Many lessons are being learned as drilling activity increases across all major basins, according to three independents who spoke at the annual meeting of the Independent Petroleum Association of America in California.

And, Kentucky independent Virginia (Gigi) Lazenby was installed as IPAA’s new chair for the next two years. She has worked on various IPAA committees for 20 years and also is a member of the National Petroleum Council. “I look forward to being IPAA’s ‘steel magnolia,’” said the founder and owner of Bretagne Oil & Gas.

Ultra Petroleum Corp. chief executive officer Michael Watford is the new vice chair, in line to assume leadership in two years.

In a wide-ranging roundtable discussion, three independents told IPAA attendees they are emphasizing cost containment, pad drilling, lining up drilling permits well in advance, and promoting better vendor relationships. As costs to drill continue to go down, those dollars are redeployed to more advanced completions and real-time frac monitoring.

Water recycling is also a big topic in every play, from the Permian Basin to Pennsylvania.

Marathon Oil Corp. president Dave Roberts conceded that big integrated companies have much to learn from smaller independents. “Integrateds tend to think they know how to do everything, so we have to listen to others and draw on a lot of resources, as we are spending so much money in these shale plays. We have to make sure we don’t ‘Marathonize’ the Eagle Ford play too quickly,” he joked.

“The biggest impediment we could have to moving forward is our own behavior. We are so used to managing big international projects that we need to expand our vendor relationships in the U.S. and recalibrate the conversation.”

Concho Resources Inc. chief executive Tim Leach noted that in today’s environment, companies have to watch costs. “You can’t operate on skinny margins. You have to work on this like a manufacturer and keep your costs down.” In the company’s Yeso play in New Mexico, Concho installed a 30-mile-long water system to cut down on the number of trucks going to and fro.

In the Fayetteville shale play, Southwestern Energy Co. is using some of its own rigs and its own frac-sand sources, said CEO Steve Mueller. “That should help us in the Brown Dense play as well. Before we went public on that play, we went to our vendors a year ago to talk about obtaining frac crews.”

Southwestern continues to experiment with its Fayetteville fracs for both the type of fluids and the type of sand used. It also employs four people full time who do nothing except meet constantly with local and state officials such as mayors, to maintain good working relationships in Arkansas.

All three executives noted that pressure pumping or frac capacity is still tight and that state authorities are often swamped when handling the demand for more drilling permits as activity increases . In the Permian Basin where Concho operates, the rig count is approaching the highs last seen in 1981.

“We need 40 permits teed up at all times, given the number of rigs we are using,” said Leach. “Regulatory agencies are struggling to keep up.”

In the Fayetteville, Southwestern keeps permits lined up early for about 400 wells. It is also laying water lines at the same time it lays gathering lines, to bring frac water in and take it away, Mueller said.

“You need strong leadership among regulators, and we are seeing that in the states where we operate (Texas, Oklahoma, North Dakota),” said Roberts.

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