During the past few years, merger and acquisition activity among Exploration & Production companies has dominated the oil and gas industry as producers scrambled to secure positions in low-cost plays across the country. With A&D activity slowing down and commodity prices stabilizing, the industry has returned to development mode and, with it, increased drilling programs. Along with this added production comes the need for additional infrastructure and the need for the “Surface Team”. This new, interconnected, multi-disciplined team of land service professionals delivers comprehensive solutions for multi-rig drilling programs and associated take away capacity.
What is behind this emerging specialization?
The need for the surface team now exists in virtually every major domestic play and has become a necessity for getting product to market through the most efficient delivery systems. The Delaware Basin example below illustrates how this need has evolved and continues to be implemented throughout the industry to decrease operating expenses and push to drill within cash flow.
The land throughout the Delaware’s 10,000 square miles, multi-stacked play, experienced an almost immediate inflow of rigs moving into an area where there was previously little exploration and limited to no infrastructure to support the rapid increase in production. Even though the economic factors in the Permian were, and continue to be, more favorable than most other areas of the country the combination of market-created cost reductions and the need for new efficiencies were driving forces in creating a more effective system. One of the easier solutions was to get trucks off the road, which necessitated product and produced water gathering systems. This new environment spawned the “Surface Team” to turnkey larger pipeline systems, gas gathering, produced water gathering, and water distribution systems. This new style land service team is needed for negotiating, analyzing, and drafting land-related contracts pertaining to surface use including, but not limited to, surface use agreements, right-of-way for pipelines, electric lines, roads, water use, frac pits, and additional infrastructure required to support the resulting boom in shale production.
What Makes an Effectual Surface Team?
The necessary components in a successful “Surface Team” includes being skilled in surface site acquisition, producer well tie-ins, salt water disposal, water collection and distribution systems, road, power, and pipeline right-of-way acquisition, as well as project sales, due-diligence, and evaluation. The most effective surface team comes from a nimble company with boots on the ground while maintaining enough resource depth to scale to the ever-changing needs of E&P and Midstream companies alike.
An effective Surface Team’s number one priority is the client’s best interest. Additionally, it is critical for a competent surface team to cultivate and manage healthy relationships with the surface owners. Another major focus when selecting a “Surface Team” is to ensure they possess a unique skill set that combines experience, knowledge, patience, communication, and the art of negotiation…all of which are necessary to successfully meet, and exceed, the client’s objectives. The most capable surface team must efficiently react to complex problems or issues that arise as asset teams prepare development strategies for the areas in which they work.