What is an Independent Oil and Gas Company?

The basic definition of an Independent Oil and Gas company is a non-integrated company which receives nearly all of its revenues from output at the wellhead. They are exclusively in the exploration and output segment of the industry, with no downstream marketing or refining within their operations. The tax definition published by the Irs states that a firm is an Independent if its refining capacity is less than 50,000 barrels per day on any given day or their retail sales are less than million for the year. Independents range in size from large publicly held fellowships to small proprietorships.

What is an Independent Oil and Gas Company?

What is an Independent Oil and Gas Company?

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What is an Independent Oil and Gas Company?

What is an Independent Oil and Gas Company?

Many independents are conspiratorially held small fellowships with less than 20 employees. The Independent Petroleum association of America (Ipaa) recorded in a 1998 witness that "a large division of independents are organized as C Corporations and S Corporations at 47.6% and 27.7%, respectively. A total of 91.4% of responding fellowships are classified as independent (versus integrated) for tax purposes. More than one fifth of responding fellowships reported their stock is publicly traded."

Independent producers obtain investment capital from a variety of sources. A 1998 Ipaa witness reports that 36.2% of capital is generated straight through internal sources followed by banks 27.8 % and face investors (oil & gas partners) at 20.3 %.

Supplying future Energy Needs

The U.S. Energy information management (Eia) states in their yearly Energy Outlook 2007, "Despite the rapid growth projected for biofuels and other non-hydroelectric renewable energy sources and the hope that orders will be located for new nuclear power plants for the first time in more than 25 years, oil, coal, and natural gas still are projected to supply approximately the same 86-percent share of the total U.S. Original energy supply in 2030 that they did in 2005." In this narrative the Eia also predicts consistent growth in U.S. energy question from 100.2 quadrillion Btu in 2005 to 131.2 quadrillion Btu in 2030.

Maturing output areas in the lower 48 states and the need to talk to shareholder expectations have resulted in major integrated petroleum fellowships shifting their exploration and output focus toward the offshore in the United States and in foreign countries. Independent oil and gas producers increasingly list for a larger division of domestic output in the near offshore and lower 48 states. Independent producers' share of lower 48 states petroleum output increased form 45 percent in the 1980's to more than 60 percent by 1995. Today the Ipaa reports that independent producers compose 90 percent of domestic oil and gas wells, furnish 68 percent of domestic oil and furnish 82 percent of domestic gas. Clearly, they are vital to meeting our future energy needs.

What is an Independent Oil and Gas Company?

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