Exploring EnErgy nEws, August 2016, Page 7

Oklahoma Corporation Commission Responds to Recent Seismic Activity

Duke University Files Claim With Estate of Aubrey McClendon

Merger in the Works for Linde & Praxair

oil & gas CornErWorld – NatioN – State

SOURCE: U.S. ENERGY INFORMATION ADMINISTRATION, WEEKLY PETROLEUM STATUS

REPORT AND WORKING AND NET AVAILABLE CRUDE OIL STORAGE CAPACITY

Employment in oil and natural gas extraction and support activities in the United States reached nearly 538,000 in October 2014, but then it declined by about 35,000 jobs, or 6.5%, over the following six months, through April 2015, according to data from the U.S. Bureau of Labor Statistics (BLS).

Declines in oil and natural gas extraction and support employment tend to lag declines in crude oil prices. As prices of North Sea Brent crude oil fell from their June 2014 level of $112 per barrel, firms reduced the number of new wells drilled and the associated workforce. The count of drilling rigs in the United States, as measured by Baker Hughes, totaled 857 for the week ending June 19, 54% below the same point a year ago and the lowest level in nearly six years.

Declines in production

jobs lag oil price declines. In July 2008, Brent crude oil reached a record-high monthly spot price of $133 per barrel, before falling to $43 per barrel by February 2009. Oil and gas produc-

tion jobs reached a high of 391,000 in September 2008, two months after the oil prices had started declining. Employment in drilling, extraction, and support activities then

continued to decline for 13 months, when the number of production jobs dropped by more than 51,000. Most (82%) of the decline in these jobs occurred after oil prices reached the lowest

monthly level and were on the rise.

BLS data showing declines in national oil and natural gas production jobs between October 2014 and May 2015 represent a

contraction of about 6.5% of the industry workforce. Although unemployment rates for states that are heavily dependent on re-sources production remain well below the national average, the effects of re-ductions in oil and natural gas jobs are different in key states.

In oil-rich North Da-kota, the unemployment rate slightly increased from 2.8% in October 2014 to 3.1% in May 2015, and Ne-braska has replaced North Dakota as the state with the lowest unemployment rate. Oklahoma’s unemployment rate also increased slightly from 4.1% to 4.3% in that period. But in Texas, where many reported reductions in oil and natural gas jobs occurred, the unemploy-ment rate actually de-creased from 4.7% in Oc-tober 2014 to 4.1% in May 2015, because of offsetting growth in other areas of its more diverse economy.

Exploring EnErgy, June 2015, Page 3

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Source: U.S. Energy Information Administration, based on U.S. Bureau of Labor Statistics, Current Employment Statistics (CES) and Brent oil spot prices from Thomson Reuters

Oil and natural gas production job declines tend to lag oil price declines

Monthly Brent crude spot price, oil and natural gas production jobs (Jan 2005-April2014)

“Oklahoma Corporation Commission Responds to Recent Seismic Activity.” Okenergytoday.com, August 21, 2016.

In response to recent earthquakes in Lincoln County, the Oklahoma Corporation Commission on Friday an-nounced two disposal wells must shut down while 19 other wells must reduce wastewater disposal well opera-tions.

New Dominion LLC’s B. Smith 31 well and Hulen Operating Co.’s Threatt 18-3 well were within 3 miles of eight small-magnitude earthquakes that rocked the Luther area last week. Both must be closed by August 25, according to a Journal Record report.

Operators of another 19 disposal wells must reduce flu-ids injected into the Arbuckle rock formation and install automatic gauges to electronically transmit disposal data to the regulator on a daily basis, according to the Journal Record. These wells are within a 10-mile proximity of the earthquake-prone area.

Marjo Operating Mid-Continent LLC, New Dominion LLC, Midstates Petroleum LLC, EOK Operating LLC and Special Energy Corp. are identified as operators of 14 wells.

Scientists have linked the fluid injected into deep un-derground rock faults with an increase in Oklahoma’s seismic activity.

In the past year, the OCC has issued several notices to operators directing them to either shut down disposal wells or reduce fluid volumes to mitigate the risk of trig-gered earthquakes

“Merger in the Works for Linde and Praxair.” Okener-gytoday.com, August 17, 2016.

Linde AG and Praxair Inc. have confirmed they are in talks about a possible merger for two of the world’s largest providers of industrial gas products.

Gas Pipeline Interfering With Tuttle Water Line Construction Project

“Gas Pipeline Interfering With Tuttle Water Line Con-struction Project.” Okenergy-today.com, August 21, 2016.

A small town in Grady County is grappling with an un-foreseen construction problem, according to a report published Tuesday in the Journal Record.

A city water line is on hold as Tuttle’s city manager deter-mines his next course of action. City Manager Tim Young says a gas pipeline is the cause of the delay.

Prior to last year, there wasn’t much drilling activity inside the city limits. City work-ers are now trying to establish and enforce permit processes after being hit with a flurry of construction requests last year, according to the Journal Record.

“We knew they were build-ing pipelines, but we didn’t real-ize the extent,” said Young. “It makes sense that every time you drill a well you need a pipeline,

but it truly didn’t click, the ex-tent of the construction around city limits.”

Since mid-2015, there has been about 250,000 linear feet of pipeline constructed within city limits, about 30 square miles. Tuttle’s ordinance re-stricts construction within 75 feet of a section line. That gives the city a 50-foot easement for its utilities and 25 feet for a home’s front yard, according to the report.

If there are unregistered pipeline companies or other utilities located in the area, the Oklahoma Corporation Com-mission has enforcement au-thority to commence further action.

LINN Energy is building a new gas plant in Tuttle and needs water for the project. The driller has offered to cover $100,000 in construction costs to build the water pipeline, ac-cording to the report.

Linde, based in Munich, Germany, said in a statement on Tuesday that the talks are preliminary and that “it is currently not foreseeable whether there will be any kind of transaction.”

Praxair, headquar-tered in Danbury, Connecticut, had a similar statement and both companies described the potential deal as a merger.

Linde has 64,500 employees in 100 countries, while Praxair has 26,000 employees in more than 50 coun-tries. Praxair North America is its largest business group with over 10,000 staff.

Linde Engineering North America just expanded its operations at the Port of Catoosa in Tulsa. Linde em-ploys about 350 people in its Tulsa office.

The companies sell gases used in a wide range of ap-plications including manufacturing, food processing and the oil and gas industry.

If the merger is approved, the combined companies would generate more than $30 billion in annual rev-enue.

“Duke University Files Claim With Estate of Aubrey McClendon,” Okenergytoday.com, August 24, 2016.

The alma mater of late oil tycoon, Aubrey McClendon, has filed a claim against his estate seeking collection on nearly $10 million in unsecured pledg-es to the university, according to a Wall Street Journal report.

In the claim filed with the estate on August 12, Duke University list-ed the amount of $18.75 million for the total pledge, with over $9.9 mil-lion remaining as a balance due. The funds were pledged for work study scholarships, athletic projects, cam-pus projects including a new student plaza and the McClendon Auditorium housed inside the university’s Fuqua School of Business.

McClendon, a 1981 Duke Uni-versity graduate, was a generous con-tributor at the North Carolina college as well as within the Oklahoma City area. The university’s influence on McClendon is visually apparent in the Georgian architecture found on the campus of Chesapeake Energy Corporation, the oil and gas company he co-founded with Tom Ward.

McClendon’s wife is also a Duke graduate. His children also attended Duke University.

Duke’s claim is uncommon in that the university is attempting to collect on a charitable pledge rather than a conventional debt. Questions linger about whether the estate will be solvent in light of the debt amassed prior to McClen-don’s untimely death on March 2.

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