American Oil and Gas Reporter - April 2015 - 153

communities had been facing, including
road and infrastructure conditions, economic hardships, and possible legislation.
Leal says the task force has benefitted
both those working in the Eagle Ford and
Texas lawmakers. "It was an inspired idea
to bring together local stakeholders to
focus on a course forward for South Texas,
to learn from the mistakes of the booms
elsewhere, and to promote economic benefits through best practices," she states.
Leal says the task force was assembled
initially to address problems in Eagle Ford
communities such as road maintenance
and housing challenges, but also to learn
how to deal with the community impacts
of the play and to learn from mistakes
made in other oil-and-gas-play areas.
"The task force helped us learn from
experiences in the Permian, the Barnett,
and other areas around Texas and other
states," she comments. "It also allowed
stakeholders to communicate with each
other about the problems that could cause
such a play to stall or collapse. That is
how the road and infrastructure maintenance issue came to prominence, which
has resulted in legislation and the passing
of a constitutional amendment that ultimately benefited the entire state."
Pipeline Forms
The Texas Railroad Commission has
announced revisions to its T-4 pipeline
form, which requires operators who claim
common carrier status to verify their
claims with sworn statements and documentation providing support for the classification. The RRC says the new T-4

form, which became effective March 1,
also requires pipeline operators who claim
common carrier status to attest to their
knowledge of the eminent domain provisions in Texas Property Code and the
Texas Landowner's Bill of Rights. The
revised T-4 form also can be used for
permit renewals, eliminating its former
T4-C form, the commission affirms.
RRC commissioners say the form creates more accountability for the pipeline
industry while enhancing RRC's regulatory oversight. It requires operators to
provide contact information for someone
who can answer questions about the
pipeline, thereby providing additional
transparency to the public.
Mills says the Alliance supports the
form change, adding, "There should be
more transparency in the forms."
Texas' Trends
According to Mills, while Texas' overall
oil and gas production is rising, or at a
minimum plateauing, there has been a significant decrease in permits to drill, rig
count, and industry-related employment.
For example, Texas' rig count dropped 7.5
percent from February to March, he says.
"With the oversupply of crude oil on
the market, the price margin has gotten
bigger the past few months," he comments.
"And price dictates everything: how many
jobs are available, how many employees
the industry can support, how many wells
can be drilled, and so on. The questions
everyone is asking are how low and how
long. How low will prices get and how
long will they stay there, or how long
will it take for the market to recover?"

Alliance Chairman George Rogers,
president of Bettis, Boyle & Stovall Inc.in
Graham, Tx., says Texas still has several
premiere plays, such as the Eagle Ford
and the Permian Basin, although, he acknowledges that rig counts and employee
numbers are in fairly rapid decline.
"Tier-one properties are still going to
be drilled," he reasons. "The Eagle Ford
is still seeing a good level of activity,
and there are parts of the Permian that
are looking very attractive."
As far as association membership and
participation, Rogers remarks that he has
not seen a drop-off in either. He says
that, typically, it takes at least a year
before the association sees an effect from
a down market. But, as of now, members
are as active as ever, he affirms.
"Everyone is still supporting the association and the work we are doing in and
with the legislature and regulatory agencies,"
Rogers states. "We are seeing fewer jobs
across the state, but it hasn't been as bad
as in years past because the state's economic
portfolio is much more diversified. It has
grown beyond oil and gas since the last
downturn. The state legislature is figuring
out how the tax revenue will work now
that we are in a no-growth period."
Rogers says he's most concerned about
how this market environment will affect
the young professionals in the industry,
especially those who have never seen oil
prices this low.
"We are working to bring young people
into the industry on all levels-midstream,
service, production, corporate," he continues. "We need young people to be the
next generation of leaders, both in the
general industry and in the Texas Alliance.
We have become an industry of choice
for young people, who may need reassurance in this price environment."
Overall, Rogers says he expects the
price drop to last 18 months or so, but
that he's confident association members
will "weather the storm well, as they always have."

Consulting Petroleum Engineers
Water Flooding - Evaluations
Cost Estimates - Design - Installation
Reservoir Studies - Simulations

STEPHENS & JOHNSON OPERATING CO.
Drilling & Completion
Supervision - Lease Operations
811 6th Street - P.O. Box 2249
Wichita Falls, Texas 76307-2249
(940) 723-2166

APRIL 2015 153

American Oil and Gas Reporter - April 2015

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