American Oil and Gas Reporter - January 2016 - 121

The Presidential Papers
INDEPENDENT OIL PRODUCERS
ASSOCIATION, TRI-STATE
DOUGLAS W. REYNOLDS JR.
VICE PRESIDENT, EXPLORATION & PRODUCTION
REYNOLDS RESOURCES INC.
OWENSBORO, KY.

FROM THE PRESIDENT
I was passing through North Louisiana
on my way to Shreveport recently. I was
troubled by the sight of the many little
pumpjacks visible along I-49 near Oil
City, La. I was troubled, but not because
they were pumpjacks. I have seen thousands on thousands of pumpjacks. Passing
these hundreds of wells as I was going
south and then a few days later going
north toward Texarkana, Tx., on the same
road, I saw a grand total of one visible
manifestation of life-a single well with a
moving pumpjack. It was a pretty stark
picture.
Just south of Oil City, I-49 crosses
into the northernmost part of the producing
area of the Haynesville Shale. The visual
evidence that tipped me off that Haynesville Shale production was close was
a very nice-looking bunch of equipment
connected by aboveground pipes with a
10-tank battery attached. It was sitting in
the middle of about 10 acres that was
covered uniformly in gravel and fenced
off. It looked very well-engineered and
state of the art.
When I got home, I did a little reconnaissance on the Internet and saw that
latter area was surrounded by Haynesville
Shale wells. These are gas wells that had
initial rates of 1.5 million cubic feet a
day, on average, and were producing, on
average, 300 Mcf/d in September.
These adjacent areas flank a lot of
oil field history. The oil wells near Oil
City are in the Caddo Pine Island Field,
discovered in 1905. When it was discovered, the closest Louisiana production
was 190 miles away, and the nearest
production in Texas was 150 miles distant.
The field has produced in excess of
333 million barrels of oil and currently
produces at a fieldwide average of something less than a quarter of a barrel a day

per active well.
So, Caddo Pine Island Field is very
old and very mature. The Haynesville
Shale play, of late notoriety, has found
prodigious amounts of natural gas, but
the wells north of Shreveport, at the
play's northern edge, are on the low end,
at least by reference to initial Haynesville
potential.
The Haynesville play is very young
and represents the cutting edge of production technology in this area. But
there was no evidence of ongoing drilling
operations to develop more of these gas
wells. The still pumpjacks in the old
area, and the absence of indicators of
drilling activity in the new area, are
symptoms of the same pathology-low
commodity prices.

Shadows
That is not a diagnosis that would surprise anybody reading this magazine. The
descent of prices is casting an ever-lengthening shadow in all the producing areas
around the country, and manifestations
of this same pathology afflict them all.
It makes for a pretty stark picture all
over, but I choose to take away an optimistic
view of my transits of North Louisiana.
When Caddo Pine Island was discovered,
who could have dreamed what lay ahead?
Over the next 100 years, fortunes were
made and lost, invested and squandered,
time and again as the oil and gas fields
and then the deeper reservoirs of North
Louisiana were discovered and their products were reduced to possession. And
many times the future looked as stark, if
not more so, than it does today.
And in 2005, who would have dreamed
what 10 years would unleash in North
Louisiana? I choose not to countenance
pessimistic thinking about our industry
until it is obvious to me that boom times
are not germinating new discoveries.
Flagging is not failing. The history of
our industry so far says that any bust is
only prelude to the next boom.
I have no doubt that 20 years hence,
we will look back and still be amazed
that after 2015 we were able to find so
much more oil and gas.
❒

INDEPENDENT PETROLEUM
ASSOCIATION OF
NEW MEXICO
MITCH KRAKAUSKAS
SENIOR LANDMAN
STRATA PRODUCTION CO.
ROSWELL, N.M.

FROM THE PRESIDENT
As we complete another year, with
oil and gas prices the lowest we have
seen in almost 10 years, it is hard to
remain optimistic for 2016. As independent
producers, we have been through this
time and again, and once more will ride
this out.
As we look back on 2015, our organization has been very active in several
state and federal regulatory issues and

policy initiatives.
We have won some and lost some,
but all in all, our industry has done a
great job protecting its future against
the federal government's constant overreach. Following are a few issues affecting our state this year, along with
a summary of New Mexico's new energy
policy.
JANUARY 2016 121

American Oil and Gas Reporter - January 2016

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