American Oil and Gas Reporter - February 2022 - 34

ConventionSec tion: Louisiana Oil & Gas Association
Multidimensional Industry
Carries On In Louisiana
By Al Pickett
Special Correspondent
BATON ROUGE, LA.-When members
of the Louisiana Oil & Gas Association
gather for their annual convention on
March 7-8 in Lake Charles, La., the infrastructure
bill President Biden signed
late last year be a major topic of discussion,
predicts LOGA president Mike Moncla.
" The infrastructure plan is the biggest
thing on everybody's plate, " Moncla assesses.
" There is reportedly $4.7 billion
in it for orphan well plugging and abandonment.
If we get federal money, we
need to be prepared to tackle the orphan
well problem. "
Moncla points out that Louisiana has
had an oil field restoration program since
1993. That program has served its purpose,
he claims, but is inadequate to the task at
hand. " It is lacking in a number of areas, "
he contends.
Therefore, he reports, one of LOGA's
top priorities for the 2022 Louisiana Legislature
will relate to the federal dollars
LOGA anticipates Louisiana will receive
to address orphan wells. " The money will
go first to the Louisiana Department of
Natural Resources, who will manage and
disseminate the funds, " Moncla explains.
Although by no means does it account
for every well in need of plugging, he
details, Louisiana's official inventory lists
about 4,600 orphan wells. " Some of these
are fairly old, as companies went bankrupt
through all the down cycles, " Moncla
describes. " What remains needs to be
cleaned up. If we could get $25 million
next year, that would be fantastic help
toward cleaning up these orphan sites. It
will be a big challenge, but our service
companies have been struggling, so they
will be up to the challenge. The last
several years have been hard for them. "
Although the bill to provide the framework
for cleaning up the state's orphan
wells is likely to be the only bill that
LOGA actively pushes during the next
legislative session, Moncla acknowledges
he has caught wind of rumors that
Louisiana lawmakers also may introduce
a measure to prevent President Biden
34 THE AMERICAN OIL & GAS REPORTER
" I look forward to an in-person annual
meeting this year. We do what we have to
during a pandemic, but I believe many questions
go unasked and impromptu discussions are
muted in a strictly virtual setting. "
-Jim Justiss
LOGA Chairman
and the federal government from denying
federally-chartered banks from making
oil and gas loans.
" We have a president pushing federal
institutions to divest themselves of oil
and gas, " he contends. " That would be
critical for our industry. "
Hot Haynesville
In a sense, Louisiana's oil and gas industry
essentially is composed of four
main components, Moncla considers.
" There is the Haynesville Shale in the
northwest part of the state, " he explains.
" There is South Louisiana land, then
inland water, then state and federal offshore
projects.
" South Louisiana does not have any
shale plays, " he contrasts. " All investors
want is a sure play such as the Haynesville;
they want horizontal drilling and hydraulic
fracturing. In South Louisiana, there are
a few companies drilling conventional
wells, and there is just not any big private
equity money or large-scale investments
to speak of. Meanwhile, the Haynesville
is one of the best plays in the country. "
LOGA Chairman James Justiss, president
of Justiss Oil Co. in Jena, La., calls
the Haynesville play the state's " shining
star " against which everything else currently
pales in comparison.
" That is the only meaningful activity
in the state now, " he reports. " South
Louisiana is a pretty mature basin for
conventional drilling. Technology has not
brought the cost down to make the
Tuscaloosa Marine Shale viable. Offshore
drilling will continue in deep water. It is
not as mature, so there is still some
activity. But budgets and hedges are set
early, so it takes so many years to get the
offshore activity in production. "
Although it was common knowledge
for decades that the Haynesville Shale
contained large volumes of natural gas,
Justiss reflects, oil and gas companies
ignored the formation as economically
infeasible until operators in North Texas'
Barnett Shale demonstrated a profitable
approach. By 2008, he recalls, hydraulic
fracturing and horizontal drilling first unlocked
the Haynesville Shale and prompted
a bona fide unconventional resource play.
Justiss claims the Haynesville can
hold its own with any basin in the country
and calculates that it can generate profits
for producers at natural gas prices as low
as $1.50 an Mcf. With natural gas prices
closer to $4, he contrasts, Haynesville
projects are thriving, but that success
also breeds other challenges.
Noise issues in the region are among
the Haynesville's challenges, Moncla reports.
" Some cities and parishes are trying
to pass ordinances that our operators cannot
drill or fracture at night, " he observes.
" They need to understand that it is unsafe
to shut down in the middle of an operation.
They also need to understand that all the
new roads and bridges in Louisiana's
Caddo, Red River and Bossier parishes
all come from oil field taxes. We need to
do a better job of explaining that it is
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