_

The Tangipahoa Parish Council declined to adopt a proposed ordinance that would have regulated and required a permit for companies to drill for oil and gas in the parish.

The proposal, “An Ordinance to Regulate Oil, Natural Gas, Salt, Sulphur and Other Sub-Surface Minerals Exploration, Development and Production,” was spurred by an increase in drilling activity and expected activity in the portion of the Tuscaloosa Trend that lies under the parish.

At a public hearing prior to the council meeting Monday night, Lauren Estopinal, an attorney representing the Louisiana Oil & Gas Association, asked the council to delay making a decision on the ordinance until association representatives and drilling firms had an opportunity to meet with council members and discuss some changes to the measure.

Estopinal contended that the state has regulatory control over oil and gas drilling and the Tangipahoa Parish proposal was duplicative and in many cases unnecessary.

She also objected to the $2,000 permit per well fee that would have been levied on drillers had the matter passed.

Council President Carlo Bruno sparred with Estopinal, saying the council needed to act on the matter to protect aquifers and infrastructure. He called the proposed ordinance “simple and straightforward” and said he doubted that it would hinder oil and gas well development.

Councilman David Vial offered a motion to put off action on the proposal while the proposal is studied further, but it failed for a lack of six votes. Voting to table were Harry Lavine, Lionel Wells, Nicky Muscarello, Vial and Bobby Cortez. Voting against tabling the measure were Louis Joseph, Ronnie Bankston, Greg Varnado and Bruno. Trent Forrest abstained.

A motion to approve the regulation ordinance also failed to garner the six necessary votes. Voting for the measure were Bruno, Joseph, Bankston and Varnado. Voting against the proposal were Cortez, Lavine, Vial, Wells and Muscarello. Again, Forrest abstained.

Council Clerk Kristen Pecararo said the measure could be re-introduced on June 11 for council action.

original article

_

Only about 20 percent of the areas of the Gulf of Mexico’s Outer Continental Shelf that are leased for potential oil and gas drilling are under production, according to a new lease utilization report Tuesday from President Barack Obama’s Interior Department.

The report comes during a presidential election year in which Republicans in Louisiana and nationally have repeatedly attacked the president for alleged delaying tactics and slow permitting for oil and gas drilling in the Gulf since the 2010 BP oil leak.

Interior Secretary Ken Salazar said that next month 38 million acres in the central Gulf will become available during a new lease sale.

“We continue to offer new areas onshore and offshore for leasing, as we have over the last three years, and we also want companies to develop the tens of millions of acres they’ve already leased but have left sitting idle in order to further reduce our reliance on foreign oil as quickly as possible,” Salazar said in a statement accompanying the report.

Out of 32 million acres leased in the Gulf’s Outer Continental Shelf, 10 million acres are approved for exploration or development and only 6.4 million of the acres are in production, according to the 23-page report.

Sen. David Vitter, R-La., responded that the administration is again focusing on “liberal talking points.”

“Often because of Interior regulations, these lands sit ‘idle’ and paying into the (U.S.) Treasury until they can move forward,” Vitter said.

Sen. Mary Landrieu, D-La., argued the federal government must enact more “straightforward and efficient” permitting in the Gulf.

“In order to make the sizeable investments needed to safely produce the energy our country needs, reduce our dependence on foreign oil, and lower prices at the pump, we must have commonsense reforms in order to put the Gulf Coast back to work,” Landrieu said.

The Interior Department contends the central Gulf is its No. 1 energy production priority with an area estimated to hold close to 31 billion barrels of oil and 134 trillion cubic feet of natural gas.

Louisiana Oil and Gas Association President Don Briggs said he hopes the June lease sales move forward as planned.

Briggs also criticized Tuesday’s report for showing the Obama administration does not understand how leasing and Gulf oil and gas production works.

“It takes years to develop (leased) properties,” Briggs said, arguing leases are revoked if companies do not produce.

That is why close to 40 percent of today’s production comes from leases lost and re-leased, he said.

The American Petroleum Institute contends out of every 100 leases in the Gulf Outer Continental Shelf, there are about 11 drillable prospects and only one major discovery.

Oil production often does not occur until about 10 years after the lease sale because of the amount of time required for exploration and the complicated setup and drilling procedures in deepwater areas, the API argues.

“It is not uncommon for a company to spend $100 million to drill a well and find no oil or gas,” according to a 2011 API fact sheet. “Moreover, companies drill more wells that have no oil or gas than wells that actually do.”

Briggs said the administration should just stick with the leases and regulations.

“If they paid for the lease, then what else matters?” Briggs said. “The federal government is still getting their money. If they (companies) decide not to drill, then that’s their business.”

original article

_

While Pennsylvania, northwestern Louisiana and gas-rich areas around the Gulf of Mexico are losing jobs and revenue as the fracking industry shrinks after a price collapse, oil-rich North Dakota and Texas are in the midst of a boom.

Other winners in the fracking lottery include central and southern Louisiana, Mississippi, Ohio and Wyoming, where the economy is expanding and revenues are climbing.

As oil prices are expected to stay around $100 a barrel for at least a couple of years, the success of these states may last longer. But the high volatility of energy prices may give local economies a headache.

With natural gas prices touching 10-year lows three weeks ago, there could be more pain ahead for gas-rich communities and states where fracking was until recently a growth industry.

The forerunners in fracking natural gas are a case in point.

Parts of northwestern Louisiana, where the Haynesville shale is located, already have been hit as gas rigs left. In Bossier City-Parish, one of the communities in the Haynesville area, the rural district tax revenue fell 25 percent to $2.5 million from January to April, according to tax administrator Ken Kirspel.

Economists warn that this type of reduction in local revenues could spread throughout Lousiana as natural gas output falls, cutting more jobs and revenue.

In the last two years, the oil and gas extraction industry added 36,000 jobs around the nation. Most of those jobs were in natural gas fracking, according to Dean Baker, an economist with the Center for Economic and Policy Research, in Washington, D.C.

Those jobs could move elsewhere, other experts said.

Fracking is a drilling technique that extracts oil and gas from shale by blasting it with water, sand and chemicals. Environmentalists have raised concerns about possible air and water pollution. Due to these concerns, Vermont is set to ban fracking, and New York has placed a moratorium on it.

How many jobs will be lost in gas production and gained in oil drilling is difficult to estimate, economists say, but local communities in gas-rich areas will feel the pain.

The estimated number of jobs lost could reach 72,000 – or double the jobs added during the fracking boom, said Baker of the Center for Economic and Policy Research. This assumes that each fracking job created one more job in related areas, such as trucking and steel manufacturing, and in other sectors, from hotels to shops, where oil and gas workers spend their wages.

GOODBYE GAS, HELLO OIL

The decline in gas rigs happened swiftly in Louisiana’s gas-rich Haynesville shale. The number of rigs has dropped to about 40 from over 140 over the past 18 months, said Don Briggs, president of the Louisiana Oil and Gas Association.

“These rigs are moving to Texas or other places to drill wells … for oil instead of natural gas,” he said.

Caddo Parish, which enjoyed the fracking boom, is getting squeezed now. Sales tax revenue fell 18 percent in 2011, and has kept slipping this year, said Erica Bryant, director of finance. “We will have to monitor the situation to determine its effect on our operations.”

Some of the economic damage comes from the lost payments that landowners hoped to get from drilling companies.

Suzanne Stinson, the court administrator for Bossier Parish, said a company that leased property from her family for three years has not renewed the contract.

“It didn’t come as a surprise to us,” she said, noting other landowners had the same experience.

The metropolitan area around Shreveport, a Haynesville drilling hub, had 6,800 mining and logging workers in March 2012, down from a year-ago peak of 7,200, according to the Louisiana Workforce Commission.

The state’s severance tax, its natural resource levy, has yet to recover from the Great Recession. It only produced $764 million in 2011 versus a 2008 peak of $1.047 billion. The state’s budget last year was about $25 billion.

Natural gas drilling could remain depressed for a couple of years, economists say, because that is how long it could take to work off the oversupply created by fracking.

The price of natural gas has fallen to about $2.50 per million British thermal units from around $13.70 in July 2008. Output fell in February, and the decline was the bigger of two monthly drops in 12 months..

Drillers have reacted. The number of gas rigs fell last week to 598, the lowest in a decade. Yet the total number of oil rigs rose to 1,372, a 25-year high..

Pennsylvania, which opened its doors to fracking, has started to see gas rigs leave the state. The number last week fell to 95 from 108 a year ago.

“I think Pennsylvania will see some moderation and there probably will be some short-term adverse effects on jobs,” said Eric Smith, a professor at the Tulane Energy Institute, in New Orleans.

The state, whose oil and gas revenue leaped to $419 million in 2011 from $176 million in 2006, could see that windfall shrink as more rigs leave, economists said To put that figure in perspective, the state’s budget last year totaled $27 billion, with gambling alone producing $1.4 billion in 2011 tax revenues.

NORTH DAKOTA’S OIL RUSH

Many rigs have moved to North Dakota because of its oil-rich Bakken shale formation.

Its mining and logging sector rose to 21,000 workers in March 2012 from 15,500 in December 2007, and its oil output topped California’s in January. Economists expect more gains.

North Dakota’s oil production in January averaged 546,284 barrels a day and “I think it’s very realistic to assume this becomes a million barrels-a-day production,” said John Harju, associate director for research at the University of North Dakota’s Energy & Environmental Research Center in Grand Forks.

The state’s 3 percent jobless rate could fall further, and might even be lower in a few drilling hotbeds, like Williston.

“There’s no unemployment here, everybody’s home values have gone up, but at the same time, there is a lot more traffic,” said Tom Rolfstad, the town’s economic development director.

North Dakota’s oil tax revenue – which totaled $1.027 billion from July 1, 2011 to March 3, 2012 – is expected to keep rising. Its budget is about $4.2 billion.

The state is aiding its booming localities, planning to send them about $1.2 billion by the time its two-year budget ends on June 30.

“They certainly have been our Big Brother through this whole thing … but it is kind of hard to keep up,” Rolfstad said.

original article

_

It has come to our attention that the Attorney General has recently released an opinion on multiple matters relating to “valuation of oil and gas production equipment and components.” The Louisiana Tax Assessors Association made the request for the opinion.

We are in the process of doing a full analysis, but one opinion of note is the valuation of the lateral in a horizontal well.  We were able to successfully defeat the rules promulgated by the LTC about 2 years ago regarding the same matter, and it appears to be coming back again.  The AG appears to side with the Assessors and the LTC on this issue.  This will certainly give the LAA the encouragement to bring the issue back and may impact the LTC.

Once we do a more complete analysis i will be sure to reach out to you and share what we find.  Please feel free to call our office with any questions at (225) 388-9525.

_

Stone Energy Corp. (NYSE: SGY) is spending $67 million in cash to buy some of Anadarko Petroleum Corp.’s (NYSE: APC) working interest in the Gulf of Mexico.

Lafayette, La.-based Stone said May 10 it will acquire The Woodlands-based Anadarko’s 25 percent interest in the Pompano field, as well as other interests in the Mississippi Canyon field.

Net production from Pompano is 1,000 barrels of oil per day and 3 million cubic feet of natural gas, according to a statement from Stone Energy.

Stone is an independent oil and natural gas exploration and production company with offices in Houston.

Anadarko recently announced a plan to increase its capital spending in 2012 by 13 percent to $6.9 billion. Geographically, more than half of its spending will go toward U.S. onshore properties, a quarter will go toward international projects, 10 percent will go toward the Gulf of Mexico, and the remainder will go toward midstream and other work.

original article

_

Landowners who have agreed to allow oil or gas drilling on their property should get at least 30 days notice before crews move in to build roads, set up drilling platforms and start drilling, says Sen. Bret Allain, R-Franklin.

The House Natural Resources Committee on Wednesday endorsed his SB535 and sent it to the full House for debate. Allain, who is a sugar cane farmer and land manager, said his bill comes from personal experience. He said he had just planted a new crop when a representative of a drilling operation started putting out markers for a road would be built to a drilling site. The representative said the road and drilling rig would be onsite within four days, and he had no time to make changes.

“If you have a mineral lease, they have the right to extract minerals,” he said. “Just give a man fair notice so he can take care of his business.”

The bill calls for the commissioner of conservation to draw up rules that would call for 30-day notice of when the operation would begin laying down roads and a drilling pad but allows an exception if a lease would run out in less than 30 days.

“Most operators do it,” Allain said. “Some don’t.”

He said the notice would give farmers time to relocate cattle, build new fences and reroute irrigation canals for crops.

Rep. Jim Morris, R-Oil City, who is in the oil and gas extraction business, told Allain, “We as an industry sometimes forget our manners.”

Morris said he wants amendments attached to the bill that would penalize landowners who with “malicious intent” do things that disrupt operations.

He said he had one job where the landowner used equipment to cut deep ruts across the road to the drilling site, piled large pieces of junk on the drilling pad and dumped trash in the drilling pits.

Allain jokingly said the landowner might have been mad because he didn’t receive 30 days notice.

The bill had the support of Don Briggs, president of the Louisiana Oil and Gas Association. He told the committee that the bill deals with “sensitive issues. We’re careful not to tread on areas we shouldn’t and have unintended consequences.”

Allain said he will work with Morris to develop amendments that address his concerns.

“It’s amazing what can happen when we work together, hold hands and sing ‘Kumbaya,’” he said.

original article

_

New rankings from Forbes magazine list Lafayette as one of the top American cities in terms of job growth and opportunities.

Lafayette was fourth among all U.S. cities on Forbes’ list of Best Cities for Jobs. Among mid-sized cities, Lafayette ranked first with a 5.2 percent year-over-year employment growth.

Overall, the list was dominated by towns with major energy industries, including several in Texas, Wyoming and North

Dakota.

“These cities’ economies have expanded steadily over the last few years, beneficiaries of a great boom in fossil fuels that, unless derailed by regulators, will continue for the foreseeable future,” the magazine said.

Don Briggs, president of the Louisiana Oil and Gas Association, said he wasn’t surprised Lafayette placed so high on the list.

“One of the things we constantly push is that Louisiana is truly an energy state, and when we think of Lafayette, it doesn’t just serve the energy industry within Louisiana, but they really serve all parts of the world, as well as other states,” Briggs said.

The rankings come during what many consider to be a time of economic prosperity in Lafayette, with several new business openings, company expansions and low unemployment. According to the Louisiana Workforce Commission, a total of 114,221 people were employed in Lafayette in March. The LWC said 5,782 people were unemployed, for an unemployment rate of 4.8 percent, one of the lowest in the country.

“What I’ve said often is these kinds of things don’t happen by accident,” said Lafayette City-Parish President Joey Durel. “I don’t give the government credit for something like this. I give the credit to the community and the leaders.”

Durel said he received positive feedback late last month when several entrepreneurs visited the city for the Cajun CodeFest and INNOV8.

“They said they’ve never been to a place where everybody seemed to be working together so well — local government, the private sector and people from all industries. I think that’s the real key,” Durel said. “We have leadership in all sectors that recognize that we do a whole lot better when we work together than when we don’t.”

To compile the rankings, Forbes used employment data from November 2000 to January 2012 and took into account recent growth trends, mid-term growth, long-term growth and the region’s momentum.

Briggs pointed out that during that time period, more energy service companies, such as ones that manufacture or provide equipment for drilling companies, have been launched in the Lafayette area.

“Years ago, we used to have more geologists and more small oil and gas companies in Lafayette and Louisiana,” he said. “Today, it’s become a major area for the service sector that services oil and gas, both offshore and onshore in the United States.”

Durel said that he is optimistic that the positive economic trends will continue.

“With where energy is now, and what we’ve done with fiber optics and the progressive nature of Lafayette, I just think we are positioning ourselves to diversify a little more and continue to grow,” he said. “I have nothing but optimism about the future of Lafayette.”

original article

_

A third horizontal well in the Tuscaloosa Marine Shale by Devon Energy is initially producing more than twice the amount of oil—about 259 barrels per day—than its first two wells produced, says Louisiana Department of Natural Resources Secretary Scott Angelle. “Based on their ongoing drilling activity, and the interest expressed by Devon and other energy exploration companies in the Louisiana TMS on both sides of the Mississippi River, it would seem that the industry is beginning to recognize a very real opportunity here,” Angelle says in a news release.

The latest and highest-producing well Devon has drilled is located in northern East Feliciana Parish. The Oklahoma City-based firm has another in East Feliciana and a third in Tangipahoa Parish. Devon—which last week reported first quarter earnings of $393 million on an oil production increase of 26%—is also drilling two other wells in the Tuscaloosa Shale. One in St. Helena Parish is nearing its target depth, Angelle says, and another in West Feliciana Parish is nearing the point of its turn from vertical to horizontal.

The Tuscaloosa Shale is a 2.7 million-acre stretch of land extending from central Louisiana to southwestern Mississippi that’s believed to hold billions of barrels of oil.

“We know that this formation has vast potential to provide domestic energy for this nation, and jobs and economic growth for this state, but it will take companies time to learn and perfect the most effective means of drawing out the oil and natural gas locked within that shale,” Angelle says.

original article