Jerry Jordan wants to encourage independents to return to wildcatting.
Last week, Jordan, president of Jordan Energy Inc., was elected chairman of the Independent Petroleum Association of America at the group's annual meeting in Dallas.
Jordan said, "To a certain extent, I think the independent sector has lost the will to explore. When I travel around the industry, I don't hear a lot about wildcats and exotic acreage plays. A few years ago, it seemed everybody was excited about exploration.
"Lately, we've been essentially trading properties.
"We're in the banking business, not the exploration business. The banking business is great-everybody makes a little money-but we're going to run out of anything to trade if we don't get back to exploration."
He said independents lost a reason to explore (reasonable prices for production), lost staff to do it, and have been losing access to new places to explore.
Jordan plans to ask his membership and groups such as the American Association of Petroleum Geologists and the Society of Petroleum Engineers how to revive the wildcatting spirit.
"As a practical matter, [higher oil and gas] prices will help us a lot. I think we need to [return to exploration] because of the nation's need for natural gas. All the experts predict a 30 tcf market for [the US] by 2010."
Jordan also wants to rebuild cooperation among independent oil groups.
He said independents' state and regional associations are "where the rubber meets the road." They basically try to handle state and regional issues, while IPAA works federal issues.
But Jordan said cooperation has slipped because "the bad times" of the past 2 years have intensified disagreements over solutions.
Jordan has visited many of the regional groups in the past 6 months. "There was a lot of trouble in the industry, and I wanted to listen to producers and get an idea of how IPAA can help."
He said the various associations have become more insular and need to improve communications. To address that, he will form a Council of Cooperating Associations, consisting of staff from state and regional groups. A full-time IPAA staff person will work with the cooperating associations.
Jordan said, "I want to know what the issues are in Midland [Tex.]. I want to know what the issues are in California."
Jordan also plans to revive efforts to improve the oil industry's image.
He said, "Several years ago, when Lew Ward was chairman, he had a great campaign to improve the industry's image, but the thing really didn't get off the ground. It got into an argument over funding the campaign and didn't even get to the harder question of what to spend the funds on. I want to flip that. I want to get back to the issue of improving our image, but I believe the way you should do that is first develop the message.
"We don't need a fancy sales pitch; we just need honest and direct ways to tell the truth about our industry, what we do, and how important we are to this country."
Jordan will ask other national industry associations to help develop that message. Then they all will decide whether to attempt to finance national or local campaigns.
He said a recent study prepared for the American Petroleum Institute will be very helpful in developing that message (OGJ, Apr. 19, 1999, p. 42).
Jordan is also concerned about industry's shrinking access to federal lands.
"Land access is a critical issue. This administration has embargoed unbelievable numbers of acres. And it added to that just last month by taking wilderness road areas out of the mix. Access is our biggest problem, other than economics."
He said the US is increasingly reliant on natural gas, but reserves are not being replaced at a fast enough rate.
"We have the resource base. The gas is there. We need to find it and get it out of the ground. But we're running out of places to drill, because so much of the future places to drill are on federal lands and in federal waters."
Jordan worked as a roustabout and roughneck for his father, a drilling contractor. He received a degree in geology from Denison University in Gran- ville, Ohio, and later graduated from the University of Michigan Law School.
He joined a Columbus, Ohio, law firm, and, aided by an oil play in Morrow County north of Columbus, built an energy law practice.
"I started investing in the business on the side, and I ended up as the second largest shareholder of a small company, Clinton Gas Systems Inc."
In 1988, he gave up the law practice and became CEO of Clinton. The company made several gas discoveries during his tenure. It was sold in 1996, and Jordan left in mid-1997 to form Jordan Energy Inc., which invests in wells.
To a certain extent, I think independents have lost the will to explore. Lately, we've been essentially trading properties. We're in the banking business, not the exploration business. The banking business is great, but we're going to run out of anything to trade if we don't get back to exploration.