American Oil and Gas Reporter - September 2016 - 97

ConventionSection: Arkansas Independent Producers & Royalty Owners

Increasing Gas Prices Fuel
Arkansas Optimism
LITTLE ROCK, AR.-The mood in
the Arkansas oil and gas community is
cautiously optimistic, and Andy Miller,
president of the Arkansas Independent
Producers & Royalty Owners Association,
says he has direct evidence life is returning
to the state's natural gas fields.
Southwestern Energy Co. announced
in late July it expected to have five rigs
running nationally by the end of the third
quarter, including one in its Fayetteville
Shale unit. After placing six Fayetteville
wells on production in the second quarter,
the company announced its plans for that
area were to drill 7-10 wells, complete as
many as 39 wells, and place an additional
37-40 wells on production in the second
half of 2016. Its capital expenditure in
the Fayetteville play is expected to jump
from $13 million in June to $80 million
by the end of 2016, the company says.
"There is some level of optimism in
Arkansas, but it certainly has been a
pretty rough period for all producers. I
think everyone still is very cautious,"
Miller, senior director of government and
community relations for Southwestern
Energy in Little Rock, assesses. "Producers
will be ready when prices recover, but I
don't want to promise anything the industry cannot deliver on. However, given
the right commodity price, Arkansas certainly will see more activity."
Miller notes he is beginning to see
other price responses to decreasing natural
gas production, as some futures strips
have climbed above $3 an MMBtu. In addition to prompting companies' plans to
pick up rigs, he predicts optimism in the
markets will push them to fracture more
of their drilled but uncompleted wells.
The industry's future prospects will be
on AIPRO's radar when it holds its annual
convention, scheduled for Oct. 3 at the
Little Rock Marriott. Miller points out
AIPRO will hold its meeting in conjunction
with the Interstate Oil & Gas Compact
Commission's annual meeting, Oct. 2-4.
AIPRO Director of Events and Communications Michele Easter says this is
the first time AIPRO and IOGCC will
hold their annual meetings together. The
25-state consortium rotates its meetings

AIPRO Annual Meeting
Little Rock, Ar.
Monday, Oct. 3
7-8 a.m. Continental Breakfast, Little
Rock Marriott
7:30 a.m.-4:30 p.m. Registration
8-11:30 a.m. General Session
State and Federal Legislative Panel: U.S.
Representative Bruce Westerman, RAr.; President Pro Tempore Senator
Jonathan Dismang, R-Beebe; Speaker
of the House Jeremy Gillam, R-Judsonia; Moderator: Roby Brock, Talk Business & Politics
Arkansas Oil and Gas Commission Update
Larry Bengal, Director
Break
Oil and Natural Gas Industry Keynote
Presentation
AIPRO Business Meeting
6-8 p.m. AIPRO-Sponsored Arkansas Dinner
Old State House

among the states, and was last in Arkansas
12 years ago. She notes that Arkansas
Governor Asa Hutchinson will be inducted
as the incoming IOGCC president during
the meeting.
Working With Government
Arkansas' regulatory environment is
relatively quiet now, Miller assesses. Part
of that probably is because of decreased
industry activity, but he gives more credit
to operators' strong working relationships
with state regulators. Miller adds that
AIPRO intends to continue to work to
maintain that rapport. Those positive connections extend into the Arkansas Statehouse, Miller says.
"I don't see any major issues with
legislators. There will be a regular session
this January," he says. "Crystal balls are
worth very little, but in talking to AIPRO
members, I get a general consensus we
will not see any major issues coming our
way in 2017. There probably will be
some of the same issues we see every
session, such as taxes and other things,

but I don't think there will be any major
obstacles for the industry."
While legislators approved the state's
$5.3 billion budget for 2016 in May, Miller
adds, finding a consistent source of highway
funding is one significant issue that continues to resurface in Little Rock. Legislators
have struggled for years to develop a consensus plan. He says there have been some
indications a funding mechanism will
emerge in the near future.
As an association, AIPRO tries to stay
abreast of federal issues and stay plugged
in where it can, Miller says. Most of that
monitoring takes place through the
Arkansas congressional delegation.
"On the issues AIPRO discusses with
federal legislators-from environmental
issues to overregulation-the industry and
its congressional representatives are on
the same page," he says. "(Our) legislators
feel the same way AIPRO does. Arkansas
operators cannot ask for any better support
from their federal legislators. We are not
against all regulations; we support sensible
regulations. But the overregulation of
the oil and natural gas industry is unnecessary and a burden that adds costs to all
Americans."
Energy Education
The Energy Education Foundation, a
nonprofit organization founded by AIPRO,
has been a very good teaching and outreach
program for the association and the oil
and gas industry, Easter says. "We did
not hold our summer teachers' seminar
this summer because there was no drilling
going on. That is a big part of what the
foundation does, but the program still
exists," Easter notes.
Miller describes the teacher workshop
as involving tours of a working well site
during the hydraulic fracturing process.
"AIPRO had built such a reputation for
that program in the educational community
that it did not want to have one session
without the things the teachers were used
to experiencing," he adds.
Easter says AIPRO will resume the
foundation's field activities next year,
SEE ARKANSAS PAGE 109
SEPTEMBER 2016 97

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