Dear Employees, Partners and Interest Owners,
In the future, when we look back, I'm certain we will wonder how we survived. To be sure, the answer will be with quick action and a whole lot of hand-wringing.
In mid-2014 we began to sell affiliate businesses that were not profitable. During that time we sold Time Lines, a charter bus company and then closed Time Car, a time-sharing car company.
Our drilling company, El Dorado, continues to hold its own even though only one of 3 rigs is being utilized.
In the first months of 2015, Mike Steele and I initiated reductions in personnel that affected all levels of the totem pole - starting with our board of advisers and continuing throughout the company, especially in the exploration department. Where there were once 45 employees, there are now 29, a 36 percent reduction in force.
Our 2015 financial goals were to reduce debt and to weather the storm. Indeed, because of the hard work and leadership of the management team, we were able to monetize non-core assets and have essentially eliminated company debt. As it relates to weathering the storm, certainly our hedging position as well as across-the-board expense reductions, have helped offset the risk of any adverse price movements.
I believe we have reacted quickly and appropriately to the commodity market correction and are prepared for a resurgence of the oil and gas business. Certainly, the sooner, the better.
In other business, our company has been very committed to environmental responsibility and safety. In many ways we have been leaders. We care about Oklahoma and we care about the environment, but there is a measure a-foot that threatens our state.
In November of 2016, Oklahomans will be asked to go to the voting booth to make a decision about State Question 777. In an effort to mislead, this question has been dubbed, "Right to Farm." State Question 777 is part of a nation-wide effort by huge agricultural businesses to eliminate state-by-state impediments to their doing business in the most economically efficient way - often at the expense of the environment or the animals they raise. If 777 passes, these huge factories will be exempt from any new local or state regulations. To be clear, the only entity that could enforce better business practices upon these companies operating in our state would be the Federal Government through the EPA.
This measure would exclude our state governor, senate, and legislature from acting. If you find the way animals raised in factory farms is unsettling, it will not improve if 777 is passed. As for the environment, the tons and tons of fecal and urine waste these factories produce is simply dumped into lagoons and eventually sprayed out into the air. This has caused many communities in Oklahoma to be under boil orders because of contaminated water tables and streams. I urge you to vote NO on 777 and give Oklahomans the chance to improve business practices and stay up with the times.
Imagine if oil and gas businesses held back environmental improvements to the days of the Nellie Johnstone No.1 in 1897. Improvements are important.
While smaller, our company remains strong. We remain committed to safety, the environment and the highest standards of business conduct and integrity.