FEBRUARY 2013

The “Better Business” Publication Serving the Exploration / Drilling / Production Industry LOGA Ready To Meet New Challenges

By Del Torkelson operators. The bills that passed near the Texas, Oklahoma or Colorado.” end of the 2012 Legislature, BATON ROUGE, LA.–Some, when which build on earlier LOGA-backed The Long View they achieve a long-sought goal, are con- legacy reforms, allow parties to assume In its first online weekly drilling report tent to forego any further struggle. Others responsibility for remediation without of 2013, LOGA noted the statewide count strive to follow-up, but fall short of the saddling them with liability for private of 102 drilling rigs fell 48 short of the standard set by their previous accom- damages (AOGR, July 2012, pg. 16). same figure a year ago. Briggs reasons plishment. Then there are those who keep LOGA Chairman Bryan Hanks, pres- that trend follows logically from a number on keeping on–and in the process–collect ident and chief executive officer of BETA of factors, including natural gas prices’ numerous victory laurels on which they Land Services LLC in Lafayette, La., extended slump. And while Louisiana never rest. says he hopes the new legal setting will contains a number of formations that Thomas Edison was already world fa- reassure oil and gas companies that could one day spur exciting resource mous for inventing the phonograph when Louisiana is a good place to do business. plays, he says, the fruit is not yet ripe. he received a patent for his incandescent “Louisiana’s legacy lawsuits have been a The Tuscaloosa Marine Shale that runs light bulb, a creation which itself preceded known entity for operators across the through Central Louisiana, North his pioneering innovations in motion pic- country,” he reflects. “Even though we Louisiana’s Brown Dense, and the ultra- ture technology. The Beatles were atop passed very positive legislation last year, deep frontier along the coast may have the rock and roll world when Sgt. Pepper’s people still may be hesitant about coming bigger futures, he predicts, but steep Lonely Heart’s Club Band came out, but here because they feel they will be tar- capital demands help to constrain their the releases still to come included the gets.” present. “white album” and Abbey Road. John LOGA President Don G. Briggs main- “There are only three rigs working in Wooden already had a pair of national tains the entire state will benefit if pro- the Tuscaloosa Marine Shale, where the titles when he began the streak of coaching ducers across the country decide Louisiana wells are deep and expensive, but I hear seven consecutive men’s college basketball will treat them fairly–a conclusion they they have found a couple of nice sweet championship teams. are unlikely to reach if the state’s policy- spots,” Briggs describes. “A couple com- For the Louisiana Oil & Gas Association, makers muddle the message of last year’s panies are plugging away and moving the drive to keep plugging away even after legislation. As the association prepares around in the Brown Dense.” significant wins has been a matter of ne- for the 2013 Louisiana Legislature, he “People have been hopeful but cautious cessity. When its members gather for the observes that Governor is about the Tuscaloosa Marine Shale, so I group’s annual convention, March 11-13 on record expressing a desire to eliminate do not think that surprises anyone,” Hanks at the L’auberge du lac Casino Resort in the state’s corporate and personal income ruminates. “Everybody still seems hopeful Lake Charles, La., they will do so only taxes (see accompanying story). Intriguing about the ultra deep, but there is a learning months after seeing LOGA cross a long- as that may seem, Briggs says LOGA is curve and there are equipment challenges sought priority off its to-do list. warning against any efforts to turn such associated with those depths and tem- With the passage of legislation to re- a proposition into a convenient tax shifting peratures. I still think there is a long- form the law regarding the state’s legacy mechanism. term vision for it.” lawsuits, the association hopes producers “We are trying to help everyone un- Meanwhile, Briggs acknowledges, the will find a way to cut through the net of derstand this is not a localized market,” play that recently enjoyed Louisiana’s questionable litigation that has ensnared he relates. “Companies can spend their top billing is experiencing a lull. “People a significant proportion of South Louisiana money here or in Ohio, Pennsylvania, are not looking for dry gas,” Briggs ac-

Reproduced for the Louisiana Oil & Gas Association and Beta Land Services with permission www.aogr.com Convention Sec tion: Louisiana Oil & Gas Association

knowledges. “Once, there were 140 rigs Furthermore, Briggs notes, an analysis to it because I have been the guy with running in the Haynesville. Now there by Louisiana State University Professor the lease in my hand,” he relates. “I are 20.” David Dismukes calculates that new proj - intend to see it at a time when the theater Nevertheless, Hanks insists the interval ects drawn by the magnet of affordable is not very full, because I am sure I will is neither unexpected nor permanent. He and reliable gas supplies could bring have a running, open commentary that I recounts that when his company was 214,000 jobs and $9 billion in new wages cannot guarantee will remain under my helping clients secure Haynesville leases in less than a decade. Briggs quotes Dis - breath.” in the play’s headiest days, operators rec - mukes as saying that being flush with Hanks says he would like to see the in - ognized their long-term development natural gas “has led to a virtual manufac - dustry hit back by promoting and distributing plans could require some patience. “The turing renaissance in Louisiana where, films such as FrackNation , a new docu - people we were working for predicted to date, some $62.3 billion in new capital mentary with a more evenhanded take on they would drill to tie up lease positions investments have been announced.” fracturing by independent filmmakers Ann and then proceed according to the gas and Phelim Media LLC. LOGA has re - pricing scenario,” he recalls. “I was pre - Fact And Fiction sponded to Promised Land by offering a pared for it to drop simply because more When it comes to competing with video response on the association’s website product was coming on.” other states for companies’ drilling dollars, that refutes Promised Land ’s inaccuracies. While the slow period marks a first Louisiana’s longtime familiarity with the Other than that, he says, instead of dropping for many people who have entered the oil and gas industry may offer one factor mass media bombs, the industry will con - industry in the unconventional resource in its favor. While numerous other states tinue to fight untruths with the equivalent play era, Hanks reflects, it is familiar to host ongoing or prospective resource of hand-to-hand combat. anyone with a couple decades’ oil and plays, few of their populations have as “Thanks to the Internet, in the last gas experience. “The younger people are much history with oil and gas as the Pel - five years, landowners across the country seeing it for the first time because they ican State. As localities in places from have become 100 times more sophisti - have been in the industry only as the New York to Colorado ban hydraulic cated,” Hanks describes. “I find myself shale plays have ramped up,” he com - fracturing and craft regulations that render trying to explain scenarios that may have ments. “They will learn our industry will many projects not worth the trouble, happened in Ohio, Colorado or Pennsyl - live through this and ramp up down the Briggs says Louisiana parishes have vania, where the regulations and landowner road. The good news is that technological proven less susceptible–though not im - rights may be far different. Because of developments may make those cycles mune–to anti-fracturing alarmism. that, the people I send into the field to quicker than they used to be.” Media misrepresentations about frac - meet and negotiate with landowners re - Nevertheless, Briggs notes, some places turing’s risks, including the Hollywood quire far more training than in the past.” beyond Louisiana’s borders continue to film Promised Land , which was released Consequently, he says, in only three attract major investment. The Eagle Ford to theaters nationwide in January, have years, BETA Land Services’ training Shale in neighboring Texas, he says, helps not helped, he acknowledges. Briggs saw manual has grown from three quarters of illustrate that policymakers are wise to the film shortly after its release, he says, an inch to a pair of three-inch binders. consider the broader context of oil and indicating the production mixes the gen - Only when a landman has been apprised gas policy. Many companies with prop - uine with the fallacious. Scenes in which of the facts can he hope to help laypeople erties in Louisiana have operating horizons a landman participates in community recognize the fiction. “I tell our guys 50 that extend well beyond the state’s borders, meetings were sufficiently true-to-life, percent of the job is educating landown - he points out. Naturally, they will invest Briggs says. ers,” Hanks relates. their capital in projects they expect will In fact, he continues, such depictions One approach that Hanks says his provide the best returns. “We are com - made him feel as if he was back in North - team prefers in shale areas foregoes tra - peting with the rest of the country,” Briggs west Louisiana when the Haynesville ditional individual meetings in favor of emphasizes. “That is why our playground Shale play was taking shape. “I had one group gatherings. “If there is a natural needs to be better.” town meeting after another in basketball alliance of friends and neighbors, we A better environment for the industry gymnasiums filled with 5,000 people and want to get them together and lay out our means a stronger state, he affirms. Since heard a lot of things from local residents,” client’s plans for the area and what we 2008, Louisiana’s natural gas industry he affirms. “It really brought back a lot hope to do,” he describes. “We use that has provided more than $14 billion in of memories that I appreciated.” time to educate them and answer questions. economic impact and created more than Unfortunately, notwithstanding its pro - That goes a long way toward building 60,000 jobs in the Haynesville Shale play ducers’ claims that the film is not an credibility. It also gives everybody a sense alone. Significant as they are, such em - anti-development screed, Briggs notes they are going to receive the same deal. ployment figures are only the start, Briggs that Promised Land’s distortion of facts It seems to provide people with a sense indicates, pointing to projects under con - about fracturing and a plot twist that of relief when we put everybody in the struction because of the state’s abundant casts the oil and gas company as scheming room and let them know we will pay gas supply. Such examples include the and dishonest make its anti-industry bias them the same.” $11 billion liquefied natural gas export obvious. facility Cheniere Energy is building in That bias was one reason Hanks ex - A Legal Perspective Cameron Parish and the $21 billion energy pressed doubt that he could attend Prom - While no Louisiana localities have and chemical plant investment Sasol Ltd. ised Land and maintain proper movie banned fracturing, Briggs reports, a few is making in Calcasieu Parish. theater decorum. “I take particular offense failed attempts to do so have surfaced in Convention Sec tion: Louisiana Oil & Gas Association

scattered parishes. More frequently, he has proven useful in dealing with local meeting, March 11-13, provides members says, local governments craft rules that governments. That same attribute has an opportunity to enjoy the passage of usurp the state’s regulatory authority over been very helpful to LOGA since she of - legacy lawsuit reform. “We should cele - oil and gas operations. Other local regu - ficially joined the association’s staff in brate what was accomplished in last year’s latory incursions, he says, include efforts August 2012, Briggs indicates. “She helps legislative session,” he suggests. to charge fees that only would apply to me look at the law a little differently,” Of course, he continues, the conference oil field trucks. Briggs remarks. “She is good at making also will keep members informed of the “They all try to make money off us,” this old guy understand the new stuff latest developments relevant to Louisiana Briggs sighs. “We meet with every parish that comes up.” producers. Among the presentations every time, explain the law and the issue LOGA Vice President Gifford Briggs LOGA plans are a state regulators forum, goes away, but it always takes a lot of agrees. “Having an attorney on staff is a a water issues panel, and remarks by work to make that happen.” huge benefit,” he affirms. “It is important Americans for Tax Reform founder and Lauren Estopinal, LOGA’s newest for us to have that legal perspective. She President Grover Norquist. government relations staffer, concurs that also does a great job communicating with The schedule largely will follow the the state’s exclusive regulatory oversight legislators and handling lobbyist func - format the association has used in past is a recurring theme in those meetings. tions.” conventions, with many of the business While local officials’ manner toward the Estopinal interned with LOGA for sessions falling on the event’s middle industry and impetus for regulating it two years while finishing law school, she day, Tuesday, March 10. According to vary widely, she says, almost none of notes, and has come to an even greater LOGA, that day’s presentations also in - them realize the extent to which the state appreciation of the group since being clude a legislative session panel featuring already keeps tabs on oil and gas activities. hired. “I have the best job,” she declares. Senator Page Cortez, R-Lafayette, Senator Nor do they know about many ready “Working with Gifford and Don has Jean-Paul J. Morrell, D-, state and industry resources to which taught me so much.” House Speaker Pro Tempore Walt Leger, they can turn. Their largely divergent but complemen - D-New Orleans, Representative Stuart “Often, they do not know about One tary approaches to lobbying are one lesson Bishop, R-Lafayette, and Representative Call or FracFocus.org,” she details. “The she cites, although she says their ability to Joel Robideaux, R-Lafayette. people in one parish were dead set on build consensus among diverse members And of course, Hanks notes, the con - frac fluid disclosure until we told them while also following their collective lead vention also provides networking oppor - about FracFocus and one of them opened is a skill that she says particularly impresses tunities. He reflects that 2013 might be a the site on her tablet.” her. “Pulling a general consensus from all particularly good year to mingle with other Local regulatory initiatives jumped the different voices is amazing,” she marvels. people active in Louisiana’s oil and gas in - alongside the prospect of a Tuscaloosa “So is the ability to honestly listen to the dustry. “The Haynesville is probably moving Marine Shale play, Estopinal says. As membership and learn to change your opin - into the next phase, where people start to leasing got under way in the area in and ions according to its needs.” monetize their assets,” he surmises. “There around East and West Baton Rouge parish - Meanwhile, D. Briggs assesses, Esto- will probably be people there looking to es, she notes, some local officials traveled pinal brings far more than her legal buy into and sell out of positions.” Ì to Northwest Louisiana to hear from their training to LOGA’s team. He cites her counterparts. “I was told that on their way thoroughness and resolve as two attributes there, everyone was optimistic and could that are serving the association well. “I not wait to see what was coming,” he re - really like her tenacity,” he states. counts. “On the way back, it was a question of how many ordinances could be passed Convention and how quickly they could do it.” Despite LOGA’s ongoing challenges, Estopinal says her legal background Hanks reflects that the association’s annual