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LB Business Journal: Focus on Signal Hill
June 13, 2014The Long Beach Business Journal’s Annual Focus on Signal Hill highlights SHP’s role in supporting the economic development for the community.
The following is an excerpt from the June 10th community-focused issue, which discussed the local production of oil in Signal Hill.
Written by Samantha Mehlinger
The oilfield under Signal Hill continues to produce more than one million barrels of oil per year, which should generate about $1.2 million in tax revenues in the 2014 to 2015 fiscal year, according to city estimates. This equates to about a 33 percent increase in oil tax revenue from the previous fiscal year. Oil production taxes are the second largest generator of tax revenue for the city, following a sales and use tax.
Signal Hill Petroleum (SHP) has increased oil production this past year through the use of modern technology. A couple of years ago, residents may have noticed trucks driving slowly through the streets, vibrating the ground as they rolled by. These trucks contained SHP employees who were conducting a geological survey of the ground beneath the city and looking to find oil resources through a process called 3D seismic imaging. Using data gathered through this survey, SHP has increased its daily oil production to 3,500 barrels, according to COO and Executive Vice President David Slater.
The production increase has led to an increase in revenues, Slater said. “With the increased revenues, it does give us the opportunity to invest more into the company. It has allowed us to expand and add new jobs,” he said. In the past year, SHP added about 25 additional jobs to its local operations, about 90 percent of which are field operations positions, Slater said. The remaining jobs are engineering and geology-related technical assignments.
“If we have the success we think we’re going to have in the next six months, continuing to grow the company as far as staffing is highly likely,” Slater said. “We’re at a juncture right now where we have staffed up. We’re investing [and] production and revenue are increasing, but we need to see a longer history of successful results before we take another step,” he noted.
California’s regulatory environment is the biggest challenge to business, Slater said. “Our biggest impediment to continuing to grow the business is regulatory permits and specifically [those required by] South Coast Air Quality Management District [SCAQMD],” he explained. “The amount of work preparing permit packages and the time frame to get permits approved is long,” he added. SCAQMD recently implemented reporting requirements for oil and gas companies engaged in well completion or well reworking activities. Under these requirements, companies must notify SCAQMD of the activities and disclose the names and quantities of chemicals used.
Click Here to Read Online Version of the Long Beach Business Journal: Focus on Signal Hill
