?Eugene L. Ames Jr. is the grandson of an oilman and his children are in the business too. Sons John and Gene III are independents.


The Ames family has been wildcatting since 1913, when Ames’ grandfather drilled his first oil well in Oklahoma’s famous Cushing/Drumright Field. The family moved around with the booms and busts from Oklahoma to Arkansas to East Texas. This Ames was born in Gladewater in the heart of the East Texas oil boom in 1933, where his father and grandfather ran a small “teapot” refinery, and held interests in hundreds of oil wells.


Later, as chairman of the Independent Petroleum Association of America in 1992, Ames fought for the very issues IPAA still faces today: land access for drilling and fair tax treatment. He was named the organization’s “Chief Roughneck” in 1995.


A geology graduate of the University of Texas at Austin in 1955, he joined his father in the business soon after. In 1986, he began assembling an exploration team, which is still together today generating prospects.


He is still chasing oil and gas, claiming he was inoculated with the oil business at birth, just like his grandfather. Here, he visits with Oil and Gas Investor on his experience in the independent oil and gas industry.


Investor You say the expanded Yegua Trend in the Upper Texas Gulf Coast is a dynamite play that remains unrecognized. Why is that?
Ames I think it’s partly because so many people are focusing on these unconventional plays today, and while the Yegua is a great play, some people do think it’s erratic. But it works with 3-D. The deep Yegua is rich in gas condensate, and is a high-quality downdip deltaic sand that goes around the coast from Orange in East Texas down to Victoria. Excellent production has been found.
Some wells in Orange and Jefferson counties produce 30 million cubic feet of gas per day, more or less, with little decline over the first two years.
It’s a very high-quality play that could exceed 1 Tcf. Our group has had success there over the years. We’re producing about 125 million cubic feet equivalent per day. We feel we know it better than anyone else, which is what you have to do when you are an independent.


Investor You won’t ever retire, will you?
Ames No, because I don’t think I will ever get all the wells drilled on?my old prospects that still need to be tested and have great potential. The big resource plays are incredible, but believe it or not, I think there is still conventional oil and gas to find, and we have some of that in mind, hopefully, in another “dead” area.
I am also active in several areas other than the “expanded Yegua,” from the Cotton Valley on the Sabine Uplift to the Woodford shale. We are in the research phase of some exciting?out-of-the-box new play?ideas that have come to fruition because of technological?advances and higher prices. As my granddad said about himself, I was inoculated with the oil business when I was born.
We don’t work as a company. We are a team of individuals who are prospect generators (geologists, geophysicists and landmen) working together.?This same team has been in place for 22 years. We don’t operate, but our prospects are developed by other operators.


Investor What do you make of these high oil prices?
Ames You have to think we’re in a spike and there will be a correction, but I don’t think it’ll ever get back to low levels. Certainly these levels are too high. No one could have predicted this.
When I was the chairman of IPAA in 1992, I made a speech at the National Press Club and I said that, by 2010, we will have $5 gasoline and be importing more than 60% of our oil, if the government doesn’t wake up and open up access. We’ve been saying this for years. We couldn’t even get the Republicans to support us. They told us the oil industry had to improve its image and get the public on our side. It’s happening now.
And they also said we’ll never do anything until there’s a crisis, and now there is a crisis. Now everybody’s getting on board that we have to drill.
The Republicans finally have the?political cover to support drilling and a strong domestic industry because the public now sees that we need to drill—$4 gasoline is the crisis needed to wake up the public and the politicians. But how do you explain Nancy Pelosi and the Democrats?


Investor Has the industry learned more about PR and lobbying since then?
Ames Absolutely. The majors finally woke up and realized they must sponsor a public-information program.


Investor Are you still collecting old petroleum-history books?
Ames Yes. I have over 200 volumes of oil history and biographies of wildcatters, and maybe 50 old maps. One of the oldest is a scientific report, Silliman’s study of rock oil, done for the Pennsylvania Rock Oil Co in 1855. This report was used to promote the money to finance Colonel Drake drilling the first oil well in 1859. It’s in my safety deposit box.
I once saved the original surface geological map of the Yates Field in West Texas from being discarded by Marathon. I was assembling my collection of old geological maps and I asked Marathon chairman Vic Beghini (at the time) if they had any original maps that led to that discovery. Their Midland office couldn’t find any, then they looked in some old storage boxes they were getting ready to throw out, and found that old map.
My call saved that map! I now have a copy of it.

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