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Member Spotlight: Jeff Moore, Moore Well Services, Inc.

Posted By Lyndsey Kleven, Communications Coordinator, Tuesday, June 30, 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:

Jeff Moore and his brother Keith grew up in the oil and gas industry, taking the lead from their father Bob. Once the brothers reached adulthood, they already had an idea of what they wanted to do.

Moore says, “We were initiated into the oilfield by growing up with our dad and working from day one, our education is straight from the field.”

Although Jeff himself never considered going outside of the oil and gas industry, there have been opportunities where he could have gone in a different direction. All in all, he always felt it was best to stay loyal to the family business.

About Moore Well Services, Inc.:

Bob Moore started Moore Well Services, Inc. in 1996, following the closure of KST Oil and Gas Company, and set up shop just down the street in Stow, Ohio.

“We’re a conventional company trying to do conventional things,” Jeff said. “We’re looking for other options and avenues to increase our revenues in times like these, just like everyone else.”

The company has 10-15 employees and will basically do everything that involves oil and gas work. Moore Well Services has 240 of its own operating wells; does well service operations, all the way to oil spill clean ups, and has disposal wells, including a 7,000-foot well in Cuyahoga Falls. The staff is made up of full time pumpers, a service work team, full roustabout crew, full rig crew, mechanic, and water truck driver.

Working for his father since 1985, Jeff, along with his brother Keith, found themselves transitioning towards running the company in 2007 when their father and his business partner both became ill. Jeff said it was a nice transition to have his father around for the following two years to advise how to run things. In 2009 when their father passed away, Jeff and Keith took over the company.

“Our work load has definitely shifted to the service side right now. We are pushing really hard to get a bigger customer base, broaden our footprint, and get as many customers as we can. In the late 2000’s we were more focused on production operations and drilling as much as we could.”

Most of their producing wells span from Cleveland to East Liverpool, with the majority of the wells being in Summit County. Recently Moore Well Services branched out into the Ohio Department of Natural Resources (ODNR) orphan well program. In late December, Moore Well Services worked to plug a leaking natural gas well in the Admiral Ernest J. King Elementary School, known as the Admiral King Elementary project.

“We physically had to remove a part of the school, cut a hole in the gymnasium floor and mobilized operations inside the gym to plug the well. That was probably our most high profile plugging project, it was extreme, the school district shut down and evacuated the school for three months. We were able to set new surface pipe and eventually plug the well, along with another orphan well located in the same area.

The ODNR orphan well program has kept Moore Well Services and other contractors very busy over the past year. With the downturn in oil and natural gas prices, it has been a good focus while business is slower. 

Another project Moore currently has an interest in has been the processing and marketing a new natural saltwater product call AquaSalina. The product is used as a pre-treatment for de-icing roads and dust suppressant, it is all-natural and has a low freeze point (-15° F), which is lower than man made salt brine.

Moore partnered with Dave Mansbery of Duck Creek Energy, Inc. the innovator and creator of AquaSalina. They repurpose conventional brine water from wells that have been in production for over a year and run it through a vigorous filter process developed by Mansbery. 

“The product is a pre-treatment for roadways, parking lots and driveways. It’s being produced, repurposed and sold to ODOT, municipalities, and landscapers statewide and across the US.” 

Repurposing brine water and channeling it into a practical product is both innovative for the industry and is helping to cut down on the need for other disposal methods. The product is currently being sold at multiple home improvement locations across Northeastern Ohio, an area that can greatly benefit from a product like this during its harsh winter months.

OOGA Involvement:

Joining the Ohio Oil and Gas Association (OOGA) in 1996, Moore has been a member of the OOGA for nearly two decades. Moore is currently involved on the Producers Committee and has previously been involved with the Environmental Committee. He is also active in the Regional Producers meetings and was elected Region 1 Producers Representative.

“You have to be a contributing member to the Association, it’s important for members to stay loyal and for the Association to stay loyal to all of its members, both conventional and shale. It’s constantly on-going in this industry, with all of the issues, and the committee meetings and Association help to keep everyone up-to-date.”

Moore cited the greatest value being in all of the work that goes on behind the scenes with the OOGA. Also that the Association does a good job of keeping its members informed of everything that is going on. He also highly regards the Ohio Oil and Gas Energy Education Program (OOGEEP) for getting out on the front lines to educate the general public, often times to unapologetic antis.

State of the Industry:

Moore cited the decline in current market prices as putting everyone in a tough position, as well as the increase of shale drilling being the source of increased regulations and awareness across the industry as a whole. 

“I think the biggest thing we need in our industry right now is stability, we need a stable market price, the current state is way too low. It’s very hard and puts everyone in a position where they are constantly having to reevaluate, cut back hours, cut back manpower, and still maintain operations”

The company recently relocated their office from Stow to Mogadore as other means of cost savings and to tighten their belt wherever the can. Moore sees the next 5 years as being a lot of the same for the conventional driller. Currently they’re feeling the repercussions of Marcellus gas, and he feels the Utica will keep coming following the Marcellus peak. 

“We’re in for a long hull, to obtain stabilized pricing. It is a cycle with a new twist, regarding the shale play in the area. Enforcement has increased along with some new regulations influenced by the recent shale activity. Whether you are a conventional producer or a shale producer we are all have a target on us with the media and anti-groups.”

Moore said fracing is constantly being accused as problematic. He noted more than 30 years ago wells all across northeastern Ohio have been hydraulically fractured. 

Shale-development’s impact on business: 

Moore Well Services works on conventional drilling, producing and servicing, when asked if they any interest in the Utica, at any capacity, Moore said, “I think you have to have interest.” The company’s current equipment isn’t capable of Utica work at the present time. Moore compared his current equipment to shale equipment that he’s seen in Carroll County, and described their (shale) work over machines as being bigger than Moore’s (conventional) drilling rigs.

“We’re conventional. We have not taken any shale water in our disposal water. We missed an opportunity, but it was a calculated risk keeping true with our conventional partners.

Moore feels he has missed some opportunities financially, but wanted to stick with its loyal customer base the company has developed relationships with over the years. Moore Well Services has been able to keep its rates low and is trying to stay steady in a rapidly changing world.

“Shale impacted conventional operators, dramatically, in a negative way. We’re still dealing with conventional wells, conventional productions and we’re getting a sub-conventional price, and everyone is in a tough position currently. Most of our gas is both produced and sold locally, and very few of us get into the main transmission lines at this point. Our gas comes in, turns around and goes right back into the local communities and I think there’s value in that.”

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America’s Unconventional Energy Opportunity

Posted By Lyndsey Kleven, Communications Coordinator, Thursday, June 18, 2015

A win-win plan for the economy, the environment, and the low-carbon, cleaner-energy future

In a joint effort last week, the Harvard Business School (HBS) and the Boston Consulting Group (BCG) released a new report America’s Unconventional Energy Opportunity. The report finds that U.S. shale drilling provides immense opportunity for both the economy and the environment. The report was an independent research effort with no outside funding support, with BCG providing in-kind pro-bono support to this complex topic.  

The report says the United States’ single largest source of competitive advantage and economic opportunity lies within its unconventional gas and oil reservoirs. Economically the benefits are profound, by 2030 these could be some of the results: 

· Support 3.8 million jobs with wages twice the national median—half of which would be accessible to middle-skilled workers

· Produce average annual energy savings of $1,070 per household from low-cost natural gas, up from nearly $800 today

· Contribute almost $600 billion in annual GDP and $160 billion in government tax revenue from production-related activities alone, with ripple effects in energy-intensive industries such as plastics, metals, and heavy manufacturing 

Additionally remarkable was the study highlighted the environmental triumphs that shale development brings. The environmental effects have been seen, and will continue to be seen in the progress the industry is making towards reducing greenhouse-gas emissions. This was no surprise to anyone working in the industry, when the report recognized that shale is speeding up our transition to a cleaner, low-carbon energy future. Natural gas is proving to be an inexpensive alternative in helping reduce air pollution and contributing to multiple new modes of transportation—natural gas powered vehicles, ships, and trains—which are cutting carbon.

Domestically the benefits we are reaping economically and environmentally are profound. But the study does not stop there; it goes on to accentuate how shale development will also bring geopolitical benefits. Having this resource and utilizing it for all of its returns will help to improve our energy security and cut back reliance on unstable regions. It also opens a new means for backing our trade deficit and building diplomacy abroad.

The primary risk would be failing to capitalize on this historical opportunity America has within its shale resources. The report observed how the U.S. is currently entangled in a misinformed and unproductive debate over hydraulic fracturing. A strong focus on “ban-fracking” campaigns across the U.S. with state and local oppositions is stalling progress. Instead of fully capitalizing on the opportunities, many areas stand in political gridlock. 

We have seen this in Ohio, and continue to see it among local control groups. Lack of awareness on: regulations, environmental impacts and climate concerns cause these groups to rally in attempts to ban or delay development. When this occurs no one is winning.

Headway is starting to happen and will continue to progress as more people are seeing the benefits and recognizing that the opposition groups are spouting ill-informed information. A new poll by Robert Morris University shows that support for fracking is growing with increased awareness. About 56% of people polled nationwide said they support hydraulic fracturing from shale; this is up from 42% in November of 2013.

The take away is that shale is providing the U.S. with resources unimaginable just a few years back. The benefits are driving the economy, and will continue to as we develop our natural resources in an environmentally responsible and beneficial way. More people are continuing to see this side of shale, as the development of unconventional energy will offer an unparalleled competitiveness and U.S. opportunity for many years to come.

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Long-Awaited EPA Study Finds Fracking Has Not Led to Widespread Water Contamination

Posted By Katie Brown, PhD, Energy In Depth, Thursday, June 11, 2015

The Environmental Protection Agency (EPA) has released its long awaited, five-year study, which finds “hydraulic fracturing activities have not led to widespread, systematic impacts to drinking water resources.”

As many have noted, this is the most important study on hydraulic fracturing to come out over the past five years – a fact that EPA’s Science Advisor and Deputy Assistant Administrator of EPA’s Office of Research and Development pointed to in a press release,

“It is the most complete compilation of scientific data to date, including over 950 sources of information, published papers, numerous technical reports, information from stakeholders and peer-reviewed EPA scientific reports.”

EPA today also released nine peer-reviewed scientific reports, which played a big role in contributing to EPA’s overall groundwater study.

EPA’s study actually builds upon a long list of studies that show the fracking process poses an exceedingly low risk of impacting underground sources of drinking water.  It corroborates a “landmark study” by the U.S. Department of Energy in which the researchers injected tracers into hydraulic fracturing fluid and found no groundwater contamination after twelve months of monitoring. It is also in line with reports by the U.S. Geological Survey, the Government Accountability Office, the Massachusetts Institute of Technology, and the Groundwater Protection Council, to name just a few.

The report contradicts the most prevalent claim from anti-fracking activists, which have made “water contamination” the very foundation of their campaign against hydraulic fracturing.  As EID reported in March, after heralding the report at its inception, anti-fracking organizations like the NRDC and InsideClimate News (ICN) later went into damage control, downplaying the forthcoming report, likely due to what it would conclude.

Hydraulic fracturing has brought cleaner air, significantly reduced greenhouse gas emissions, created millions of jobs, reduced energy prices, strengthened national security, and turned the American economy around.

With this new report, it couldn’t be clearer that shale development is occurring in conjunction with environmental protection — and the claims by anti-fracking activists have been thoroughly debunked.

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Member Spotlight: Mark D. Jordan, Knox Energy, Inc.

Posted By Lyndsey Kleven, Communications Coordinator, Monday, June 1, 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:

Mark Jordan’s family has a notable history of oilmen, preemptively leading Mark into the industry at a young age. His grandfather W.F. Jordan started in the industry in the 1920s as a roughneck working on rigs in Texas and Oklahoma. He became good at what he did, and gained ownership of two rotary rigs. W.F. later moved the rigs from Oklahoma to southern Illinois where he established himself over the next 40 years as a well-known drilling contractor.

Mark’s father Jerry was raised in Illinois and grew up working as a roughneck for W.F., Jerry went on to become a geologist and lawyer, leading a storied career as an attorney, oilman and association leader.

Mark started out working for companies his dad was involved with.

“The first summer I worked for American Exploration I worked in the office doing administrative things. The following summers I worked out in the field for American Exploration and The Clinton Oil Company.”

Mark spent a large part of his youth in Columbus, until he went to Mars Hill College in Ashville, North Carolina where he received a business degree. After that he earned his two-year Associates Degree in Petroleum Technology from Seminole State College in Oklahoma. Mark finished up his schooling in 1984, and was planning to work in Oklahoma—until the bottom fell out of the oil and gas industry that year, having the greatest initial impact in Oklahoma and Texas. The Clinton Oil Company was still doing well at the time, so Mark came back and took a field supervision job in North Eastern Ohio for the next 4 years.

“I was working with contractors and other company employees in getting wells and pipelines hooked up, and gas flowing. We were doing well at the time, drilling 70-100 wells a year and kept really busy.”

In 1986-87 the downturn started to hit Ohio too, and in 1988 things got so slow that Mark came back to work out of the Columbus office doing gas marketing. The subsidiary, Clinton Gas Marketing, was flourishing which is where he worked for the next 5 years.

“Gas marketing companies were new and could make a good margin, and it was a good field to be in. I was a gas buyer for local Ohio gas, which was neat because I was meeting producers all over the state.”

After that Mark moved over to plugging and ran the administrative effort of plugging a large number of wells for CGAS. From here, he moved onto Project Development focusing on Rose Run drilling projects.

“We needed to bring in a lot of capital/partners to drill these types of wells. Our geology department was one of the best in the state and that made my job easier.”

In the mid 1990s Mark became the Vice President of the land department. Mark greatly enjoyed this position and had a lot going on at the time. CGAS developed various held by production acreage, and had to fill in a lot of leases to make up the proper blocks for seismic surveys. This was Mark’s last job he held at CGAS as Enron bought out the company in 1996.

“Market conditions changed, causing them to move in a different direction and they started downsizing the company. I recognized this and made a deal to leave the company early. I was also able to acquire 120 marginal type wells that they had in Muskingum County, which helped me to start Knox Energy.”

It ending up being a great platform for Mark to leave the company, he had worked for CGAS for 14 years and gained a wealth of experience.

“I learned a lot because of all the different jobs I had and it really helped me to start my own company.”   

About Knox Energy, Inc.:

November of 1998 is when Mark left CGAS and started his own company, Knox Energy, Inc.

“My office was in the basement of my house, and I remember my Ping-Pong table was my filing cabinet. It was terrible market conditions; $9 oil and $2.50 gas.”

Mark’s father Jerry helped him get the company started, right around the time Jerry was becoming the chairman of the Independent Petroleum Association of America. Jerry had been watching the supply and demand of natural gas and encouraged Mark to start the company.  He said, “hang in there, Mark, there’s going to be a boom”. They soon bought another 260 wells from CGAS. 

“A year or two later one of our friends Harry Berry decided to retire and sell his service rig, so we decided to buy it because it fit well with all the older type wells we had.  After we acquired the existing production we be began drilling new wells as the price of gas began to rise.  To date we have drilled over 400 Clinton and Berea wells.”

Mark moved into an office on the east side of Columbus and began hiring a staff. Many of his staff were former employees of CGAS, which worked out well as it was being downsized and Knox Energy was growing.

“The people that helped me build Knox Energy are unbelievable and have such great industry knowledge.”

Currently Knox operates approximately 620 wells throughout Eastern Ohio, with the main concentration of those being in Knox and Licking Counties.  It also runs a service rig division named Berry Well Service which operates five service rigs and other equipment, and is located in Gratiot near Zanesville.    

OOGA Involvement:

Mark became a member of the Ohio Oil and Gas Association (OOGA) in the early 1990s.

“Being involved with the Association has really helped my company. One of the keys to business is networking with your industry peers. It’s so important that you do that and you want to stay as connected as you can. You have to give back to the industry because it gives so much to us.”

Mark first began getting more involved with the Association through its regional producers committees, he credits Tom Stewart for pulling him in to get more involved, as well as his father. He is presently on the Executive Committee and has learned even more being on the front line of all the decision-making, and holds serving in this role as an honor.

“The greatest value is what you can learn, and how you can help your own company. You can help your company by being involved with OOGA, because you know all the things that are affecting your industry, from new regulations, to what the predictions are for the future, to new technologies.”

Looking ahead:

Mark has been in the business since the late 1970s, and would never have believed the advances that are taking place. Specifically, where the industry is at today with the shale revolution. Mark noted that horizontal drilling has affected conventional producers in negative and positive ways.

“We have to be involved with everything that can impact our industry. If you don’t stay very alert as to what all is being talked about, whether it be regulation, or new technologies, if you’re not staying on top of it all you can be affected badly. We’ve got to help our industry have the best environment possible.”

Mark emphasized the importance of being alert to what’s influencing the future, and being able to affect the future by planning. 

“The current market conditions are very tough but it will turn around at some point. What I’ve found is, the producer community in Ohio is really good at working together.  We all need to stay involved in the association in order to try and make our industry conditions as best as they can be.”

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OOGA 2015 Summer Meeting Preview

Posted By Lyndsey Kleven, Communications Coordinator, Wednesday, May 20, 2015

The 2015 OOGA Summer Meeting will be held at the Zanesville Country Club on July 27th – July 28th bringing together the membership and top industry leaders. The meeting will include a legislative update on issues impacting Ohio’s oil and gas industry followed by a schedule chockfull full of activities.

The Monday golf round will consist of competitive stroke play at Zanesville County Club. Tuesday golf rounds will include competitive stroke play at Longaberger Golf Club and scramble rounds being held at Zanesville Country Club and Eagle Sticks. A new venue will be hosting this year’s shooting activities due to scheduling conflicts.  Ken Miller Supply is sponsoring the shooting activities that will take place at Dillon Sportsman Center.  Shooting activities will include skeet and trap fields plus rifle and pistol ranges. Tennis, euchre, corn hole and other miscellaneous events will take place simultaneously at Zanesville Country Club.

As has been the tradition since 2006, the 2015 Oilfield Patriot Award event will take place on Monday evening, sponsored by Producer Service Corporation. Festivities will include a reception, dinner, award ceremony, and a video presentation honoring the recipient.

As many of you know the annual Summer Meeting has grown in size over the last few years to reflect the changes of Ohio’s oil and gas industry. Registration for this year’s event will take place through the new OOGA member services platform. Login and register early for the 2015 Summer Meeting at www.ooga.org

Click here to download the flyer

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Feds Authorize Dominion Cove Point Liquefied Natural Gas Exports

Posted By Lyndsey Kleven, Communications Coordinator, Thursday, May 14, 2015

On May 7, the U.S. Department of Energy issued a final authorization for Dominion to export domestically produced liquefied natural gas (LNG). Dominion’s LNG operation, Cove Point, located on the Chesapeake Bay in Maryland has been approved to export LNG up to 0.77 billion standard cubic feet per day (Bcf/d) of natural gas for a period of 20 years.

LNG is formed when natural gas is cooled to around -260 F, which becomes a clear, odorless, noncorrosive, nontoxic liquid. According to the American Petroleum Institute, the volume of natural gas shrinks by approximately 600 times when liquefied. LNG has been handled safely for decades, with more than 100,000 LNG vessels making trips without incident.

Highly regulated, the LNG industry is overseen by the Federal Energy Regulatory Commission, the Department of Transportation, the U.S. Coast Guard and the Department of Homeland Security, just to name a few. Under the Natural Gas Act, countries that do not have a free trade agreement (FTA) with the U.S. must be granted permission from the Department of Energy to allow export authorization. It has taken years to gain the federal support needed for the U.S. to export domestically produced LNG to countries that do not have a FTA with the U.S.

Approval of LNG exports is huge—positively impacting: the industry, Dominion and other LNG exporting companies alike, numerous states producing the resource, Calverty County (the home of the facility), and it will affect the entire nation. The Cove Point liquefaction project is estimated at $3.4-$3.8 billion, creating thousands of construction jobs, 75 permanent jobs and expected to create an additional $40 million in annual tax revenue for Calverty County.

In Ohio, Dominion operates Dominion East Ohio, one of its two local distribution companies and has additional gas processing infrastructure in the state. The Ohio transmission system and Ohio natural gas will now be part of the network used to send product to Cove Point for export.

In the U.S. Energy Information Administration’s Annual Energy Outlook for 2015 (AEO2015), it predicted natural gas becoming the dominant U.S. energy export, pending the enactment of additional policy changes. With its new federal approval, the Cove Point facility is projected to be operational in late 2017. On point with reality, the report found the U.S. becoming a net exporter of natural gas as early as 2017.

Also in the AEO2015 forecast, domestic natural gas production is expected to continue increase and in 2015 alone could continue to do so at a record average production rate of 72.4 Bcf/d. In Ohio, this resource is abundant in the Utica shale, and many other shale formations across the country contain the resource.

According to Dominion, once completed Cove Point will produce about 5.25 million metric tons of LNG annually, for it’s already contracted service agreements with two overseas companies. LNG transported from Cove Point can reduce global greenhouse emissions by millions of tons a year as a replacement for coal that is currently used in overseas electricity generation. Shipments from Cove Point are projected to reduce U.S. trade imbalance by at least $2.8 billion annually, to as much as $7.1 billion. 

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OOGA Member Spotlight, Dick Poling

Posted By Lyndsey Kleven, Communications Coordinator, Monday, May 4, 2015

The member spotlight series features legacy OOGA members who have also 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:

Richard C. Poling, grew up in Hocking County on a dairy farm. His father owned the farm and the dairy business was not exactly booming in the late 1950s and early 1960s. Poling’s father shifted his focus from the dairy farm and started trading leases, eventually leading him to start pumping wells. This became Poling’s initial exposure to the oil and gas industry. Poling was an only child and spent a lot of time with his father; in his early childhood he was around the oil wells and helped pumping and hooking up wells.

Poling decided he wanted to become a surveyor and went to school at Muskingum Technical College to study drafting and surveying. He worked doing this for one year until the oil embargo of the early 1970s sent the country into a recession and Poling was out of a job.

In 1974 Poling went to work for Oxford Oil under Bill Straker, as a draftsman creating Oxford’s maps, permits and applying for permits, and he also did leasing. As Oxford Oil was picking up more business Poling began working in the office and out in the field. In 1976 Straker encouraged Poling to go back to school for Petroleum Engineering. Poling enrolled for school in Zanesville (currently Zane State College) and received his Associates Degree in Petroleum Engineering in 1977. Poling continued working for Straker at Oxford Oil fulltime while he obtained his degree and the two years after receiving it.  During that time Poling expanded his experience by added well completions to his growing list of capabilities.

In 1979 Poling left Oxford and went to work for Bremco to help take care of some of their wells. Poling left Bremco in 1980 and went into business for himself. The early 1980s was a very busy time for the industry and Poling started out by operating and drilling wells for Jerry Olds.

“He was doing a lot of consulting work, so he lined me up a lot of clients to do other oilfield work for and well completion,” Poling said. “I kept doing this until I got enough production on my own, and with him, to really make it all work.”

About R.C. Poling Co., Inc.:

R.C. Poling Company was formed in 1980 and is based out of Junction City, Ohio in Perry County. Poling started the business by doing anything that needed to be done, from buying and selling wells, drilling and producing wells, and even plugging wells. Poling and his 33-year-old son currently operate 175-200 conventional wells mostly throughout Southeastern Ohio, the business also employs an office manager.

“We’ve done a lot of drilling and completions and we’ve put together drilling deals,” Poling shared, “A lot of the local people that are in the oil and gas industry are partners with us on wells, and we purchase some older wells.”

The fluctuating oil market has a great impact on an independent oil producer’s drilling plans for the year. Poling said in good times they would drill 10 wells, and only one in poorer market conditions. When times are slower they focus on doing a lot of their own maintenance work and would consider buyouts of other companies.

“It has treated me good, it is good work, I have enjoyed it, and I have had a lot of fun,” Poling said. “I have met a lot of characters over the years. I used to say you could spend a day with the ‘old-timers,’ do a hard day’s work and have more fun than if you paid somebody for work. I could tell stories all day long about the oilfields.”

Poling thinks of R.C. Poling as a typical, small-sized, oil and gas producing company. Poling said before the shale boom, there were thousands of companies like his around. There were a few big companies like Oxford Oil and Ken Oil but the rest of the producers were mom and pop operations. Some of the producers had 20 wells, other would have upwards of 500 wells, but take out the handful of big companies and the rest were similar to R.C. Poling.  

To stay informed with what is going on in the energy industry Poling is on the board of directors of South Central Power Company, largest electric cooperative in the state of Ohio, with 110,000 members. He has also been a chairman of Commodore Bank, in Somerset for 25 years.

“You learn a lot about trends in the energy business in general. And in the banking you learn a lot about finances, investments and monetary policy and why things are done the way they are.”

OOGA Involvement:

Poling joined the Ohio Oil and Gas Association (OOGA) in 1974 when he started working for Oxford Oil. He maintained his individual membership when he left the company and started working for himself. Poling is active on the OOGA Board of Trustees and has been since 1996.

The value Poling sees in the OOGA is volume of members and the dimension of voices this group provides. “The bigger the voice, the louder the voice, the more they pay attention to you. No one wants to listen to me, but they will listen to 3,000 of us.”

Growing up around the oil and gas industry in southeastern Ohio, Poling has known former OOGA Executive Vice President Tom Stewart since childhood.

“I can remember, when I was a kid, going out when Tom’s dad fraced one of the first wells that was hydro fraced in this part of the country, in the late 1950s,” Poling shared. “We went to that, just to see it take place. Everyone in the area came to see it, there were cars parked for miles. They were going to hydraulically fracture a well, and that just wasn’t heard of at the time. Especially with the amount of water that was needed, everyone was rather skeptical. It made a very nice well, from then on they were fracing.”

Poling credited Stewart as being a great supporter for the oil and gas industry over the years. Poling said, “Tom Stewart has been such a great advocate for the oil and gas industry because he grew up with it, he knows what it is, and he knew what the people he was working for were thinking about and how they work. He was out there to help us and protect us—he’s always been an advocate for small oil and gas producers and has done a good job over the years.”

The Association works to represent conventional and horizontal drillers, and Poling feels well represented as a conventional driller. He says that all people in the industry should bind together and support the OOGA or that other opposing groups will conquer.

Shale-development’s impact on business:

There is no shale drilling in the areas where Poling operates, and Poling only drills conventional wells. However, Poling has seen the development’s impact creating a shift in attitude among landowners. Most notably, landowners have developed a sense entitlement overvaluing their perceived worth in royalties.

Poling also attributed increased regulatory standards on the oil and gas industry as a ramification of the shale boom.

“The industry is changing, in my opinion, they keep squeezing the smaller producer out. Between government regulations, environmental regulations and liability issues, you’ll have to be a decent sized company that’s able to afford to have the staff to keep up with it all.”

Poling again recounted drilling memories from his earlier years. “I have been around fracing for over 50 years and I don’t know of one documented case where it’s ever hurt anybody or harmed anybody. In 1958 we would go watch frac jobs and the road would be blocked off for it. The farmers down in the hills hadn’t seen anything like it.”

Dealing with Anti-Development

In dealing with anti-development, Poling sees a common theme in viewpoints, with a big issue being the idea that everything can be 100 percent renewable.

“You’ve got to have energy. Solar, wind, and other renewables have not developed enough yet to fully support us. They will in their day and there is a place for them—we’re starting to see more and more people use them. What the American people want is clean, reliable, cheap energy, whether its electric, natural gas or gasoline, whatever they’ve got, and so far nothings has beat natural gas and coal fired electricity.”

Poling sees natural gas as being the key player in future energy. In an electrical shortage natural gas would be the quickest fix. He also think the future will include a lot of personal gas generation. Poling stated that many people have back up generators now that run on natural gas, and thinks we could see more fuel cells in the future.

“You can not run an industrial nation on solar power. Nothing is going to be as cheap or as efficient as coal fired generation or base load generation. People don’t realize that, and they probably won’t ever realize that until they get cold or dark.”

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America's Energy Future, Outlook Through 2040

Posted By Lyndsey Kleven, Communications Coordinator, Wednesday, April 29, 2015

The U.S. Energy Information Administration conducted its annual study and analysis of America’s Annual Energy Outlook for 2015 (AEO2015), and the future is bright. The report contains energy forecasts to 2040 that hold varying predictions taking into account if crude prices were to rebound quickly and remain high, as well as the reverse. The findings show what can be expected among various scenarios shaping the domestic energy market over the next 25 years.

Unleashing crude oil from tight formations thanks to hydraulic fracturing allows for strong growth in production through 2020, in turn causing a decline in net petroleum imports and a growth in net petroleum exports, in every pricing scenario. AEO2015 shows a slowing in growth of domestic production after 2020 offset by increased vehicle fuel economy standards and more efficient technologies decreasing dependency.  

In 2040, 17% of U.S. crude oil and petroleum products will be imports, this cut by nearly half as the country was importing 33% of its total supply in 2013. In the high oil price and high oil and gas resource cases the U.S. can become a net exporter of petroleum and other liquids after 2020 as we continue to efficiently tap our resources. The current federal administration has recently vetoed the cross continental construction of the Keystone pipeline, an oil pipeline system crossing the United States into Canada.

Natural gas will be the dominant U.S. Energy export, forecasting that U.S. regulation changes will allow for exports. A handful of Ohio’s congressional delegation are currently trying to enact legislation and advocating for a lift in the ban on some exports. Upholding that allowing for exports of Liquefied Natural Gas (LNG) will be a start that allows the U.S. to turn closer to securing its energy independence.

The report finds that the U.S. could soon become a net exporter of natural gas as early as 2017, transition from its current position as being a net importer. Many areas of the country is blanketed with this resource, much of which we are seeing in Ohio with the Utica shale. Looking ahead to 2040, the lowest projection shows the U.S. exporting 3.0 trillion cubic feet (Tcf) in a low oil price scenario; in prime market conditions this could exceed 13 Tcf. In order to do so, additional infrastructure needs to be built.

To allow the natural gas to flow across U.S. regions, a stronger pipeline infrastructure needs to be put in place. This could require realignment of existing lines and new construction projects.

In Ohio two major pipeline projects are currently in the planning process. The Rover Pipeline LLC is approximately a $3.7 billion interstate natural gas project that could move 3.25 BcF a day, gathering in West Virginia and Eastern Ohio for delivery to the Midwest Hub near Defiance, Ohio. The NEXUS Pipeline project is approximately a $2 billion investment to move 1.5 BcF a day from Ohio to Ontario. These would allow for transportation of natural gas across Ohio states and are currently being mapped out with plans to have them built by 2017.

In turn, with growth in production and new infrastructure to transport the product will also contribute to expansion of several manufacturing industries. In Ohio we are seeing this first hand, one particularly impressive project in the works is the recent announcement of Belmont County being chosen as the potential site for a $5 billion ethane cracker plant. Capitalizing on the region’s natural resources, this type of investment will do great things for our state.

The all-intensive AEO2015 paper can be found here, including more than 150 pages of the United State’s energy outlook.

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Severance Tax and Budget Update

Posted By Brian Hickman, Director of Government Affairs, Operations Managing Director, Monday, April 13, 2015

While a revised budget proposal is still being worked upon by the Ohio House of Representatives, some media reports are detailing significant changes in the Governor’s original proposal. Some of these changes will have an impact on the Ohio oil and gas industry. An official announcement on these changes is expected this Tuesday (4/14) before the House Finance Committee.

As you may recall, Governor John Kasich provided a $72.3 billion executive budget proposal to the House for consideration. The proposal included a projected personal income tax cut of $5.7 billion, while increasing taxes by the tune of an additional $5.2 billion in an effort to offset the lost state revenue. The Governor’s vision is to move the Ohio economy from a service-based economic system to a more consumption-based model going forward. 

Overall, the House is expected to remove several provisions that would raise taxes upon certain businesses. Expected to be removed are the increases in a severance tax on oil and natural gas production, the Commercial Activities Tax (CAT), the state sales tax, including a general broadening of this tax to several services not currently included.

While several of these provisions were for the goal of reducing the state’s personal income tax, House Republicans are expected to still offer a sizeable reduction in the tax due to the retention of a few of the Governor’s priorities (IE – a reduced cigarette tax increase) and a continued strong state revenue projection. The cut is expected to be in the neighborhood of a $1 billion overall reduction.

In addition to these tax changes, the House is expected to also make changes to the oil and gas regulatory components as well. At this time, the extent of those changes are not as definitive as the tax provisions.   

Again, the state budget process is far from over. Now, as the House nears the end of their process, the bill will move onto the Ohio Senate where it will see more changes. Then, a conference committee between the House and Senate will hammer out the final version of the bill being proposed by the state legislature for the Governor’s signature.   

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Member Spotlight: Joseph W. Haas, Reserve Energy Exploration Company

Posted By Lyndsey Kleven, Communications Coordinator, Wednesday, April 1, 2015

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

Background information:

Joe Haas had an unconventional start in the energy industry. Haas spent a number of years in the navy in the 1960s, working for Admiral Hyman G. Rickover; Rickover was the United States Navy admiral who directed the nuclear propulsion program.  It was a joint command between the Navy and the Atomic Energy Commission.  Haas was a Petty Officer assisting with the interview process for all officers entering the Navy’s nuclear power program,  helped coordinate the applications for security clearances for successful candidates and performed other administrative functions. The experience launched his fascination with the role energy would play in our country’s future. Following his years in the U.S. Navy, Haas finished his pre-law program at Cleveland State University and was headed to law school.

“I talked my brother Bob into going to law school with me.  He went and I didn’t,” Haas said. “I went to work for my brother Jim who had started a small oil and gas company, focused primarily in Geauga County.”

In 1972 Joe went to work for his brother, Jim Haas, who had started American National Petroleum and knew immediately that the oil industry was where he wanted to spend his career.  It was a small growing business, Joe worked as a Landman, financial officer and any other job that needed to be done. Soon after starting, his brother bought a drilling rig and Joe helped manage that for a couple of years.                                                                                                                    

“I loved the industry.  So I basically stayed and didn’t go to law school. Jim loved wildcatting and we worked on several large land programs in Ohio and New York.  At one time we had 100,000 acres of oil and gas leases in the Finger Lakes region of New York.  We sold those properties to Earl Linn (Mike Linn’s father) and Colt Crucible Steel.  Several hundred wells were drilled on those leases.”

Jim and Joe worked together until 1976.  

“I had my own ideas on how to run a business and Jim had his. So at the age of 29 I started my first company, which was called Pioneer Resources.”

Pioneer Resources focused on land acquisition and worked throughout Ohio and New York, doing several land acquisition programs.  Like many small independent companies at the time, Pioneer had difficult financial times after the commodity prices plunged in the mid 1980’s.

From 1988 to 2000, Haas did oil and gas land work and gas marketing in Ohio, Pennsylvania and New York.  In 2001 Haas formed Reserve Energy Exploration Company, which he still runs today.

About Reserve Energy Exploration Company:

Haas is the President of Reserve Energy Exploration located in Auburn Township, Geauga County. The company’s business model is to locate new reserves beginning with the development of a geological concept, reviewing historical data and using this experience to identify potential areas that may support oil and gas exploration. Upon completing the initial studies, a land team will research lease availability and infrastructure. Reserve would then typically partner with an operating company and begin to acquire leases.

The exploration team will then high grade the prospect with an in-depth subsurface study and geophysical studies that furthers the likelihood for a successful drilling program.  Depending on the size of the program, Reserve and its joint venture partner will begin developing the project or in the case of larger (10,000+ acres) seek a large independent to jointly develop the prospect. Many times Reserve will continue to do land services after the prospect is in the development stage.

“We’ve worked with many of the operators in Ohio, helping them put their land programs together.  We work with a lot of the legacy operators to help them augment their own land departments and have also worked with some of the largest independents in the country.”

Haas has a daughter and three sons, all of which have joined Reserve Energy in various capacities.  Over the course of the last 12 years, all of his children have taken an active role in the business after pursuing other endeavors.  It is anticipated that the new generation will own and manage the business. 

As the company grew, it got involved in larger projects.  Reserve Energy currently has lease positions in Ohio, Illinois, Kentucky and Pennsylvania.  With the help of Joe’s sons and daughter the company has put together four utility scale Wind projects (150,000 acres) in Michigan, New York and Ohio.  Two of the projects are currently being developed.   

Having worked in the oil and gas industry for more than 40 years, Haas has a profound respect for the industry.  He feels the oil and gas business in the United States is strong because most people in the industry respect and have a deep appreciation of the challenges and opportunities the industry offers.  His children share the gratitude to be able to work in such a great business.

“Because we are a land based company we have a tremendous appreciation for the relationship between the landowners, both surface and mineral, and the oil and gas industry.” Haas said, “America is one of the only places in the world that an individual owns mineral rights.  The freedom of mineral ownership in the United States has helped create the largest, most diverse, innovative and efficient oil and gas industry in the world.  The fact one does not need to negotiate with the government to obtain mineral rights allows anyone that has the courage and financial wherewithal to develop the oil and gas rights in a free market environment.”                                                                                         

Shale-development’s impact on business:

Reserve was well prepared for the Shale boom in Ohio after having been involved in large-scale exploration projects throughout the Appalachian, Michigan and Illinois Basins. As Shale started developing (2004), the first project Reserve worked on was in New York, which never got fully developed because of the politics and the hydraulic fracturing ban currently in place there.

“We watched the development of the Marcellus carefully, a lot of friends were working on projects,” Haas shared.  “Our first real aggressive Shale projects were in eastern Ohio. By 2008 we put together a large lease position somewhat ahead of the big activity that occurred in 2010 and 2011. The company has about 125,000 acres of Shale leasehold acres in various stages of development. There are 28 Shale wells drilled on projects Reserve initiated. Reserve has participated as a working interest and/or royalty owner in most of them. Some have been more successful than others.” 

Haas cited having a well-trained and effective land team and working with geologists and engineers that really understood the Shale and helped develop the projects. Reserve worked closely with several legacy operators in Ohio and were able to place their deep rights under their held by production assets in drilling programs along with term leases secured by Reserve.

Current Projects

Recognizing that the success of the Shale programs would eventually negatively impact the commodity prices for oil and gas, Reserve shifted its focus from Shale prospects to shallow oil.  Joe and his joint venture partner Bill Kinney of Summit Petroleum Inc. are focused on developing conventional prospects with lower finding cost.  They are currently in the process of creating several large exploration projects in Ohio.

OOGA involvement:

Haas joined the Ohio Oil and Gas Association in 1975 and has been an active member his entire career. He served as a Trustee for the Association in the late 1980s when he was elected as one of the Association’s Regional Producers’ Representatives. Tom Stewart asked Joe to chair a Landman’s committee to manage an attempt by the State of Ohio to license Landmen. The committee defeated the attempt to license Landmen as real estate agents.  Haas feels the Association creates a vehicle for the diverse membership to work together for the betterment of the industry and each member.    

“I think the difference between the oil and gas industry and many other businesses in this country is that the participants love the industry.  It goes beyond the role they play in the industry, whether they’re a geologist, an engineer, a Landman, drive a truck, pump wells, everyone  should realize the importance of our work and have a deep appreciation and respect of the industry,” Haas said.  “There always seems to be negative forces that are opposed to the oil and gas development, therefore, people in the oil and gas industry tend to be very protective of our business, I don’t see that in other industries.”

One of the greatest benefits of being a member, and the most important aspect Haas noted, was the effectiveness of the Association’s legislative advocacy on behalf of the industry.  

“OOGA has been one of the most effective oil and gas trade associations of any of the other state oil and gas organizations in the country.  It’s very well respected.” Haas said, “We spend time in other states and knowledgeable oil people speak very highly of the OOGA.  The organization has a strong cadre of producers and professionals that volunteer countless hours to make the OOGA an effective industry advocate.”

The networking opportunities are also important.  The Association provides an opportunity to build long lasting friendships and business relationships which are critical for success in the oil and gas industry.

“For my business, the networking is very important. It’s great to meet the folks in the business at the meetings and activities the Association holds. It is hard to go out and drill [especially Shale] when you have several companies contributing leases to the unit unless you have some form of relationship. Contacts made at various OOGA functions often turn out to be very helpful in a future business deal.”

Haas also mentioned OOGA’s sister organization, OOGEEP, for doing a tremendous job in getting the word out to schools and the public at large as to what the industry is all about. He feels showing the benefits, both financially and the long term security of our nation needs to be publicized by groups like OOGEEP. 

“I encourage all oil and gas professional to not only be active in the OOGA, but also their respective professional associations.”  Joe has been an active member in the American Association of Professional Landmen (AAPL) since 1977.  He has twice served on the Board of Directors and served as a member of several committees.  As chair of the long range educational committee, he helped create two videos that set out the AAPL’s ethical standards and best practices.  These videos are used for seminars and in house training of Landmen. 

Joe and wife (Cindy) of 42 years live in Newbury, Ohio.  They both are active in several civic and church organizations.

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