Winter NAPE Expo Business Conference Highlights - 2014


The NAPE Expo is a North American event with some international influence, which features key players in the oil and gas industry. The business conference theme for 2014 was sustainability in the U.S. oil and gas industry.

The conference touched on key issues such as hydraulic fracking, regulatory and environmental issues, operational procedures and technological innovations.

Hydraulic Fracking and the Issue of Water

Multiple speakers  put a spotlight on the practice of hydraulic fracturing, and water sustainability. Here are some of their comments:

  • Former Secretary of the Interior, Ken Salazar, said, "I believe hydraulic fracking is safe... there is not a single case where fracking has caused an environmental problem for anyone."
  • David Blackmon, Dir. FTI Consulting, said, "the biggest issue by far facing the industry today is water."
  • 880 Trillion Gallons of brackish water in Texas could potentially be used for development in 2 - 3 years according to Blackmon
  • "The Eagle Ford doesn't flow back as much water as other areas, and it looks like its going to be at a net water deficit for some time," said Andrew Slaughter, VP, Upstream Research, IHS

Regulations and Environmental Issues

  • Effective January 1st, new casing and cementing regulations went into effect for all Texas Operators
  • Texas Rail Road Commissioner, Christi Craddick, to Texas Operators: "we'll be implementing and enforcing flaring rules [in February 2014]." Read more at
  • David Blackmon, Dir. FTI Consulting, said, "the Endangered Species Act could potentially have a significant (detrimental) impact on business in [Texas]."

Operational Procedures and Using Technology for Sustainability

  • Robert Turnham, CEO, Goodrich Petroleum on business strategy: "We move early, identify opportunities and take the risk up-front. If you move early, then you enjoy lower royalty burdens straight off the top."
  • Apache converting waste gas to electricity for field grid usage
  • General industry focus on artificial lift technology in shale drilling to quickly drain reservoirs
  • New diverter technology being utilized to make shale drilling more economic in marginal wells

Other Notable Comments from the Conference

  • Luke Keller, VP, BP America, said, "[the] U.S. could achieve energy independence by 2035."
  • "$2000 financial benefit to every American household by 2015 due to unconventional drilling of natural gas," according to Don McClure, VP, Government Stakeholder Relations and Legal, EnCana Oil and Gas USA
  • "The U.S. has close to 200 - 300 years of hydrocarbon reserves," according to Charles McConnell, Rice University
  • Industry encouraged to support better outreach and education initiatives via social media outlets

Learn more about NAPE by visiting

What is a Frac Holiday?

Frac Job Control Room
Frac Job Control Room

You might have heard a few operators mention "frac holidays" during earnings season the past two quarters. Don't worry, you're not going to be flooded with discount emails and advertisements.

A "Frac Holiday" is a term used when an operator let's its frac crews take time off for various reasons.

Oil and gas operations have hundreds of steps and processes. Companies attempt to plan best as possible, but one thing they don't want is a bottle neck at the end of the line. If a company can't complete a well,  it has a big investment and no revenue. For that purpose, a lot of companies work with excess frac'ing capacity. When crews get ahead of the drilling schedule, crews will be given time off to allow rigs to catch up.

Hydraulic Fracturing Does Not Contaminate Drinking Water

Hydraulic fracturing, fracking, or frac'ing, depending on who you talk to, DOES NOT contaminate drinking water.  That was the conclusion from a University of Texas Energy Institute study of the process. The study noted that contamination is usually related to above ground spills or a mishandling of wastewater.

Noteably, the study was not funded by industry dollars.


ConocoPhillips 3Q Eagle Ford Growth - Truck Constraints and Well Costs

ConocoPhillips announced third quarter earnings yesterday (Oct. 26) and provided several Eagle Ford updates. The company averaged production of 31,000 boe/d with a 77% liquids cut. September production had risen to 36,000 boe/d, but included a loss of 10,000 to 12,000 boe/d related to third party trucking constraints. Without the constraints, production is approaching 50,000 boe/d. Conoco believes they will reach 100,000 boe/d by 2013.

In regards to the constraints:

There was a new trucking facility that was built in Eagle Ford...., but they really didn't move the needle that in terms of increasing capacity. We have talked about building pipeline gathering system, kind of a trunkline to get us to a liquid trading point out of Eagle Ford. We think that will be done the middle of next year. But we've got a lag of 10,000 to 15,000 a day of Eagle Ford that we can't get out just because of constraints.... That will continue until more infrastructure is built up in the area. So I guess it's a good problem to have, to be producing more and these wells to be more productive than what we thought they were, and we are investing in additional infrastructure in that area.

ConocoPhillips current backlog of wells isn't related to completions or fracking, but simply hooking the wells into gathering systems. The company has three dedicated frack crews that have been more than enough to keep up with the rig count. Trucking condensate is the major backlog in bringing wells to production.

The company operated 15 rigs in the quarter and plans to grow its Eagle Ford rig count to 16 by year end.

The average 30-day well rate is still running around 1,400 BOE. We've got -- we've initiated pad drilling. We've got some details on the -- let's say more of an E&P type of approach to Eagle Ford that we could probably run you through, but I don't have EURs or decline rates on Eagle Ford for you.

Well depth is somewhere between 16,000 and 19,000 feet. We're running 3,500 to 5,800 laterals. And on average, about 15 stage fracs. I think well cost that I've seen, drilling and completion are probably in the $6 million to $8 million per well range.

Read the company's press release at