Is US Shale Oil Production Profitable?

My answer to a recent Forbes article: How Is U.S. Shale Oil Production Performing So Well?

This is a decent analysis of the current state of affairs of U.S. shale production. The author’s assertion that “shale oil and gas have been spectacularly successful, only dropping (in aggregate) when prices declined “sharply” is questionable. 

Why? The shale industry has been very successful if production is the primary barometer of success. The relevant question is “but are they profitable?” Looking back, the answer is “not very.”  A survey by the WSJ in 2019 asserted that 90% of the shale wells drilled were not profitable stating that the investment in shale drilling was 80 billion dollars in the hole. 

Of course, that was just a snapshot in time. 

The simple answer is, the shale drilling industry can be profitable if the price of oil and gas is high enough and companies can keep costs low enough. What is the price of profitability and have costs been cut enough? That’s the question the investment community should be asking.

We shall see if the investment community has a long or a short term memory. We will need oil and gas for another half-century at least. Or, as my ole Daddy would say “those baby calves always come home to the milk”. Every modern industrialized country on earth has built their respective economies on using more fossil fuels, not less.

This segment of the industry will recover and prosper as long as they and OPEC don’t overproduce and prices stay high enough. As more oil and gas companies commit to zero emissions by a certain date (2035 and or 2050 seem to be the popular targets) investors should hope they are merely talking the talk.

Walking the walk is just too expensive.

~Mike Cantrell

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The Enemy Of My Enemy: Big Oil Befriends Big Corn

This story reminds me of the tax reform act of 1986. I remember during the middle of it when we all thought we were gonna lose all of our tax provisions having the flash of insight that our country is made up of thousands of special interest groups all with their own political champions. All these groups support their own interest. They also coalesce with other groups that have the same interest but that are completely different entities.
One of the significant coalitions at that time was the formation of the Council for a Secure America. This was a coalition between American Oil And Gas Producers and American friends of Israel. Our intent was obvious. Their intent was to make sure that America had a strong oil and gas industry so as not to be dependent on Middle Eastern oil.
They were largely liberals from the East and West coast. We were largely conservatives from the Southwest. What a perfect coalition to engage with a myriad of responsive elected officials!
President Biden wants to end the use of fossil fuels by 2035.
That’s a great political soundbite but most likely falls far short of reality.
Our experience of 40 years tells us “lots of luck uncle Joe”. A lot has to happen and there is a myriad of interest groups that are negatively affected by this proposition.
This article merely points out one – the ethanol industry.
The political reality is that the corn belt is also positioned in the Midwest where there are several battleground states.
At last count, the American Petroleum Institute ( API) had over 140 lobbyists on Capitol Hill. They may publicly embrace the “green new deal” but privately they are going to work to preserve their profits from their core business. A myriad of interests will weigh in, most likely behind the scenes due to the popularity of fighting climate change.
My friend and entrepreneur John Cassidy made his fortune with the philosophy of “find out which way the crowd is going and go the other way“.
This might just be the time to double down on investment in fossil fuels. There is no question the Presidents efforts will at least raise the price of oil and natural gas. There are too many unknown variables to really know what’s going to happen. My money is on John!!

~Mike Cantrell

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Personal Recollections of Dr. Tom Coburn

Dr. Tom Coburn died last Friday after a long bout with Cancer. There really are very few truly great men. But I consider Senator Dr. Tom Coburn right up there with the founding fathers in selfless service to his country.

I first met Dr. Coburn when he was a Congressman running for the U. S. Senate in Oklahoma.

I didn’t think much of him as Congressman, mainly because I thought he was “too heavenly bound to be any earthly good.” Unlike my model of a fine Congressman who brought home much needed infusion of federal dollars to his home district Dr. Coburn’s principles wouldn’t let him do that. He believed if roads needed to be built it was the job of County Commissioners and the Oklahoma state highway department, not the federal government. Earmarks were the mechanism Congressmen used to bring home the money from DC, whether the district needed it or not. Dr. Coburn thought that was just bad public policy.

But when I heard this brilliant and principled man on a debate stage I was all in; even though at the time I was supporting one of his opponents. I told him so after the meeting and, while we sometimes differed in philosophy, I never wavered in that support.

My biggest test with Senator Coburn was when Congress was debating ending the oil and gas tax provisions necessary to stimulate investing in a business that was “risky” but vital to our National security. I just knew no one was going to convince him how important these provisions were to Oklahoma and the nation. I was right. No one was.

While trying to figure out how to approach this task I was fortuitously seated on a plane going back to DC with Senator Coburn and had his undivided attention which allowed me to dive in and make my case. Tom’s powerful intellect didn’t suffer fools very long. Fortunately, it didn’t take that long. He was already familiar with the very complex tax law applying to the oil and gas industry. Tom was, in addition to being an accomplished physician and a fearless non-politician Senator, also a CPA. I then realized my angst was totally unnecessary. He simply understood and followed his own principles. Days afterward, when testifying in the Senate Finance Committee to the importance of those provisions, he gave the best, most succinct argument of the day for their retention.

But by far the most memorable encounter with Dr. Tom was during the 2008 Presidential cycle. We were both in Florida at a Club for Growth meeting. We got to the dining room early and just sat and visited until everyone came in. I asked him who we should support for President that year. There we seven or eight Republicans battling it out to get the nomination. He shocked me when he said “Mike, the most intellectually honest man in the race is Senator Barrack Obama”. He continued “while we totally disagree on what to do with the public’s money- he wants to do more social programs and I want to give it back to the tax payers – we both abhor government waste.” That to me was the Tom Coburn few saw. While no one was stronger in his principles of conservatism, for him it was never personal nor was he ever really partisan.

Our Country needs more Citizen public servants like Dr. Tom Coburn. The term “Rest In Peace“ just doesn’t seem to fit him. I’m more reminded of 2 Timothy 4:7 when the Apostle Paul said “I have fought the good fight, I have finished the race. I have kept the faith.”

Dr. Tom, you have earned your crown of righteousness!

~Mike Cantrell

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Survival Strategies in Tough Times

The Small Business oil and gas producer in America has always faced the challenge of falling product prices from time to time.

This particular time is doubly challenging. Last week Russia refused to go along with cuts in production necessary to balance the market. This resulted in Saudi Arabia’s countering with pricing discounts that have collapsed world oil prices. At the same time, the world is facing a rapidly decreasing demand forecast due to the Coronavirus.

There are many strategies, depending on the company and several other factors, for coping with these tough times. But here are a few basic principles that most likely apply to us all.

  • Denial or holding onto unrealistic expectations is not a good strategy. This particular challenge is for real. While no one knows how long this will last, we are much better off to embrace a realistic viewpoint and take calm, not reactionary, but immediate actions. Depending on a quick solution by Governments or geopolitical events to bail us out is a siren song destined to wreck us on the rocks.
  • All expenses matter. No expense is too small to be considered. Little things do add up to big things. And mindfulness about expenses becomes a healthy ongoing practice. Like Peter Drucker said in Managing for Results, “There are no profit centers, there are merely cost centers.”
  • Communication is especially important in tough times. We should communicate with our vendors. If we are going to be late with payments, we should tell them and even work out longer terms. I remember watching my Dad exercise this principle 50 years ago. He called Schlumberger and Halliburton, who he owed more than he could afford to pay. He told them he couldn’t pay them at the moment. He asked them to allow him to take a longer time to pay the invoices. As I recall they gave him six months to pay. He was able to make it on that basis and remained loyal to them for decades for their understanding. The same principle applies to all vendors. This is also a good time to negotiate for services. The service sector is in this with us. In fact, they are even more vulnerable. My experience is that they will work with us in good faith. They will not do it if we don’t ask.
  • We should communicate with our bankers. If we have debt, and most of us have at least some, we should have an open and transparent conversation with our bankers. We should let them know where we stand financially and what steps we are taking to “weather this storm”. If we need to, we shouldn’t hesitate to ask for interest only payments. Depending on the bank, they will almost always work with us. But just like any of us in business they don’t like surprises or being caught off guard. I have yet to meet a banker that wants to be in our business. So, it is in their best interest to help us stay in ours.
  • We should communicate honestly and openly with our employees. In my company, in tough times we have always had a “team meeting” where we discussed our various options. Without exception, we agreed to take cuts across the board. Yes, I let them decide along with me. We never laid anyone off because of a downturn. Letting your employees participate in your decision-making process gives them ownership in the ongoing vitality of the company and simply empowers them to care. But, at the same time if you have employees who are not carrying their load it’s a good time to move on from them.
  • Maybe most importantly of all, while making tough decisions try to maintain a positive, but realistic attitude. This too shall pass.

~Mike Cantrell

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The Many Lives of the American Shale Drilling Industry

The challenges facing the American horizontal drilling and fracking industry, also known as the shale drilling industry, have been documented extensively over the past several years. The article linked below calls them “casualties.” Are they?

The Organization of Petroleum Exporting Countries (OPEC) lowered oil prices by increasing production to regain the market share that the U.S. Shale drilling industry was taking from them- six years ago. The shale drillers kept drilling.

OPEC thought these drillers could not be profitable with oil under $80 per barrel. They reacted by lowering cost and improving technology. Prices continued to fall and have yet to recover above $70 West Texas Intermediate(WTI); the benchmark price of U.S. oil. In fact, as of today, OPEC is attempting to drill another nail in the coffin of the U.S. Shale industry by increasing production and crashing the price to $31 per barrel (WTI).

Average decline rates of 70% of recoverable oil, in the first three years, require that these companies continue aggressively drilling in order to just keep up  with current production levels. They have done that.

These horizontal drilling companies have encountered numerous other problems, not the least of which is fracking interference from their own subsequent wells thereby diminishing the reserves that they had previously counted on their financials. They’ve acknowledged this – and kept on drilling and fracking.

Investors have all but abandoned them for lack of returns on investment. They are taking hits that few industries have survived.

When the horizontal drilling and fracking industry began in earnest the U.S was producing around 9 million barrels of oil per day. For the past two years U.S. production has hovered stubbornly, above 13 million barrels per day. The horizontal drilling and fracking industry is the sole reason for this resurgence of American oil and gas production.

The destruction of hundreds of existing vertical wells by their horizontal frack jobs resulted in the formation of the Oklahoma Energy Producers Alliance (OEPA). The OEPAs sole mission is the protection of the small business oil and gas producers in Oklahoma.  Since its inception three years ago this organization has been vigorous in opposing the destruction of vertical wells from horizontal fracking and the policy issues allowing and incentivizing it.

The horizontal drilling and fracking companies are tenacious and “bare knuckle“ opponents. But, I do not consider them as permanent adversaries. This article calls them casualties. I call them survivors in the ongoing tradition of the US oil and gas industry. They will look different than they do now. There will be more bankruptcies and consolidations. But the industry and the technology that has spawned it will continue to improve and survive.

It is no secret that I have been active in the battle between the large horizontal frackers and the small business oil and gas producers. But I have never underestimated them. Neither should OPEC or the American public.

https://www.wsj.com/articles/u-s-shale-drillers-could-be-casualties-of-oil-price-war-11583769768?mod=djem10point

~Mike Cantrell

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Truth and Transparency

I have been in the oil and gas business for over forty years and in the communications space for about that long as well. I think that gives me a unique perspective. Reflecting on our public image, I’m afraid we got it the old fashioned way – we earned it.

While much of that earned image was created by past sins, a few still dog us today. Those we should work to eliminate. But a good deal of our image problem has been our communication strategy… or lack thereof.

A case in point is the American horizontal drilling and fracking industry. It is without question the most impactful segment of our industry. Advances in horizontal drilling and fracking technology have been a “game-changer” for America and our allies.

However, their communication style is largely one of hype and denial which doesn’t serve them or the rest of the industry well. I believe it’s time they switched this strategy of hype and denial to one of honesty and transparency.

The horizontal fracking industry is currently experiencing both profitability and environmental problems.

There are articles published almost every day about capital fleeing the drilling sector because at this price level, most horizontals (90% by a WSJ survey) do not make a profit. If investors are in the hole by 80 billion (according to the WSJ) no wonder drilling capital has all but dried up. Oil obtained with “funny money” produces “funny oil” and is unsustainable. The investment community has finally caught up with the hype of big wells touting almost endless reserves. The reserves that these companies have projected are now known to be much less than was originally revealed.

The major issue seems to be that subsequent wells after the first ones are drilled are coming up around 40% short of initial projections. This is most likely an honest mistake that the companies themselves didn’t anticipate. It seems as if the horizontal community is slow to acknowledge this if they do at all. A far better strategy would be to publicly acknowledge the inaccuracy of their projections, after all, they were projections.

They then could bridge to a message of “yes our subsequent wells are not as productive as we thought. That is why we are working on technology to solve the problem as well as cost-cutting measures to bring us back to profitability.”

So far their environmental problems have yet to be widely publicized. They are more serious with greater long term consequences.

Earthquakes are now fairly well acknowledged to be caused by water disposal in high volumes and under high pressures. Fracking itself has been known to cause minor earthquakes but rarely with a magnitude of over 3.0. Induced seismicity events from oil and gas industry activities have been mostly confirmed in Arkansas, Colorado, Oklahoma, and Texas. In Oklahoma, the major earthquakes, caused by water injected in high volumes under high pressure into the Arbuckle formation, which is right on top of the basement rock, have mostly been eliminated by controlling, and in some cases, ceasing injection in that formation.

But the regulatory bodies have unintentionally created a bigger problem by permitting shallower wells to be drilled to handle the water that formerly went into the Arbuckle. Now injecting water in those formations, which simply could not hold the massive volume of water created by horizontal frack jobs, has most certainly caused at least one serious “purge” or breakout to the surface.

The last data that I saw showed that several hundred wells had pressure on the surface casing, which is the string set and cemented below fresh and treatable water to protect them from harm. A failure of the surface pipe or the cement around it would likely cause a purge to the surface and could endanger groundwater.

Though the companies and their regulatory body have finally acknowledged this problem, they have underplayed it in the news. In fact, an unsuspecting public could even believe they are caused by some natural occurrence.

This communication strategy is a mistake, even if the regulatory body doesn’t know exactly how to remedy the problem. Admittedly, the industry and even those that regulate them have a long history of non-disclosure or even cover-up of problems.

The industry has traditionally, with few exceptions, had an impenetrable wall of an understanding that we would all stick together and not talk about problems like this.

Well, I guess I penetrated that wall. I have been cast by some of the large horizontal fracking companies as anti-oil and gas simply by openly talking and writing about the truth. They even cringe when I use the word “fracking”.

But it’s my concern for the long term health of our industry that we should shine a light on these concerns and commit to addressing them.

It should never be considered divisive to tell the truth. Hype and denial are horrible communication strategies and need to be replaced with honesty and transparency. These companies may not like the truth. But I believe it’s the only communication strategy that serves our industry well over the long run. Once the public catches on, and with an active, anti-fossil fuel environmental movement, they will.,we will lose even more credibility with an already skeptical public. And if the public believes our industry shouldn’t exist we will not prosper long.

 

~Mike Cantrell

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Obama’s Energy Policy: Death By A Thousand Cuts

Christopher Helman Forbes Staff

Contributor Group Energy

 

This is a guest editorial by Mike Cantrell, president of the Domestic Energy Producers’ Alliance

What sounds like the title of an Alfred Hitchcock movie is actually the Obama Administration’s strategy to kill America’s oil and natural gas production. And it should scare the living daylights out of us all.

President Obama, Treasury Secretary Timothy Geithner, Interior Secretary Ken Salazar and Energy Secretary Steven Chu, have all made it clear they want to make fossil fuels more expensive. And after their failed attempt to crush fossil fuels in one fell swoop with cap and trade legislation, they’ve turned to federal agencies to impose a long list of selective and foolish regulations on America’s oil and natural gas producers.

Of course each of these regulations on their own won’t be the death of fossil fuels. But combined,  they’re setting the stage for a chilling ending that will mean the loss of millions of jobs, billions in tax revenue and weaker national security.

Speaking of Hitchcock, let’s talk about birds. The Administration sued seven oil companies for the deaths of 28 birds in North Dakota. The maximum penalty per dead bird is a $15,000 fine and six months in jail. Meanwhile, the Administration is in the process of fast-tracking wind energy development across the United States and providing legal protection to wind operators that kill an estimated 440,000 birds a year. Fortunately, North Dakota Federal judge Daniel Hovland had the good sense to dismiss the complaint saying “To be consistent, the government would have to criminalize driving, construction, airplane flights, farming, electricity and wind turbines … and many other every day, lawful activities.”

Sound absurd? There’s more. In 2010, the EPA slapped a remediation order on a natural gas producer in Texas while the state’s oil and gas regulation agency was still conducting tests regarding alleged water well contamination. After testing was complete, the contamination was found to be naturally occurring and in no way related to drilling. But the EPA’s arbitrary and shameful actions proved the agency can target any company at random and force them to clean up, at their own expense, a problem they had nothing to do with.

And more costly regulations are on the horizon with the U.S. Fish and Wildlife Services now considering the addition of 100 Texas species to the endangered species list. It’s estimated that one species alone, the dune sagebrush lizard, could cost oil and natural gas producers, and state and private royalty owners hundreds of millions of dollars over the next ten years.

But perhaps most troubling could be the reporting of Greenhouse Gas (GHG) emissions on oil and gas facilities in the field. And at what cost? Training, consulting fees, data tracking and ultimate reporting will cost one large independent an estimated $10-$20 million per year. The EPA definitions and thresholds will encompass the smallest to the largest domestic producers.

And to what end? Take your pick – regulatory cap and trade, curtailment, or a new carbon tax. The Obama administration will do through regulation what they could not accomplish through legislation.

In looking for a hint of energy policy that benefits Americans one can reference the administration’s release of 30 million barrels from the Strategic Petroleum Reserve during the Libyan crisis that cost the taxpayer millions of dollars and lowered the price for about a day.

Or you could look to the Administration’s decision to deny the Keystone XL pipeline permit. That decision not only deprives American consumers of oil from a friendly neighbor, Canada, but also means most of the 500,000 bbls per day of oil from the massive Bakken field in North Dakota and Montana will continue to be transported by truck or rail at a much higher cost; ultimately resulting in higher gasoline prices. Of course it’s just a coincidence that Berkshire Hathaway, run by Warren Buffett, one of Obama’s biggest supporters, owns the railroad transporting significant amounts of that oil.

So who’s the ultimate victim in this tale of mounting regulation? The American people. The administration knows that by increasing regulation, it also increases the cost of doing business and ultimately, the price consumers pay at the pump. And by making fossil fuels artificially expensive, they’re clearing the path for their friends in the so-called “green” energy industry.

What’s even more alarming is that all of this comes at a time when America’s abundant supply of oil and natural gas could play a significant role in solving our nation’s most pressing problems—unemployment, debt and national security. For the first time in 62 years, America is a net exporter of petroleum products, and we now count natural gas reserves in centuries. Obviously, we’re now considerably less dependent on foreign oil. America is also benefiting from the $86 million a day that oil and natural gas companies pay to the federal government in taxes, royalty payments and fees. The industry currently supports 9.2 million jobs and, with the right government policies in place, it’s poised to create an additional 1.4 million jobs by 2030.

Any way you slice it, the Obama Administration is out of touch with reality. Let’s just hope this opportunity for a stronger economy and energy independence doesn’t end up like Janet Leigh in Hitchcock’s most famous scene—in a big house with a knife sticking through it.

The writer, Mike Cantrell, is president of Oklahoma City-based Domestic Energy Producers’ Alliance, a unique grassroots approach to domestic onshore energy advocacy and education. DEPA’s mission statement: “We are an alliance of producers, royalty owners, oilfield service companies as well as state and national independent oil and gas associations representing the small businessmen and women of the energy industry. We are devoted to the survival of U.S. crude oil and natural gas exploration and production.”

https://www.forbes.com/sites/energysource/2012/03/06/obamas-energy-policy-death-by-a-thousand-cuts/#1a050b503e9a

 

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ECU’s 2019 Entrepreneur of the Year

Cantrell has made his mark as a trailblazer in the energy sector

Cantrell, ECU’s 2019 Entrepreneur of the Year, to deliver annual Limes Lecture

  • By Mark Bratcher | East Central University
Mike Cantrell has been named East Central University’s 2019 Entrepreneur of the Year and will deliver the annual Limes Lecture to college and visiting high school students after accepting the honor next week.

Cantrell, of Ada, has made his mark as a trailblazer in the energy sector for close to four decades. Currently leading several petroleum-related businesses, his name is synonymous with success in his field. He is also recognized for his robust civic leadership.

“I am honored that ECU would name me as Entrepreneur of the Year,” Cantrell said. “I know I’ll be joining an illustrious group to have won this award.”

Cantrell, who earned his bachelor’s degree in psychology from ECU in 1972, will address young entrepreneurs during the award luncheon portion of the event on Thursday, Nov. 21, at the Chickasaw Business and Conference Center. An entrepreneurial competition among high school students, called Tiger Tank, will also be featured during the event.

“I received a good liberal arts education at ECU that has served me well in all areas of my professional life – in industry, in politics, in leadership and communications,” Cantrell said. “It also taught me to understand others. All these things gave me a head start in business.”

Among the professors that Cantrell cited as mentors during his time as a student at ECU were Drs. Gerald Williamson and Eric Stiger in the business department and Drs. Thelma Davies and Roy Maxwell in the psychology department.

“Mike was a pleasure to have in class,” said Williamson, who is retired from teaching and now represents the ECU Foundation. “Mike is a thinker, but he is also a doer. That’s a potent combination, and I’m not the least bit surprised about all his success.”

Cantrell’s professional résumé is a very impressive read. In addition to his successful private businesses, he has served on numerous state and national boards and committees that advise or regulate the petroleum industry and beyond. Among his myriad career highlights are co-founding and chairing the Oklahoma Energy Resources Board, the nation’s first oil field site mitigation and education program, and serving as president of the Oklahoma Independent Petroleum Association

“In our lives, we have careers that last 40 to 50 years, but it’s that experience of four to five to six years in college that lays the foundation for success,” Cantrell said. “It’s more about the well-rounded education you get. And I certainly got that at ECU.”

The annual Limes Lecture is named for Leonard Limes, who attended ECU in the post-war 1940s. Limes is a successful geologist, attorney and entrepreneur from Konawa, , who established the lectureship in 2000 with a $25,000 gift to the ECU Foundation.

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Good Policy Benefits All

Number four of the Rotary Club’s Four-Way Test – whether something is beneficial to all concerned – comes to mind when observing the ongoing dispute between a segment of the state’s oil and gas industry and the state’s county commissioners and municipal governments.

The Oklahoma Energy Producers Alliance, made up of small oil and gas producers across Oklahoma, respectfully disagrees with the state’s big oil and gas producers over House Bill 2150, which would strip virtually all authority of local and city governments over the oil and gas industry.

In our view, that is a serious overreach. The most egregious hypocrisy of this bill is that it hides the true intent behind the “rights of mineral owners.”

If enacted, this bill will create a backlash over time, harming our relationship with our fellow citizens.

The state’s oil and gas industry has enjoyed unusual support from the state’s elected officials. That support should be honored as a covenant with Oklahoma to always measure our political initiatives with the best interest of the citizens of Oklahoma in mind. If that unwritten covenant is not honored, our industry will inevitably suffer in the long run.

The horizontal frackers and their trade association maintain they should be allowed to use the county rights of way to lay “temporary lines” to transport water from location to location regardless of the authority of the state’s county commissioners. A recent state Supreme Court decision reaffirms that the “Oklahoma Corporation Commission has exclusive jurisdiction over oil and gas operations” – an assertion with which we largely agree.

There is no question that this capability saves oil and gas drillers a lot of money. However, increasing profits should never come at the expense of public safety.

There is also no question that this bill is in response to decades of overreach by municipalities that hit the industry with ridiculous fees and regulations. We know of no such overreach by county governments.

This issue begs for compromise.

We have offered a compromise, to no avail. So, without compromise, we oppose HB 2150.

It is in the long-term best interest of Oklahoma’s oil and gas industry to live in harmony with our fellow Oklahomans and the officials they elect to watch over them. Running over them is a bad idea and at the end of the day an unprofitable one.

Mike Cantrell is president of the Oklahoma Energy Producers Alliance.

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Right-of-way Disputes

The Oklahoma Energy Producers Alliance supports the right of elected county commissioners to determine what is in the best interest of the residents in their respective counties when it comes to the use of the rights of way over which they have jurisdiction.

There is a dispute in Kingfisher County between horizontal oil and gas producers and the county’s commissioners regarding overlaying temporary produced water pipelines on top of the ground in the county road rights of way. The county commissioners determined that these lines constitute a safety hazard, damage both private and public property, exposing the county to potential liability, and must not be allowed.

The ability of companies to lay so-called temporary water lines in county rights of way is very beneficial to the companies needing to transport water from one location to another. But those benefits pale in comparison to the possibility of losing one Oklahoman’s life in an accident involving pipelines put on the surface of the right of ways of our county roads.

The OEPA has several members who reside or operate conventional vertical oil and gas wells in Kingfisher County. Our members are Oklahoma companies, operators, and leasehold and royalty owners concerned with protecting the rights of conventional vertical oil and gas well producers. Most of our members own their own companies and have lived and operated in Oklahoma for generations. While we vigorously support our members, we also support what is best for Oklahoma and its residents.

It’s unfortunate that heavy-handed methods and misrepresentations are being put forth by certain facets of our industry to justify the need to use the rights of way to increase profits, without counterbalancing that against the interests and protection of the county and its residents. While the Oklahoma Corporation Commission has exclusive jurisdiction over oil and gas operations, that jurisdiction typically ends at the oil and gas lease line. We make no judgment on the practice of laying pipelines in county rights of ways. However, we do support the county commissioners’ right to decide how those areas are used.

Mike Cantrell is principal of Cantrell Investments LLC and serves as president for the Oklahoma Energy Producers Alliance.

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