More than two years ago, Sunland identified and
targeted the growing activity in the U.S. unconventional shale plays as key
areas for future Sunland growth. These areas include the Barnett, Haynesville,
Eagle Ford, Marcellus, Bakken as well as the Utica shale plays. These shales are
composed of natural gas, oil or a combination of the two hydrocarbons. Some
industry groups project the U.S. unconventional shale plays hold 750 trillion
cubic feet of recoverable gas and 23.9 billion barrels of recoverable
BGI&E Develops A National Shale Footprint
For the last several years work in shale plays has been a major
contributor to BGI&E's revenue stream.
Since the establishment of the Tolar area office in 2005 BGI&E
has maintained a group of employees providing service/maintenance, sup-port and
construction personnel in the Barnett shale to public and private E&P and
In November 2010, BGI&E placed a large crew in the Eagle Ford
shale play near Gonzales, TX to install hub facilities (liquid treating plants)
for a midstream client. In the time since then they have expanded operations to
include construction of gathering and separation facilities, terminals, rail
heads and various other installations to support their drilling programs. Today
BGI&E has nearly tripled its employees involved in these efforts. In April
2012 they were approached by a large upstream client to install similar
facilities near Gonzales and additional employees were brought on board to
facilitate their needs.
From June 2011 through October 2011 BGI&E constructed a
cryogenic facility for a public compression company and have since completed
another, both in West Virginia in the Marcellus shale. They presently have
employees in Bedford, PA constructing another compressor station.
Located in central and western Oklahoma, the Cana Woodford/ Granite
Walsh plays are a focal point for a large BGI&E public E&P customer. We
currently have seven projects running for them and two for a mid-stream client
with a strong group of dedicated employees. Other midstream customers also
utilize us in these areas.
North central Oklahoma and south central Kansas share the
Mississippi Lime shale play. BGI&E currently has several employees
throughout this region serving midcap midstream companies.
Several large midstream clients and a large integrated oil company
enlist BGI&E on a recurring basis to assist them with their maintenance and
capital projects in West Texas and Southeastern New Mexico in several plays
named Avalon Bone Spring, Wolfcamp, Wolffork. The midstream customer, one of
BGI&E's preferred clients, is very active in these plays located in and
around the Permian Basin and Central West Texas. We recently completed the
retrofit of their rail terminal in West Texas and have a residual crew wrapping
up a compressor/amine/cryogenic facility for them. In July 2012 we will begin
construction on another compressor/amine/cryogenic facility in West Texas, in
the heart of the Wolfcamp play. This work will continue through the last quarter
In total, over 60% of BGI&E employees are
actively involved in work related to shale plays. The outlook for continuation
of this work is favorable and additional opportunities present themselves
Sunland Field Services – A Combination of Organic Growth and
Sunland Field Services ("SFS”) was founded in
Carthage, Texas, in April 2011 to provide services to clients operating in the
Haynesville Shale of East Texas and North Louisiana. Some of the services
provided by SFS Haynesville are Roustabout/Maintenance Services, Pipeline
Installations, Facilities Construction, Painting, Plant Maintenance, Hydro
Testing and Integrity work. Clients include a who's who of public and private
E&P and mid-stream companies. During the first sixteen months there have
been many rewards. Seeing a vacant lot turn into a professional, clean and
organized operation; developing relationships with multiple clients; gaining
those clients' confidence and trust in Sunland Field Services; and watching the
staff develop into contributing members of Sunland are just a few.
Sunland Field Services expanded in the fall of 2011 to Tilden,
Texas to provide services to clients in the Eagle Ford Shale of South Texas.
SFS Eagle Ford started by performing Well Hook Ups for an E&P company
with one crew and generally provides the same services as SFS Haynesville. Some
of the clients that we have and are currently working for include both upstream
and midstream companies.
On April 1st, 2012 SFS acquired the assets of
Black Horse Construction, operating in the Bakken shale of North Dakota. Black
Horse Construction had been operating in the Bakken since late 2009, primarily
working for public E&P companies, providing Roustabout and Field Service
work. From Roust-about services to Facility construction to well pad
construction, SFS Bakken has the expertise and ability to perform. Since
the acquisition, SFS Bakken has added private E&P companies as well as an
integrated oil company to its client list. With an ever growing client list,
Sunland Construction is optimistic about the future possibilities within the
Bakken Operations. SFS Bakken has also begun to market the other services that
Sunland's family of companies has to offer, such as Station Construction,
Electrical and Instrumentation and Pipeline construction.
In May 2012, SFS Houston was established
through the purchase of another company's assets to pro-vide services to clients
in the greater Houston, Texas area. Currently, the division is working for one
of the largest public midstream companies in the area with a maintenance crew
and pipeline locators. This area has a lot of potential and we look forward to
watching this division develop.
Sunland & Affiliates Continues To Expand In The
The Rocky Mountain Division of Sunland Construction has been
active in the Bakken Shale of North Dakota for the last two years for its
private midstream client. While remaining busy with this client, the division
has looked to expand its customer base and project backlog in this region. With
deep experience, a committed workforce and a developed infrastructure the
division is aggressively pursuing additional major projects as well as gathering
work throughout the Bakken.
In May 2011, MB Construction moved into the Bakken Play of
North Dakota at the request of its long-time Colorado E&P client. Since that
time MB's client base has grown to include other public E&P and energy
Stations Construction's Expanding Shale Presence
Construction has capitalized on opportunities in several shale plays. They
completed eight meter stations on a large pipeline that the Gulf Coast
Division built, which is a product of gas activity in the Haynesville shale.
The Marcellus play has provided opportunities with a large E&P company where
Stations successfully completed three meter stations in some rugged locations
and Pennsylvania weather. The division led the way into the Eagle Ford Play of
South Texas. Working for two E&P companies, they established a foothold in
the area resulting in an operations base in Tilden, which is now in use by SFS
Eagle Ford to service an expanding client base. Station continues to have a
presence in the Eagle Ford with a current project installing pipe and equipment
at three new storage and loading terminals for a public midstream
The Bakken is the latest area of opportunity for the Station
Division. Thanks to the Rocky Mountain Division's efforts with their private
midstream client, we were able to win work on a compressor station job. We look
forward to future opportunities with this and other Sunland clients in the area.
Thanks to these plays, we've been able to expand our client base.
Some customers are new to our division while we have had a welcome increase in
opportunities for others. These opportunities have also given us new challenges
that come with the fast paced nature of this market.
Utica Shale Is
Sunland's Most Recent Shale Activity
Sunland has not had any activity in the up and coming Utica shale
other than bidding and missing work until early July 2012 when the Eastern
Division was awarded a pipeline project by a large public mid-stream
company. This job also has two valve set-tings and a launcher and receiver.
Continued Growth In Shale Plays
Much has been written about the positive impact that drilling,
producing and transporting oil and gas from the shale plays to end users has had
on the local economies throughout these shale plays. Through organic and
acquisitive growth, Sunland & Affiliates are helping employ hundreds of men
and women while contributing to the local economies in all of these locations.
With continued planning, business development, execution and perhaps additional
acquisitions, we expect our presence in many of these areas to expand even
We would like to extend our appreciation to all of those who have
worked or are currently working in one of the shale play areas for Sunland &
Affiliates. We realize that work conditions are not always ideal, but through
your commitment to safety, quality and customer satisfaction we continue to help
bring our nation closer to energy independence.