September-October 2013 - Kansas Independent Oil and Gas

Transcription

September-October 2013 - Kansas Independent Oil and Gas
SEPTEMBER/OCTOBER
2013
The Challenge of Energy Policy
Explored at 2013 KIOGA Annual Convention
year’s convention an overwhelming success. Convention
participants were able to share ideas, network with
peers, participate in thought-provoking sessions, and
hear updates on KIOGA’s associational activities.
Keynote Speakers
Keynote Speakers at KIOGA ‘s 76th Annual Meeting
and Convention were Art Horn and Gregg Marshall.
Horn is a meteorologist from Connecticut and owner of
The “Art” of
Weather”.
There’s just always something about
He is an
your convention that’s special. You
e x p e r t
guys
have
a lot of momentum building.
witness for
Your
group
always exhibits such
lawyers
in
w e a t h e r - great camaraderie and smart
r e l a t e d presentations, too.
lawsuits and Dave Thomas, Brothers & Co., Tulsa, OK
educates
p e o p l e
across the nation on the realities and myths of climate
change. Marshall is the Wichita State University head
men’s basketball coach. In the 2012-2013 season,
Marshall’s team finished in the NCAA Final Four.
Horn relayed how various organizations use
deceptions, half-truths, corruption, and blatant lies to
attack the way our nation makes energy.
Horn said proponents of man-made global
warming are being challenged more and
more by scientists who don’t buy into the
climate catastrophe scare. Scrutiny of
man-made climate change arguments
reveal why they are failing. Horn said
nature is showing us that carbon dioxide
concentrations are not ruling global
temperature. Since 1998 twenty eight
percent of all carbon dioxide emissions released into the
atmosphere since 1850 have occurred yet there has been
no warming. World-wide hurricanes are not increasing
in number or strength. There has been no Category 3 or
higher hurricane strikes in the United States since 2005.
This year, we are on our way to having the fewest number
of tornadoes since modern record keeping began. Sea
“
“
O
ver 1,000 participants from oil and gas exploration and
production companies, service and supply companies, financial institutions, and government agencies
converged on Wichita for the KIOGA 76th Annual Meeting
and Convention held August 18-20, 2013, at the awardwinning DoubleTree by Hilton Hotel Wichita Airport. Also,
91 exhibitors filled the exhibitor pavilion for a well-attended
event. Many legislators, government officials, dignitaries
and business leaders from around the nation joined in the
convention including U.S. Senator Pat Roberts, U..S.
Congressman Tim Huelskamp, U.S. Congresswoman
Lynn Jenkins, U.S. Congressman Kevin Yoder, U.S.
Congressman Mike Pompeo, Kansas Governor Sam
Brownback, Kansas Attorney General Derek Schmidt,
Kansas State Treasurer Ron Estes, KCC Chairman
Mark Sievers, KCC Commissioner Shari Feist-Albrecht,
Kansas House Speaker ProTem Peggy Mast, 10 State
senators, 18 state representatives, 15 state agency officials,
and other special guests. Several media outlets covered
the convention including the Wichita Business Journal, The
Wichita Eagle, Kansas City Star, The Hill, American Oil &
Gas Reporter, The Territorial Magazine, KSN TV Wichita
and KWCH TV Wichita.
Reviews and comments
from convention attendees were very positive.
The Chairman’s
Chairman Letter....... 2
welcome reception kicked
Congress Returns......4
off the convention where
the group was entertained
Regulation Nation....12
by the music of De`ja` Vu
- A Beatles Tribute Band.
AESC Post..... .........14
The KIOGA Convention
Research in KS........18
Committee,
led
by
Scott Ball, once again
Message from KIOGA
developed an outstanding
program
offering
President.................22
excellent speakers, a
wide variety of exhibitors,
Legislative Interim...24
and
entertainment.
Leaders Honored.....28
Convention Coordinator,
Kelly Rains, did an
Domestic Energy.....40
amazing job organizing
the logistics. A great deal
of teamwork made this
...continued on page 8
MESSAGE from the CHAIRMAN
Dear KIOGA Member:
appreciate the opportunity to serve as the Chairman of KIOGA for the
next two years. KIOGA is truly the best and one of the most respected
oil and gas associations in the country. That is due, in part, to wonderful individuals that take time from their jobs and families to participate
as the KIOGA Board of Directors. I am eager to work with the KIOGA
Board and personally thank Dwight Keen for his leadership and dedication as past KIOGA Chair and his years of involvement in KIOGA.
I
Timothy F.
SCHECK
Chairman, KIOGA
Mr. Ed Cross: There are many adjectives that could be used to
describe our President. The one that stands out in my mind is “dedicated
leader.” He is not only present in the federal and state legislation, but also
in the local communities. He is an advocate for education and recruiting
our youth to the oil and gas industry. I would like to acknowledge
Kelly Rains, Brandi Biggs, and Scott Ball, as well as the countless
volunteers for all their hard work throughout the year and at this year’s
annual convention. That is what KIOGA is about “working together.”
During the 2013 KIOGA Annual Convention, I expressed my
goal to significantly increase the KIOGA membership during my
Chairmanship term. Today, KIOGA has over 1400 members and is the
lead state and national advocate for the Kansas independent oil and
gas industry. Association membership numbers are vital to KIOGA’s
sustainment and growth. Increased membership enhances and
increases our effectiveness as a collective voice in our industry. In an
effort to further strengthen our Association, KIOGA will be kicking off a
major membership drive. While KIOGA has a robust membership, there
still remains far too many companies and individuals that do not belong.
We must continue to build association membership to be successful
against well-funded and determined adversaries. I am excited about
the possibilities increased membership would bring to our organization.
For current members, I thank you for your support and ask
your assistance in promoting the KIOGA membership drive. Consider
this, if each current member recruits a minimum of one new member
to KIOGA, we will double the current membership and strengthen
our network. It is crucial now more than ever that we have a united
voice with decision makers so that we can further our industry while
protecting our way of life. KIOGA bridges the gap between state
and national leadership, and local issues, concerns, and progress.
If you are not currently a member, I invite you to join and be an
active supporter of the finest oil and gas industry in the Midwest.
Additional information can be found by contacting KIOGA at our
Wichita Office (316-263-7297) or Topeka Office (785-232-7772).
Sincerely,
Tim Scheck
Your Chairman
“Growth is never by mere chance; it is the result of forces working
together.’
James Cash Penney
2
KIOGA thanks the following companies for their support through advertising in our newsletter.
Advertiser
Page
Advertiser
Page
Advanced O&G Data
11
Paragon Geophysical Services, Inc.
30
AJAX
33
PlainJan’s
19
Baker Hughes
31
Polymer Services, LLC
41
Basic Energy Service
26
Promap
15
Blue Rock Energy Capital
35
Rainmaker Sales, Inc.
Breckenridge Exploration
23
SCO-JO
23
C&B Equipment, Inc.
11
Sunrise Oilfield Supply
39
Central Power Systems
32
Superior Pipeline Company
35
Coffeyville Resources
39
Tidelands Geophysical
21
Consolidated Oil Well Services
19
Tim Miller Oilfield Sales
21
Crescent Services, LLC
16
The Independent Oil & Gas Directory
15
CST Oil & Gas Corp
25
TRC
Dart Oil & Gas
18
Trilobite Testing
30
David Morris, P.A.
10
Ulterra
28
Drill Baby Drill
40
Wellhead Systems, Inc.
32
Duke Drilling Company, Inc.
32
Wildcat Resources
40
EnviroClean
26
Evenson Auctioneers
33
Foley Power Solutions
29
GraybaR Electric
17
Great Plains Gas Compression
14
Hartman Oil
19
IHS
6
11 / 35
WANT TO SEE YOUR AD IN THE
NEXT NEWSLETTER?
Contact KIOGA today!
O: (316) 263-7297 | F: (316) 263-3021
[email protected]
7
JAS Equipment Rental
10
Jayhawk Oilfield Supply
21
Kimray
36
Kansas Strong
20
Lockhart Geophysical
26
Melland Engineering
32
Monster Pump
6
Murfin Drilling Co., Inc.
28
Nex-Tech
23
NOV FiberGlass Systems
42
Oil Field
Gas Field
Oil and Gas Field
3
Congress Returns to Washington with Full Agenda
Oil & Gas Tax Provisions Remain at Risk
C
ongress returned to Washington on September 9th
with the same full agenda it left in August, but now facing the immediate task of deciding if the U.S. should
launch a military strike on Syria. While recent polling indicated
that the situation in Syria is a growing concern for Americans,
the economy in general remains the number one problem
according to Americans, followed by jobs and unemployment, dissatisfaction with government, and healthcare. As
Congress reconvened to debate issues related to the nation’s
debt and deficit, anxiety related to these issues remains high.
Federal Budget & Debt Ceiling
Federal Budget - After Syria, Congress’ most immediate
tasks will be to pass a temporary spending bill to prevent
much of the government from shutting down on October
1st and raising the debt ceiling before the government runs
out of money to pay its bills by as early as mid-October.
Passage of a temporary spending bill would buy time to
work out how to fund government programs over the next
12 months, but passage of such a measure is in doubt.
Republicans are considering whether to use the measure
as a tool to reign-in Obama’s expansion of federallysubsidized medical care, known as ObamaCare that would
require millions of Americans without health insurance to
either buy it or pay penalties to the Internal Revenue Service.
Republican leaders have said they are eager
to avoid an impasse and government shutdown. They
prefer a straight-forward temporary spending bill that
would keep agencies running at current budget levels,
reflecting the automatic across-the-board spending cuts
known as sequester and in place for the past 6 months.
A grass-roots campaign over Congress’ August recess
to not include ObamaCare in the funding has increased
pressure on House leaders to attach such a provision.
Congressional Democrats and the White House
are eager to reverse the cuts. Negotiations between
the White House and Senate Republicans collapsed last
month over disagreements on tax increases and cuts to
federal benefit programs. Without a deal, those automatic
spending cuts could become entrenched through all
of next year and possibly into the next several years.
Debt Ceiling - The Obama Administration wants Congress
to raise the $16.7 trillion cap on its borrowing authority. House
Speaker Boehner and Tea Party Republicans see debt
limit legislation as leverage to force further spending cuts.
President
Obama
agreed
in
2011
to
Boehner’s demand that spending cuts equal the
size of the debt limit increase, but the president
says he won’t do it again. Republicans leaders say
such a debt limit increase without corresponding
spending cuts that Obama wants is a non-starter.
House
Majority
Leader
Eric
Cantor
(R-VA) said the House will move on the
debt
ceiling
before
the
middle
of
October.
4
What’s Happening with Industry’s Tax Provisions?
With the turmoil in the Middle East driving up oil
prices and Congress returning to work on tax reform,
debt ceiling, and other issues, some policymakers could
become less supportive of oil and gas tax provisions and
instead use the price of oil as a call to eliminate oil and
gas tax provisions as a means of funding the government.
We can expect President Obama to use the Middle
East turmoil as platform to call for eliminating oil and
gas tax provisions to fund “green” energy initiatives to
be less dependent on foreign oil. However, KIOGA has
taken a proactive approach and see the situation as an
opportunity to drive home why oil and gas tax provisions
like percentage depletion and IDCs are so important for
reaching energy independence which, in turn, brings about
more freedom. KIOGA President Edward Cross wrote
and distributed to media two editorials that emphasized
the proper response to oil market price fluctuations
resulting from war and rumors of war is to retain current
oil and gas tax policy that allows American oil and gas
companies to produce at home more of the oil and gas our
nation needs. The editorials titled Increased Domestic
Energy Production Never More Important and U.S.
Energy Independence is About Freedom appeared
in the Hays Daily News, Gyp Hill Premier, Topeka Metro
Congressman
Steny Hoyer (D-MD)
Senator Baucus (D-MT)
News, The Wichita Eagle, and other newspapers across
Kansas as well as newspapers in Illinois and Oklahoma.
KIOGA
met
with
House
Minority
Whip
Steny
Hoyer
(D-MD)
in
mid-October.
Hoyer said that he was less than optimistic about a
comprehensive tax reform bill passing Congress this year.
He said legislation is a long-shot “unless we can forge an
agreement between the White House and Congress, which
is unlikely.” Hoyer said new revenue is vital to any tax
reform deal, which is a nonstarter for Republicans. KIOGA
also met with Senate Finance Committee Chairman Max
Baucus (D-MT) who said that he thought a consensus
was forming around a rewrite of the corporate tax code.
Baucus said he thinks the momentum that might be forming
around corporate tax reform should be used as an engine
for comprehensive tax reform that includes individual
codes as well and not just stop with corporate tax reform.
Baucus’s remarks are different than those of President
Obama who, last summer, offered a rewrite of the corporate
code only and dedicating the new revenue to infrastructure
...continued on page 5
Congress..continued from page 4
projects. Republicans rejected that proposal. However,
Baucus may be open to corporate tax reform only if that is
the only way he can get a bill to a conference committee.
Baucus nor Congressman Camp seemed optimistic
about the odds of advancing a tax overhaul during
the coming showdown over the national debt.
KIOGA also met with House Ways & Means
Committee Chairman Dave Camp (R-MI) who said that
Congressman Pompeo Introduces
Pipeline Permitting Reform Act
Congressman Camp (R_MI)
Congressman Brady (R-TX)
changes to the corporate and individual codes must move
in tandem. In conversations with House Majority Leader
Eric Cantor (R-VA) last summer, KIOGA learned that
there is a reluctance to subject the full House to a vote
on tax reform, which will eliminate or limit many popular
tax provisions, if the Democrats in the Senate are unlikely
to do the same. KIOGA met with Congressman Kevin
Brady (R-TX) who leads the House Ways & Means
Committee Energy Tax Working Group, in October. We
explained that President Obama’s tax reform proposal
appears to spend the same dollar twice. Obama proposes
spending dollars from eliminating tax provisions to reduce
the corporate rate to 28% and then spend the same
dollars again on $800 billion of government spending
projects. We also emphasized that the preservation
of percentage depletion and IDCs as a means to
sustain capital availability and formation to promote
continued exploration and production are necessary to:
Sustain
current
economic
recovery
being
fueled in large part by the energy sector,
Promote energy security and domestic self-sufficiency, and
Protect
consumers
from
historic
roller-coaster
on
energy
prices.
Brady agreed with and was very receptive to our comments.
He encouraged us to keep unified and to continue our frequent
face-to-face meetings with key policymakers. Brady plays
a critical role in keeping oil and gas tax provisions out of a
House Ways & Means Committee tax reform bill markup.
Finally, KIOGA met with
Senator Pat Roberts (RKS) and Congresswoman
Lynn Jenkins (R-KS). Both
Roberts and Jenkins are
key players in tax reform.
Roberts is a member of the
Senate Finance Committee and Jenkins
is a member of the House Ways & Means Committee
and Vice-Chair of the House Republican Caucus, the 5th
highest-ranking position in the House Republican Caucus.
Seeing a tax reform bill get out of committee
this year would be a surprise. Also, neither Senator
Natural
Gas
Congressman Mike Pompeo
(R-KS), along with Congressmen
Jim Matheson (D-UT), Pete Olson
(R-TX), Cory Gardner (R-CO), and
Bill Johnson (R-OH), introduced the
Natural Gas Pipeline Permitting Reform
Act earlier this year. The bipartisan Congressman Pompeo (R-KS)
bill modernizes the application and
review process for natural gas pipeline projects. The
measure would require the various agencies charged
with reviewing these projects to complete their work
within a firm timeline. Doing so would provide greater
certainty for interstate natural gas pipeline projects, but
most importantly would benefit the millions of American
families who would benefit from lower utility bills.
“This bipartisan piece of legislation makes
common sense reforms to the natural gas pipeline
permitting process,” said Congressman Pompeo. “We’re
looking forward to modernizing how we approve natural
gas pipelines as natural gas becomes more prevalent
as a source of electricity generation.
Consumers
must have affordable and reliable energy choices.”
Going Forward
KIOGA continues to explain to policymakers, the
public, and the media, that the oil and natural gas industry
does not receive unique treatment in the tax code. We
explain how the oil and natural gas industry uses business
deductions similar to those realized by other businesses
in the tax code. KIOGA is providing policymakers with
information that focuses on the broader benefits of
increased oil and natural gas development to the American
economy; explaining the positive contributions of American
oil and natural gas made possible under the current
tax system. We remain focused on the preservation of
percentage depletion and IDCs.
In preparation for
the return of Congress, we updated our reference
material and prepared quick-response strategies.
KIOGA has met with 18 U.S. Senators and 21
U.S. Representatives in 2013.
In mid-October,
we met with Washington, D.C. media in a
media dinner event.
Our meetings focused on:
The
role
of
the
independent
oil
and
natural
gas
producer
in
the
U.S.
How
oil
and
natural
gas
are
explored
and
brought
to
development.
The importance of capital and the need for tax policy that
...continued on page 32
5
Newsline Update
(316) 269-5464
Please feel free to edit and use these stories to fit your format.
Let us know if there is someone you would like to hear.
Currently playing on the newsline:
6
Line 1
Dawn Phoenix from the Kansas Bar Association talks about the
timely and relevant legal topics that will be discussed at the
upcoming 38th Annual KBA/KIOGA Oil & GasConference that will take
place in Wichita on October 18th.
Line 2
Tim Scheck, KIOGA Chairman, discusses the concerns many oil
producers, land and mineral owners, and other concerned citizens
have with the proposed Grain Belt Express Clean Line Transmission
Project.
Line 3
Art Horn, Meteorologist & Professor at Tunxis Community College,
discusses why man-made climate change arguments don’t survive
scrutiny.
Line 4
Dick Schremmer, AESC President, discusses his leadership role in
a national oil and gas industry organization as he begins his term
as the President of the Assocation of Energy Service Companies
(AESC).
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2013 Convention...continued from page 1
level is rising at the same rate it has for the last 100
years with no acceleration. Polar bear populations are at
record highs. Computer model temperature predictions
are much too warm and the difference between them
and measured temperature is increasing each year.
Arctic sea ice loss at the end of the summer has leveled
off. Horn said man-made climate change arguments
are failing because they are wrong.
Coach Gregg Marshall shared
his views on what it takes to be a leader
and presented strategies for leading
during times of great change.
He
discussed the insights he had gained
from the 2012-2013 basketball season
and related the motivational tactics used
to convince a group of young men to
believe in themselves and advance to the Final Four.
Marshall said that he expects every athlete to play up to
their potential. Marshall said the key to Wichita State’s
success in 2012-2013 was preparation and playing with
more passion than the opposing team. He said last year’s
Wichita State team thought they could beat anybody.
Kansas
Governor
Sam
Brownback addressed the convention by
praising oil and gas producers’ contribution
to the state economy. Brownback said the
hope and promise of Kansas rests upon
three essential building blocks; opportunity,
accountability, and responsibility.
He
said Kansans have always believed that
opportunity is what we make of it; that all
of us must be held accountable for both
our action and inaction; and that the future
of Kansas is the responsibility of each
of us. Brownback said that one of the
main priorities of his Administration is to create jobs that
provide meaningful increase in income and opportunity
for Kansas families. He thanked the oil and gas industry
for being a key player in making that priority a reality.
KIOGA Board of Directors and General Membership
Meeting
8
The KIOGA Board of Directors and General
Membership Meeting featured an update on association
activities including governmental relation activities in
Topeka and Washington, federal and state legislative
and regulatory update, update of ongoing association
public information program activities, and more. Dwight
Keen, outgoing KIOGA Chairman, welcomed the board
and updated the board on oil and gas severance tax
audit issues and horizontal drilling spacing issues. David
Bleakley updated the board on ongoing abandoned well
issues. David Nickel updated the board on ongoing
royalty payment litigation.
Mike Pompeo, Kansas
4th District Congressman, informed the board about
his approach to oil and gas issues as a member of the
U.S. House Energy & Commerce Committee. Jon
Callen summarized the progress of the Kansas Oil
& Gas Resources Fund (KOGRF) public information
efforts. Edward Cross, KIOGA President, reported to
membership on KIOGA’s federal and state legislative
and regulatory activities, communication challenge,
advocacy strategy, and summarized the progress
of KIOGA’s public information efforts and initiatives.
The board elected a new Chairman, new
members to the Board of Directors, and new Advisory
Board Members. Tim Scheck,
Owner/Operator of Scheck
Oil Operations in Russell
was elected the new KIOGA
Chairman, succeeding Dwight
Keen of Keen Oil Company
in Winfield who completed his
two-year term as Chairman.
See article in this newsletter for more information.
Trade Show
For the 14th year, we were excited to host our twoday trade show. The 2013 KIOGA Convention offered the
largest trade show in KIOGA history with 91 exhibitors
participating in the trade show pavilion. We want to extend a
special thanks to our exhibitors who made the 2013 KIOGA
Annual Convention trade show a resounding success!
Technical Sessions
Over
1,000
participants
heard
technical
presentations made during the Conference. The morning
technical session saw an overflow crowd hear about
federal tax reform, budget, and regulatory challenges as
five members of the Kansas Congressional delegation
discussed how the decisions of the Obama Administration
impact oil and gas producers and the economy. The panel
discussion titled “Over the Cliff – Digging in on Taxes” was
moderated by KIOGA President Edward Cross and explored
what policies are currently in place in Congress and what
may lie ahead in future policy.
Panelists included Kansas
Senator Pat Roberts, Kansas
1st District Congressman
Tim Huelskamp, Kansas 2nd
District
Congresswoman
Lynn Jenkins, Kansas 3rd
District Congressman Kevin Yoder, and Kansas 4th
District Congressman Mike Pompeo. The panelists
spent about 1 ½ hours discussing oil and gas tax and
regulatory issues, providing insights into
the showdown looming in Washington,
D.C. this fall over the debt, healthcare,
and tax reform, and answering questions
from the audience.
During the forum:
 Representative Jenkins said two
coming key votes – passing a
...continued on page 9
2013 Convention...continued from page 8
federal budget before it expires in October,
and raising the federal debt ceiling sometime
in October – give Republicans leverage to
force changes. She said, “Republicans are not
going to fold like a cheap suit, like we have on
a couple of occasions. We are
going to try to fix the problem, and
the only way to fix the problem is
to fix the tax code and some of
our autopilot spending programs
like Medicare and Obamacare.”
 Representative Huelskamp said
that he for one was willing to do what it takes to
force change. He said, “I don’t believe in shutting
down the government, but I do believe in shutting
down Obamacare.” He also said the key to
revitalizing the U.S. economy lay in eliminating
unneeded regulation. He cited a study that
showed for every federal regulator eliminated,
98 private sector jobs are created. Despite
those findings, the Obama Administration
continues to introduce new regulations.
 Senator Roberts said Obamacare
was one step removed from
national health insurance. He
said “We have to stop this.”
Turning to the 2014 elections,
Roberts said Republicans could
win enough seats in 2014 to gain
a majority in the Senate, but that might not
be enough to drive their agenda consistently.
He said. “It’s possible that we could gain six
seats. To make a difference we really need 10.
If we get a majority, we get three or four who
hold out and want something.”
 Representative
Yoder
said
regulatory overreach by the EPA is
a threat imposed not by Congress,
but entirely by the Obama EPA.
This administration wanted a
cap-and-trade system to regulate
greenhouse gases, but Congress said no. So
beginning in early 2009, EPA began putting
together a house of cards to regulate emissions
of carbon dioxide. The agency declared that
emissions endangered public health. That
premise has been used by EPA to launch an
unparalleled onslaught. The result has been a
series of regulations that will ultimately affect
every citizen, every industry,
really every aspect of our
economy and way of life.
 Representative Pompeo said
the reality of the Affordable
care
Act
(Obamacare)
is already beginning to
help
said,
facts
what
Republicans make their case.
He
“Americans are starting to see the true
of the Affordable Care Act and it’s not
the president told them it would be.”
In discussing regulatory matters, Congressman
Huelskamp said that to keep the EPA from circumventing
the legislative process, Congress needs to defund EPA’s
ability to write these regulations. Congressman Yoder
agreed saying Congress needs to step in saying ‘No, we
are not going to fund that because you need to act through
the will of the people.’
Jenkins suggested the Obama Administration had
lost some support from environmental groups and one
way for the Administration to cover its left flank was to back
increased regulatory action. Roberts pointed out a strong
executive branch was an advantage on national security
issues, but the legislative branch held responsibility for
crafting the nation’s laws. Too often the White House imposed
regulatory authority without involving Congress, he said.
Congressman Pompeo said the House can pass
all kinds of bills that reign in government spending and
regulatory overreach, but they die in the Senate. The
only way to fix this, he postulated, is to use the power
of the ballot box.
In another morning seminar, Scott Jackson of
DuPont discussed Dupont’s research into the application
of Microbial Enhanced Oil Recovery (MEOR) technology
for waterflood reservoirs. The presentation reviewed
the mechanisms examined and how ongoing research
has provided many insights into the appropriate
application of MEOR.
Afternoon technical sessions saw Karen Vines,
Vice President and Director of Employee Benefits
Governance and Compliance at IMA, Inc., discuss
some of the key elements that will help individuals and
organizations navigate through the post health care
reform landscape while minimizing
financial exposure and maintaining
compliance. Also, Dr. Walter L.
Manger, Professor of Geology,
Emeritus at the University of Arkansas
enlightened the audience with a
technical presentation discussing
the geological variances that are
creating challenges for developing
economic
Mississippian
Lime
wells across Kansas and Oklahoma. Manger looked
at how Mississippian Lime sequence stratigraphy and
depositional dynamics have made high-grading the best
reservoir locations difficult and provided insight into
potential stimulation changes by differences in facies.
Entertainment
Convention attendees enjoyed the dynamic
and energetic music of Ernie Biggs’ Dueling Pianos
...continued on page 10
9
2013 Convention..continued from page 9
as we celebrated KIOGA’s 2013 Annual Convention
Committee Chair, Scott Ball’s KIOGA Late Night Show.
Golf, Sporting Clays, Gin Rummy, Bingo and Ladies
Events
The Annual KIOGA Golf Tournament hosted over
200 golfers and was held at Crestview Country Club
using both the North and South Courses. The KIOGA
Sporting Clays Tournament, gin rummy, and Bingo Bash
also saw nearly 100 participants.
The KIOGA ladies events were well attended
and included a visit to the Kansas Star Casino with
a fabulous lunch at the upscale Woodfire Grille
Steakhouse inside the casino. The ladies events also
included a brunch at The Forum Theatre and a special
showing of the production Nunsense.
Special thanks goes to our members, sponsors,
contributors, supporters, and exhibitors for making
the KIOGA 76th Annual Meeting and Convention a
resounding success. With this year’s convention behind
us, we begin planning for more value-added features
to make next year’s convention even more successful!
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Regulation Nation
Obama Oversees Expansion of the Regulatory State
P
resident Obama continues to take a strong role on
the regulatory front to push environmental proposals. Obama has overseen a dramatic expansion of
the regulatory state. The reach of the executive branch
has advanced steadily on Obama’s watch, further solidifying the power of bureaucrats who churn out regulations.
American oil and natural gas producers are under siege
from agencies like the EPA, USFWS, BLM, and others.
President Obama signaled his intent to use the
machinery of government to further his policy goals after
the 2010 elections, declaring: “Where Congress won’t
act, I will.” Since then, the administration has pressed
ahead unilaterally on several fronts including hydraulic
fracturing, endangered species, climate change, and more.
Hydraulic Fracturing
12
On May 16th, the U.S. Bureau of Land Management
(BLM) released its proposed well stimulation and hydraulic
fracturing regulation for Federal and Indian Lands. KIOGA
submitted comments expressing our opposition to BLM’s
proposed rule because it imposes costs that are not
commensurate with any benefits the rule might provide
and because the proposed rule is duplicative of State’s
efforts to regulate oil and natural gas. The proposed rule
imposes significant compliance costs without providing
any environmental benefit or additional protection. The
BLM’s economic analysis is inadequate, omitting several
cost categories. The BLM says compliance costs range
from $3,138 - $5,011 per well. An independent analysis
estimates costs per well to be $96,913.
KIOGA’s
comments asked the BLM to withdraw the regulatory
proposal. Also, Governor Brownback signed a Republican
Governor’s Association letter asking the same. The public
comment period for the proposed regulations closed in late
August and BLM is now reviewing hundreds of thousands
of comments before making a decision on the rule, which
will likely take place in 2014. The original intent of the rule
was to ensure that the hydraulic fracturing process does
not contaminate groundwater. The BLM proposal is made
up of three primary elements: disclosing the chemicals
used in fracking; ensuring wells are constructed soundly;
and making sure that wastewater is managed safely after
the fracking process. The relationship among the federal
government, oil and gas companies, and state regulators
is getting more tense. The BLM is writing regulations
controlling oil and gas drilling on Federal and Indian
Lands even though many states already have rules on the
books. This issue is important even for states that don’t
have Federal and/or Indian Lands because the federal
government will most assuredly pressure all states to adopt
the federal standards. KIOGA participated in a meeting
with Interior Secretary Sally Jewell in August. Jewell said
BLM is trying to find a balance for states that do have strong
regulations in place. She said that of the 30 states that
are producing oil and gas, 13 have not promulgated any
regulations controlling hydraulic fracturing and that BLM
therefore felt the need to adopt a base rule. KIOGA told her
that number (13) would be significantly lower depending
on how “regulation” and “hydraulic fracturing” are defined.
Jewell said she is interested in setting up a process for
states to seek and get approval for a variance from parts
of the rules that are covered by state rules. However, the
variance process remains unclear and uncertain because
BLM would have unfettered discretion to revoke or modify
the variance. Federal permit approval is estimated to
take about 270 days. In early September, Congressman
Rob Bishop (R-UT) questioned the comments made by
the National Park Service on the proposed BLM hydraulic
fracturing rules. The National Park Service comments
relied heavily on Cornell Professor Anthony Ingraffea’s
claims regarding methane leakage from oil and natural gas
wells that have been discredited by other scientists as well
as the Department of Energy and the EPA. Bishop, who
is a member of the House Natural Resources Committee
and Chair of the Subcommittee on Public Lands and
Environmental Regulation, asked National Park Service
Director Jon Jarvis to answer specific questions about the
Service’s comments to BLM. Bishop said the comments
were inconsistent with scientific integrity policy, do not
clearly differentiate between facts and opinions, and do
not adequately characterize the uncertainty on which
its scientific judgments are based. Bishop asked the
Service to answer the questions by October 15th. U.S.
House Majority Leader Eric Cantor (R-VA) is developing
legislation that prohibits the federal government from
duplicating state hydraulic fracturing regulations.
KIOGA visited Cantor’s office in mid-October and took
an early position in favor of that legislative proposal.
House Majority Leader
Eric Cantor (R-VA)
Congressman
Rob Bishop (R-UT)
Endangered Species – Lesser Prairie Chicken
Some interesting developments regarding the
Lesser Prairie Chicken (LPC). The LPC ranges over a fivestate area (KS, OK, TX, NM, & CO) and all ten Senators
from the states as well as all five Governors signed a
letter endorsing the Range Wide Plan (RWP) and twoyear effort of the collaborating state wildlife agencies. The
RWP approach is the best means for our industry to try to
minimize the chances of a “threatened” listing for the LPC.
Some integrated companies (Exxon, Chevron, & BP) and
few large independents along with a few organizations like
the Environmental Defense Fund (EDF) and the Kansas
Farm Bureau favor a different approach – one that calls
for establishing a “land credit banking system”. Exxon and
...continued on page 13
Regulation Nation .continued from page 12
EDF have been attempting to get Texas Governor Rick
Perry to reconsider his position of support for the RWP.
Exxon and EDF asked Governor Perry to have the Texas
Parks & Wildlife Agency pull out of the five-state RWP plan
and support their land cap-and-trade proposal. KIOGA
President Edward Cross visited with Governor Brownback
about this issue to make sure Governor Brownback knew
where the Kansas industry stood and provide him with
some facts. Cross told the Governor that the “land credit
bank system” promoted by Exxon and the EDF would be a
profit-making enterprise for certain investors and that costs
to developers – particularly oil and natural gas explorers
– could preclude smaller companies from competing
for leases or drilling wells. No government-sanctioned
regulatory program should create a competitive advantage
for one company over others. Cross shared with the
Governor that the RWP allows companies and individuals to
voluntarily participate in conservation of LPC habitat while
simultaneously continuing energy, agriculture, utilities,
and other forms of development and recreation. He also
expressed to the Governor that the RWP developed by the
five state wildlife agencies is the only tool being developed
to preclude the listing of the LPC. The Exxon/EDF plan
concedes defeat and assumes that the LPC will be listed.
If we concede defeat on the LPC the Obama USFWS will
force 300 other species onto the endangered list without the
benefit of any scientific research. KIOGA urged Governor
Brownback to not only support the RWP effort, but to also
encourage Texas Governor Perry to resist the Exxon/EDF
effort and continue to support the five-state RWP plan.
LPC Challenges - KIOGA is working with our colleagues
at the Domestic Energy Producers Alliance (DEPA) to
explore possible legal challenges to LPC listing under
the Endangered Species Act (ESA). KIOGA President
Edward Cross is an executive board member of DEPA
and is working with DEPA to explore potential legal
challenges to LPC listing based on Agency failure to
follow rulemaking procedures under the Administrative
Procedure Act, employing the Data Quality Act to question
Agency data, information, and science, Agency failure
to adhere to the Regulatory Flexibility Act, and more.
Also, 29 western Kansas counties have formed the
Kansas Natural Resource Coalition (KNRC) to facilitate
government-to-government coordination during major
federal action. The KNRC is taking a “reset” approach
to the LPC listing proposal by invoking a longstanding
statutory requirement that federal agencies coordinate
with local governments.
By invoking Coordination,
KNRC is focusing on the procedural omissions,
technical deficiencies, and lack of economic studies
required by federal policy and multiple Executive Orders.
Climate Change
President Obama unveiled his vast new anticarbon
agenda last June. The goal of the plan is said to be to reduce
carbon emissions in the U.S. to control global climate change.
EPA NSPS Standards - The EPA continues using authority
granted by the Clean Air Act to draft a host of rules that are
designed to combat climate change. KIOGA joined the
Domestic Energy Producers Alliance (DEPA) last year in
filing a suit in the D.C. Circuit Court of Appeals challenging
the EPA’s New Source Performance Standards (NSPS)
promulgated for the oil and natural gas industry. On
the same day, we also petitioned the EPA to reconsider
certain aspects of the regulations that disproportionately
impact the smaller, independent natural gas producers.
Issues of particular concern are the highly complex and
technical “low pressure gas well” definition that was
allegedly intended to provide relief for low pressure
wells and EPA’s inappropriate use of industry-wide
averages to calculate the cost-effectiveness of various
requirements on well completions and storage tanks.
We are in the process of evaluating specific issues to raise
on appeal of the regulatory package. For example, EPA’s
assumptions and subsequent controls on storage tanks
are suspect. In the proposed rule, EPA suggested that
emission controls on storage tanks emitting more than 10
tons per year (“TPY”) of VOCs would be cost-effective.
Almost unanimously, industry argued that the threshold
should be 12 TPY. In the final rule, EPA lowered the
threshold to 6 TPY. Industry also took exception to EPA’s
estimate of the number of storage tanks affected by the
proposed regulations. EPA estimated that only 304 tanks
would be affected nationwide. Commenters estimated
the number would exceed 10,000 in Texas alone. The
issues associated with storage tank controls are also
covered by the petition for reconsideration. Another issue
under consideration is EPA’s failure to differentiate low
production vertical and some horizontal wells that utilize
hydraulic fracturing techniques that are dramatically
different in scale and how those differences impact the
cost-effectiveness of EPA’s controls. KIOGA’s petitions
provide standing to file legal action if necessary, or at
least the opportunity to pursue legal action if we so desire.
Man-Made Climate Change Arguments are Failing
- A recent report to the UN Intergovernmental Panel on
Climate Change (IPCC) has led some scientists to claim
that the world is heading for a period of cooling that will not
end until the middle of this century. If correct, it contradicts
computer forecasts of imminent catastrophic warming.
Despite the original forecasts, major climate research
centers now accept that there has been a ‘pause’ in global
warming since 1997. Meteorologist Art Horn shared with
us at the 2013 KIOGA Annual Convention in August that
scrutiny of man-made climate change arguments reveal
why they are failing. Horn said nature is showing us
that carbon dioxide concentrations are not ruling global
temperatures. Since 1998, 28% of all carbon dioxide
emissions released into the atmosphere since 1850 have
occurred yet there has been no warming. Hurricanes have
become a major part of the public relations campaign for
...continued on page 15
13
Schremmer Elected to National Post
Former KIOGA Chairman to Lead AESC
F
ormer KIOGA Chairman
Dick Schremmer, President
of Bear Petroleum, Inc.
and Gressel Oilfield Service in
Haysville, was recently elected by a
national oil and gas organization to
serve in a national leadership post.
The
Association
of
Energy Service Companies
(AESC) elected Schremmer
to serve as the 2013-2014
AESC
President
during
the AESC Annual Meeting
in
Carlsbad,
California
in
July.
The AESC represents
the energy service industry
through a network of national
committees and local chapters.
Schremmer, who has
been involved in the formation
of various oil field service
businesses
and
production
companies, also serves as
Vice Chairman of the Liaison
14
Committee of Cooperating Oil
& Gas Associations, a national
organization of 29 state oil
and gas associations who
collaborate to organize strategies
to meet grass-root industry
concerns and execute on
critical objectives. Schremmer
said he is looking forward to
traveling across the country
and meeting AESC members at
their local chapters and gaining
their perspectives on the key
issues the industry faces today.
Schremmer follows in the
footsteps of other KIOGA leaders
who have served in national oil
and gas industry leadership posts.
Kenny Gates is a past-President
of the AESC and Dave Murfin is
a past-Chairman of the National
Stripper Well Association (NSWA)
and past-Chairman of the Liaison
Committee
of
Cooperating
Oil
&
Gas
Associations.
KIOGA is proud that one
of our members and former
Chairman
was
recognized
and
elected
for
national
leadership responsibility. KIOGA
congratulates Dick and offer him
our best wishes for success!
Regulation Nation..continued from page 13
radical action on climate change. After Hurricane Sandy
hit the Eastern Seaboard last fall, environmental activists
fell over themselves attempting to claim that the intensity
of the storm was a result of greenhouse gas emissions.
Worldwide hurricanes are not increasing in number
or strength. There has been no Category 3 or higher
hurricane strikes the U.S. since 2005. This year, in the
U.S., we are on our way to having the fewest number of
tornadoes since modern record keeping began. Sea level
is rising at the same rate it has for the last 100 years with
no acceleration. Polar bear populations are at record
highs. Computer model temperature predictions are much
too warm and the difference between them and measured
temperature is increasing each year. Man-made climate
change arguments are failing because they are wrong.
Responses to Challengers of Man-Made Climate
Change – President Obama said, “I don’t have much
patience for people who deny climate change…”
and referred to challengers as belonging to “the Flat
Earth Society”. Picking up on Obama’s comments,
environmental activists attempt to marginalize man-made
climate change challengers by calling them “deniers”. But
what is a denier? Rodney Leach (Lord Leach) of Fairford
aptly defined what a ‘denier’ is. He said, “A ‘denier’
denies certainty on a complex and still young scientific
subject. A ‘denier’ questions assumptions about the near
irrelevance of solar, oceanic, and other anthropogenic
influences on temperature. A ‘denier’ prefers evidence to
model projections. A ‘denier’ tests alarming predictions
against actual observations. In short, a ‘denier’ exhibits
the symptoms of a genuine seeker after scientific truth.”
President Obama’s climate change policies are not making
energy more affordable. In fact, his climate change
policies are resulting in higher costs, more bureaucracy,
and greater economic pain. There is little doubt that the
damage being done by climate change policies currently
exceed the damage being done by climate change.
What the FERC!
President Obama’s choice to head the Federal
Energy Regulatory Commission (FERC), Ron Binz, is
facing much scrutiny in the U.S. Senate. Recent reports
indicate Binz, the former head of Colorado’s Public Utilities
Commission, has been coordinating his campaign to gain
a position on FERC with alternative energy companies,
Democrat lobbyists, and green-technology strategists.
Opponents to Binz’s nomination say the lobbying effort is
evidence that environmental activists are trying to expand
Obama’s global-warming agenda to FERC. In the past, Binz
has expressed his belief that government edicts and dictates
rather than cost or marketplace should drive energy supply.
15
Kansas Energy Conference
October 1-2, 2013
Manhattan, KS
AAPG Midcontinent Section Meeting
October 12-15, 2013
Wichita, KS
KBA/KIOGA Oil & Gas Conference
October 18, 2013
Wichita, KS
Governor’s Water Conference
October 24, 2013
Manhattan, KS
2013 Midwest Energy Policy Conf.
October 29-30, 2013
St. Louis, MO
IOGCC Annual Meeting
November 4-6, 2013
Long Beach, CA
IPAA Annual Meeting
November 7-9, 2013
San Antonio, TX
Desk and Derrick Industry Appreciation Luncheon
Suppliers Party
November 12, 2013
Wichita, KS
December 11, 2013
Wichita, KS
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17
What’s Going on With Oil & Gas Research in Kansas?
University of Kansas Proposed Earth, Energy & Environment Center
O
il and gas research is an important tool for
Kansas independent oil and natural gas producers. This article marks the first in a series of
articles that will look at some of the oil and gas research
being done in Kansas. This article focuses on some of
the newest projects being developed at the University
of Kansas (KU). Other university and college projects
in Kansas will be reviewed in future KIOGA newsletters.
KU Earth, Energy & Environment Center
Today’s oil and natural gas industry demands
geologists and petroleum engineers collaborate and work
together effectively to achieve productivity, economic
efficiency, and environmental safety. At KU, this integration
is well underway and gaining momentum. KU’s new
Earth, Energy & Environment (EEE) Center Project will
enhance these cross-functional skills by allowing earth
scientists and petroleum engineers to take classes, work
in the field, and complete real-world projects together.
The EEE Center will bring together a highly
innovative team of geologists and engineers who
benefit greatly from interaction. Cutting-edge research
and teaching labs, extensive computing power,
3D visualization, and active learning classrooms
will
attract
outstanding
faculty
and
students.
Expanded labs will:
 Accelerate and expand TORP’s ability to partner
with industry
 More than triple existing computing power for stratigraphy, GIS, LiDAR, reservoir characterization
and analysis
 Double KU’s capacity for stable isotope analysis
 Dramatically speed experimental work on dolomite
diagenesis.
New labs will include:
 Extensive core layout and scanning: enabling calibration of well logs to core
 PVT: allowing fluid/rock interaction research at
high pressure and temperature
 3D visualization: enabling high-resolution techniques (CT, gamma, GPR) to image fluid flow
through fractured media
The EEE Center is a state-of-the-art project
that will transform KU’s opportunities for impact.
The project is envisioned as a place where KU can:
 Achieve a dynamic interface between the KU and
the Kansas oil and gas industry;
 Advance industry-relevant research and speed
technology transfer;
 Fully integrate Geology and Petroleum Engineering;
 Train the next generation of innovative, ethical industry leaders.
18
The EEE Center Industry Outreach Conference
Center will include a 160-seat auditorium, a 30-seat
high-tech collaboration lab, a 10-work-station hospitality
suite for industry visitors, and a business center.
This facility will welcome the industry to KU as never
before. Here KU plans to host workshops, training,
and topical conferences and consistently engage oil
and gas developers with our faculty and students.
KU plans to shape relevant research questions and
develop an active pipeline between KU and the industry.
Funding to date ($20 million and counting) suggests that
the Earth, Energy & Environment Center at KU will be the
house that independent oil and gas built. KU looks forward
to collaborating with industry to make this project a success.
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We have the Opportunity to Control our Energy Future
A Message from your KIOGA President Edward Cross
O
22
ne of the most watched indicators of our country’s economic
health is employment. Through
the last several years of slow economic
recovery, we know that the oil and natural gas industry has been one of the few
bright spots in our economy.
A recent report from IHS
shows the oil and natural gas
industry supported more than 9.8
million American jobs last year.
That’s 600,000 more jobs than the
industry supported just two years
earlier.
The report also showed
that unconventional oil and natural
gas development increased U.S.
household disposable income by
$1,200 in 2012 and is projected to
increase to $3,500 by 2025, due to
reduced costs of energy and other
goods and services.
The oil and natural gas
industry supports jobs in all 50 states.
In Kansas, the industry supports
nearly 67,000 jobs and over $3 billion
in family income. In areas of Kansas
where oil and natural gas are found,
the industry represents a quarter of
the jobs in some counties and 60% to
70% of the property tax. The oil and
natural gas industry is a dependable
and stable element of the Kansas
economy today and will be a critical
part of the economy going forward.
It wasn’t long ago that some
in America thought we were coming to
the end of our energy options – that
we faced a future based on scarcity
of resources that meant rising prices
and costs that could wreak havoc on
our economy. Today, we face a far
different future – one in which the
U.S. is the world’s largest producer
of natural gas and could soon be the
largest producer of oil.
This energy revolution is great
news for every taxpayer, consumer,
motorist, and business in America.
Game-changing
innovations
in
horizontal drilling and hydraulic
fracturing are creating hundreds of
thousands of new jobs every year.
Furthermore, the availability
of lower-cost energy has U.S.
manufacturing poised to experience
a revolution as well, meaning more
jobs and economic benefit here at
home. Reduced energy imports and
increased global competitiveness of
U.S. energy-intensive industries is
projected to contribute $180 billion to
trade balance in 2022. The IHS report
projects a total of more than $2.4
trillion will be invested in the upstream
oil and natural gas industry between
now and 2025.
The American oil and natural
gas revolution has generated a
spectacular expansion of domestic
energy production and has moved
our country to a point where energy
independence is within reach. For the
first time in generations, America’s
path to true energy security seems
clear.
And if we get our energy
policy right today, this could be just the
beginning. That is KIOGA’s message
to members of Congress as they
returned to Washington in September.
We need policy leaders who
will pursue sensible energy policies
and will let science guide their
decisions, not political ideology. And
this becomes a problem when looking
at the stark difference between the
rate of new energy development on
private and state lands versus federal
land.
While oil and natural gas
exploration and production on
state and private lands has created
thousands of new jobs and greatly
improved our energy security, oil
production on federally-controlled
areas fell more than 23% from 2010 to
2012 and is today below what it was in
2007. The economic activity in the oil
and natural gas sector is happening
despite federal government action.
Comparing the job increases in the
oil and natural gas sector to that
of government sponsored energy
efficiency programs provides a
comparison for policymakers who
have sought government energy
management program as a means
to create jobs.
The comparison
shows
clearly
that the private
sector’s response
to
markets,
investment,
and
technology
provides
far
more
benefits
than government
dictates
and
subsidies.
The job increases in
the oil and natural gas sectors of
our economy without government
intervention dwarf those from heavyhanded Washington, D.C. edicts to
the private sector.
KIOGA
continues
our
vigilant efforts working with key
Congressional policymakers to try
to get our energy policy right. To
keep them focused on the facts, we
continue our robust public information
and public advocacy campaigns to
promote sensible energy policy that
will improve America’s energy supply
and national security. We continually
update our fact sheets, issue briefs,
and other reference materials
explaining how the oil and natural gas
industry can create more jobs, reduce
the deficit, and enhance our nation’s
security.
Ultimately, it would be
unforgivable if, based on flawed
science or outdated assumptions,
this country were to abdicate its
responsibility to future generations
by missing this opportunity to lead on
energy and to put control of our energy
future back into our own hands.
Thanks to our abundant
natural resources and the technology
we’ve developed to access them, we
have the chance to be a dominant
player in global energy markets
and guarantee our energy security
for decades to come. The benefits
for American families, businesses,
national security and our long-term
energy security demand that we seize
this opportunity!
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23
Several Challenges Emerge in Legislative Interim
Tax Audits - Proposed Regulations - and More
T
he challenges facing the Kansas oil and natural
gas industry have grown in number and complexity. In addition to the federal challenges coming from
Washington, a number of state issues are beginning to
emerge. KIOGA has been busy preparing for the upcoming 2014 regular Kansas legislative session which begins in
January 2014. Many KIOGA members have been participating in legislative and regulatory meetings focusing on issues
important to the independent oil and natural gas industry.
Special Legislative Session – The Kansas Legislature
opened a special session on September 3rd primarily
to address the state’s Hard-50 murder sentencing law
and to approve a handful of confirmations. The special
session lasted two days. No oil and gas issues emerged.
24
Oil & Gas Severance Tax Audit Issues – Several
producers have recently expressed frustrations with
Kansas Department of Revenue (KDOR) oil and natural
gas severance tax audits. The KDOR issued Notice 1216 that announced the KDOR’s intent to rigidly enforce
the deadline for filing Kansas severance tax returns.
Also, a number of producers received oil severance tax
audit requests from the KDOR that required significant
amount of time and resources to compile and often asked
for information already in the public domain. In addition,
several producers received natural gas severance tax
audit assessments that artificially increase natural gas
prices in excess of what is received by the producer to
calculate gross value of the natural gas. KIOGA President
Edward Cross met with Richard Cram (KDOR Director of
Policy & Research) in late August to discuss the Kansas
severance tax returns issue. KDOR issued Notice 1216 that said the KDOR intended to rigidly enforce the
deadline for filing Kansas severance tax returns. Although
taxes are not due until the 20th day of the second month
following production, KDOR is asking that the severance
tax returns report be submitted by the last day of the
month following production. KIOGA explained to Mr.
Cram that the information KDOR is requesting is not
available to natural gas producers by the filing deadline.
Mr. Cram circulated our concerns internally at the KDOR
and said they want to fix the procedure so that taxes and
the Kansas severance tax report is due at a time when
all information is available. That may require a statutory
change and KIOGA continues to meet with the KDOR to
see what change might be proposed and what might be the
best procedure for pursuing a technical statutory change.
Cross also met with Michael Boekhaus (KDOR Audit
Administrator) in early September and discussed several
errors on KDOR’s part on the KDOR assessment – things
like assessing value based on the highest number which
would appear on a remittance to royalty owners or the
index price identified on a gas purchase contract. KIOGA
discussed the fact that KDOR’s request for information
strains the resources of many producers and much of the
information requested in already in the public domain.
KIOGA members Steve Dillard, David Nickel, Alan Banta,
and Emma Richmond joined Cross in a meeting with Mr.
Boekhaus and 6 other KDOR Audit Services personnel on
September 12th. KIOGA discussed and detailed several
KDOR audit issues. KIOGA expressed our concern with
the KDOR assessing natural gas severance tax based on
index price identified on a gas purchase contract when the
tax has historically followed the intent of the law to value
and tax natural gas on the value the operator receives.
KIOGA also discussed concerns about KDOR deducting
producing days for natural gas wells that are open to the
pipeline, but unable to overcome pipeline pressure. Finally,
KIOGA discussed KDOR audit requests for compilation
of information – like pumper gauges and notes – that
require excessive time and resources to complete when
much of the information is available in the public domain.
The meetings have been productive for communicating
the concerns and needs of the industry and KDOR
and have set the stage for more discussions. KIOGA
continues to work with KDOR to resolve these issues.
Royalty Payment Issues – The Kansas Court of Appeals
recently ruled that the royalty clause of an oil and gas
lease provides for a royalty payment of the proceeds from
the sale of gas at the well, and the term “proceeds” refers
to the gross sale price in the contract between the gas
purchaser and the lessee, producer, or seller, so long as the
contractual rate per thousand cubic feet has been approved
by the applicable regulatory authority. If the lessee,
producer, or seller claims that it is entitled to compute and
pay royalties based upon an amount less than the gross
sale price, it must find the authority to do so somewhere
other than in the lease’s royalty clause. For purposes of
calculating royalty payments, the lessee, producer, seller
is not allowed to deduct the cost of the stipulated price
adjustments contained in the gas purchase agreements
from the gross sale price of the gas, even though the gas
purchaser, according to the terms of its gas purchase
agreement, or otherwise, withholds the price adjustments
from its payment to the lessee, producer, or seller. KIOGA
submitted an amicus brief in this matter that was contrary
to the outcome of the case. The case has been petitioned
to the Kansas Supreme Court to review the decision.
Proposed KCC Hydraulic Fracturing Regulations
Hydraulic fracturing has been and continues to
be effectively regulated by the Kansas Corporation
Commission (KCC). All of the laws, regulations, and
permits that apply to oil and natural gas exploration and
production activities also apply to hydraulic fracturing.
These include laws and regulations related to well design,
location, spacing, operation, and abandonment as well
as environmental activities and discharges, including
water management and disposal, waste management
and disposal, underground injection, surface disturbance,
worker health and safety. In 2012, hydraulic fracturing
legislation was signed into law in Kansas. That legislation
...continued on page 25
Challenges Emerge..continued from page 24
said that if there were need for additional regulation of
hydraulic fracturing in Kansas, the KCC was authorized
to promulgate such regulation. The legislation clearly put
regulation of hydraulic fracturing in the regulatory process.
KIOGA supports the state regulatory process and have
been an active participant in KCC public meetings focusing
on the development of hydraulic fracturing disclosure
regulations. Hydraulic fracturing is subject to a rigorous
and well-established regulatory process developed in
accordance to the geology, hydrology, climate, topography,
industry characteristics, development history, state legal
structures, population density, and local economics unique
to each state. KIOGA provided testimony (both written and
oral) in support of the proposed KCC hydraulic fracturing
disclosure regulations at a KCC hearing on August 15th.
KIOGA believes the proposed KCC hydraulic fracturing
disclosure regulations reflect the unique characteristics
of Kansas and provide adequate environmental
protections while encouraging economic growth.
Abandoned Wells Open Docket – KIOGA joined
comments from EKOGA on August 6th regarding the KCC
open docket on the general investigation of abandoned
wells in Kansas and responsibility for plugging such
wells (the Quest case). The comments were prepared
by David Bleakley, KIOGA board member and EKOGA
board member, who was also an expert witness and
intervener in the original Show Cause Order. The
comments affirmed the KCC’s findings and recommended
that the docket be closed and the Commission direct
the KCC Oil & Gas Advisory Committee and its Rules
and Regulations Subcommittee consider appropriate
amendments or changes to regulations which are
consistent with the findings and conclusions of the KCC.
project. The 700-mile overhead, high voltage direct current
transmission line will deliver wind energy from Kansas to
Missouri, Illinois, Indiana, and states farther east. Several
producers have expressed concerns about how this
project will affect current oil and natural gas wells and the
drilling of future wells. The concerns center around the
proposed route the line is taking through historical and key
Kansas oil and natural gas fields. If the transmission line
project deters the drilling of future oil and natural gas wells
or has an impact on existing oil and natural gas wells, it
would have a significant impact on revenue to the state
of Kansas as well as local communities/counties. The
transmission line project has been granted a 10-year state
tax abatement while tax revenue from oil and gas activity
is gained immediately. KIOGA Chairman Tim Scheck
prepared a distributed a letter to the editor expressing
these concerns.
Scheck encouraged oil producers,
landowners, community leaders, and concerned
citizens to voice any concerns or endorsements of
the Grain Belt Express Clean Line project to the KCC.
Other Issues – As we approach the 2014 Kansas
Legislative Session, KIOGA remains vigilant in monitoring
potential threats and opportunities. The KDOR Property
Valuation Division will be holding a meeting in Garden City
on October 2nd to discuss the 2014 Oil & Gas Appraisal
Guide for 2014. KIOGA will be participating in the meeting.
Proposed SFM Explosives Regulations – The Kansas
State Fire Marshal (SFM) recently proposed new
explosives regulations that could affect several wireline/
perforating companies in Kansas. The proposed new
regulations would require additional liability insurance,
new handler permits for those individuals who physically
inventory explosive magazines, and require refresher
training approved by the SFM for a blaster permit. KIOGA
President Edward Cross presented comments at a SFM
hearing on these new proposed regulations on September
11th. Cross expressed industry concerns about SFM
requiring liability insurance beyond industry standards,
costly additional training requirements, and whether
current industry training modules would be approved by
SFM or if wireline/perforating companies would be required
to take training courses that would be largely unrelated
to our industry. Cross expressed KIOGA opposition to
proposed SFM regulations that appear to be duplicative
of federal ATF, DOT, OSHA, and MSHA regulations.
Grain Belt Express Clean Line Concerns – Several
KIOGA members have recently expressed concern about
the Grain Belt Express Clean Line transmission line
25
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Tony Carlson - Initiatives, Inc. - Lenexa, KS
Richard Pasek - Reinhardt Services, Inc. - Russell, KS
Flavious Smith - Forestar - Denver, CO
Keith Hofmann - Future Acquisition Company, LLC - Houston, TX
Zack K. Wiggins - Martin, Pringle, Oliver, Wallace & Bauer, LLP - Wichita, KS
Chelsey Carlson - Fleetmatics - Rolliing Meadows, IL
Mike Montgomery - Trek Resources, Inc. - Dallas TX
Conrad Mirochna - Trek Resources, Inc. - Dallas TX
Jim Standley - Linn Energy - Houston, TX
Tony Grant - Engineering America - Olathe, KS
Wayne Kieffer - Hays Chevrolet - Hays, KS
Richard L. Payne - Foundation Energy Management - Fort Worth, TX
Joseph D. Combs - Murfin Drilling Company, Inc. - Wichita, KS
Logan Magruder - Taos Resources Operating Company, LLC - Houston, TX
Douglas Wicklund - Wicklund Petroleum Corporation - Naples, FL
Aaron K. Kilgariff - AKK, LLC - Wichita, KS
Paul Mangan - MV Purchasing - Wichita, KS
James Malone & Sam Brock - BM Operations - Russell, KS
Cathy Pocock - MV Purchasing - Oklahoma City, OK
Melvin & Janice Stoppel - Stoppel Supply Co., Inc. - Russell, KS
Gene Gottschalk - High Plains Machine Works, Inc. - Hays, KS
Bryan K. Collins - RSS Services, Inc. - Garden City, KS
Heath Long - Global Cementing LLC - Russell, KS
Matt Ulrich - Matt’s Cat - Russell, KS
Jack Krier - Main Street Media, Inc. - Russell, KS
Howard Washburn - Washburn Energies, Inc. - Bel Aire, KS
Daniel Heflin - Kansas CNG - Wichita, KS
Steve Trueblood - USA Express - Russell, KS
Pat Hilger - Hilger Enterprises - Russell, KS
Ronald & Marilyn Davis - Russell, KS
John Dreiling - Dreiling Field Services, LLC - Hays, KS
Icer Vaughan - Addis Petroleum LC - Wichita, KS
Fred Weigel - Leigew, LLC - Russell, KS
Charles Ramsay/Robert Plante - H&C Oil Operating, Inc. - Plainville, KS
Tim Gulick - C&G Drilling Company - Eureka, KS
Buz Lukens - Brace Fox, LLC - Benton, KS
Joseph A. Schremmer - Withers, Gough, Pike, Pfaff & Peterson, LLC - Wichita, KS
Rob Dove - Dove Chevrolet-Buick-Cadillac - Great Bend, KS
Brian C. Gensch - AGH Wealth Advisors - Wichita, KS
27
Kansas Oil & Gas Industry Leaders Honored
Richard Koll and Adam Beren Recognized for their Leadership
T
wo KIOGA Board Members were recognized for their
dedication, participation, and commitment to the
Kansas oil and natural gas industry during the KIOGA
Board Meeting on August 18th and at the 2013 KIOGA
Annual Convention on August 19th. Richard Koll received
the 2013 KIOGA President’s Leadership Award and Adam
Beren received the 2013 KIOGA Outstanding Service Award.
KIOGA President’s Leadership Award – A special
award to recognize individuals who have made unique
contributions to the success of KIOGA’s state and/or federal
advocacy efforts. These individuals often subordinate their
personal gain to help the industry as a whole by providing
insights, time, consideration, and leadership to KIOGA to
address critical and key state and federal advocacy issues
and concerns. The recipient of the 2013 KIOGA President’s
Leadership Award is Richard Koll. Richard has served
as chairman of KIOGA’s Ad Valorem Tax Committee
for many years and voluntarily provides many, many
hours and days of time, effort, insights, and leadership
addressing oil and gas industry ad valorem tax issues and
concerns for the Kansas oil and natural gas industry as
a whole with the Kansas Department of Revenue, county
assessors, and more. Richard’s tireless efforts have
saved the Kansas oil and natural
gas industry millions of dollars over
the years. Honoring Richard with
the KIOGA President’s Leadership
Award is a small way we can say
thank you to Richard for his amazing
dedication,
commitment,
and
efforts. Richard joins past KIOGA President’s Leadership
Award winners David Nickel and Steve Dillard.
KIOGA Outstanding Service Award – A special award to
recognize individuals who have made unique contributions
to the success of KIOGA’s public information, energy
education, and/or public outreach efforts. These individuals
often subordinate their personal gain to help industry as a
whole with their tireless efforts and contributions to KIOGA’s
public information, energy education, and public outreach
efforts. The recipient of the 2013 KIOGA Outstanding
Service Award is Adam Beren of Berexco LLC. Adam has
taken an active and lead role in developing basic, entrylevel oilfield training for the Kansas oil and natural gas
industry. Adam’s efforts are addressing a critical need of
the Kansas oil and natural gas industry. Also, over the past
several years Adam has provided invaluable insights and
input to KIOGA’s public information
efforts addressing federal policy
and regulatory issues. Honoring
Adam with the KIOGA Outstanding
Service Award is a small way we
can say thank you to Adam for his
amazing dedication, commitment,
and efforts.
Adam joins past
KIOGA Outstanding Service Award winner Alan DeGood.
The success of KIOGA’s advocacy and
public information efforts are made possible by the
amazing efforts of our members. KIOGA is delighted
to have the opportunity to honor these two individuals
who have made a positive difference for all of us.
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Link to pictures:
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Congress...continued from page 5
supports American development, namely
the preservation of percentage depletion
and IDCs. (KIOGA prepared an editorial
about oil and natural gas tax provisions titled
Why Oil & Gas Tax Provisions are not
Subsidies that was shared with DC media.)
The importance of small businesses
that
produce
American
oil
that
offsets the need for foreign oil, and
The facts about hydraulic fracturing.
The bottom line is we still have many
challenges ahead of us. KIOGA remains
focused and hard-charging and has
established a forward-looking presence with a
number of key policymakers. We will continue
to be diligent in the process and will continue
to take the industry’s case directly to those
in Congress during the remainder of 2013.
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KBA/KIOGA Oil & Gas Conference
Coming October 18th!
M
ark your calendars for Friday, October 18, 2013 for
this year’s KBA/KIOGA Oil & Gas Conference. The
conference will be held at the Hyatt Regency Hotel
located at 400 West Waterman in Wichita.
Advancements throughout the oil and gas industry
have brought a number of changes to legal issues that
regulate the oil and gas industry. In order to keep abreast
of these changes, the Kansas Bar Association (KBA)
and KIOGA are coming together for the 38th year to offer
continuing legal education (CLE) seminars approved for
CLE credit in Kansas and Missouri.
The conference has been approved for 7.0 hours
of continuing legal education (CLE) credit in Kansas and
Missouri, including 1.0 hour of ethics and professionalism.
Make plans to join us on October 18th to share ideas,
network with peers, and participate in thought-provoking
seminars.
Several topics of interest to oil and gas producers
will be presented at this year’s meeting. Topics include:
 Recent Developments in Oil & Gas Law
 What is My Mineral (or royalty) worth? How to
“Selling Oil & Gas Production at Auction Since 1975”
Deal With Valuation Issues




KCC Update
Clearing Title of Old Severed Mineral Interests
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KIOGA Educational Activities at Kansas State Fair
Spotlight Kansas’ Role in the Development of Energy
or the 14th consecutive year, KIOGA participated
in the Kansas State Fair. KIOGA’s long-standing
presence at the Kansas State Fair has proven to be
very effective for building good will and providing opportunity to communicate with the public. The 2013 Kansas
State Fair marks the event’s 100 year anniversary and
provided an opportunity to focus on the historical significance of the Kansas oil and gas industry. The Kansas
oil industry celebrated our sesquicentennial (150 year
anniversary) in 2010 and the Kansas State Fair 100 year
anniversary provided a unique opportunity to spotlight
Kansas’ role as a leader in the development of energy.
Treating fair-goers from across Kansas with
informational material explaining the truth about the oil and
gas industry, volunteer KIOGA members presented the
Kansas oil and gas industry in a positive light during this year’s
Kansas State Fair. More than 300,000 visitors attended
this year’s Kansas State Fair that ran September 6th-15th.
“The KIOGA oil and gas industry educational exhibit
is a worthy investment of time and resources especially
when speaking to crowds of curious people,” said Kelly
Rains, KIOGA’s fair exhibit coordinator.
“Amazing
adventures awaited passer-bys. KIOGA unveiled our new
oil and gas production display. The display exhibited small
scale working models of oilfield equipment commonly
used during the exploration and production of crude oil
and natural gas in Kansas.” A big “Thank You” goes out
to Clarence Denning with Murfin Drilling Company.
Clarence spent countless hours building
the models and then several more
transporting them to Hutchinson. Thank
you, also, to Derrick at Bear Petroleum
for helping to pack up the models and
deliver them to Wichita. If you didn’t get
a chance to visit the booth, stop by the
Wichita office and see them in action.
F
34
These interactive exhibits and models allowed fairgoers the opportunity to gain a better understanding of how
oil and gas is formed, discovered, and produced in Kansas
and why it is so important to our economy and standard of
living. “What a great way to connect to people of all ages
who need affordable and reliable energy,” said Rains.
A special thanks goes to the John Niernberger
for preparing an interactive pipe screw activity that
drew much interest and assured the KIOGA booth
was always well-attended. In addition, KIOGA energy
education material and data provided facts, statistics,
and information about the Kansas oil and gas industry.
KIOGA relies on an extensive volunteer network for
staffing the fair exhibit. Several KIOGA members stepped
up and volunteered their time to interact with fair-goers.
Special thanks go to the following volunteers and the
companies that allowed them time to staff the KIOGA booth:
JoAnn Aguilera, Mull Drilling Co., Inc.
Bob Bass - National Oilwell
Bette Bassford - Seal Tite Lining
Bob & Shelley Bayer - Lario Oil & Gas
Brandi Biggs - KIOGA
Bryan Clark - Clark Marketing
Ed & Michele Cross - KIOGA
Alan DeGood - Trek Resources
Kelley Edgar - Edgar Oil
Linda Feist - Bachman Production Specialties
Clinton Franey - Kansas Strong
Kenny Gates - Pratt Well Service, Inc.
Brian Gaudreau - Vess Oil Corp
Bill & Judy Hess - Cobalt Energy
Brent & Kristie Homeier - Mai Oil / Scheck Oil
David Jervis - Range Oil Company
Dwight & Lenore Keen - Keen Oil Company
Jeff Kennedy - Martin Pringle
Dan & Rosie Klaus - Basic Energy/Sunrise Supply
Andrea Krauss - John O. Farmer, Inc.
Bob Krehbiel - Attorney
Kathryn Langrehr - Langrehr & Co.
Jerry Mason - Duke Drilling
Ernie Morrison - Mull Drilling Co., Inc.
Chris & Mica Nelson - Apollo Energies, Inc.
John Niernberger - Ritchie Exploration
Mike & Jan Novy - Novy Oil & Gas, Inc.
Larry Richardson - Pickrell Drilling Co., Inc.
Tim & Barbara Scheck - Scheck Oil Operations
Dick & Janice Schremmer - Bear Petroleum
Carol Schuetze - Territorial Magazine
Mark Sheve - Mull Drilling Co., Inc.
Bob Swann - Swann Resources, Inc.
Darrel Walters - Berentz Drilling Co.
J.L. White - Kansas Strong
Haley Wilkinson - Kansas Strong
Bill Wix- Attorney
The KIOGA Educational Foundation sponsored
the educational booth at the Kansas State Fair for
the 14th consecutive year. If you would like to make
a donation to the foundation or find more information
about our energy education programs, please
contact Kelly Rains at the KIOGA Wichita office at
316-263-7297 or Mark Shreve at 316-264-6366.
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KIOGA Convention Sponsors 2013
Thank You for Supporting the 76th Annual Convention
WILDCATTER SPONSOR $15,000 or more
Palomino Petroleum, Inc.
BLACK GOLD SPONSOR $10,000 or more
IMA, Inc.
PLATINUM SPONSOR $7,500 or more
Cochran Chemical Company, Inc.
GOLD SPONSORS $5,000 or more
Basic Energy Services
Coffeyville Resources
Colt Energy, Inc.
Consolidated Oil Well Services, LLC
Jayhawk Oilfield Supply, Inc.
Kimray, Inc.
Linn Energy
Maclaskey Oilfield Services
Mai Oil Operations, Inc.
Mull Drilling Company, Inc.
MV Purchasing, LLC
Polymer Services
SandRidge Energy
Trilobite Testing, Inc. /
Monster Pump Operations, Inc.
SILVER SPONSORS $2,500 or more
AKA Energy Group, LLC
Atlas Pipeline WestOK
Baker Hughes, Inc.
Berexco, LLC
Breckenridge Exploration Company
D.S. & W. Well Servicing, Inc.
DCP Midstream, LP
Empire Energy E&P, LLC
Insurance Planning, Inc.
JP Energy
Lockhart Geophysical Company
Murfin Drilling Co., Inc.
NCRA
Plains Marketing, LP
Pratt Well Service, Inc.
Raymond Oil Co., Inc.
Scheck Oil Operations
Southwind Drilling, Inc.
Swift Services, Inc.
Tim Miller Oilfield Sales
TREK AEC, LLC & American Energies Pipeline
Vincent Oil Corporation
BRONZE SPONSORS - $1,000 or more
Abercrombie Energy, LLC
Apollo Energies, Inc.
BKD, LLP CPAs & Advisors
36
Blue Goose Drilling Co.,, Inc.
Buckeye Corporation
Central Power Systems & Services
CFMI, LLC dba Wallace Energy
Claflin Pump & Supply, Inc.
Commerce Bank
Corrosion DC, Inc.
Crawford Supply Co.
Daystar Petroleum, Inc.
Discovery Drilling Co, Inc.
Duke Drilling Company, Inc.
Edmiston Oil Company, Inc.
Evenson Auctioneers
Gore Oil Company
H&B Petroleum Corporation
Halliburton
High Sierra Crude Oil & Marketing
INTRUST Bank
J & D Pump & Supply, LLC
JACAM Chemicals 2013
K & N Petroleum, Inc.
Knighton Oil Company, Inc.
McCoy Petroleum Corporation
McDonald Tank Co.
Mid-Continent Safety, A DXP Company
Midwestern Pipeworks, Inc.
MTM Petroleum, Inc.
Mud-Co / Service Mud, Inc.
Nalco Champion, an Ecolab Company
ONEOK Field Services Company, LLC
OXY USA, Inc.
Pacer Energy Marketing
Paragon Geophysical Services, Inc.
Pickrell Drilling Co., Inc.
Pioneer Energy Services
Ritchie Exploration, Inc.
Shakespeare Oil Company, Inc.
Stelbar Oil Corporation
Sullivan and Cook / Petroleum Consultants, Inc.
Sunrise Oilfield Supply, Inc.
Superior Pipeline Company
Sweetman Investments, LLC
T & C Consulting
TGT Petroleum Corporation
THE DICKSTER
Tidelands Geophysical
Tomcat Drilling, LLC
Trans Pacific Oil Corporation
Truck Parts & Equipment, Inc.
VAL Energy
Wellkeeper
White Exploration, Inc.
Woolsey Operating Company, LLC
KIOGA Convention Sponsors 2013
Thank You for Supporting the 76th Annual Convention
GENERAL SPONSORS - $300 or more
Albert Hogoboom Oilfield Trucking, Inc.
Anderson Energy, Inc.
Bachman Production Specialties, Inc.
Bank of Oklahoma
Beauchamp Oil & Royalty Co.
Berentz Drilling Company
Butterfly Supply/Great Plains Inspection
Cathodic Systems, LLC
DaMar Resources, Inc.
Deutsch Oil Company
Dick’s Engine Machine Service, Inc.
Exploration Geophysics, Inc.
Express Well Service & Supply, Inc.
F & M Bank & Trust Co.
F.G. Holl Company, LLC
Geo. R. Shaw Living Trust
Grand Mesa Operating Co.
Hi-La Engine, Pump & Supply, Inc.
J. Fred Hambright, Inc.
John O. Farmer, Inc.
Jones Gas Corporation
Kansas Acid, Inc.
Keen Oil Company, LLC
Lario Oil & Gas Company
Log Tech of Kansas, Inc.
Lotus Operating Co., LLC
Martin Pringle Law Firm
Maverick Drilling, LLC
Mohican Petroleum, Inc.
Nabors Completion & Production Services Co.
National Oilwell Varco
Norris Sucker Rods
Novy Oil & Gas, Inc.
Orecat Energy, Inc.
Orvie Howell
Parrish Oil Company, LC
Pintail Petroleum
Ralfe Reber
Range Oil Company, Inc.
S.R. Weilert Oil, LLC
Territorial Magazine
The Trees Oil Company
TRC Rod Services of Oklahoma
Wyoming Casing Service
THANK YOU FOR ANOTHER
GREAT YEAR!
Email [email protected] for a link to the pictures
HOSPITALITY ROOM HOSTS
Allied Oil & Gas Services
Danco Systems
Halliburton Artificial Lift
Hess Services, Inc.
INAalert/Black Gold Technologies/Southwind Drilling
John Crane Production Specialists
K.E. Andrews
Maclaskey Oilfield Services
Tim Miller Oilfield Sales
TREK AEC
Wellhead Systems
Wellkeeper
37
76th KIOGA Annual Meeting Elects Tim Scheck
2013-2015 KIOGA Chairman
T
im Scheck, owner/operator of Scheck
Oil Operations in Russell was elected
the 2013-2015 KIOGA Chairman at the
KIOGA board meeting held during the KIOGA
Annual Convention on August 18th. Scheck
brings a unique set of skills and leadership
at a time when the challenges facing the oil
and gas industry are equally unique. Scheck
said he wanted to focus on significantly increasing KIOGA
membership during his tenure as KIOGA Chairman. Scheck
replaces outgoing Chairman Dwight Keen of Winfield, who
completed his two-year term at KIOGA’s Annual Convention
in Wichita on August 20th.
Thirty-one of the 66 Directors were elected to fill
the vacancies from expired terms on the KIOGA Board of
Directors. The following 31 Directors will join the remaining
35 Directors on the KIOGA Board:
 Steven C. Anderson,
Mull Drilling Company, Inc., Wichita, KS
 Keith Befort,
Allied Oil & Gas Services, LLC, Wichita, KS
 Adam E. Beren,
Berexco LLC, Wichita, KS
 Thomas E. Blair,
Tomco Oil, Inc., Atlanta, KS
 Ron Cook,
Petroleum Consultants, Overland Park, KS
 Kent Duetsch,
Duetsch Oil Company, Wichita, KS
 Shawn Devlin,
Viking Resources, Inc., Wichita, KS
 Mark Evenson,
Evenson Auctioneers, Inc., Wichita, KS
 Kraig L. Gross,
Kansas Natural Gas, Inc., Hays, KS
 Rick Hiebsch,
Vincent Oil Corporation, Wichita, KS
 Barry Hill,
Vess Oil Corporation, Wichita, KS
 David Jervis,
Range Oil Company, Inc., Wichita, KS
 Jeff Kennedy,
Martin Pringle Oliver Wallace & Bauer LLP,
Wichita, KS
 Dan Klaus,
Basic Energy Services, LP, Wichita, KS
 Earl M. “Mac” McKnighton,
Knighton Oil Company, Inc., Wichita, KS
 Kurt Mai,
Mai Oil Operations, Inc., Dallas, TX
38
 Brock McPherson,
McPherson & McVey Law offices, Great Bend, KS
 Michael E. Montgomery,
Trek AEC, LLC, Dallas, TX
 Todd Morgenstern,
Southwind Drilling, Inc., Ellinwood, KS
 Margery Nagel,
F.G. Holl Company, LLC, Wichita, KS
 Ed Nemnich,
K&N Petroleum, Inc., Ellinwood, KS
 William S. Raymond,
Raymond Oil Company, Inc., Wichita, KS
 Eugene A. Reif,
Pickrell Drilling Company, Inc., Wichita, KS
 Michael J. Reilly,
Grand Mesa Operating Company, Wichita, KS
 Scott Ritchie III,
Ritchie Exploration, Inc., Wichita, KS
 Ryan J. Schweizer,
McCoy Petroleum Corp, Wichita, KS
 Rick Stinson,
Lario Oil & Gas Company, Wichita, KS
 Darrel G. Walters,
Berentz Drilling Company, Inc., Wichita, KS
 K. Robert Watchous,
Palomino Petroleum, Inc., Newton, KS
 Charles Wilson,
Berexco, Inc., Wichita, KS
 I. Wayne Woolsey,
Woolsey Energy Corporation, Wichita, KS
The Directors unanimously elected the following
officers:
 Chairman – Tim Scheck, Scheck Oil Operations,
Russell, KS
 Southwest Vice Chairman – Kenneth S. White,
White Exploration, Inc., Wichita, KS
 Northeast Vice Chairman – Nick Powell, Colt
Energy, Inc., Fairway, KS
 South Central Vice Chairman – Alan Banta, Trans
Pacific Oil Corporation, Wichita, KS
 Treasurer – Scott Fraizer, Woolsey Operating
Company, LLC, Wichita, KS
The following Advisory Board Members were also
elected:
 Thornton E. Anderson, Anderson Energy, Inc.,
Wichita, KS
 James W. Rockhold, Rockhold Engineering, Inc.,
Great Bend, KS
 Lee Banks, Banks Oil Company, Wichita, KS
Providing the products and services required from casing point to
production point with maintenance support in between
6Exclusive S-55 casing
6Down hole pump shops at each store
6New and used pumping units
6Pumping unit gear box oil recycling
6 Line Pipe (steel, poly, fiberglass)
6Tank batteries
6Sucker rods
6Pipe, valves and fittings
6New and used engines
6Fleet of on-site parts trailers
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39
Increased Domestic Energy Production
Never More Important
T
he current conflict in the
Middle East only underscores the need for increased
domestic energy production.
Unrest in oil producing
regions around the world will always
cause fluctuations in the price of
oil. Markets will always react to
uncertainty, whatever the source.
At its core, U.S. energy
independence is about freedom.
When the U.S. is not reliant upon
oil from conflict regions, we have
more flexibility in responding to
these inevitable crises. More energy
independence gives the U.S. the
ability to walk away from or not
be drawn into regional conflicts in
order to impose oil market stability.
Current policy on oil and
gas tax provisions - namely cost
recovery mechanisms like percentage
depletion
cost
recovery
and
expensing of intangible drilling and
development costs (also known as
IDCs) - has produced an American
oil and gas revolution that has
resulted in a spectacular expansion of
domestic energy production and has
moved our country to a point where
energy independence is within reach.
U.S. oil imports are now less
than 37% when they were over 60%
just five years ago and we measure
LesliTown
Phone:(913)980Ͳ8207
Fax:(913)837Ͳ2241
[email protected]
Oil&GasConsultingServices
KCCFilingsviaKOLAR 9 OperatorLicense 9 DrillingIntents
9 WasteTransfer 9 PitClosure 9 CompletionReports
9 InjectionWellApplication
9 TransferofOperator
9 WellInventory
9 WaterInjectionReports Accounting/Recordskeeping
InsuranceManagement
Oil&GasLeaseResearch
CoordinatesubͲcontractors
KDOTCompliance
Oil&GasLeaseExemptions
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PersonnelManagement
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Experience
Bachelor’sDegreeinBusiness
3rdGenerationOilBusiness
QuickBooks
KOLAR/LEO7
KSDept.ofRevenue–Oil&GasDiv.ofPropertyValuationTraining
EKOGA&KIOGAMember
40
natural gas reserves in centuries.
Thanks to more domestic oil and natural
gas development, we are becoming
more energy independent every day.
The proper response to
market fluctuations resulting from
war and rumors of war is to redouble
our efforts at achieving energy
independence. Misguided proposals
to eliminate critical oil and natural gas
tax provisions would only serve to
undermine U.S. energy production.
The solution is to allow American oil
and natural gas companies to produce
at home more of the oil and natural
gas we know our nation is demanding.
By encouraging more development of
our nation’s ample oil and natural gas
resources rather than relying so much
on imports, we could significantly
enhance our national security.
Contrary to what some in politics
and the media have said, the oil and
natural gas industry currently enjoys
no unique tax credits or deductions.
Since its inception, the U.S.
tax code has allowed corporate tax
payers the ability to recover costs
and to be taxed only on net income.
These cost recovery mechanisms or
tax provisions, also known in policy
circles as “tax expenditures”, should
in no way be confused with “subsidy”,
i.e., direct government spending.
Oil and natural gas tax
provisions like percentage depletion
and IDCs are neither “loopholes”
nor “subsidies”, but are simply cost
recovery mechanisms similar to those
used by other industries. These tax
provisions are critical for independent
oil and natural gas producers to sustain
capital availability and formation to
promote continued oil and natural gas
exploration and production activity.
Market-created jobs, rather
than those directly created and
supported by the government, is a key
benefit of increased oil and natural gas
exploration and production activity.
Energy access, not taxes
are the key to moving our nation
toward energy independence and
unlocking new jobs for Americans.
America has spilled far too
much blood and treasure in conflict
regions due to our dependency on
foreign oil. Oil and natural gas tax
provisions like percentage depletion
and IDCs allow American energy
producers to put that money back into
exploration and development of U.S.
oil and natural gas supplies, creating
jobs and strengthening freedom.
(This editorial was written by
KIOGA
President
Edward
Cross and appeared in media
throughout Kansas and elsewhere)
41
42
© 2013 National Oilwell Varco
All rights reserved
D392005056-MKT-001 Rev 01
Email: [email protected]
KIOGA Trade Show 2013
Thank You for Making the Convention a Success
Accu
Accu
Ac
cura
ratte
ra
te Saffet
ety
ty Co
Comp
Comp
mplililian
ance
an
ce
Adler Tank Rentals
Advanced Oil & Gas Data Solutions, LLC
AESC
AGH Employer Solutions
Airgas Mid South
AJAX
AKA Energy Group, LLC
Allied Oil & Gas Services
Arrow Engine Co.
Atlas Pipeline WestOK
Baker Hughes, Inc.
Basic Energy Services
Black Gold Technologies
Blue Rock Energy Partners
Breckenridge Exploration Company, Inc.
Butler County History Center
Caseco Truck Body
Central Power Systems & Services
CERAM-KOTE COATINGS, INC.
Chemoil Products
CK Power
Cochran Chemical Company
Consolidated Oil Well Services, LLC
Crescent Services, LLC
Cretcher Heartland, LLC
DanCo Systems, Inc.
DCP Midstream
Decker Electric / SPOC Automation
Desk and Derrick Club of Wichita
DuPont
DynaFlo, LLC
E.B. Archbald & Assoc. / SSI
Eclipse Oil & Gas Assoc. / EOGA
eLynx Technologies
EMI, LLC
Enviro Clean Products & Services
Evans Enterprises, Inc.
Foley Equipment / Foley Power Solutions
Graybar Electric
GreaseBook, LLC
GSI Engineering, LLC
Halliburton
Hampel Oil Distributors
High Sierra Crude Oil & Marketing
IHS
IACX Energy, LLC
IMA, Inc.
iSi Environmental
JACAM Chemicals 2013, LLC
JCI Industries
Kansas Corporation Commission
Kansas Geological Survey
Kansas Strong
Kimray, Inc.
Lockhart Geophysical Company
Lonestar Geophysical Surveys
Maclaskey Oilfield Servies
McAda Fluids Heating
Mid-Continent Aviation Services
ONEOK Field Services Company, LLC
OPECO, Inc.
Pacer Energy Marketing
Paramount Land
PetroBase, LLC
Pioneer Energy Services
Plain Jan’s
Polymer Services
RAE Systems
Rain for Rent
Roberts Truck Center
Salta Pipe Co.
Sco-Jo Land & Environmental
Seal Tite Lining Systems
Spicer & Sandburg
Stucchi USA
Sumner County Economic Dev.
Superod
TECGEN
Tertiary Oil Recovery Program
Tex-Ok-Kan Oil Field Services, LLC
Tidelands Geophysical
Travelers Insurance
TRC Rod Services
Truck Parts & Equipment, Inc.
TXAM Pumps
Universal Lubricants
Weld-Tech
Wellhead Systems, Inc.
Wildcat Resources, Inc.
43
229 E. William, Suite 211 | Wichita, KS 67202-4027
(316) 263-7297 | www.kioga.org
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MAIL TO: KIOGA | 229 E. William, Suite 211 | WICHITA, KS 67202