Debate gushes within OIPA ranks

Chairman’s letter targets former chairmen over long-lateral drilling differences

Internal discussions at a state energy association over proposals for longer drilling laterals in Oklahoma have escalated, with the chairman asking for the resignation of six former chairmen if they don’t stop advocating for competing legislation at the Capitol.

Jeff McDougall, chairman of the Oklahoma Independent Petroleum Association, sent a letter Monday to the six board members, including Mike Cantrell and former Tulsa Mayor Dewey F. Bartlett.

McDougall accused the six board members of violating their fiduciary duty to OIPA by publicly supporting House Bill 1890 and setting up an organization called the Oklahoma Energy Producers Alliance. The bill has language already voted against by the OIPA board, McDougall said in the letter.

“Your right to advance your cause through the Legislature and otherwise is not at issue here,” said the letter, a copy of which was obtained by The

Oklahoman. “What is at issue, however, is that you cannot do so while a director of the OIPA. It is time for each of you to choose where your loyalties lie and act accordingly.”

A spokesman for OIPA confirmed the letter’s authenticity but said the organization had no comment.

Several bills at the Legislature would lift a prohibition on drilling horizontal wells longer than a mile in nonshale formations. While there is support for longer laterals, the effort has been tripped up by the details. Some smaller vertical producers worry expanding horizontal drilling would interfere with their wells and production.

Cantrell, with Cantrell Energy Partners, said he was disappointed with McDougall’s letter.

“I’ve been involved in OIPA for 35 years and I’ve never seen this kind of intrigue,” Cantrell said. “We’re six former chairmen and probably between the six of us have chaired every OIPA committee. To be castigated for exercising our right of free speech is a little unbelievable.”

McDougall’s letter included copies of previous letters sent by the six former chairmen to lawmakers, as well as a letter from the group to OIPA’s board of directors explaining its legislative efforts on extended lateral legislation.

Cantrell said his group’s letters to lawmakers intentionally weren’t on OIPA letterhead and only mentioned that the six were former chairmen of OIPA. He said directors can only be removed by a majority vote of OIPA’s board.

“Jeff is the great intimidator, but I don’t think the six of

us can be intimidated,” Cantrell said. “He’s decided to be judge, jury and executioner, and in effect, that’s the board’s prerogative. This ain’t Russia, and he ain’t Vladimir Putin.”

McDougal’s letter mentions a compromise on the extended laterals legislation that was offered by Cantrell and Continental Resources Inc. founder Harold Hamm. OIPA’s board voted against that motion, the letter said.

“We now know that the Alliance is sponsoring HB 1890,” the letter said. “What the OIPA board voted down is exactly what HB 1890 provides for — in particular the 1,280-acre cap which Harold Hamm opposed and the 50 percent approval mechanism which is sponsored by Mike Cantrell and some smaller producers.”

Cantrell said he appreciated Hamm’s efforts to broker a compromise on the extended lateral issue. Continental is among the state’s most active drillers and producers.

“To his credit, Harold has tried hard to find common ground within OIPA,” Cantrell said. “He was willing to find fairness and that was a selfless mark of a statesman.”

A Continental spokeswoman deferred comment to OIPA officials.

Pete Brown, with Cimarron Production Co., said he hadn’t yet seen McDougall’s letter. He defended the efforts to explain the issues by him and the five former OIPA chairmen.

“We’re not against horizontal drilling,” Brown said. “We think it’s a good thing for the state. But when they proceed, they have to take care not to damage other people’s property. We were trying to find a resolution.”

Bartlett, whose father helped start OIPA, said he hoped there was still a chance to resolve the internal issues at the association.

“We’ve always had differences where we express our opposition, sometimes forcefully if necessary, but we always come together and find common ground.”

David House, with Jireh Resources LLC, said the six former chairmen were very clear in their letter that they were speaking on behalf of themselves.

“Mr. McDougall certainly has the right to express his opinion,” House said of McDougall’s suggestion they resign from the OIPA board.