The 2010 Wildcatters’ Open- Results…

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IPAA’s 2010 Texas Wildcatters’ Open was held Thursday, March 25 at Cypresswood Golf Club in Spring, TX. The weather was wonderful and IPAA welcomed close to 300 golfers and distributed approximately 100 prizes including door prizes, contest prizes and team prizes. IPAA would like to extend a special thank you to all of this year’s sponsors, especially Schlumberger, who has been the tournament benefactor since the inception of the event. The success of this tournament would not be possible without each of the sponsor’s generous support.

Congratulations to the 2010 Tournament Winners!

Tradition                      Creek                           Cypress
 1st Net                          1st Net                         1st Net
 Rodney Kubicek       Bill Yost                      Brian Spector
 Jack Bergeron           Fred Toney                Frank Verducci
 Scott Rice                    Jeff Hibbler                Kelly Loyd
 Phil Inman                  Chris Atherton          Tom Kleiderer
     
 2nd Net                       2nd Net                        2nd Net
 Burk Ellison               Quentin Hicks            Ted Behrens
 Robert Workman     Jude Rolfes                 Richard Kaufman
 Stacy Palmatary       Brian Nelson              Martin Buckley
 Jim Denney                Jerry Kennedy          Darrell Noblitt
     
 1st Gross                     1st Gross                        1st Gross
 John Walker              Jason Price                   Kevin Ryan
 Tony Fox                    Lance Wroblewski     Chris Casey
 Ron Whitmire           Don Rundle                   Will Cauley
 Don Crow                    Paul Whitehead           David Casey

Continue reading →

A Tale of Two Policies (Part 2)

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Following up on the earlier post regarding the success of U.S. production of crude oil, specifically in North Dakota and the Gulf of Mexico comes this editorial from Investor’s Business Daily which really hits the nail on the head with respect to the Obama Administration’s attitude towards U.S. energy policy, especially as it relates to U.S. production of energy.

The author points out that stimulus money aimed at spurring on construction projects has failed to do so and that the Administration takes a wrong headed view of the opportunity that America’s oil and natural gas producers present in terms of providing good paying jobs and having a significant positive impact on the overall state of the economy.

The author correctly points out that, “The Obama administration has now turned its attention to energy policy. But rather than looking at the energy sector as a vehicle for reinvigorating the American economy, the president has proposed hiking the tax burden on oil and gas companies by $45 billion.”

As I pointed out in part 1, energy production is capital intensive and tagging industry with a $45 billion charge would be devastating to indsutry’s efforts to produce American energy and provide American jobs.

The author goes on to point out that:

“The Sierra Club, a strong advocate of the plan, claims that the tax hikes will “help correct some of the market distortions that unfairly advantage dirty energy at the expense of clean energy.” In reality, it’s the other way around: On a BTU-equivalent basis, the subsidies for renewable energy sources dwarf those received by fossil fuels.”

I encourage folks to read the editorial in its entirety.

Having said that it becomes clear that despite industry’s success in moving forward with production in difficult formations, heavy investment in American production and American jobs;,employing over 9 million workers, this Administration continues to side with anti-development forces who either have no cogent, long term vision of American policy or are idealogues driven by an agenda that is simply too ignorant to the realities of the American economy to care. It is critical that those interested in a sound, long term energy policy continue to remain active participants in developing that policy lest we leave our fates to those who either know no better or simply do not care.

March Madness: Pennsylvania vs. New York

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IPAA Economist Fred Lawrence Charts Drilling Activity in Pennsylvania vs. New York

IPAA Economist Fred Lawrence Charts Drilling Activity in PA (Blue) vs. New York (Orange) from Jan. 2008 to Feb. 2010

Over the past few months, the industry’s coalition group — Energy In Depth – has been doing a lot of work to encourage natural gas exploration and production in a new shale formation known as the “Marcellus.”  This geographic area covers most of western Pennsylvania, western New York and reaches well into the rest of Appalachia.

There are some interesting trends to note.  The Commonwealth of Pennsylvania has policies in place that encourage responsible natural gas exploration and production, which results in more American energy, more jobs, local and state tax revenues, royalties to landowners and other economic benefits.  The State of New York, however, has discouraged natural gas production — with many vocal opponents of responsible development coming from New York City.

For a side-by-side comparison of what’s going on in PA and NY, visit the Energy In Depth website here.

A Tale of Two Policies (Part 1)

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The Energy Information Administration today announced that U.S crude oil production was a net increase in 2009, offsetting declines elsewhere for the first time since 1991. These increases were due, in large part, to production rates in North Dakota and the Gulf of Mexico.

This is great news for producers and consumers alike as well as those concerned about America’s dependency on foreign imports of energy. However, much still needs to be done to build on this success story and America’s independent producers stand ready to fill that need.

As most who pay attention to such matters already know, this type of success in the field does not happen overnight. It takes years of planning on the part of the business sector and years of commitment and sound policy from the public sector to yield such results. Production in the Gulf of Mexico is an excellent example of such a scenario unfolding.

The article states:

Last year’s increase resulted mainly from drilling investments made by energy companies before prices collapsed in 2008, said Tancred Lidderdale, an analyst in the Energy Information Administration, part of the U.S. Department of Energy.

The federal deepwater reserves in the Gulf of Mexico have been known about for years but only last year were sufficiently tapped to significantly boost production.

“It takes anywhere from five to 10 years to develop new deepwater, offshore fields,” Lidderdale said Wednesday.

Through October, the most recent month for most specific data, federal deepwater production in the gulf was up 30 percent, an increase of 107 million barrels, compared with the first 10 months of 2008.

In North Dakota, production was up just under 30 percent, or 15 million barrels, over the first 10 months of 2009. Most came from the Bakken shale in the western part of the state.

New drilling technologies such as improved methods of hydraulic fracturing — pumping a pressurized mixture of water and chemicals underground to split rock — have enabled production in the previously unproductive formation.

It is important to note that these projects are capital intensive due to the long term nature of such ventures as well as the level of expertise and technology involved. Anything that would take capital out of that equation would severely hinder a producer’s ability to access and develop such reserves.

Refiners’ View on Climate Change Legislation

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Today comes this piece courtesy of Reuters regarding skepticism among the U.S. refining community that a climate bill passes during this session of Congress.

The article says, “The contentious debate over healthcare reform overshadowed climate change legislation last year after the House of Representatives passed a bill that would have set an economy-wide cap and trade system that applied to power companies, refineries and factories.”

A couple further quotes from the article:

The contentious debate over healthcare reform overshadowed climate change legislation last year after the House of Representatives passed a bill that would have set an economy-wide cap and trade system that applied to power companies, refineries and factories.

And…

However, refiners bruised from a year of losses and low margins, as well as lingering sluggish demand amid a slow economic recovery, say Washington’s focus is likely to zero in on the election through 2010.

“The consensus is, nothing’s going to happen,” Deming said. “But next year, who knows?”

An independent refining lobbyist said at the NPRA gathering that his company rejected the deal because it lacks specifics on cost and potential effects on refiners.

“In the absence of any detail, no is a safe answer,” the lobbyist said.

On the one hand I understand the skepticism.

Moderate Democrats in the House have already had to take one very tough vote on climate change that may cost a couple of seats. That vote has yet to yield any meaningful action in the Senate. Throw into that mix the toughest vote of the Obama Presidency taken over the weekend on health care and one quickly understands how it might be tough to get moderates back on board for another unpopular vote. Particularly at a time when the economy continues to struggle and opportunities to explain the votes and appease constituents ahead of the mid-term elections begins to run short.

On the other hand, anything seems possible in this town. It is critical for constituents and industry to continue to be vocal and engaged with their delegations to ensure that a bad bill does not see the light of day.

OPEC Update – Steady as She Flows but Where It Stops Nobody (I Don’t Think) Knows

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crudeoilbarrelsIt probably does not come as a surprise that the Organization of the Petroleum Exporting Countries (OPEC) has recently decided to hold production steady. The official production target of 24.845 million barrels a day (Mmb/d) has held since December 2008. I found at least two interesting issues in the news.

The first is that compliance continues to decline as producers seek to take advantage of spot prices over $80 per barrel. Compliance is now around 53 percent – down from approximately 80 percent in March 2009. This adds approximately two Mmb/d to their ‘official’ ceiling.

The other interesting note concerns Iraq which is not bound by the group’s quota agreement. According to the Energy Information Administration (EIA), Iraq’s total liquids production has grown from 1.7 Mmb/d in 4Q 2005 to 2.4 Mmb/d in 4Q2009 and a recent paper by the Energy Policy Research Foundation Inc. (EPRINC) noted that production could reach 9.6 Mmb/d by 2017 if certain obstacles are overcome. The recent auction in December included rights to develop 60 billion barrels in ten fields.

U.S. crude production also shows a rare increase in 2009 – a trend which looks to continue, helped by increased production in fields such as the Bakken in North Dakota where production has doubled in the past two years. Other non-OPEC countries such as Brazil, Azerbaijan and Kazakhstan are also increasing supply. Based on supply forecasts for 2010 by the IEA, there is over one Mmb/d of increased production forecast in 2010 between non-OPEC and OPEC natural gas liquids. Continue reading →

IPAA Chair: State remains America’s oil, gas engine

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Yesterday, IPAA Chairman Bruce Vincent, who is also president of Houston-based Swift Energy Company, had an op-ed published in the American Press, a Lake Charles, La. newspaper, ahead of his participation in the Louisiana Oil and Gas Association’s (LOGA) Annual Meeting.

The op-ed discussed the economic benefits of oil and natural gas production in America — how it creates high-paying jobs and revenues for the local, state and federal government.

He will be speaking to attendees at the LOGA Annual Meeting tomorrow morning about the barrage of legislative proposals in Washington that would be devastating to America’s oil and natural gas industry, especially independent producers. Click here to view the editorial online (subs. req’d). Excerpts from the op-ed are below.

“We have the energy reserves on-hand and at the ready to fuel, power and light our economy for generations. In fact, we have enough domestic natural gas supplies to meet our nation’s needs for greater than 100 years. Our offshore oil and gas reserves are significant, too. Responsibly producing these resources will help stabilize prices for American families as we continue to develop alternative and renewable energy forms, and invest in commonsense conservation initiatives.”

“Producing oil and gas here at home will also help break our deep dependence on foreign nations to meet our nation’s energy needs. And it will continue to create thousands of jobs. Louisiana has demonstrated this for years. Now it’s time for the rest of the country to start taking notice.”

Chairman Vincent was also featured this weekend in the Houston Chronicle for an executive Q&A special. To view the article, click here.

Finally, Chairman Vincent attended the Winter NAPE Expo down in Houston back in February and was interviewed by World Energy’s ‘Sarah Palin look-a-like’. He discussed the pivotal role the nation’s independent producers will play to create jobs in the U.S. and strengthen national security, as well as the benefits of NAPE for the oil and gas industry. To view the two-part interview series, click here and here!

Congress: The Week Ahead

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The House took a historic vote late Sunday night to pass the health care reform legislation that has been bogging down Washington for months. Approved by a vote of 219-212, it is not without controversy. And while President Obama plans a signing ceremony for the legislation on Monday, there is a strange feeling that health care will remain a top issue in the weeks and months ahead.

But for now, Democrats are looking forward, hoping to advance additional pieces of their agenda before campaign season wrestles away the full attention of our elected officials. It’s unclear exactly which issue will be up next, but some of the top candidates are financial regulation reform, immigration, and energy/climate. While financial reg reform seems most likely, and closest to being ready, Sunday marked a large rally in Washington for immigration reform. The timing wasn’t the best, considering the spotlight being on health care all weekend, but that is no fault of the organizers. It does beg the question of whether or not immigration reform has a legitimate chance of being considered this year. On the surface, most would say it is doubtful. But if last year is any indication of how aggressive this administration and Congress intends to be, then it should come as little surprise if the health care victory encourages them to push harder for more of their agenda. Seeing efforts on financial regulation reform, immigration reform, energy/climate, education reform… all in the next four months… is a possibility.

This week marks the beginning of Senator Dodd’s markup on the financial regulation reform bill. Also expected this week is more information on the energy/climate bill from the Kerry/Lieberman/Graham trio, reportedly a more informative outline to be released to industry groups and lawmakers. It remains to be seen how willing the two bodies of Congress will be to tackle more highly partisan issues, after the challenge of completing health care.

Further hearings over budget proposals are also scheduled for this week, as the budget process sloths along in the background. Keep in mind that the budget and appropriations process will demand considerable time and attention over the next couple months. A full agenda indeed.

Key Committee Schedules for Week of March 22 – 26

Senate Banking

Senate Energy & Natural Resources

Senate Environment & Public Works

House Appropriations

House Natural Resources

Congress: The Week Ahead

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Dome sun 1Some mild confusion appears to be lingering on Capitol Hill, carrying over from last week.  After Senate Majority Leader Reid announced earlier this year that he would break down the overall jobs bill into multiple smaller measures, few probably guessed that they would all be referred to as “the jobs bill.”  Unfortunately, each new bill has been designated as “the jobs bill” as it being considered on the floor, prompting many questions of “which one?”  So it has been announced again that the Senate will continue its work on jobs and extenders legislation this week.  The House, meanwhile, has a light legislative week ahead as it awaits the Senate action on the jobs measure.  Don’t worry if it doesn’t make sense, it’s all under control.

Other issues remain topical as well, as Senator Dodd is expected to share with Senator Corker a draft of the financial regulation reform bill he has been working on.  A compromise is trying to be reached, and it remains unclear until later this week just how close they may be to that.  Congress will also resume the FY11 Budget hearings in both chambers this week.  House and Senate Approps will welcome more administration officials to provide their testimony in justification/defense of the budget proposal.

Last week’s IPAA Call-Up was a great success.  As independent producers blanketed Capitol Hill to discuss priorities for the year, they were received warmly, and more importantly with open ears.  Feedback from members and staff has been encouraging so far, and will give IPAA plenty to build on moving forward.  Thanks to all of our members who participated last week.

Key Committee Schedules for Week of March 8 – 12
 
House Appropriations

 
Senate Appropriations

 
House Natural Resources

 
Senate Energy & Natural Resources

From Washington, IPAA Chief Sends the Messages of America’s Independent Producers Nationwide

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IPAA Chairman Bruce Vincent

IPAA Chairman Bruce Vincent

This week, IPAA kicked off its annual Washington Board Meeting and Call-Up with a media blitz featuring Chairman Bruce Vincent, who is also president of Houston-based Swift Energy Company. A dozen reporters from leading national, regional and trade publications participated in a media roundtable on Monday at the IPAA headquarters. Chairman Vincent discussed the annual D.C. Call-Up and outlined the critical issues facing America’s oil and natural gas producers that would be discussed with Congressional leaders. The critical issues outlined included: energy taxes, federal regulations, particularly hydraulic fracturing and climate change, and commodity markets. Articles appeared in the Energy Guardian, San Antonio Express, Houston Chronicle, Oil and Gas Journal, Gas Daily and Oil Daily subsequent to the media roundtable.

Chairman Vincent also took to the air waves and appeared on News Radio KTOK out of Oklahoma City, Okla.; KCRS AM out of Midland/Odessa, Texas; Talk Radio News Service; The Lars Larson Show, the nationally syndicated broadcast out of Portland, Ore.; and WIZM 1410 out of La Crosse, Wis.

Finally, Chairman Vincent appeared on a Fox Business segment entitled “Natural Gas: An Overlooked Resource.” He discussed the significance of natural gas and how this great American resource can create new jobs, increase domestic supply and strengthen national security. Click here to view the Fox Business interview.