Table of Contents

Vol. 7, No. 2
2nd Quarter 2001

Finding Niches in the e-Business Realm

Rapid change is a fact of life in the e-business world. Although a few players are duking it out to provide all encompassing services, business models that service niches and service them innovatively are building momentum. Niches can range from managing surplus equipment and data mining from drilling/permitting activity to the more traditional lease/property exchange.

Surface equipment can represent as much as 5% of lease value. Managing surplus equipment, not typically considered a core value activity, can nevertheless affect lease value. Producers need cost- and time-effective tools. For both buyers and sellers, an effective accessible marketplace delivers value. Network Oil (http://www.networkoil.com) enhances the surface equipment buy-sell process through traditional auctions, remote bidding at traditional auctions, e-auctions, and online listings. Sellers receive broader exposure. During a recent e-auction, most lots went to buyers outside the region where the equipment was located. In another transaction, property that had been on the books for two years sold within three weeks. For buyers, it means professional marketers can look for you using sourcing services, and with e-auctions or remote bidding at traditional auctions, one doesn't have to be present to buy. 

Leasing, permitting, and drilling activity data, when managed on a near real-time basis, are of great value to operators, the service industry and others. Through a server-side map-based environment, DrillingInfo.com (http://www.drillinginfo.com) is striving to provide the tools for real-time data management. Their Oilfield Virtual Scouttm allows users to define areas of interest, then users are provided alerts to any new activity within that area of interest. Within the Permit Prospector, service industry users can use near real-time permitting data that lists appropriate producer contacts to get their foot in the door while business decisions on who to use for services are being made. Initially populated with Texas data, the system was recently expanded to include Louisiana data. With these services and an affordable, unlimited usage, flat fee business model, industry is recognizing the value—subscriptions are increasing at a 20% per month rate.

The above are just two examples of niches being served. Similar examples could be presented for lease/property exchange or purchasing. Capabilities develop and change rapidly in the e-business world, so annual checks for what is out there are not sufficient.

A recent workshop in Houston, presented by the Texas Independent Producers and Royalty Owners Association under PTTC auspices, provided a current look at many options. Craig Clark, Executive Vice President of U.S. operations for Apache Corporation and vice chair of PTTC's Texas Producer Advisory Group, who moderated a panel session during the workshop, commented, " Due to investment capital requirements and the human element involved in the up-stream E&P sector, e-business capabilities are developing more rapidly than industry acceptance. But acceptance will accelerate as we strive to enhance our margins through technology deployment. An important point to remember is that e-business enhances, not replaces, current processes by providing real-time information with greater efficiencies."

New Pumping Unit Clutch Reduces Power Costs & Improves Production

A patented new product, MS Clutch, developed by Jingbao Tech, offers the potential to reduce power costs, increase production, and improve pumping unit balance. MS Clutch can be installed on any existing pump unit without requiring modifications to the pumping unit itself. The clutch is pre-installed on a flywheel and takes less than an hour to install. Employing patented new technology, the clutch is designed to last for 10 years under normal operations, much longer than conventional clutches.

During the down stroke of the pumping process, the clutch is released and the pump string is on a free fall. The frequency of stroke is thus increased. Also because of the higher speed going down, the status of the down hole fluids is also changed compared with where no clutch is used. Oil production rate is therefore increased. Power can be saved because of the loading changes when the clutch is released.

Results from an early field test are promising. In a 10-well 10-day test, average power savings with the clutch were 24%. Daily oil production from individual wells, which produced from 15 to 70 b/d before the test, increased from 10% to 30%.

MS Clutch is being marketed worldwide through EMER Industries, Inc in Houston, Texas (e-mail: info@emeri.com; Tel: 281-398-8883; Fax: 281-398-9119). EMER Industries, Inc. is also looking for U.S. oil producers who are willing to try the products.

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Prospects Sought for Proving Performance of New Continuous BTEX Measurement Instrument

New Paradigm Exploration, Inc., in partnership with Dakota Technology, Inc. has developed an ultraviolet laser-based detection system for BTEX gases. The continuous flow detection system provides for second-by-second analysis of the total BTEX signal. Using global positioning system technology, New Paradigm can now provide a profile of BTEX concentration in the field in real time. Prior studies performed by New Paradigm using their MSI-301 stationary instrument have established the effectiveness of BTEX in screening prospect acreage, reporting 86% predictive accuracy for oil and condensate production (Oil and Gas Journal (OGJ) article, March 30, 1998). The new instrument allows one to survey large areas rapidly, covering up to 100 linear miles per day. Since studies indicate that some wind-driven drift of the signal occurs, some stationary measurements using the MSI-301 instrument are still required.

New Paradigm is looking for operators willing to be sponsors of a multi-prospect study using the new continuous sampling tool. Sponsors would allow their prospects to be evaluated, and be committed to drilling those locations regardless of the BTEX results. Upon completion, sponsors would have the data for their prospects, plus an analysis of instrument/drilling results in other prospects in the pilot study. To stimulate interest and sponsorship that will allow a database of instrument effectiveness to be quickly developed, New Paradigm is offering to perform surveys for cost (actual cost plus mobilization fees, not to exceed $600 per prospect). Prospects should be located in the Permian Basin, Eastern Shelf, southeast New Mexico, or central or north Texas. Since the instrument is 4WD-vehicle-mounted, terrain must be accessible. Physical access to prospects must be prearranged by sponsors.

For more information, contact Jerry Calhoun, New Paradigm Exploration, phone 615-383-0570, email gercalhoun@aol.com.

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Lessons Learned from Deepwater Well Kick Study

Several "kicks" experienced by Gulf of Mexico operators from semisubmersible and dynamically-positioned drillships for wells with water depths ranging from 2,000 to 6,100 ft were investigated. 

Information for each event was obtained through on-board interviews with the operator and contract personnel and from study of pertinent well logs and reports.

In an article describing the lessons learned, Gary Nance with Randy Smith Training Schools presented data from four different kicks and summarized the lessons learned from the total effort. Lessons were learned in the areas of: well control preparation, kick detection, well kill procedures, kick behavior, and equipment. Those drilling offshore are encouraged to view the full article on the International Association of Drilling Contractors website http://www.iadc.org/dcpi/dc-mayjun01/x-wellcontrol.pdf.

Excerpted from article by Gary Nance, Randy Smith Training Schools in Drilling Contractor, May/June 2001.