Houston-based Broad Reach Power LLC plans to move into a new office in downtown Houston.

Broad Reach currently is located in temporary space in the Galleria area, but it will move to an office at Three Allen Center in the first quarter of 2021, said CEO Steve Vavrik. The company just signed the lease in August, securing 8,900 square feet of space in the downtown office building, which is undergoing renovations.

Broad Reach employs 29 people total, 19 of whom are based in Houston. Over the next year, Vavrik said he could see his company adding eight to 10 employees in Houston.

The company has been growing lately and taking on larger projects as well. Broad Reach develops and operates utility-scale battery facilities in Texas, California and the Pacific Northwest. Right now, it has two operational battery assets at 10 megawatts each, both in Texas. But the company just started construction on two new assets in Texas, this time at 100 megawatts each.

Houston is an important place for Broad Reach because its talent pool gives the company access to the kinds of people it needs to make those projects work, Vavrik said.

“You’ve got a great talent pool of people who know how to do this,” Vavrik said. “When we were looking around — and we looked at other large metro areas — (we decided) it’s going to be easier here, we’re going to find the talent available.”

On top of that, the drop in oil prices has pushed many Houstonians in that industry now to consider deploying their expertise in Broad Reach’s line of work, Vavrik said.

“The majority of our new hires either were already part of the renewable sector or were part of the energy sector and said ‘I’m interested in taking my skills and being part of the transition,’” Vavrik said.

Broad Reach is backed by investments from two private equity firms — EnCap Investments LP and Yorktown Partners  LLC — alongside another investment from Mercuria Energy, according to its website. Right now Broad Reach is developing its assets using funding from its backers, though Vavrik said it could eventually rely on its own balance sheet for growth once it gets more cashflow coming in.

Brazil-based Braskem SA (NYSE: BAK) has started up a new polypropylene production line in La Porte, putting an end to construction that created work for over 1,000 people.

The new line, dubbed Delta, has a production capacity of 1 billion pounds per year, according to a press release. It represents nearly three years of labor by about 1,300 development and construction workers as well as a $750 million investment by Braskem. Now that construction is complete, Braskem employs 50 people to support commercial operation of the plant.

That $750 million figure is up from the company’s original expectations. Back in 2017, the company expected the project to cost about $675 million, according to press releases at the time.

Braskem America CEO Mark Nikolich said in the latest press release that Delta is the largest polypropylene production line in North or South America.

“The completion of this plant really affirms our polypropylene leadership in North America, and that was our intent,” Nikolich said during a virtual press conference on Sept. 11. “It’s a very large line.”

Braskem started construction in September 2017 during the aftermath of Hurricane Harvey. The project was completed in the aftermath of Hurricane Laura and amid the Covid-19 pandemic.

“I consider this a miracle project,” Nikolich said.

Braskem originally decided to site the project in La Porte for a number of reasons — it had space in its existing facility there, and the region was ripe with feedstock for the plant with strong pipeline connectivity, Nikolich said in a 2017 interview with the Houston Business Journal.

The decision was not driven by tax abatements or other government incentives, and the Delta project doesn’t have any incentives associated with it, Nikolich said at the time.

By Joshua Mann, Senior Reporter

Courtesy of The Houston Business Journal

https://www.bizjournals.com/houston/news/2020/09/11/braskem-completes-la-port-polypropylene-project.html

Houston-based Bruin E&P Partners LLC emerged from bankruptcy Sept. 3 freshly trimmed of old debt.

Bruin originally petitioned the Southern District of Texas Bankruptcy Court for Chapter 11 protections on July 17. That means it is now emerging after a relatively brief 48 days in the court — beating its original plans by a full week with nearly unanimous support from its creditors.

“Bruin has been able to undergo an extremely efficient and uncontentious Chapter 11 proceeding due to the support of our stakeholders,” CEO Matt Steele said in a press release.

Bruin used the bankruptcy process to cut $840 million in debt, turning all its ownership interest over to creditors in exchange.

In addition to the new ownership, Bruin emerged from bankruptcy with $230 million in exit financing and a new board of directors. The new directors are Steele, Kevin Asarnow, Mark Bisso, Richard Doleshek and Mike Wichterich.

Bruin’s bankruptcy had its roots in an unfavorable borrowing-base redetermination earlier this year. The lenders for Bruin’s reserve-based loan cut the borrowing base under the credit facility from $710 million to $400 million in April, putting the company $110 million into overdrawn territory as a result, Steele said in a declaration to the court early in the bankruptcy process.

Bruin is far from the only oil and gas company to turn to the court as a means of remedying its financial situation. Exploration and production companies like Bruin have had to contend with plunging demand for their products due to social distancing as a response to the Covid-19 pandemic.

Just in the past few weeks, both Arena Energy LP and SAExploration Holdings Inc. have filed for bankruptcy in the Houston court, and 2020 in general is shaping up to be a hot year for such petitions.

In total, 34 oil and gas companies filed for bankruptcy in the Southern District of Texas during the first seven months of 2020, according to data published by Haynes and Boone LLP. That’s more than in any full year since 2016, and it’s just four cases short of the first seven months of 2016.

Measured by total debt brought before the court, 2020 has already reached above $65 billion, well over any other full year since before Haynes and Boone began recording the data in 2015. The closest was in 2016, when just under $47 billion was recorded for the full year. But there are still five months left in 2020 for which the latest report doesn’t yet account.

By Joshua Mann – Senior Reporter

Courtesy of The Houston Business Journal

https://www.bizjournals.com/houston/news/2020/09/03/bruin-ep-exits-bankruptcy.html

This weekend we celebrate American labor and the contributions of our hard working citizens to the development and achievements of our amazing country. We wish you, and your family, a blessed weekend of celebration and relaxation. That being said, we are always ready to support your needs be they pumps, seals, or field service work.

Our services include, but are not limited to:

  • Millwright & Field Services
  • Pump Repair & Replacement Services
  • Mechanical Seal Repair & Replacement Services
  • Vibration Analysis & Laser Alignment

Several energy companies based, or with a significant presence, in the Houston area are beginning to assess the impact Hurricane Laura had on their facilities.

Houston-based Westlake Chemical Corp. (NYSE: WLK) and master limited partnership Westlake Chemical Partners LP (NYSE: WLKP) announced late Thursday, Aug. 27, that initial assessments indicate their facilities in the Lake Charles area incurred limited physical damage. The employees who stayed at the facility during the hurricane are safe.

However, restarting the facilities, which were shut down as a precautionary measure before the storm, “will primarily depend upon the availability of electricity, industrial gases, and other feedstocks,” press releases state.

“We do not expect any material impact to (Westlake Chemical OpCo LP) or to the (MLP) as a result of Hurricane Laura as, pursuant to OpCo’s ethylene sales agreement with affiliates of Westlake Chemical Corp., (Westlake Chemical) is obligated to pay a margin and fixed costs for 95% of OpCo’s budgeted ethylene production, even following a force majeure event,” said Albert Chao, president and CEO of Westlake.

Houston-based Citgo Petroleum Corp., which is majority-owned by Venezuelan oil giant Petróleos de Venezuela SA (PDVSA), reported no safety issues or hydrocarbon releases directly related to Hurricane Laura at its Lake Charles Manufacturing Complex.

However, the refinery suffered damage due to high winds, and a detailed assessment is currently underway but will take several days. The company does not expect an immediate restart but will not issue a schedule until the assessment is complete.

“We are pleased to confirm that all of our employees are safe, and thanks to the advance preparation and hard work of our refinery employees, there wasn’t any flaring or release of hydrocarbons resulting from this ferocious storm,” Citgo President and CEO Carlos Jordá said in an Aug. 28 press release.

Houston-based Phillips 66 (NYSE: PSX) also has yet to determine restart timelines.

“Our response is now focused on ensuring the safety and well-being of our employees,” the company said in an Aug. 28 update. “Facility assessments are underway at all impacted locations and will likely take several days. Timelines for operational restarts are largely dependent on assessment impacts and access to electricity and other utilities in the region.”

The Netherlands-based Royal Dutch Shell PLC (NYSE: RDS.A, RDS.B), which has its Shell Oil Co. arm based in Houston, aimed to begin inspections of its Auger, Enchilada and Salsa assets Aug. 28.

“These inspections will enable us to determine when we can safely re-deploy personnel and resume operations to those platforms,” the company said in a 10 a.m. update. “Meanwhile, we are beginning to re-deploy personnel to all other assets that have not been impacted, including those in the Norphlet and Mars Corridors. Perdido was the only one of our nine operated assets that was not shut it and remains in production. Our drilling operations are in the process of restarting. As always, the safety of our people, the environment and our assets are Shell’s top priority.”

As of Aug. 27, London-based BP PLC (NYSE: BP), which has its U.S. headquarters in Houston, was preparing to inspect its company-operated facilities in the deepwater Gulf of Mexico.

“Production will remain shut-in until we have confirmation that our platforms are able to operate safely, pipeline companies have confirmed the operability of offshore pipelines and the shore-based transportation and receiving systems are working as necessary,” the company said in a statement. “Weather permitting, overflights will begin Friday (Aug. 28) to survey our facilities. At this time, we cannot predict how long this process will take, safety is our top priority as we move forward and determine next steps.”

By Olivia Pulsinelli – Assistant Managing Editor

Courtesy of The Houston Business Journal

https://www.bizjournals.com/houston/news/2020/08/28/energy-facilities-assessing-damage-hurricane-laura.html

With Hurricane Laura looking to make landfall in the early hours of Thursday morning, our prayers are for the safety of you, your loved ones, and our community as a whole. Let us hope she loses strength prior to her arrival.

With regard to the immediate necessary steps to keep our industry moving forward, we are well experienced in the necessary steps to get facilities up and running again from our extensive work post-Harvey. We are prepared to work on disaster time for you to repair pumps, seals, and motors as necessary to get you up and running again.

Until that time, let us all take time to properly prepare in order to best take care of our families.

Link to the latest storm path predictions:
https://spacecityweather.com/models-have-trended-west-with-laura-and-thats-not-good-for-houston/

Hurricane Kit Checklist:
https://texasready.gov/build-a-kit/disaster-supply-checklist.html

Arena Energy LP, an offshore oil and gas exploration and production company based in The Woodlands, has filed for bankruptcy with over $1 billion in debt.

Arena petitioned the Southern District of Texas Bankruptcy Court — which is based in Houston — for Chapter 11 protections on Aug. 20. It did so with at least $1.07 billion in debt, according to a declaration to the court by CFO Michael Vallejo.

Arena owns 340,724 net acres along the Gulf of Mexico shelf, Vallejo said in the declaration. Like many other companies in the offshore oil and gas sector, Arena has had to contend with slumping oil prices for the past several years as other companies produce massive crude oil supply out of unconventional onshore production from inland Texas and other regions.

“Such challenges have been exacerbated in recent months by the unprecedented drop in global energy prices and market uncertainty,” Vallejo said in the declaration.

Social distancing as a response to the Covid-19 pandemic has cut deeply into demand for fuels, which also means reduced demand for crude oil. That, combined with uncertainties around potentially rising international supply from Russia and OPEC member states, pressed crude priced deep into record lows earlier this year, and they are still substantially weaker than they were at the start of the year.

Arena employed 57 people when it filed for bankruptcy. The company produced $580.8 million in 2019 revenue, according to court documents.

Arena has been based in The Woodlands since it formed in 1999, but its headquarters moved last year to 2103 Research Forest Drive, the former headquarters building of Chicago Bridge & Iron, which is now called Lake Front North in Hughes Landing.

By Joshua Mann – Senior Reporter

Courtesy of The Houston Business Journal

https://www.bizjournals.com/houston/news/2020/08/21/arena-energy-files-1b-bankruptcy.html

IPS Pump Services Inc was honored to team up with CIMA Services LP on this great project at Kinder Morgan, Inc.. All of our employees hold themselves to the highest standard and are always proud of the work they do. We look forward to the next opportunity we have to team up with CIMA and Kinder Morgan.

Click the Link below to read the full article.

BIC Magazine August 2020

 

 

When Southwestern Energy Co. acquires Montage Resources Corp. later this year, the combined company will likely be the third-largest natural gas producer in Appalachia — and a step closer to consolidation in the industry that has been hinted at but not yet become reality.

Springwoods Village-based Southwestern (NYSE: SWN) announced Aug. 12 that it would merge with Irving, Texas-based Montage (NYSE: MR) in an all-stock transaction valued at more than $200 million. The deal will likely close in the fourth quarter, pending approval from Montage shareholders. Montage’s biggest shareholder, Houston-based EnCap Investments, has agreed to vote its 39% stake in favor of the merger.

The deal will boost Southwestern’s position in northern West Virginia and eastern Ohio, providing more acreage in West Virginia than Southwestern has now and giving Southwestern a presence in Ohio. Southwestern is the fifth-largest shale gas producer in Pennsylvania. All of its holdings in the state are in the dry gas region of northeastern Pennsylvania.

CEO William Way said during a conference call Aug. 12 that Montage’s assets will be complementary to Southwestern’s, allowing the combined company to increase scale. It’ll add the dry gas Utica to Southwestern’s arsenal while adding to its assets in northern West Virginia, where increasing emphasis is being placed by companies like EQT Corp. (NYSE: EQT), which also sees growth opportunities in the Mountain State.

“Montage’s Utica experience in combination with SWN’s operational expertise is expected to accelerate the learning curve and economic potential of SWN’s existing West Virginia Panhandle Utica position,” Way said.

The combined company will have 786,000 acres across the three states with production of 2.8 billion cubic feet per day. About 80% of the production is natural gas.

Consolidation in the Appalachian natural gas industry has been long predicted by analysts — and by industry executives themselves — because of the mature nature of the Marcellus and Utica as well as the narrower growth opportunities. Some consolidation has occurred, most notably in 2018 with the EQT Corp.-Rice Energy Corp. merger. But even with low commodity prices and Covid-19 weighing on it, there hasn’t been a rush of deals.

“This is the kind of deal we’ve been looking for for a while,” said Andrew Dittmar, senior M&A analyst at Austin-based Enverus.

Dittmar noted that Southwestern-Montage is not a merger of equals but instead a deal that brings benefits of a larger asset base. He said that money for deals that had been there in the past isn’t there now, which has led to all-stock deals like this with no premiums.

Montage Resources sprang to life in February 2019 with the merger of Eclipse Resources and Blue Ridge Mountain Resources. Montage didn’t return a request for comment, and Southwestern didn’t take questions from analysts during its conference call Aug. 12 due to its stock offering announced earlier in the day.

San Antonio-based Epic Midstream Holdings LP announced a number of deals for its natural gas liquids subsidiary Aug. 5, including the completion of a new, multimillion-dollar processing plant.

Epic Y-Grade LP’s 110,000-barrel-per-day fractionation plant in Robstown, Texas, is now in service and fully commissioned, the company said. Fractionation is the process of separating a mix of natural gas liquids into pure components — substances like ethane, propane and butane are often mixed with gasoline, used as petrochemical feedstock or used to heat homes.

Epic announced in December that it had taken out an extra $150 million on its credit line in order to finance the new facility, which will sit next to an already-operational fractionation plant processing 170,000 barrels of NGL per day.

The pair of facilities are fed by Epic’s Y-grade pipeline, which delivers NGLs from wells in the Permian Basin and Eagle Ford Shale to the processing plants. From there, the separated liquids are sent to refiners, petrochemical companies and export markets along the Gulf Coast, according to the company’s website.

Epic also announced Aug. 5 that it had sold an interest in an approximately 80-mile portion of the 700-mile Y-grade pipeline to fellow midstream companies Ohio-based MPLX LP (NYSE: MPLX) and Austin-based WhiteWater Midstream. MPLX and WhiteWater also entered into transportation agreements along other portions of the pipeline, which is capable of carrying up to 600,000 barrels per day of natural gas liquids.

In order to meet its obligations to the companies, Epic plans to extend an already existing ethane pipeline from Markham, Texas, to Sweeney, Texas, and convert the pipeline to one that carries NGLs.

Houston-based Phillips 66 (NYSE: PSX) also signed a multiyear contract with Epic for NGL and ethane storage, as well as ethane transportation and fractionation capacity.