The Northeast ONG Marketplace - June 2015

PRSRT STDU.S. POSTAGE PAIDBECKLEY, WV 25801

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

ENVIRONMENTAL MANAGEMENT- Page 14 Compliance and Best Practices; a Guide to Secondary Containment

NEW TECHNOLOGY - Pages 22-23 Do you need a Land Management System?

ONG SPOTLIGHT - p 3

HEALTH & SAFETY - p 10-11

INDUSTRY INSIGHT - p 18-19

LEGAL & FINANCE - p 26

Matt Huff, Beth Powell and Bob Beck

your one source for secondary containment

Secondary Containment from the Leak & Spill Experts.®

Tired of paying multiple people to handle your secondary containment, only to have them drop the ball somewhere during the process? New Pig Energy has the know-how to manage the entire project from start to finish. Our one-source approach eliminates the finger-pointing, breakdowns and B.S. to spare you the headaches and save you money.

Been there. Lined that.As the industry leader since 2011, we know secondary containment better than anyone. We manufacture our own PIG Liner, we install it, we even remove and recycle it for you. We’ll work with you to improve yields and efficiencies through re-engineering, not by throwing more labor at the problem. Plus, you always get 24/7 access to our technical expertise, real-world experience and regulatory knowledge.

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Page 2 The Northeast ONG Marketplace

PLAYS COVERED: Marcellus

UticaJune 23-25, 2015Pittsburgh, PA

David L. LawrenceConvention Center

Presented by: Hosted by:

Producers in the Northeast have unlocked the Marcellus formation – one of the world’s largest natural gas reservoirs and the undisputed driver of the U.S. shale gas revolution. Marcellus natural gas production has surged from 2 Bcf/d in 2010 to an estimated 16.7 Bcf/d, and production from the below-lying Utica formation has increased 12-fold. In the wake of this unprecedented growth, takeaway capacity remains a key challenge. Yet midstream operators are investing $20 billion through 2018 to build infrastructure that can move 20 Bcf/d of natural gas to lucrative markets across the country.

Technological innovation gave producers access to this abundant resource. And the evolution of technology is allowing the industry to defy the odds and remain profitable. Since 2008, producers have slashed breakeven costs in half by finding ways to operate more efficiently.

This June, the region’s most-active players take the stage at DUG East to discuss the latest efficiency-driven drilling and completions technologies.

Resource Resilience Engineers enhance value in a prolific gas/liquids province

Secure your seat at DUGEast.com

OPENING KEYNOTE: Adam Sieminski Administrator Energy Information Administration

LUNCHEON KEYNOTE: Dr. Charles Krauthammer Columnist, Author and Pulitzer Prize Winner

FEATURED SPEAKERS

3,100+ Industry Professionals 20+ Executive-level Speakers 320+ Exhibitors

DUG East FP_NE ONG Marketplace.indd 1 3/24/15 1:39 PM

DUG East 2015, Hart Energy

Call it the Golden Triangle of Natural Gas. The area where southwest Pennsylvania, southeast Ohio and northern West Virginia mash up near the Ohio River is turning out to be the natural gas version of Fort Knox. Monster gas wells are fulfilling the promise of geologists who say Utica Shale production might end up being bigger than its Marcellus Shale cousin.

The Appalachian Basin is now the largest natural gas field in the world, according to the U.S. Energy Information Administration. Researchers estimate that by 2018

this region will produce a third of all U.S. gas production, with a lot of that being shipped to the Gulf Coast and even exported abroad. Everyone now recognizes how much this success in the natural gas industry has dramatically improved the economy, affecting numerous cities and towns throughout Pennsylvania, Ohio and West Virginia.

But, what lies ahead for the region? A distinguished roster of speakers will focus on Utica and Marcellus shale opportunities at Hart Energy’s 6th annual DUG East Conference & Exhibition, June 24 and 25 in Pittsburgh. An opening reception welcomes attendees the evening of June 23. All events are held at the David L. Lawrence Convention Center.

DUG East draws several thousand people representing oil and gas companies, investors and their suppliers.

This year’s agenda features a stellar line-up that includes executives from some of the top producers in the area, including Dominion Resources, Chesapeake Energy, Hess Corp., Rice Energy, Consol Energy and Eclipse Resources.

Recently one of the Marcellus Shale’s most successful operating companies, Range Resources Corp., drilled its first deep Utica Shale well in Pennsylvania, located in western Washington County. That well has turned out to be the largest Utica Shale producing well in the tri-state area, capturing widespread industry excitement.

Range Resources chairman, president and CEO Jeff Ventura, a petroleum engineering graduate of Penn State University, will be a keynote speaker at DUG East on June 24. He will explain how Range discovered the Marcellus Shale and has now expanded its learnings to the fast-developing Utica Shale as well.

DUG East attendees will also get a broader view of how production in the region fits into the U.S. energy picture, as Adam Sieminski, Administrator of the U.S. Energy Information Administration, will be the opening keynote speaker on June 24. Under his leadership, the EIA analyzes production growth trends and rig productivity in the Marcellus and Utica plays and it explains the significance of fast-growing oil and gas production to government policymakers, as part of the American shale energy renaissance.

This year, Hart Energy is proud to announce that DUG East attendees will be able to hear perspectives on world events and U.S. politics from Pulitzer Prize-winning political columnist, author and Fox News commentator Dr. Charles Krauthammer during the DUG keynote luncheon address. His weekly column is syndicated in more than 400 newspapers worldwide.

June 2015 Page 3

THE ONG SPOTLIGHT

Helping make your rig move, drilling and fracing operations safe and efficient

THE PRIMARY RESOURCE FOR THE

NORTHEAST OIL & NATURAL GAS INDUSTRYwww.ongmarketplace.com


ARTICLESTHE ONG SPOTLIGHT: DUG East 2015, Hart Energy.................................................................... 3

HEALTH & SAFETY: Safety Excellence: Integrating Safety Throughout Your Business Process ............ 10

ENVIRONMENTAL MANAGEMENT: Compliance and Best Practices; a Guide to Secondary Containment in Appalachia ............................ 14-15

INDUSTRY INSIGHT: Strata Worldwide: From Mining to Shale—Keeping Workers Safe .......... 18-19

NEW TECHNOLOGY: Do you need a Land Management System? .................................... 22-23

LEGAL & FINANCE: A Tale of Two Oil and Gas Acts ............................................................................. 26

ADVERTISER INDEXALBERTA RIG MATS ............................................. 3ALBERTS SPRAY SOLUTIONS ........................... 23ALFRED CONSTRUCTION INC............................. 3ALPINE ELECTRIC ................................................ 9APPELLATION....................................................... 4BENMIT ................................................................. 8BRAD PENN LUBRICANTS................................. 16BROUSE MCDOWELL ......................................... 17CALU ................................................................... 25CHANCELLOR INSURANCE ................................. 9CPI SERVICE ......................................................... 7CST INDUSTRIES ............................................... 19D&S INDUSTRIAL PRODUCTS .......................... 11ELECTRO-QUIP CORP .......................................... 7ERNST SEED ......................................................... 8ETC ........................................................................ 9FORTIS ENERGY ................................................. 15HKRENTS.COM ................................................... 11JGX INDUSTRIES LLC .......................................... 9KRUSE AUCTIONS.............................................. 24LEE REGER BUILD ................................................ 9LYDEN OIL COMPANY ........................................ 23MID-ATLANTIC STORAGE ................................... 9MJ PAINTING CONTRACTOR ............................... 4NEW PIG ENERGY ................................................ 1NORTH AMERICAN FIELD SERVICES ................. 9ONG ONE CALL .................................................. 24PERMA-FIX ......................................................... 17PPC NAT GAS SOLUTIONS ................................ 17PREMIER SAFETY & SERVICE INC ..................... 8PSB INDUSTRIES ............................................... 16RIGMAIDS ........................................................... 16RIJA, INC ............................................................... 8RJR SAFETY INC ................................................. 16SHANNON SAFETY ............................................ 12

STEEL TANK & FABRICATING CORP ................ 16STERLING LUMBER COMPANY ........................... 5TEK CONSTRUCTION SERVICES....................... 28TOTAL EQUIPMENT COMPANY ......................... 12TRI TOOL ............................................................ 20UNIT LINER ........................................................... 5WEAVERTOWN ENVIRONMENTAL ................... 16WESTERN ENVIRONMENTAL LINER ................ 13

CALENDARSASSOCIATION MEETINGS ................................... 4NETWORKING EVENTS ..................................... 13TRAINING & WORKSHOPS ............................... 16UPCOMING EVENTS .......................................... 21

EVENTSDUG EAST ............................................................ 2IOGANY SUMMER MEETING ............................ 17NAPE ..................................................................... 6

CONTACT US FOR ADVERTISING,INFORMATION OR MAILING LIST CHANGES:

The Northeast ONG Marketplace

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. Any warranties, representations or opinions made in the advertisements or articles are those of the contributors and not The Northeast ONG Marketplace.

ASSOCIATION MEETINGS

IPAA Mid-year Meeting | June 24-26, 2015Sante Fe, NM - www.ipaa.org

VOGA Annual Meeting | June 24-26, 2015Virginia Beach, VA - www.vaoilandgas.com

IOGANY Summer Meeting | July 8-9, 2015Findley Lake, NY - www.iogany.org

KOGA Annual Meeting | July 14, 2015Lexington, KY - www.kyoilgas.org

AESC Summer Meeting | July 22-24, 2015Pittsburgh, PA - www.aesc.net

June 2015 Page 5

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HEALTH& SAFETY

By: Jeff Kady, Cosmo Consulting

I often tell people that there is no magic bullet, no specific step by step recipe when it comes to achieving success in a safety program. Certainly there are components that are critical to your success but every organization is different. Different cultures, different risks, different resources and different desired outcomes all set the stage for the degree of success your safety program will have. One thing however is certain, if you strive for mediocrity your will achieve it.

To me, compliance is essentially that point of mediocrity. Compliance is the bare minimum we can do to ensure we aren’t cited. It gives us a chance to provide a safe work environment for our employees. The truth is striving to be compliant should only be your first step towards implementing a successful safety program. Moving beyond compliance to capture all the benefits that safety excellence can provide an organization is where you will see the true contributions that can be made to every facet of your business.

Studies have shown that a strong and successful safety culture has significant impacts on employee morale, quality and productivity. The benefits reaped by these enhancements and decreased expenses such as lost or restricted time, experience substitution and out of pocket expenses contribute directly to the bottom line. If you think about this from a purely monetary point of view and you recognize that many expenses associated with injuries to your employees come directly off of your bottom line then make sure you are giving this impact its full due. What I mean by this is let’s say a specific injury has cost your organization $100,000 out of pocket. Does that mean you now need to increase your revenue by $100,000 to make up for it? Well actually the required revenue increase is a function of the margin your organization operates on. In very basic terms, if your organization operates at a 10% profit margin you will now need to increase sales by $1,000,000 in order to cover that $100,000 out of pocket loss.

Typically in an organization that strives only for compliance these realities are over looked which, when you think about it is pretty strange given the fact that often the reason cited for not doing more with regards to safety is that it costs too much. In reality just the opposite is true, not excelling in safety costs entirely too much. And for those doubters, do a thorough cost benefit analysis. Calculate both the direct and indirect costs associated with a loss and see how quickly your profits dwindle.

So why all this talk about how the success of your safety program can impact your business? Well that’s why we are here right? Without the entity that exists for the purpose doing business we wouldn’t be in business. Just like every other facet of the organization, marketing, production, operations, engineering, etc., safety is an intricate component necessary for success. This leads me to the question, would the leadership of your organization be agreeable to mediocre quality, customer service or productivity? One would think the obvious answer is no but the reality is that for some organizations the answer is yes. In fact for some companies that is their target market. That being said, these organizations are not who we are talking about here. My focus is on those companies who strive for excellence in their business model, who want to put out the best product, provide the best service and be leader in their space. Here is where the opportunity exists. This is where we can make a case that safety excellence is every bit as important as excellence in quality, productivity or customer service. Now we can show the contributions, from a business perspective, that safety can make.

It is important to understand that excellence is achieved by having that mindset that drives you be the best that you can be in all facets of your being. The same holds true for business. Excelling over all requires you to excel in every facet of your business. Picking and choosing where you want to drive excellence and where mediocrity is ok is unacceptable and will diminish your overall success. Excellence is not what you do once but what you do continuously. Hence the reason a strong safety culture impacts all other components of your business and why integrating safety into every element of your business is critical for your overall success.

When I speak of integrating safety throughout your business I don’t mean just making everyone aware of the rules and regulations or providing training for all. What I am talking about here is the need to be an intricate component, part of the equation for every element within your business. True integration is achieved when every decision that is made considers how it will impact the safety of your employees and the security of all of your assets. My view takes the holistic approach that we are all stewards of our organizations assets, people, property, productivity, public image and planet, the 5 P’s. In order to steward those assets effectively we need to be a forethought and not an afterthought.

How beneficial would it be to be involved in the design phase of a new assembly line where you could provide input with the engineering team on the layout and design, what ergonomic factors and features need to be addressed, where anchor points should be placed, appropriate guarding and preferential controls? Would it not be better to evaluate the safety factors of two pieces of equipment before one is purchased than trying to develop the mitigation technique that remedies a hazard your employee should never have been exposed to in the first place?

It would be difficult to dispute that taking this type of proactive role provides far greater benefits than being reactive to whatever hazards are introduced without your consult. To do so though safety must be woven into the fabric of every function of the business from engineering to marketing. Without that interdependency you will frequently be placed into that reactive role and as such you will always be starting behind the eight ball.

Safety excellence begins with the understanding that if you want to excel you must always strive for excellence. To begin that journey within your organization you must have the full support of everyone from the top to bottom and that means integrating your expectations into every facet of the business. Only then can you fully develop the safety culture that will engrain excellence throughout the organization.

If you would like additional information or assistance on steps that you can take that will help you integrate safety throughout your organization please contact Cosmos Consulting at info.cosmosconsultingllc.com Please look for future articles that will identify cutting edge technological solution which can assist in integration and improve overall safety management efficiency or visit www.complaincefactors.com

SAFETY EXCELLENCE: INTEGRATING SAFETY THROUGHOUT YOUR BUSINESS PROCESS

June 2015 Page 11


June 2015 Page 13

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ENVIRONMENTALMANAGEMENT

By: Beth Powell, Vice-President and General Manager, New Pig Energy

With the Chapter 78a draft currently under review, this guide explains the different types of secondary containment according to PA Act 13 and associated best management practices for installation, maintenance, safety, and spill prevention.

Pennsylvania Act 13 of 2012Unconventional well sites must be designed and constructed to prevent spills to the ground surface or off the well site. Containment practices must be in place during

both drilling and hydraulic fracturing operations and must be sufficiently impervious and able to contain spilled materials, and be compatible with the waste material or waste stored within the containment. Containment plans must be submitted to the department and describe any equipment that is to be kept onsite to prevent a spill from leaving the well pad.

Containment systems shall be used wherever drilling mud, hydraulic oil, diesel fuel, drilling mud additives, hydraulic fracturing

additives, and/or hydraulic fracturing flowback are stored. Containment areas must be sufficient to hold the volume of the largest container stored in the area plus ten percent. (§3218.2 of the Act).

Master Containment PlansThe containment plans mentioned in the act are called Master Containment Plans (MCP) and were required for unconventional well permits starting October 14, 2012. The detailed plans should include the installation, utilization, integration and maintenance plan of all potentially used containment systems, as well as manufacturer’s specifications on materials used, installation directions, maintenance requirements, chemical compatibility, warranted uses and reuse/disposal considerations. The MCP should state how the secondary containment system will be used in practice, either as local containment or as complete containment.

Local ContainmentLocal containment is only deployed at the site of the reservoir (tanks), such as diesel fuel tanks, chemical tanks, roll offs, drilling rigs and trucking transfer stations. These systems may also include using a spill deck under all chemical storage tanks of a certain size or deploying a collapsible portable containment system around all diesel fuel tanks.

Complete Containment

Complete containment is deployed for the entire well pad operation. When employing this type of practice:

1) Choose a liner that is a. Durable--Able to support the weight of heavy equipment, such as drilling rigs and trucks.b. Impervious--Constructed from a synthetic material with a coefficient of permeability of no greater than 1 x 10-10 cm/sec and with sufficient strength and thickness to maintain the integrity of the liner. c. Chemically Compatible--Designed, constructed and maintained so that the physical and chemical characteristics of the liner are not adversely affected by the waste and the liner is resistant to physical, chemical and other failure during transportation, handling, installation and use.

2) Identify the type and thickness of the liner and the installation procedures to be used.3) Verify that adjoining sections of liners are sealed together to prevent leakage in accordance with the manufacturer’s directions. 5) Design the liner system and site grade to efficiently collect and remove spilled material, waste and rainwater.6) Ensure the berming of the entire pad meets the permeability standard. (Act 13 FAQs)

Inspection and Maintenance PlanThe Master Containment Plan must include an inspection and maintenance plan for ensuring the timely and quality repair of damage that is caused to any containment systems including, but not limited to: tears, punctures or any condition that compromises the maximum permeability requirements of the liner system.

Liner Containment SystemsIn support of the Act 13 and the Master Containment Plans, three types of containment are typically found on Pennsylvania well pads: pad, tank and equipment.

Pad ContainmentThis is the main liner that is placed over a large square footage, typically centered off the wellheads. The liner installed before rigging up and before a completion move. Berming is typically 6” to 8” high. Although some operators tie into plastic barricades (to control traffic to designated areas), the entrance ways are typically only 6” to 8”. The liner may be directly attached to the cellar walls, either mechanically or with a coating, to prevent any back up at the well head from pushing under the liner.

Tank Farm ContainmentThis is the containment under the battery of frac tanks and may or may not be on top of Pad Containment. Plastic, metal or concrete barricades are used to provide high walls to meet the 110% containment of the largest tank. If walls are 2’ or higher, bridge ladder may be used to enter/exit.

Equipment ContainmentThis liner is placed directly under equipment that is leak prone. It may be on the Pad Containment to limit spread (mud tanks, pump house) or it could be under a generator, light post, sewer treater, etc. that is off the Pad Containment. Berming is typically 6” to 8” high.

Best Management PracticesThe following sections contain lessons learned in the Appalachian Basin. They have been field tested by numerous operators.

COMPLIANCE AND BEST PRACTICES; A GUIDE TO SECONDARY CONTAINMENT IN APPALACHIA

Sub-base1) The sub-base needs to provide a flat, firm foundation. 2) If the top layer of the sub-base is too hard, such as soil cement, protruding debris and stones cannot be pushed down by traffic and can result in punctures. 3) If the top layer of the sub-base is too soft, such as mud or high-clay content soil, developing ruts will cause traffic to bounce and embed forks in to the liner. The rutted areas also do not support the liner, which can result in tears.4) The sub-base has a large effect on the number of patches required throughout the liner lifetime. A gravel base will shift to disperse load; 3/4 inch to fines limestone (2A modified, crusher run, #57) is recommended. Rounded stones may result in few punctures--but may develop ruts.5) All pads should be rolled before the liner is installed.

Maintenance1) Inspect the containment on a frequent basis for holes and berm issues. Weekly is typical.2) Patch according to manufacturer’s instructions. Mud and water must be removed before applying the patch.3) Do not place pipe racks directly on the containment liner. Use rig mats/isolation pads or keep the liner tight to the catwalk. 4) For closed-loop systems, use rig mats in the back yard for the drill cutting bins and track hoe path.

Safety1) Use liners with high coefficients of friction (COF) to limit slips and falls. Avoid ones with smooth surfaces. Also avoid textured ones with smooth seams since there is a large change in the COF between the two areas. A consistent, high COF is critical when snow, ice and drilling mud are present on the surface.3) Limit loose layers and wrinkles in the containment liner. Wrinkles should be pulled out during installation and after equipment is placed. The edges should be weighted down until berming is complete.

Spill Prevention1) Liners should be designed for the application. Liners exposed to vehicles and equipment should be highly resistant to tears and punctures.2) If grounding rods are placed through the liner, boots and standing pipe must be used to maintain sump capacity. The height must be at least as tall as the berm.3) To avoid spills backing up ender the liner, the liner should be attached to the cellar wall. This should then be either mechanically fastened or sprayed to the cellar walls. 4) Clean up hydrocarbon spills as quickly as possible, such as drilling mud and pipe dope. Place catch basins where this is likely to happen (e.g. valves). 5) Liner should terminate at or beyond the top of the berm. The lowest point of the liner determines the entire containment’s sump capacity. 6) Avoid parking on the berm since this lowers the overall sump capacity.7) When forming corners, ensure edges of the liner remain at the top of berm.8) Fuel tanks should be double-walled. Some operators place them on two liners (Pad and Equipment/Tank Containment), with the second cut to fit around them specifically. This provides four levels of containment. 9) Repair tears quickly to reduce tripping hazards.10) Barricades or flags at the corners reduce damage caused by contactor vehicles.

11) Fluid transfer is a high risk activity for spills. If the transfer is not occurring with a liner present, place catchment basins under the connections and valves.

ConclusionsSecondary containment on drilling and completion sites requires planning and inspection to ensure compliance with federal and state regulations. The sub-base, inherent liner durability, and seaming method have a direct impact on the long-term functionality of the containment system. Maintenance programs should address inspection frequency, correct patching methods and berm repair. Control of traffic and contractor training on the site will greatly reduce maintenance costs. When choosing the liner or other barrier, be aware of safety concerns. In cold and wet climates, a high coefficient of friction surface can significantly reduce slip and falls. Limiting wrinkles, removing spills and repairing tears also have a direct impact on safety.

For More Info: Phone: 1-855-PIG-LINER (744-5463) Email: [email protected] Web: www.newpigenergy.com

June 2015 Page 15


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nuclear wastetechnical

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SAVE THE DATE!

35th Annual Summer Meeting Technical Sessions, Golf Tournament, Clay Shoot Tournament, Barbecue and Equipment Show

July 7-9, 2015 Peek’n Peak Resort & Conference Center, 1405 Olde Road, Findley Lake, NY 14736

The resort has a beautiful indoor/outdoor pool, spa, miniature golf, two 18-hole golf courses, bicycle and Segway rentals, Mountain Adventure Park and more. Peek and Peak is right outside of Findley Lake – a quaint village with a picturesque lake, and is only a short drive to Bemus Point which sits right on Chautauqua Lake. For hotel reservations: 716-355-4141 - mention IOGANY for room block and rates.

Tuesday, July 7th 1:00 – 4:30 pm: Business Succession & Estate Planning Seminar for the Oil & Gas Professional Wednesday, July 8th 8:30 am – 3:00 pm: Technical Session (lunch included) 7:00 pm: Get Acquainted Cocktail Reception

Thursday, July 9th 8:00 am: Golf Tournament

• Peek’n Peak Lower Course – Scramble • Peek’n Peak Upper Course – Play your own ball

(Prior to June 15th registration by Golf Sponsorship only through IOGANY! After June 15th open registration begins with Peek Pro Shop. Lunch and beverages provided at the turn on each course. CASH PRIZES!)

9:00 am: Sporting Clays Shoot at Critter Path – must provide your own transportation to location. Cash prizes!

9:00 am – 12:00 pm: Stripper Well Technology Transfer Session

12:00 pm: 35th Annual Barbecue & Oilfield Equipment Show – Lunch and dinner provided. Vendor displays, great food, door prizes and music throughout the day!

Outdoor Exhibiting is available on July 9th during the Barbecue. No fee for exhibits but registration form and barbecue ticket required.

For more information on the meeting and sponsorship opportunities please visit the IOGANY website at: www.iogany.org / Events or call our office.


INDUSTRYINSIGHT

By: Kristie Kubovic, Director of Communications, Shale Media GroupEdited By: Benjamin Kliest, Editor, Shale Media GroupImages Courtesy of: Strata Worldwide

Strata Worldwide is a company known for their global safety products and technologies for the mining industry. However, similar needs in the shale oil and gas industry influenced the company to expand their services for these other energy

sectors. Strata joined with Trolex, a UK-based company that provides safety monitoring solutions and gas detection equipment, to develop a safe, wireless gas detection system for drill rigs, called RigGuard™. This monitoring and early detection warning system is a completely wireless, battery-powered system that was developed specifically for oil and gas drilling rigs.

Shale drilling sites must rely on detectors to monitor various gases from a number of different sources that could potentially harm the site’s workers. For example, for many years hydrogen sulfide has been a well-known hazard for the industry. According to the Occupational Safety and Health Administration (OSHA), “Hydrogen sulfide is a flammable, colorless gas that is toxic at extremely low concentrations. It is heavier

than air, and may accumulate in low-lying areas. … Oil and gas wells can release hydrogen sulfide and expose workers to hydrogen-sulfide gas. The three best practices to help prevent injury and death are: active monitoring for hydrogen-sulfide gas; good planning; and training programs for workers.”

Aware of the potential risks, the industry has worked diligently to follow and go beyond these OSHA guidelines to keep its workers safe. However, the shale oil and gas industry is growing and companies must evolve with it in order to continue to keep workers safe. For instance, since 2010 the similar fatalities of nine oil-field workers over a four year period in the central US drew attention to a previously unknown, but potentially harmful situation on well sites. All nine workers were working alone in similar jobs near production tank hatches. Initially the explanation was thought to be natural causes. However, taking note of the similarities, the industry and government organizations began to investigate to see if there might be a connection and if there were, a way to protect workers. Though still under study, it is believed that these fatalities involved toxic fumes; however, hydrogen sulfide doesn’t look to be the cause, but rather benzene.

According to the Centers for Disease Control (CDC) for these cases, “When hatches on production tanks are opened by a worker, a plume of hydrocarbon gases and vapors can be rapidly released due to the internal pressure present in the tank. These gases and vapors can include benzene, a carcinogen, as well as low molecular weight hydrocarbons such as ethane, propane, and butane. In addition to asphyxiation and explosive hazards, exposure to high concentrations of these low molecular weight hydrocarbons can have narcotic effects, resulting in disorientation, dizziness, light-headedness, and other effects.”

Situations with gases like these are reasons that companies, such as Strata Worldwide, develop new products like RigGuard™ to keep the industry safe. During drilling operations, RigGuard™ alerts drill rig personnel of up to 64 toxic and combustible levels of gases, including hydrogen sulfide (H2S), carbon monoxide (CO), methane (CH4), oxygen (O2), and benzene (C6H6). “The gas detectors can monitor up to 64 different gases by simply switching out the e-Module sensor inside it. It then automatically reconfigures to the new gas. RigGuard™ is there to detect these harmful gases and provide an early warning for personnel to evacuate the area,” explained Rob Albinger, Product Manager, Strata Worldwide.

Prior to RigGuard™, other systems did transmit data wirelessly; however, the systems were electrically powered, which involved power cords and 110v plugs—items that aren’t always conducive on a drilling rig. The huge benefit of RigGuard™ is that it is completely, 100% wire and cable free. Strata Worldwide’s battery-powered system leaves the units completely untethered and employs magnetic mounting, which means the sensors are immediately operational and could utilize numerous locations for set-up.

“Strata is committed to the design and development of technologies that are beneficial for today and that lay a foundation for improved solutions in the future. With a strong in-house engineering team driving product development, Strata has both the ability and the versatility to create specific solutions to meet customer and market demands across any industry. Such is the case with Strata’s completely wireless, battery operated, harmful gas monitoring system RigGuard™. RigGuard™ is not only an on-site warning system, but also an overall rig gas monitoring system,” informed Mike Berube, President and CEO, Strata Worldwide.

“The system’s quick and easy installation enables the sensors to be moved and relocated at will. Strata’s RigGuard™ gas detectors magnetically mount directly onto the drill rig. Each unit monitors the concentrations of a specific gas. If concentrations exceed the specified limits, the units emit warning alarms by flashing tri-colored LED lights and sounding audible horns at 90dB. The color of the LED light indicates which gas has been detected,” explained Albinger, who added, “Stainless steel sensor shields guard the sensor modules and provide additional protection. In addition, the sensors are powered through commercially available D-cell batteries, which last an average of 40 to 50 days.”

All data is automatically transmitted from the sensors over Strata’s secure StrataConnect™ networks to the operator’s RigGuard™ Programmable Logic Controller (PLC) display, which includes a central processor and screen. “The PLC display features a full color digital touch-screen display that requires no external

STRATA WORLDWIDE: FROM MINING TO SHALE—KEEPING WORKERS SAFE

June 2015 Page 19

antennas or data cables. The PLC is typically located in the central control room, also known as the doghouse, which is often on the rig or at a nearby office and is powered by a standard 120VAC. From here, operators can monitor all areas of the rig simultaneously in real-time and receive immediate notice of any alarms,” expounded Albinger.

Albinger pointed out, “Continuous gas concentration levels, battery-life, and warning alarms are also monitored. In addition, the information can securely be sent off-site to a central RigGuard™ Control Center by interfacing with the Internet via a cellular, satellite, or intranet connection to enable remote, mobile, and centralized data collection across multiple rigs and provide remote monitoring, alerting, historical data, and trending analysis.” This means the data on the PLC display could be viewed anywhere around the globe. Albinger says, “All site data, even from multiple sites, is collected and viewable in one central location. It can be displayed on any Internet-enabled device including computers, tablets, and smartphones. This capability is ideal for operations with multiple drill rigs in vastly remote locations.”

Strata has incorporated the RigGuard™ software with Google Maps, enabling operators the ability to manipulate the display to view everything from the exact locations of each individual rig sensor to the overall map location of all rigs. Sensor icons on the display are labeled according to the respective monitored gas and are color-coordinated according to their operating status. Albinger relayed, “As a design standard, sensors in normal operating mode appear green while those in alert mode appear red.”“Strata Worldwide provides RigGuard™ as a turnkey, full service product for gas drilling operations. Certified Strata technicians will be on-site to install and configure the system as well as provide training for all personnel. Technicians are also available on-site to complete routine inspections, maintenance, and any potential system repairs,” expressed Albinger.

The system is also available on a rental basis too with no upfront costs. This includes all of the equipment, installation, set-up, and ongoing maintenance, which is provided by certified Strata personnel and is all a part of the one set monthly fee. “It works out being a completely hands-off, hassle free system for the customer,” relayed Albinger.

There is a lethal risk for a number of gases during drilling operations in the shale oil and gas industry. Early detection and warning is crucial to the safety of rig workers. Strata Worldwide will be exhibiting RigGuard™ at DUG East at booth 701. Albinger added, “We are going to have a fully operating demo system on display in the booth, showing the detectors registering rising gas levels, emitting warning alarms, and transmitting data to the central control unit. The software interface will be displayed on a screen for attendees to view.”

Headquartered in Atlanta, Georgia, Strata Worldwide services mining regions in North America, Australia, Europe, and South Africa. The company’s product line includes: wireless communications and tracking systems, emergency mine refuge chambers, secondary roof support products, proximity detection systems, and contract construction services. For

more information on RigGuard™ or StrataConnect™ in the shale oil and gas industry, visit strataworldwide.com, call 877-691-6601, or email [email protected].

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. In addition, join us on June 18th for our next Elite Energy Event in front of the Holiday Inn Express in Bentleyville, PA from 5-8pm. Kristie Kubovic is the Director of Communications at Shale Media Group. Contact her at [email protected]

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June 2015 Page 21

UPCOMING EVENTS

Denotes National EventVisit our website for links to these events

WWW.ONGMARKETPLACE.COM/EVENTS

JUNE15-17

Northeast LDC Gas Forum Boston, MA | www.ldcgasforums.com/ne/

22-25A&WMA Annual Conference Raleigh, NC | www.ace2015.awma.org

23-25DUG East Pittsburgh, PA | www.dugeast.com

20-22URTeC 2015 San Antonio, TX | www.seg.org

28-29PIOGA Pig Roast and Equipment Show Champion, PA | www.pioga.org

3-6Appalachian Gas Measurement Short Course Moon Township, PA | www.agmsc.org

19-20NAPE South Houston, TX | www.napeexpo.com

25-26IADC Well Control Conference Galveston, TX | www.iadc.org

16-17Shale Insight Philadelphia, PA | www.shaleinsight.com

16-17IADC Asset Integrity & Reliability Conference Houston, TX | www.iadc.org

16-19ADDC Annual Convention Lubbock, TX | www.addc.org

17SOOGA Annual Trade Show Marietta, OH | www.sooga.org

21-23AESC Annual Tradeshow and Conference Ft. Worth, TX | www.aesc.net

28-30SPE Annual Technical Conference & Exhibition Houston, TX | www.spe.org

7WV Oil and Gas Expo Morgantown, WV | www.wvoilandgasexpo.com

13-15SPE Eastern Regional Meeting Morgantown, WV | www.spe.org

27-28PIOGA Eastern Oil & Gas Conference Monroeville, PA | www.pioga.org

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NEWTECHNOLOGY

By: Ken Sigmon, Marketing & Sales Manager, Bluetick Inc

How do you currently manage your land activities? Do you use spreadsheets, mappers and the map department, accounting, and a documentation management system? Do you feel comfortable with this arrangement? Also, how do you keep up

with expiring leases? What would be the cost if you lost the lease on a potential high volume producing tract? Imagine how efficient your land team could be if you had a land management system.

Land management systems (LMS) are used by a variety of companies to manage their assets. Some of the companies that utilize land systems are E&P companies, mining companies, law firms, pipeline companies, and royalty partnerships. These systems maintain an electronic collection of leases, company owned fee lands, rights-of-way, unit designations, and any other type of agreement that may need to be tracked. These systems not only allow easy record keeping and reporting, but also provide help in managing those properties. It is time to evaluate the purchase or license of a proper land system. Continuing to manage your land activities manually with spreadsheets is a big gamble.

The implementation of a land system will provide a boost in productivity in many areas. The most obvious way is having a database of all leases that are acquired, and having the ability to organize those leases in a variety of ways. Most systems have a scheme for grouping leases by prospect, project area, organizational ownership, and tract. Another seemingly obvious thing that a proper land system can do is track lease provisions and generate reports on those provisions as necessary. For example, if a block of 100 leases are being sold, the lease analyst could quickly build a report to list all leases which had provisions requiring notice or consent for assignment.

Another great use of land systems is to generate a calendar of upcoming lease obligations. It’s powerful to be able to, at a glance, determine if primary terms are ending, Pugh clauses are activating, or lease rental payments are coming due. While there are many ways to manually track these items, an automatically generated e-calendar is an excellent solution. In fact, some systems provide an e-calendar module that can send automated emails.

Once a company makes the decision to begin evaluating land management systems, it is the beginning of a process that could take a few weeks to 6 months or longer. This evaluation time frame is largely dependent on the sales, design, implementation and testing processes that are required by the system provider and their client. While many of the less expensive land management systems offer an “out of the box” package that is appropriate for use by most oil and gas companies, some companies have more complex needs. In this case an enterprise or on-site land management system may be required to meet the company requirements.

When evaluating a land management system a very important decision is whether you prefer a lease based or tract based system? The major difference between the two types of land systems, Tract based and Agreement (Lease) based primarily comes down to the architecture of the database. In other words, the structure of how the data is stored. Modern databases (collection of tables of data) are referred to as Relational Databases since they allow data in different tables to “relate” to

each other through some identifier and thus allow queries (questions) of the data through several tables at a time. Agreement based systems typically have their architecture designed to wrap everything around the Agreement or Lease. Lease data is stored in a table and other data can be “joined” to that table through the lease # or id. Typically, with this type of system, a user can look at a lease and see its tracts but cannot look at a tract and see its leases.

Tract based systems are designed so that ALL data stored has a tie in some way back to a tract. Tracts are stored in a table, owners in another, leases in another and so on. This allows the user to look at a lease and see its tracts, look at a tract and see its leases, or even look at an owner and see its tracts or leases. The structured

form of data in a Tract based system is a natural fit and lends itself easily to growth. Tracts exist and they have owners with interest. That basic foundation allows for practically any other feature to be added and attached to it either at the tract, owner or ownership level. Not only is the architecture easier to implement but operations and reports run faster since you are not left querying mounds of redundant data. Any system can store a mass of data for you but it takes one properly designed to provide you with accurate information in a timely fashion. Suppose you have a Unit containing tracts that are leased and some that are not. With a Lease based system you would only see those leases within the unit and would have no way of seeing the unleased tracts. Suppose then you wanted to attach a WI (Working Interest) or ORRI (Over-Ride Royalty Interest) to the leases and unleased tracts; this would certainly not be possible in a leased based system. With a Tract based system, this is not only possible, but can be expanded even further to include ROWs (Right-of-Ways) on those tracts, wells in those units, title transfers of the ownership of those tracts, and so on.

So, could your company be too small to use a Land Management System? If you are an E&P operator or a land broker and you are still using spreadsheets to manage your data then you are doing your company an injustice. Spreadsheets are not databases. Databases allow you to get information from data and without a proper land system that has at its foundation an accurately designed relational database,

DO YOU NEED A LAND MANAGEMENT SYSTEM?

your company’s efficiency will suffer. You will also be susceptible to missing lease expirations; as well as, missing rental payments which we know can be a costly experience.

The right land management system will pay for itself by improving efficiency and accuracy and assisting users by automatically notifying personnel of upcoming dates of interest. Bluetick has a land solution regardless of your company size. Our client’s managers get answers to questions quicker than ever before and we often have clients tell us, “I can’t believe we ever operated any other way”.

Improve your land management activities and get started on a Land Management System software solution today. Contact Bluetick LMS for the most innovative and intuitive tract based LMS, that is integrated with the premier maps services Esri ArcGIS®.Ken [email protected] and Sales ManagerBluetick Inc.1501 Highwoods Blvd, Suite 102Greensboro, NC 27410

Page 23June 2015

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LEGAL &FINANCE

By: Stephanie N. Rosser, Attorney, Davis Law Group

As oil and gas companies continue to explore the country’s vast shale plays and produce the abundant natural resources found beneath the surface, landowners are finding themselves in unique, and sometimes difficult, situations when a previous mineral or oil and gas reservation affects their interest in the oil and gas estate of their surface lands. Possible remedies or solutions for landowners are dependent upon the state where the property is located. The following is an overview of how two states, Pennsylvania and Ohio, address severed mineral and oil and gas interests.

PennsylvaniaPurpose: Enacted on July 11, 2006, the Pennsylvania Dormant Oil and Gas Act (DOGA), 58 P.S. § 701.1 et seq, was created for the purpose of: (1) facilitating the development of subsurface properties by reducing the problems caused by fragmented and unknown or unlocatable owners of oil and gas interests; and, (2) protecting the interest of unknown and unlocatable owners of oil and gas. The Pennsylvania DOGA specifically states that “[i]t is not the purpose of this act to vest the surface owner with title to oil and gas interests that have been severed from the surface estate.” 58 P.S. § 701.2. Prior to the enactment of the DOGA, some parcels or tracts of land could not be developed because all of the oil and gas owners were not available to be leased. How it works: When an oil and gas company is interested in developing a tract of land but there are unknown owners who hold an interest in the oil and gas estate, any person who owns an interest in oil and gas underlying a tract of land may petition the court in the county where the tract is located to declare a trust “in favor or all unknown owners of an interest in the oil and gas underlying the tract whose identity, present residence or present address is unknown and cannot be determined by diligent efforts.” 58 P.S. § 701.4(a).

Requirements of the Petitioner: (1) Make a diligent effort to locate the owner; (2) Despite diligent effort, Petitioner is unable to identify or locate the present residence or other address of one or more owners of the oil and gas interest in question; (3) Appointment of a trustee is in the best interest of all owners of interest in the oil and gas.

If these requirements are met, the court will appoint a financial institution as trustee of a trust for the unknown owner(s), and will authorize the trustee to execute and deliver one or more oil and gas leases. All bonuses, rental payments, royalties, and other income owed to the unknown owner(s) is paid to the trustee until the trust is terminated. The trust will remain in force until the unknown owner(s) of the oil and gas interest(s) has been identified to the satisfaction of the trustee and all owners have received their share of any funds held in trust. As long as a lessee is paying money that is owed to a trustee, the lessee is not liable for claims made by unknown owners.

OhioPurpose: First enacted in 1989 and later amended in 2006, the Ohio Dormant Mineral Act (ODMA), ORC § 5301.56, was created to reunite abandoned mineral interests with the surface estate. (It is noted that the term “mineral” as used in Ohio includes oil and gas.)

How it works: As originally enacted in 1989, the ODMA provided that a severed mineral interest is deemed abandoned and reunited with the surface estate after 20 years unless the interest was in coal, was held by the United States, the State of Ohio, or by any political subdivision of either. However, the mineral interest was not deemed abandoned if, within the preceding 20 years, any of the following occurred: (1) the mineral interest was the subject of a recorded title transaction; (2) there had been actual production; (3) there have been underground gas storage operations; (4) a drilling or mining permit has been issued; (5) a claim to preserve the mineral interest was properly filed; or, (6) a separately listed tax parcel was created for the mineral interest.

The 1989 version of the ODMA did not specifically address when the 20-year period began, and many disputes have arisen over whether it provided proper notice to the mineral owner.

The 2006 amendment most notably sets froth the specific requirement that a surface owner must provide notice to a mineral owner by direct service or publication that the surface owner intends to have the mineral owners’ interest declared abandoned. Only the surface owner can initiate this process, as opposed to the Pennsylvania DOGA which allows any person who holds an interest, including an oil and gas company, to petition for a trust. Under the ODMA, if the mineral owner fails to take action to preserve their interest, the surface owner must file an affidavit of abandonment no sooner than 30 days but no later than 60 days after notice is served. Following the timely filing of an affidavit of abandonment, the surface owner must lastly file a notice of failure to file.

Recent Litigation: Many of the early common pleas court ODMA decisions have made their way through a district appellate court and are now finding their way to the Ohio Supreme Court. Some of the more notable cases the Ohio Supreme Court has heard or will hear oral arguments for are:

(1) Chesapeake Exploration, L.L.C. v. Buell, Case Number 2014-0067. Oral arguments were heard August 20, 2014; no decision has been handed down at this time. The court is considering: (a) Is a recorded lease a title transaction under the ODMA?; and, (b) Is the expiration of a recorded lease and the reversion of the rights granted under the lease a title transaction?

(2) Corban v. Chesapeake Exploration, L.L.C., Case Number 2014-0804. Oral arguments were heard May 6, 2015; no decision has been handed down at this time. The court is considering: (a) Does the 2006 or 1989 version of the ODMA apply to claims asserted after 2006 alleging that the minerals automatically vested in the surface owner prior to the 2006 amendment?; and, (b) Is the payment of a delay rental during the primary term of a lease a savings event?

(3) Walker v. Shondrick-Nau, Case Number 2014-0803. Oral arguments are scheduled for June 23, 2015. The court is considering a number of propositions of law, including: (a) Is the 2006 version of the ODMA the only version to be applied after June 30, 2006 (the effective date of the statute)?; and, (b) Does the 2006 version of the ODMA apply retroactively to severed mineral interests created prior to June 30, 2006?

(4) Eisenbarth v. Reusser, Case Number 2014-1767. The Supreme Court recently accepted this case for appeal; no oral arguments have been scheduled at this time. The court is considering: (a) Does the 1989 version of the ODMA adopt a rolling or static look back period (in regard to the 20-year period)?; and, (b) Is an oil and gas lease a title transaction?

A TALE OF TWO OIL AND GAS ACTS

Page 27June 2015


Documents

The Northeast ONG Marketplace - June 2015