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2015 Year in Review from OOGA President

Posted By David Hill, OOGA President, Tuesday, December 29, 2015

I would like to take a moment to reflect on past year and all that has materialized within the Ohio Oil and Gas Association in 2015. As I reflect on what we’ve seen over the year, the litany of issues the industry has faced this particular year have been seemingly insurmountable. I can't think of any time in the last 40-years where the hill to climb has seemed so high.

We have seen crude oil prices fall below $40 per barrel and natural gas prices are languishing at record lows, creating a general sense of gloom and doom among our industry on a global scale.

The price rut, brought to us mainly by Saudi Arabia, which is making an effort to control market share, is wreaking havoc on the United States’ domestic oil and gas industry. Decisions made half way around the globe are having real life implications right here in Ohio. Simultaneously, the collapse of the natural gas price in Appalachia, mainly due to lack of adequate infrastructure to get the gas out of the basin, is making life practically impossible for many members of the Ohio Oil and Gas Association.

Seeking Resolution:

All while this was going on, some of our elected officials in Ohio still believed that this would be a good time to increase the severance tax. After months of interested party meetings with the Administration, affected agencies and appointed House and Senate members to the 2020 Tax Policy Study Commission, I am pleased to report that it looks like we won’t have to discuss the severance tax for the next year or so.

The Association went through every aspect of oil and gas taxation from cost recovery to post production with the group.  It was truly a thorough process, and we believe the Commission finally realized that the industry was not over exaggerating our dire situation. 

And as if that wasn't enough, the well haters, mainly funded by left-leaning individuals and organizations, continued to declare war on the fossil fuel industry. Make no mistake, these groups, at their core, despise capitalism. 

The OOGA spent a considerable amount of time dealing with local control initiatives, dubbed the “Community Bill of Rights,” that popped up in multiple areas from Medina to Athens, by some radical outfit based out of Pennsylvania—the Community Environmental Legal Defense Fund (CELDF). They started attempting to dupe folks over in Youngstown several years ago into placing these items on the ballot.  Thankfully voters in Youngstown are smarter than what the CELDF had hoped and voted down the ballot initiatives for a fifth time this past November.

These groups also caught the attention of the Ohio Secretary of State Jon Husted, who issued an order to put a stop to this nonsense and keep these items off the ballot in Athens, Medina and Fulton Counties in November.  The way the CELDF crafted their ballot language to ban oil and gas activities did not follow Ohio law, which states that you need to establish an alternate form of local government when you propose to change the current system. Of course the Secretary of State’s ruling did not sit well with the CELDF and their disciples so they ended up taking the matter to the Ohio Supreme Court. 

But all in all, in dealing with these dishonest initiatives we successfully pushed back to defeat the majority of them. Columbus also sought for a similar initiative but came of short of having enough valid signatures for its petition, and the city of Akron and Portage County did not move forward with any action knowing they didn’t not have enough signatures to support.

If there was ever a time when the OOGA and this industry needed the full support of its entire membership, it is now. In light of the current situation it may seem difficult to donate your precious time and energy. But, if you're willing to help in this fight it is greatly important to stay involved with your state Associations to help get us through these challenging times.

Issues to Come:

In 2015 this Association has been actively engaging in stakeholder meetings on a number of rules packages stemming from the passage of several items of legislation over the years.  Secondary containment, well spacing and incident notification rules are being discussed and should be sent out for comment early next year. It is our hope that the new well spacing rules open up new opportunities for both our shale and conventional operators. 

The Association is still pursuing corrections to Ohio’s unitization laws that have caused our operators to stall all of their projects that include state lands.  We remain committed to the passage of House Bill 8 and will hopefully see some movement on that issue early next year. 

Looking Ahead:

It is estimated that by the year 2050, there will be 10 billion people on planet earth. Please remember that it will be your industry, the oil and gas industry, which supplies the energy needs for those 10 billion people in 2050. Things are very dire as we stand here at the end of 2015. However, access to abundant clean energy will continue to improve the human condition around the world for decades to come, so hold your head high.

In conclusion, I really cannot remember a more difficult and challenging time facing the domestic oil and gas industry in my lifetime. In these miserable times, giving up and throwing in the towel is not the solution. We must remain resolute, we must all work together and we all need to share information and ideas on how to survive in this environment. Please remember there is a reason why we are called "independent" oil and gas producers. We are a resilient and independent lot of people. We will get through this—we always have. No one is saying it's going to be painless or enjoyable.

I have recently had the opportunity to go to a few Universities throughout Ohio and give a "state of the industry" speech to the geology students and staff. More often then not, the students are very polite and attentive, and much is able to come to light during the question and answer sessions. But what troubles me the most is that these young people were struggling to see how they were going to be able to monetize the geology degrees that they are in the process of earning.

I offered to arrange a tour of a Utica production pad, a Clinton production well and allowed them to tour one of my own UIC facilities. With each visit the students became more and more engaged in the discussion and each site lasted longer and longer as the questions kept popping up. As I reflected on the day with the group of students, it dawned on me that in light of what we’re currently facing, what we have to do is gain the interest of the next generation and to build the next defenders of the industry. When an opportunity presents itself to engage the next generation, we have to show them, explain to them and let them see the value in what it is that we do—it is what makes me and someday them, proud to work in the oil and gas industry.

As I always say to the OOGA membership, keep your heads held high and always remember that you are helping to produce clean, abundant, domestic, affordable, life-giving energy to a nation that is starving for more.

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Merry Christmas from the OOGA

Posted By Lyndsey Kleven, Communications Coordinator, Tuesday, December 22, 2015

The Ohio Oil and Gas Association (OOGA) hosted its annual holiday membership reception on December 17, 2015 at the Cherry Valley Lodge in Newark. The event had a great turn out, with more than 200 members coming out to celebrate the holiday season with colleagues, friends, and Association staff.

Following the annual OOGA Executive Committee and Board of Directors meeting, a large representation from these groups was also present. This event is a great opportunity for groups to network, mingle, and Association members from near and far to get together to enjoy hors d’oeuvres and drinks.

The OOGA thanks everyone who was able to attend the annual holiday reception and wishes all of our members a very Happy New Year!

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Member Spotlight: Eddy Biehl, Stonebridge Oilfield Services

Posted By Lyndsey Kleven, Communications Coordinator, Tuesday, December 15, 2015

The member spotlight series features legacy OOGA members who have been a member of the Association for at least 10 years. If you would like to recommend someone to be highlighted, please contact Lyndsey Kleven lyndsey@ooga.org

Background information:


You can trace Eddy Biehl’s family history in oil and gas back to the 1870’s. Eddy’s great-great-grandfather briefly strayed from farming to give the oilfields a try but discovered he didn’t like it. The industry at some point busted in the 1870s and he went back to the hillside farms, which laid fallow for a couple of years and that was when he swore off the oil and gas industry. To his dismay, his four sons and son-in-law all went into the oil and gas business starting during the 1890s boom.

 

Eddy is the fourth generation in oil and gas and grew up on stories that his grandfather told his father and uncles of the oil booms in the 1890s. The family that didn’t stay in Ohio and the Appalachian region followed the industry west to California, and Texas by way of Illinois and Kansas. 

“There was family on mother’s side in the industry that were well shooters and glycerin hands. Before we had fracking we used nitroglycerine to access oil and gas. The safety concerns people have today pale in comparison to what was previously done with nitroglycerine.”

Eddy grew up working on nearby leases when he was 12 years old. Growing up around the business he thought that he wanted to get away from it in high school. This was in the 1960s and the industry was just coming out of a dry spell, which was tough. He recalled one of his first “economics lessons” of how his grandpa carried around a check from his best barrel of oil in 1928 and his worst in 1968, 40 years later and the checks were almost the same.

“I was going to run off and become a chemist and a lawyer, but ended up becoming a geologist with plans to go into mining. I went to Harvard and got my degree in economic geology in 1979.  I thought I was going to do hard rock metal mining. I then took a year off and came back to work in the coal mines to get some experience underground, which happened to be the year of the big strike with United Mine Workers. So I went back to work in the patch for a year, that really started to re-set the hook.” 

The 1979 oil boom caused prices to spike and Eddy started working on some well sites setting rigs as a well site geologist. He worked as an independent consultant until he was able to build up enough business to start a consulting firm. In the height of the boom they were setting rigs all over the Appalachian basin. Throughout his consulting work, Eddy and a partner had started drilling some of their own wells in the 1980s. When rigs were being laid down they morphed into the financial side and started doing asset evolutions, bankruptcies, and foreclosures. 

Eddy continued to do evaluation work from 1984 through 1998. He worked as the operations manager for Halwell Company, whose focus was on acquiring distressed properties in Ohio, West Virginia, and Pennsylvania for over a decade. This expanded into 11 states with 1,200 operated wells and more than 300 non-operated interest wells. The downturn came in the late 1990s and in 1998, Eddy acquired the company whose remaining assets were 900 wells in southeastern Ohio.

Company Information:

Stonebridge Operating Company was formed from the wells Eddy had acquired from Halwell in 1998. The company started during a bust, which was a difficult way to start off. To tighten cost they sold the office they had, with plans of being a district production office. They functioned as a small producer, operating wells and fixing them up.

Shale operating affected Stonebridge Operating Company as they originally estimated shale drilling was going to double cost and halve revenues. It turned out it more than doubled the cost of drilling and cut revenues by more than half on the traditional vertical wells. Eddy created a strategy to expand the company into new arenas.

Stonebridge devised and implemented on a four-prong approach to its operations. With close to 1,000 wells, traditional vertical drilling was still important. Cutting cost while still trying to figure out how to make the drilling work remains a focus today. The second prong was modifying its existing injection wells in order to take additional water from the shale plays to generate some additional income. Eddy described the remaining prongs and the shift to shale work.

“We don’t own a lot of deep rights but we had some leases we were able to clean up. We were able to put together a couple packages and worked with horizontal drillers, where they did have the deep rights. This included working with PDC on the first shale well drilled in Washington County, through a Stonebridge lease. The last piece we needed was offering service work.”

Stonebridge Oilfield Services was formed and provides services to Utica wells and vertical wells throughout the Appalachian Basin.

In 2011 Stonebridge Oilfield Services started offering services to the Utica drillers in Carrollton. They have worked on more than a third of the Utica wells in Ohio. The company provides roustabout oilfield services and continues to provide new services including containment, pipeline construction, land clearing, excavation, and injection wells.

“We’re not too good to do anything, were not afraid to get dirty or work hard. When a company needs a couple of extra hands on a rig move, or to hook up some pipe, they give us a call. It has given us the chance to develop some confidence, experience, and knowledge in the horizontal shale play.”

Stonebridge Oilfield Services is learning as they go and have expanded the services they offer as they’re gaining more confidence with horizontal drilling. With the current downturn, Utica drillers are looking for more bundled services which Stonebridge has been able to accommodate.

The service business has been good and done well, exceeding the production side this year. Production revenue has dropped during the downturn and Stonebridge Oilfield Services is always looking for ways to adapt and cut cost. In terms of the overall Stonebridge umbrella, they are becoming more service focused than production. 

Stonebridge has more than 80 employees and is based in Marietta. They have a Uhrichsville Yard where they service most of the Utica drilling support (previously in Carrollton). They also have yards and permitting facilities in Barnesville and Fleming. 

Shale-development’s impact on business:

Independently Stonebridge Oilfield Services didn’t have the specialized knowledge to drill horizontal shale wells, even though they had drilled a lot of vertical shale wells. Also with the group’s decline in drilling and shift to well services, they didn’t want to shift its capital to drill horizontal shale wells. Stonebridge Oilfield Services has taken its traditional oilfield knowledge to do roustabout contractor work in the Utica.

“2010 was kind of a pivotal moment for us, to watch the shale plays jump the river and come to Ohio. The family had seen dozens of booms and busts, but I said we were fixing to have our first “boom-bust” and that’s a different thing than we’ve ever been thorough before. You could just see that this thing was going to roll over the river and come south in Ohio,” Biehl said.  

Getting involved in the service business has allowed Stonebridge to participate in some new business ventures. “We looked at the play and frankly I was tired of standing at the gate peaking in. I wanted to be a part of what was going on.”

As Stonebridge has gained more confidence and picked up lessons along the way, they have been able to add the services that shale drillers are looking for.  The current focus is on growing injection well, pipeline construction, containment and production services.  The company has also diversified and is installing poly pipe for an asphalt company and containment for a county jail. 

“The industry has been built on change, and booms and busts. Change can be exhilarating and hard, and the Utica has been both for us, but you have to adapt to it. We’re dealing with higher line pressures, lower prices, which makes it harder to sell gas. But there are also many opportunities to do new things and it has been great for Eastern Ohio. The industry has been resilient enough to get under that cost curve and make it work.”

OOGA Involvement:

Eddy has been a member of the Ohio Oil and Gas Association (OOGA) since the early 1980s, seeing through the numerous issues that the industry faced throughout this decade. Eddy has taken on a participatory role with the Association throughout the years.

“The OOGA has been a vital voice for Ohio producers and helps to prevent overregulation. We have seen it before and we’re seeing now that the regulatory climate lags the booms, and a lot of time is spent with new proposed regulations. Often times this is like fixing the barn door after the horse is already out.”

Being in the industry for more than three decades, Eddy has seen how far it has come. From safety to environmental advances the industry has made great strides.

“The number one important thing the OOGA does is to be the industry voice and work to help balance the regulation. The group has remained a voice for vertical well producers, which is the industry’s “bread and butter.” We need to be proud that Ohio is doing many things better than other states and that all voices continue to be represented among the oil and gas industry.”

Eddy is also active on the national level where he is the small service company representative on the National Safeland Advisory Board.  

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The Ramifications of Low Oil and Natural Gas Prices

Posted By Lyndsey Kleven, Communications Coordinator, Tuesday, December 8, 2015

Throughout 2015 we’ve seen a lot occur within Ohio’s oil and natural gas industry. The most radical change, noticeable to those working in the industry and any regular person, would be the staggering drop in commodity price—with multiple factors playing into what we’re currently seeing.

OPEC, making an effort to control market share, has contributed to the price rut created all across the United States on our domestic oil and natural gas industry. Decisions being made across the globe are having real life pricing implications right here in Ohio.

The effectiveness of our oil and gas producers is another piece of this. Looking at the industry as a whole, it has done such a good job at more effectively producing oil and natural gas in recent years that it has created an oversupply. Robust natural gas production has helped inventories soar to record highs we haven’t seen before.

New production is stalling as producers are responding to the current market conditions. Although overall production levels in the Utica Shale continue to rise (the latest ODNR Utica production report shows a Q3 2% increase in oil production and a 10% increase in natural gas production), the production is a result of wells that have been drilled and are now being completed or that now have access to pipelines that can finally move the commodity to market.

Simultaneously, there is still inadequate infrastructure to move the natural gas from our Appalachian Basin. Access is vital to oil and natural gas producers, as it is a key economic factor in a company’s decision to drill a well in certain areas. Without this access, the natural gas is either not produced (the well is not economic to drill) or produced and is consumed within the basin (which further depresses the commodity price the company receives).  

Finally, let’s look at where the domestic oil and natural gas industry was approximately ten years ago. In short, the opposite factors were in play. After Hurricanes Katrina and Rita struck in late 2005, natural gas was not as readily available and prices in this basin hovered around $12.00 per mcf. The price eventually receeded, in part, due to company’s expanding their drilling plans to increase the supply. Higher prices and lower supplies led to companies expanding their drilling plans. Conversely, lower prices and higher supplies lead to company’s contracting their drilling plans – which is what is generally happening for the Ohio producer.    

To recap, it’s a challenging time to be oil and gas producer in the midst of all these circumstances. It is a great time for Ohio consumers who are benefitting greatly with serious energy savings from the higher supplies and lower energy costs.

And the savings continue on products associated with this production. For example, gasoline prices have fallen to six year lows in Ohio. At Thanksgiving, some Ohio pumps were dipping under $1.50 a gallon. Consumers are expected to save a reported $7 billion at the pump during this holiday season, which translates out to about $40 per driver.

I’ve seen it myself in my monthly bills. My household’s monthly electric, natural gas, and gasoline expenses are at lows I haven’t seen in years. And for that I have to thank Ohio’s oil and gas producers. 

Tags:  drilling  natural gas  ohio oil and gas association  oil  shale 

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OOGA President David Hill Provides a First Hand Look at Production for Kent State Students

Posted By Mike Chadsey, Director of Public Relations, Tuesday, November 24, 2015

It was a chilly Saturday morning, but the 16 Kent State University Geology Department students, who are members of the University’s chapter of the American Association of Petroleum Geologists, caravanned to a PDC Utica well pad on the outskirts of Cambridge for a tour.

OOGA President David Hill extended the invite to them as he concluded his talk with the department facility, staff and current students recently on the main campus of Kent State. Hill was asked to speak about the current state of the industry and what current students should expect to experience when they graduate. He shared with them that the industry is down but not out and that it will bounce back, and when it does there will be positions of all kinds waiting to be filled. As he explained, “not everyone has the intestinal fortitude and the willingness to be relocated throughout their career, but if you do this could be a great opportunity for you upon graduation.”

During the hour long presentation, David shared with everyone his personal experience in the industry with details about how and why he got started and what he has seen over the years. To hammer this point home he said, “this industry is second only to NASA in our use of technology, and it is always changing and always improving.” David went on to explain the various careers in the industry and what type of education and training is needed to fill those positions.

At the conclusion of his prepared remarks, began the question and answer session that promoted various questions about production in Ohio, to that word that seems to be on everyone’s mind these days, “fracking.” It was at this point the idea of an up-close and personal tour was mentioned. There was no hesitation from David and he could barely keep his excitement contained and said, “Absolutely! We want you all to come down and see what we do and how we do it!”

David arraigned for a tour of a Utica production pad, a Clinton production well and his own Underground Injection Control (UIC) well. With each visit the students became more and more engaged in the discussion and each site lasted longer and longer as the questions kept popping up. By late afternoon the tour had concluded so David took everyone out to lunch to keep the conversation going. It was at lunch that we heard that of all the field tours they had taken as a group, this was by far the most interactive and interesting.

As lunch was winding down and the group started to make their way back to campus, David pulled me aside and said that he really enjoyed the day and explained that “this is what we have to do to gain the interest of the next generation and to build defenders of the industry, we have to show them, explain to them and let them see the value in what it is that we do. It is what makes me, and someday them, proud of the work.”

After everyone said their goodbyes and shared their thanks, I jumped in my own car and started to make the trek back home. I reflected thinking how proud I was to be an alumni of Kent State (Go Flashes!) and proud of the interest that was shared among the new group of friends we had made—it was great day. 

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OOGA Technical Conference Day 2 Recap

Posted By Lyndsey Kleven, Communications Coordinator, Monday, November 16, 2015
Updated: Thursday, November 12, 2015

The Ohio Oil and Gas Association hosted its fifth annual Technical Conference and Oilfield Expo on November 4 & 5, 2015. This year’s event was moved into the heart of the Ohio oilfield and held in Cambridge at the Pritchard Laughlin Civic Center. 

What really stole the show were the speaker presentations at the Technical Conference, providing in depth discussion on topics impacting the oil and gas industry. Key topics of interest to attendees on Day 1 of the Technical Conference Included:

Wayne Vanderhoof with RJR Safety, Inc. started the second day presentations covering Passenger Vehicle/Pick-Up Truck Fleet Safety. This presentation provided general information and guidance to develop a procedure or policy for fleet safety when the fleet consists of passenger vehicles such as cars, SUVs, and light duty pick-up trucks.

James Blazer with BWC provided comments, as well as Kristin Kutchak with Halliburton, covering best practices cementing horizontal wells.  

Richard Schwartz with the Vorys Houston office gave a legal perspective on “It” Happened! What do you do? Internal Investigations of Well Site Events. This presentation addressed the technical, legal and ethical implications of well production emergencies and how to effectively plan for investigations.

Rich Cochran with Western Reserve Land Conservancy presented on Uncommon Ground for the Common Good. The presentation looked at the strategy focused on the eastern Ohio counties that are impacted by development of the Utica Point Pleasant formation. Cochran explained how and why they developed this strategy and explored the promise inherent in the vision. 

Jackie Stewart, Director in Strategic Communications segment & State Director for Energy In Depth—FTI Consulting wrapped up the Technical Conference presentations enlightening the audience on crisis communications and protecting your reputational brand. Jackie hit on the importance of ways to understand how to protect your company and prepare in advance, should an incident occur, providing the audience with a best practices toolkit for their company. 

 

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OOGA Technical Conference Day 1 Recap

Posted By Lyndsey Kleven, Communications Coordinator, Monday, November 9, 2015
Updated: Thursday, November 12, 2015

The Ohio Oil and Gas Association hosted its fifth annual Technical Conference and Oilfield Expo on November 4 & 5, 2015. This year’s event was moved into the heart of the Ohio oilfield and held in Cambridge at the Pritchard Laughlin Civic Center. 

What really stole the show were the speaker presentations at the Technical Conference, providing in depth discussion on topics impacting the oil and gas industry. Key topics of interest to attendees on Day 1 of the Technical Conference Included:

An overview of the National Stripper Well Association, from chairman Mike Cantrell. Cantrell provided insight into the organization in his presentation Not Your Grandfather's NSWA.

Kevin Kosko with Shale Mountain Resources presented on the Potential and Future Impacts of NORM/TENORM. The presentation covered myths, facts, current and future regulations associated with Technologically Enhanced Radioactive Materials (TENORM) generated during exploration and production activities in the Marcellus and Utica shale plays.

Erosion and Sediment Control and Cost Management from CEC, Inc. Ababu Gelaye gave the audience insight on some current challenges and considerations in management and compliance of erosion and sediment issues, and how those can have direct impact on project completion schedules, the bottom line and potential liabilities.

The Status of Rulemaking Initiatives presented by Scott Kell from ODNR Division of Oil and Gas Resource Management was of interest to many. This presentation looked at the results of amendments to Ohio Oil and Gas Laws passed by the Ohio General Assembly in recent years, and ODNR’s goal to develop effective rules in an efficient manner. Kell walked the audience through the rulemaking process and its design to document considerations of constructive input from the various stakeholders directly affected. 

Ryan Elliott with Vorys, Sater, Seymour and Pease, LLP Columbus office gave an SPCC Update and Compliance with New Rules. This covered the changing regulatory landscape that operators need to be aware of in order to comply. 

Wayne National Forest Lands Minerals Program Manager Richard Jones provided attendees with an introduction to the oil and gas administration on the Wayne National Forest, which has recently become a hot topic. Jones gave an overview on the roll of the Forest Service as the administrator of federal surface estate, mineral development, and coordination with ODNR and BLM.

Tony Villegas with C&J Energy Services provided insight on Lateral Science, Making Engineered Completions, an Every Well Event. Following this Tom Tomastik with ALL Consulting spoke on A Proactive Approach to Addressing Annular Pressure Issues in the Utica-Point Pleasant Shale Play.

Brad Bacon with PDC Energy, Inc. closed out the first day presentations, gaving an insightful presentation on Induced Seismicity—A Growing Concern for the Oil and Gas Industry. This presentation gave the audience a look into some actions that may mitigate the magnitude and the frequency of these earthquakes. 

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Member Spotlight: Jack Miller, Ken Miller Supply, Inc.

Posted By Lyndsey Kleven, Communications Coordinator, Monday, November 2, 2015

 The member spotlight series features legacy OOGA members who have been a member of the Association for at least 10 years. If you would like to recommend someone to be highlighted, please contact Lyndsey Kleven lyndsey@ooga.org

Background information:

Jack Miller had an early start in the oilfield, as many families with multi-generations in the industry do. Today he runs Ken Miller Supply, Inc. the company his father Ken started in 1959, which has grown over the years. Jack recalled the story of how Ken Miller Supply, Inc. came very close to never taking off.

After working for another supplier for a period, Ken decided he’d like to have his own company so he bought four frac tanks and started a business in Wooster, Ohio. Early on in the beginnings of the venture, Ken moved in on a local well with a frac tank on the back of his truck, when unexpectedly the motor went out. Ken had a family with four kids at home, had just quit a reliable job, and his new start-up wasn’t going exactly as planned. He sat on the running board of his truck and cried, knowing he was under and the business wasn’t going to make it.

As luck would have it, a fuel deliveryman that Ken knew was driving down the street and stopped to see what happened. Ken explained how he was done because the motor on his truck went out. The guy chuckled and explained that he could put a new one in for $700, which is what Ken did and never looked back. The company’s first office was a red trailer that didn’t have any heat; Ken worked out of this space for over a year.

“When I was 12 in the 6th grade my dad was in the supply business and it was just him, so he’d get me out of school because he couldn’t measure a load of pipe by himself,” Jack recalled of his start in the business. “When I was 16 I drove a big truck moving frac tanks. We had the world’s largest 300-barrel frac tank rental company, having 500 of them, with 25 drivers. I was one of those drivers for about eight years part-time, I became full-time in 1974 when I graduated from college.”

Jack went to Ashland University and studied marketing, sales, and finance. He was the first person in the family to go to college, and it was very important to him and his family that he had a college education.

“I enjoyed driving trucks but you never knew when you could get home, and on top of that we would work all day Saturday. While driving my truck, I sold a man a million dollars worth of new pipe. My dad pointed out to me that we didn’t have new pipe. And I said, ‘we’re going to get some.’ So we drove down to the mill in 1978 with a million dollar order and we asked if they wanted the order, which they said yes, so then we had new pipe. 

Jack’s business sense cultivated the company into new arenas and expanded the operations. In Ohio, being in the supply business since 1980, Jack has seen many suppliers coming in and out of the state. 

“Our business isn’t sexy or exciting, we just sell a load, sell another load, and it all adds up.”

Company Information: 

Miller Supply sells everything that it takes to hook up a well, from piping, culvert pipe, valves and fittings. As drilling has evolved over the years, the amount of products that are needed to drill a well has influxed. 

“We never once in our industry said the word “recycle” but we have recycled pipe in wells eight times. And no other industry recycles one item every time. No industry recycles as much as the oil and gas industry, because we recycle everything.”

Jack’s resourcefulness is a trait he seemingly got from him father. Ken’s ingenuity was just as impressive and helped operations run more efficiently, this showed when he invented the straight truck. He took a tractor and trailer and cut it in half, stretched it 10 feet and welded in a 10 foot frame and drive line (this was before school buses in 1959).

“My dad called International Harvester and told them he stretched one of the trucks 10 feet to see what they thought. They said he was crazy, not to do it, and that it would never work, but it did. If only he had patented the idea it would have made us more money than any of the other business. He was the first one that thought of the long wheelbase.”

Other people moved tanks with a tractor and trailer and would get stuck. Miller Supply was resourceful and used straight trucks that ran like a four by four.

They also plugged wells and bought used casing from 100 wells a year. Being in the recycling business, this is how Miller Supply got its casing, Jack explained that 100 wells will yield about 300,000 feet of used four-and-a-half casing. 

“We bought these wells to plug and then the Arab oil embargo came in 1974 and oil prices increased. A well that made three tanks a year became a good well, so things really changed, and then we became producers.” 

Hence how the Miller’s drilling company Ken Oil got its start. Ken Oil is an Ohio drilling company that has wells in 14 counties, its early success came from drilling around the old wells they purchased. In 1988 Ken Oil started drilling Rose Run wells and had another good bite at successful drilling. They have a good relationship with the state and get along well the ODRN and inspectors and fellow producers.

“In the Rose Run we learned we had to share. You had to share leases with people and become friends with operators that you never had before, it was really a good thing for Ohio. So now we have more joint ventures then we had in the past because of the Rose Run activity.” 

Today Ken Oil is in more of in a “hanging-on mode,” and Ken Miller Supply is the primary endeavor. 

Various slow times in Ohio caused Miller Supply to expand. When times were slow in Ohio, they took on the mentality that they could either “go home” or go roughly four hours away—about how far a truck will take you in half a day—to start new locations. The company currently has 11 locations in five states. 

“We don’t have partners so we grew really slow because we used our own money, which overall has really been good.”

The businesses employ 136 employees and they are very proud that 70% of those employees have been with the company 15-30 years. Jack says that he employs great people and is also thankful that they stay with him and they don’t have to train new people all of the time.

“Our people, like myself are, our salesmen, our managers, have all driven truck, threaded pipe, so we’re really hands on. This makes us unique as a supplier today and it gives us a great amount of knowledge for our customer’s problems.”

The employees are willing to take their knowledge of the business and share it to help others be successful.

“We have the knowledge to help people. We can learn something in Pennsylvania, then we can tell the guys in Ohio and save them the learning curve. Everywhere the drillers are regionally smart, and our company is regionally smart, but that doesn’t mean we can take what we do and go to Texas.”

Jack cited an example of a Texas company coming up to Ohio the first year shale drilling occurred and brought porta pots with stainless steel toilet seats. He recalled that there was a man screaming in the middle of winter because he was frozen to it. He ended the story by saying, “and that’s why you want to buy Ohio.”

Shale-development’s impact on business: 

After expanding Miller Supply Company to 11 locations in 5 states put the company in a nice position for where all the shale development was taking place. 

“When shale came around that put us right in the main fairway where all of the shale operators are. It’s interesting, in the year 2007 when the shale activity started we sold 25 pipe items, today we sell 79 pipe items. So everything I thought I knew in all my years of learning got thrown away, and now we’re in a completely different category of products.” 

Jack described how shale drilling has made things more difficult for the producer, because they have become so efficient at drilling it has created a glut of gas and packed the pipelines. Also the current state of commodity prices has put everyone in an extremely difficult situation, saying that producers are netting half of what Rockefeller was getting in the 1900s—and he didn’t pay income tax. As a conventional producer Jack says it creates another set of problems. It is really tough to drill a well on the current leases and have it pay for itself.

OOGA Involvement:

Jack has been a member of the Ohio Oil and Gas Association (OOGA) since the early 1970s and has served on the board of trustees since the late 1970s. Getting an early start, Jack is one of the Association’s longest sitting trustees. Ken Miller was also a very active member and trustee, he enjoyed being involved for many years.

Today Jack also serves on the executive committee and is thankful for everyone who does because he knows that it is such a time commitment.  

“We get way out in front of problems, years in front of when Bill and Betty Buckeye start to actually see them. And we have done so much to make it affordable to operate in Ohio—but we need to do more. It is really nice how each president has been so uniquely qualified to do a good job for the Association. And under the leadership of Tom Stewart as former executive vice president, and now Shawn Bennett serving as EVP, we have the right people in place to carry out the policies.”

Jack would say to those involved in any aspect of oil and gas, “get involved with the Association and stay involved. It’s a very inexpensive way to get your finger on the pulse of what’s going on. And it will affect you, so you might as well be part of the solution.” 

In addition to Jack’s commitment to the OOGA over the years, the Miller family has done a great deal to give back to their local community in Wooster, donating resources and community building space. When Jack became involved with the family business, this opened up free time for Ken and he opened the Ken Miller Supply Oil & Gas Museum. The museum houses a vast collection of early gas pumps, drilling machines, tractors, trucks and cars. The museum is located at 7920 Shreve Road and is open to the public the second Saturday of each month from 12:00 pm to 3:00 pm.  

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A National Forest with Local Impact

Posted By Mike Chadsey, Director of Public Relations, Monday, October 26, 2015
Updated: Thursday, October 29, 2015

As I make my way through the highways and back roads of southeast Ohio I often pass through parts of the Wayne National Forest. As it turns out, that large geographical section of Ohio has a long history of natural resource development, including oil and gas, but you would not know that just by looking around. It is truly a national treasure that has dramatic local impact not only by its natural beauty but also the resources it provides. What our forefathers did for today’s generation by setting aside that land for both recreational and economic use was a great vision and plan.

What began in 1935 and now covers 241,191 acres in 12 counties, the Wayne National Forest and has 1,283 active wells in its vast acreage. Those are divided up among federally owned minerals and privately owned minerals. 

The breakdown of mineral ownership looks like this:

·       41% or 98,858 acres of the WNF, oil and natural gas minerals are federally owned

·       59 % or 142,333 acres of the WNF, oil and natural gas rights are privately owned

 

Of the 1,283 active wells in the Wayne National Forest, ownership looks like this:

·       493 are government owned

·       790 are privately owned

 

The breakdown of the location of the federal wells looks like this:

·       Washington County: 285 Wells

·       Monroe County: 117 Wells

·       Perry County: 30 Wells

·       Athens County: 25 Wells

·       Hocking County: 31 Wells

·       Lawrence County: 5 Wells

 

According to the WNF there are approximately 60,000 acres of public minerals that have not been leased. The WNF is not divided into a nice and neat square box, but is instead a patchwork of land purchases over the decades. And there is great potential that privately owned minerals are stuck in the middle and are inaccessible because the federally owned land cannot be leased. This also could raise the question as to why the federal government wouldn’t want to lease the land in order to capitalize on this resource. 

After poking around the web for a bit of information I found a group called LEASE, which stands for “Landowners for Energy Access and Safe Exploration.” They are a group of landowners in and around the Wayne National Forest who want to develop their private minerals but cannot because they are sandwiched in with federally owned minerals. They advocate for access to their property and mineral rights and are asking the government to work with them to do so. The timing could not be better, with horizontal drilling a well pad could be miles outside of the forest and go underneath the public and private property to access the natural gas locked in the shale formation. This would not disturb the surface, and folks could still hike, bike and play in the water without any interruption.

As with much of Ohio, there is an abundant history of natural gas development and the Wayne National Forest is certainly part of that legacy. A legacy that is not totally been utilized, but will hopefully be soon. 

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Energy Development is on Everyone’s Mind These Days

Posted By Mike Chadsey, Director of Public Relations, Monday, October 19, 2015
Updated: Wednesday, October 21, 2015

If you follow national politics you will notice the recent trend from the various presidential campaigns announcing their energy polices. Most candidates from both parties are talking about what they will do if elected and presenting their views on energy and the issues and challenges that come with development. One candidate even choose to make their energy policy announcement in Ohio last week. If you watched the first Democratic Party debate in Las Vegas, four of the five candidates spoke about climate change. It will certainly be a topic of conversation when the Republican Party rolls into Cleveland in a few months for the nominating convention.

I had the chance, many years ago, to be a paid staffer on two different presidential campaigns. You want to talk about a different kind of energy, there is nothing like the rush of working on something as grand of a scale as that; it was an amazing opportunity.

Of the candidates that have talked about their energy plans and vision, many have talked about the Keystone XL pipeline, LNG exports, the Clean Power Plan, methane emissions, ozone standards, development and rules on federal lands. I would encourage you to check out the plans, as they vary as much as the candidates and parties do.

With that being said, at the national level there is a lot of the talk these days about the different forms of energy and the ups and downs within each market, as well as the debate over items like crude oil exports or drilling in the artic. These topics are important but don’t forget to pay attention to what your local candidates are saying as most are up this November. This year, a local election year, seems to already have been forgotten about before it even takes place, due to the elephant (or donkey) in the room, which is the national election over a year away.

I would argue that as important as that election will be, your local officials play a role in your day-to-day life more than President “so and so” ever will. Take the Community Environmental Legal Defense Funds charter amendments as an example. I doubt those are on the President’s radar, but a large group of mayors and trustees in eastern Ohio have been talking about them these last few years. Also look at the pipelines that current do and will run through northern Ohio, and discover what the various city councils and county commissioners have to say about those activities. What do they think about drilling? How do they spend monies earned from leasing and royalties? Do they work with you to resolve issues?

My advice is don’t skip out on this election while paying attention to what is next. Much like in football, you can only run one play at a time and those who try to think about what is next make mistakes on what they are doing now. Local elections matter.

Ohio will no doubt be active this year and next as the long list of national candidates make their way to the Buckeye State campaigning. As with this presidential election, like those in the past, look around when you see those events on TV, you will find many local candidates lining up to support their favorite. But they can’t be there if we don’t elect them first this year. With either political party, you win from the ground up. Like I said, local elections matter. 

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