2020_March_IOGANews

The Voice of the

Independent Since 1959

NEWS

March 2020

First Aid, CPE, AED Training Coming The Independent Oil and Gas Association of West Virginia (IOGAWV), the West Virginia Oil and Natural Gas Association (WVONGA) and the West Virginia Manufactures Association (WVMA) have teamed up to offer members a comprehensive first aid, CPR and AED training course in two locations.

The first session is on Tuesday, March 24, at TC Energy's auditorium in Charleston. The second session is on Tuesday, March 31, at the Bridgeport Country Club. Both sessions will cover the same material

and will run from 9:00 am to 3:00 pm. Space is limited to 50 registrants at each location and will be taken on a first-come, first-served basis.

This National Safety Council course is lead by an expert in occupational first aid training and has curriculum and content that includes: how to prevent disease transmission; bleeding and wound care; poisoning, allergic reactions and choking; among other things.

This proven method of instruction improves skill mastery and longterm retention.

The registration fee is $75 and includes instruction/ certification and lunch.

An online registration form has been Todd Tetrick created and Safety Committee is available at Chair https://wvonga. memberclicks. net/first-aid--cpr-and-aed-training.

Upon completion of the form, you will be prompted to pay via credit card or to be invoiced.

2020 Buyers’ Guide Now Available Online The Independent Oil and Gas Association of West Virginia (IOGAWV) is pleased to inform you the IOGAWV Buyers’ Guide, THE premier resource of relevant products and services for oil and gas professionals is now available on the home page at the IOGAWV website at www.iogawv.com.

Overland Park, Kansas-based Strategic Value Media is proud to provide IOGAWV members with this useful and easily accessible yearround resource.

“This comprehensive Guide offers a year-round resource of a vast network of industry suppliers and will greatly assist industry professionals

in making educated purchasing decisions throughout the year,” said Charlie Burd, Executive Director of IOGAWV. “Once again, Strategic Value Media has done an exceptional job with this Guide and the response to this Guide by the industry has been phenomenal.”

The 2020 version of the Guide features updated and expanded company and product listings, in addition to other valuable information relating to the oil and gas marketing industry. The Guide also offers oil and gas suppliers and companies exceptional visibility by showcasing their products and services to a targeted, industry-specific

buyer group.

If your company or business has not yet taken advantage of this exceptional opportunity to highlight your products Chris Weikle and services in Communication and the Guide, it Education Committee is not too late!

Chair To learn more about advertising your product or services within this exclusive Guide, please email iogawv-advertise@svmmedia.com.

INSIDE

Kevin Ellis / 2 Taylor Frankovitch / 3 Charlie Burd / 4 Thomas Downs / 5 Industry Events / 6 Greg Kozera / 7 Mark Clark / 8 Hugh Byers / 9 Chris Weikle / 10, 12 Ergon / 12 Sam McKown / 13 Student Scholarship Applications / 20

2

Kevin Ellis IOGAWV President

Takeaways From Current Natural Gas Market Report Shared The U.S. Energy Information Administration (EIA) released its most recent natural gas report on February 29 for the period February 19-26, 2020. Here are some key takeaways.

• Spot and futures continue slide on warmer weather and large inventories • Domestic demand decreases week over week • U.S. supply remained flat week over week • Working gas storage is 41% ahead of last year and slightly higher than the five-year average These points are likely no surprise to most. However, it is always instructive to view current market conditions in detail so that we may educate West Virginia’s leaders on the need to reform taxes and other costly and burdensome regulations that impact West Virginia producers. As you know, the regular session of the 2020 West Virginia Legislature will be ending in days.

The IOGAWV lobby team will make a final push for favorable policies prior to the end of the session.

Chart 1

In next month’s newsletter, we will provide a comprehensive update on the outcome of the legislative session. For this month’s newsletter article, I will rely on summaries, tables and charts published by EIA in its weekly natural gas report for the week February 19-26, 2020.

Selected Excerpts from EIA Natural Gas Weekly Update Northeast prices fall. (See Chart 1 below.) At the Algonquin Citygate, the price went down 67¢ from a high of $2.78/MMBtu February 19 to $2.11/MMBtu on February 26. At the Transcontinental Pipeline Zone 6 trading point for New York City, the price decreased 43¢ from a high of $2.33/ MMBtu to $1.90/MMBtu for the same period.

The Tennessee Zone 4 Marcellus spot price decreased 20¢ from $1.80/MMBtu Feb. 19 to $1.60/ MMBtu on February 26. The price at Dominion South in southwest Pennsylvania fell 14¢ from $1.79/ MMBtu to $1.65/MMBtu during the same period.

Demand falls with warm temperatures in key demand centers.

Thu, Fri, Mon, Tue, Wed, Spot Prices ($/MMBtu) 20-Feb 21-Feb 24-Feb 25-Feb 26-Feb Henry Hub 1.98 1.92 1.89 1.90 1.92 New York 2.24 1.90 1.68 1.76 1.90 Chicago 1.84 1.75 1.73 1.77 1.76 Cal. Comp. Avg.* 2.13 2.07 2.04 2.06 2.08 Futures ($/MMBtu) March contract 1.920 1.905 1.827 1.847 1.821 April contract 1.931 1.917 1.843 1.851 1.837 *Avg. of NGI's reported prices for: Malin, PG&E Citygate, and Southern California Border Avg. Source: NGI's Daily Gas Price Index

(See Chart 2 on page 18.) Total U.S. consumption of natural gas fell by 4% compared with the previous report week, according to data from IHS Markit. Natural gas consumed for power generation declined by 3% week over week. Industrial sector consumption increased by 2% week over week. In the residential and commercial sectors, consumpGas Report Continued on page 18

2019-2020 OFFICERS BOARD MEMBERS J. Kevin Ellis President Ben Sullivan Vice President/Program Chair Maribeth Anderson Secretary-Treasurer/Investment Comm. Chair Brett Loflin Immediate Past President James W. Crews Director/Commerce Comm. Co-Chair Jon Farmer Director/Producers Issues Comm. Co-chair David Haney Director/ Producers Issues Comm. Co-chair Jon Hildreth Director Jeff Isner Director/Commerce Comm. Co-Chair Bob Radabaugh Director/Evironmental Committee Chair Sarah Smith Director/Govt. Affairs Comm. Chair Todd Tetrick Director/Saefety Committee Chair Chris Weikle Director/Comm. & Educ. Comm. Chair

3

Taylor Frankovitch Bowles Rice

Taking the Fright out of Unknown NPRI Royalties Held in Suspense

In 2019, the West Virginia Legislature took a giant step forward for producers when it enacted the West Virginia Unknown and Unlocatable Interest Owners Act in conjunction with the Cotenancy Modernization and Majority Protection Act. Under certain circumstances, these Acts permit oil and gas production without having to resort to a missing heirs petition in order to lease unknown or unlocatable oil and gas owners. Now that you have gotten the gas to flow, where do you send the bonus money and royalty checks if you cannot locate the owner? That answer may depend on whether it is an unknown owner of the oil and gas in place or whether it is an unknown owner of a nonparticipating royalty interest.

The West Virginia Unknown and Unlocatable Interest Owners Act1 (the “Unknown Owners Act”) governs the payment of money due for an oil and gas lease to unknown and unlocatable interest owners.

The Unknown Owners Act requires an oil and gas operator to file a report and remit payment of the amount due to unknown and unlocatable interest owners to the West Virginia State Treasurer’s Office (the “Treasurer’s Office”) on a quarterly basis.2 Additionally, the Treasurer’s Office requires an operator to make “reasonable efforts” at least once per calendar year to identify and locate the unknown and unlocatable interest owners prior to submitting their report and making payment to the Treasurer’s Office.3

What interests fall under the Act?

The Unknown Owners Act applies to money attributable to unknown and unlocatable owners of in-place oil and gas interests, which are leased pursuant to the Cotenancy Modernization Act. Specifically, an unknown and unlocatable interest owner is defined as a “a person vested with a present ownership interest in the oil or natural gas and their constituents in place in a mineral property whose present identity or location cannot be determined . . .” (emphasis added)4 Because the definition of unknown and unlocatable interest owners provides that a person must be vested with an inplace interest, it can be argued that nonparticipating royalty interests (“NPRIs”) are not governed by the Unknown Owners Act, even if the underlying fee interests were leased though the Cotenancy Modernization Act. Notwithstanding, payments reportable under the Unknown Owners Act broadly include amounts payable for the extraction, production, and sale of minerals, including royalties.5 Therefore, it is unclear if the Unknown Owners Act applies to NPRIs if the associated inplace rights are leased through the Cotenancy Modernization Act. We believe that the legislative intent was for all payments accruing under the Cotenancy Modernization Act to be paid pursuant to the Unknown Owners Act, and there do not appear to be any policy arguments to treat royalty payments to unknown or unlocatable NPRIs owners differently from royalty payments to unknown or unlocatable in-place

owners.

At the time of drafting this article, the Treasurer’s Office has not taken a position as to whether money attributable to the owner of an NPRI only, which is leased through the Cotenacy Modernization Act, is subject to the Unknown Owners Act or the West Virginia Unclaimed Property Act. The Treasurer’s Office has taken the position that the Unknown Owners Act only applies to interests that are leased pursuant to the Cotenancy Modernization Act. This means that if an operator holds a validly executed held-by-production lease, but the person entitled to receive bonus, rentals, or royalties from the lease is currently unknown or unlocatable, the provisions of the Unknown Owners Act do not apply. In that case, an operator is required to hold those monies and remit payment to the Treasurer’s Office pursuant to the provisions of the West Virginia Uniform Unclaimed Property Act (the “Unclaimed Property Act”).6 Generally, under the Unclaimed Property Act, payments attributable to unknown or unlocatable individuals are only subject to the custody of the State of West Virginia if the last known address of the apparent owner is within the State or there is no last known address for the apparent owner and the operator is domiciled in the State. As a result, when an unknown or unlocatable interest owner’s last known address is not in the State of West Virginia and the oil and gas operator is not domiciled in the State of West Fright Gone Continued on page 14

4

Charlie Burd Executive Director, IOGAWV

From the Burd’s Nest: Finish Line in Sight As I pen this article on Sunday, March 1, only six days remain in the 2020 Regular Legislative Session.

Wednesday, February 26, was “crossover day” and the day all bills must be out of its house of origination.

Fortunately, most of the bills of importance to us were successfully passed and we will continue to work then until session ends at midnight, Saturday, March 7.

In my younger years, I spent a good deal of time running. At first to keep in shape and then, as my times and endurance improved, I enjoyed competing in short community runs--usually to benefit some cause.

The one thing I learned early on was to have a game plan in place to help me stay focused and achieve my goal on where I hoped to finish in the race. And the finish line was always a welcome sight.

As we approach the legislative finish line, we are optimistically cautious as several pieces of legislation of great importance to the industry are still in the race. While it is impossible to see what potential obstacles could befall us, we will simply continue to run the race to plan.

Thus far, 855 Senate bills have been introduced, and 1,530 House bills. Add in another 261 plus resolutions. Up to this point, both the Senate and House have collectively passed 88 bills. Governor Justice has signed 24 bills. Your IOGAWV lobbying team has reviewed and assessed all 2,646.

So, here is an update on some legislation of most importance: Committee Substitute for HB4090 (The Marginal Well/Plugging Bill), is a bill to reduce the severance tax on marginal oil and natural gas

wells, excluding wells utilizing horizontal drilling techniques targeting shale formations, to 2.5% from 5% and to provide that the 2.5% tax paid on such wells is to be used to plug abandoned oil and gas wells without a responsible operator through the use of a new fund called the Oil and Gas Abandoned Well Plugging Fund. The vertical oil and gas wells which are affected by the severance tax reduction produce on average more than 5 Mcf natural gas or one-half barrel of oil per day and on average less than 60 Mcf of natural gas or 10 barrels of oil per day. The plugging fund is capped at $6 million. Should the plugging fund exceed the $6 million cap, the severance tax drops to zero.

IOGAWV fully supports this bill that passed the House of Delegates on February 5 by a vote of 99-01, passed out of Senate Finance with a non-threatening amendment and is currently on passage (third reading) in the Senate.

Committee Substitute for HB4217 and Committee Substitute 329 are the WVDEP Rules bundle that contain HB-4311 and SB-338 respectively, which both promulgate legislative rules relating to the Oil and Gas Conservation Commission’s oversight of deep well spacing. These rules will support and enhance the drilling of horizontal wells and eliminate the current 3,000-foot surface spacing requirement in addition to other downhole spacing criteria. IOGAWV is in full support of this rule’s bill that passed the House of Delegates on February 14 and now lies on second reading in the Senate. We anticipate one of these bundles to pass without

further amendment. IOGAWV supports this rules bundled bill.

Committee Substitute for HB4421 (Creating Natural Gas Liquids Economic Development Act of 2020) is a bill to encourage development, transportation and use of natural gas liquids for the benefit of natural gas projects in the state. As recently amended, certain tax credits would be related to the transportation and storage of such liquids.

This bill has passed the House of Delegates and the first of its two Senate Committee assignments. We anticipate this bill to go to the full Senate for passage the last week of session. IOGAWV supports this bill.

Committee Substitute for HB-4615 (West Virginia Critical Infrastructure Protection Act) is a bill that codifies criminal penalties for persons convicted of willfully trespassing or entering property containing a critical infrastructure facility without permission by the owner of the property; holds such persons liable for any damages to personal or real property while trespassing; prescribes criminal penalties for organizations conspiring with persons who willfully trespass and/ or damage critical infrastructure sites and holds conspiring organizations responsible for any damages to personal or real property while trespassing. These “Critical Infrastructure Facilities” includes nearly all oil and natural gas facilities related to compression, transportation, processing, storage, distribution and crude oil piping. This bill passed the House of Delegates February 13 and currently lies in Senate Judiciary for further consideration. IOGAWV supports Burd’s Nest Continued on page 15

5

Thomas Downs WeatherBELL Analytics

Early Summer Forecast Update Provided While we do expect March to turn colder and winter to last well into spring, when the pattern finally breaks we expect it to get warm fast.

The Southeast has seen persistently warm conditions over the last several months, and we expect that to continue into the spring and early summer months.

The warm weather in the East will be more the result of muggy conditions and elevated nighttime temperatures, as rain should again be plentiful.

For more up-to-date information, please subscribe to our energy forecast services.

For more information about WeatherBELL’s services and to get the hot-off-the-press forecast updates, please visit our website www.weatherbell.com or contact us at sales@weatherbell.com.

:=?-: Dominion Energy

:i' Craig C. Colombo

LDC Gas Supply Strategic Advisor

Dominion Energy Services, Inc. 120 Tredegar Street, Richmond. VA 23219 0: 804-787-6167 M: 804-921-2788 Tieline: 8-738-6167 F: 804-787-6483 craig.c.colombo@dominionenergy.com

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6

Industry Events

Mark Your Calendar for These Coming Dates March 7, 2020 2020 West Virginia Legislative Session Ends West Virginia Capitol Charleston, WV

April 28-29, 2020 WV Governor’s Safety Conference Embassy Suites by Hilton Charleston, WV Info: www.wvsafetyconference.org

August 12-20, 2020 NAPE Global Business Conference G.R. Brown Convention Center Houston, TX

March 24, 2020 IOGAWV Safety Seminar TC Energy Charleston, WV Info: www.iogawv.com

May 17-19, 2020 IOGCC Annual Business Meeting Oklahoma City, OK Info: http://iogcc.ok.gov/events

March 24-25, 2020 10th Annual Shale Water Management Congress Marcellus & Utica Returns Marriott City Center Hotel Pittsburgh, PA Info: www.shale-water-marcellus-utica.com

June 1, 2020 Ted Cramer Memorial Golf Outing and Steak Fry Wanango Country Club Reno, PA Info: Click here

August 20, 2020 Divot Diggers Golf Outing and Steak Fry Tam O’Shanter Golf Club Hermitage, PA Info: Click here

March 25-26, 2020 WV Construction/Design Show Charleston Coliseum Charleston, WV

June 8-9, 2020 IOGAWV Science Teacher Workshop Embassy Suites by Hilton Charleston, WV Info: www.iogawv.com

March 31, 2020 IOGAWV Safety Seminar Bridgeport Country Club Charleston, WV Info: www.iogawv.com

June 8-9, 2020 KOGA Annual Conference Embassy Suites -Lexington Green Lexington, KY Info: www.kyoilgas.org

April 1, 2020 PIOGA Spring Meeting Rivers Casino Pittsburgh, PA Info: Click here

June 29-July 1, 2020 IPAA 2020 Mid-Year Meeting Newport Beach, CA Info: www.ipaa.org

April 20-21, 2020 Marcellus and Manufacturing Conference Marriott at Waterfront Place Morgantown, WV Info: www.wvma.com

July 14-16, 2020 Tom Dunn Academy WV Wesleyan College Buckhannon, WV Info: www.iogawv.com August 2-4, 2020 IOGAWV Summer Meeting The Greenbrier White Sulphur Springs, WV Info: www.iogawv.com

September 18-19, 2020 IOGAWV Sports Weekend Bridgeport/WVU Info: www.iogawv.com September 22 & 23, 2020 Fall Conference and Golf & Clay Shoot Seven Springs Mountain Resort Champion, PA Info: Click here November 8-10, 2020 IOGCC 2020 Annual Meeting Houston, TX Info: http://iogcc.ok.gov/events

7

Greg Kozera Learned Leadership LLC

Create a Bigger Pie Growing up in Pittsburgh we had a big family. I have five brothers. On Sundays, we always had a big family dinner. Mom would cook all afternoon. We all sat down for dinner and said grace together. I wish there had been video back then so I could see what it must have looked like.

As soon as we said “Amen,” the race for food was on. My mother always claimed her three hours of cooking were devoured by us in five minutes.

Leftovers was not a term I understood until later in life. Mom was still eating when someone would ask, “What’s for dessert?”

Desserts were special since we didn’t get them all the time. We knew there would be a dessert after Sunday dinner. My mother’s homemade pies were incredible. I especially loved her apple and lemon meringue pies. Dessert was different than the rest of the dinner. Everyone got a piece of pie. The pie was always carefully divided into 8 equal pieces.

To feed her hungry horde, Mom knew she had to make the biggest pie possible.

Because of the speaking I do, almost 20 years ago I joined the National Speakers Association (NSA). I wanted to get better at speaking and learn the business of professional speaking. Cavett Robert founded NSA in 1973. It is an organization built around the values of mutual support, shared success and giving back. Cooperation, not competition, helps to “build a bigger pie.” I was amazed to see the process at work.

Members who compete against each other for business willingly help each other to improve their craft and share ideas. I know that I can approach any member for help in any

area of my business and they will go out of their way to help. Members also know they can come to me for assistance. The only thing we can’t talk about is fees. In the oil and gas and other industries this is unheard of. In the oil and gas industry, we have been able to work together on safety and legislation. Sometimes even that can be a challenge.

The oil and gas industry has a unique opportunity right now. When I experienced my first down turn in the 1980s because of the “gas bubble” the solution seemed simple. Just find new customers and sell them gas. Everyone, however, knew “the bubble” was a temporary situation.

We knew gas supply was limited and so did potential new customers. Everyone remembered winter curtailments of the 1970s. Today we know we have over 100 years of supply based on today’s technology. We have plenty of gas for new customers.

As a manager, I learned there are two ways to increase profits. One is to cut costs. The other is to increase revenues. In a down turn typically cost cutting is viewed as the way to survive. Our industry has been doing it for years. We have reduced staffs we have created efficiencies by mergers and acquisitions. We have used technology to drill longer laterals. We have rigs that have cut drilling time in half or more. It used to take 45 days to drill a 3,000-foot horizontal lateral 10+ years ago. Today we can drill an 18,000 foot or longer lateral in just 15 days. That is impressive.

We needed these efficiencies just to survive. I spent most of my career in the service industry. I marvel at the changes like boxed sand and disap-

pearing frac plugs that have made it possible to do more stages a day and get wells in production faster.

All of this is good. We can produce more product at a lower cost.

Unfortunately, the reality is we can’t “save” ourselves into success. It is time to work together to create a bigger pie. I am the President of the NSA Ohio Chapter. ALL of our members help to grow the pie bigger. We work together and hold special events like speaker showcases to promote our members. We can do the same thing in the oil and gas industry. Increased demand for product helps everyone, not just the company that sold the gas.

We need to change our thinking. We don’t have a low gas price problem. We have a lack of sales problem. It is time to quit cutting and start growing. We have a huge existing pipeline infrastructure. Every company in this industry should be promoting the product. It is clean burning, environmentally friendly, abundant and economical. The antis don’t like to hear it; for those concerned about climate change, natural gas is the solution not the problem.

(More about that in a future article.)

There are plenty of opportunities along existing pipelines to increase sales of natural gas.

The Shale Crescent USA organization I am part of is actively promoting this region to manufacturing and petrochemical companies because of our abundant economical natural gas and NGLs. Over half of our prospects are from Asia. I ask executives of these companies, “What keeps you awake at night?” The answer I get 100% of the time is, “SecuBigger Pie Continued on page 14

8

Mark D. Clark Spilman Thomas & Battle, PLLC

Failed Bills in the 2020 Session Charlie Burd's article this month (see page 4) brings you up to speed on significant bills that have passed or are still alive in the legislative process. It is also helpful to review some of the introduced bills that failed to pass by Crossover Day. Each year Crossover Day is the 50th day of the legislative session by which a bill must pass out of its house of origin, which this year was February 26, 2020. Thus, House bills must have been passed by the House of Delegates and Senate bills must have been passed by the Senate no later than February 26, so we can be grateful that the following bills failed to pass this year.

HB 4190 would have imposed a tax on the privilege of transferring real property to "mineral interests or right to extract any mineral interest."

Thus, oil and gas leases would be subject to the transfer tax, presumably based upon the consideration paid for the lease. The bill may have required that the consideration paid for a lease be set forth in the lease as well.

HB 4610 would have required oil and gas operators, and others, to withhold West Virginia income tax on royalty payments made to persons who do not reside in the State.

This would be a new requirement that would impose an administrative burden on operators and require non-resident royalty recipients to file a West Virginia tax return in order to receive a refund of the withheld funds.

HB 4787 would have authorized the West Virginia Department of Environmental Protection to increase the penalty amounts assessed for violations of individual or gener-

al construction stormwater permits, including the oil and gas construction stormwater permit, for permits covering disturbances of 100 acres or more. This bill would negatively affect primarily pipeline projects, as well as other large disturbance area projects.

HB 4827 titled the "Orphan Oil and Gas Well Prevention Act" that would: (1) require operators obtaining new well work permits to set aside plugging costs as a condition of the permit; (2) impose on producing wells a 15-cents per mcf fee to be paid to the State Treasurer; (3) prohibit the issuance of new well permits, unless the applicant agrees to plug all orphaned and abandoned wells in the leased area to be drained by the proposed well; and (4) require that a seller, assignor or transferor of an existing well remain responsible to furnish money to plug that well.

This bill proposes to shift plugging responsibility to operators who have no connection to an abandoned well and stifle oil and gas development in West Virginia.

SB 827 titled "Oil and Gas Industry Road Use," would prohibit the issuance of a well work permit until a road use agreement and permit is issued by the Division of Highways.

A road use agreement would be subject to providing a sufficient surety. bond or insurance in the amount of $135,000 per paved mile, $46,000 per tar and chipped mile and $36,000 per graveled mile for oil and gas operators and $200,000, $60,000 and $50,000, respectively, for pipeline

operators.

This list of bills provides you with a little perspective on the types of bills that are offered by opponents of the industry. The amount of vigilance that Charlie Burd and your lobbying team must maintain on your behalf cannot be understated, because these issues may be included in bills introduced next year when they may be more favorably received.

If you have questions or comments regarding the this article, please contact Mark Clark at MClark@ Spilmanlaw.com.

Please watch for IOGAWV Action Alerts during the Legislative Session.

9

Hugh Byers Direct Energy

Nymex Natural Gas Futures Contract 12-Month Forward Strip Average Prices Through 2/20/2020

$5.00

$4.50

$4.00

$3.50

$3.00

$2.50

$2.00

1/2/2013

1/2/2014

1/2/2015

1/2/2016 NG 12M

1/2/2017 NG 24M

1/2/2018

NG 36M

Bloomberg Finance L.P.; CME; For Informational Purposes Only

1/2/2019

1/2/2020

10

Chris Weikle Communications & Education Committee Chair

You Can Sponsor 2020 June Science Teacher Workshop The Independent Oil and Gas Association of West Virginia (IOGAWV) is preparing to host its third annual Science Teacher Education Workshop in June 2020, and one Hurricane Middle School teacher is using those lessons in her classroom.

Earlier workshops were attended by more than 40 science teachers each year from across the state. The goal of the workshop is to help foster STEM (science, technology, engineering and math) and energy education by connecting science teachers to the energy industry, and Maureen Miller has surpassed that goal over the last two years with her eighth grade science classes.

“The IOGAWV Teacher Seminar was one of my top 10 continuing education experiences ever,” Miller said. “I want all of education to be elevated and I hope this opportunity continues for teachers.”

Miller said her experience with the IOGAWV Science Teacher Education Workshop has helped her impression of the industry become more positive. “Oil and natural gas help with efficiency, cleanliness and jobs,” she said. “Fossil fuels will be part of our energy ongoing, so how can we do it better?”

The workshop consists of seven learning stations, related curriculum and hands-on STEM activities regarding the natural gas and crude oil industry. Each teacher receives an IOGAWV material kit with supplies to conduct experiments learned during the seminar with their students in the upcoming school year.

Miller uses those materials to create a project-based learning (PBL) opportunity for her classes that in-

volves constructing a mock pipeline through Putnam County, focused in and around Hurricane. “I did a NASA Endeavor program in 2018 and this class now is part of the lesson plan I developed for NASA,” Miller explained.

“The first two workshops turned out to be wonderful events, and Maureen proves that teachers walked away with valuable tools

and information for their students,” IOGAWV Communications and Education Chair Chris Weikle said.

“I’d encourage our members to get involved with this program, either as workshop panelists or sponsors.”

Dates for the 2020 IOGAWV Science Teacher Workshop are June 8-9, 2020. If you’re interested in sponsoring this outstanding program, use the form on page 11.

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11

Science Teacher Workshop Sponsor Form

2020 Science Teacher Workshop Sponsor Form Embassy Suites, Charleston, WV June 8-9, 2020 ____________________________________________________________ Company Name ____________________________________________________________ Contact Name _____________________________________________________________ Address _____________________________________________________________ City State Zip ____________________________________________________________ Telephone Email

Sponsorship opportunities:

______ Diamond Event Sponsor $5,000 and up (call for availability) • Banner hung at sponsored event • Specific signage at sponsored event • Listing on Diamond Sponsor board • Logo and name listed in event PowerPoint presentation • Logo listed in event program, web site page and newsletter ______ Platinum Sponsor $3,000 • Listing on Platinum Sponsor board • Logo and name listed in event PowerPoint presentation • Logo listed in event program, web site page and newsletter ______ Gold Sponsor $2,000 • Listing on Gold Sponsor board • Logo and name listed in event PowerPoint presentation • Logo listed in event program, web site page and newsletter ______ Silver Sponsor $1,000 • Listing on Silver Sponsor board • Logo and name listed in event PowerPoint presentation • Logo listed in event program, web site page and newsletter ______ Bronze Sponsor $500 • Listing on Bronze Sponsor board • Logo and name listed in event PowerPoint presentation • Logo listed in event program, web site page and newsletter Please return this form to IOGAWV, address below, by July 13, 2020. Be sure to email a high resolution (300-dpi minimum) version of your company’s color logo and a link to your web site to lmillersmith@iogawv.com.

Thank you for your continued support! www.iogawv.com

300 Summers Street | Suite 820 | Charleston, WV | 25301 P: (304) 344-9867 F: (304) 344-5836

12

Chris Weikle Communications & Education Committee Chair

2020 College and Vo-Tech Scholarships Deadline is March 20 In 1997, the Independent Oil and Gas Association of West Virginia, Inc. (IOGAWV) established its Scholarship Program in an effort to become more involved in higher education in West Virginia. The Scholarship Program was specifically created to reward the outstanding scholastic achievements of high school seniors whose parents work in the oil and natural gas industry for IOGAWV membership companies.

Since the Scholarship Program’s inception, IOGAWV has awarded a total of $168,500 in scholarships to these very deserving students.

The Association also awards deserving high school “student employees” who have completed a required number of working hours at an IOGAWV member company.

Beginning in 2020, there will be two scholarships awarded each year to students attending community college or vocational-technical education programs.

Complete eligibility rules for both scholarship types can be found on our web site at http://iogawv.com/ about/scholarship.aspx and have been sent to all member companies.

The completed application, includ-

ing all required forms and information, must be signed by the high school counselor and postmarked no later than March 20, 2020.

From all the applications received, an IOGAWV Scholarship Review Committee will award a number of one-time only scholarships. Should you have any questions, please contact Dee Beane at 304-344-9867 or via email at dbeane@iogawv.com.

Full details and forms are available at www.iogawv.com. See pages 20-23 for college scholarship forms and pages 24 and 25 for community college/vo-tech scholarship forms.

Ergon

Monthly Appalachian Basin Crude Oil Prices NYMEX AVG OIL PRICE 2018 AVG Price - $64.79/bbl 2019 AVG Price - $57.02/bbl 2020 AVG Price - $57.98/bbl

$80.00 $70.00 $63.79

$60.00

$58.09

$60.89 $54.86

$57.50

$56.68

$54.84

$50.00

59.84

57.08

$54.13

$57.98

$40.00 Series1

$30.00 $20.00 $10.00 $-

Feb-19

Series1

Feb-19 $55.07

Mar-19 Mar-19 $58.09

Apr-19 Apr-19 $63.79

May-19 May-19 $60.89

Jun-19 Jun-19 $54.86

Jul-19

Aug-19

Jul-19 $57.50

Aug-19 $54.84

Sep-19 Sep-19 $56.68

Oct-19 Oct-19 $54.13

Nov-19 Nov-19 57.08

Dec-19 Dec-19 59.84

Jan-20 Jan-20 $57.98

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Sam McKown Membership Committee Chair

IOGAWV Board Approved Five New Members in February Please welcome these new members approved in February: Beitzel Corporation ALL Nicholas Mitchell 333 Corporate Drive Grantsville, MD 21536 Phone: (301) 245-4107 Cell: (304) 830-3082 nickmitchell@beitzelcorp.com www.beitzelcorp.com

Decota Consulting PRO Company, Inc. David Raines 4984 West Washington Street Cross Lanes, WV 25313 Phone: (304) 776-3333 Fax: (304) 776-3371 davidraines@ decotaconsulting.com www.decotaconsulting.com Hawk Technical ALL Services, LLC Drema Fitzhugh PO Box 13399 Charleston, WV 25360 Phone: (907) 903-2524 drema@hawkpros.com www.hawkpros.com

Legg’s Welding Inc. PRO Kyle Legg PO Box 610 Clay, WV 25043 Phone: (304) 587-4335 Fax: (304) 587-4337 leggswelding@gmail.com www.leggswelding.com WVU Parkersburg ASO Michele Wilson 300 Campus Drive Parkersburg, WV 26104 Phone: (304) 424-8355 Cell: (304) 588-1514 Fax: (304) 424-8266 michele.wilson@wvup.edu www.wvup.edu

Premium Service for Your Premium Product.

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1.800.278.3364 eopsales@ergon.com

14

Bigger Pie

Continued from page 7

rity of supply of our energy and feedstocks.” Our region (the Shale Crescent USA) is the ONLY place in the world were a company can build on top of their feed stock and in the middle of their customers. That is ultimate feedstock security! We are working with companies who expect to start construction this year.

It takes time to get a new customer like this. It is much easier to grow demand from companies already in the region. We are working with local companies on expansion. This is a message we all need to promote.

Shale Crescent USA has the hard data local companies need to justify expansion to create more jobs and use more local natural gas. Shale

Crescent USA is like NSA. We are willing to share all we know to help the industry.

I challenge you to change your thinking from cost cutting to sales.

We have a great product. It is time for everyone to start promoting it.

We have the opportunity to work together to “create a bigger pie.”

We need to get started.

Promote IOGAWV College and Vo-Tech Scholarships to your employees.

The deadline is March 20, 2020.

Fright Gone Continued from page 3 Virginia, the operator must then comply with the unclaimed property and escheat laws of another state, generally the state of the apparent owner’s last known address. Learning and complying with the laws of various states can be an extremely burdensome endeavor.

Recommendations If you utilize the Cotenancy Modernization Act to obtain leases for an unknown or unlocatable interest owners, you must comply with the quarterly reporting requirement of the Unknown Owners Act and the annual “reasonable search” requirement enacted by the Treasurer’s Office. Prior to remitting payment to the Treasurer’s Office for any NPRI interest leased through the Cotenancy Modernization Act, we recommend contacting the Treasurer’s Office to ensure that it will be accepted.

1 2 3

W. Va. Code. § 37B-2-1 et seq.

W. Va. Code. § 37B-2-4 et seq.

W. Va. Code R. 112-16-5

4

W. Va. Code § 37B-2-3 and W. Va. Code. § 37B-1-3

5 6

W. Va. Code § 37B-2-3 (see definition of “reserved interests”).

See W. Va. Code § 36-8-1, et seq.

15

Burd’s Nest Continued from page 4 this legislation.

SB-655 (Relating to the valuation of natural resources property) is a bill written to clarify the types of operating expenses that must be used for purposes of valuing producing oil and natural gas wells; determines the methodology that shall be used by the Tax Commissioner in calculating operating expenses; provides for confidentiality of information submitted by natural resource producers to the Tax Commissioner; provides for reports that must be submitted by the Tax Commissioner to the Joint Committee on Government and Finance; and provides for alternate appeal process of proposed valuation of natural resources property for ad valorem property tax purposes. This bill passed the Senate 27-7 on February 19 and has been single-referenced to House Finance for further discussion and possible passage. IOGAWV fully supports this bill.

Committee Substitute for SB802 (Relating to public utilities)

would present producers an opportunity to provide direct natural gas service to large volume users when the natural gas used is produced in West Virginia. This legislation would apply only to new users of natural gas with an annual consumption of 100,000 Mcf or greater; provides for advance notice to the public utility; and must comply with natural gas pipeline safety requirements pursuant to Chapter 24B of the Code of West Virginia. This bill has passed the full Senate, was sent to the House of Delegates where it passed out of House Government Organization with an agreed-to amendment on natural gas usage and is now before the full House for passage.

IOGAWV supports this bill.

On the completed side of the ledger, HB-4091 (The Expedited Permitting Bill), is a bill that will allow for expedited oil and gas well permitting and expedited oil and gas well permit modifications upon the payment of applicable expedited fees. The designation of the

proceeds of such expedited fees, and the daily pro rata refund of the expedited fees if the permit is not approved within specific parameters, are directed to and managed by the WVDEP. IOGAWV did not oppose this bill that has passed the House of Delegates 98-0-2 and passed the Senate 33-0-1. Governor Justice signed this legislation into law on February 17, 2020.

As you might imagine, there are also several bills that would have negative connotations for us. Bills that deal with partitions suits, the release of leases, and those that attempt to deal with the bonding of wells and roads are but a few. You can be assured Phil Reale, Jim Fealy, Daniel Hall and I, in alliance with your Association leadership, will be on top of these and other bills as the Session ends at midnight March 7.

Please allow me to close by thanking each of the members who have provided additional assistance and counsel on these important matters.

Join the Online Buyers Guide: iogawv.com Get your name out to the industry across the country through IOGAWV!

16

17

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Whether it’s a state or federal regulatory matter, local land use or zoning challenge, acquisition of title and rights to land, or jointly developing midstream assets, we help solve complex legal problems in ways that favorably impact your business and bring value to your bottom line.

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Please register now for the Safety Seminar on March 24 in Charleston or March 31 in Bridgeport.

18

Gas Report Continued from page 2 tion declined by 8%. Natural gas

exports to Mexico were the same as last week, averaging 5.4 Bcf/d.

Supply is flat. (See Chart 3 on page 18.) According to data from IHS Markit, the average total supply of natural gas remained the same as in the previous report week, averaging 100.0 Bcf/d. Dry natural gas production remained unchanged week over week. Average net imports from Canada decreased by 7% from last week amid lower demand in Northeast and Midwestern markets.

Storage (See Chart 4 on page 19.): The net withdrawal from storage totaled 143 Bcf for the week

ending February 21, compared with the five-year (2015–19) average net withdrawal of 122 Bcf and last year’s net withdrawal of 167 Bcf during the same week. Working natural gas stocks totaled 2,200 Bcf, which is 179 Bcf more than the five-year average and 637 Bcf more than last year at this time.

According to The Desk survey of natural gas analysts, estimates of the weekly net change to working natural gas stocks ranged from a net withdrawal of 140 Bcf to 167 Bcf, with a median estimate of 157 Bcf. The average rate of withdrawal from storage is 9% lower than the five-year average so far in the with-

drawal season (November through March). If the rate of withdrawal from storage matched the five-year average of 8.3 Bcf/d for the remainder of the withdrawal season, the total inventory would be 1,876 Bcf on March 31, which is 179 Bcf higher than the five-year average of 1,697 Bcf for that time of year.

Appalachian Basin produced natural gas remains a significant part of total U.S. supply (See Chart 5 on page 19.). As of Jan. 1, 2020, combined production from the Marcellus and Utica shales averaged 31.13 Bcf/d. The below chart reflects the upward growth trajectory of Appalachia production.

Chart 2 U.S. natural gas consumption - Gas Week: (2/20/20 - 2/26/20) Average daily values (Bcf/d): this week last week U.S. consumption 95.5 99.7 Power 28.3 29.1 Industrial 24.9 24.5 Residential/commercial 42.3 46.1 Mexico exports 5.4 5.4 Pipeline fuel use/losses 7.4 7.5 LNG pipeline receipts 8.7 8.0 Total demand 117.0 120.5 Source: IHS Markit Note: LNG pipeline receipts represent pipeline deliveries to LNG export terminals.

last year 100.0 28.7 26.3 45.1 4.8 7.2 5.1 117.1

Chart 3 U.S. natural gas supply - Gas Week: (2/20/20 - 2/26/20) Average daily values (Bcf/d): this week last week last year Marketed production 107.1 107.1 100.2 Dry production 94.7 94.7 89.2 Net Canada imports 5.1 5.4 4.8 LNG pipeline deliveries 0.2 0.2 0.3 Total supply 100.0 100.3 94.2 Source: IHS Markit Note: LNG pipeline deliveries represent natural gas sendout from LNG import terminals.

Gas Report

Continued on page 19

19

Gas Report Continued from page 18

Chart 4

Chart 5

20

Scholarship Application

2020 Scholarship Application Last Name

First Name

MI

Mailing Address City

State

Home Phone Number

Zip Code

Social Security Number

Date of Birth

College/University Planning to Attend

High School

High School Phone Number

 My Parent/Guardian works for an IOGAWV Company Parent/Guardian Name

IOGAWV Company

 I Work for an IOGAWV Company (referral letter attached) IOGAWV Company Graduation Date Awards Assembly Date & Time

If you filed a Free Application for Federal Student Aid (FAFSA), what is the amount of your Expected Family Contribution (EFC) as reported to you on the Student Aid Report (SAR)? $

.

SCHOLARSHIP ELIGIBILITY REQUIREMENTS: 1. Applicant must be a West Virginia high school senior.

2. Applicant must be a dependent of an employee/retiree of an IOGAWV Company in good standing OR be employed by an IOGAWV Company in good standing (Student employee must have worked a minimum of 400 hours. Validation of hours worked and a letter of recommendation from the employer must be provided).

3. Applicant must enroll in a four-year West Virginia college or university.

4. Applicant must compose a 300-500 word essay answering the question: “Describe your community’s perception of the Oil and Gas Industry and explain how you would improve it.”

5. Application must be signed by a high school counselor.

6. Mail the application with all activity and course forms (listed below), essay, transcript and ACT scores as instructed below. This must be postmarked no later than Friday, March 20, 2020.

ATTENTION STUDENT: List your advanced placement and honors courses, organizations, volunteer and extra-curricular school activities with which you were affiliated during the four years of high school on the appropriate forms (Advanced Placement and Honors Courses, Extracurricular School Activities, Community Service and Non-School Activities - Including Employment). Please deliver these forms along with your completed application and essay to your high school counselor.

ATTENTION SCHOOL COUNSELOR: Please sign this application and mail it along with the student’s essay, transcripts, ACT scores, and activity and course forms to the address below before March 20, 2020.

Student’s guidance counselor’s signature PLEASE NOTE: ONE SIDED COPIES ONLY – NO STAPLES! Independent Oil and Gas Association of West Virginia, Inc. Attention: Dee Beane 300 Summers Street Suite 820, Charleston WV 25301

21

Scholarship AP/Honors Form

Advanced Placement and Honors Courses Grade Level

Course

22

Scholarship School Actvities Form

Extracurricular School Activities Grade Level

Estimated Hours per Year

Activity

TOTAL HOURS

23

Scholarship Community Service Form

Community Service and Non-School Activities (Including Employment) Grade Level

Estimated Hours per Year

Activity

TOTAL HOURS

24

Technical Scholarship Application

25

Technical Scholarship Form

300 Summers Street, Suite 820 Charleston, WV 25301 Phone (304) 344-9867 Fax (304) 344-5836