Before

After

So here’s the solution that we came up with.  We first cut tiny stainless steel circles on our water-jet.  Then, we set up and drilled a .030 hole in the center of each piece.

Locations:
Borger, TX | Amarillo, TX | Liberal, KS
Oklahoma City, OK | Elk City, OK

Is your location safe?

At DISCO, Inc., the ‘D’ stands for diversified and that includes our multi faceted surface safety systems.  Shown is one of our custom actuator safety valves as installed on a completed location.

Rated as API approved at 3,000 psi, this valve ensures that expensive gas separator units can be shut in if parameters fall outside of a known low or high setting.

Used in conjunction with High/Low controls, safety can be ensured on locations at the gas production unit or well head.  At Disco, a wide range of custom safety valves are available to facilitate any need.  We are geared for service and are eager to satisfy any safety needs you might have. Service, repair and reconditioning are all available through your industrial supplier … DISCO, Inc.

Diversified Industrial Service Company, Inc.
1400 N. Main | Borger, Texas 79007 | Phone: 806-274-2214

The price of Natural Gas, the energy fuel which has been gaining attention as a safe and clean substitute for nuclear power (since disaster struck in Japan), never really recovered from the hit it took from the Big Recession of 2008/2009. Natural Gas is the only commodity on earth which is still trading a depression levels, while the rest of the commodity complex is again trading at pre-crisis prices.

Everyone knows the NG story by now: a new technology Hydraulic Fracturing aka ‘Fracking’was introduced in the NatGas market, freeing humongous Natural Gas reserves in the American soil. The market was flooded with gas and NG stockpiles in the US ballooned. The network couldn’t take much more Natural Gas… at the same time a fierce recession hit the US economy.

Abundant supply in combination with plummeting demand equals ‘horror’ in the commodity arena.

The Natural Gas price got hammered from the high 12’s to the low 2’s USD per per million British thermal units (MBtu) within a few months: an unseen massacre. In the following months, the price recovered somewhat, but there has always been a lot of resistance around the $5/MBtu level.

Finally, after three years of depression in the NatGas market, things are starting to turn.

Today, the stockpiles of Natural Gas in the US are still bulging, but the levels aren’t creeping up as fast as before. In fact, underground storage levels are dropping below the 1 year and 5 year averages!

Via IEA:

Working gas in storage was 1,919 Bcf as of Friday, May 13, 2011, according to EIA estimates. This represents a net increase of 92 Bcf from the previous week. Stocks were 235 Bcf less than last year at this time and 36 Bcf below the 5-year average of 1,955 Bcf. At 1,919 Bcf, total working gas is within the 5-year historical range.

And there are more signals that the supply side, which has been the biggest drag on the price of NatGas, is tightening.

The number of rigs in the US is dropping again. Baker Hughes Inc., a top-tier oil and Natural Gas field service company, has a century long track record of counting NG rigs. Their latest report showed US rig count dropped to 866 last week, down 6 rigs from a week ago, the lowest level since the end of January 2011.

Baker Hughes shows that the rig count is in decline once again.

Although fundamentals in the NG complex are changing, the bulk of commodity analysts and energy specialists are very bearish on Natural Gas. Of course, that’s what a 3-year long depression does to a person.

The latest survey of the CME showed that of the 17 ‘member’ analysts, ten are forecasting a price drop, while 4 are predicting the price will stay flat in the coming period. Only 3 pundits showed some positivism for the future price evolution of Natural Gas.

So, Natural Gas is still the commodity everyone loves to hate, although some research firms are starting to raise their price forecasts. Here are the latest numbers from McDaniel & Associates, an independent Canadian oil and gas consulting firm.

In the end, the current price, taking into account the recent fundamental shifts on the supply side, is becoming a total joke in the recent explosive commodity environment!

For instance, if we take the energy equivalents of oil and Natural Gas, at today’s oil price of $98/barrel, Natural Gas should be trading around $17 per MBtu. Today, the price of Natural Gas is still hovering around $4.4/Mbtu!

And of course, one can argue that the demand for NatGas can start to fall again if another crisis hits. We think the contrary is more likely, as we calculate that Natural Gas is trading at around $25.5/barrel oil equivalent. Industrial users could start to switch to the much cheaper Natural Gas.

Being contrarians, we are becoming very bullish on the risk/return proposition which Natural Gas has to offer for investors. The downside looks limited, while the upward potential is enormous. With a pressure rising every day, even a small event can set the NG price on fire!

A preferred position should be held in the mid- to small cap (junior) Natural Gas segment, as we think the prices for the stocks are currently trading at ‘rapture’ valuations! The second half of 2011 could turn out to be quite interesting for Natural Gas investors…

As an industrial service company, we see A LOT of compressors, both reciprocating and screw compressors.  Here are a few things to keep in mind if you’re charged with the task of maintaining them:

1.  Closely monitor the viscidity of the oil.  Compressor oil will thin out over time, which leads to less lubrication ultimately bearing failure.

2.  Change compressor oil filters on a regular basis, or on pressure differential of no more than 10# or every 90 days.

3.  Take oil analysis.  Check with the oil manufacturer, because a lot of them will provide this service for free.

4.  Closely monitor discharge temperature and make sure that is does not exceed 230 degrees.

5.  An alignment test is almost always performed when a new or newly refurbished compressor is put into service.   However, if the driver is changed or the skid has been moved, you should probably take the time to run another alignment test.  It will be worth the time.

(Source: Datamonitor)Exterran Holdings, Inc., a natural gas compression services company, and Exterran Partners, L.P. have announced that Exterran Partners has agreed to acquire compression and processing assets from Exterran Holdings for consideration valued at approximately $228 million.

The acquisition is expected to expand Exterran Partners’ contract operations fleet to approximately 1.9 million horsepower which would comprise approximately 52% of the combined Exterran Holdings and Exterran Partners US contract operations business.

“We are pleased to enhance Exterran Partners’ position as a leading compression services provider in the US and to enter the processing services market by acquiring natural gas processing assets that benefit from a long-term contract with one of the nation’s largest energy producers,” said Michael Aaronson, CFO of Exterran Partners’ managing general partner.

In connection with and upon closing of the transaction, the omnibus agreement between Exterran Partners and Exterran Holdings will be amended to reflect adjustments in the cap on selling, general and administrative costs from $7.6 million per quarter to $9.0 million per quarter while the cap on operating costs will remain at $21.75 per horsepower per quarter.

The transaction consideration includes the assumption of approximately $159 million of Exterran Holdings debt and the delivery to Exterran Holdings of approximately 2.5 million common units of Exterran Partners, or the cash equivalent thereof, and approximately 51,000 general partner units of Exterran Partners.

Exterran Partners expects to finance the transaction and continue to finance its business in a manner consistent with its current and target capital structure, which may include debt incurred under the partnership’s revolving credit facility and/or the issuance of public securities. The transaction is subject to regulatory approval and other closing conditions and is expected to close in June, 2011.

Not many companies our size have full time safety supervisors.  However, that’s been a top priority of Disco, Inc. from day one.  I asked our safety supervisor, Lewis Kasko, to tell me a little about our program here:

“Since coming to work for DISCO as Safety Supervisor almost four years ago, I have been privileged to be a part of a company that is consistently progressing in the area of workplace safety. In the industrial environment it is important that companies maintain a good safety record as well as being productive. I have been pleased to see that our injury statistics show that our company has been able to keep injury rates low. Over the last four years special attention has been paid to certain components for a successful safety program, including personal protective equipment, hazardous materials, forklift operations, equipment guarding, fire protection and housekeeping, education, and many others.

But more importantly I have witnessed that the desire for safety is becoming part of our employee’s normal routine. It is becoming something more than just what needs to be done. The best evidence I have seen of this is when someone comes and asks me,” is this the correct way to do this safely, or am I being safe enough”? I often find that safety concerns are pointed out to me before I have even had a chance to notice them.  Above all else it is these things that let me know that our safety program is progressing.

I am pleased to be part of an organization, and partnered with workers who make DISCO a safe and productive workplace.”