McAlester News-Capital, McAlester, OK

April 11, 2014

Changing hands: Gray Mud Disposal’s new owner 'bullish' on Enid's drilling future

By Dale Denwalt, Staff Writer
Enid News and Eagle

— Gray Mud Disposal recently was acquired by Nemaha Environmental Services, an Alva-based environmental oil field service company.

Owner Michael Morford said the facility will continue operating under the name, and members of the Gray family will stay on board as members of the company.

His interest in the drilling mud disposal facility, which is located north of Enid, came about because he predicts drilling in Garfield County will remain strong.

The Woodford Shale has a geological formation south of the city that could explode in popularity over the next few years, Morford said, making the disposal facility a key part of oil field logistics.

“The Garfield border hugging Kingfisher and Logan County is some of the best acreage in the state of Oklahoma. Without a doubt,” he said, referring to the play that so far has no concrete name. “It’s the best rock formation, I’d argue, in the state of Oklahoma.”

Drilling mud, a water and chemical slurry, has several uses in drilling, including lubrication and pressure control. Gray Mud Disposal would offer the nearest pits in the region.

“It’s an ideally located facility for two different oil trends that have long-lived drilling potential for the next five to 10 years, at least. And we think Enid is just dead center on the bull’s-eye of where we want to focus our efforts,” said Morford.

According to a Nemaha Environmental Services statement, Gray Mud Disposal will expand and upgrade in the coming weeks. The facility has been in continuous operation since 1987, and within the past two years, it expanded to include a saltwater disposal well. It currently is permitted to operate for at least another 20 years.

Nemaha is focused on solving environmental and logistical issues in the energy industry. After a career as a military logistics officer and in investment banking for oil and gas interests, Morford combined his experience.

“Logistics is what it’s really all about. We’re about two things — improving the logistics efficiencies in the oil field, and environmental stewardship,” he said.

He said recently he never liked Wall Street, but loves the energy industry.

“When I started to see the issues with the waste streams, that’s when the light bulb went off for me,” he said. “This is what I’m going to do for the rest of my life.”

Among the issues he sees on the horizon is a greater conflict over water.

“There’s a head-on collision coming with the oil and gas industry and the agricultural industry in the state when it comes to water use. It needs to be addressed before it becomes a problem,” Morford said.

His company, Nemaha, focuses on improving water efficiency, reducing costs and becoming better integrated with communities in energy-rich environments, according to its website.