Tpa oil show binder1

SUNDAY, OCTOBER 19, 2014 O I L S H O W 2 0 1 4 ODESSA AMERICAN 1

Gowith the

Flow

2014 Permian BasinInternational Oil Show

STORY PAGE 9

WHAT’S INSIDE>> Visitor’s guide ..............2>> Airport traffic ..............3>> Water wildcatters ........4>> Feeding the masses ......5>> Oil legend Jim Henry ....6

>> Oil show president ........7>> Oil show impact ............9>> Oil show security ........10>> C&J Energy expands ....11>> ‘Boom different’ ..........12

PHOTO BY COURTNEY SACCO | ODESSA AMERICAN

2 ODESSA AMERICAN O I L S H O W 2 0 1 4 SUNDAY, OCTOBER 19, 2014

BY JARED [email protected]

The Permian Basin International Oil Showwill be coming to town in Oct. 21-23, and while theevent provides its own as-sortment of activities toenjoy, there are stillplenty of other things tosee when the show hasconcluded for the day.

The Wagner Noël Per-forming Arts Center willhave several events foroilmen and women aliketo unwind with duringthe week.

“It will be nice to havemore shows to offer asthey (oil show visitors)come in and we hopethey will come out andexperience the building,”said Wagner Noël spokes-woman Stephanie Rivas.“There is really a goodvariety of shows and tick-ets are still available forall but the Heart show, sowe encourage everyonewho is coming into townto come out to the venueand visit.”

There will also besome events going on inMidland for Oil Show at-tendees to visit whilethey are here in the Basin.The Midland Center willbe hosting the 11th An-nual Tour De Vine spon-sored by the March ofDimes as well as the Yel-low Rock Tattoo Exposi-tion.

Executive Director forthe PBIOS Tony Fry, thereis not much planned afterthe show as far as enter-tainment goes but severalwho come into town ven-ture out in search of funwhile here in Odessa orMidland.

“If they’re an exhibitorwe do have an exhibitormeeting and cocktailparty but that’s by invita-tion only,” Fry said. “Wedo have visitors thatcome and stay and theywant to go watch westTexas football so theyhave the chance to dothat. I also certainly knowwe have some nice golfcourses in the area.”

Here are some eventshappening this week:

T H E W A G N E R N O Ë LP E R F O R M I N G A R T SC E N T E R :

>> What: Susan Boyle at theWagner Noël.

>> When:7:30 p.m. today.

>> Where:1310 N. FM 1788,

Midland.>> Cost: Tickets start at

$47.50.

M U S E U M S>> What: CAF Airpower Mu-

seum.>> Where: 9600 Wright

Drive. Midland. >> When: 9 a.m. to 5 p.m.

Tuesday through Saturday. >> Cost: Children (5 and

under) free, Children (6-17) $9,Adults (18-64) $12, Seniors (65and up) $10, Current militarypersonnel with ID free.

>> Call: 432-567-3010.

>> What: The Ellen Noël ArtMuseum, “Spirit of the Mask.”

>> Where: 4909 E. UniversityBlvd.

>> When: 10 a.m. to 5 p.m.Tuesday through Saturday.2 p.m. to 5 p.m. Sunday.

>> Cost: Free admission. >> Call: 432-550-9696.

>> What: Presidential Mu-seum and Leadership Library,The Bush House Museum.

>> Where: 4919 E. UniversityBlvd.

>> When: 10 a.m. to 5 p.m.Tuesday through Saturday.

>> Cost: Free admission,suggested donations are welcome.

>> Call: 432-363-7737.

O T H E R E V E N T S : >> Mark 10 Theatricals and

the Kaleisodscope Companypresent ‘Coraline.’ Shows are at7:30 p.m. Oct. 24, 25, 29, 30, 31and 2:30 p.m. Oct. 26 at the

Permian Playhouse, 310 W. 42ndSt.

Tickets are $15. Make reser-vations by calling 432-362-2324.

Book by David Greenspan,music and lyrics by StephinMerritt, based on the novel byNeil Gaiman and directed byMark Tenniswood.

Visit mark10theatricals.comand allhallowsread.com

>> Club Patron, 5850 W.University Blvd., Suite 140, hasscheduled the 2014 Fall BallTuesday.

Doors open at 7 p.m.The event features

Whitechapel, Upon A BurningBody, Glasscloud and BlackWater Masochist.

Tickets are available atjandbproductions.frontgatetickets.com.

>> MIDLAND Midland HighSchool, 906 W. Illinois Ave., hasscheduled “Zombie Apoca-lypse,” a Halloween-themedconcert presented by the or-chestra at 7 p.m. Thursday inthe auditorium.

A carnival and costume contest has been scheduled at 5:30 p.m. in the cafeteria. Tick-ets are two for $1.

For more information, call689-1100.

>> Fathom Events hasscheduled “The Met: Live inHD,” live performances of TheMetropolitan Opera’s ninth season at 11:55 a.m. Saturdaysand 6:30 p.m. Wednesdays onthe following dates at CinemarkOdessa 12, 4221 Preston SmithRoad, Odessa, and Regal TallCity Stadium 14 with IMAX, 4915W. Loop 250 N., Midland.

Wednesday: Le Nozze di Fi-garo.

For tickets or more informa-tion, visit www.FathomEvents.com.

>> Mark 10 Theatricals and The Kaleidoscope Company have scheduled“Coraline” the musical Oct. 24-26, Oct. 30-31 and Nov. 1at the Permian Playhouse, 310W. 42nd St.

Call 366-2323 or visitwww.mark10theatricals.com.

>> The Ellen Noël Art Mu-seum, 4909 E. University Blvd.,has scheduled Movies at theMuseum, featuring movies bywriter and director, Wes Ander-son, in the Rodman Auditorium.

The following movies havebeen scheduled.

Oct. 25: 2 p.m., FantasticMr. Fox (rated PG).

>> MIDLAND The Hindu Association of West Texas(HAWT) has scheduled Diwali,the Festival of Lights celebra-tion, a grand showcase of In-dian culture, from 5 p.m. to 8 p.m. Saturday at the WagnerNoël Performing Arts Center,1310 N. FM 1788, Midland.

The festival includes dinner,live music, sensational stageshows, Dandia dance, hennatattoos and vendors with Indianclothing and jewelry.

Tickets are $25 for adultsand $15 for children/students.

For tickets, call BharathiRanderia at 689-3575, SharadaSatyavada at 528-7563 or NaliniPatel at 296-2314.

Visit www.hawttemple.org.>> MIDLAND The Midland-

Odessa Symphony andChorale has scheduled the fol-lowing Ensemble Chamber con-certs at 3 p.m. at the WagnerNoël Performing Arts Center inthe Rhea-Greathouse RecitalHall, 1310 N. FM 1788, Midland.

Oct. 26: “Back In Time” —West Texas Winds.

O T H E R E X H I B I T I O N S>> ALPINE Museum of the

Big Bend, 400 N. Harrison St.,Alpine, has scheduled the ex-hibit “Marfa Flights: AerialViews of Big Bend Country” byPaul V. Chaplo through Jan. 18,2015.

Museum hours are from 9 a.m. to 5 p.m. Tuesdaythrough Saturday and 1 p.m. to5 p.m. Sunday.

Admission is free. Donationsare welcome.

Call Mary Bones at 432-837-8734 or visit http://museumofthebigbend.com/learn/adult-programs/.

>> The Ellen Noël Art Mu-seum, 4909 E. University Blvd.,has scheduled the exhibit “Keysof the Renaissance” featuringthe collection of Gary Ventolini,MD, Thursday through Jan. 31,2015.

Museum hours are from 10 a.m. to 5 p.m. Tuesdaythrough Saturday and 2 p.m. to5 p.m. Sunday.

Call 550-9696 or visitwww.noelartmuseum.org.

Odessa’s Stonehenge is located on the campus of the University of Texas of the Permian Basin,located near the intersection of East 42nd Street and Preston Smith Road.

OA FILE PHOTO

There’s much to do in thePermian Basin during the show

Welcome to the Oil Patch

The WagnerNoëlPerformingArts Center,located onFM 1788betweenOdessa andMidland,plays host tonumerousshows ofnationallyrecognizedartists.Among themis 2009Britain’s GotTalentcontestantSusan Boyle(top left),who willperformtonight at 7:30.

FILE PHOTOS

Bloody Bill’sDef Con 1HauntedWarehouseand Circus ofthe DeadMurderMaze, one ofOdessa’smore-macabresources ofentertain -ment during theHalloweenseason, willbe opentoday, Friday,Saturday,Oct. 26, 30,31 and Nov. 1.It is locatedat 2215 W.Second St.

OA FILE PHOTO

School children enjoy one of many exhibits at the Permian Basin Petroleum Museum and Chaparral Racecar Gallery, 1500 W.Interstate 20 in Midland. Exhibits range from oil equipment through the years to a look at the ancient Permian Sea. The largestcollection of antique drilling equipment in the world is on display. Visit 10 a.m. to 5 p.m. Monday through Saturday or 2 p.m. to 5 p.m. Sundays. The Chaparral Gallery is home to Jim Hall’s Chaparral racecars.

OA FILE PHOTO

The Globe Theatre of theGreat Southwest, located at2408 Shakespeare Road onthe campus of OdessaCollege, serves as a venue toseveral local theatricalproductions. The nextproduction, ‘The RockyHorror Show,’ is scheduled for 7:30 p.m. and 11:59 p.m. Oct. 31. For more informationon this and other productionsat The Globe, visitwww.globesw.org.

OA FILE PHOTO

SUSAN BOYLE

Permian Basin, includingMidland and the MidlandInternational Airport.However, he said it wasimportant that two func-tional airports are locatedso closely to the show.

Oil show officials haveestimated up to 45,000people could visit the oilshow, which could meanmore fuel is purchased.

Precinct 3 Commis-sioner Dale Childers saidhe hopes to showcase theairport and a business-friendly environment thathas been forged there.

pects an increase in activ-ity at the airport and thecounty is already workingto prepare for the oil show.

County employees arebumping up a landscapingproject to have it done be-fore the oil show in addi-tion to adding awnings onsome of the buildings atthe airport, Redford said.

She also said some ofthe rehabilitated taxiwaysat the airport should at-tract people.

“If we have more airtraffic coming in and outof our airport during thatweek, it definitely wouldresult in more revenue forthe county,” Redford said.

The county allows thesale of fuel on-site andgets a flow fee from thefuel company.

Debbie Fair, one of theowners of the new fixedbase operator at Schle-meyer Airport, said in her

first year of being with theairport for the oil show,they’re hoping to attractsome people by advertis-ing and direct mail outs.

People may be moreused to flying into Mid-land International Airportbecause they have morespace, she said, but theyhope to change that.

She also said she knowsof one company bringingin three airplanes that willbe on display during theoil show.

Tony Fry, executive di-rector of the oil show, saidwhich airport people flyinto will partially dependon whether they are flyingprivate or commercial,since commercial flightsdo not fly in to Schle-meyer.

Fry said he has no pref-erence which airport peo-ple fly in to, because theoil show is for the entire


BY JON [email protected]

With an estimated threetimes the normal jet trafficto come into SchlemeyerAirport during the Per-mian Basin InternationalOil Show, staff will have itshands full in one of thebusiest times of the year.

Scott Jones, a line serv-ice technician at Schle-meyer Airport, said theairport had at least triplethe corporate traffic fromfour days before the oilshow until two days afterit ended two years ago, thelast time the exhibitionwas in town.

“They show up indroves,” Jones said. “It al-ways coincides with Air-sho time, so October is abusy time for us.”

Jones said because theairport doesn’t chargelanding fees or ramp fees,it’s a popular alternative toMidland International Air-port. While gang hangarstorage is normally $50 pernight, Jones said it’s al-ready full and won’t haveany vacancies for the oilshow.

That means the airportwill be storing any planesthat don’t have a hangar, orhaven’t worked out a dealwith someone who does,on the aprons and differ-ent ramps.

Main aprons can onlyhold about eight planes,and fill up quickly, Jonessaid.

“It’s busy and that’skind of the way we want itaround here,” Jones said.“It’s not a problem, just alittle hard work.”

Ector County JudgeSusan Redford said she ex-

With the high-end busi-nesses that will be flyingin, Childers said, a lotmore fuel will be pur-chased than usual. EctorCounty receives a fee forfuel that is purchased atthe airport.

Marv Esterly, directorof Midland InternationalAirport, said they expectto see similar increases asSchlemeyer in both com-mercial and privateflights.

“There’s definitely anuptick in traffic when theoil show comes around,”Esterly said. “I suspectthat this year is going tobe even better than prioryears.”

Esterly said while air-lines won’t add flights tothe schedule, flights that

previously may not havebeen full will be packedand that gang hangars atthe airport will also behousing more aircraft.

The pricing of the ganghangar and ramp fees forprivate flights varies basedon the type of plane andother factors, Esterly said,and is determined byLandmark, the airport’sfixed base operator.

Sara Bustilloz, city ofMidland spokeswoman,said because the airport isself-funded, increasedbusiness is important.

“It affects our bottomline,” Bustilloz said.

“The more businessthat we see, the more im-provements and projectswe can get going out atthe airport.”

Morebusinesswill help

Schlemeyer

Airports expect increased traffic for oil showA plane sitson thetarmac neartheSchlemeyerField airportterminalearlier thisyear. Anestimatedthree timesthe normaljet trafficcomes intoSchlemeyerduring theoil show.

OA FILE PHOTO


BY COREY [email protected]

Oil companies increasinglycompete for water in WestTexas, a fact that organizers ofthe Permian Basin Interna-tional Oil Show as early aslast year anticipated wouldlead to more exhibitors fo-cused on their strategies forthe precious resource.

“Honestly, we’re anxious tosee them,” said Tony Fry, ex-ecutive director of the oilshow. “Because I want tomeet them myself.”

But projections for waterused by the oil and gas indus-try in the Permian Basin in2014 only increased, a trendexpected to continue.

PacWest Consulting Part-ners in Houston just lastmonth estimated the oil in-dustry would use 540 millionbarrels of water in 2014 — al-most all of it, for hydraulicfracturing. It reflected a starkupward revision by the firm,one of the few that tracks in-dustry water usage by region.

In February, the PacWest

anticipated 375 million barrelswould be used through theend of the year.

That level of demandmeans more and more oilcompanies will seek alterna-tive water strategies and morewater-sourcing companieswill seek to provide them,said Chris Robart, a partnerwith PacWest.

“It’ll continue to mature inthe Permian Basin,” Robartsaid. “There is a lot of consoli-dation that is happening rightnow across all the servicecompanies and pure-plays, asfar as water transfer or waterstorage, who want to go tomarket with a competitiveservice around water.”

And the oil show’s ex-hibitor list reflects that em-phasis on water. There are thestart-ups and the larger com-panies cobbled together fromsmaller ones, focusing onwater reclamation and watertreatment. Then there are thevarious related businesses,like manufacturers of storagetanks.

Take Rockwater Energy

Solutions, formed by a Hous-ton-based private equity firmin 2011 after a series of acqui-sitions. Representatives of thecompany, a third-time oilshow exhibitor, tout a pres-ence in Odessa that dates to1975 through three of the busi-nesses it acquired: Fas-line,Reef and Benchmark, allfounded here.

Each of those companiesfocused on water manage-ment and developing produc-tion and stimulationchemicals. Rockwater now re-ports about $1.4 billion in an-nual revenues. In thePermian, it added sand-transloading and hauling,water treatment and otherservice lines.

“There are three areas thatwe consistently look at: Obvi-ously, advancing our waterreuse program, developingnew chemicals that meet thatend and finding ways to makethe fracturing process moreefficient while providing ourcustomers with the informa-tion, whether through moni-toring or analytics that can

help them make those deci-sions,” said Dustin Brown,marketing director for thecompany in Houston, whosees a greater demand forsuch services. “It’s been a pro-gressive thing. It hasn’t beenall at once. I think the indus-try is picking it up.”

Brown cited a Sept. 1, 2013,rule by the Texas RailroadCommission that establishedno permit require-ments for operators or watermanagement contractors onrecycling operations at pro-duction sites.

There are companies suchas 212 Resources, based inHouston but with an office inAndrews, that offer oil recov-ery from flowback and pro-duced water, along withwastewater treatment specifi-cally for drilling, completionand production with technol-ogy the company markets thatwas developed in Wyoming.There is R360 EnvironmentalSolutions, another Houstoncompany, that markets serv-ices from landfill-waste dis-posal to oil reclamation,

transportation, and closed-loop equipment and wastecollection.

From New England isChief Environmental Prod-ucts, seeking to grow its busi-ness selling containers thatprevent or contain spillsaround tanks and selling fracktanks some 50,000 barrels incapacity, according to ShawnJaeger, a sales manager for themanufacturer.

They have already noticeda growth in demand for theirfrack tanks in the PermianBasin.

“We’ve been selling on ortwo and now we are tellingfour at a time ahead of com-ing down there,” Jaeger said.“Something has changed asfar as the need for these fracktanks. I don’t know what it is.They must be fracking moredown there than they werebefore.”

More fracking draws several companies focused on water to oil show

West Texas welcomes water wildcatters

>> Rockwater EnergySolutions’ web page:

www.rockwaterenergy.com

‘It’s beena progres-sive thing.It hasn’t

been all atonce. I

think theindustryis picking

it up.’DUSTINBROWN

Marketingdirector forRockwater

OA FILE PHOTO

P U M PJ A C K S AT S U N R I S E

BY JARED [email protected]

The Permian Basin International Oil Show, orthe Little InternationalOil Show as it was origi-nally called, began backin 1940 with 35 exhibits.

That same year theOdessa Chuck WagonGang was created, andever since, the two organ-izations have gone hand in hand to serve the visit-ing public who come inevery two years for theshow.

In the past, the two or-ganizations have helpedone another and evenhave others involved inboth the oil show and thechuck wagon gang help-ing drive success into thefuture.

“We have been part ofthe Oil Show since dayone. I remember back inthe 70s we would feed

over 10,000 people in theparking lot over there forlunch and it was a prettybig deal,” Chuck Wagon“boss” Steve Hurt said.“We have a lot of mem-bers who are also in-volved in the oil showand that we are able tocommunicate with themreally well.”

Two years ago, thePBIOS drew in more than39,000 people and Hurt,along with PBIOS Execu-tive Director Tony Fry,expect this year to be big-ger and better than ever.The Chuck Wagon Gangwill be on hand for lunchMonday through Thurs-day during the show.

“It’s a big deal but weenjoy it. It’s very impor-tant to us and we justhave fun doing it,” Hurtsaid. “This is going to bethe biggest oil show everbut we are ready to stepup to the plate.”

The scene is one thatFry is no stranger to,being the Chuck Wagonleader in 2003 and feed-ing the Oil Show audi-ences. Although thechallenge of feeding the

masses is not such a diffi-cult task for him, heknows the gang will havetheir hands full in 2014.

“It’s not much of achallenge for us here atthe show, because we cansay hey there is lunchover here,” Fry said. “ButI’m sure for the gang itwill be. Anytime you aredealing with that numberof people and thatamount of food you haveto have things wellplanned out and havegood cooking teamsready.”

Both Hurt and Fryagreed that for the showgoers, having the lunchoption on the grounds isa matter of conveniencefor audiences who willflock to the Basin.

“The whole idea is thatonce they get in and finda parking place it’s hardto leave the grounds, sothe Chuck Wagon Gang isthere and it’s a conven-ient place for them to getlunch,” Hurt said.

With the growing oilpopulation in the areaand demand higher thanit has been in some time,

Hurt is bringing out any-where from 60 to 80 peo-ple to help out with thecooking, dishwashing,preparation and anythingelse that will be neededduring the show.

“Wednesday and Tues-day will be pretty heavydays we will do anywherefrom about 4,000 to 6,000 people,” Hurt said.“We expect Thursday andMonday will be thelighter days because peo-ple will be coming in orleaving to head homefrom the show.”

Hurt is also expectingan unprecedentedamount of food for theevent, and while hecouldn’t quite put an

exact number on it,preparation has alreadybegun but even with amonth’s prep; there is stilla question of how it willall work out.

“We have a lot of pre-sales already, probablyclose to 30,000 and weare still a month out. Wewill get that last minutedash when we send an-other email out in theweek before the oil showbecause we need to havea general number and weknow through experiencehow this works,” Hurtsaid. “We have to preparefor this it’s an art not a

science. You don’t wantto run out but you don’twant to waste anythingeither.”

Despite all of the prepwork, predictions and theactual undertaking ofpreparing the food, Hurtsaid the gang always en-joys the show as well asthe benefits it brings tothe organization.

“It’s a crazy operationbut somehow we get itdone because we just re-ally enjoy doing it,” Hurtsaid. “The show is alwaysreally important to us andit helps us get through thenon-oil show years.”


Feeding the massesChuck WagonGang prepares

for Oil Show

SteveCompton,left, andMike Lipseyjoin otherOdessaChuck WagonGangmembers asthey grillsome of the2,500 steaksthat theyserved forlunch at the2012 oilshow.

OA FILE PHOTO

BY NATHANIEL [email protected]

It happens only everytwo years, but a lot of plan-ning goes into what willhappen when the PermianBasin International OilShow hits Ector County.

Larry Burdette, owner of Zucchi’s Ristorante,though, has had a solidplan that he said has beendoing him well for the past10 years.

During the week of theoil show — which lastsMonday through Thursday— Burdette says the sched-ule has always worked acertain way: Companiesand employees meeting onMonday for the grandopening, and saying theirfarewells on Thursdays.

But that Tuesday andWednesday though, peopleare looking for a place toeat, and that’s where Bur-dette said his businessessee a lot of those peoplecome in.

“What I do, I’ve got dif-ferent company that leasethe restaurant,” Burdettesaid. “We open up forthem … we lease it out, weget about 100 to 200 peo-ple and we have open barand food.”

Typically, Burdette said he only closes hisrestaurants down on thatTuesday and Wednesdayof the oil show, letting hisregular customers know in advance about his plans — something he

Restaurants, hotels prepare

for influx of people

said they support.The increased busi-

nesses, he added, does notseem to burden his stafftoo much.

Making hors d’oeuvreand selecting a limitedmenu, most of the staffwalk around and take careof the guests.

So how long does it taketo rent out one of Bur-dette’s restaurants?

“We’ve been booked forabout a year,” he said.

Starting Oct. 21, peoplefrom all over the countrywill visit Odessa for the oilshow, held every two yearsat the Ector County Coli-seum.

The oil show originallystarted in 1940 with 35 ex-hibits, but it has grownsince then.

“Last year they hadabout 700 exhibitors,”Linda Sweatt, director ofconvention and visitorsbureau with the OdessaChamber of Commercesaid. “This year, they’relooking to add an addi-tional 110.”

Though the employeeswith the Chamber spend alot of time talking to busi-nesses and helping themfind places to stay, Sweatt

said the main role theyplay is helping people findhotels, if any are open.

Because of the oil boom,hotels in Odessa and EctorCounty stay full, andSweatt said many fill upway in advance before theoil show.

“They also stay in Mid-land, Big Spring, even SanAngelo and Lubbock,”Sweatt said. “As far aspreparation, it’s the onlything we can do.”

One hotel group saidwhile they do see in-creased reservations andguests during the oil show,it is hard to tell with thegrowing number of peoplewho already visit the area.

Don Walts, generalmanager at the MCMGrandé Hotel and Fun-Dome, said it’s “prettymuch business as normal.”

“We typically don’t havereservations (for the oilshow) until January orFebruary,” he said.

Setting up at the EctorCounty Coliseum mainlyfalls on the exhibitors, butEctor County Judge SusanRedford said this year willbe different, in terms ofrevenue.

Passed in 2013 by the

83rd Texas Legislature,Ector County is now ableto collect revenue fromhotel/motel taxes — taxgathered through hotel andmotel fees that go towardsprograms that are de-signed to increase tourism.

Redford said she is notsure how much moneywould be raised with the increased populationthrough the oil show, butsaid the money raised forthe Coliseum through thetax money would go to-wards expanding BuildingG, expanding the parkingcapacity, building a newhorse arena with stables,and a number of otherprojects.

“We are pretty muchseeing our hotels at full ca-pacity anyway,” Redfordsaid.

Locals prepare for 2014 Oil Show

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Vegas VIP for FOUR– 3 days – 3 nights

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Custom Vegas Packages available

Call 725-222-3847 for pricing & reservations!

We are proud to have been of service to the Permian BasinInternational Oil Show organization during the past 74 years.

“A Rare Partnership Well Done”1940-2014

2014 PERMIAN BASININTERNATIONAL OIL SHOW

October 21, 22 & 23

You are invited to join us for complimentarycoffee conveniently located in

Buildings A, G and D from8:00 to 10:00 a.m. daily during the show.

Odessa Chuck Wagon GangOdessa Chamber of Commerce • Bank of America Building

700 N. Grant Street, Suite 200 • Odessa, Texas 79761432-332-8143 • Fax 432-333-7867

Serving Bar-B-Q at its finest worldwide for 74 years and still cooking

LEDFORDINSURANCEJEFF LEDFORDOWNER

4519 N GARFIELD• STE 4MIDLAND, TX 79705PHONE: 432-618-1141FAX: [email protected] In

Oil Field Insurance

process of winding downits Midland Basin opera-tions. The propertychanged hands first to BPand then to the Michiganoil company CMS Energy.

Henry Petroleum won afarm-out of 14 wells fromCMS while it was headedby Danny Campbell, later aHenry employee, wholacked financing to de-velop the properties.

They fracked the wellsand they were fair. Notgreat. Then they turned toa church and fishingbuddy of Henry PetroleumPresident Dennis Johnsonto help them improve:Phelps.

Company geologists in-cluding Dave Feavel alsodecided this time to trytheir luck to the westernedges of the Midland Basinin Upton County. There,they reasoned, larger rockmight be more porousthan the flat sea-bed of theformer Permian sea.

This roughly 400-foot-thick field, later named theSweetie Peck, is wherethey drilled the Caitlin2801. All wells were namedafter an employee’s rela-tive, this one after business

development managerGary Pitts’ daughter. Itcame in about 150 barrelsper day.

“If you want to talkabout the discovery of thecommercial Wolfberryplay, our first Sweetie Peckwell, the Caitlin, that wasit,” Johnson said.

They moved south andtried again, about 17 milesinto a field they named theChickadee. There theydrilled the Beverly No. 1 —this one named afterHenry’s daughter. It camein over 100 barrels too.

All told, they drilled fivewells on each field. Allwere good.

“Generally, when youare outlying the bound-aries of a field, it’s within amile or two — This was17!” Henry said. “So weknew we were onto some-thing huge.”

He did some rough cal-culations and figured outthat 17-acre area with 80-acre spacing containedsome 3 billion barrels ofoil. If true — and it turnedout to be an undercount —that meant the largest fielddiscovered in the PermianBasin in 50 years.

And their early wells, in2003, are generally cred-ited with establishing thescope and potential of aplay previously considereduneconomical.

Henry Petroleum wasdrilling wells in theSpraberry Formation, afield of the Midland Basinabout 150 miles long and75 miles wide that was firstdiscovered commerciallyin 1949. Typically, oilmensought sparse mounds ofmore porous Spraberryrock that might yield crudeinstead of a dry hole.

But in the late 1990s, oilwas trading at times forless than $12 a barrel andproduction costs were lowbut rising. In 2001, Henrytold the Odessa Americanthat for every 10 barrelspumped, it took three topay production costs.

So oilmen were bailing,like Odessa’s Kirk Ed-wards, who ran his OdessaEnergy Inc. until selling itin 2001. In those days,wells were much cheaper:maybe $300,000 dollars, afraction of what wells costnow.

“People had to drill thewells very economically,”Edwards said. “You wentout and put out a verylarge frack job over theseSpraberry wells and hopedyou’d make a 100-barrelwell. If you did, it wouldusually pay out two orthree times and you wouldmake your money back.”

‘ O N T O S O M E T H I N GH U G E ’

A play called the Wolf-camp lay below theSpraberry, but it was lessporous. There had beensome experimenting by acontracting engineernamed Dennis Phelpsworking for a companynamed ARCO in the late1990s to implement frack-ing techniques thatMitchell Energy and De-velopment Corp used inthe Barnett with successextracting gas.

Phelps worked among300 wells drilled by Arcothat produced Spraberryand some in Wolfcampformations with some suc-cess in a lease called theBoltinghouse, even thoughthe company was in the

T H E W O L F B E R R YDrilling these wells was

about a $15-million risk in anon-producing area, John-son said. So the company,mindful not to spreadthemselves too thin,sought a three-fourthspartner in Pure Resourcesinstead of taking out bank

loans. Pure would be ac-quired by Chevron, whichnetted billions off HenryPetroleum successes.

Not that Henry Petro-leum did poorly.

Nobody really caughton to their breakthroughfor about three years.Meanwhile, Henry Petro-leum scooped up about300,000 acres of MidlandBasin to drill.

“It had been dead foryears, and people saw usdrilling on it and thoughtwe were really crazy,”Henry said.

Part of the reason peo-ple did not know whatHenry was up to was thatthe wells took up to sixmonths for water produc-tion to taper off, revealingjust how much crude theywere pumping. To know,scouts would have to keepwatching.

They weren’t lying toanybody about what theywere doing out there, eventhough they kept it quiet.Johnson ordered employ-ees to keep maps off thewalls, for example, whenthey weren’t using them.

Operations managerVan Temple grew tiredone day of sayingSpraberry-Wolfcamp, so hecoined a new term: “The

EDITOR’S NOTE: This storyinitially appeared in theJuly 27, 2014, edition of theOdessa American.


Jim Henry drives aTesla. His wife bought itfor him about two monthsago for their golden an-niversary, and even thoughsome of his fellow oilmenfriends still tease him a bit,his new electric carsparked a thought.

“To me that’s the waveof the future,” Henry saidduring a recent interview.“It’s going to replace, even-tually — over 40 years orso — all of the internalcombustion engines ... Halfa barrel of oil goes totransportation. Thatmeans that fuel will haveto come down. That meansthe price we get for a bar-rel will have to comedown.”

In this view, oil compa-nies must figure out a wayto stay profitable. It meansthe sort of innovation thesmall independents likeHenry are known for, andhe cites plenty under waywith the developments inhorizontal drilling amid afrenzy of activity in thePermian Basin.

Henry and his team arethe ones credited with es-tablishing the economicsof Permian Basin crudeagain, after the doldrumsof the 1990s and 1980s.

Ironically, they didn’treap the billions otherswould. But the success ofHenry Petroleum, thebounty it proved still lay inthe ground and the subse-quent philanthropy itwould enable him to pur-sue inspired the PermianBasin Oil Show’s board toname him this year’s hon-oree.

“I don’t know how youcould pick somebody inWest Texas that’s muchmore of an icon to the oil-field than Jim Henry,” saidDon Gregory, the immedi-ate past president of the oilshow among those who se-lected Henry. “He’s had anoutstanding history build-ing up the company, pio-neering a lot of areas andtechnologies, giving backto the community.”

It’s exciting, Henry said,but he bristled at anotherdesignation so often usedto describe him: “The Fa-ther of the Wolfberry.” Re-ally, that title belongs to ateam of innovators whosometimes disagreed butmanaged in 2003 to unlockcrude from tight rock con-sidered an uneconomicalno-man’s land.

B Y E - B Y E T O P E A K O I LBy 2001, Henry believed

that the Permian Basin wasslowly dying as a self-de-scribed “disciple” of PeakOil Theory, that the worldproduced the most oil itever would, declining eversince. The Permian Basinpeaked in 1973, so thethinking went.

In retrospect, he saidthat flew out the windowwith the advancement ofhydraulic fracturing pio-neered by the late GeorgeMitchell in the 1990s andapplied in the PermianBasin by Henry Petroleum.

Fracking combineswater, sand and chemicalsinto a mixture blasteddown a well bore to cracktight rock and release oiland natural gas. The tech-nique was nothing new. Infact, wells were oftenfracked in the PermianBasin in an almost last-ditch effort to suck oilfrom dying play.

But 11 years ago, HenryPetroleum started experi-menting in the PermianBasin with a version ofMitchell’s hydraulic frac-turing techniques. Thiswas called a slick-waterfrack, basically involving amore-refined gel andwater pumped at higherpressure. Now this areadrive’s today’s boom.

Applying it unleashedoil previously considereduneconomical to capture.


Oil legend Jim Henry and the Fathers of the WolfberryOil show honoreeon the innovation

that built the boom

Jim Henrystands at theHenryPetroleumL.P. BeverlyTank Battery.Henry andhis team arethe onescredited withestablishingtheeconomics ofPermianBasin crudeagain, afterthe doldrumsof the 1980sand 1990s.

COURTESYPHOTO

>> See HENRY Page 7

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it has been known as a‘working man’s show.’ Butwe honestly want every-one from the workers inthe field to the executivesin the board room to at-tend.”

From the upstream tomid-stream and the down-stream, there will be some-thing new for everyone tosee, Wadzeck said.

And Fry agreed.“In this industry you

start in the field and youwork your way up,” Fry

said, adding that thePBOIS is for industry only,but for industry at anylevel.

Attendance is expectedto go over the top this year,with 444,810 square feet ofconvention space and 685exhibitors and 109 of thoseare new exhibits.

“I don’t know how wecould make it bigger,”Wadzeck said.

O N T H E N E T : >> www.pboilshow.org

Wolfberry.” It stuck.In time, Henry said

they started sharing howthey were completingtheir wells.

“We didn’t hold any-thing tight,” Henry said,before correcting himself.“Well, we held tight that itwas working.”

When it caught on, aland rush started. In 2006,land that would have gonefor $300 an acre skyrock-eted “overnight,” Henrysaid, to $3,000 an acre.

Those chasing a newboom included Midland’sthen-mayor Wes Perry,whose oil company leased4,000 acres of undevel-oped land between Mid-land and Odessa. ClaytonWilliams, a friend ofHenry who began drillingin the Permian in 1957.

“(Jim) is a good manand whatever he is doing,you better not criticizehim,” Williams recentlytold the Odessa American.“Because he is probablygoing to be right.”

T H E N E X T S T E PThings kept getting big-

ger.Soon, three of the Fa-

thers of the Wolfberry leftHenry Petroleum — oper-ations manager Mike La-Monica, landman DougRobison and Feavel, thegeologist. Johnson, thepresident of the company,also left to start SummitPetroleum. No hard feel-ings, Henry said. It was agreat time to start an oilcompany.

The next year, in 2008,the Midland-based publiccompany Concho Re-sources acquired HenryPetroleum and affiliatesfor about $584 million.That established a corearea in the Wolfberry playfor Concho, now one ofthe most prolific drillersin the Permian Basin.

Henry Petroleum hadbecome too big at morethan 100 employees,Henry said. He didn’t taketo the culture of a publicor like-sized company.And at about $145 a barrel,he was rightly convincedoil would drop, even

though it remains around$100 a barrel now.

He regrouped as HenryResources and did itagain. Then, in 2010,Henry Resources soldmore assets to Linn En-ergy. Again, Henry be-lieved oil would drop.

“Regret it? I don’tknow,” Henry said. “It’d beclose.”

He is modest about dis-cussing his wealth, but heis known as a prolificgiver. The Henry Founda-tion’s impacts include, forexample, a $1 million do-nation last fall to the Mid-land Independent SchoolDistrict to help pay forsupport staff.

The company now ispursuing the horizontalwells that Henry said ex-emplify the sort of inde-pendents’ inventiveness.By early July, they haddrilled their second well.

And so a technology-driven narrative replacedpeak-oil theory for Henry.The horizontal drillingrapidly dominating newexploration out heremakes drilling for new oilmuch cheaper, and alongwith continued advancesin completing wells, keeps the oil business eco-nomical enough to survivethe electricity-is-king fu-ture Henry sees in hisTesla.

These are the drivingthemes for the 80-year-old West Texas oilman —technology and the in-evitable collapse of oilprices, or put another way,the importance of thesmall independent oilcompanies figuring out away to keep themselvesgoing whenever it hap-pens.

“What is so amazingabout this story is thesmall independent, theMidland dream of makinga lot of money, the ad-vance of technology —the tremendous amount oftechnology,” Henry said.“Every year we get betterat what we are doing pro-ducing oil, and we canproduce it cheaper andcheaper. We have to learnto make money at a lowerprice. And that’s wherehorizontal drilling comesin. Horizontal drilling isthe next step.”


BY CELINDA [email protected]

When Larry Wadzecktalks about the oil businessin the Permian Basin, hestays away from the words“boom” or “bust.”

But indeed, he’s seen afew after being in the busi-ness for more than fourdecades.

“I like to say we are infortunate times right now,”Wadzeck said.

Wadzeck, area managerfor National Oil WellVarco Fluid Control, ispresident of the 74th An-nual Permian Basin Inter-national Oil Show, hasbeen on the board of thePBIOS since 1996 and hasbeen on the executivecommittee since 2006.

Being elected president,he said is an “honor Inever thought I’d see.”

And as he scanned theboard room of the PBIOSfilled with portraits of pastpresidents like T.L.“Woody” Gregory, EdBarham, W.R. “Bro” Hill,Kirk Edwards and JoeYoung, he is overcomewith gratitude.

“If you just look aroundthis room you see all of theprofessional associationswith the industry,”Wadzeck said. “Many ofthese guys on the boardhave guided and directedme.”

He will oversee a boardcomprised of 200 mem-bers.

“The 200 board mem-bers in the industry in thePermian Basin has beenthe key to our success,”Wadzeck said. “And I loveall 200.”

He says enduring therough times, have madehim stronger.

“Going through the notso fortunate times is terri-ble — it is an industrykiller,” Wadzeck said. “ButI’ve been fortunate to sur-vive through those times

— and it has made me astronger person.”

The fortunate times aregoing to make this OilShow slated for Tuesdaythrough Thursday one forthe record books, Wadzecksays.

As president, Wadzeckmust set the tone and di-rection of the show whilemaintaining new elementsand continuing the excel-lence the show is knownfor.

Tony Fry, executive di-rector of the PBIOS, saidhe and Wadzeck will beworking closely together.

“Our relationship goesback to 1992 and he’s adear friend who I look forhim to set the tone of theshow and work with theboard of directors,” Frysaid. “What Larry says in-fluences the board verymuch. He drives a lot of in-sight into the show andnew ideas that go intomaking it a success.”

The theme of the PBIOSis “Go with the Flow: Up-stream, Midstream, Down-stream.” And this year,Wadzeck is aiming to offersomething for everyone —from the oil field hand tothe oil field executive.

“We are going to havesomething for the guy whostakes the project and others on down the lineuntil the product goes intothe gasoline tank,”Wadzeck said. “In the past

Wadzeck: ‘We’re in fortunate times’President

of PBIOS weighs in on the booms

and busts

COURTESY PHOTO

Larry Wadzeck, area manager for National Oil Well Varco FluidControl, is president of the 74th Annual Permian BasinInternational Oil Show and has been on the board of the PBIOSsince 1996 and has been on the executive committee since 2006.

Henry>> From Page 6

‘Our relationship goesback to 1992 and he’s adear friend who I lookfor him to set the toneof the show and work

with the board ofdirectors. What Larrysays influences the

board very much. Hedrives a lot of insightinto the show and new

ideas that go intomaking it a success.’

TONY FRYExecutive director of the PBIOS



BY NATHANIEL [email protected]

Officials in Odessa areexpecting more than justvisitors and exhibitors dur-ing the Permian Basin In-ternational Oil Show thisyear.

They’re also expectingthose visitors to bring inadditional dol-lars to be circu-lated around inthe community.

With the oil boom inOdessa still in full swingand hotels almost alwaysat full capacity, howmuch money canofficials expect tosee?

“About $4 mil-lion, and thatdoesn’t includegasoline or peopleeating out,” LindaSweatt, director ofconvention and visi-tors bureau for theOdessa Chamber ofCommerce said.

Sweatt addedthat the number waslow and on the conserva-tive side.

Playing host to the oilshow on even numberedyears, Sweatt said officialswith the event were esti-mating about 40,000 peo-ple and more than 800 exhibitors this year tocome into Odessa.

The only problem is,and despite the growinginfrastructure, Sweatt saidshe did not know if therewould be enough rooms tohouse everyone.

In a September articleby the Odessa American,only three of eight hotelscurrently being built areexpected to come onlineby Oct. 21, when the oilshow begins. Many of thevisitors, Sweatt said, willend up staying in Midland,

Officials talk oil show impact

Big Spring, and as far awayas Lubbock and San An-gelo.

In total, Sweatt saidthere will be between2,500 hotel rooms usedduring the oil show inOdessa.

But even if those visi-tors don’t spend the nightin Odessa, they will end up

spending moneyon gas, food orother itemswithin the local

community. “That money is going to

circulate … into our com-munity,” she said.

Money used onhotel rooms usuallygo to their respec-tive companies —meaning money fora room at Motel 6mostly goes to thecorporation — butboth the City ofOdessa and EctorCounty receive apercentage throughhotel and moteltaxes.

The hotel/moteltax, defined by the TexasComptroller through theTexas Tax Code, is im-posed on the rental of aroom or space in a hotelcosting $15 or more eachday and can only be usedtoward tourism.

For the city of Odessa,the tax collected is 7 per-

cent of the room total; forEctor County, it is 2 per-cent.

Numbers provided bythe City of Odessa showthat during fiscal year 2011,which started Oct. 1, 2010and ended Sept. 31, 2011,the City of Odessa received$309, 815 from sales tax.

For fiscal year 2013,which started Oct. 1 2012and ended Sept. 31, 2013;the total amount ofhotel/motel tax receivedwas $1,197,599.

Both of those yearswere years the oil showwas held.

“Defiantly, thosemonths of October spiketremendously,” AssistantOdessa City Manager Kon-rad Hildebrandt said. “Ob-viously, it (the oil show)has a big economic impactfor our city. It’s positive inthat aspect.”

Money from thehotel/motel taxes are usu-ally given out yearly by theCity of Odessa to variousnon profits in the city.

For the county, the recently enacted hotel/motel tax will go towardsthe Ector County Coli-seum, where the oil showis held. Ector County JudgeSusan Redford said someof the things the countywould like to improve atthe coliseum include BarnG and parking.

“It has made the coli-seum self-sufficient werewe don’t have to allocateproperty tax dollars,” Red-ford said.

>> For theTexas TaxCode onHotels:

tinyurl.com/ycopnou

Extra revenue predicted as event comes into town

HOTEL OCCUPANCY TAX

F I S C A L Y E A R 2 0 1 4 :>> October:......$1,093,819.>> November: ....$208,169.>> December: ........$41,171.

F I S C A L Y E A R 2 0 1 3 : >> October: ......$1,197,599.>> November: ....$226,183.>> December: ....$48,658.

F I S C A L Y E A R 2 0 1 2 :>> October:........$940,861.>> November:......$55,676.>> December:......$38,283.

F I S C A L Y E A R 2 0 1 1 :>> October: ......$309, 815. >> November: ..$263, 296. >> December: ......$17,044.

F I S C A L Y E A R 2 0 1 0 : >> October: ......$412, 378.>> November: ....$40, 922.>> December: ........$7,284.

*Note: Fiscal years starton Oct. 1 and end the follow-ing year on Sept. 31.

OA FILE PHOTO


The hotels are packed,the booths wait decoratedfor exhibitors and the rigs stand upright at theEctor County Coliseum,among the other equip-ment that drives this un-precedented oil boom.

It’s oil show time

again. And organizers expect this one startingTuesday to be the biggestever, with up to 45,000 attendees who bookedhotels as far away as Lubbock.

Nearly 700 companieswill present at more than1,100 stations, with 109new attendees this year.

Permian Basin International Oil Showtargets the breadth of the boom

Go with the flow

>> See FLOW Page 10

20th Permian Basin Inter-national Oil Show. Organ-izers adopted that name toreflect the foreign ex-hibitors and attendees andmarket to more.

This year, foreign busi-nesses come from as faraway as China and as closeas Chihuahua, Mexico,home to a group of busi-nessmen traveling toOdessa with hopes tobroaden ties as their owncountry’s historic energyreform unfolds.

It is a boom rooted in acrew of Henry Petroleum,who in 2003 started takingthe techniques of the late-George Mitchell and ap-plying them to theMidland Basin. TheirSweetie Peck wells wouldestablish what came to beknown as the Wolfberryand proved the economicsof sapping crude fromtight rock.

The owner of that com-pany, Jim Henry, is thisyear’s honoree. After a se-ries of sales, he runs an-other company, HenryResources, and remains asbullish as ever about thefuture of the Permian Basin.

“Every year, we get bet-ter and what we are doingproducing oil,” Henry said.“And we can produce itcheaper and cheaper. Wehave to learn to makemoney at a lower price.And that’s where horizon-tal drilling comes in. Hori-zontal drilling is the nextstep.”

The organizers came upwith the “Go With TheFlow” name, and, as itturns out, takes on a newmeaning as this oil showapproached. So muchcrude is pumping fromPermian Basin wells thatthere are not enoughpipelines to get it to refin-ers.

“It affects all of us,” saidSteve Pruett, chairman ofthe Permian Basin Petro-leum Association and theCEO of Elevation re-sources in Midland. “...The reality is that we’ve

exceeded our ownexpectations for produc-tion growth.”

In response, producershad to discount their crudeat an average $12 in recentmonths. The blowout hitmore than $21 in mid-Au-gust.

But startup of the Brid-geTex late last month of-fered some relief as itbegan pumping what willbea total capacity of about300,000 barrels per dayfrom Colorado City to theGulf. Experts say theforced discounts could lasteven after more pipelinescome online in 2015, butthey narrowed after theBridgeTex came online toless than $7 per barrel.

There is another glut,however, between Midlandand Colorado City.

And then there arecrude prices, falling in re-cent weeks amid signs thatthe Organization of Petro-leum Exporting Countrieswould cut prices instead ofproduction in the face ofweak demand and globaloversupply. Producersbrace themselves for adownturn in the comingyear they expect toweather by focusing ondebt, transportationarrangements and efficien-cies.

It’s a situation that callsupon the sort of innovationthe oil show representsand serves as a reminderthat the midstream anddownstream componentsare crucial.

“We are going to havesomething for the guy whostakes the project andother on down the lineuntil the product goes intothe gasoline tank,” saidLarry Wadzeck, presidentof this year’s oil show andarea manager for NationalOil Well Varco Fluid Con-trol. “In the past it hasbeen known as a ‘workingman’s show.’ But we hon-estly want everyone fromthe workers in the field tothe executives in the boardroom to attend.”

The theme: “Go withthe Flow: Upstream, Mid-stream, Downstream.”

“You can break the oiland gas industry into prob-ably seven to 10 sub-indus-tries, and we wantedeveryone to know thatthere is something outhere, regardless of whatphase of the industry youare in,” said Tony Fry, theoil show’s executive direc-tor. “We are very veryproud of the fact that wesold out. We have new ex-hibitors and a lot of the oldones.”

The Permian Basin seesthe greatest productionsince the more than 2 mil-lion barrels a day of theearly 1970s, when waterflooding and CO2 recov-ery came in to play. On Fri-day, 562 rigs operated inthe Permian Basin. Andthe Energy InformationAdministration expectsthe region’s daily produc-tion to reach 1.8 millionbarrels in November.

They want a biggerpiece of it: The drillers, themanufacturers, the oilfieldservices companies, thewater recyclers, the trans-port logisticians, and soforth. There are the rela-tively new attendees. Theregional employees of C&JEnergy, for example, seekto use this oil show, theirsecond, to tout a greaterPermian Basin footprintafter acquiring the oilfieldservices an arm of NaborsIndustries. Regional Man-ager Jared Bennett saidthey want keep their namein the same conversationas giant competitors likeSchlumberger.

“This is a very, very hotspot in the oil and gasbusiness,” Bennett said.“This is a lot of attentionfor a lot of people.”

And there are the long-tenured, such as SivallsInc. Dick Sivalls, has pic-tures of the oil show inFloyd Gwinn Park, takenbefore the oil show movedinto the coliseum in 1956,back when his dad still ranthe company. He attendedoil shows as a kid andknows their ins and outs.

Take this tidbit for ex-ample:

“One thing you will no-tice is that if the weathergets bad, all the well crewscan’t get out into the field,”Sivalls said. “So they sendthem to the oil show. Youcould get mobs of peopleout there.”

The event began in1940, and ever sinceOdessans have celebratedit as a symbol of its econ-omy but always as an eco-nomic boon of its own.

A boon to businesseslike Engine Service Supply,selling its sundry oilfieldequipment, but also toplaces like Keith’s Ham-burger Station — whoseowner Keith Johnsonstarted calling his steakfingers “world famous” lit-erally because of the inter-national oil showattendees who orderedthem.

Technically, it is the


BY AUDRIS [email protected]

Odessa police officersare gearing up to providesecurity as oil equipmentrolls in and members ofthe petroleum industrycome to the cityfor the sold-out PermianBasin Interna-tional OilShow.

“We providesecurity everyyear for the oilshow,” Odessa Po-lice Departmentspokesman Cpl. SteveLeSueur said. “We’vebeen partnering up withthem for a very long timenow. We know it’s impor-tant for our community.”

The annual event istaking place Oct. 21 to 23at the Ector County Coli-seum with 685 exhibitors.

“The Odessa PoliceDepartment has workedwith us probably sincethe beginning of theshow. They’ve been in-volved as long as I’vebeen involved,” AnthonyFry, executive director ofthe show, said. “We havepeople on the ground 24hours a day.”

Fry has worked withthe international oil showfor about 30 years.

Ector County Sheriff’sOffice spokesman Sgt.Gary Duesler said off-duty deputies have

helped provide securityin previous years butwon’t be at the event thisyear.

“We have helped ifthey’re shorthanded forsome reason but it’s beenquite a while since we’vedone that,” Duesler said.

Police officials withboth department said anemail is sent out to theirofficers and deputies for

those interested insigning up for

shifts.Off-duty offi-

cers helpingwith security atthe oil show arepaid $30 an hour,LeSueur said.

“We can’t workon duty because

we’re short-handed,”LeSueur said. Most of theofficers helping at theevent are not on patrolbut serve in other capaci-ties at the police depart-ment, including those inthe detectives division.

The exact number ofofficers helping at the oilshow won’t be releaseduntil the event is over forsafety reasons, LeSueursaid.

The oil show wel-comes members of the oilindustry from across theworld and helps intro-duce new equipment,technology and developbusiness relationships.

The event first beganin 1940 with 35 exhibitsand was known as the“Little International Oil Show.” The namechange was made in 1994due to the growing num-ber of exhibitors coming

in for the event.Permian Basin Interna-

tional Oil Show officialssaid the event is a non-profit venture whose pur-pose is to help educate,networking and showingoff new technologies.

Odessa officers are incharge of patrolling thearea around the EctorCounty Coliseum 24hours a day, seven days aweek before, during and afew days after the event.

“Basically at night youdrive around and look foranything that looks suspi-cious,” LeSueur said.

Officers start securingthe area a few days beforethe event as equipmentstarts coming in to thevenue and after the oilshow is over for theequipment that is still leftat the scene.

“I think it’s great forthe community. We’rehappy to help out withthe security because weknow there’s a lot ofequipment coming in andout. There are a lot ofpeople coming in and outof there,” LeSueur said.“The last thing we want istourists that are here fac-ing problems. We don’twant them to become avictim of crime.”

Partnership withorganizers beganwith event’s start

Odessa police secure oil show

>> For more information on the

Permian Basin International OilShow, visit the

show’s web page: www.pboilshow.org/about

Flow>> From Page 9

‘You canbreak the

oil andgas indus-

try intoprobablyseven to10 sub-

industries...’

TONY FRYExecutive

Director of thePBIOS

OA FILE PHOTO

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The oilfield servicesworkers of C&J EnergyServices want the oil-show to help them keeptheir name in any conver-sation about major frack-ing companies of thePermian Basin.

Because by the time theshow begins Tuesday, regulators are expected tobe close to signing off ontheir $2.68 billion acquisi-tion of Nabors Industries’completion and produc-tion arm. The deal willmake Houston-Based C&JEnergy Services, whatbegan in 1997 as a casingcompany in South Texas,the fifth largest oilfieldservices company in theUnited States.

They look to the Per-mian, where their foot-print remains smaller, fornow, than in other boom-ing basins such as the Ea-gleford.

“The Permian Basinhas become a huge focusfor many of our cus-tomers, we are trying togrow with them,” said Re-gional Manager Jared Ben-nett, during an interviewinside their headquartersat 6913 N. FM 1788 in Mid-land. “We are trying toshow what we can do tohelp them grow with thearea and complete asmuch as they can.”

C&J joins more estab-lished players in announc-ing plans to expand in thePermian, a move drivenby the shift to horizontaldrilling. Now, about 60 percent of the drillingrigs in the region drill horizontally.

This creates wells thatrequire bigger crews,more supplies like sand,more water, greater pres-sure. More everything. Itmeans a boon for oilfieldservices companies.

C&J Energy’s combin-ing with Nabors will cre-ate the largest fluidmanagement fleet in thecountry, and the second-largest workover and well-servicing fleet, accordingto company statements.C&J will also have direc-tional drilling services,adding that line in July.

Bennett declined to talkspecifics about what theNabors acquisition willmean for the company, cit-ing the Securities and Ex-change Commission’songoing review.

But they will be able toadd Nabors service linessuch as cementing to theircompletion work, frack-ing, coiled tubing, pres-sure pumping andwireline. They will absorbNabors employees underC&J management, andwhile it’s unclear howmany workers that in-volves, Bennett said theystill look to hire beyondthat.

The acquisition willalso allow C&J to expandthe reach of their servicearea, such as further intoNew Mexico, wheredeeper Delaware Basin of-fers bigger jobs to frackingcompanies.

COO Donald Gawicktold investors in a secondquarter conference callafter the announcementabout Nabors that thecompany faces a backlogin West Texas.

“It’s very significant,looking out over the nextthree or four months,we’ve fully covered up,”Gawick said. “And we’vegot a number of cus-tomers that are very highutilization clients. They’rehoping that we can con-tinue to add capacity.”

Before the acquisition,the company added80,000 horsepower, orabout two frack-fleets,that increased their capac-ity in the Permian Basinby about 40 percent.

“The hope, and this isnot going to be an easyroad, is that they will beable to make better use ofNabors’ assets thanNabors has been,” saidChris Robart, a partner atPacWest Consulting Part-ners in Houston, whichanalyses the oilfield serv-ices industry. “I’m sure theanswer is yes, that theywill end up with a biggerpresence there. For any-one in the oil servicesmarket, the Permian is thebiggest source of growthin the next 3, 4, 5 years.”

Meanwhile, Nabors byspinning off its comple-tion and production willnow focus on its coredrilling business.

About 30 companies intotal offer services such aspressure pumping.

Regional executives ofHalliburton, Schlum-berger, Baker Hughes andWeatherford Internationalhave disclosed plans togrow their workforces thatadd up to more than atotal 1,200 new employ-ees. It’s companies likethis, and other big playerslike the private companyProPetro, that C&J’s Per-mian workers want tostand alongside at the oilshow.

“Putting 45,000 sets ofeyeballs on C&J’s nameand getting us associatedwith some of our largercompetitors and in thatsame discussion is whatwe are shooting for,” Ben-nett said. “I think we’vemade a lot of headway inthe past year-and-a halfdoing that. With our ac-quisition, it takes us to thefifth largest service com-pany. So we are in that dis-cussion. And we hope toenhance that.”

Business nowfifth-largest

oilfield servicescompany

C&J Energy expanding, seeks 45K eyes of the oilshow

Jared Bennett, the regional manager of C&J Energy Services, stands outsiderecently in front of the company’s Permian Basin location on FM 1788.

EDYTA BLASZCZYK|ODESSA AMERICAN

>> For moreinformation

on C&J Energy

Services:www.cj

energy.com/company-

profile/about-cj-energy-

services-inc

Robert Pomroy

Founded 1984 • 30 Years in Business

ROPER, INC.R.O. Pomroy Equipment

Rental, Inc.P.O. Box 1683 • Odessa, TX 797602936 I-20 East • 1-877-542-1092

Office (432) 335-0520Fax (432) 335-0521

Email:[email protected]

NEW & USED EQUIPMENT

CATERPILLAR:LOADERS-DOZERS-MOTOR GRADERS

COMPRESSORS

COMPACTORS

CRANES

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tank batteries and sundryequipment.

“But where ownershippermits, you will wantmore central batteries,”Pruett said.

In his company’s case,they try to connect be-tween four and eight wellsto a surface productionsystem. But those varyfrom their lower-pressurelower-gravity MidlandBasin wells to theirDelaware Basin wells withheavier grade, higher pres-sure condensate thatneeds more treatment.

Generally, ElevationResources sees enoughequipment supply butenough of a demand toprompt them to start buy-ing surface productionequipment as soon as theyschedule a drilling planfor the year, said BrianZachry, a completion andreservoir engineer for thecompany.

“The biggest issue ismanpower,” Zachry said— the workers to truck inor install the equipment.

Sivalls seeks moreworkers too. The com-pany has about 300 em-ployees but could usemore. He offered weldersas an example: Pre-boom,the company employedabout 30 and as activitypicked up, they raisedwages by more than $10an hour. But they still lostabout eight welders, whenthey could use about 50.

The result is overtimethat allows welders tomake more than $100,000a year.

“If the bust comes,which perish the thought,then we’d first start slidingdown the overtime,”Sivalls said. And it wouldhelp prevent layoffs. “Butthis boom looks differentthan any of the booms be-fore.”


EDITOR’S NOTE: This storyinitially appeared in theJune 15, 2014, edition ofthe Odessa American


Long before theirsprawling manufacturingplant at 2200 E. SecondStreet was built, theSivalls family got theirstart in the oilfields ofOhio, where crude wastransported by mule-drawn carts, said C.Richard Sivalls, presidentof Sivalls Inc.

His point is that theequipment needed to sup-port companies pumpingoil out of the groundchanges with time. Thosechanges occur over a longtime — as in the 114 yearssince his grandfatherfounded the company. Butthey happen over a shorttime too.

The oil boom begin-ning five years or so agocreated a surge in domes-tic demand for surfaceproduction equipment:the tank batteries thatstore the oil and producedwater, the heater treatersand separators that untan-gle the muddle of hydro-carbons that emerge froma wellbore and move themmore neatly to a pipelineas oil and gas. That meansa boon for Sivalls Inc.,which had been focusingmore and more of its op-erations abroad.

“Developing wells withfracking, that produces awhole lot more oil thanthey ever got out of a wellbefore, which requiresmuch more equipmentand much bigger equip-ment,” Sivalls said duringa recent visit.

One thing the boommeans for Sivalls Inc. ismore orders in revitalizedparts of the country. It

means requests for equip-ment that can handle thehigher pressures of in-tense volumes of oil andgas. And it means payingworkers like welders a lotof overtime, facing a chal-lenge in attracting work-ers who could run theirown businesses in the oilboom. Sivalls employeesnow work orders weeksand months ahead ofwhen the well whose oil itwill handle is completed.

“It got that way prettyquick,” Sivalls said.

They opened up moreoffices in the UnitedStates. Besides Odessa’smain plant and headquar-ters, they run sales anddistribution offices inplaces including Williston,N.D., servicing the Bak -ken; Vernal, Utah, servic-ing the shale basins of theRockies; and elsewhere inTexas, Brownwood,Pampa and Houston.

“It used to be well towell,” said Stephanie La-timer, Sivalls daughterwho is the vice presidentof administration and hislikely successor. “But nowthey will buy quantity be-cause there is such ashortage.”

Another boom develop-ment is a now-standarddemand for process con-trols that allow companymen to monitor the pres-sures and flows of theirequipment from a laptop.This was not common inthe early 1980s’ boom oreven a decade ago, Sivallssaid.

Sivalls began workingfor the company in 1953 asan engineer, six years afterhis father moved it toOdessa in hopes of break-ing into the post-warboom. Sivalls took over in1974. Sivalls dropped thename Sivalls Tanks in thelate 1970s, because by thatpoint the company ex-

panded to include otherproduction equipment.Now, Sivalls sells tank bat-teries sometimes as partof a complete system butdoes not manufacturethem any more in favor ofmore specialized equip-ment like heater treatersthat also take up less plantspace. Sivalls won a multi-million dollar contract in1996 that offered the com-pany a major entrance intothe Russian market, sell-ing mainly to Surgutnefte-gas, operating in Siberia.

“We thought it wouldlast 10 years at first,”Sivalls said. “Now, it’sbeen nearly 20.”

Sivalls Inc also operatesin other regions such asCanada, Persia, the Mid-dle East and South Amer-ica. This helped carrySivalls through the lesseryears of the PermianBasin, and internationalwork still representsabout 30 percent of thecompany’s business today.Russia, specificallySiberia, is their biggest in-ternational market and sofar Sivalls said the ten-sions between the westand Russia over theUkran ian crises has notimpeded the company’swork.

“It’s straight up busi-ness deals. We sell tothem, they buy, and we allget paid,” Sivalls said. “It’sprivate business we aredealing with.”

The extreme cold ofSiberia requires weather-ization added to an al-ready complicatedengineering job, whichSivalls said still gives theman advantage over Russiancompetitors with lesserexperience.

“They are hard workersand they are not dumb,”Sivalls said. “They werejust not exposed to manu-facturing modern oilfieldtechnology.”

During a recent visit,about a half-dozen werefinished or in the works atthe plant.

The finished heater-treaters, painted whitewith giant Cyrillic letter-ing, could pass for a sub-marine prop. Nearby arechambers made by thecompany where pumpersin Sibera can access thecontrols without being ex-posed to the elements.Each of these systemssells for about $1.5 million,Sivalls said, and they ex-pect to ship out 300 thisyear.

But the domestic boomshows no signs of slowingand continues to bringnew and varied demands,Latimer said. Those in-clude higher-pressureproduction equipmentmade from thicker steelthat might be used for thehigh-condensate wellsdrilled in the southwest-ern Delaware Basin or thehigh volume horizontalwells becoming more andmore common.

Some companies, suchas the super majorChevron, plan to central-ize their surface produc-tion equipment, takingadvantage of their legacyacreage. That meanstanks, treaters and separa-tors that can handle morewells. And while expertsforecast more sucharrangements as the Per-mian Basin’s oil industrymoves from discovery andoptimization to a longermanufacturing stage, noteveryone will be able topursue this method.

The reason, said StevePruett, president of Eleva-tion Resources, is that alot of Permian Basinacreage belongs to multi-ple royalty owners and socrude must be kept sepa-rate. That means multiple

Sivalls Inc. has 114 years in the oil industryOwner: Between the wellhead and the

pipeline ‘This boom looks different’

>> Photos of Sivallsfacility andproducts:

tinyurl.com/p3a2woq

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