Moving “Upstream” in
Oil and Gas Operations
Curtiss‑Wright has long provided “downstream” refining and processing technology for oil and gas companies. Now, through the acquisition of Cimarron Energy, we are expanding our role in the industry by moving “upstream” into the emerging, high-growth shale oil and gas industry segment that utilizes hydraulic fracturing—and with a differentiating competitive advantage.
Our opportunity in the production segment of the market was born of two events: the discovery of huge domestic shale oil and gas reserves, and advances in high-technology directional drilling. Directional drilling, which permits miles of first vertical and then miles more of horizontal drilling, allows companies to reach reserves that previously were beyond recovery. These discoveries and recovery technologies make natural gas a financially attractive alternative to coal for industry and utilities. These huge domestic reserves also represent a significant opportunity for our aftermarket services.
Cimarron is a leading manufacturer of highly customized and engineered production and processing equipment for the separation of oil and gas from both hydraulically fractured and conventional wells. Most importantly, this includes an innovative environmental product, which, because of environmental requirements that went into effect in 2012, is one of the faster growing product lines in the oil and gas market. Key processes include the complete incineration of waste products associated with storage tank venting, well head venting, and any other toxic materials produced by hydraulic fracturing wells.
Fracturing—or “fracking”—is a process that proponents say is an efficient means of moving the United States more quickly toward energy independence, but one that environmentalists fear may damage water and soil over time. Scientific studies to date show, however, that there is no conclusive evidence of water or soil pollution linked to fracking, but the effect of gas emissions in the atmosphere can be serious. Cimarron anticipated the need for equipment that would eliminate these toxic by-products such as methane, which has up to 10 times the harmful impact of CO₂ with regard to greenhouse gasses. Tens of thousands of gas wells in the United States require technology to either burn or reprocess 95% of these harmful gases. Cimarron’s product eliminates 99.8% of them.
This differentiating competitive advantage in shale oil and gas would be rationale alone for our entry into the business. However, it also expands Curtiss‑Wright’s aftermarket parts, service, repair, and maintenance offerings with additional revenue opportunities for mission-critical, production-focused technologies for the oil and gas industry in the United States, Canada, and internationally.
As one of the industry’s key product innovators, Curtiss‑Wright has gained significant market share for fabricated valves and large capacity vessels for downstream coking and catalytic cracking processes. With the invention of an unheading valve for coking, we transformed a once dangerous manual process into a remotely operated, intrinsically safe, coke-drum unheading system.
This system yields significant reductions in delayed coking time and both operational and maintenance costs, propelling the industry in a new direction for safety and efficiency. Our wireless SmartPRV™ product provides feedback on every pressure relief valve discharge event, including the time and duration, allowing plant personnel to more accurately estimate releases.
Most of the growth in new refining comes from emerging markets in which nationally owned oil companies want to produce finished product to meet their own domestic needs in addition to selling to world markets. While we participate in all of these new-build opportunities, the long-term growth resides in the maintenance, repair, overhaul (MRO), and aftermarket revenue stream.
Curtiss‑Wright has built a steady base of aftermarket products and services that meet the need for improving the efficiency of existing downstream facilities, much as we have done for the operating fleet of commercial nuclear reactors. We have developed a solid aftermarket organization focused on severe service applications that require extremely quick turnaround. Because a shutdown can cost a refiner up to $1 million a day, there is a premium for service providers who can quickly and safely service, repair, and/or replace critical valves and vessels in just the four or five days allowed for a scheduled five-year maintenance operation.