| The basic definition of an Independent Oil and Gas | | | | states in their Annual Energy Outlook 2007, "Despite |
| Company is a non-integrated company which | | | | the rapid growth projected for biofuels and other |
| receives nearly all of its revenues from production at | | | | non-hydroelectric renewable energy sources and the |
| the wellhead. They are exclusively in the exploration | | | | expectation that orders will be placed for new |
| and production segment of the industry, with no | | | | nuclear power plants for the first time in more than |
| downstream marketing or refining within their | | | | 25 years, oil, coal, and natural gas still are projected |
| operations. The tax definition published by the IRS | | | | to provide roughly the same 86-percent share of the |
| states that a firm is an Independent if its refining | | | | total U.S. primary energy supply in 2030 that they did |
| capacity is less than 50,000 barrels per day on any | | | | in 2005." In this report the EIA also predicts |
| given day or their retail sales are less than $5 million | | | | consistent growth in U.S. energy demand from 100.2 |
| for the year. Independents range in size from large | | | | quadrillion Btu in 2005 to 131.2 quadrillion Btu in 2030. |
| publically held companies to small proprietorships. | | | | Maturing production areas in the lower 48 states and |
| Many independents are privately held small companies | | | | the need to respond to shareholder expectations |
| with less than 20 employees. The Independent | | | | have resulted in major integrated petroleum |
| Petroleum Association of America (IPAA) recorded in | | | | companies shifting their exploration and production |
| a 1998 survey that "a large percentage of | | | | focus toward the offshore in the United States and |
| independents are organized as C Corporations and S | | | | in foreign countries. Independent oil and gas |
| Corporations at 47.6% and 27.7%, respectively. A | | | | producers increasingly account for a larger |
| total of 91.4% of responding companies are classified | | | | percentage of domestic production in the near |
| as independent (versus integrated) for tax purposes. | | | | offshore and lower 48 states. Independent |
| More than one fifth of responding companies | | | | producers' share of lower 48 states petroleum |
| reported their stock is publicly traded. " | | | | production increased form 45 percent in the 1980's to |
| Independent producers derive investment capital | | | | more than 60 percent by 1995. Today the IPAA |
| from a variety of sources. A 1998 IPAA survey | | | | reports that independent producers develop 90 |
| reports that 36.2% of capital is generated through | | | | percent of domestic oil and gas wells, produce 68 |
| internal sources followed by banks 27.8 % and | | | | percent of domestic oil and produce 82 percent of |
| outside investors (oil & gas partners) at 20.3 %. | | | | domestic gas. Clearly, they are vital to meeting our |
| Supplying Future Energy Needs | | | | future energy needs. |
| The U.S. Energy Information Administration (EIA) | | | | |