POINT OF VIEW: IPAA's True: Membership, energy policy top concerns

The Independent Petroleum Association of America's plate is a full one of late, according to IPAA Chairman Diemer True. The association, under True's guidance, is watching keenly the actions of the US House and Senate as those bodies debate an omnibus bill setting the country's energy policy.

IPAA also is grappling with other industry-wide issues, such as sustaining the association's membership and maintaining access to capital for its member companies.

IPAA's challenges

This month, True reached the midpoint of his 2-year term as IPAA chairman. One of the organization's main challenges, he told OGJ, has been maintaining its membership numbers. "With mergers and acquisitions (happening) within the industry, we've seen a significant decline in membership."

Another challenge is industry's struggle to access capital for acquisitions, despite IPAA's sponsorship of two investment symposiums—one in London and one in New York—that have been well received by investment bankers, analysts, and IPAA's various member companies, True noted. IPAA is mulling sponsoring another symposium in the US, he said.

In addition, IPAA is looking into establishing a mutual index fund comprising its member companies based on relative market capitalization. True explained that no one company would represent more than 5% of the fund. "This (fund) would be particularly helpfulUto our smaller members, as they have a difficult time making the market in their stock." IPAA is actively looking for investors now, True said.

Yet another challenge for IPAA's members, True said, has been the US Congress's ongoing deliberation on US energy legislation. According to True, there are a number of provisions in both the House and Senate versions of the energy bill that would make "a significant improvement in the investment climate" for independent oil and gas operators in the US (see related story).

"There is a lot to commend the proposed legislation, and I think that the confereesUstill really have their shoulder to the wheel and are working as hard as they can to get a good piece of legislation together that they can bring back to their respective body," True told OGJ. "I think there is some real momentum to getting a bill passed," he noted, but each day that Congress gets closer to adjournment and to national elections, "it becomes more difficult."

True—like many others in industry—envisions a "lame duck" congressional session following November's elections. "Right now, I'm sure that there are a lot of members in Congress asking themselves, 'Will I be better off to have voted on an energy bill before I go home to campaign, or will I be better off if I have not voted on an energy bill?' Come post-election, they will know," he said.

True beginnings

True currently serves as a partner—along with his brothers Hank and Dave—of True Cos., based in Casper, Wyo. True Cos. had its beginnings in 1948 when True's father, H.A. True Jr., expanded the one-rig Reserve Drilling Co. into a five-rig operation by 1951.

During that year, H.A. True, along with Douglas S. Brown, bought out the other Reserve Drilling interest holders and founded True & Brown Drilling Contractors. Another partnership, True & Brown Oil Producers, was formed in 1953, which was bought out by H.A. True the following year. In a partnership with his wife, Jean, H.A. True changed the names of the companies to True Drilling Co. LLC and True Oil Co.

After obtaining his undergraduate degree, Diemer True had planned to attend law school. He then served in active duty in the US Army and while on a hiatus to get into law school, he moved to the family's field operations, which were then in Gillette, Wyo. "Pretty soon," he recalled, "we had several children, and the oil field held a great deal of interest to me."

He then relocated to the company's main office in Casper and assumed a variety of supervisory and managerial roles. In 1972, he and his brothers became partners in the firm.

At the beginning of this year, both of True's sons acquired interests in the family business. "The goal is to keep the business in the familyUand we think we have a strategy to do that," he said.

Wyoming state politics

True entered Wyoming state politics after being challenged by his wife. He had been complaining to her about the state's elected officials, and she warned that if he was not going to be a part of the solution, he would have to stop his criticism. Looking back, he admitted, "I seriously didn't expect to win." True was elected to the state legislature in 1972, but when he arrived there, he found it a real challenge. "It was an eye-opening thing," he said.

True served as chairman of the Wyoming Senate Minerals Committee for 10 years. He said that this role was a "real education" for him, as he lacked the legal background for the job. His presence was a benefit to the legislature, however, because he had some practical experience in the petroleum industry. "We had very few oil and gas people in the legislature in all the years that I was in there," he noted.

True reached a point when he even contemplated a full-time political career but did not pursue it due to the challenges involved with holding such a position and trying to raise a family at the same time.

When True was elected as IPAA chairman, he said he was "dumbfounded," adding, "It's really an honor."

"Being chairman of IPAA has just been the most interesting experience in that all of my business career and oil and gas experience has really been in the Rockies, for all intents and purposes," True said. "To learn that there is a big oil and gas industry elsewhereU that's been a tremendous experience for me, personally."

Changed philosophy

Over the years, True said his thinking about the oil and gas industry has altered slightly. He recalled that when he was first working in the field as a roustabout and roughneck, he was a lot less concerned about environmental issues. Now, however, he noted just how focused industry is on those issues. "It's a change in the culture," he said.

Also, the importance of oil and gas to the US economy remains strong—even though it remains a significantly lower percentage per unit of the nation's gross domestic product than it once was.

"Obviously," True observed, "the American public takes oil and gas for granted, where I don't take it for granted. I realize the challenges that we have in front of us in order to provide it."