American Oil and Gas Reporter - September 2016 - 98

ConventionSection: Indiana Oil & Gas Association

Indiana Oil And Gas Industry
Ready For Better Days
By Del Torkelson
EVANSVILLE, IN.-The first couple
months of 2016 may have provided oil
and natural gas prices more dismal than
the winter weather, but as the temperatures
thawed and winter gave way to spring
and summer, the market showed signs of
life. West Texas Intermediate crude oil
prices topped $50 a barrel by June and
NYMEX natural gas prices occasionally
bounced within shouting distance of $3
an Mcf.
According to Indiana Oil & Gas Association President Jeff Hoy, the state's
oil and gas producers were starting to
feel pretty good and some of them maybe
even had begun to dust off their drilling
portfolios. Then, in a matter of weeks,
oil prices gave back a chunk of the ground
they had taken months to regain.
In early August, when oil prices fell
below $40, Hoy, a petroleum geologist
and owner of JLH Geologic Consulting
LLC in Evansville, said Indiana producers
certainly could have done without the
market swoon. "There was growing optimism when the price had its bump," he
recounts. "Since it has gone back down,
the mood has returned to simply trying
to do the best we can with lower prices."
And as INOGA prepares for its annual
convention, scheduled for Oct. 6 at the
Tropicana Convention Center in Evansville, that means members are trying to
think around corners and stretch their
dollars further. Fortunately, Hoy suggests,
the area's companies know a thing or
two about survival. "These are good organizations with good people and decision-makers who know when to keep
and when to cut," he assesses. "To put it
into a few words, I would say it is about
good organizational skills and good people."
Operational Efficiency
According to Hoy, the mainstays in
the Illinois Basin industry always are
looking for a better approach. "Some
people who have been in this business
forever are looking for cheaper ways to
find oil," he reports. "They are being in98 THE AMERICAN OIL & GAS REPORTER

INOGA Annual Meeting
Evansville, In.
Thursday, Oct. 6
8:30 a.m. Registration Opens, Tropicana
Convention Center
9 a.m.-Noon Morning Workshop
Herschel McDivitt, Indiana Division of
Oil and Gas, Update on New Rules
Package and Division
Todd Thompson, Indiana Geological
Survey, Present Status and Future of
the IGS
Charles Venditti, Countrymark Production, "Oil and Natural Gas Sector:
Emissions Standards for New and
Modified Sources Include Methane
and Volatile Organic Compounds as
Part of OOOO"
Noon Lunch on Your own
1:30 p.m. Afternoon Workshop
Kevin Strunk, Consulting Geologist,
"Jointing, Fracturing, Faulting and
Structural Patterns of Indiana and
Vicinity: Implications for Regional
and Local Fractures"
Austin Ridgely, LAMAC Engineering,
A Brief History of the Public Land
Survey System in the Indiana Oil
Basin"
Erica Spolar, LAMAC Engineering,
Wetlands and Flood Plain Issues
5 p.m. Social Hour
6 p.m. INOGA Banquet
Awards and Business Meeting
Keynote Speaker: Brian Habacivch, Constellation

novative and considering creative ways
to cut costs."
Some of the Illinois Basin's larger
companies, he continues, have taken an
all-hands-on-deck approach to meet the
challenges associated with thinner staffs.
"Some supervisors have been doing field
work," he relates. "They are still wearing
that first hat, but they also are helping
their companies in the field."
The market also has prompted some
acquisition and divestiture activity, Hoy
says, pointing to Rex Energy Corp.'s
mid-June announcement that it would
sell its Illinois Basin assets to Campbell
Development Group LLC for $40 million-$50 million, depending on how com-

modity prices behave during the next
three years. According to a press release,
the sale includes 76,000 net acres in Illinois, Indiana and Kentucky that are producing 1,700 net barrels of oil a day.
"That was a good-sized deal," Hoy
comments. "Some people are looking to
sell their production, and there have been
a number of other acquisitions. Low oil
prices offer a good time to buy new production, so operators are going that route
with what cash flow and capital they
have."
As for his own professional activity,
Hoy acknowledges that his clients are
not drilling much, but he stays busy,
nonetheless. "From a geology standpoint,
it is one of those times in which you try
to stay motivated, so you look at maps
and high-grade your prospects even better.
That way, if you do want to sell one, the
economics are there," he relates. "It goes
along with planning for the future. I don't
know about many of my peers, but I am
in a position to ride this out for a while-
though not a very long while-and so I
am dotting i's, crossing t's and setting
things up for when it does come back."
According to Hoy, INOGA's efforts
to help members endure today's market
include a free pumper workshop that the
group put on in conjunction with the Illinois Oil & Gas Association. Even if many
companies are not putting drill bit to
ground, he reflects, a great many presumably continue to produce their wells
and will appreciate any savings they can
realize.
"Companies have only a certain amount
of revenue," he notes. "Turning a profit
becomes a matter of cutbacks, which can
include streamlining the operation and
trying to make it more efficient."
Hoy explains that the first pumper
workshop took place in late spring at
Dee Drilling Co. in Mt. Carmel, Il.,
adding that there are plans to hold another
one in late October in Mt. Vernon, In.
"Our associations want to give something back to our members," he offers.
"The workshop talked about pumpjacks,
injection pumps, downhole pumps, and
even insurance, chemicals and different



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

Contents
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American Oil and Gas Reporter - September 2016 - Cover3
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