President's Message

As the energy industry becomes more involved in discussions about climate change and the need for environmentally sound energy alternatives, natural gas will continue to take a leading role in the transition to cleaner-burning fuels and a greater independence from foreign oil. That is why the Marcellus Shale — and other major U.S. gas plays now accessible because of advances in drilling technologies — are emerging as important factors in America’s energy strategy and one answer to an energy-hungry economy.

The nation's shale reservoirs are estimated to contain more than two quadrillion cubic feet of natural gas, a supply of clean, affordable, American natural gas that will last more than 200 years. This energy supply is larger than all of Saudi Arabia's oil reserves, and it is cleaner, less expensive and, perhaps most important, it is American. Because we import more than 60 percent of the oil we consume, our dependence on foreign oil costs this country $1 billion a day. We can all agree that this must change.

Providing the necessary infrastructure to match the increased drilling activity in these emerging areas and keep pace with growing production volumes is critical. That is especially true in rich gas windows, where processing and NGL handling capacity are needed in addition to gas gathering systems. Infrastructure is more difficult to develop in rich gas areas because it requires three times as much capital as areas with drier gas. Apart from gathering, producers need natural gas processing, liquid handling facilities, fractionation facilities and marketing facilities including pipeline, rail, truck and barge. A great deal of capital is required and it is time consuming to build the necessary infrastructure.

Development of the America's abundant natural gas reserves requires a collaborative effort between producers and midstream companies like Caiman Energy. All of us have committed enormous amounts of manpower and capital to secure the nation's new energy future and at the same time stimulate the economy as the nation reaches toward recovery.

We are proud to work alongside many of America's leading producers in this important effort.

Currently, Caiman Energy is focused on expanding its gas gathering and processing capabilities in the Marcellus Shale where at present we have more than 500,000 acres committed to our midstream services. We have contracted with several producers, and as the weather breaks this spring, we will increase the speed of pipeline construction, expanding our growing network of high-pressure and gathering pipelines and our processing capacity so that producers will be able to increase their production and delivery of natural gas throughout the region.

Caiman’s commitment in the Marcellus Shale is one of many being made across the country in the interest of economic development. The many benefits to this region alone, including job creation, have been noted by economists and industry leaders across the Marcellus Shale states. The West Virginia University College of Business and Economics reports that gas producers invested some $2.35 billion to develop the Marcellus Shale in West Virginia in 2009, resulting in the creation of some 7,600 jobs. The study found that employment levels related to oil and natural gas in West Virginia, including wells, pipelines and construction, increased by 49 percent in 2009, and it credits Marcellus Shale development as the driving force. The study went on to estimate that by 2015 the Marcellus Shale could bring another 20,000 jobs to the state’s northern region.

As one of the major players in the Marcellus, we have additional investment capital available and we will continue to direct our efforts and expertise toward building state-of-the-art infrastructure that will service quality natural gas production for a long time to come.

Jack Lafield
President & CEO
Caiman Energy LLC