Don Briggs

Don Briggs

A Ragin’ Cajun with advocacy and geopolitics on his mind, Don Briggs has been president of the Louisiana Oil & Gas Association (LOGA) since he founded it in October 1992. He is a 1964 graduate of USL (the University of South Louisiana, today known as the University of Louisiana in Lafayette). Given that he worked for Owen Drilling Co. while attending USL, he has been involved in the oil and gas industry for more than 50 years.

Over that time he has owned several companies, including Dolphin Pipe Rental and Aztec Corp., but he sold some to Newpark Resources and realized others could run by themselves, so in 1992 he stepped away from managing his business to organize LOGA, knowing that the industry needed to be heard in Baton Rouge. Briggs has served as president ever since.

He also serves or has served on energy-related committees for many organizations and governor-appointed state boards such as the Ground Water Management Advisory Task Force and Oilfield Site Restoration Committee. He has been a member of Harold Hamm’s Save Domestic Oil executive committee and served on the boards of the Lafayette Petroleum Club and the advisory Council of the Center for Petroleum Development, a Shell Oil/Louisiana State University venture.

Investor: Don, what’s the biggest concern of your members these days?

Briggs: Naturally the biggest issue is the price of oil and natural gas. That’s huge. We talk about oil prices all the time but gas prices are in the cellar too, and have been for some time. The question we ask ourselves is, are we moving into the same manufacturing mode for oil that we did for gas, keeping the price down, and yet able to produce more with fewer rigs?

We are in a real standoff with the Saudis, who want to bring down the resource plays. Are our guys going to be able to stand in Death Valley, square off, and have enough bullets to survive? Our guys don’t seem to be backing down—U.S. production has been climbing since November, so it’s fascinating to watch.

One big change we’ve seen is that 30% of U.S. gas production is now coming from the four major shale oil plays, from associated gas. The concern for my members is we are taking pipelines that went to the Northeast and getting them turned around, to send gas back down to our region.

Investor: How has Louisiana been affected?

Briggs: Production is down, the Haynesville is down, the Gulf of Mexico is down. The severance tax the state receives is in decline. For every dollar drop in the price of oil, the state loses $12 million in severance tax.

There are about 72 rigs working in the state now, including 30 in the Gulf, so we’re not anywhere near the volume of rigs we’d like to see. A guy I had lunch with today, who once had 400 employees, now has 80—and he’s grateful for the 80.

Investor: Oh dear! What can LOGA do?

Briggs: In the legislative session next year, we’re going to look at reintroducing some incentives that we had for years that recently were “sunset-ed” out, such as the severance tax exemption for re-entering old wellbores. You’d get two years of tax relief or until payout, whichever comes first. I can’t begin to tell you how this will play out. You know the state has a tremendous, $1 billion shortfall—we’re in big trouble—and next year we’ll have a new governor and a third of the legislature will be brand new.

Investor: Aren’t you a target?

Briggs: It’s kind of hard to be a target when you’ve got nothing left. But the reality is, they certainly will be looking at the upstream and petrochemical industries.

Investor: But soon you’ll be exporting LNG from Louisiana.

Briggs: Yes, the Sasol project is still in the works, and Cheniere goes online by the end of this year. We’re hoping that will suck up some of the gas surplus and help our markets. But we’re doing fine on gas production in this country with just 300 gas rigs running.

Investor: And in the Haynesville?

Briggs: There are 25 or 26 rigs running up there. It’s a good solid producing area. There are 2,800 wells completed in the Haynesville but we could easily drill another 10,000.

Investor What do you hear about the Tuscaloosa Marine Shale and Cotton Valley?

Briggs: The Tuscaloosa is a high-cost play—you need $80 or $85 oil, so we don’t have any rigs running there now. It’s potentially a nice play, but you’ve got to figure out the right cocktail when you’re fracturing. The Cotton Valley is an emerging play with a great deal of potential, but there’s not a lot of talk about it.

Investor: Your advice for negotiating the downturn?

Briggs: You just can’t control this stuff, but the industry is resilient. Remember, times like this are also times of opportunity. There is a lot of money out there looking for a place to go, so I think you’ll see people making some pretty good deals. The world is still going to need oil and gas.

Since 2008 we’ve doubled oil production in this country and stopped talking about peak oil. Just look at us! We went from importing gas to exporting it. About the time you think you know something, you find out you don’t really know anything at all.

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