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MonDak API Office Holders Give Summary of Oil Industry at Year's End

 

December 26, 2018 | View PDF

The American Petroleum Institution (API) is a national trade association that represents the oil and gas industry, with local chapters in oilfield regions throughout the United States. The organization includes more than 600 companies in an industry that employs more than 10.3 million people nationwide. As the end of 2018 draws nigh, The Roundup reached out to office holders with the MonDak chapter of API and asked for their insights on the petroleum industry in our current local economy.

Terry Williams has been the president of the MonDak chapter of the American Petroleum Institute (API) for ten years and is a shop foreman for Elim's Economy Polymers and Chemicals. The Roundup spoke with Williams and asked about the function API serves in the region.

Williams explained, "API is an organization that tries to be the liaison between the oilfield and the public to try to keep everybody on the same page. I kind of feel that's what we do best. We're not strictly oilfield. We are a community service organization and donate a lot of money back to the community. We give scholarships and support community organizations."

Williams was asked for his opinion regarding the petroleum industry in the MonDak region and whether or not Bakken residents should be optimistic for 2019.

Williams said, "Yes, I think we're optimistic this year. From what I'm hearing, everybody is doing better. Production is steady and on the rise, but it's not getting out of hand. It's a good, steady economy out there. Everybody is looking for help, but it's a good problem to have I guess."

When asked if production was on the rise in Montana as well as North Dakota, Williams said, "I would have to say yes. There's four rigs drilling in Montana, and we've been having zero, so that's an improvement for Richland County. A couple of those rigs might be near Baker. But there's more than fifty in North Dakota, so there's room for improvement."

Williams was asked to explain the reason why Richland County has not seen the type of growth as that seen in Williams or McKenzie County or elsewhere in North Dakota.

"What I'm hearing," Williams reported, "is that right now, where oil price is at, they're going after the heart of the oil and that's in Stanley, New Town, over there. But in the future, they'll be expanding and coming back to Eastern Montana and re-fracking some of those wells. Those were early fracks, and they'll one day need to be redone and invested in again."

Williams predicted that Montana would eventually see an uptick in petroleum activity over time.

"As those leases get used up over there in North Dakota, they'll come back over this way. I foresee Eastern Montana to be a player again. And that's coming from two different oilfield sources we've worked with."

Regarding recent instability in oil prices that have led to dramatic ups and downs toward the end of 2018, Williams dismissed concern and explained it was just a part of normal market activity.

Williams said, "One thing that happens is that as price goes up, there's more activity, so you're over-producing again. So then, in a way you cause it to go right back down. I think the morale is good out there. I feel comfortable that there's going to be steady growth."

Williams also said that the economy still had room for small petroleum-related industries getting started or making their way in an industry with corporate giants.

"I think the mom and pops still have a shot out there. I think it's pretty steady for everybody."

Jeff Aisenbrey, the treasurer for the MonDak API and the owner of J&L Fencing and Pit Liners, explained that it's not impossible, but more difficult than it used to be, for new companies.

Aisenbrey told The Roundup, "There's not as many start-ups as there used to be. A lot of those companies that were around before the boom have disappeared. The issue is that there are only so many acres companies can drill, and those mineral rights have been tied up. Then it's hard to get your foot in the door.

He continued, "Those companies contracting with the major producers thought bigger was better, and when the boom ended in 2015, they over-extended themselves. Our company has been doing this since 1981, and the key to maintaining growth is to not over-extend yourself, don't borrow, and to stay steady."

Aisenbrey reported that his company had a good year, and in his estimation, most others did also. Like Williams, he was not greatly concerned about the instability of the market.

Aisenbrey said, "The instability all hinges on the oil price. The media can help control the price by what they report. If all in a sudden there's a surplus, the price will go down. And then when it goes down, they'll produce less and then the price will go up. It's just how things work."

 

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