occurs.”
Indeed, the risks to our energy security, resilience, and reliability are obvious. But the bigger, and more immediate issue is the regressive nature of forcing consumers to use electricity instead of energy sources like natural gas and propane that sell for a quarter, or half, as much as the energy that consumers can get from the electric grid.
Last year, I published a report for the Foundation for Research on Equal Opportunity that looked at the natural gas bans that are being implemented in dozens of communities in California. According to the Sierra Club, 42 California communities have now imposed bans. On its website, the club, which is the largest environmental group in America, claims that gas-free homes are “a win for our climate, health, and safety.” In January, the city of Denver released a plan that aims to ban natural gas connections in new buildings by 2027. In February, the city of Seattle enacted legislation that bans the use of natural gas in new commercial buildings and large multifamily buildings. In Massachusetts, about a dozen towns have partnered with the Rocky Mountain Institute, which recently got a $10 million grant from the Bezos Earth Fund, to advocate for the right to ban the use of natural gas in homes and commercial buildings.
Banning natural gas forces consumers to use more-expensive electricity to heat their homes, cook their food, and heat the water needed to wash their clothes and dishes. Proponents of the electrify everything push, including the Natural Resources Defense Council, which got $100 million from the Bezos Earth Fund, prefer to call their efforts “beneficial electrification.” The more accurate term is “forced electrification” because it will increase the energy burden on low- and middle-income consumers.
I am pro-electricity. But the idea that we humans should “stop burning things” in the name of climate change ignores the need for energy security, resilience, and basic fairness. Over the past five years, I traveled to India, Iceland, Lebanon, Puerto Rico, Colorado, and New York to look at the world through the lens of electricity. I’ve recently published a book (A Question of Power: Electricity and the Wealth of Nations) and co-produced (with my colleague, Tyson Culver) a documentary (Juice: How Electricity Explains the World) that spotlights electricity. The book and film show that we need many terawatts of new generation capacity to bring the 3 billion people in the world who are now living in energy poverty out of the dark and into the bright lights of modernity. Robert Bryce
Oil Price Outlook
Oil prices rose despite OPEC+’s decision to increase production. In fact, rather than a bearish move, investors interpreted the decision as a vote of confidence in demand. “The [supply] deficit that we’re already in is likely to accelerate,” Jeff Currie, head of commodities research at Goldman Sachs Group Inc., said in a Bloomberg Television interview
OPEC+ agrees to gradually increase production. OPEC+ decided to add more than 2 mb/d over the next few months, betting on rising demand. The deal calls for a 350,000-bpd increase in May, followed by the same amount in June, and then by 450,000 bpd in July. At the same time, Saudi Arabia will ease its voluntary 1 mb/d cuts by July. OPEC+ surprised markets last time around by maintaining cuts, this time they surprised in the other direction after analysts expected no change.
Pioneer Natural Resources nears $6 billion deal for DoublePoint Energy. Pioneer Natural Resources (NYSE: PXD) is nearing a $6 billion deal to acquire DoublePoint Energy, a cash and stock deal, according to Reuters.
Shale output to erode. U.S. shale production is set to decline through at least 2022, according to BNEF. By the end of the year, the industry could lose another 485,000 bpd. “It could be a while before U.S. oil companies feel comfortable growing production again,” BNEF analyst Tai Liu said in a note.
Total and Shell see lingering refinery issues. Total’s (NYSE: TOT) Port Arthur refinery may be offline for another three to four weeks for repairs after an unplanned shutdown during the Texas freeze. Royal Dutch Shell (NYSE: RDS.A) is having problems with its Deer Park refinery as well. Meanwhile, ExxonMobil (NYSE: XOM) said it would take an $800 million hit related to the storm.
Oil companies win one climate court case, lose another. A federal appeals court rejected New York City’s effort to hold oil majors accountable for climate change, a big win for the industry.
EVs gain in Biden’s $2.25 trillion infrastructure plan. President Joe Biden introduced the outlines of his major infrastructure package, which would have far-reaching effects on the energy industry. The bill calls for $174 billion for EV recharging stations. “For the EV sector, the Street has been awaiting this day since Biden was elected,” an analyst with Wedbush Securities wrote in a note to clients. ChargePoint Holdings Inc (NYSE: CHPT), the largest owner and operator of EV-charging stations in the U.S., jumped as much as 24%
Aramco could reduce dividend. Aramco could pay less than the originally planned $73.5 billion to its Saudi state shareholder in order to prioritize investments, Crown Prince Mohammed said earlier this week, opening the door to the oil giant to relieve some of the pressure on its balance sheet
Renewables gain too. The infrastructure plan calls for a 10-year extension of wind, solar, and battery tax credits. It also calls for incentives to build out 20 GW of long-distance transmission.
Oil’s surprise gain in Biden’s plan. Bloomberg notes that Biden’s infrastructure plan, which leans heavily on clean energy, would also stoke demand for asphalt, boosting heavy crude blends.
Is Russia About To Invade Ukraine? While the world is focused on OPEC news and Easter preparations, the Ukrainian crisis is heating up and there is a real threat of a military confrontation involving Ukraine, Russia, and Belarus.
Oil Up on Global Economic Recovery
NEW YORK (Reuters) -Global benchmark Brent crude inched higher on Wednesday on improving global economic outlook, but U.S. crude fell on rising gasoline inventories amid fears that new coronavirus outbreaks will weaken a global recovery in fuel demand.
Brent crude futures were up 44 cents, or 0.7%, to $63.18 a barrel by 1:42 p.m. EDT (1742 GMT) while U.S. West Texas Intermediate crude fell 40 cents, or 0.7%, to $59.73.
U.S. crude stocks fell 3.5 million barrels last week, but gasoline inventories jumped 4 million barrels, the Energy Information Administration said, compared with expectations in a Reuters poll for a 221,000-barrel gasoline drop. [EIA/S]
“If you don’t need to make gasoline, then you don’t need to use more crude oil,” said Bob Yawger, director of energy futures at Mizuho Securities.
Oil prices found support from indications from the U.S. Federal Reserve that policymakers were universally optimistic in their overall economic outlook.
The International Monetary Fund on Tuesday said unprecedented public spending to fight COVID-19 would push global growth to 6% this year, a rate not achieved since the 1970s, which also helped the fuel demand outlook, which also helped prices.
However, rising COVID-19 cases in the Americas, which accounted for more than half of all coronavirus-related deaths last week, kept prices from moving higher.
The global crude market could also face a supply increase as Iran and major world powers took steps toward reviving an agreement that froze Iran’s nuclear weapons development.
Iran and world powers agreed to form working groups to discuss the possibility of reviving the 2015 deal that could lead to Washington lifting sanctions on Iran’s energy sector and increasing oil supply.
“Iran is the single largest upside supply risk for the oil market,” said Stephen Brennock of oil brokerage PVM.
Oil prices dropped earlier this week after the Organization of the Petroleum Exporting Countries (OPEC) and allies, a group known as OPEC+, agreed to gradually ease oil output cuts from May.
2021 SIPES CONVENTION
The annual SIPES Convention offers a great opportunity to connect and reconnect with like-minded people. Who are these like-minded people? They are your peers – independent prospect generators, geological, geophysical, and engineering consultants; and some are investors. The convention is centered around two mornings of technical talks, followed by interesting and fun activities focusing on the uniqueness of the area. The technical talks can be used to satisfy Continuing Education requirements, including an ethics talk. The talks provide technological updates and news of innovations and solutions to interpretation, sales, and production problems of the independent community. The technical talks are of a more intimate nature than are those of large conventions. There is ample time for questions and explanations during the technical sessions and during networking events. The convention is usually held in the first half of the year in a tourist-friendly venue. There are optional tours offered for your significant other!
What do these graphs tell you? It should tell you we need to find new production ASAP. Keep drilling! – Jeff Allen
SIPES 2020 SPONSORSHIP OPPORTUNITIES
□ Platinum Sponsor – $5,000
Full-page ad for 12 months in SIPES newsletter and recognition on the SIPES website.
□ Gold Sponsor – $2500
Half- page ad for 6 months in SIPES newsletter and recognition on the SIPES website.
□ Silver Sponsor – $1500
1/4 page ad for 3 months in SIPES newsletter and recognition on the SIPES website.
□ Bronze Sponsor – $500
Business card ad for 6 months in SIPES newsletter and recognition on the SIPES website.
Restricted to SIPES members only
— The deadline for having company logos included in early event promotion is the 15th of the month prior to advertising initiation. Logos will be included in subsequent ads as received, and print deadline permitting.
— Logo files and ads should be sent to Jeff Allen at Jeff@AllenEnergyLLC.com
— Logos should be in high-resolution vector format (.eps, .ai, or .pdf)
— Ads should be in high-resolution vector format (.eps, .ai) or high-resolution format at 300 DPI or greater (.jpg or .tiff)
— All sponsors are welcome to display brochures and company marketing materials on site the day of the event.
SIPES 2020 HOSPITALITY SPONSORSHIP
Hospitality sponsors receive recognition at monthly SIPES luncheons in the form of a spoken announcement, projection of company logo onto presentation screen before speakers begin, the right to place marketing materials on tables, and the opportunity to give a brief overview of the company’s offerings. Given the high level of individual recognition, hospitality sponsors do not receive the additional benefit of advertising space online or in the newsletter.
□ Member Sponsors, Non-Member Sponsors and Corporate Sponsors
$800 per monthly sponsorship
Please complete the form below and indicate the level of sponsorship and if you would like to opt in to the hospitality sponsorship.
You will receive an email on details of payment instructions after you submit the form.
SIPES Book Recommendation
From Dirt Roads to Black Gold is an inspiring true story of a self-made entrepreneur, Younas Chaudhary. Raised in a remote village in Pakistan, Younas built several successful businesses in the USA and Canada using a mix of common sense, hard work, consistency and determination. Younas had only $30 in his pocket when he first landed in Edmonton in 1973. He did backbreaking hard work, encountered frequent challenges and religious persecution. Later in life, tragedy struck when his wife was diagnosed with Parkinson’s disease. Despite the odds, Younas established himself as a visionary businessman with foresight in a highly volatile oil & gas industry. This book is for anyone who has ever doubted themselves or their abilities. The message is simple: perseverance, consistency and self-belief can pave your way to success. His secret to success is simple: work hard, be positive, be consistent, and never give up. “From Dirt Roads to Black Gold” shows us how one man took on the world with just a few dollars, a dream, and never looked back. The proceeds from the sale of this book will benefit the Younas and Bushra Chaudhary Foundation, a nonprofit charity. Learn more at: http://ybcfoundation.com.YBC Foundation email address is: firstname.lastname@example.org.
SIPES Houston Chapter, 5535 Memorial Drive, Suite F654, Houston, Texas 77007
Tel: 713-651-1639 · Fax: 713-951–9659 · www.sipeshouston.org · e-mail: email@example.com