SIPES-HOUSTON CHAPTER NEWSLETTER
JUNE 2015
San Andreas Fact Check
Raising Capital with Private Equity
Next Generation Independents
OPEC Update
EPA Fracking Report
John Hankey Remembered
Lift the Ban on US Crude Exports
SIPES-Houston Newsletter | June 2015
SIPES HOUSTON CHAPTER 5535 Memorial Drive Suite F 654 Houston, Texas 77007 Tel: 713-651-1639 Fax: 713-951-9659 www.sipeshouston.org email: [email protected]
Chapter Officers 2015
Chapter Chair Jay Moffitt (713) -750-9485 x 104 [email protected]
Chair Elect James Mertz (281) 205-8140 [email protected]
Past Chair Jory Pacht (832) 338-5928 [email protected]
Secretary Russell Hamman (713) 526-7417 [email protected]
Treasurer William Smith (713) 650-3060 [email protected]
Website Chair James Allen (713) 871-2350 [email protected]
Technical Program Chair Grant Fergeson (832) 613-4009 [email protected]
Continuing Education Chair Kenneth Mallon (713) 705-7955 [email protected]
Hospitality Chair Chris Atherton Public Relations Chair Jeff Lund
(713) 275-1664 [email protected]
Membership Chair(s) Chip Betz (713) 658-8096 x 17 [email protected] Patrick McCarthy (713) 650-0311 [email protected]
Newsletter Chair Jeff Allen (713) 871-2350 [email protected]
Deal Buyers List Chair Hans Sheline (281) 241-7271 [email protected]
Political Affairs Chair
Ross Davis (713) 658-3131 [email protected]
Sponsor Coordinator Christine Milliner (562) 881-6326
National Directors Ralph Daigle (National Pres-ident) (281) 292-6859 [email protected] Mike Jones (713) 654-0080 [email protected] Jeff Lund (713) 275-1664 [email protected]
Office Manager B. K. Buongiorno (713) 651-1639 [email protected]
In This Issue Letter From The Editor 1 Jeff Allen
June Luncheon 2 Ken R. Hopper
San Andreas Geology Review 3
Next Generation Independents 4 Mertz Energy
Prospect Spotlight 5
OPEC Update 6
Global Oil Shortage? 7
May Luncheon Review 9 Russell Hamman
News From The Board 10 Russell Hamman
Pop Quiz 11 Jeff Allen
CES 2015 Save The Date 13
John Hankey 14 Scott Daniel
Earthquakes & Injection 15
Oil Export Ban 15
On the cover: Volcanic activity is breaking records. On may 25th the Wolf Volcano at Isabela Island, the largest of the Galapagos Is-lands erupted for the first time in 22 years.
Want to be on the cover? Email Jeff Allen, the editor, at [email protected]
1 SIPES-Houston Newsletter | June 2015
Many organizations are going through a membership crisis. The baby
boomers that once filled the membership seats are leaving and the age
gap is wide enough to cause concern. SIPES is no different. As we look
for new members we must stay true to the essence of SIPES; a selective
group of well respected independents sharing the same goal of success
in a difficult industry. The original concept of SIPES, as established by
its founders, was a self-certifying organization. Companies contacted
SIPES members to ensure they got an ethical and experienced individu-
al. Members of SIPES take pride in their affiliation and should be reluc-
tant to vouch for a new member unless they are confident in both the
skill and ethics of the potential member. SIPES will continue to be a
valuable label within the industry as long as the members stay true to
the values.
IMPORTANT other news: the Petroleum Club has a new rule concerning
food – if you don’t specify your special-needs meal before the lunch-
eon you will be charged an extra $20. We don’t want anyone to be
charged extra so please take the time to contact BK for your special
meal needs well ahead of time. The website is being updated. Thanks
to Danny Matranga and the many people that sent in your helpful
thoughts. We encourage you to use the website to RSVP for luncheons
and other events as well as to pay local dues.
Jeff Allen
L E T T E R F R O M T H E E D I T O R
*The meeting will be at the new
Petroleum Club, 1201 Louisiana
Street on the top floor.
Abstract
Drawn from direct experience with
prospect generators, La Mesa has
seen the industry evolve into a
dichotomy of Unconventional, statis-
tical drilling plays, and the pursuit of
incremental reserves in
residual opportunities in known
trends. These opportunities are rela-
tively lower risk prospects, but
require seasoned expertise, and pre-
cision tools and data to help de-risk
these targets.
This presentation will share with
SIPES members what we’ve gained
from our perspective of working
with explorers pursuing these re-
serves. From surface permit chal-
lenges, to adapting survey
design to restrictive culture, the in-
formation presented will help pro-
spect generators understand
today’s seismic issues in the field,
and see a range of strategies for
meeting these challenges.
The talk will also present technical
points on survey design in these
prospects, as well as case studies on
modifying acquisition plans for
greater fold and offset yield.
Biography
Ken has been active for over 20
years in management, financial, op-
erating, and service segments of the
oil and gas industry. La Mesa Geo-
physical began in 1998 as the seis-
mic survey resource for its allied
exploration and operating compa-
nies. After developing several fields
and selling those assets, La Mesa
Geophysical continued to innovate
as a small survey specialist serving
Independents today. Ken was
also co-founder and Chief Operating
Officer of Houston-based Buccaneer
Resources, an E&P company
originally listed on the ASX in Aus-
tralia. He is a graduate of Texas
A&M University
PROSPECT–FOCUSED EXPLORATION PROJECTS & 3D SURVEYS KEN R. HOOPER
J U N E S I P E S L U N C H E O N
Date: Thursday, June 18th
Place: Petroleum Club
1201 Louisiana St.
Time: Social 11:15
Luncheon registration deadline
is Noon, Tuesday June 16th
$30 for Members and Affiliates
$35 for guests and non-
members
Additional $5 for walk-ups
No-shows will be billed.
Call, fax, or e-mail your reserva-
tion to the SIPES-Houston Office.
You can sign up online at
www.sipeshouston.org, but
payment is still required at the
luncheon or by mail.
2 SIPES-Houston Newsletter | June 2015
S A N A N D R E A S , T H E M O V I E . A G E O L O G I S T S R E V I E W
3 SIPES-Houston Newsletter | June 2015
The blockbuster movie San Andreas has hit theaters. The premise
is the San Andreas fault along California produces a 9.1 earth-
quake and destroys much of the state. As all Hollywood movies,
facts are fabricated for entertainment. Well known Geo-Blogger
Garry Hayes took a look at the facts so when you see it with your
family you can flex your geology muscles. See the full post HERE
The geologists, who've
worked as a team to try
and predict earthquakes,
predict earthquakes at
Hoover Dam, and go there
to investigate. Their little
harmless quakes escalate
quickly into a big quake,
and the dam is destroyed.
A couple of things: the ge-
ologists say there are no
faults at Hoover Dam. Ac-
tually, there are lots of
faults at Hoover Dam. It
might be more correct to
say that faults there are not
known to be active. Dams
are known to reactivate
dormant faults on occasion,
due to water pressure
along the fractures. Oh, and no one can predict earthquakes.
The Hoover Dam gets destroyed and I know they couldn't spend
time on this kind of thing, but I sure would have liked to hear
about the effects downstream on the Colorado River of having an
entire year's flow happen in one day. It would have destroyed a
string of dams all the way to Mexico, and flooded out of existence
a number of towns. But that would have taken up an entire movie,
and we had to get back to the destruction about to take place in
California
So, for the rest of the movie, we see Los Angeles get devastated
by the worst earthquake in west coast history, a 9.1 or so (no, it
can't happen). The geologist realizes that it is only a precursor to a
much larger quake in San Francisco .
The San Andreas is a transform fault, meaning it shifts sideways
during earthquakes. It behaves in a segmented manner, with a
history of large, but not gigantic, earthquakes (in the real world,
the quakes top out at about 7.8-8.0 magnitude, about 1/30th the
size of a magnitude 9 quake. The northern segment broke in 1906,
the famous San Francisco quake at magnitude 7.8 (the movie "San
Francisco", 1936, still stands as one of the best earthquake movies
ever). The central segment, from Cajon Pass to Parkfield, broke
less famously in 1857. The southernmost segment, down in
the Palm Springs/Coachella Valley region, has not gone off in
about 350 years. It is pretty much the most dangerous stretch
of the fault in California. No, there aren't going to be any
magnitude 9+ quakes in California. You'll have to look
north to the Cascadia Subduction Zone in Washington and
Oregon (and far north California). The San Andreas will slip
sideways 10 or 20 feet, but the ground isn't going to open up
like this. In fact, even the world's worst earthquakes don't
make tsunamis this big. Nor do they curl in like a surfer wave
on the North Shore of Oahu.
But like I said, I rather enjoyed the whole movie, and the spe-
cial effects were quite good, even if these were things that
wouldn't happen in real life. Don't use this movie as your ed-
ucation in the nature of earthquakes. I highly recommend this
sort of thing: http://www.earthquakecountry.org/roots/. Or
this: http://earthquake.usgs.gov/earthquakes/.
- Garry Hayes, professor of geology at Modesto Junior Col-
lege and former president of the National Association of Geo-
science Teachers, Far Western Section.
N E X T G E N E R AT I O N I N D E P E N D E N T S
Mertz Energy is an oil and gas exploration and production company based in
Houston, Texas. Mertz’ focus is on generating, drilling and producing conven-
tional oil and gas prospects.
Mertz Energy is staffed with seasoned successful experts in geology, geophysi-
cal and reservoir engineering with decades of experience in the Gulf Coast and
other basins both domestic and international. Prospects are generated inter-
nally or are acquired from independent generators with whom Mertz has es-
tablished close working relationships.
Mertz has had success in finding production and generating new drilling pro-
spects by doing detailed geology, geophysical and reservoir analysis in old
fields thought to have been depleted. Mertz has also generated new 3D acqui-
sition projects, currently underway and is scheduled to drill three to four new
wells, all on separate prospects, during the remaining half of 2015.
In addition to ongoing generation and development work, Mertz is seeking
high quality ideas it can put together from concept to production, and has the
track record to demonstrate that it can successfully execute projects from both
a technical and business perspective.
Mertz Energy
In our industry there is a shift of age. As a social organization it is our duty to welcome the next class. In this segment SIPES will highlight the next generation of oil finders. If you are a brand new independent please contact the editor, you must be a SIPES member to qualify.
4 SIPES-Houston Newsletter | June 2015
5 SIPES-Houston Newsletter | June 2015
P R O S E P C T S P O T L I G H T
Are you a member of SIPES? Do you have a prospect to sell? If so, please talk to Jeff Allen, the newsletter
editor, to inquire about being published in the newsletter on this page.
6 SIPES-Houston Newsletter | June 2015
Click on the image for the full article on reuters.com by Alex Lawler
Oil group OPEC agreed to stick by its policy of unconstrained
output for another six months on Friday, setting aside warn-ings of a second lurch lower in prices as some members such as Iran look to ramp up exports. With oil prices having rebounded by more than a third after
hitting a six-year low of $45 a barrel in January, officials meeting in Vienna saw little reason to tinker with a strategy
that seems to have resurrected moribund growth in world oil consumption and put a damper on the U.S. shale boom. Oil prices rose by nearly $1 a barrel after the decision, paring some of this week's losses on news that OPEC had not raised its output ceiling to match current output levels that are much
higher, as a handful of analysts had suggested. Iranian oil minister Bijan Zanganeh had promised to press the group for assurances that other members would give Tehran room to add as much as 1 million barrels per day (bpd) of supply once Western sanctions are eased. But most delegates saw little reason for Tehran to pick a fight now.
Libya, still afflicted by a crippling civil war, hopes to double production to some 1 million bpd by September if key ports resume working, but past efforts have failed to deliver a sus-tained recovery in shipments. "The markets are moving in OPEC’s favor," said Dr. Gary
Ross, executive chairman of PIRA Energy Group. "Prices are stimulating robust demand growth and slowing capex. This was the objective of the Saudi strategy and it’s working." OPEC output has exceeded the group's 30 million bpd ceiling for most of the past year, reaching 31.2 million bpd in May,
its highest in three years, according to a Reuters survey. "Balances show we are oversupplied and OPEC is in pedal-to-the-metal mode," said Bob McNally, founder and president of
Washington-based consultancy The Rapidan Group. He said Brent crude could fall back to $50 a barrel. It was not clear whether OPEC had made any decision re-garding Indonesia's request to rejoin the group after a more
than six-year hiatus in its membership. Now a net importer of oil, Indonesia hopes to foster better dialogue between producers and consumers.
O P E C A g r e e s t o K e e p P u m p i n g
7 SIPES-Houston Newsletter | June 2015
GLOBAL OIL SHORTAGE BEFORE YEAR’S END?
Now that OPEC has left its pro-duction quota unchanged, the
world will contin-ue to see a glut in supplies, right? Some analysts aren’t so sure. Sanford C. Bern-stein predicts
that by the end
of the year global demand will out-strip supply by an estimated 1.5 million barrels
per day. That flies in the face of a lot of separate estimates. The IEA says that oil supplies are still in excess of what the world is consuming, by some 2 million barrels per day. Even with flat supplies coming from US shale, drillers are still pumping way more oil than the world is consuming. That leaves Bernstein as an outlier when it comes to
guessing which way oil markets are heading. But there is reason to believe that Bernstein is not off the mark. While market analysts are right to closely watch the trajectory of US
production levels as well as what OPEC is up to, a lot less attention is being paid to the demand side of the equation. Part of OPEC’s strate-gy, we must remember, is to ensure the world stays hooked on oil
for the long haul. The cartel’s strategy of keeping prices low dovetails with that – low prices reduce the urgency to transition away from crude oil. And their strategy is bearing fruit – demand is growing quickly. The IEA said in its May report that “global demand growth gained mo-
mentum in recent months.” That is certainly true in the US, where motorists are hitting the roads at levels not seen since before the financial crisis. Seduced by lower prices, gasoline consumption is at its highest level since 2007, after years of stagnation. Low gas prices are also giving a boost to SUV sales as drivers cast off their energy efficient ways at the first sign of weak prices.
If Bernstein is right, however, and demand exceeds supplies, then oil prices will have to rise quite a bit. Already crude oil inventories have posted several consecutive weeks of drawdowns, an indication that the glut is no longer building, but rather is already in the process of abating. But there is another possibility that Bernstein may be overlooking:
the potential wave of new production coming online in the months ahead. Iran is on the verge of rejoining the international community, opening the flood gates to 400,000 barrels per day in the near-term. That number could double or triple within a year. Iraq is projected to lift oil exports by 100,000 barrels per day in June. Yet one more OPEC nation could also boost production. Libya, suffering under
years of war, could potentially add another half million barrels of oil per day to global supplies, perhaps as early as July.
Gateway Exploration is Looking for
Prospects and Acquisi-tions in the Gulf Coast
Click on image for the article by Nick Cunningham
8 SIPES-Houston Newsletter | June 2015
SIPESHOUSTON.ORG If you are not yet registered as a member on the site
please do so ASAP. You can now pay your national and local dues online. If
you have not paid them please do so ASAP. For events and announcements please visit the website.
Attendance confirmation and payment for luncheons can
be done through the website. Many growing pains with the website have now been
resolved and will continue to be fixed. Any questions or issues with the website can be directed
9 SIPES-Houston Newsletter | June 2015
Raising Capital with Private Equity, Cay Friehofer
Navigating the process of mid-markets buyouts has evolved
along with our industry over the past 15 years. However, one
thing that remains a consistent need during interactions with
private equity groups is a concrete plan and focus on details.
The upstream private equity business began in the late 1980’s.
Around 2000, the average fund was $191 million and focused
on conventional deals typically less than $25 million each. By
2006, the fund size average grew to $674 million and changed
focus to unconventional deals. Since that time, funds have
grown to larger than one billion dollars and individual deals
within those funds now commonly exceed one hundred million
dollars. This increase in both fund and individual deal size has
resulted in more capital backing fewer management teams.
There are a number of types of capital providers and a number
of spaces in which they operate. Upstream, midstream and
downstream parts of the petroleum industry all present funding
opportunities. These providers include private equity, mezzanine
finance, hedge funds, pensions and sovereign wealth funds.
Currently she estimates that there is over $100 Billion of under-
played capital waiting in the wings.
A plan requires an area, a strategy, an outlook and forecasted
capital needs. Strategic factors include such things as oil vs.
gas, and operated vs. non-operated properties. A potential cli-
ent must also consider strategy type, the amount and type of
investment capital, and the number of partners involved in the
project.
One wrinkle to current prices is the wide gulf between sellers’
valuations and bank lending levels. Sellers value their interests
near $80/barrel while bank lending is in the range of $55-60/
barrel valuation.
The process of seeking private equity funding has a number of
variables. A signed letter of intent for an asset is a concrete step.
Some capital providers and teams utilize the services of a mer-
ger and acquisitions advisor and both sides can benefit from the
advisors input. On average, there are between five and ten
sponsors appropriate for each asset. One negative perception
for capital providers is spending too long in the market. All of us
have seen a legitimate project and thought “there must
be something wrong with it if they haven’t sold it by
now.” Between market entry and closing, the process should
take less than six months to conclude. Intermediate steps in-
clude identifying potential sponsors, negotiating technical and
financial terms and due diligence both on behalf of the provider
and management team. Due diligence on behalf of the provider
is obvious but the manage-
ment team should have
some frank conversations
with the management
teams of other portfolio
companies in the umbrella.
The group has benchmarks
and financial structures as
goals. The target return on
investment (ROI) is greater
than 25% with a return of
invested capital exceeding
2.75 times invested capital.
Their structure also targets
a 50/50 blend of debt and
equity. Upon exit,
the management
team is compensated with a waterfall arrangement based on
performance metrics where higher returns lead to a greater per-
centage of proceeds to the team. Private equity terms are as
varied as prospect sales terms but she did give examples of
things that memorialized in any agreement. Some private equi-
ty groups are very hands on when it comes to assets and others
are just about the financial metrics. The teams salary considera-
tion must be explicit. All PE assets will be sold, typically within 3
-5 years, so the sale terms and revenue sharing need to be
ironed out as well.
M a r c h L u n c h e o n R e v i e w b y R u s s e l l H a m m a n
Cay Friehofer, The Presenter
Steve Hill, Randy Schott, Jim Bennett, Robert Dunn
N E W S F R O M T H E B O A R D R u s s e l l H a m m a n P i c t u r e s C o n t i n u e d
10 SIPES-Houston Newsletter | June 2015
The SIPES National Meeting is June 15-18 in Deer Valley, Utah.
The luncheon costs will undergo some changes in 2016.
Please stay tuned for announcements in that regard. The
changes deal primarily with late reservations and walk-ins but
not normal reservations. Houston chapter dues notices were
mailed out earlier in the year and should have been paid by
now.
Effective July 1st a late fee will apply to all unpaid dues. Spon-
sorship attendance and technical efforts continue for the 2015
CES which will be held September 25th at the Marathon build-
ing. CES advance reservation pricing will be $195 for SIPES
members and $225 for non-members. Our website continues
to improve thanks to the tireless efforts of Jim Allen and
Danny Matranga. The deal buyers list is being renovated and
updated so please contact Hans Sheline for more infor-
mation on this soon to be revitalized resource.
Chris Atherton has accepted the role of hospitality chairman
so please contact him regarding sponsorship activities and
potential leads. The maps in schools program will soon place
three more maps.
Buck Curtis and Dennis Gregg, Kiwi Energy, Sponsors
Russell Hamman and Bob Anderson
Warren Dalton and Sara Davis
11 SIPES-Houston Newsletter | June 2015
P O P Q U I Z ! E PA F R A C K I N G R E P O R T
Both questions must be answered correctly.
1. True or false? Why? Glass is a solid.
2. True or False? Why? Ice is a mineral.
Send answers to the Newsletter Editor,
Last Months Answer:
1. The founding members of OPEC were Iraq, Kuwait, Iran, Saudi Ara-
bia, and Venezuela
2. The largest consumer of energy in the world is, China. China has
taken the #1 spot from the USA
3. The USA has a ban on crude exports to stifle the impact of future oil
embargos by foreign oil producing countries. President Ford signed
the Energy Policy and Conservation Act in 1975 after the 1973 Arab
oil embargo shook the USA with high oil prices.
Article by Andy Tully
Both the energy industry and environmentalists are welcoming a report
by the U.S. Environmental Protection Agency (EPA) that hydraulic fractur-
ing, or fracking, has the potential to contaminate drinking water, but that
there’s no evidence that the problem so far has been widespread.
Five years ago Congress asked the EPA to study the issue, and on June 4
the agency’s Office of Research and Development (ORD) issued the docu-
ment, which identifies only “specific instances where one or more mecha-
nisms led to impacts on drinking water resources, including contamina-
tion of drinking water wells. The number of identified cases, however, was
small compared to the number of hydraulically fractured wells.” EPA
spokesman Thomas Burke said the $30 million study “greatly advances
our scientific understanding of fracking’s impacts, and it serves as a foun-
dation for future study.”
The report said that from 2000 to 2013 there were 6,800 sources of drink-
ing water situated within one mile of a fracked well. “These drinking water
sources served more than 8.6 million people year-round in 2013,” it said.
The U.S. energy industry and its allies welcomed the report. One repre-
sentative, Erik Milito, director of the Upstream Group of the American
Petroleum Institute, said it “confirms what the agency has already
acknowledged and what the oil and gas industry has known. Hydraulic
fracturing is being done safely under the strong environmental steward-
ship of state regulators and industry best practices.”
Rep. Robert Latta, an Ohio Republican, agreed. “This study further miti-
gates any concerns about hydraulic fracturing’s potential impacts to
ground water, and will allow us to continue development under the ro-
bust regulatory oversight of the developing states,” he said.
Environmentalists also embraced the report, but for a different reason:
the potential for broader water contamination. “The assessment smashes
the myth that there can be oil and gas development without impacts to
drinking water,” said John Noel of Clean Water Action. And Amy Mall of
the Natural Resources Defense Council said there’s no escaping the re-
port’s conclusion that some water contamination already has occurred.
“The report, while limited, shows fracking can and has impacted drinking
water sources in many different ways,” she said. “We agree that the
public needs better protections.”
12 SIPES-Houston Newsletter | June 2015
13 SIPES-Houston Newsletter | June 2015
14 SIPES-Houston Newsletter | June 2015
JOHN HANKEY 1951-2015 The first time I met John Hankey was at a SIPES meeting. He handed me a cotton handkerchief
embroidered with “Hankey Oil”. At the time I thought that this was different, and I remember it
did not work well with my Card Scan….but it made me remember him. As we continued to see
each other at SIPES meetings, John and I found we had a great deal in common. We were both
the same age. We both had grown up in California -- I in what is now the City of Moreno Val-
ley and John in Escondido, a mere sixty miles down what was then Highway 395. We had been
to many of the same places along the coast, doing the things that young men do in Southern
California. There is a reason the Beach Boys sang about California girls! John was lucky
enough to catch one, and Mary was truly the love of his life. John attended Stanford University
and I attended the University of Southern California. I remember John could gloat with the
best when Stanford beat USC in football. Fortunately this did not happen too often.
John and I served for four years together on the SIPES-Houston board. In that time, the mem-
bership of the Houston Chapter almost doubled in size, mostly through John's efforts. The
board position of Sponsor Coordinator was John's idea and he set the guidelines for the posi-
tion. Additionally, it was John that pushed to codify the review process should a potential
member to SIPES be challenged on ethics. These rules are now part of the Houston Chapter
bylaws, and have been forwarded to national for consideration and adoption. In short, John
exhibited an energy and insight that was as unique as the hanky he gave me when we first met.
I still have the hanky and I will keep it as a reminder of a unique individual, with high moral
character and boundless energy. John you will be sorely missed. — Scott M. Daniel
Obituary—John Evans Hankey, husband, father, son, brother, scientist, painter, and lover of
music, died Thursday, the 28th of May 2015, in Houston. Throughout his 63 years, John possessed an infectious joie de vivre, an enormous heart,
and remarkable determination.
John was born the 8th of June 1951 to John Armitage and Martha Evans Hankey in La Jolla, California. He spent an idyllic childhood on the family's
citrus and avocado farm in Pauma Valley, California with his sister, Kathie and brother, Jim. Life on Friendly Farm provided John and his siblings with
space vast enough to let their imaginations run wild and instilled in them the strong principles with which John lived his life: humility, honesty, kind-
ness, and diligence.
A precocious entrepreneur, young John E. raised a barn full of chickens and became the primary egg vendor to families in the valley. John graduat-
ed valedictorian from Fallbrook Union High School in 1969 and went on to Stanford University, where he graduated in 1974 with a Master of Sci-
ence in Geology. By virtue of a paper plane flown through the Stanford Library, he met Mary Neville from Los Angeles. They married in 1974 and set
out in their red Volkswagen Square-back to Denver, Colorado, where John began work as a geologist for Exxon. In 1976, John and Mary started up
the VW again, this time moving to Kingsville where they first encountered cockroaches and the sweltering heat of South Texas. After the birth of
their first daughter, the three moved to Houston in 1977. Together, John and Mary started Hankey Oil Company in 1981, bravely navigating the
rocky Texas oil and gas industry landscape for over three decades. Emblematic of his unique spirit, John may have been one of the only oil men in
Houston to drive a Toyota Prius when hybrid vehicles were first introduced.
John cherished his children - Martha Evans Hankey, Hillary Lockhart Hankey, and John Neville Hankey who all now reside in California. Family ad-
ventures were the highlight of his life. Together, the family loved road trips throughout Texas, California, and many other U.S. states, as well as fur-
ther journeys abroad. He looked forward to many more adventures.
To know John was to know a man filled with unbridled passion. He loved painting, gardening, and camping. Music moved him, whether that of the
choir of Christ Church Cathedral or the Hightailers at Last Concert Cafe. Often deemed one of the most energetic dancers on the floor at weddings,
it surprised few when John's necktie wound up around his head during the festivities. For the last ten months, John fought a valiant battle against
cancer, nobly sustaining his spirit, humor, and emotional generosity until his passing. Many thanks go out to the many doctors and nurses at MD
Anderson, as well as to the caregivers, family, and friends who so lovingly watched over John during his illness. We honor the departed by taking
legacy of love and energy and carrying it forward. Let us honor John's life and his contributions with a re-dedication to living our own lives in
peace and openness, grace and goodness.
15 SIPES-Houston Newsletter | June 2015
INJECTION EARTHQUAKES? LIFT THE BAN ON US OIL EXPORTS! The results of the 1970s-era US crude oil export ban have been sti-
fling, much like tying one hand behind our backs on the international
stage. It’s time this policy changed, especially since the government
is talking about easing energy restriction on countries such as Iran.
The reasons for enacting the export restrictions no longer apply.
The Center on Global Energy Policy at Columbia University said in a
January 2015 report that lifting the ban, which was put in place dur-
ing the Arab oil embargoes of the mid-1970s, would help producers
and consumers, as well as improve U.S. security overall.
The Center for Energy Studies at Rice University’s Baker Institute for
Public Policy argued in a March 2015 report that removing the export
ban on U.S. crude will have positive “implications for overall market
function, infrastructure investment and energy sector activity.”
Center on Global Energy Policy report: http://bit.ly/1FrsTZV
Baker Institute report: http://bit.ly/1xKG6Nk
The Economist: http://econ.st/1GSPT6g
The connection between wastewater injection wells and an
alarming increase in the frequency of earthquakes is getting a
lot more scrutiny these days. First was Oklahoma, which has
suddenly become the earthquake capital of the United States.
The number of earthquakes with a magnitude of 3.0 or higher
more than quadrupled between 2013 and 2014 in the state.
The culprit? Scientists are becoming more confident that the
injection of wastewater into disposal wells causes fault lines to
“slip,” contributing to the likelihood of an earthquake.
The issue has become highly contentious in Oklahoma. But
now the controversy has spread to Texas, where a subsidiary
of ExxonMobil is under the microscope. After a series of earth-
quakes struck near Dallas, Texas regulators are demanding
answers. The regulators will hold a set of hearings beginning
on June 10 in which they will look into a set of earthquakes
that have been linked to disposal wells operated by XTO Ener-
gy, a shale gas company purchased by ExxonMobil back in
2010.
Research from Southern Methodist University, based in Dallas,
may have found a link between nearby injection wells and the
earthquakes. What is worrying state regulators is the fact that
the fault line that was triggered had been dormant for a long
time, but sprung to life after the disturbance from the disposal
wells.
The frequency of earthquakes has spiked and seismologists
are now confident in the link. Even the CEO of ConocoPhillips
Ryan Lance has come out and admitted that there is a connec-
tion. “We’ve followed all the data and the evidence and it does
appear that in some areas water disposal is creating seismic
events,” he said in May. “We’re trying to understand how
widespread it is.” Article by Charles Kennedy
16 SIPES-Houston Newsletter | May 2015
SIPES 52ND ANNUAL MEETING & CONVENTION
CLCIK ON THE IMAGE TO REGISTER AND LEARN
SIPES Houston Chapter, 5535 Memorial Drive, Suite F654, Houston, Texas 77007 Tel: 713-651-1639 Fax: 713-951-9659 www.sipeshouston.org e-mail: [email protected]
Upcoming SIPES Events
June 18th: Luncheon, Ken Hopper, Petroleum Club
Science-Based Events in Houston Museum of Natural Science Lectures June 16th: Climate and the Demise of Maya Civilization by An-dre Droxler June 30th: The Threat of Asteroid Impacts by David Kring,
Ph.D. Society For The Perfroming Arts June 17th: An Evening with Neil deGrasse Tyson at Jones Hall
* * *
Chris Atherton has accepted the role of hospitality
chairman so please contact him regarding sponsorship
activities and potential leads.
