CEO Says More Drilling Can Meet Energy Needs

October 25, 2008

Featured in the Tulsa World
By Rod Walton
World Staff Writer

The best alternative to meeting America’s future energy needs is to go traditional, Laredo Petroleum Inc. Chairman and CEO Randy Foutch said Friday.  Calling wind power “unpredictable and unsightly” and ethanol “kind of a joke,” he believes that improved drilling technology and political will can help the nation out of its energy dependence on foreign sources. 

Foutch spoke to a crowd of several hundred people during the second Friends of Finance lecture at the University of Tulsa’s Allen Chapman Activity Center.  “We need to do a lot more of what we’re already doing,” he said. “It’s there. We just need the political will to go and get it.”  For instance, Foutch estimated, untapped federal lands hold enough oil reserves to provide gasoline to 65 million cars for 60 years. The natural gas trapped under federal lands could heat 60 million households for 160 years, he added. 

Some studies indicate that the heavy oil from oil shale and tar sands on federal lands alone could provide an estimated 1.23 trillion barrels of crude, or 50 times the current U.S. proven reserves, he said.  “We don’t have an oil crisis; we have an oil dependency crisis,” Foutch added. “We have a lack of an energy policy.”  The country’s known coal reserves could last up to 300 years, but environmental concerns are limiting mining efforts and must be addressed, the Laredo CEO pointed out. 

He marveled that nuclear power is good enough to have fueled the military’s submarines for decades but is considered too dangerous to build power plants on land.  Although Laredo is devoted to oil and gas drilling, Foutch said he is concerned that about 95 percent of America’s transportation efforts are fueled solely by petroleum.  “That needs to change,” he said. 

Foutch started Laredo Petroleum last year with $600 million in available credit from the Warburg Pincus private equity firm.  The 16-month-old company already has completed 64 of 68 wells planned, according to reports.  Prior to Laredo, Foutch and his partners started three other energy companies — Colt Resources, Latigo and Lariat — and eventually sold all three for hundreds of millions of dollars, according to reports.  Tulsa-based Laredo now employs about 85 people and concentrates its drilling operations mainly in Oklahoma and the Texas Panhandle region.

The next Friends of Finance luncheon will be Dec. 3. Cary Evert, president of Hilti Inc.’s North America operations, will be the featured speaker.

Rod Walton 581-8457
rod.walton@tulsaworld.com