I’m Wayne Farris, founder and CEO of Champ Oil. 2015 marks our 34th year in operation. That’s something to be proud of, because within this same period of time, 95% of independent oil and gas exploration companies in America went out of business. But Champ Oil has not just survived…we’ve thrived, drilling some 350 wells with a better than 85% overall success rate in commercially-productive wells. So what’s the secret to our success? Read on…
1n 1981, the price of oil was controlled politically. As a result, it was almost impossible to figure a payout on the investment for drilling an oil well. With markets in turmoil, and indicators predicting a rise in natural gas prices, we turned our attention to drilling for natural gas.
I spent three years researching the ‘lower 48’ for shallow, inexpensive and prolific natural gas prospects, before selecting Champ’s area of development in the Appalachian Basin of Kentucky. We focused on Whitley and McCreary counties, where we now control over 400 square miles, surrounded by an estimated 200 mile gas pipeline gathering system. Our research and development paid off, as our track record speaks for itself.
In the early 2000’s, the economics of drilling changed once again. Expensive, multi-stage hydraulic fracturing (“fracking”) techniques allowed others to produce natural gas from what were mostly considered “tight sands” or formations that are otherwise thought of as unproductive. Wall Street brought new development companies into public trading on an almost-daily basis. With their newly-minted public offerings, these companies were highly-leveraged, using newly-developed, horizontal, multi-stage fracking technology. As a result, many of the wells they drilled were leveraged so highly that would take 25 years of production before they could see a payout. After over a decade of this type of operation, the result has been a glut in America’s natural gas market. While the rest of the world gets over $16/mmBTU, American producers are currently only able to get $3/mmBTU.
We saw this trend coming, years ago, so for the last five years Champ Oil has focused on developing mostly inexpensive, shallow, vertically-drilled oil prospects in proven areas in Kentucky’s Whitley, McCreary, Bell, and Henderson counties, as well as Overton county in Tennessee. We’ve maintained a 90% success rate for our commercially-productive wells during this time. You see, there’s more to oil and gas than just drilling wells — it’s knowing how to spot trends and maximize your efforts, in order to get the biggest bang for your developmental buck. It’s putting together a team that can leverage that knowledge to deliver viable, inexpensive prospects with great merit to our working partners. That’s what makes a winner!
From the early days of oil exploration, the oil business has required skill, knowledge, courage, and an entrepreneurial spirit to succeed. Champ Oil has the formula that makes us successful. You have to look no further than our past to imagine our future. Stay tuned…we’re just getting started.
CEO Champ Oil Co.