Roger A. Soape, Attorney Jeffrey , Attorney Roger A. Soape

2011 AAPL ANNUAL MEETING SPONSORS
PLATINUM
GOLD
SILVER
BOSTON SEMINAR
GOLF
A wholly owned subsidiary of ExxonMobil
BOSTON 2011
ETHICS PANEL
JEFFREY TYNER,
ROB SHULTZ,
Independent
ExxonMobil Production Company
Learning Objectives:

By the end of the session, participants
should:
◦ Be able to locate the AAPL Code of Ethics
◦ Enhance familiarity with the AAPL Code of
Ethics
◦ Increase awareness of potential ethics issues
and consequences
AAPL’s 57th Annual Meeting – June 8-11 in Boston, MA Copyright © 2011 by
AAPL
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AAPL Code of Ethics

From the AAPL home page, select “ABOUT AAPL”
AAPL’s 57th Annual Meeting – June 8-11 in Boston, MA Copyright © 2011 by
AAPL
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AAPL Code of Ethics

In the ABOUT AAPL menu, select “Code of Ethics”
AAPL’s 57th Annual Meeting – June 8-11 in Boston, MA Copyright © 2011 by
AAPL
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AAPL Code of Ethics
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AAPL
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AAPL Standards of Practice
The Bylaws of the AAPL provide that a Code of Ethics has been established “to inspire and
maintain a high standard of professional conduct” for the members of the Association. The
Code of Ethics is the basis of conduct, business principles and ideals for AAPL members. This
standard of professional conduct and these guiding principles and ideals mandated by the Code
of Ethics within the AAPL Bylaws are summarized as follows:
A. Fair and honest dealing with landowners, industry associates and the general public so as
to preserve the integrity of the profession (Art. XVI, Sec. 1);
B. Adherence to a high standard of conduct in fulfilling his fiduciary duties to a principal
(Art. XVI, Sec. 2);
C. Avoiding business activity which may conflict with the interest of his employer or client
or result in the unauthorized disclosure or misuse of confidential information (Art. XVI,
Sec. 2);
D. Performance of professional services in a competent manner (Art. XVI, Sec. 2);
E. Adherence to any provisions of the Bylaws, Code of Ethics, or any rule, regulation, or
order adopted pursuant thereto (Art. V, Sec. 9);
F. Avoiding the aiding or abetting of any unauthorized use of the title “Certified Professional Landman,” “Registered Professional Landman,” “P.Land” or “CPL/ESA” (Art. V,
Sec. 9); and
G. Avoiding any act or conduct which causes disrespect for or lack of confidence in the
member to act professionally as a land professional (Art. V, Sec. 9).
AAPL’s 57th Annual Meeting – June 8-11 in Boston, MA Copyright © 2011 by
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For Each Scenario:
Determine if an issue exists
 If there is a problem, what is the
underlying AAPL / industry standard?
 Cite any applicable provision(s) of the
AAPL Code of Ethics
 What could have been done to avoid the
problem(s)?
 What options (absent litigation) might
exist to resolve any issues?

AAPL’s 57th Annual Meeting – June 8-11 in Boston, MA Copyright © 2011 by
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Scenario One
An AAPL member earns the CPL
designation in 1985 but never recertifies.
For the next 13 years, he / she continues
to represent they are both a member of
the AAPL and a CPL.
 ISSUE: Misrepresentation, Misuse of CPL
Designation, False Advertising

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Scenario Two
The grandparent of an AAPL member and
CPL dies. Rather than proceed to
probate, the member cashes – and spends
– her Social Security and government
annuity checks for the next 18 months.
 ISSUE: Fraud, Forgery, Theft

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Scenario Three
An 81 year old CPL and charter member
of the local association learns he’s
suffering from a terminal illness. To
protect his assets for his heirs, he opts to
prepare his own tax return for the first
time in 25 years and intentionally
understates his income by $800,000.
 ISSUE: Fraud, Income Tax Evasion

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Scenario Four
An independent working for multiple
clients conducts research for two
companies in a courthouse an hour from
home. Each job requires 2-3 hours of
effort. He completes both tasks plus
travel in one 8-hour day, then bills both
clients for a full day plus travel expense.
 ISSUE: Fraud, Double Billing

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Scenario Five
At a golf outing, a Land Manager asks a
peer to recommend someone to work a
prospect. She rejects the proffered name,
explaining she’s had that broker engaged
“exclusively” for 14 months. The two
later compare invoices and discover they
were both billed $53,900 for 183 identical
days and $22,360 for expenses.
 ISSUE: Fraud, Double Billing

AAPL’s 57th Annual Meeting – June 8-11 in Boston, MA Copyright © 2011 by
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Scenario Six
Alabaster Energy issues proposal letter
offering participation in 3,000 acres. Coventurers accept and pay for entire
prospect. Four wells are drilled in four
Sec.s. Partners receive DOs citing
proportional interest in 1,250 acres.
 ISSUE: Breach of Contract
 What if partners cash revenue checks
without realizing acreage discrepancy?

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Scenario Seven
Keechi E&P assembles and sells an
interest in a prospect to TideCo retaining
a 75% net revenue. Keechi drills 2 wells
and sends DOs to TideCo at a 68% NRI.
When TideCo objects, Keechi counters
by saying it’s “common knowledge” in
industry they retain a 7% in-house
Company ORRI.
 ISSUE: Misrepresentation, Fraud

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Scenario Eight
SimOil hires an AAPL member to check
records and acquire O&G leases. They
successfully complete 3 wells. While
preparing DOs, SimOil’s lawyer notices
the broker’s affiliated company purchased
royalties in the prospect area AFTER the
record check and during completion.
 ISSUE: Self-Dealing, Violation of Fiduciary
Duty

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Scenario Nine
After a cursory record check, Mid-States
directs its broker to lease open acreage.
Mid-States subsequently D&Cs 6 wells.
Their DO clerk notices the broker’s wife
owns minerals in multiple tracts across
the prospect area, but her ownership
post-dates the original record check.
 ISSUE: Self-Dealing, Violation of Fiduciary
Duty

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Scenario Ten

Arapaho’s landman hires a broker to take
leases at a set bonus and royalty rate. A
month later, Arapaho's Land Manager
notes costs are >10% above approved
limits and queries the landman. He says
he had to put more brokers in the field.
After 60 days, the Land Manager realizes
they’ve overspent the AFE by 142% and
only 60% of the prospect area is leased.
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Scenario Ten (continued)
Another broker is hired to check records.
She finds ORRI assignments from Arapaho
to the broker, all of which were filed after
the project began. An internal audit
reveals checks for exactly 25% of the total
budget were issued to the landman’s
brother, who is not associated with the
O&G industry.
 ISSUE: Conspiracy, Fraud, Kickbacks

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Scenario Eleven
After pleading guilty to a felony at 18,
Simon receives deferred adjudication, pays
restitution, successfully completes five
years probation and the matter is stricken
from his record. He truthfully
acknowledges the incident on his
application to join the AAPL. Can he be
admitted to membership in the AAPL?
 ISSUE: Felony Conviction

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Open Forum

Audience members are invited to query
panel members and present fact scenarios
for discussion
◦ Please use handheld microphones so
everyone can hear questions / scenarios
◦ Please do not use names of Companies, firms
or individuals
AAPL’s 57th Annual Meeting – June 8-11 in Boston, MA Copyright © 2011 by
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Adjourn
THANK YOU FOR YOUR
ATTENTION AND
PARTICIPATION!!
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