Basin Resources Fall 2013

BASIN RESOURCES4

www.basinresourcesusa.com FALL 2013

Fall 2013

Four Corners Innovations Inc. 34New research park to turn great ideas into profitable endeavors

PNM Job Growth Initiative 33Company supports small business

Mancos Shale play 40Activity increases, companies still optimistic

Energy News 44Across the nation

BHP-Biulliton 36Navajo Nation works toward purchasing Navajo Mine

Merrion honored 38Business group names T. Greg Community Star

contents

16

22 26

10

32

50 years and going strong San Juan Generating regionalhaze reduction plan moving

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Harrison first graduate of School

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BASIN RESOURCES6

www.basinresourcesusa.com •FALL 2013

Editor’s note

When the cost for dry natural gasdropped to a decades-low price,producers in the Basin were hithard. However, as always, the ingenuity and persistence of peoplein the San Juan Basin continuesfinding innovative ways to moveforward.

In this issue we have a number ofstories that point out what a greatasset San Juan College School ofEnergy is for education, employment and the oil and gasworkforce but, with the addition ofFour Corners Innovation Inc., alsofinancially for the college.

All that leads to a huge financialasset for the entire community andthe Four Corners.

In his column in this issue RandyPacheco, Dean of the School of Energy, explains the benefit of theresearch park.

“In San Juan County, we are veryfortunate to have the energy industry continue to support SanJuan College. However, with thepartial closure of the San Juan Generating Station power plant, the

loss of coal production, and thelower prices of natural gas, we faceincreasing challenges to generaterevenue.

“We need the financial resourcesto support San Juan College’s current faculty, attract new members to our faculty and bringnew technology to our community.

FCI is looking for innovativeideas and opportunities within andoutside of San Juan College. TheCollege has an implementationteam that is generating innovativerevenue ideas to share with theFCI. The FCI board is composed ofmembers from several market sectors in the community – fromhealthcare and business, to education, trades and energy. Theirbreadth of experience enables themto evaluate proposals carefully.”

It’s no secret the oil and gas industry has hit a rough patch overthe last couple of years.

We have an update on theprogress of the Mancos Shale Playand production has increased andoptimism remains high that the

development could provide a bigturnaround in state production.

Aztec Well Servicing, anotherarea innovator, just celebrated its50th anniversary.

The Aztec Well family is now amid-sized nationally based servicecompany, and Jason Sandel hasmanaged to replicate his father’ssuccess across the U.S.

The company took its services toa national level after the crash of2008, and Jason has built serviceoperations in communities wherethe oil and gas industry hasboomed.

The company has grown out ofnecessity for work and a valuedpartnership with its customers,Jason said, adding that he also isinvesting in new technology suchas the new drilling rig he has inGrand Junction, Colo. It is entirelyfueled by natural gas, and it canwalk by itself on location.

With our history, and our welldocumented history of innovation,our area will continue to succeedand grow.

©2013 by Majestic Media. Basin Resources is distributed three times a year. Materialherein may not be reprinted without expressed written consent of the publisher.

Area innovators continue moving forward

FALL 2013 • www.basinresourcesusa.com

BASIN RESOURCES8


Four Corners Innovations Inc., or FCI, was created as a revenue

generator for San Juan College when the State of New Mexico

and our country were struck with the recession, which adversely

affected those who depend on taxes for their funding.

Some very forward thinking individuals at San Juan College

gave thought to the future of the institution and began to look at

additional revenue sources. Four Corners Innovations Inc. was

incorporated in the spring of this year and lots of exciting things

are happening, which will provide revenue that will benefit San

Juan College, its staff and, most importantly, its students.

San Juan College wants to encourage entrepreneurs within the

faculty and staff and, with the assistance and help of FCI, their

ideas will be reviewed and supported. FCI was modeled after

other similar organizations at the University of New Mexico

(which has Lobo Development, a real estate developer), New

Mexico Tech (which is famously known for its research with

explosives), and New Mexico State University (which does exten-

sive biofuel research).

The University Research Park Act, passed by the New Mexico

Legislature in 1978, allows universities and colleges the ability to

do research and economic development within the community. In

San Juan County, we are very fortunate to have the energy

industry continue to support San Juan College. However, with the

partial closure of the San Juan Generating Station power plant,

the loss of coal production, and the lower prices of natural gas, we

face increasing challenges to generate revenue.

We need the financial resources to support San Juan College’s

current faculty, attract new members to our faculty and bring new

technology to our community. San Juan College wants to be a

part of economic development, and Four Corners Innovations Inc.

is an important part of that goal.

FCI’s goal is to offer financial support to San Juan College. The

college is not directly supporting FCI, but will benefit from

revenues generated by FCI to help provide new equipment for our

students and other financial needs of the college.

FCI is looking for innovative ideas and opportunities within

and outside of San Juan College. The College has an implementa-

tion team that is generating innovative revenue ideas to share with

the FCI. The FCI board is composed of members from several

market sectors in the community – from healthcare and business,.

to education, trades and energy. Their breadth of experience

enables them to carefully evaluate proposals.

Other institutions in the county have achieved high success with

research parks similar to FCI. Duke University has a medical center

that provides research to the pharmaceutical industry, and New

Mexico Tech developed the nicotine patch. Through FCI, we can

develop research that will benefit the students and staff of San Juan

College and the community by creating economic development.

Four Corners Innovations Inc.:

Developing research to benefitSan Juan Collegestudents, staff andthe community

ranDy PachecoDean of School of energy

San Juan college

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BASIN RESOURCES10


DebrA MAyeux

Basin Resources

An oil and gas tycoons’ belief in his

employees led to the birth of several well

servicing companies that have lasted

throughout the decades in New Mexico

and Texas.

It led to the opening of Aztec Well

Service, which recently celebrated its

50th Anniversary of servicing the oil and

gas industry in the San Juan basin and

across the united States.

The company started when J.P. “bum”

Gibbins decided in 1963 he wanted to

leave the business after a nearly 50-year

career in the oil patches of West Texas

and New Mexico, he asked the foreman

of seven different yards to buy him out

for $100,000.

“bum Gibbons was one of the largest

oilfield service company owners of his

day,” said Angie Sims, general manager of

buster’s Well Service. Her grandfather

purchased Gibbons’ assets to start his

company as did many other foremen,

according to an article in Well Servicing

Magazine.

One of those foreman was Wayne

Sandel, who had moved his wife and two

children in Aztec in the 1950s to work

for Gibbins.

“My grandfather was a faithful and

loyal employee to Mr. Gibbins,” said

Jason Sandel, vice president of Aztec

Well Service.

Wayne and his wife Sally decided they

would try to come up with the money to

purchase the yard and seven pole units,

but it was difficult to secure a loan in the

1960s. He couldn’t get a loan from the

local banks, because he didn’t have

collateral. Wayne called Gibbins and said

that while he would love to buy the area

and start his own business he couldn’t

get the money.

Gibbins would not take no for an

answer and told Wayne to meet him at

Midland National bank the next

morning. Wayne showed up with his son,

Aztec Well Serviceworks in 15 states, operates in 7 basins and employs 750 people

BASIN RESOURCES 11

Jerry, who had graduated from Farming-

ton High School three years earlier. They

met in the lobby and Gibbins cosigned

on a $100,000 for the Sandel family.

Aztec Well Service was born in June

1963.

Jerry was attending Texas Tech Uni-

versity when Wayne and Sally bought

the business. Sally ran the office and

Wayne took over the operations. Jerry

knew it was time to come home and help

out. He began working on the rigs, but

to this day remembers taking turns with

his other family members sleeping on the

couch in the company office, so there

was someone there to answer the phone

24 hours a day.

The company’s first job came from

Roy Owens, father of Jerry’s longtime

friend Bunky Owen. It was in the Rat-

tlesnake field near Shiprock.

Aztec Well Service began working

with several other local companies that

helped shape the history of the not only

the oil and gas business, but the people

of the San Juan Basin, of which the

Sandels have had a major impact.

When the business started Jerry left

Texas Tech to come home and help

out, but he brought with him the

philosophy of a vertical integration

business model. Applying this philos-

ophy helped Aztec Well service be-

come a full-service energy company,

Jason said.

Jerry encouraged business growth

through the purchase of companies

whose services and equipment Aztec Well

Service would need to be the best at its

business.

In 1965, the Sandel purchased a

drilling company, which became Totah

Drilling in 1967. In 1970, they pur-

chased Triple S Trucking, and added

equipment hauling services in 1974 and

liquid hauling services in 1977. Double

M was purchased in 1983 and they latest

addition to the company was Road Run-

ner Fuels.

“Each of those businesses supply to

the Aztec Well Servicing process of sup-

plying to ourselves to keep costs down


BASIN RESOURCES12


and deliver to customers at a great price

with exceptional quality,” Jason said.

“The vertical integration model still

drives our work and business processes.”

Jason entered the family business in

2001. He is the vice president, but Jerry

remains president and comes to work

each day. “He is a guiding force of how

we do our business,” Jason said of his

father.

Jason never thought he would go to

work for the family company. He grew

up in Farmington and graduated from

Rocinante High School. He left for col-

lege and later became involved in politics

while living in Santa Fe.

But in 2001, Jason’s mother Nancy

died, and Jerry was “seemingly alone”

with no family in Farmington.

Jason and his wife, Stacy, decided to

move back to Farmington with their

young daughter, Stella. It was time for

Jason to learn the family business.

“I’ve come in and taken it to a new

level,” he said. The Aztec Well family is

now a mid-sized nationally based service

company, and Jason has managed to

replicate his father’s success across the

U.S.

The company took its services to a na-

tional level after the crash of 2008, and

Jason has built service operations in

communities where the oil and gas

industry has boomed.

The company has grown out of

necessity for work and a valued partner-

ship with its customers, Jason said,

adding he also is investing in new tech-

nology such as the new drilling rig he

has in Grand Junction, Colo. It is entirely

fueled by natural gas, and it can walk by

itself on location. “We’re taking it to the

next level, while building relationships

with our customers, working hand-in-

hand to meet their needs.”

“Each of those businesses supply

to the Aztec Well Servicing process

of supplying to ourselves to keep costs

down and deliver to customers at a great

price with exceptional quality. The

vertical integration model still drives

our work and business processes.”

— Jason sandel,

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Aztec Well Service is in 15 states and

seven operating basins and employs 750

people, whom Jason said provide a

backbone to the company.

“The success of the company is based

upon them and their dedication,” he said.

“Those men and women who work day

and night, who are out there fighting the

elements and faced with the challenges

to deliver fuel for America’s future –

those people are the basis for our

success.”

The generosity of Gibbins and his

belief in his employees has been paid

forward and come full circle with the

Sandels and their Aztec Well Family

employees. They do an “honest day’s

work for an honest day’s pay,” and they

work together with a focus on safety and

success for the company.

That success has allowed the company

to give back to the communities in which

serves. Aztec Well Service gives money to

capital improvement projects, children’s

BASIN RESOURCES14


ball teams, the Boys and Girls Clubs, aca-

demic teams, school activities their em-

ployees’ children are involved in and to

much-needed projects in the community.

“We do what we can,” said Jason, who

also serves as a city councilor in Farming-

ton. “Kids and family and dedication to

the community that’s what we’re really

about.”

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Photo Simulation of Units 1-4 SCR Retrofit - San Juan Generating Station SCR Project. — PNM Photo


Debra Mayeux

Basin Resources

a plan to install selective non-catalytic retrofit technology, or

SNCr, on two units at San Juan Generating Station is moving

through state agencies for final approval and submission to the

environmental Protection agency.

The plan calls not only for SNCr installation on two units, it

also calls for the shutdown of two other units at the Public Serv-

ice Company of New Mexico coal-fired power plant. Once the

process is completed it is estimated that regional haze from the

plant will be cut down, thus meeting the federal rule adopted in

1999 for regional haze.

The New Mexico environmental Improvement board met

Sept. 5 in Farmington discuss PNM’s plan,

which was drafted by the New Mexico en-

vironment Department and Governor Su-

sana Martinez’s office in cooperation with

PNM. at the meeting, the board not only

received testimony from environment De-

partment Secretary Designate ryan Flynn,

but also from community members, govern-

ment bodies and concerned citizens.

“We had four different public meetings, including three in

Farmington. each was dedicated to discussing the economic and

environmental impacts – the impacts on jobs in the region,”

Flynn said of the process leading up to presenting the state im-

plementation plan to the environmental Improvement board. “It

became clear we could not come up with an alternative that

would receive an endorsement from everyone.”

The state improvement plan, or SIP, would include the shut-

ting down of units 2 and 3 at San Juan Generating Station and

the installation of Selective Non-Catalytic retrofit technology on

units 1 and 4. The city of Farmington opposed the SIP, saying it

would harm the region’s economy, because the plant shutdown

San Juan Generating regional

haze reduction plan moving

through state agencies

PNM

BASIN RESOURCES18


would result in a loss of 818 megawatts

of power produced in San Juan County.

This could mean a loss of jobs and tax

dollars while also being a burden on

plans for economic development in the

region. This is why Farmington City

Councilor Jason Sandel asked the Coun-

cil as the local governing body to adopt

a resolution opposing the agreement.

Despite the fact that PNM plans to

construct a natural gas-powered electric

plant that peaks at 117 megawatts and

only has a daily output of 17 megawatts,

Sandel pointed out that the community

will lose the 818 megawatts of electric

generation. While the plan meets federal

demands, it also potentially would cost

the community millions in lost jobs and

tax revenue, he said during a council

meeting.

“I see more than 838 megawatts of

power exiting the community. …That

“At the end of the day, we are transferring those energy

production jobs and the use of our infrastructure and

perhaps even our severance tax to Palo Verde Power Plant

in Arizona and is that what we really want for the state

of New Mexico and this community?— Jason sandel,

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energy that is produced here and transmitted out of here is

going to be replaced with additional electricity from Palo

Verde Power Plant in Arizona. It is critical for us to stand

up and say this power generation leaving our community is

the wrong thing for San Juan County, for the workers the

businesses and the community,” Sandel said. “At the end of

the day, we are transferring those energy production jobs

and the use of our infrastructure and perhaps even our sev-

erance tax to Palo Verde Power Plant in Arizona and is that

what we really want for the state of New Mexico and this

community?”

Sandel pointed out that the city of Farmington Electric

Utility did a study of power production in the area, and

that study came forward with the possibility of the city

partnering with another company for the construction of a

natural gas facility.

Instead, city staff presented a plan for the city to further

its partnership with PNM and take over ownership in the

two units that will remain open. Sandel said he thought

that was a “conflict.”

Councilor Dan Darnell, however, disagreed. “If the SIP

goes into effect we’re still going to have two units and

somebody is going to have to invest in those units. I see no

conflict here,” Darnell said. “We’re at the point where we

are trying to decide – somebody has to own those shares –

is it a good idea is it not? We’re not here to throw stones at

anybody, we just want a solution.”

Darnell actually opened the discussion saying he wished

the city didn’t have to have a “haze rule we have to comply

with.”

Darnell looked at the SIP as a plan with some “give and

take,” where the EPA came to town and didn’t consider the

implications of its actions. “Guys, take into consideration

what you are doing to the communities you are going into

with this plan. Don’t walk in to a community and say we

are not taking any economics into consideration. We are

only looking at one thing and that is environmental con-

cerns, because I think there is a balance and there is no

balance here,” Darnell said, adding he wishes the cities of

Farmington, Bloomfield and Aztec, and San Juan County,

would have had a seat at the negotiation table.

Flynn pointed out that it was the fault of the EPA as

well as the former state administration forcing the hand of

the Martinez administration and PNM on this issue.

PNM and the state had until 2007 to come up with a

plan to reduce haze as well as nitrous oxide emissions from

the plant. The state presented the EPA with a plan in June

2011. This included the best retrofit technology for the

plant, with a less severe impact on jobs and coal-fired elec-

trical output from the community.

The EPA rejected the plan, saying the state missed the

2007 deadline, which Flynn said was the result of a lack of

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Public hearing at San Juan College. – File photo

BASIN RESOURCES 21


interest in the project from the Bill

Richardson administration.

“I think it’s really important to em-

phasize we inherited a really bad prob-

lem. We were forced to consider a plan

that the state promulgated after the

2007 deadline. That was a failure of

leadership by the prior administration.

They put the state and this region in a

bad position,” Flynn said.

Governor Susana Martinez sued the

EPA in the Tenth Circuit Federal District

Court and the case is ongoing. The alter-

native SIP came as a result of the parties

sitting down outside of that lawsuit to

try to come up with a plan to address

the federal environmental regulations

being imposed on the plant.

“The state decided it was best for New

Mexicans to move forward with a plan

that included the shutdown of two

units,” Flynn explained. “It will improve

visibility, cut down on pollution and

conserve water.”

Under the SIP, PNM has agreed to en-

sure there will be no layoffs, despite the

shutdown. The company also promises

to build a 200 megawatt peaking natural

gas plant in San Juan County, which will

provide approximately 300 construction

jobs.

PNM also has given more than $1

million to the Navajo Nation to provide

for educational opportunities within the

tribe and has donated more than

$100,000 to Four Corners Economic

Development.

“We cannot say this plan is perfect,

but it is the best path forward in a very

difficult situation,” Flynn told the Envi-

ronmental Improvement Board.

Once the Environmental Improvement

Board makes its decision on the SIP, the

plan will be forwarded to the Public

Regulation Commission for approval.

“We cannot say this plan is perfect, but it is the best path

forward in a very difficult situation.”

— Ryan Flynn,

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DOROTHY NOBIS

Basin Resources

Call her petite, call her tiny, call her short, call her dy-

namite in a small package. But never, ever call Trish Harri-

son unmotivated.

An admitted over-achiever, Harrison enjoys challenges

and opportunities. While an employee of the Colorado

Forest Service, Harrison was on the front lines, fighting

forest fires shortly after graduating from high school.

The forest fires soon led to a fire of another kind –

Harrison met her husband, Dayton, while both were serv-

ing on a fire line and they fell in love.

College beckoned both Harrisons – Dayton’s goal was

to get his degree and continue working for the Forest

Service, and Trish majored in business and accounting.

When the couple learned they were pregnant, they de-

cided Trish would stay home and raise the baby and the

two other children that soon followed.

When all three children were in school, Trish decided

to return to the work force. She was hired as a contractor

by a major oil field company in 2002 and, in 2006, was

hired full time. In 2009, Trish was invited to be a training

coordinator for the company at San Juan College’s School

of Energy, where she also developed classes.

“One day, I sat down with Randy Pacheco (dean of the

School of Energy) and we discussed the possibility of cre-

ating a degreed program for people who were working in

the oil field,” Trish said.

“The Advanced Petroleum Production Operations

(APPO) program was the result, which offered students an

Associates of Applied Science degree.”

As the discussion about the program continued and

evolved, Trish said, “I looked at Randy and said ‘why am I

not in the program when I helped design and develop it,’

and he said, ‘You should be.’”

Trish enrolled and began an independent study class.

“Ken Johnson (the class instructor) gave me the books, and

I studied nights and weekends, reading books and train-

ing material,” she said. “I switched my major (from

Trish Harrison

R singto the challenge

Harrison first graduate of School of Energy APPO program

BASIN RESOURCES 23


accounting and business), worked with Ken and got through

the classes.”

“And I’ll graduate in May,” Trish added proudly.

For Ken Johnson, working with Trish was a pleasure. “Trish

already had her GE’s (general electives), so it took her eight

months to complete the program,” Johnson said. “It was a lot

of work for her because she has a job, but she’s committed to

her company and to the oil and gas industry.”

To earn an APPO Associate of Applied Science degree at

San Juan College, students must have a minimum of two years

of experience in the oil and gas industry and be employed by

an oil and gas company, Johnson explained, and must have

completed the other requirements necessary for graduation.

“One hundred percent of San Juan College credits may be

transferred to New Mexico Highlands University so students

can get their bachelor’s degree,” Johnson added.

For Trish, getting her degree means she’s achieved one of

the many goals she’s set for herself. “I want to get my bache-

lor’s degree in business with an emphasis on oil and gas,” she

said. “And I’m debating just doing just fun stuff – volleyball

(she was a volleyball coach for several years), climbing or bik-

ing -- or continuing working 60 hours a week!”

All kidding aside, Trish said she appreciates the support sheRandy Pacheco, Dean of the School of Energy, presents Trish Harrison with her certificate in the

Advanced Petroleum Production program. – Courtesy photo

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BASIN RESOURCES24


received from her employer and

encourages other oil and gas in-

dustry employees to check out

the educational opportunities

their companies offer. “Most in-

dustry companies support and

encourage education,” she said.

Ken Johnson agreed with

Trish. “This program affords

many opportunities to existing

employees (of oil and gas indus-

try companies). (Getting) the de-

gree is a lot of work, but the

payouts are worth it.”

As a woman in an industry

that, for many years, was a man’s

world, Trish said she is grateful

that women are now accepted

and respected in the oil field.

“There were a number of

women engineers (years ago),”

Trish said, “but women have

started, more and more, working

in the field. It’s physically chal-

lenging – you have to be strong

enough to manipulate a valve

and lift things. Now, the (indus-

try) recognizes the importance

of having women in the work-

place, and companies know they

can do the job.”

Trish said opportunities for

women in the oil and gas indus-

try have also increased. “The

field jobs are no longer limited

to only men, and the opportuni-

ties for women are huge. If

women want an opportunity,

they can get it.”

Trish also said she appreciates

the training offered by San Juan

College and the School of En-

ergy. “The School of Energy

makes a difference in people’s

lives,” Trish said. “I love interact-

ing with the people at the

School of Energy, and now, with

my education, I can talk intelli-

gently about things and ask in-

telligent questions when I’m

talking about things like starters

in an engine. That (education)

enhances my knowledge and my

participation in meetings.”

Trish also encourages others

to take advantage of higher edu-

cation and training. With many

companies not hiring those

without a degree, Trish said

she’ll be talking to young peo-

ple, encouraging them to get

their education. “If they have a

degree, the opportunities are

way better,” she said.

Randy Pacheco, dean of the

School of Energy, said Trish is

an inspiration, not just to

women, but to everyone in the

oil and gas industry.

“Trish is dedicated to the in-

dustry and understands the im-

portance of education,” Pacheco

said. “Trish is the first one to

graduate from our Advanced Pe-

troleum Production Operations,

Associate of Applied Science

program. I’m very proud of her.

She’s a role model to women

who want to work in the oil and

gas industry. Trish is a profes-

sional and her co-workers re-

spect her. I’m glad the School of

Energy and San Juan College

helped prepare her to continue

to succeed in an industry she ap-

preciates and loves.”

So, call Trish Harrison tiny,

call her short, call her dynamite

in a small package, but always

be respectful of her, said Ken

Johnson.

“Don’t misjudge Trish,” John-

son said with a big grin. “Don’t

think because she is little that

she’s a pushover. I’ve seen her

mad, and she can kick butt!”

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BASIN RESOURCES26


Dorothy NobisBasin Resources

What do military veterans, students

working to get their Commercial Driver’s

License, or CDL, and horses have in

common?

A lot – especially if you’re a student at

the San Juan College School of Energy’s

CDL training class. Students working to

obtain their CDL license attend an eight-

week, 15-credit hour program and spend

three weeks in the classroom and four

weeks behind-the wheel, or BTW, with

the CDL exam taken in the eighth week.

The School of Energy has 10 Class A

tractors, eight dry vans and two flatbed

trailers, three Class B trucks and a Class

B passenger coach. An MPRI TransSim

IV simulator, installed in a 38-foot self-

contained trainer, is used for specialized

training.

As part of their training, students need

to learn how to maneuver the big trucks

and how to inspect and load trucks ac-

cording to state and federal regulations.

While most of the training is done within

San Juan County, instructors at the

School of Energy looked for other op-

portunities to provide students’ training

in heavy traffic and on Interstate high-

ways.

Maury Tiehen is the coordinator for

the CDL program and, about five years

ago, decided to pursue the idea of having

students travel to Albuquerque, Santa Fe

or other New Mexico cities to add to

their training. While students aren’t al-

lowed to haul for a for-profit company,

they can assist non-profits, Tiehen said.

“I talked to NAPI (Navajo Agricultural

Products Industry) and we loaded potatoes

Horses for HeroesCDL students learn life skills while helping others

BASIN RESOURCES 27


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to take to the Roadrunner Food Bank in

Albuquerque and brought back food for

our local ECHO Food Bank,” Tiehen ex-

plained. “It was a wonderful experience for

our students, going over the Continental

Divide with 800,000 pounds of potatoes.”

Unfortunately, that program ended and

Tiehen went on the look for another. He

BASIN RESOURCES28


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serves on the Board of Directors for the New

Mexico Trucking Association and when the as-

sociation requested help from members to take

hay for horses used in the Horses for Heroes

program last year, Tiehen jumped at the chance.

“We have contacts at NAPI and I made

arrangements to get hay from them,” Tiehen

said. “The students would load the hay, make

sure they met the DOT (Department of Trans-

portation) regs, make the trip and help unload

the hay.”

The Horses for Heroes-New Mexico Inc.

Cowboy Up! is a non-profit corporation based

in Santa Fe. According to the corporation’s

website, it is a unique horsemanship, wellness

and skill-set restructuring program that is of-

fered free to veterans and active military who

have sustained physical injuries or combat

trauma, or PTSD, during their time serving

their country. Veterans work with horses and

learn to ride and participate in other aspects of

ranch life. They work with cattle and enjoy the

camaraderie of cowboys who are also veterans.

The program allows veterans to become in-

structors and, under the volunteer mentorship

of working ranch cowboys, raise and train the

horses that are the program horses for future

veterans coming into the program.

Unfortunately, when the drivers were ready

to take the hay from NAPI to Santa Fe this

year, NAPI had no hay left. Dean Emery, of

Emery Ranch in Aztec, heard of the need for

hay for the horses and donated 249 bales for

the students to take to Santa Fe. Mickel Wilson,

an adjunct instructor for the CDL program, was

one of the instructors who made the trip.

“It was a great benefit to the students by ex-

periencing the process of loading and unload-

ing the hay and doing all the paperwork,”

Wilson said.

Jason Backe was one of the students who

participated in the project. Backe entered the

CDL program at the School of Energy for a

good reason. “It’s (the license) a golden meal

ticket,” he said, with a smile. “I helped load the

hay – it took a couple of hours to load it and it

was a lot of work.”

For student Sam Greyeyes, being able to help

with a project for military veterans has a spe-

cial meaning.

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“I’m a veteran,” Greyeyes said, “and I’ve ‘been there, done

that.’ To be able to help these veterans recover and move back

into society is a way I can help them and is something I want

to do. From a vet’s aspect, we’re one team at the end of the

day and we have the same goal – go home safely. Unfortu-

nately, sometimes society views us (veterans) differently and all

we want to do is (to) be treated like everybody else.”

“I’m fortunate and I’m OK,” Greyeyes added, “but to be able

to help these vets get back to their lives is really good.”

Jake Gomez took the CDL training to upgrade to a Class A,

which will allow him to tow a vehicle that weighs more than

10,000 pounds. While he knew taking the classes would be

advantageous for him in his chosen career field, he didn’t

know the classes would also give him the opportunity to help

others.

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www.basinresourcesusa.com • FALL 2013

“It was pretty cool taking hay for the horses,” Gomez said.

“It’s a good thing they’re doing for those vets.”

Gomez said the classes also broadened his circle of friends.

“I’ve enjoyed every bit of taking these classes,” he said. “Now I

know where Santa Fe is and I’ve gotten to know the other stu-

dents and they’ve become good friends. They’re a great group

and the teacher has been great. I enjoyed the experience of

pulling and parallel parking a trailer, and I can’t wait to go show

everyone (at work) what I learned!”

Donald Brockman is also a veteran and was more than happy to

help with the Horses for Heroes project. “It’s a good project – it

helps people who don’t know what to do with their lives (when

they leave the military) by giving them what they need to get back

to work. As a veteran, it’s part of my responsibility to help them.”

Les Welsh and Rick Greenaker are also instructors for the CDL

program. Both participated in the Horses for Heroes project and

both agreed it was good for the students. “They (students) had to

deal with traffic on completely different roads and it was a good

experience for them,” Welsh said.

Rick Iannucci is the executive director for Cowboy Up! Horses

for Heroes, New Mexico Inc., and in an email to Raul Garcia, a

board member of the New Mexico Trucking Association, ex-

pressed his appreciation to the San Juan College School of Energy

students for their help.

“We were blessed to meet you and for you to put us on track

with the guys from San Juan College,” Iannucci wrote. “We have

established a great relationship with them and we look forward to

their trips here. By hauling the hay and thus making the hay af-

fordable, they have literally made us able to continue to provide

this program free to our combat warriors.”

A letter of appreciation from Nancy De Santis, director of the

New Mexico Horses for Heroes, stated, “Please know that your

generous support helps us to continue our effort in giving veterans

their new and vital mission: To rest, recuperate and restructure

their skill sets so that they can reach their life goals.”

Randy Pacheco, Dean of the School of Energy, considers pro-

viding students with the opportunity to learn a life skill that will

help them be successful in their career is matched only by giving

them the opportunity to help others.

“Horses for Heroes is a wonderful program that helps those men

and women who have selflessly served our country by giving them

the encouragement and support they need to re-enter civilian life,”

Pacheco said. “Our students not only experience the hands-on

challenges of driving in heavy traffic, loading and unloading trail-

ers and doing the paperwork necessary as a CDL drive, but they

experience the benefit of helping others.”

When Pacheco received a thank-you letter from De Santis, he

forwarded it on to the instructors and students in the CDL pro-

gram with a note that said, “This is why I feel working with the

School of Energy is a blessing from God and why I feel all of

you are a blessing in my life. Good job, CDL folks!”

BASIN RESOURCES 31


New Mexico is sitting on an untapped gold mine. Well, not

quite a gold mine – although we do have some – but in terms

of natural resources, the oil and gas located on New Mexico’s

federally-owned lands is about the same.

New Mexico is among the top oil and natural gas producing

states in the nation. These industries are the foundation upon

which New Mexico’s economy and budgets are built. However,

we’re like a car that is only firing on four of six possible pis-

tons. That’s because so much of our lands are owned by the

federal government and, thus, underutilized.

A whopping 41 percent of New Mexico is controlled by

Washington. Some of these lands are completely off-limits to

economic activity as they are owned and managed by Native

tribes and the DoD, but more than 20 million acres currently

managed by the Fish and Wildlife Service, National Forest

Service, and Bureau of Land Management, could be considered

for oil and gas exploration.

At a time when New Mexico’s economy is struggling, the

positive economic impact of accessing these resources would be

tremendous. A new report from Dr. Timothy Considine, profes-

sor of energy economics at the University of Wyoming, the re-

sults of which were released by the Rio Grande Foundation,

found that New Mexico could see an increase of 68,000 new

jobs, more than $1 billion in new tax dollars, and $8.4 billion

in additional economic growth if energy production was al-

lowed on these lands.

To say that these numbers represent an economic game-

changer for New Mexico is an understatement. We could go

from struggling economic laggard to having plentiful jobs and

economic-prosperity.

Look at North Dakota. That state’s economy grew by an in-

credible 13.4 percent in 2012 while the nation as a whole grew

by only 2.5 percent and New Mexico grew by a paltry 0.2 per-

cent. The unemployment rate in North Dakota is just 3 percent,

lowest in the nation. This is the result of technological ad-

vances that have unleashed an energy boom in North Dakota.

But having the land under state and private control has made a

big difference. Only 2.7 percent of North Dakota is controlled

by Washington as compared to New Mexico’s 41 percent.

Proposals to shift New Mexico’s federally-controlled lands to

the state will undoubtedly set off alarm bells among the envi-

ronmental community, but they shouldn’t. After all, in terms of

environmental problems on New Mexico’s federal lands, the re-

cent epic forest fires are among the most significant. They are

being caused by federal mismanagement.

According to the U.S. Government’s own Watchdog, the

GAO, “The most extensive and serious problem related to

health of national forests in the interior West is the over-accu-

mulation of vegetation, which has caused an increasing number

of large, intense, uncontrollable and catastrophically destructive

wildfires.”

Under a regime where the state controlled these lands, as has

been proposed in the Legislature, a portion of the $1 billion in

new tax money collected could be used to manage New Mex-

ico’s federal lands in a way that prevents forest fires, allows for

multi-purpose uses, and restores the lands to pristine conditions

in the wake of any energy or other uses.

Unfortunately, Washington lacks the focus to invest these re-

sources and has mismanaged New Mexico’s lands to the point

where each June massive new forest fires are expected.

There is no doubt that the current administration in Wash-

ington will oppose any shift of federally-controlled lands to

state control. But New Mexicans, as we saw with the bi-parti-

san effort to restore the withheld $26 million in royalty pay-

ments, we can move mountains when we unite.

Environmentalists, outdoors enthusiasts, frustrated job-seek-

ers, traditional users, and political leaders looking to goose the

economy should come together to support efforts to restore

poorly-managed federal lands to state control.

Paul Gessing is the President of New Mexico’s Rio Grande Founda-

tion. The Rio Grande Foundation is an independent, non-partisan, tax-

exempt research and educational organization dedicated to promoting

prosperity for New Mexico based on

principles of limited government, eco-

nomic freedom and individual respon-

sibility.

Paul GessinG

unlocking federal funds

would be economic boom for state

Rio GRande Foundation

PResident

BASIN RESOURCES32


Debra Mayeux

Basin Resources

San Juan College and New Mexico

Highlands university have partnered to

create the state’s first bachelor degree

program in oil and gas management.

The presidents from both institutions

signed a memorandum of understanding

Sept. 3 to begin offering the program to

students from San Juan College’s School

of energy.

“This is a very momentous and impor-

tant occasion,” said Dr. James Fries, presi-

dent of Highlands university, as he

signed the agreement. “This is a program

that has been needed.”

San Juan College approached High-

lands with the idea about a year ago, and

Highlands developed the oil and gas

management degree from the ground up.

It was done to help support the industry,

which Fries said is a key industry to the

state.

“The oil and gas industry is a tremen-

dous part of the economy in New Mex-

ico,” he said. “It’s important there be a

new generation of people with oil and

gas experience ready to move into man-

agement positions and become future

leaders in the industry.”

That was the idea behind developing

the bachelor’s and master’s degree pro-

gram with a focus on oil and gas man-

agement, said randy Pacheco, director of

Dr. Toni Pendergrass, president of San Juan College, left, and Dr. James Fries, president of New Mexico Highlands University, talk before signing some 18 agreements andmemorandums of understanding between the two entities just before the college board meeting at San Juan College. – Debra Mayeux photo

SJC, Highlands create oil, gas management bachelor degree program

First in New Mexico

* degree 48

Debra MayeuxBasin Resources

Public Service Company of New Mex-

ico is supporting small business by provid-

ing funding and support to WESST for its

Technology Toolkit Loan Program.

The program was launched by the PNM

Job Growth Initiative and is an alternative

financing product that gives small business

clients access to low-interest loans with the

purpose of purchasing technology related

materials.

The small businesses, which must be

clients of WESST, can use the funds to

purchase computer related software, com-

puter devices and anything needed to set

up or enhance a business website.

“There’s a big percentage – two-thirds –

of really small businesses that don’t have a

Web presence at all or are accessing tech-

nology in business,” said Kim Blueher,

vice president of lending for WESST.

The loan program is a spinoff of

WESST’s efforts to educate small busi-

ness owners on the importance of using

technology for everything from market-

ing to networking with other business

owners and potential clients.

The Technology Toolkit initially was re-

leased in Albuquerque in the format classes

that focused on “educating the entrepre-

neur on how to incorporate technology

into business,” Blueher said. This included

social media and online marketing.

The loans were rolled out statewide

with PNM’s assistance.

“PNM has a long history of supporting

WESST,” Blueher explained. “Two of the

three women who started WESST were

PNM employees, and PNM has continued

to support WESST throughout its 24-year

history. PNM also has a long history of

supporting economic development in New

Mexico.”

PNM was searching for a statewide or-

ganization to partner with on an economic

development initiative and selected

WESST’s Technology Toolkit™ Program.

That was because “many entrepreneurs in

New Mexico, especially in rural areas,

could benefit from incorporating technol-

ogy into their businesses to help them

grow and reach markets they might not

otherwise be able to access.”

The loans are available to small busi-

nesses anywhere in the state and will be

secured by newly purchased computer

and/or related software, devices and other

items with a value to cover the amount of

the loan.

The money can be used on “anything

you can connect to improve business

through technology,” Blueher said.

The interest rate is set at 5 percent with

varying repayment terms based on the

client’s cash flow. The terms of the loan are

from six to 24 months and the amounts

range from $500 to $5,000.

“Each situation is different, and the pro-

gram will help determine the loan amount

based on the client’s need, repayment abil-

ity and collateral available,” Blueher said.

There is a one-time, non-refundable appli-

cation fee of $25.

These loans are important, she said, be-

cause of the need for technology in all

business – from startups to businesses with

a long history.

“Most of the markets are moving toward

Web-based marketing,” Blueher said. Peo-

ple find out about businesses online. “They

communicate with small businesses

through the Web, using Facebook and

Twitter.”

To learn more about the loan program

go to WESST’s website at west.org.

BASIN RESOURCES 33


PNM Job Growth InitiativeCompany supports small business by funding WESST Technology Toolkit Loan Program

Agnes Noonan

WESST President

BASIN RESOURCES34


Lauren Duff

Basin Resources

Many of us do not have aclear definition of what a re-search park is, but Four CornersInnovations Inc. in a partnershipwith San Juan College has a fullgrasp of the concept and is onthe way to developing muchneeded revenues for the college.

Research parks are oftenlinked with major research uni-versities. They exist to createlinkages between the university,industry, and the community.The result of research parks isconverting new research intonew businesses that generatenew jobs.

San Juan College recently an-nounced it will follow in the

footsteps of several higher edu-cation institutions in New Mex-ico and develop a research park.The name of this research parkis Four Corners Innovations Inc.“We are in its infancy stages. Weare just now initiating it and get-ting our bylaws in place,” saidSan Juan College President Dr.Toni Hopper Pendergrass,adding the research park willhelp “encourage innovation andprovide additional revenue tothe college.”

Educational institutions inNew Mexico are allowed tohave research parks because ofThe University Research ParkAct, which was enacted by statelegislature in 1978.

The purpose of the UniversityResearch Park Act is to “pro-

mote the public welfare andprosperity of the people in NewMexico, foster economic devel-opment within New Mexico,and engage in other cooperativeventures of innovative techno-logical significance that will ad-vance education, science,research, conservation, health oreconomic development withinNew Mexico,” according to Sec-tion 21-28-2 of the act.

The idea of creating a re-search park at San Juan Collegecame from an implementationteam at the college called GrowSan Juan. “What they do is theycome up with proposals andthen share them with the execu-tive leadership team,” Pender-grass said.

The executive leadership teamsaw the benefits of having a re-search park and decided to cre-ate a Four Corners InnovationsInc. “The members are nomi-nated by the San Juan CollegeBoard. They are comprised ofcommunity members from dif-ferent market sectors in ourcommunity so it represents all ofour schools at the college.”

The FCI Board’s purpose is toreview the research projects anddecide “if we want to build apartnership. We have a processwhere we ask does this havemerit and will this patent enablemonetary recoveries,” said Dr.James Henderson, who is amember of the Four Corners In-novation Board.

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Four Corners Innovations Inc. New research park to turn great ideas into profitable endeavors

dr. James Henderson

Four Corners InnovatIon

InC. board member

“Universities have been

doing this for years. What (a

research park) will do for the

college is it enables this col-

lege to become involved in

things that actually will be

extremely beneficial because

there will be monetary values.

BASIN RESOURCES 35


“Universities have been doingthis for years. What (a researchpark) will do for the college is itenables this college to becomeinvolved in things that actuallywill be extremely beneficial be-cause there will be monetaryvalues,” Henderson added.

There are a “myriad” of waysa research park can generate rev-enue for the college, Pendergrassexplained. “If (someone) writes abook that is highly marketablethen the college can share inrevenue or if someone has apatent or invention that ishighly marketable then the col-lege can also share in revenue.”

At the School of Energy, hav-ing a research park allows forthe school to help other energyinstitutions improve their educa-tion and training programs. “SanJuan College is one of the topthree as far as developing educa-tion and developing training forthe energy industry,” Dean ofthe School of Energy and CEO

of Four Corners Innovations Inc.Randy Pacheco said. “We wantto establish quality within vari-ous community colleges thatwant to mimic the education

and training we are doing. Cur-rently there is no mechanism inwhich to do that. But San JuanCollege has put lots of moneyinto the School of Energy so we

want to be able to help other in-stitutions but not give away allof San Juan College’s invest-ments.”

Several future research proj-ects that will be conducted bythe School of Energy will befunded through “some initialrevenues” that were generatedthrough out of state training andan energy conference that washeld in the springtime, Pender-grass said.

Other schools in New Mex-ico that have a research exten-sion include Santa FeCommunity College, the Univer-sity of New Mexico, New Mex-ico State University, and NewMexico Institute of Mining andTechnology.

“We are more than just acommunity college; we are will-ing to take on research. This islooking at ideas that can spawnfrom inside the community andreally move the college,”Pacheco said.

“We want to establish quality

within various community

colleges that want to mimic

the education and training we

are doing. Currently there is

no mechanism in which to do

that. But San Juan College

has put lots of money into the

School of Energy so we want

to be able to help other insti-

tutions but not give away all

of San Juan College’s invest-

ments.”

dean of School of eneRgy

Randy Pacheco

BASIN RESOURCES36


Debra MayeuxBasin Resources

As the Navajo Nation continues to

work toward purchasing Navajo Mine

from BHP-Billiton, the Navajo govern-

ment is in the throes of developing energy

policies as well as a company that will be

dedicated to transitioning control of the

mine to the nation.

Navajo Nation President Ben Shelly

voiced support for the policy as well as

the Navajo Transitional Energy Company,

or NTEC, while visiting the area on Oct.

4.

“We have an outdated energy policy

that needs to be updated,” Shelly said,

voicing support for the energy policy,

which was originally drafted in 1980. “I

am committed to supporting NTEC in

order to keep paychecks going to our

Navajo people. I have asked the council

to ensure that the financial mechanism

used will pay back any moneys appropri-

ated to the process.”

The Navajo Nation formed Navajo

Transitional Energy Company to oversee

the ownership transition of BHP Billiton’s

Navajo Mine to the tribe. Negotiations are

ongoing, but Council Delegate LoRenzo

Bates has introduced a bill to provide seed

money for the new company to finalize

the purchase of Navajo Mine.

Bates’ legislation seeks funding from

the Navajo Nation’s Unreserved, Undesig-

nated Fund Balance to pay for initial and

BHP-BillitonNavajo Nation works toward purchasing Navajo Mine

BASIN RESOURCES 37


immediate costs and obligations associated with the ongoing

negotiations and ultimately the acquisition of Navajo Mine

from BHP Billiton.

"It is important for Navajo leadership to work collabora-

tively together and to respect the lines of authority during

negotiations, for the success of this important project. We

must keep lines of communication open between the parties

involved," Naize said.

He and Shelly have issued a joint letter directing Navajo

Nation staff to focus their efforts on closing the pending

transaction.

When and if the purchase of Navajo Mine is complete the

tribe will retain 800 local jobs at the mine, which it said

will help support the local economy.

“I am committed to supporting NTEC in order to keep

paychecks going to our Navajo people. I have asked the

council to ensure that the financial mechanism used will

pay back any moneys appropriated to the process.”— Navajo NatioN PresideNt BeN shelly

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BASIN RESOURCES38


The New Mexico Business coalition

honored T. Greg Merrion of

Farmington at its annual He-

roes Event on Sept. 26 at the

Albuquerque Country Club.

Merrion was named the

Community Star for the state

of New Mexico, along with

six other Heroes in different

categories.

Each year the coalition

honors people who go “beyond their job

description” in doing what is good for New

Mexico, according to the organization’s

website.

The New Mexico Business Coalition is a

grassroots organization that promotes pro-

business principles in the state with the

hopes of improving the economy and qual-

ity of life for New Mexicans.

This year the organization also recog-

nized Sen. John Arthur Smith, of New

Mexico District 35, as the Hero of the Year;

Cemco Inc., as the business of the year and

KRQE’s Larry Barker as the media star.

Three elected officials also were recog-

nized as heroes. They are Rep. Carl Trujillo

of District 46, Bernalillo County Commis-

sioner Wayne Johnson and Albuquerque

City Councilor Janice Arnold-Jones.

Merrion honored

Business group names T. Greg Community Star

Riley Industrial was named Businessof the year in Farmington, NM

Serving the Southwest and Rockiesfor 42 years

505.327.4947

1970

Sonny Riley founded what at thetime was Riley Corp. The Dog-house was located on AnimasStreet. Sonny worked out of itwith no electricity, no water anddid his paper work with a flash-light for one whole year until hebuilt the building on AnimasStreet to replace the Doghouse.

The name was changed to Riley Industrial Services, Inc. We thenexpanded into the uranium industry, oil and gas industry as wellas some power generating stations.

The first vacuum truckwas purchased, which isstill in operation today.

Services were sandblasting only.

Started providing fiberglass repairs on piping and tanks

Expanded in Chandler, AZ

Expanded in Odessa/Midland, TX

Sonny began designing and building hydroblast units from the ground up

Purchased our first Hydro-X truck.

Opened a $1 milliondollar training facilitybecause we are 100%committed to safety.

As of 2013 we currentlyhave 33 Industrial VacuumTrucks in our fleet alongwith 31 Hydro-X Units toservice the Four Cornersand surrounding areas

Purchased the land and building on San Juan Blvd. Where we reside today.

We established theRiley Industrial Men’sHealth Fund, a projectthrough the San JuanMedical Foundation. We hold an annual golftournament as our

biggest fundraiser forthis fund.

Expanded to Show Low, AZ.

Expanded to Lubbock, TX.

1975

1982

1984

1985

1987

1990

1995

2004

2005

2010

2013

2010NOVEMBER

2011AUGUST

2012APRIL

BASIN RESOURCES40


LAuren Duff

Basin Resources

The recent success seen within the San

Juan Basin has been in the oil window of

the Mancos Shale, according to George

Sharpe, Merrion Oil and Gas investment

manager.

Oil production has increased by 33

percent from 180,000 barrels per month

in 2010 to 240,000 barrels per month in

April/May 2013, Sharpe said. “Most of

the wells are drilling for oil.”

natural gas production, however, has

decreased. Currently, natural gas produc-

tion is at 60 billion cubic feet per month

Activity up, companies still optimistic about production


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and “it looks like it is still declining,” he added.

Encana and WPX Energy are two companies that are

drilling in the San Juan Basin. “Encana has been busy and has

got it going. WPX is up in the dry gas area and the gas wells

up there were very good,” Sharpe said. “There certainly are

economic assets down Highway 44 and testing continues in

other areas of the Basin to determine how extensive the eco-

nomic window may be.”

New Mexico Oil and Gas Association President Steve

Henke said companies within the Four Corners are continuing

to explore development within the southern part of the Basin.

“Companies are attempting to determine the extent of the

play and what is more productive than others. In the northern

part of the Rosa area, there is a possibility for future develop-

ment, but it will depend on natural gas commodity prices.”

In June, Encana purchased 67,000 acres within San Juan

Basin because “we feel this is an area where we can be suc-

cessful and it is a good area for us to develop,” Encana

Spokesman Doug Hock said. “Earlier this year we announced

that we have had enough success we are ready to ramp up

commercial production. We felt there was an economic play

there to develop, and we are encouraged by the results we

have had to date.”

Encana is drilling for oil and operated two drilling rigs in

the beginning of the year. In August, Encana released one of

its two rigs to stay within the 2013 capital budget. “We had

been efficiently drilling wells and allocated certain capital for

the year. We were in danger of going over the level of allo-

cated capital and as a result of that we had to release one of

those rigs,” Hock said, ensuring that regardless of releasing a

rig, Encana isn’t “pulling back” because the San Juan Basin is

a “promising area.”

WPX also is pursuing oil development in the San Juan

Basin after exploratory drilling this spring yielded commer-

cially economic results from the Gallup Sandstone in the

Mancos formation, according to a WPX press release.

“WPX is estimating a year-end 2013 exit rate of 3,400

(barrels of oil equivalent per day) from this new develop-

ment,” the press release stated.

Currently, WPX has lease rights to more than 31,000 net

acres in the oil window of the San Juan Basin for its Gallup

Sandstone development.

“Certainly we have seen increase in activity and interest

with acreage for lease, so we need to be optimistic about the

southern part of the Mancos in terms of the economy of

Farmington and the Four Corners region. We are hopeful,”

explained Henke, adding that once natural gas prices improve

“I think we will see a rebirth of activity in the natural gas sec-

tor as well.”

“Hopefully, there will be an uptick and the rumor is people

want to pick up rigs,” Sharpe said. “Every rig is hundreds of

jobs.”

BASIN RESOURCES42

www.basinresourcesusa.com • FALL 2013

Lauren DuffBasin Resources

The Permian Basin in thesoutheastern part of New Mex-

ico and western part of Texas isan oil and gas producing giant,and many employees working inthe San Juan Basin have movedto Midland, Texas, because of

the large amount of activitywithin the region.

It is apparent the PermianBasin is much more active thanthe San Juan Basin when looking

at the rig count. During theweek of Oct. 4, there were sixhorizontal rigs drilling for oil inMidland County and 15 verticaloil rigs, according to the BakerHughes Rig Count. In San JuanCounty, there were two horizon-tal oil rigs and one vertical oilrig. Within the entire PermianBasin, there were 190 horizontaloil rigs and 229 vertical oil rigs.

“The way we determine therig count is as long as the rigsare actively drilling that week,then that is what we capture,”said Emil Ferenz, Baker Hughesmarket research resource man-ager.

There are several large oil andgas producers in New Mexicothat have field offices in Mid-land, said Steve Henke, New

The Permian Basin is an oil-and-gas-producing area locatedin West Texas and the adjoiningarea of southeastern New Mex-ico. The Permian Basin covers anarea approximately 250 mileswide and 300 miles long. Vari-ous producing formations suchas the Yates, San Andres, ClearFork, Spraberry, Wolfcamp, Yeso,Bone Spring, Avalon, Canyon,Morrow, Devonian, and Ellen-berger are all part of the PermianBasin, with oil and natural gasproduction ranging from depths

from a few hundred feet to fivemiles below the surface. The Per-mian Basin remains a significantoil-producing area, producing

more than 270 million barrels ofoil in 2010 and more than 280million barrels in 2011. The Per-mian Basin has produced over29 billion barrels of oil and 75trillion cubic feet of gas and it isestimated by industry experts tocontain recoverable oil and natu-ral gas resources exceeding whathas been produced over the last90 years. Recent increased use ofenhanced-recovery practices inthe Permian Basin has produceda substantial impact on U.S. oilproduction.

Workers go where the jobs arePermian Basin big draw for area oil and gas employees

What is the Permian Basin?

* jobs 43

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Although the Eagle Ford Shale in SouthTexas gets most of the chatter when itcomes to talk of major oil production fromhydraulic fracturing, the storied WestTexas fields of the Permian Basin arerevving up to steal the limelight.

Between January and June of this year,the Permian Basin has already surpassedoil production in the Eagle Ford, showing889,808 barrels each day compared to the598,706 barrels per day in South Texas,according to statistics from the Texas Rail-road Commission, which regulates thestate’s energy industry.

Houston energy companies are amongthe top players in the field. The top pro-ducer in the Permian Basin is Houston’sOccidental Permian Ltd., which producedmore than 20 million barrels during thefirst six months of the year. Irving-basedPioneer Natural Resources USA Inc. wasnext with more than 12 million barrels ofoil production. Rounding out the top threewas Houston’s Apache Corp. which pro-duced almost 10 million barrels of oil.

The consensus is that the Permian Basin

oil production will reach 2 million barrelsof oil per day within the next five years,said Stephen Shepherd, an associate in theexploration and production research groupat Simmons and Company International inHouston.

As production moderates in the Dako-tas' Bakken Shale, the Permian is expectedto fill the gap, Shepherd said.

Simmons and Company expects theEagle Ford to surpass the Bakken in oilproduction sometime in 2014. In 2013,

the Eagle Ford is on track to produceabout 930,000 barrels of oil per day. TheWilliston Basin in the Bakken Shale is pro-ducing in 2013 a little more than 1 mil-lion barrels, and those two are expected toflip in 2014. The Permian should producearound 1.4 million in 2013.

It’s generally expected that the EagleFord will continue at that pace while thePermian will accelerate its production,driven by horizontal drilling. – HoustonBusiness Journal

Mexico Oil and Gas Association president.“It wouldn’t surprise me that some of thosesupport jobs are going to Midland and thePermian Basin.”

Oil and gas service companies within theFour Corners also have concerns with em-ployees moving to Midland. “We could havethe best technology to use here, but if welose people, we won’t be able to do the jobwe are supposed to get done,” said DannySeip, president of Blue Jet Inc., a perforatingand logging wireline oilfield service com-

pany in Farmington. “When we see natural prices rebound, I

think we will see the employment increase inthe San Juan Basin,” Henke said.

As far as students graduating from SanJuan College’s School of Energy, they typi-cally stay in the San Juan Basin to work, ac-cording to School of Energy Dean RandyPacheco.

“I would assume a lot of them are stayinghere because they have families, but you willquickly find where the big money is. If they

have the knowledge and the experience, thenthat would be valuable to them.”

He added that oil and gas companies arerecruiting students during their first week oftheir first semester in college. “They are try-ing to build a relationship with them andthen take them to basins where there is not alot of eligible workforce,” Pacheco said.

“The reason why a lot of the (students)are working in the San Juan Basin is thatthey have the knowledge and the experi-ence.”

jobs

Permian Basin on track to be top shale oil producer

BASIN RESOURCES44


. . . . . . . . . . . . . . . . . . . . . . . . . .

Across the Nation

Benchmark light, sweet crude oil futures

prices fell Oct. 1 for a third consecutive trad-

ing session on the New York market amid

rising concerns that a partial U.S. government

shutdown could reduce crude demand.

Both Democrats and Republicans were

quoted in the media on Oct. 2 saying resolu-

tion of an impasse on the federal budget

could take weeks. Meanwhile, White House

and lawmakers planned more talks Oct. 2 in

efforts to break a stalemate that closed some

agencies.

House Republicans were trying to devise a

piecemeal strategy of financing government

operations going into December. Meanwhile,

analysts suggested the budget impasses could

reduce oil demand because hundreds of

thousands of federal employees might go

without pay for an undetermined period.

Natural gas prices on Oct. 1 reached their

highest level on NYMEX since Sept. 20. The

upward momentum was expected to continue

as forecasters watched a system likely to

enter the Gulf of Mexico. The National Hur-

ricane Center said a low-pressure area has 40

percent chance of forming into a tropical cy-

clone. The system was expected to reach the

southern gulf by Oct. 3.

The U.S. Energy Information Administra-

tion’s weekly inventory report came out as

scheduled Oct. 2 and was expected to do the

same on Oct. 9 regardless of a government

shutdown. Crude oil stockpiles built more

than analysts had expected.

Crude inventory builds

The American Petroleum Institute said its

information showed crude stockpiles in-

creased 4.5 million bbl last week. EIA’s in-

ventory report, meanwhile, said U.S.

commercial crude oil inventories – excluding

those in the Strategic Petroleum Reserve –

increased 5.5 million bbl for the week ended

Sept. 27 compared with the previous week.

At 363.7 million bbl, crude inventories are

toward the upper range for this time of year.

Total motor gasoline inventories increased

3.5 million bbl and are at the top of the aver-

age range. Finished gasoline and gasoline

blending component inventories both in-

creased. Distillate fuel inventories decreased

1.7 million bbl and remain near the lower

limit of the average range for this time of

year. Propane-propylene inventories in-

creased 1.6 million bbl, which is middle of

the average range.

U.S. refinery inputs averaged 15.4 million

b/d for the week ended Sept. 27, which was

146,000 b/d lower than the previous week’s

average. Refineries operated at 89 percent of

capacity. Gasoline production fell, averaging

8.9 million b/d. Distillate fuel production

rose to about 4.9 million b/d.

EIA said crude oil imports averaged 8.4

million b/d last week, up 438,000 b/d from

the previous week. Over the last 4 weeks,

crude oil imports averaged just under 8 mil-

lion b/d, which was down 6.5 percent from

the same 4-week period last year.

Total motor gasoline imports – including

both finished gasoline and gasoline blending

components – last week averaged 559,000

b/d. Distillate fuel imports averaged 85,000

b/d last week.

Energy prices

The NYMEX November contract for

benchmark U.S. light, sweet crudes fell 29

cents on Oct. 1, settling at $102.04/bbl.

During the trading session, the November

contract dipped briefly to $101.06/bbl but

rebounded. The December crude contract

dropped 21 cents to settle at $101.69/bbl.

Heating oil for October delivery was

down 1.6 cents to a rounded $2.95/gal on

NYMEX. Reformulated gasoline stock for

oxygenate blending for October lost 1.76

cents to $2.61/gal, marking its lowest settle-

ment price for 2013.

The November natural gas contract

climbed 4.9 cents to a rounded

$3.61/MMbtu on NYMEX. On the U.S.

spot market, the gas price at Henry Hub, La.,

was $3.58/MMbtu, up 6.2 cents.

In London, the November IPE contract

for North Sea Brent crude dropped 43 cents

to $107.94/bbl.

The October contract for gas oil dropped

$7.75 to $905.25/tonne.

The Organization of Petroleum Exporting

Countries reported its basket of 12 bench-

mark crudes declined 19 cents to

$105.42/bbl on Oct. 1. – Energy Watch

MARKET WATCH: Oil futures fall as government shutdown threatens crude demand

BASIN RESOURCES 45


richard Gilliland

President, Independent Petroleum

Association of New Mexico

You know how it feels whenyou’re watching a movie and thehero is falsely accused? Youbegin feeling angry as you awaitthe vindication of the good guyand the exposure of the villainspreading vicious lies. That’s thefeeling that we in the oil and gasindustry endure all too fre-quently. i felt this frustration lastweek when i read an op-ed col-umn published in the Journalwritten by a longtime anti-indus-try agitator.

in his piece he wrote, “BigOil” is “an industry that has nomoral code of conduct. They arean industry based in greed, steal-ing our water, fouling our air,causing major health issues andshowing no regard for ouroceans.” and for good measure,he claimed that the industry is“killing our planet.”

Wow. This may be a newrecord for bizarre, over-the-toppropaganda.

Many books, movies and TVshows have been produced de-bunking this kind of nonsense,but here are a just few facts toconsider.

Oil and natural gas – and coal– built and sustains our modernworld. Oil is in virtually everyproduct you touch, and it is thefuel source for virtually all trans-portation. natural gas providesthe heat in our homes; it cooks

our food, and it is the feedstockfor fertilizer, chemicals and allsorts of products we use.

Our lives would not exist inany way that we would recog-nize without these vital andpowerful energy resources. innew Mexico the oil and gas in-dustry is especially important. ifour economy were a train, oiland gas would be the lead loco-motive.

last year the industry pumped$1.7 billion into the state’s Gen-eral Fund. The oil and gas eco-nomic engine accounts forapproximately 95 percent of theland Grant Permanent Fund and99 percent of the Severance TaxPermanent Fund.

This money is used to supportour public schools, universities,hospitals, water reservoirs, publicroads and buildings, state parksand more. if we were one of thestates not fortunate enough tohave petroleum resources, ourpersonal and business taxeswould have to be much higher inorder to pay for public services.

On the environmental side,the anti-industry activist’s claimsare even more preposterous. Theland, air and waterways of ourcountry are much cleaner thanthey were a generation ago. Thishappened because the publicrightly demanded that businessand industry stop unnecessarilydamaging the environment andbecause technological advance-ments – such as cleaner-burningand more-efficient engines –made a cleaner society economi-

cally possible.none of this would have hap-

pened if our brightest minds did-n’t have adequate energyresources to do their work.

The anti-energy agitator isgreatly concerned about carbonemissions. is he unaware that in2012 energy-related emissions inthe United States were the lowestin two decades? Or that emis-sions have trended significantlydownward in the past five years?

The U.S. Energy informationadministration reports that theswitch to natural gas electricitygeneration away from coal is byfar the biggest driver behind ourdecline in greenhouse gas emis-sions. here in new Mexico, oiland gas producers have con-tributed millions of dollars andhundreds of thousands of acresof leasehold toward cooperativeconservation programs. State oiland gas producers have workedwith the conservation groupcenter of Excellence to protect

many of new Mexico’s uniquespecies. The U.S. Fish andWildlife Service recently creditedour efforts with saving the dunesSagebrush lizard from beinglisted as an endangered species.

i’m incredibly proud of theimportant work my industrydoes to provide the economicbenefits, essential fuels and envi-ronmental philanthropy thatnew Mexico deserves.

We are honest, hardworking,salt-of-the-earth people workingmostly for small, independentcompanies in towns such ashobbs, artesia, roswell, Farm-ington and Bloomfield. We lovethis state and are honored tomake such a large contribution tothe land of Enchantment.

When you read bombasticclaims about oil and gas produc-ers, i trust you will be able toseparate the good guys fromthose who have “no moral codeof conduct.” – IPANM

Oil & Gas industry supports economy and environment

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BASIN RESOURCES46


Don’t mess with New Mex-ico’s renewable energy rule. Giveit some time before changinganything.

That was the overwhelmingmessage from dozens of solar in-stallers, biofuels developers, re-newable energy lobbyists andregular citizens who testifiedTuesday before the New MexicoPublic Regulation Commissionconcerning proposed changes torenewable energy regulations.

Only three people in thepacked Apodaca Hall in the

PERA building spoke in favor ofchanges, including one who ad-vocated dumping the state’smandate for renewable energy al-together.

The PRC is considering revi-sions to a rule approved late lastyear that regulates the costs topublic utility rate payers ofadding renewable energy. Thisso-called reasonable cost-thresh-old caps the costs to utilities andtheir customers of adding renew-able energy. Currently it is set at3 percent of a utility’s total rev-

enues.The rule sought to define how

the costs are calculated, but afight has ensued once again overthe matter.

Shortly after two new PRCcommissioners were sworn intooffice and less than a month afterthe rule was approved, NewMexico’s attorney general, statePublic Regulation Commissionstaff and large industrial energyusers, like Intel and The Univer-sity of New Mexico, appealed it.They think the rule as written

will cost customers too muchmoney without proven benefits.

Randy Sadewic, a solar in-staller at Santa Fe’s long-timesolar company Positive Energy,said Tuesday it has taken 60years of steady work to begintransitioning from fossil-fuelsources to renewable energy.“Today we are slaves to fossilfuels that consume an increasingamount of our income and con-sume our precious water,”Sadewic told commissioners. –Santa Fe New Mexican

MIOX Corp. of Albuquerque has an-nounced a new distribution agreement withVeolia Water Solutions and Technologiesfor cooling tower water treatment, waste-water reuse, industrial water treatment anddownstream oil and gas water application.

MIOX, best known for making munici-

pal water-treatment systems, also makes in-dustrial cooling tower systems and systemsthat recycle water used in industry.

MIOX’s systems use salt and electricityto make chemicals that the company sayscan kill almost any bugs living in water.The industrial systems control bacteria and

algae that can plague industrial applications.The new partnership will bring MIOX’s

systems to Veolia Water’s design and buildprojects for water and wastewater treat-ment. Veolia Water recorded 2.4 billioneuro in revenue in 2012. – Albuquerque Busi-ness First

Speakers urge commission not to change renewable energy rules

MIOX lands distribution deal with major water company

BASIN RESOURCES 47


Natural gas spot pricesclosed at $3.51 per MMBtu(millions of British thermalunits) on October 4—downslightly from $3.56 perMMBtu the prior week.

Natural gas prices are espe-cially important for domesticindependent upstream nameswhose production largely in-cludes natural gas such asChesapeake Energy (CHK),Southwestern Energy (SWN),Comstock Resources (CRK),and Quicksilver Resources(KWK).

Natural gas price movementis also relevant for commodityETFs such as the U.S. NaturalGas Fund (UNG), an ex-change-traded fund designedto track the price of HenryHub natural gas (the standardbenchmark for domestic natu-ral gas prices).

Looking ahead,weather will be an

important demand factor

As the winter months ap-proach, an important driver fornatural gas demand and there-fore natural gas prices will betemperatures. Colder weatherwill increase demand for natu-ral gas, as it’s a major fuel forhome heating. Natural gas prices arelow from a long-term

perspectiveFrom a long-term historical

perspective, natural gas hasbeen trading at low levels overthe past few years. Prior to thefinancial crisis of 2008, naturalgas had reached peaks of over$15.00 per MMBtu. Since2008, a large amount of natu-ral gas supply has come online

without an equivalent increasein demand due to the discov-ery and development of largenatural gas shale resources inthe United States. Many in-vestors expect natural gasprices to remain relatively de-pressed, as the development ofshale resources has allowedcompanies to produce natural

gas economically at lowerprices.

For companies weighted to-wards natural gas assets andproduction, prices have an im-portant effect on valuation

Market participants and up-stream energy companies mon-itor natural gas prices becauselower prices translate intolower revenues—and thereforelower margins and valuationfor natural gas producers.

Slightly negative

short-term catalyst:

Prices remain

relatively low from a

long-term view

This past week, natural gasprices were down slightly,which was a negative short-term catalyst. In the mediumterm, winter weather will be animportant driver to watch fornatural gas prices. From awider long-term perspective(five years and longer), naturalgas prices are relatively low.Fluctuations in natural gasprices most affect natural gas–weighted producers, such asthe companies mentionedabove (CHK, SWN, CRK, andKWK), and the U.S. NaturalGas Fund ETF (UNG). In-vestors with such holdings findit prudent to track the price ofnatural gas. – Market Realist

Natural gas prices flat, but cold weather could help boost demand

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the San Juan College School of Energy.

“This degree is specifically for the oil

and gas industry,” Pacheco said, explain-

ing that the School of Energy gives stu-

dents an opportunity to receive an

associate degree and then get a ground-

level job in the industry.

“The student ends up working in the

field and is a great lease operator,” he

said. “Management wants to promote the

worker into a management positions. If

they go out and pursue a little bit of edu-

cation with this degree program, they

learn about human resources, how to

budget and how to forecast – all skills

they need in the industry.”

It will cover such issues as oil and gas

finance, accounting, oil and gas contract

law, energy policy and the environment,

petroleum economics and project manage-

ment.

The program will be offered in San

Juan County, but it is an Internet-based

program. “The focus is on the Four Cor-

ners region, but it is applicable nation-

wide,” said Buddy Rivera, director of the

Highlands University Farmington Center.

San Juan College President Toni Pen-

dergrass added that this program will

allow San Juan College students an op-

portunity to be successful and “pursue

ambitious career goals.”

In addition to the oil and gas degree

partnership, SJC and Highlands also

signed 18 admission agreements that

guarantee San Juan College students a

seamless transition of SJC credits to

Highlands to as they work to complete

their bachelor’s degree.

The college also signed a second mem-

orandum of understanding focused on

professional and personal development. It

is an agreement of reciprocity that will

allow employees at both institutions an

opportunity to take free courses at each

institution.

San Juan College employees have an

opportunity to continue their education at

Highlands with a four-credit hour tuition

waiver for classes, while Highland’s em-

ployees receive the same benefit at SJC.

“This will help in professional develop-

ment and advancement in their careers,”

Pendergrass said.

Fries added that his employees are ex-

cited to be able to use the Health and

Human Performance Center at SJC

through this memorandum of understand-

ing. “Our partnership with San Juan Col-

lege has been phenomenal,” he said.

For more information on the oil and

gas business degree program call High-

lands at 505.566.3805.

degree

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DXP Safety Services ...................................................51678 Bloomfield Blvd.Farmington, NM505-325-SAFE(7233)www.dxpsafetyservices.com

Edward Jones/Dennis Gross ......................................232713 E. 20thFarmington, NM505-325-5938www.edwardjones.com

Edward Jones - Marcia Phillips ..................................354801 N. Butler, Suite 7101Farmington, NM 87401505-326-7200www.edwardjones.com

Elite Promotional & Embroidery................................171013 SchofieldFarmington, NM505-326-1710www.elitepromonm.com

Four Corners Community Bank ..................................27505-327-3222 New Mexico970-565-2779 Coloradowww.TheBankForMe.com

Foutz Hanon ............................................................202401 San Juan Blvd.Farmington, NM505-326-6644

Halliburton ..............................................................28www.halliburton.com

Henry Production.....................................................30601 S. Carlton AvenueFarmington, NM505-327-0422

Highlands University ................................................28505-454-3004nmhu.edu/energy

Mechanical Solutions, Inc. ..........................................21910 Rustic PlaceFarmington, NM505-327-1132

Metal Depot .............................................................382001 San Juan Blvd.Farmington, NM505-564-8077www.metaldepots.com

Millennium Insurance Agency....................................132700 Farmington Ave., Building AFarmington, NM505-325-1849 • 800-452-9703www.millnm.com

Miller & Sons Trucking..............................................251110 W. Sategna Ln.Bloomfield NM 87413505-632-8041www.powerinnovations.com

On the Spot Cleaning................................................12(505) 327-0592www.onthespotcleaning.com

Partners Assisted Living...........................................37313 N. Locke Ave.Farmington, NM505-325-9600www.partnersassistedliving.com

Pumps and Service...................................................19505-327-6128www.pumpsandservice.com

QuickLane Tire & Auto Center ...................................425700 East Main St.Farmington, NM505-566-4729

Reliance Medical Group ............................................213751 N. Butler Ave.Farmington, NM505-324-1255 Occupation Medicine505-324-1255 Urgent Care1409 Aztec Blvd.Aztec, NM505-334-1772www.reliancemedicalgroup.com

Riley Industrial.........................................................39505-327-4947

San Juan College School of Energy ...........................46800 S. HuttonFarmington, NM505-327-5705www.sanjuancollege.edu

San Juan Plastic Surgery...........................................182300 E. 30th St., Building B #103Farmington, NM505-327-1754

San Juan United Way.................................................43505-326-1195www.sjunitedway.org

Southwest Concrete Supply.......................................452420 E. MainFarmington, NM505-325-2333www.southwestconcretesupply.com

The Spare Rib ..........................................................471700 E. MainFarmington, NM505-325-4800www.spareribbbq.com

Spotless Solutions .....................................................9505-326-4755www.spotlesssolutions.com

Sundance Dental Care...............................................52505-407-087www.sundancesmiles.com

Uncle Bob’s Auto & Truck .........................................473995 Cliffside Dr.Farmington, NM505-436-2994

Yokogawa Corporation..............................................511-800-447-9656www.yokogawa.com/us

Ziems Ford Corners..................................................245700 East MainFarmington, NM505-325-8826

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Basin Resources Fall 2013

Documents

strong san juan

large array of service

trained service center

corners innovations

nm state

graduate of school

equipment sales

navajo minemerrion