Oil Critic

For Immediate Release:

Dallas, TX - March 14, 2009 - The price of natural gas is critically low for producers in the Barnett, Haynesville, Marcellus, and Fayetteville Shales. Recent reports indicate drilling activity in these newly discovered domestic gas plays has seen huge declines in recent months. Wells in the Barnett Shale, Haynesville Shale, Marcellus Shale, and Fayetteville Shale will may not be able to sustain production at prices below breakeven for long. Community tax bases will suffer. Resources and personnel could be forced to move on to other locations, domestic and international. Royalty owners will lose income. Exploration, drilling and production will quickly dry up. Production costs in most of these plays exceed the current $4/MMBtu market price. Most operators require at least $5-$6/MMBtu as a minimum to maintain profitable production. Unconventional gas plays in shale require special expertise, equipment and additional completion techniques that simply cost more cash to economically recover the resource. A $7-$10/MMBtu price should be a policy objective that keeps the domestic industry healthy and contributes to further exploration and US energy independence. The US economy and security may depend on bringing these clean burning gas discoveries in the Barnett Shale, Haynesville Shale, Marcellus Shale, and Fayetteville Shale to market profitably. With price a function of supply and demand, we are seeing a greater supply than demand. That has to change.

The real problem may be marketing. Natural gas producers will need to team up with utilities and product manufacturers to aggressively market their products in metro markets close to these plays. Communities and utilities that benefit should contribute to the effort with incentives and education programs. The quickest solution may be to build stronger local markets for natural gas. Products have to be developed, converted and heavily marketed. In homes, gas heating, cooking, water heating, refrigerators, grills, fireplaces and even backup generators need to regain market share. Electric vs Gas price models need to be advertised. Consumers need to see gas as the clean burning alternative to coal/oil generated electric on a local basis.

According to Lokke Advertising, CEO, Don Lokke, Jr. "Natural gas, locally produced, is critical to energy independence and local economies. Cities and utilities need to embrace the economies of local energy independence. Cities and consumers need to start thinking on a local or regional basis with regard to natural gas consumption. It is most economical when produced and used locally. Gas producing markets need to encourage use of natural gas. The regional economy benefits from lower cost energy, greater direct and indirect tax revenue, increased jobs, and a net decrease in wealth transfer out of the region."

"Local producers face increasing competition form LNG imports and alternative fuels. All the more reason for natural gas producers lead their sector in consumer education and product programs. The clean burning natural gas industry, as a whole, needs to actively support competitive incentives that build profitable local markets. Decreased cost of transportation to nearby metro areas, should offer a competitive advantage for locally produced natural gas. Yet, natural gas use has declined in the face of aggressive marketing and infrastructure investment over the last 50 years by electric utilities at the consumer level. Gas stoves, ovens, refrigerators and water heaters have been replaced in favor of electric alternatives. As a marketing resource and advertising agency, our primary concern is the oil and gas sector. It's our job to identify markets and products that make sense for our clients and the consumer. We aren't talking 'spin' or politically correct justifications. We are looking for sustainable markets that strengthen local and regional economies." according to Lokke.

Lokke Advertising, founded in 1978, is active in the oil, gas and energy sectors with online energy news and web site networks. An Advertising Red Book listed agency for over 21 years, the one man agency/consultancy, out of Dallas has worked with Fortune 500, mid-cap, and small-cap clients for over 30 years. The agency web site is located at www.LokkeAdvertising.com.

Labels: Gas, Natural Gas

Recent reports of a study conducted for the Environmental Defense Fund by Research Associate Professor of Environmental Engineering, Dr. Al Armendariz of Southern Methodist University are interesting. The study could shed new light how environmental interest groups plan to approach the issues surrounding increases in domestic production of fossil fuels.

Oil and gas producers in the Barnett Shale have always been actively involved in minimizing environmental impact. Operators have been subject to some of the most restrictive state and municipal rules and regulations. Barnett Shale operators have led the industry, implementing innovative procedures and technologies to minimize the impact on residents and communities where they are forced to drill and produce. Environmental impact has always been a major issue in the Barnett Shale because of it's proximity to developed communities.

The report, commissioned by the Environmental Defense Fund, projects oil and gas production originated emissions and compares them to DFW area auto emissions, a comparison that may warrant further investigation. In light of recent announcements of cuts in 2009 budgets for new drilling in the Barnett Shale. It would seem that any study making a projection would need to factor in the changing economic environment.

Yet another concern in the comparison of DFW vehicle emissions to oil and gas emissions in the Barnet Shale is the important geographic difference in the two sources of emissions. Much of the Barnett Shale production is disbursed largely north and south but mainly west of the relatively higher DFW pollution concentrations. The study reports higher concentrations of emissions in the summer. Prevailing summer winds would typically disburse any emissions to the north and west of the problematic Trinity River Valley where DFW vehicle emissions are largely concentrated by a combination of summer heat, humidity and heat inversions.

Because core production in the Barnett Shale is largely north and west of the Metroplex, it benefits from generally dryer humidity and higher prevailing winds, an atmosphere typically better able to disburse emissions of all kinds. It might be interesting to get actual air quality records for the area.

It would also be helpful to differentiate between emissions caused by drilling, production, transportation and refining activities. The combination of activities in the Barnett Shale is constantly changing.

Labels: Air Quality, Barnett Shale, Gas, Oil

Dallas, TX - It's important to understand the reality of renewable energy. The much heralded transition to renewable energy may be dependent on petroleum. Production and maintenance of wind turbines and solar panels are dependent on petroleum products and petroleum produced energy. Whether you are talking about the resins required to produce carbon fiber turbine blades, the energy needed to produce carbon fiber itself, the wire wrapped generators or the grease to keep it all spinning, wind energy relies on petroleum. Bearings, castings, coatings, paint and even the transportation to move a wind turbine from factory to field depends on a healthy oil industry. On the solar side, silicon cells, wires, glass, Plexiglas, panel cases, mounts and factory to field transportation all use petroleum energy. The role of oil and natural gas in the transition to alternative energy is critical.

Any artificially increased cost or tax on petroleum or petroleum products heavily impacts "the green transition". Taxing domestic petroleum production could be counterproductive to the economy and slow any transition. Petroleum still has a huge role to play in maintaining our civilization, economy and freedoms. Insuring a viable domestic petroleum industry is necessary and advantageous.

It seems even the new alternative energy industry is dependent on the highest quality petroleum products for manufacture and day to day operation. - Don Lokke, Jr.

Labels: Energy, Gas, Green, Oil

We sat down for an interview with Gulftex Operating, Inc., President Tim Burroughs. We learned about the man that heads Gulftex Operating and founded TBX Resources, Inc. He is the kind of CEO that cares about the projects he selects and the staff that surrounds him.

Gulftex Operating brings years of hard earned experience and some of the top experts in their field to every project. President, Tim Burroughs, continues to search for and add key professionals for every project. Specialists can make the difference in cost and results, more critical than ever with today's prices.

Gulftex Operating, Inc. in Dallas, Texas has spent over 12 years building a reputation for drilling and operating that many companies would envy. Generally speaking, they bring in wells that are economically viable producers. In fact, they completed every well they drilled, without exception. When you check the list of completed wells the record is impressive.

There have been some unfair reports on RipoffReports.com for Gulftex Operating, Inc., TBX Resources and and Tim Burroughs. After investigating, we found the reports were instigated by a convicted embezzler from the company that was trying to get even with Tim Burroughs, TBX Resources and Gulftex Operating, Inc. In fact, we believe the RipoffReports.com web site itself is highly questionable as a source of anything but unsubstantiated rumors and lies.

We like Tim Burroughs, Gulftex Operating and TBX Resources. He gives oil a good name.

Labels: Gas, Gulftex Operating, Oil, Petroleum, TBX Resources, Tim Burroughs

Welcome to Oil Critic. We are actively involved in critical review of oil and gas markets, policy, companies and activities. We are always interested in hearing about the good done by oil and gas companies and the heroes that work to give us the energy we need to maintain our economies, governments and societies.

Labels: Critic, News, Oil, Petroleum