Virginia Oil and gas Association
Jerry Grantham - VOGA President
The Virginia Oil and Gas Association (VOGA) may be some what of a misnomer. In 2008, the industry in Virginia produced 15,712 barrels of oil; no not per day or per month but for the whole year. In the same year the industry produced a record 128.4 bcf of gas. Natural gas represents 99.9% of the hydrocarbon production out of the Commonwealth of Virginia so natural gas, both coalbed methane and conventional is really what our industry is all about. We have both a great resource and industry here in Virginia that provides the state with jobs, revenue and the cleanest burning fossil fuel available.
Virginia’s 2008 natural gas production of 128.5 bcf equated to an average daily rate of 352 mmcfd. This represents a 15% increase over 2007 production and a 60% increase over the past 5 years. Preliminary numbers for 2009 indicate that this upward trend in production will continue in this year.
Virginia is know for its CBM production and in fact is now ranked 5th in coalbed methane production in the nation. Coalbed methane currently accounts for 77% of the gas produced in Virginia, however a recent resurgence in conventional drilling is occurring and production from this resource has been steadily increasing in the last 5 years. Some of this resurgence has been due to horizontal drilling which was first done in the Devonian Shale in Virginia in 2007. To date, the industry in Virginia has drilled 40 horizontal wells testing horizons such as the Lower Huron Shale, Berea Sandstone and Big Lime Formation.
However all is not well in Virginia, as elsewhere, we have experienced an exciting yet challenging year in 2009. With continued weak prices, the drilling activity in the Commonwealth has decreased from 700 wells in 2008 to an estimated 500 wells in 2009.
On the regulatory front, the Virginia gas and oil regulations were open for re-write in 2009. A committee, consisting of state officials, industry and non-industry representatives was created to review and update the Commonwealth’s gas and oil regulations. The re-write has gone through public comment period and the new regulations should be adopted in early 2010.
In legislative matter, the Virginia General Assembly considered bills during the 2009 session involving post-production costs. The bills would have precluded producers from deducting any post production costs from wells that were forced pooled. This bill was defeated with strong opposition by the gas industry.
As a result of the post production costs issue, state legislators, the Division of Gas and Oil and VOGA held a series of town hall meeting in the producing counties of southwestern Virginia to educate landowners and address issues that residents voiced about drilling gas wells. These meeting were very successful and have served as the spring board for VOGA to develop a permanent education program here in Virginia.
Although VOGA is an all volunteer organization, our members have stepped forward to serve on various committees including: Legal and Government Affairs; Taxation; Political Action (PAC); Membership and Finance; Public Relations and Meeting Planning. The Association is grateful to all members who have been active participants in the organization over the past year. The continued growth and success of VOGA and the industry will require a similar commitment as we meet the challenges of 2010
Membership in VOGA continued to grow in 2009 with an increase to 90 member companies. This represents a 100% increase in our membership in the past 4 years. VOGA continues to attract companies from all aspects of the gas industry in Virginia. We like to say that we represent companies from the “drill bit to the burner tip” and our membership clearly reflects that diversity. VOGA provides these members a political watchdog through active participation in the legislative process and closely monitoring issues like taxation and regulation.
We had record attendance at all of our VOGA events in 2009. The 3rd annual spring barbeque was held in Vansant, Virginia. This event is designed to say “thank you” to all of the hard working people in the field. VOGA’s annual summer meeting was held in June in Virginia Beach and our fall meeting was held in Abingdon, Virginia in late October.
VOGA will continue to represent its members with effective legislative participation and will further our efforts to educate, inform and build positive relationships for our industry. Our goal in 2010 is to continue to get the positive message out about our industry here in Virginia.
