In this week’s miscellany of articles we bring you news of a slew of unveilings, openings, and other optimisms, plus the usual slate of management advice. These are the full versions of the “Drilling Deeper” news items that appeared as abbreviated versions in the print edition of PBOG’s September 2016 issue.
Forum Unveils Syntactic Foam Plant
Forum Energy Technologies has expanded its specialist syntactic foam manufacturing capabilities with the opening of a new plant near Houston. The six-acre facility in Bryan, Texas, brings Forum’s Syntech product line closer to clients in the oil and gas industry and has the capacity to support future growth. Syntech will share the property with another of Forum’s brands, Dynacon, to create a production hub with an enhanced engineering capability and streamlined process. Thomas Mittner, product line manager at Syntech, said, “Our Syntech brand is viewed as the leader in the field of buoyancy and has a long history in providing syntactic foam developed specifically for use with Remotely Operated Vehicles (ROVs). Being closer to our clients provides them with the opportunity to visit our site and view products. We will be working more closely with the team at Dynacon and will leverage their engineering and manufacturing expertise.”
Forum Syntech is one of world’s largest original equipment manufacturers in the niche ROV market for syntactic foam. The product is used to provide buoyancy modules for use in ROVs and other submersible equipment. The new plant not only allows the expansion of Forum’s ROV flotation manufacturing capabilities, but also includes the expansion into manufacturing larger installation buoyancy modules, rigging buoyancy and custom/project specific flotation modules.
Forum Energy Technologies, Inc. is a global oilfield products company, serving the subsea, drilling, completion, production and infrastructure sectors of the oil and natural gas industry. The Company’s products include highly engineered capital equipment as well as products that are consumed in the drilling, well construction, production and transportation of oil and natural gas. Forum is headquartered in Houston, TX with manufacturing and distribution facilities strategically located around the globe. For more information, please visit www.f-e-t.com.
Torchlight Reaches TD at Permian Well
Torchlight Energy Resources, Inc. announced that the Flying B Ranch #1 has been drilled to a total depth of 6,470 feet. The well has been logged and 25 sidewall cores were taken from the different pay zones. The well has been cased and cemented in preparation for a near term frac’ing and completion. Rich Masterson, Torchlight’s consulting geologist, said, “We are encouraged with the initial scientific data from the logs as it correlates very well with the offset Davis Bros. Harris Est. #1 well from a pay, porosity, and resistivity perspective. In addition, we have some preliminary data from the CMR and Lithoscanner log analysis and as expected, the results are showing that the rock qualities in this Flying B Ranch #1 well are very similar to the wells drilled in the Wolfberry formation (a name coined to indicate the Permian Basin Shale play including comingled production from the Wolfcamp, Dean, and Spraberry formations). We encountered over 400 feet of pay zone and have identified at least two horizontal targets. The Wolfcamp A&B, the Dean, the Leonard, and the Spraberry formations are all present and showing as potential completion targets. The zones have low clay content and high organic content.”
Will McAndrew III, COO of Torchlight, added, “Next steps are to evaluate all of the scientific data gathered and determine which intervals to frac and the best frac design to stimulate optimal production results. We are excited to begin this phase of our Hazel Project development. Once we have established oil production, we will plan additional vertical wells for control purposes and a horizontal development plan.”
ExxonMobil Expands Ultra-Low Sulfur Fuels
ExxonMobil announced plans to increase production of ultra-low sulfur fuels at its Beaumont refinery by approximately 40,000 barrels per day, further strengthening its integrated downstream portfolio while meeting environmental standards. Construction is scheduled during the second half of 2016 to install a selective cat naphtha hydrofining unit, which uses a proprietary catalyst system to remove sulfur while minimizing octane loss. Startup of the flexible technology, known as SCANfining, is expected in 2018. Gasoline produced using this technology will meet the U.S. Environmental Protection Agency’s Tier 3 gasoline sulfur specifications. “ExxonMobil continues to strengthen its portfolio of world-class refining assets,” said Steve Cope, director of North America refining, for ExxonMobil. “This investment further enhances the competitiveness of our U.S. Gulf Coast refineries.”
Installation of the selective cat naphtha hydrofining unit is the facility’s second expansion project in a year, following the announcement of the Beaumont refinery’s capacity expansion in 2015, and demonstrates ExxonMobil’s long-term view and disciplined approach toward advantaged business investments. Beaumont is well positioned to competitively supply high-demand growth markets around the United States in the face of a challenging industry environment.
“This specialized unit will improve our product yield, and demonstrates our technology advantage and focus on increasing energy efficiency,” said Fernando Salazar, manager of the Beaumont refinery. “This project represents the largest capital investment in our Beaumont refinery operations in more than a decade, and will benefit the local economy with both temporary and full-time jobs.”
About ExxonMobil Refining & Supply
ExxonMobil Refining and Supply and its stewarded affiliates operate a global network of reliable and efficient manufacturing plants, transportation systems, and distribution centers that provide a range of fuels, lubricants, and other high-value products and feedstocks to our customers around the world.
About Beaumont Refinery
ExxonMobil’s Beaumont refinery is part of the company’s integrated operations in Beaumont, Texas, which includes a 345,000 barrel-per-day capacity refinery, as well as chemical, lubricants, and polyethylene plants. ExxonMobil has approximately 2,100 area employees, and its operations account for approximately 1 in every 7 jobs in the region. A 20,000 barrel-per-day expansion of the refinery’s crude processing ability, announced in 2015, is currently under way.
Sub-Saharan Africa to See 43 New Operations
A total of 43 crude and natural gas projects are expected to start operations in Sub-Saharan Africa by 2025, of which 31 are crude and 12 are natural gas, according to research and consulting firm GlobalData. The company’s latest report states that Nigeria is set to lead the region in terms of number of planned projects, with 11, followed by Angola with eight. Joseph Gatdula, GlobalData’s Senior Upstream Analyst, explained saying, “The region will experience investment delays across a wide scope of projects. However, developments will continue to come online in the mid-term, including fields which started development prior to the downturn in prices and those which demonstrate break-evens at or below today’s current oil prices.”
Tullow Oil PLC and Total S.A. will lead the region in terms of operatorship with five planned projects each. Of the 10 projects the two companies are expected to operate, nine are crude and one is natural gas, with Chevron Corporation occupying third place in terms of development with its three planned projects.
Key planned projects in the Sub-Saharan region are expected to contribute 1.1 million barrels of oil per day (bd) to global crude production in 2025, and 7.7 billion cubic feet per day to global gas production.
In regards to capital expenditure (capex), around $153.5 billion (U.S. currency) is expected to be spent between 2016 and 2025, with Mozambique leading the region with a capex of $70.4 billion. Almost all of this will be spent on the Rovuma Area 1 Complex and Rovuma Area 4 Complex projects.
Jonathan Markham, GlobalData’s Upstream Analyst, noted, “Progress on the liquefied natural gas (LNG) projects in Mozambique has slowed over the last few years due to financing issues and regulatory uncertainty. The operators are expected to start with relatively small-scale developments, such as Eni’s 3.4 million metric tonnes per annum (mmtpa) floating liquefied natural gas (FLNG) solution.
“Reduced investment is likely to lead to a slower build-up of the projects than initially planned, only reaching an estimated combined capacity of 30 mmtpa by 2025. A final investment decision (FID) for the FLNG development is expected in 2016, while approval for the onshore facilities is likely to be delayed until 2017 and LNG exports from Mozambique are projected to start at the end 2021.”
Among companies in the Sub-Saharan region, Eni SpA will have the highest capex spending, with $21.3 billion on key planned projects over the next 10 years.
Major undeveloped discoveries in the Sub-Saharan region include Zabazaba-Etan and Nsiko, both located in the Niger Delta Basin. Young Okunna, GlobalData’s Upstream Analyst, said, “Although Nigeria is expected to add over 510,000 bd of additional oil production capacity by 2025, the likelihood of this happening is dependent on fiscal certainty and relative peace in the Niger Delta region. Almost half of the expected additional capacity still lacks an FID, with the field operators expected to make a decision by 2020. This will be greatly influenced by prevailing market conditions and security around the planned projects.”
Why Vets Make Topnotch Employees
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Politicians call them heroes and strangers thank them for their service. But when their enlistment comes to an end, veterans need more than a pat on the back as they return to civilian life. They need jobs. And increasingly, they seem to be getting them because the unemployment rate among veterans has been on the decline in recent years. In May, the veteran unemployment rate was 3.4 percent, down from 5 percent for the same month in 2015, according to the Bureau of Labor Statistics. That compares to a 4.7 percent overall unemployment rate. “I think in the last several years there has been a focus on the importance of hiring veterans and many businesses have taken that to heart,” says Nick Baucom, a U.S. Marine veteran who makes hiring veterans a priority for his company, Two Marines Moving (www.TwoMarinesMoving.com).
“But probably the biggest reason that the unemployment rate for veterans has trended downward is that, as a group, veterans bring with them experience and attitudes that make them great employees,” said Baucom.
Baucom’s moving company employs more than 100 veterans between its two locations—the Washington, D.C., area and Miami. He wants to hire more because his company is booked three to four weeks in advance and he could use the extra help.
“But with the unemployment rate for veterans dropping, it’s becoming more challenging to hire them,” says Baucom, who also is author of On the Move: A Marine’s Guide to Entrepreneurial Success.
“I can’t complain too much, though, because I’m glad so many other employers are seeing the benefits of having veterans in their workforce,” he said.
Baucom says there are several reasons veterans make topnotch employees, including:
- Their tenacity. Veterans know what perseverance is all about, if for no other reason than they survived boot camp, an arduous challenge that puts a person’s fortitude to the test. Marines, for example, must prove they can hike 20 miles carrying a fully loaded pack.
• Their decisiveness. People in the military don’t always have the luxury of taking all day to analyze a situation before making a decision. Yes, they must gather data and understand it thoroughly—but they understand the need to do it expediently. “A 90 percent solution now is better than a 100 percent solution later,” Baucom says. “Both in the Marines and in the business world, I’ve found that waiting for that 100 percent solution just leads to paralysis.”
• Their initiative. Anyone in the military learns to follow orders. But they also understand that there are situations when they need to take action in the absence of orders. If something needs to be done, they don’t have to wait to be told.
“I know that Marines go through quite an ordeal in their training and in carrying out their missions,” Baucom says. “When we ask them to move a piano, it probably doesn’t seem all that difficult in comparison.”
LongPoint Closes $525 Million Capital Raise
LongPoint Minerals, LLC, announced June 8, the closing of its initial capital raise totaling $525 million with a lead equity commitment of $450 million from an affiliate of CPPIB Credit Investments Inc. (CPPIB Credit), a wholly owned subsidiary of the Canada Pension Plan Investment Board (CPPIB), alongside $75 million from third party investors. There will also be a second closing within 60 days for up to an additional $200 million of commitments. LongPoint Minerals is a recently launched Denver-based company focused specifically on the acquisition of oil and gas mineral interests. The company is backed by a management team bringing together over 30 years of industry-leading experience and a proven track record. LongPoint will seek to acquire high-growth, long-life mineral interests in the top U.S. resource plays by leveraging management’s unique technical and land expertise. Said George Solich, president and CEO: “This is an important partnership for LongPoint. With CPPIB’s strong financial backing along with other institutional investors, we can deploy our differentiated technical model for strategic mineral and royalty acquisitions in the targeted basin areas. Over time, we will look to expand our capabilities to other regions in the U.S.”
Build a Culture of Trust
By Walt Grassl
Walt Grassl
Alice and Bob are both supervisors at a medium size company. One day over lunch, they were comparing the pluses and minuses of some of their past bosses. During the discussion, they were reminded of Greg, probably the best leader they ever had. While Greg was personable, focused, and set high standards, they concluded Greg’s greatest quality was that he created a culture of trust. Greg did not yell, threaten, or lie to get his teams to meet short-term deadlines. He also did not, and would not, sacrifice long-term success to meet short-term deadlines.
Four Keys to Reproducible Results
By Eliakim Thorpe
Matthew and Janice are emerging entrepreneurs who recently went into business together. During a lunch meeting at a local restaurant they began to discuss their future profit projections and how well their business is performing financially six-months after its opening. What began as a conversation about dollars and profit margins quickly turned into a debate over the Great Recession, and the benefits of transforming an organization primarily driven by profit, to an organization led by purpose-driven employees.
Matthew prefers to discuss profit strategy, profit projections, and profit margin regardless of the current economic conditions impacting revenue. He firmly believes that the organization can be financially resilient during economic turmoil if a profit strategy is developed. Janice believes in maximizing human capital—not necessarily every employee—but those who’ve demonstrated passion, dedication and an unwavering commitment because of their belief in the values of the organization. She is confident that if people change, the organization will change and weather any economic instability.
Rose, a well-respected manager, joined in and shared her perspective on the importance of organizational transformation that must be internally-driven by people, and not solely motivated by bottom lines. She believes that if human capital is not leveraged properly within an organization, transformation can never occur and the development of a profit/revenue strategy will be insufficient in an ever-changing global economy.
Conversely, some of the most resilient organizations can encounter troubles because they fail to realize the importance of organizational transformation. The most successful brands implement organizational transformation designed to change people and not organizational structures.
Rose and Janice are correct. The engine to every economy is people. Without people there is no economy. Purpose-driven, passionate, talented, and dedicated employees make transformation successful. As an enterprise, you evaluate what is in your control and what you can influence. You can’t control market conditions, inflation, and the decline of the economy. But you can control the growth of people and the emphasis you place on having a transformed workforce during a prospering and declining economy.
When you embark on your leadership journey to foster a transformative work environment, it is critical that you can ensure consistency and long-term success. There are four keys to reproducible results for business leaders, entrepreneurs and executives to consider on the path to transformation.
- Engaged Employees
During any transformational process, it is imperative that the organization understands that people power the transformation. Organizations must understand that the greatest commodity at their disposal is not products, profit, or capital—but people. Every dimension of a transformational company is tightly connected to its people because they are the greatest assets of any business.
Your workforce must be your company’s cornerstone if it is to be successful, profitable, and sustainable. Without people, there is no organization! When your workforce feels—and truly believes—that they have a direct stake in the future of the company, they become invaluable assets toward your transformative goals.
- Organizational Culture
Every organization must learn to be intentional about the attitudes, behaviors, values, and guiding principles it broadcasts. Whatever a leader broadcasts becomes its organizational culture. Organizational culture is built upon Convictions, Conduct, and Character. If the manager or leader is unable to demonstrate these three C’s, it will create bad attitudes, unwanted behaviors, limited perspectives, and difficult working environments.
Developing this culture requires a committed and consistent articulation of its values that contribute to the social and psychological environment of any organization. A culture that includes expectations, experiences, and a shared philosophy by all provides guidance on how an organization interacts with its employees and its customer (in a larger context, its community and society). In essence, organizational culture is simply the temperament of an enterprise led by its leader who is skilled with setting the temperature. The temperament of the leader will determine the culture of an organization. A strong organizational culture becomes the GPS when an organization loses it way!
- Performance Increase
Every organization wants a greater ROI. Greater output and increased productivity come at minimal cost when employees are engaged and a strong culture courses through your company. Many businesses define performance as the intellectual and physical energy of an employee, which is designed to meet a specific job responsibility. It is leveraging the capabilities of its workforce to generate greater output. The better the alignment with vision and value, the more likely people will rise to greater output. The components of a productive and high-performing organization include quick thinking and decision-making, fast to-market strategy, and the ability to maintain momentum. Leaders must be skilled at energizing the workforce gifts and talents if greater productivity is desired. When employees are motivated, greater productivity is manifested!
- New Product Innovation
Creativity and ingenuity must be at the forefront of product innovation. Employees want to create impact. The best way for that to occur is to allow them to be part of the innovation-based projects in your company by letting them get their hands dirty. Ideation is important, but being part of implementing the ideas that come to life can be a more exciting and meaningful growth opportunity for your employees that will inspire them to perform.
Additionally, provide your employees the resources to be innovative in their work. When given the right tools and resources, the best employees will instinctively challenge themselves to be more innovative—and will perform better. When an organization is immersed in a transformational culture—not just ideation—innovation occurs.
Organizations that are successful in their transformational endeavors are people-centered, purpose-driven, solution-focused, service-oriented, profit-savvy, and innovatively positioned to create lasting change. The challenge in business leadership or entrepreneurism nowadays is the ability to be resolute and steadfast in an economic climate that appears to promote profit above partnership with consumers to create lasting change in and around the community. Organizations are more likely to face adverse economic conditions if they are primarily driven by profit. Investment in people must be at the center of any transformational organization.
Close observation of successful organizations during adversity found that those who believed in transformational leadership styles and a workforce with a transformative and evolved culture resulted in a boost in profits, highly motivated employees, and stronger organizational outcomes.
ABOUT THE AUTHOR:
Eliakim Thorpe is a highly sought-after speaker, consultant, thought-leader, entrepreneur, author, and a leading authority on organizational transformation. He is the creator of the T.H.R.I.V.I.N.G. Organization: A New Philosophy to Transform Organizations, which is both a philosophy and a systematic process to help businesses create frameworks to become transformational—internally and externally. As an IT professional, Eliakim has worked with and consulted for Fortune 10 to Fortune 500 companies such as IBM, Whirlpool, and GM. For more information about Eliakim, please visit www.EliakimThorpeSpeaks.com.