IPAA's True: US independents hammer out issues with membership, energy policy
"There is a lot to commend the proposed (US energy) legislation, and I think that the conferees . . . still 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."
Senior Staff Writer
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.
This month, True reached the midpoint of his 2-year term as IPAA chairman.
One of the organization's main challenges, he told OGJ late last month, has been maintaining its membership numbers. "With mergers and acquisitions (happening) within the industry, we've seen a significant decline in membership," True noted.
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 very well received by investment bankers, analysts, and IPAA's various member companies, True noted. IPAA is currently mulling over sponsoring an additional symposium somewhere else 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 helpful . . . to 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.
"There is a lot to commend the proposed legislation, and I think that the conferees?still 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 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. "Our father, clearly—and we used this term with real affection—was 'the boss'—there was no question about it—but over the next 20 years, increasingly various responsibilities were delegated to the three sons," True said.
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 family . . . and 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.
One perk, he recalled, was that due to the legislature's meeting schedule, he found it possible to serve his state and maintain his full-time career as partner. "Being in a family business, that's another big advantage in that my responsibilities were covered by my brothers and my dad, and I could be gone for that amount of time," 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 elsewhere . . . that's been a tremendous experience for me, personally."
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. Oil and gas fuels 97% of all US transportation.
"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."
Diemer True was named president of the Independent Petroleum Association of America in October 2000. He is a partner in the Casper, Wyo., based independent operating and services company True Cos.
True worked variously as an oil field roustabout, roughneck, ranch hand, oil scout, land man, and field truck supervisor before becoming a partner in True Cos. in 1972.
True Cos. is involved in oil and gas exploration and development (True Oil Co.), marketing (Eighty-Eight Oil Co.), transportation (Belle Fourche Pipeline and Black Hills Trucking), oil field and tubular sales (Toolpushers Supply Co.), and oil and gas drilling (True Drilling LLC), as well as agriculture (True Ranches) and financial services (Hilltop National Bank).
True served 4 years in the Wyoming state House of Representatives and 16 years in the Wyoming state Senate, retiring as Senate president. He also served as chairman of the Wyoming State Republican Party during 1992-96.
True has a business degree from Northwestern University.
In addition to his IPAA chairmanship, True has served as chairman of IPAA's Land and Royalty Committee.
True also serves as vice-chairman of Business Industry Political Action Committee and has long been active in the Petroleum Association of Wyoming as well as other trade associations.