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Independent Since 1959
NEWS
June 2018
Register Now for STEPS Meeting July 19 The Safety Committee is working hard on furthering IOGAWV’s commitment to safety training for all of our members. IOGAWV, in conjunction with WVONGA and the WV Manufacturers Association, is jointly sponsoring the upcoming STEPS meeting to be held on Thursday, July 19, 2018 from 11:00 a.m. to 3:00 p.m. at the Erickson Alumni Center on the Evansdale Campus of West Virginia University in Morgantown. Lunch will be provided.
For those members who are currently participating in the BrickStreet Workers’ Comp Program, this Appalachian STEPS Network meeting will meet your annual safety training requirement. There is no charge to attend the STEPS meeting. However, in order to make appropriate food service arrangements, please complete the registration form on page 19. The deadline is July 6. If you have any questions, please feel free to contact Lori Miller
Smith in the IOGAWV office at (304) 344-9867 or lmillersmith@ iogawv.com. We look forward to seeing you on July 19. Jim Rode There is no Safety Committee cost to attend, so Chair please make your reservation by July 6 by using the registration form on page 19.
Marginal Well Credit for 2017 Announced
The Internal Revenue Service announced May 26, 2018, in Notice 2018-52, that the Marginal Well Production Credit (MWC) for natural gas production from qualifying wells in calendar year 2017 is $.51 per mcf for the first 18 mcf of daily production. Arnett Carbis Toothman is committed to staying up-to-date on issues that will benefit the oil and natural gas industry and those who serve its members. The following is a summary of this credit and its source and application. Marginal well working interest owners have not experienced much in their favor in the past several years with lower production, lower natural gas sales prices and increased operating, transportation and regulatory costs. Surprisingly, a very positive current item for marginal well working interest owners may be found in the federal income tax area with a federal income tax credit for 2017
natural gas production. Internal Revenue Code Section 45I was passed by Congress as part of the American Jobs Creation Act of 2004. This MWC was based on production from qualified marginal wells. Qualified marginal oil wells are those with an average production of not more than 15 barrels per day, those wells producing heavy oil, or wells producing not less than 95% water with average production of not more than 25 barrels per day of oil. Qualified marginal natural gas wells are those producing not more than 90 mcf per day. The first step in determining wells that qualify for this credit is making certain they qualify as marginal wells, combining oil and natural gas equivalent units to determine marginal well status. This tax provision allows a $3 per barrel tax credit for the first three barrels of daily oil production
from an existing marginal well and a $.50 per mcf tax credit for the first 18 mcf of daily natural gas production from a marginal well. Don Nestor The second step Chair, Taxation is determining Committee the actual average daily production from the qualified wells and limiting that production to a daily combined three barrels of oil and 18 mcf of natural gas in equivalent units of production. If oil produced from qualifying wells is not allowed in a year due to oil’s reference price being too high, which was the case for 2017 production, it should be appropriate to include only natural gas in your 18 mcf of qualifying production calculation. The qualified Well Credits Continued on page 8
INSIDE
Marc Monteleone / 2 Dennis Xander / 3 Charlie Burd / 4 Mark Clark / 5 Mark Taylor / 7 Greg Kozera / 9 Charlie Burd / 11 Ergon / 13 Industry News / 14 Sarah Smith / 15 IOGCC News / 15 Industry Events / 16 Hugh Byers / 17 TDA Application / 18 Safety Seminar Registration Form / 19
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Marc Monteleone IOGAWV President
Let’s Not Miss Another Opportunity You have heard us say for the last year that the oil and natural gas industry is the best HOPE for West Virginia’s future in terms of providing a strong economy, good paying long-term jobs and increased tax revenues. We have talked about upstream and downstream manufacturing, natural gas fired power plants, the Appalachian Storage and Trading Hub and LNG exports. The problem is that all we have done is talk!! It is time to stop talking and take some action. We are squandering this opportunity, and if we do not take action soon, we will miss out on the true benefits that this opportunity can bring to West Virginia. We need for our state leaders to work together and take aggressive steps to make this opportunity a reality. Let’s focus on one of the benefits set forth above, natural gas fired power plants, and see how West Virginia is doing in its efforts to attract this new and progressive industry to our state. Pennsylvania currently has 60 natural gas fired power plants in service and 22 under construction. Ohio currently has 17 natural gas fired power plants in service and four under construction. West Virginia currently has four natural gas fired power plants in service and one under construction. Yes, we are last again! Clearly, our leadership is not making the most of this critical opportunity and West Virginia is simply losing out to Pennsylvania and Ohio. Natural gas fired power plants allow us to use the natural gas we produce in our state, create good paying jobs and provide low
electricity prices to our citizens and businesses. We need to reverse this trend immediately and our leaders need to get in the game and attract this vital business to our state. Some of our leadership says we do not need natural gas fired power plants and that our old power plants are just fine. But that could not be further from the truth as the numbers clearly show. The most telling number that shows how bad we are failing is in our cost of electricity. In 2008 West Virginia had the 3rd lowest electric rate in the country. In 2017 West Virginia’s electric rate was the 21st lowest in the country and we had the fastest growing electric rate in the country. What makes this even worse is that from 2012 through 2015, six major coal fired power plants with a total of 18 generators closed in West Virginia. We are going backwards!!!! We need to reverse this trend now. Our leadership needs to work hard to attract natural gas fired power plants to our state. Without natural gas fired power plants, our electric rates will continue to rise and we will not be able to attract the upstream and downstream manufacturing to West Virginia. The cost of electricity is a key component to attracting future manufacturing jobs and West Virginia’s high cost of electricity will greatly limit our ability to attract future businesses to West Virginia. If our leadership does not reverse this trend now, West Virginia will simply miss out on a wonderful opportunity that has fallen into our lap. The Marcellus and Utica shale plays represent one of the largest oil and natural gas fields in the
world. We need to make the most of this opportunity and develop more uses for the gas and oil in West Virginia. Natural gas fired power plants are one way to seize this opportunity and assure the potential manufacturers that West Virginia is the place to locate. Let’s stop talking and get to work!
2017-2018 OFFICERS BOARD MEMBERS Marc Monteleone President Brett Loflin VP/Program, Govt. Affairs Chair Jim Pritt Secretary-Treasurer/Commerce Co-chair Scott Freshwater Immediate Past President James W. Crews Director, Commerce Co-chair J. Kevin Ellis Director, Governmental Affairs Co-chair Doug Malcolm Director, Environmental Chair Mike McCown Director, Comm. & Educ. Chair Sam McKown Director, Producers Issues Co-chair James Rode Director, Safety Chair Sarah Smith Director, Membership Vice Chair Rick Toothman Director, Producers Issues Co-chair
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Dennis Xander Denex Petroleum
Tom Dunn Energy Leadership Academy Accepting Applications
The Tom Dunn Energy Leadership Academy (TDA) is accepting applications through June 4, 2018, for its 2018 class. The Academy is scheduled for July 10-12, 2018, on the campus of West Virginia Wesleyan College (WVWC) in Buckhannon, WV. High school sophomores, juniors and seniors interested in learning more about the energy industry, regional career opportunities
and leadership skills are encouraged to apply. The Academy, sponsored by the Independent Oil and Gas Association of West Virginia (IOGAWV), provides students with an in-depth look at West Virginia’s oil and natural gas industry. During the three-day event, students will be immersed in the industry through classroom presentations and field
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trips with industry experts. Students also will learn about industryrelated programs offered at local colleges and universities during the college fair, hosted during the final day of the program. Tuition, lodging and meals will be provided free of cost to all participants. “The Tom Dunn Academy provides students with a unique opportunity,” said Dennis Xander, member of the Academy’s board of directors and president of Denex Petroleum. “There aren’t many other programs that provide such an in-depth view of one of the state’s most important industries, especially at no cost. We are incredibly happy to offer this to West Virginia students, as they will comprise our future workforce.” Applications are available at www. TomDunnAcademy.org, and will be accepted through June 4. Applications can be submitted electronically or by mail using the application form on page 18. All costs, aside from transportation to and from WVWC, are covered, and students are housed on campus. Students who attend will receive certificates of completion for their efforts. “We encourage all interested high school students to submit an application,” Xander said. “This is a wonderful learning experience, and we hope to see our 2018 class comprised of students from all across the state.” To learn more about the TDA and download the application, visit www.TomDunnAcademy.org. Be sure to like and follow the TDA on Facebook and Twitter.
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Charlie Burd Executive Director, IOGAWV
From the Burd’s Nest: Here I Go Again! Five surgeons were discussing who has the best patients on which to operate. The first surgeon says, “I like to see accountants on my operating table because when you open them up, everything inside is numbered.” The second responds, “Yeah, but you should try electricians! Everything inside them is color coded.” The third surgeon says, “No, I really think librarians are the best; everything inside them is in alphabetical order.” The fourth surgeon chimes in: “You know, I like oil and gas producers. Those guys understand cost overrides, that the job may take longer than planned and there is always a risk to take.” But the fifth surgeon knew he had them all beat when he observed: “You’re all wrong. Lobbyists can be the easiest to operate on. They don’t let their heart get in the way of the job, they already know the outcome BEFORE the procedure and – since most have a head and butt that are interchangeable – you have two chances to get it right.” There ya go – that’s me! As I begin this article with a bit of levity, as you may recall, back on November 6, 2017, I had lower back surgery where L-3-4-5 and S-1 were fused, and two titanium rods and eight screws were inserted to stabilize an ever-progressing sciatic nerve issue in my legs. I am very happy to tell you that, to this day, and as my back surgeon told me in advance, I have not had one pain in my legs and I, thus far, proclaim myself the posterchild for this type of back surgery. What you likely did not know was two weeks before my back surgery,
and because of the sciatic nerve issues, I slipped on my steps at my home and caught myself with my right arm. I knew immediately I had injured myself but said little to anyone and proceeded to back surgery. What I suspected in mid-October was confirmed in a March MRI. I have three tears in my right rotator cuff and had shoulder surgery May 24!! But, as back in November, my plan will be to work from home after that first couple days of agony. You are welcome to call me. There is lots going on that I will continue to monitor, so it is my hope for it to be “business as normal.” As we move closer to the end of our business and membership fiscal year on June 30, IOGAWV will find itself busy with: a. The election of four new Board of Director members. Voting by special ballot is well underway and the outcome will be determined on June 13, 2018. We have presented five OUTSTANDING candidates: Jon Farmer representing Arsenal Resources, LLC; Jeff Isner representing Pillar Energy, Inc.; Bob Radabaugh representing S&R Ventures, Inc.; Ben Sullivan representing Greylock Energy, LLC; and Todd Tetrick representing EnerVest Operating, LLC. b. Presenting its new leadership team for the 2018-19 membership year. This should be announced in the July 2018 issue of IOGA News. c. Preparing for the 2018 Summer Meeting, August 5-7, at The Greenbrier Resort. d. Following closely the outcome
of the 2018 General Election to be held, Tuesday, November 6, 2018. e. Then, based on the outcome of the General Election: • Being ever mindful of a Special Legislative Session with potentially harmful legislative actions; and • Developing IOGAWV’s platform of producer, busi ness and industry friendly 2019 legislative initiatives. There is much left to do and accomplish in this last seven months of 2018. Be on the lookout for more frequent MailChimp notices giving you the most timely and factual information on industry activities and happenings. Also, be on the alert for candidates endorsed by your GOpac Committee—and please consider contributing to GOpac so that those candidates friendly to the oil and natural gas industry can be provided much-needed funding to their individual re-election campaigns. Finally, as you are reading this, my surgery will be completed and my right arm and shoulder will be immobilized. Thank goodness I am left-handed!
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Mark D. Clark Spilman Thomas & Battle, PLLC
Horizontal Well Reporting Updates Under HB4270 The West Virginia Legislature passed House Bill 4270 regarding the information to be reported to royalty and working interest owners by well operators. The new law will become effective on June 8, 2018. The new reporting requirements are limited to horizontal wells and the intent is to provide more detailed information to royalty owners and to provide more timely production volume reporting to the West Virginia Department of Environmental Protection’s Office of Oil and Gas (“OOG”). The Information Reporting and Payment to Owners is part of Chapter 37B - Mineral Development and consists of only three sections:
Section 1. Oil and natural gas production information reporting from horizontal wells. This section is limited to horizontal wells governed by §22-6A-1 et seq. and requires “the following information with each payment to all royalty and working interest owners receiving payments:” (1) A name, number, or combination of name and number, and the state issued American Petroleum Institute number that identifies each lease, property, unit, pad, and well, for which payment is being made, and the county in which the lease, property, and well are located; (2) Month and year of production;
(3) Total barrels of oil; number of MCF, MMBTU, or DTH of natural gas; and volume of natural gas liquids produced from each well and sold; (4) Price received per unit of oil, natural gas, and natural gas liquids produced; (5) Gross value of the total proceeds from the sale of oil, natural gas, and natural gas liquids from each well less taxes and deductions set forth in §37B1-1(a)(6) of this code; (6) Aggregate amounts for each category of deductions for each well which affect payment and are allowed by law, including 4270 Reporting Continued on page 6
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4270 Reporting Continued from page 5 without limitation those deductions provided for under the terms of the governing lease; (7) Interest owner’s interest in production from each well expressed as a decimal or fraction and reported pursuant to §37B1-1(a)(1) of this code; (8) Interest owner’s ratable share of the total value of the proceeds of the sale of oil, natural gas, and natural gas liquids prior to the deduction of taxes, if applicable, and other deductions set forth in §37B-1-1(a)(6) of this code; (9) Interest owner’s ratable share of the proceeds from the sale of oil, natural gas, and natural gas liquids less the interest owner’s ratable share of taxes, if applicable, and other deductions set forth in §37B-1-1(a)(6) of this code; and (10) Contact information of the producer of the oil, natural gas, or natural gas liquids, including a mailing address and telephone number. Section 1(b) also authorizes royalty and working interest owners to bring a civil action against the operator to enforce compliance with this information reporting and entitles a prevailing interest owner to reasonable attorneys’ fees and court costs. However, the civil action may only be brought after the operator fails to provide the requested information within 60 days following its receipt of a written request for the information by certified mail. Thus, the operator must receive a written demand with a 60 day right to cure any deficiency in the information provided. Section 2. Accumulation and payment of proceeds from production from horizontal wells. This section applies to all horizontal wells (i.e. not limited to article 6A
wells) and authorizes the operator to hold and accumulate payments or proceeds until the proceeds payable exceeds $100. However, regardless of amount accumulated the operator must distribute the proceeds at least once per year and any time the production ceases or upon transfer of the payment responsibility to another party. Section 3. Payments from horizontal wells to be made timely; interest penalties. This section also applies to all horizontal wells (i.e. not limited to article 6A wells) and requires operators to make payments within 120 days from the first date of sale is realized and within 60 days thereafter for each additional sale, “unless such failure to remit is due to lack of record title in the interest owner, a legal dispute concerning the interest, a missing or unlocatable owner of the interest, or due to conditions otherwise specified in this article.” Such undistributed payments may be held in suspense pending the resolution of uncertainty about their recipients without interest penalty. If the operator fails to timely remit payments a mandatory interest penalty based upon the prime rate plus 2%, compounded quarterly, until payment is made is imposed. In addition to the foregoing requirements, §22-6-22(f) is amended to require “quarterly report of the monthly volumes of oil, natural gas, and natural gas liquids produced from any horizontal well drilled” be filed with the OOG. The subpart also requires that “all reported data shall be made available to the public” through the OOG’s web site and authorizes the promulgation of rules to require timely quarterly reporting and a process for collecting such data. By memorandum dated May 11, 2018, OOG Chief James Martin stated that “[t]hese changes, effective
June 8, 2018, apply only to wells permitted under W. Va. Code § 22-6A-1 et seq.” The memorandum explains that additional guidance will be made available, but proposes the following due dates: • 1st Quarter 2018 production reporting will normally be due each calendar year by May 15; however, for 2018, first quarter will be due June 30; • 2nd Quarter will be due August 15 • 3rd Quarter will be due November 15; and • 4th Quarter will be due February 15, 2019. The memorandum also explained that “wellhead oil and (lease) condensate will be reported together as crude oil, and any downstream NGL which are accounted to a well, will be reported as NGL to that well API.” H.B. 4270 imposes significant additional administrative burdens on operators and owners of oil and natural gas produced from horizontal wells. The information reporting will likely require modification of existing computer payment systems requiring some time to implement. Because these requirements become effective on June 8, 2018, it is important for operators of horizontal wells to become familiar with these requirements and take timely steps to assure compliance once the law takes effect. If you have questions, please contact Mark Clark at MClark@Spilmanlaw.com or Dave Yaussy at DYaussy@Spilmanlaw. com.
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Mark Taylor WeatherBELL Analytics
WeatherBELL: What To Expect This Summer
Image: April 2018 Temperature Anomaly For more information about WeatherBELL’s services and to get the hot-off-the-press HDD forecasts, please visit our website www.weatherbell.com or contact Mark Taylor at (770) 855-1585/taylor@weatherbell.com.
Many in the Midwest had the coldest April on record (since 1895). The south-central states also saw the coldest overnight minimum temperatures on record. As we expected, May has seen a widespread sudden snap to summer weather, though the Southeast and Mid-Atlantic have been cooler. This summer, we are expecting a warmer than average pattern for much of the country, though we are not expecting runaway heat. There is the possibility of a weak El NiĂąo developing this fall; more information on that will be out next month. Stay tuned to WeatherBELL energy services for the latest monthly and weekly forecast updates.
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Well Credits Continued from page 1 average daily production under this limitation would then be applied to the number of days that the working interest owner actually owned that well interest. The third step in determining the dollar amount of federal tax credit available is to apply the qualifying production in a year to the approved dollar amount per unit of production. For oil production, the original $3 credit per barrel was to be proportionately eliminated as the inflation adjusted average price of oil increased from $15 to $18 per barrel. For 2017 oil production, the inflation adjusted maximum credit of $3.76 per barrel was eliminated as the average allowable sales price of oil in 2016 increased from $18.00 to $22.53 per barrel and the 2016 reference price for oil was above $38.29 per barrel. For 2017 natural gas production, there is a MWC for the first 18 mcf of daily production from qualifying wells of $.51 per mcf. The original maximum MWC of $.50 per mcf has now increased due to inflation to a maximum of $.6259 per mcf. The original $.50 per mcf credit was reduced as the average price of natural gas in the year prior to the production year increased from $1.67 to $2.00. With inflation, the 2017 natural gas maximum credit of $.6259 per mcf is reduced as the reference price of natural gas in 2016 increases from $2.09 to $2.50 per mcf. In other words, if the reference price for natural gas production is less than $2.50 per mcf in 2016, there will be a MWC for 2017 natural gas production. The Internal Revenue Service is the agency that is to calculate and publish the 2016 natural gas reference price. This average natural gas price will determine the amount of credit per mcf of qualifying production no matter what producers
actually sell their natural gas for in 2017. The Internal Revenue Service issued Notice 2018-52 listing the 2017 inflation adjustment factor of 1.2518 and the 2016 applicable reference price of $2.17 per mcf. Based on these factors, the MWC for 2017 natural gas production from “stripper wells� is $.51 per mcf. This natural gas federal income tax credit for 2017 qualifying production is definitely good news. One additional limitation on use of this credit is that it may only offset regular income tax in excess of Alternative Minimum Tax (AMT). An offsetting benefit to this AMT limit is that any MWC not used in a year due to total tax or AMT limits may be carried back 5 years and over up to 20 years. This extended number of years to utilize this credit hopefully ensures a significant amount of Section 45I
credit for 2017 natural gas production will be realized by those with qualifying marginal well production. We will continue to monitor and update information about this credit as its specific application become better defined. If you have any questions concerning the above information or how this credit may be applied to benefit you, please contact the following Arnett Carbis Toothman LLP associates at 800-924-0729 or email at: don.nestor@actcpas. com; marlin.witt@actcpas.com, bill. phillips@actcpas.com; ryan.nestor@ actcpas.com; or wanda.bailey@ actcpas.com. You may also contact any of our Arnett Carbis Toothman LLP offices and we will respond to your requests concerning this valuable credit or other planning needs you may have.
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Greg Kozera Learned Leadership LLC
A Big Week In Orlando Started At the Wellhead
Imagine an exposition with over 65,000 attendees, over 2,000 exhibitors from over 100 countries in three huge exhibit halls multiple football fields wide and long that goes on for five days. What you have is the National Plastics Exposition (NPE) 2018, The Plastics Show. This show covers every aspect of the plastics industry from manufacturing the resins to producing the products we all use every day. This show is so big it only happens once every three years. This year it took place May 7-11th in Orlando, Florida. We had a great team led by the Polymer Alliance Zone who had the booth, supported by Shale Crescent USA, the West Virginia Development Office and several regional economic develop-
ment leaders. Our common goal was to bring industry that uses our energy and jobs to West Virginia. Increased demand close to the wellhead is one of the best remedies producers have to current gas prices. Plastics are made from petrochemicals that come from oil, natural gas and natural gas liquids (NGLs). These come from wells that almost ALL require hydraulic fracturing whether they are located in Ohio, West Virginia, Saudi Arabia or Russia. The petrochemicals are turned into resins at crackers in places like the Gulf Coast, eastern Canada, locations overseas and soon at the Shell cracker under construction in Monaca, PA outside of Pittsburgh. Because the Shale Crescent USA
Region is now producing over 30% of the USA’s natural gas and a large part of the USA’s NGLs, we are an ideal place for additional crackers and other petrochemical plants. These resins are turned into the products we use every day by various processes using high tech automated equipment. Try going an hour without touching something from the plastics industry. I can’t do it. Most of the companies (called converters) that do this work are in Ohio, West Virginia, Indiana, Michigan, Pennsylvania and Virginia. Ohio has more people employed in the plastics industry than any other state. The converters are here because this is where most of the US and Canadian Wellhead Continued on page 10
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Wellhead Continued from page 9 population is located that buy their products. The technology and engineering used to manufacture something as simple as the bottle cap to a plastic bottle, the packaging for our food, the grill to a car, modern medical equipment or even a solar panel will amaze you. The dirty little secret that the anti-fossil crowd never talks about is that you can’t have modern wind and solar energy without petrochemicals which come from oil, natural gas and natural gas liquids. Of course, all of those come from wells that require hydraulic fracturing. People like their modern stuff like cell phones, cars, clothing, shoes, medicines, toys, etc. We don’t talk about this enough. The antis avoid it like the plague. Our goal in Orlando was to bring industry and jobs back to our region. This starts with creating awareness. People need to know that this is a great place to bring a business and raise a family. Keith Burdette, President of the Polymer Alliance Zone based in Parkersburg, has been to many NPEs. He said, “We have had more leads from this week’s Expo than any other. People are looking for us and coming to our booth.” Shale Crescent was able to meet face-to-face and follow up with three companies we had discussions with at the World Petrochemical Conference (WPC) in March. They all had key decision makers in attendance at NPE. We have been in contact with all three by phone and email since WPC. It is always better when we can talk in person and NPE helped us to do that. Our discussions centered on the IHS-Shale Crescent Study. They now understand and believe that our region has a huge advantage in natural gas and NGL cost Wellhead
Continued on page 12
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Charlie Burd Governor Justice’s IOGCC Representative
IOGCC Adopts Resolution Supporting Appalachian Hub
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Wellhead
Continued from page 10
and availability. These are their feed stocks. They know that we are close to most of the converters. These are their customers. We discussed their needs for things like additional rail infrastructure, NGL storage and work force development. That is why we need students in our community and technical colleges and in the apprenticeship, programs the skilled trades offer. The focus of Shale Crescent USA is on the top 100 energy users in the world. Approximately a third of these companies were represented at NPE and we made a point to contact all of them. Many have such a large presence in the Gulf that they won’t come here. Our region is actually a threat because our success could impact the natural gas and NGLs they get from the Shale Crescent USA region. Others are prospects. We wanted to make sure that we are on their radar screen when they choose to expand. The Polymer Alliance Zone and West Virginia Development Office have a much broader focus. We complement each other. Shell was well represented at NPE. Their exhibit space was close to us. They had a well laid out two-story booth that was about the size of my house. It contained a large detailed model of their planned ethane cracker at Monaca, PA. Two Shell people were assigned to the cracker model just to explain and answer questions. Construction is underway. We were told that there are already 2,000 construction workers on site. Without oil and natural gas the three huge exhibit halls in Orlando would be empty. Plastics start at a wellhead somewhere. We are fortunate that today, because of reservoirs like the Marcellus and Utica, most of those wellheads are in the USA.
Our country is the Saudi Arabia of NGLs, which happen to be the best and most economic feedstock to use. This does not mean that all of the exhibitors at NPE understand the importance of oil and gas to their business. Some have no idea that their business would not exist without oil and gas wells and hydraulic fracturing. We were standing at the Shell cracker model when two gentlemen from California approached. One scornfully commented, “Oh, that’s that fracking area.” They walked away quickly, still totally clueless. The plastics industry could be some of our biggest advocates if we can educate them. It was a good week for West Virginia and Ohio in Orlando at
NPE. We have a strong team and are working together. We are still in a marathon and are putting miles behind us. We are seeing wins with local firms including West Virginia converters expanding and hiring. We have companies looking hard at our region for expansion. I learned that one West Virginia firm has hired over 30 engineers from WVU and Marshall in just the past year. These are young people who will stay here and raise their families here. Industry returning to the Shale Crescent USA region means increased demand for natural gas closer to your wells. We all need to continue to keep a positive attitude, believe and prepare.
We’re now accepting applications for producer companies that would like to be featured in IOGA News; please contact IOGAWV’s Charlie Burd at cburd@iogawv.com.
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Ergon
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Industry News
PTTC Workshop Set for Morgantown in July on “Hydraulic Fracturing in Horizontal Wells” WHO SHOULD ATTEND This is a relevant, timely and academically exciting topic, and should be of great interest to the petroleum, geological and engineering communities – anyone who deals with considerations such as optimal well-planning, production, economics and reservoir behavior – and to students and their professors. With the recent Superior Court opinion in PA regarding “fracking trespass,” there should be additional interest from the legal community in how to reasonably measure the lateral extent of induced fractures. COURSE CONTENT This two-day short course will focus on the challenges and issues that arise when hydraulic fracturing operations are conducted in horizontal wells, as compared to vertical systems. The mechanics of completion and diversion techniques and tools, such as plug-n-perf and sliding sleeves, will be discussed, along with the pros and cons of these various horizontal well completion systems. In-situ stress profiles and their effects on transverse and longitudinal fracture growth, both near wellbore and far-field, will be addressed. Stress shadowing and the resulting impacts on cluster and stage spacing will be reviewed. Proppant and fluid selection, proppant transport, and the conductivity requirements will be discussed. The application of diagnostics, such as DFIT’s and geometric measurements (tracers, microseismic, fiber optics, etc.) will be reviewed, along with how the results can be integrated for enhancing future treatments. Other topics will include: perforating, fracture cleanup, flowback, brittleness, enhanced
permeability volumes, treatment optimization, and post-treatment analysis. All disciplines are welcome to attend the course, however, a basic understanding of hydraulic fracturing should already be in place prior to enrollment. ABOUT THE SPEAKER Dr. Jennifer L. Miskimins is an Associate Professor and Associate Department Head in the Petroleum Engineering Department at the Colorado School of Mines (CSM). She if the founder and director of the Fracturing, Acidizing, and Stimulation Technology (FAST) Consortium at CSM and holds B.S., M.S. and Ph.D. degrees in Petroleum Engineering. In addition to her times at CSM she worked for Marathon Oil Company and as a Senior Consulting Engineer for Barree & Associates in Lakewood, CO. She is a member of SPE, SPWLA and AAPG, and was an SPE Distinguished Lecturer. She currently serves on the SPE International Board of Directors as the Completions Technical Director. LOCATION, PARKING & HOUSING The conference will be held on West Virginia University’s Evansdale Campus in the National Research Center for Coal and Energy building (1272 Evansdale Drive). Free oncampus parking will be available in the WVU Coliseum parking lots and in lots 40 and 46 between NRCCE and the WVU Greenhouse. (See map at https://campusmap.wvu. edu/files/d/8fd60371-1823-43bda4f4-160d9104d3cf/campusmapevansdale.pdf.) If parking in lots 40 or 46 please pick up 2-day parking pass at the registration desk. For those wishing to stay over-
night in Morgantown on the 17th, there are several options within a mile of the NRCCE, including the Holiday Inn (1188 Pineview Drive), Euro-Suites (501 Chestnut Ridge Road), Hilton Garden Inn (150 Suncrest Town Center Drive) and Hampton Inn (1053 Van Voorhis Road). REGISTRATION: ONLINE AND MAIL OPTIONS The registration cost of $295 covers lunch, coffee breaks and all workshop expenses. Pre-registration online is required by July 10 at: https://www.eventbrite.com/e/ hydraulic-fracturing-in-horizontalwells-tickets-45936831299. Payment by credit card or check is accepted. To pay by check, select the small, blue “Show other payment options” link immediately below the Order Now button on the website. Send checks to WVU NRCCE PTTC, attn.: Rose Vergara, PO Box 6064, Morgantown, WV 265066064. Make checks payable to the WVU Research Corp. and include “Hydraulic Fracturing” on the memo line. Checks must be received by July 10. On-site check in will begin at 8:00 a.m. The workshop will start at 9:00 a.m. and will end by 5:00 p.m. daily. PDH CREDITS PTTC will issue a certificate for twelve (12) Professional Development Hours at the end of the workshop. To receive this certificate at the workshop, you must register in advance. For further information contact: Doug Patchen, at 304-293-6216 (doug.patchen@mail.wvu.edu) or Rose Vergara at 304-293-6905 (rvergara@mail.wvu.edu ).
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Sarah Smith Membership Chair
IOGAWV Board Approved Four New Members in May Please welcome these new members approved in May: Benchmark SH&E ALL Services, LLC Daniel Arnold 1000 Green River Drive Suite 116 Fairmont, WV 26554 Phone: (304) 672-6912 darnold@benchmarkpllc.com benchmarkpllc.com
Gas Field Services, LLC ALL Larry Cavallo 749 Brightridge Drive Bridgeport, WV 26330 Phone: (304) 641-2457 larry@gasfieldsvc.com gasfieldsvc.com Holiday Inn Express ALL & Suites Pam Helman 80 Old Nicholette Rd. Minerals Wells, WV 26150 Phone: (304) 489-4111 Fax: (304) 489-4119 mineralwellssgm@ mphhotels.com
Murvin & Meier Oil Co. POP Kate Blackford PO Box 396 Olney, IL 62450 Phone: (618) 395-4405 Fax: (618) 395-3207 katieb@murvinandmeier.com
Save Sept. 21-22 for IOGAWV’s Sports Weekend.
IOGCC News
IOGCC 2019 Officer Slate Includes Charlie Burd The Interstate Oil and Gas Compact Commission (IOGCC) member states voted unanimously to adopt the 2019 slate of officers during their annual business meeting in Oklahoma City, Okla., on May 8. North Dakota’s Gov. Doug Burgum will serve as 2019 chairman, with Richard Simmers, of Ohio, as vice chairman and Charlie Burd, of West Virginia, as second vice chairman. Burgum succeeds the 2018 chairman, Gov. Asa Hutchinson, of Arkansas. IOGAWV Executive Director Charlie Burd said, “It is an honor and a privilege to be offered the opportunity to serve in a leadership position with the IOGCC. I look
forward to representing Governor Jim Justice and the State of West Virginia in this capacity.” Burd has served as the Governor’s appointee to the IOGCC since 2016. He was originally appointed by Governor Tomblin. The Interstate Oil and Gas Compact Commission (IOGCC), formerly the Interstate Oil Compact Commission, is a United States organization, representing the governors of over 35 states, plus several associate states, and 11 international affiliates. The international affiliates include Canadian provinces of Alberta, British Columbia, New Brunswick, Newfoundland and Labrador, the Northwest Territories, Nova
Scotia, Saskatchewan and Yukon, plus Egypt, Republic of Georgia and Venezuela. Other affiliate members include U.S. Department of Energy, U.S. Department of the Interior, U.S. Environmental Protection Agency, Federal Energy Regulatory Commission and National Association of Regulatory Utility Commissioners. The IOGCC assists member states efficiently maximize oil and natural gas resources through sound regulatory practices while protecting our nation’s health, safety and the environment. It serves as the collective voice of member governors on oil and gas issues and advocates states’ rights to govern petroleum resources within their borders.
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Industry Events
Please Add These Dates To Your Calendar June 4, 2018 Ted Cranmer Memorial Golf Outing & Steak Fry Wanango Golf Club Reno, PA Info: www.pioga.org June 19-20, 2018 IOGAWV Teacher Education Conference Embassy Suites Charleston, WV Info: www.iogawv.com June 20-22, 2018 Virginia Oil & Gas Association Annual Meeting Hilton Garden Inn Virginia Beach, VA Info: www.vaoilandgas.com June 25-27, 2018 IPAA Mid-year Meeting Fairmont Austin Hotel Austin, TX Info: www.ipaa.org July 10-12, 2018 Tom Dunn Energy Academy WV Wesylan Buckhannon, WV July 19, 2018 IOGAWV Safety Seminar WVU Erickson Alumni Center Morgantown, WV August 5-7, 2018 IOGAWV Summer Meeting The Greenbrier White Sulphur Springs, WV Info: www.iogawv.com August 15-16, 2018 Summer NAPE Brown Convention Center Houston, TX Info: http://napeexpocom/
August 17, 2018 SOOGA Fall Golf Outing Oxbow Golf Course Belpre, OH Info: www.sooga.org August 23, 2018 Divot Diggers Golf Outing & Steak Fry Tam O’Shanter Golf Club Hermitage, PA Info: www.pioga.org September 21-22, 2018 IOGAWV Sports Weekend Bridgeport Country Club Bridgeport, WV
September 30 – October 2, 2018 IOGCC Annual Conference Coeur D’Alene Hotel Coeur D’Alene, ID Info: http://iogcc.publishpath. com/events October 17-18, 2018 Fall Oktoberfest, Annual Meeting and Sports Outing Seven Springs Mountain Resort Champion, PA Info: www.pioga.org November 11-13, 2018 IPAA Annual Meeting Ritz-Carlton New Orleans, LA Info: www.ipaa.org
Homestead Communications
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homestead communications po box 13604 | charleston, wv 25360 304.984.0308 | homesteadcommunications@frontier.com
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Hugh Byers Direct Energy
Nymex Natural Gas Futures Contract 12-Month Forward Strip Average Prices Through 5/31/2018
Register now for IOGAWV’s Summer Meeting at www.iogawv.com. To book your room at The Greenbrier, call Jessica Dowdy at 855-453-4858 or jessica_dowdy@greenbrier.com.
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Tom Dunn Academy Application Form
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Safety Seminar Registration Form
2018 STEPS Meeting Registration
Sponsored by IOGAWV, WVONGA and WVMA Erickson Alumni Center, WVU-Evansdale, Morgantown, WV July 19, 2018 _____________________________________________________________ Company Name _____________________________________________________________ Address _____________________________________________________________ City, State, Zip _____________________________________________________________ Telephone Participant
Member Y/N
There is no cost to attend this meeting.
Please register by July 6, 2018, by fax at (304) 344-5836 or mail this registration form to: IOGAWV, 300 Summers Street, Suite 820, Charleston, WV 25301
For additional information, call Lori Miller Smith at (304) 344-9867. www.iogawv.com
300 Summers Street | Suite 820 | Charleston, WV | 25301 P: (304) 344-9867 F: (304) 344-5836
300 Summers Street, Suite 820 Charleston, WV 25301 Phone (304) 344-9867 Fax (304) 344-5836
Presort Standard U.S. Postage PAID Charleston, WV 25312 Permit No. 175