American Oil and Gas Reporter - January 2016 - 115

The Presidential Papers
ARKANSAS INDEPENDENT
PRODUCERS & ROYALTY
OWNERS ASSOCIATION
ANDY MILLER
SENIOR DIRECTOR OF GOVERNMENT
& COMMUNITY RELATIONS
SOUTHWESTERN ENERGY CO.
LITTLE ROCK, AR.

FROM THE PRESIDENT
As I contemplate the words of this
annual report, I am reminded of the speed
and the change we have encountered during
2015. It was a great year to serve as
Arkansas Independent Producers & Royalty
Owners Association President, and I join
the rest of the Board of Directors by taking
pride in the numerous accomplishments
and the ongoing development of what remains a relatively new association.
Before briefly listing some of AIPRO's
2015 activities and undertakings, I want
to specifically thank and recognize a couple outgoing board members who have
served this organization and our community very well.
Alan Ribble with Atlanta Exploration
understood the need for and the importance
of a statewide association to represent
those involved in oil and natural gas production. He is a founding board member
and has served his fellow South Arkansas
producers very well. We are pleased he
will remain an active AIPRO member
and supporter, and are thankful for his
work and efforts in forming and developing our association.
Then there is the AIPRO board member
who has been taken from our midst by
Arkansas' new governor, Asa Hutchinson.
Our state's 46th governor recognized
Danny Games' abilities and wooed him
away from the oil and natural gas community to work on our state's economic
development. Hutchinson certainly got a
great one. A charter member of AIPRO's
Board of Directors, Games first worked
in our industry at Chesapeake Energy
Corp. and then with BHP Billiton. We
will miss his presence and counsel, and
are fortunate he continues to work for
our state's betterment.
New Initiatives
Our state association enjoyed many

successes in 2015. Once again, we enjoyed
a productive annual meeting. We are
proud of our educational outreach efforts
to those outside our industry. This is especially important for educators and students. The Arkansas Service, Transmission,
Exploration & Production Safety (STEPS)
Network has maintained excellent attendance as it pursues its mission to educate
our industry's workers, and to keep them
safer and more vigilant about health,
safety and environmental concerns.
AIPRO worked earnestly during this
year's state legislative session to ensure
our industry was well represented and
informed during the general assembly's
deliberations and activities. AIPRO provided members with weekly updates, and
these efforts received a communication
award from the Arkansas Society of Association Executives.
Some new programs and endeavors
include the 501(c)(3) Arkansas Energy
Education Foundation, an online buyer's
guide to assist members shopping for
goods and services, the Arkansas Energy
Political Action Committee, and an ongoing effort to form a premium insurance
program with industry-related carriers.
Price Cure
Now for a brief reflection on our industry. There is no way to sugarcoat it:
The oil and gas industry is in the middle
of a difficult time. American ingenuity
and technology have created an oversupply
of hydrocarbons, which has taken a big
bite out of commodity prices. Frankly,
we have more oil and gas than anyone
dreamed possible only 10 short years
ago. It has completely changed the entire
world's energy picture.
Arkansas' three natural gas utilities
have reported that consumers' monthly
natural gas bills will drop 19-23 percent

this winter. Meanwhile, at the gasoline
pumps, our state's drivers readily can find
gasoline that costs less than $2 a gallon.
That is the good news: Our country finally
has a measure of energy security and we
are not hostages of those who hate us.
It is a difficult time for producers,
however, one that tests leadership and is
a source of much anxiety and restructuring. We are victims of our own success.
Nevertheless, as with all commodities,
the law of supply and demand indicates
low prices are the cure for low prices.
Drilling rigs are being laid down all over
the United States, and our state has seen
the rig count drop from 60 to four in
only seven years. Hydrocarbon production
will drop and eventually commodity
prices will stabilize.
The good news is, we now know that
those resources are in the ground and
are recoverable. Eventually, they will be
produced. Arkansas has been blessed by
an abundant supply of natural resources,
and those resources will continue to benefit us well into the future.
Reasons For Pride
Arkansans can be proud we have been
on the forefront of the energy revolution.
The Fayetteville Shale was the second
unconventional play (behind the Barnett
in Texas) and was a technological proving
ground. The combination of horizontal
drilling and hydraulic fracturing has revolutionized the energy industry worldwide.
Consider a few notable facts:
* Arkansas produces 3.5 percent of
the country's natural gas. We rank fourth
in shale gas production and 20th in oil
production. Arkansas is truly and very
solidly an energy state and will continue
as one for decades.
* U.S. manufacturing is experiencing
a comeback. American jobs are being
created because low and reliable energy
costs offset the lower labor costs that
can be found abroad.
* Economically feasible technology
is enabling us to liquefy natural gas,
which will make the United States a net
natural gas exporter by 2017.
* Finally, legislation passed in Washington will allow U.S. producers to export
oil for the first time since the 1970s. This
is vital for American oil producers. President
Obama once threatened to veto this legislation on the grounds that only the Commerce Department should authorize such
JANUARY 2016 115

American Oil and Gas Reporter - January 2016

Table of Contents for the Digital Edition of American Oil and Gas Reporter - January 2016