Our History

Palo Petroleum, Inc. (“Palo”) was established in 1976 for the exploration and development of oil and gas properties. The discovery of the legendary Blind Hog Field in Eastland County, Texas in 1976 was a prelude to Palo’s future successes. Since its inception, Palo has conducted numerous successful drilling programs and joint ventures while working with individual, long-term investors such as John Lawrence, former Dresser Industries Chairman and Louis F. Davis, former Arco vice-chairman, as well as major players in the oil and gas industry including Texaco, Boeing, ConocoPhillips and Amoco (now British Petroleum). Palo has focused the majority of its drilling activities in proven oil and gas trends in North, East, West and West Central Texas, Oklahoma, Wyoming and the Rockies.

The principal founder and majority stockholder of Palo is Mr. James P. Graham, President and Chief Executive Officer. Mr. Graham is now joined by his two sons, Tyler Graham (Vice President at Palo) and Jace Graham (President of Rising Phoenix Resources), who represent the fourth generation of Graham’s to be in the oil and gas business.

From its start-up days and into the 1980s, Palo’s drilling and development activities focused on proven oil reserves mainly in West and West Central Texas. Palo drilled and operated over 200 wells during this period, primarily in the Spraberry-Dean trend of the Permian Basin. When oil prices began to drop and believing that natural gas prices were at or near an all time low in 1987, Palo’s staff shifted its focus from oil and began to concentrate its efforts on identifying low risk, shallow gas prospects. This search led Palo to the San Juan Basin area of southern Colorado. The Fruitland Coal play of the San Juan Basin was gaining considerable momentum and Palo negotiated the drilling rights to some of the best locations in this trend. The resulting Picnic Flats Project and Bondad Project were then developed and led to the discovery of proven developed and undeveloped reserves exceeding 100 BCF of gas. Palo developed and operated the Picnic Flats Project until the sale of the properties to Amoco Production Company and others in 1995. The Bondad Project is currently operated by ConocoPhillips. Palo retained a significant interest in this field.

In 1998 Palo shifted its focus from southern Colorado to the Powder River Basin coalbed methane play in Wyoming. Palo commenced the development of its Northeast Spotted Horse (NESH) CBM Project in Campbell County, Wyoming in 2001. Sixty-five wells were drilled and related infrastructure for full scale development of an additional 120 wells was installed. The NESH Project was sold to StormCat Energy (USA) Corporation in February 2005. Palo also assembled large coalbed methane acreage positions in Johnson and Campbell Counties, Wyoming which have been successfully developed by Williams Production Company, Lance Oil & Gas Company and Marathon Oil Company. Over 100 wells have been drilled in lands which Palo retained an interest in Wyoming.

Since the sale of the NESH Project and the majority of its Permian Basin properties, Palo has focused on non-operated exploration closer to home. Palo has been active in the Barnett Shale gas play in North Texas participating in drilling ventures with J-W Operating, XTO Energy and Range Resources. In drilling ventures with Wells Fargo Energy, XTO Energy and CH4 Energy, Palo has also been active in the deep Cotton Valley/Bossier trend in East Texas.

In 2009 Palo began its royalty acquisition program. Palo Royalties, LLC (PRL) was established in 2011 for the management and servicing of mineral and royalty interests. We are currently managing several partnerships which are actively acquiring royalty and mineral interests in Barnett Shale gas reserve areas in Tarrant, Johnson and Parker Counties, Texas and Woodford Shale “liquids rich” oil and gas reserve areas of Oklahoma. We are aggressively looking for new areas in the U.S. where we can utilize our knowledge and expertise to identify strategic opportunities to create value for our investors and partners. Palo has recently participated in a sizable 3-D seismic program in the southeastern portion of the Mississippi Salt Basin to delineate under-developed and formerly unrecognized structural and stratigraphic prospects in a productive, but sparsely drilled area.