July 2021 Wellhead Magazine

Le Norman’s tenure as Alliance chairman set organization’s course for future — page 22

Simmons addresses committee exploring storm impact.....9

Brawley, Harding appointed to Alliance Board of Directors.....19

Hulsey elected to Petroleum Alliance chairmanship.....21

JULY 2021

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TABLE OF CONTENTS

Brook A. Simmons President

11

Adria Berry Senior V.P. - Government Affairs & Public Policy

Legislative successes set stage for continued industry victories

Angie Burckhalter Senior V.P. - Environmental & Regulatory Affairs

13

Natalie Kinmonth Senior V.P. - Membership & Development

Lesser prairie chicken back in the spotlight

Cody Bannister Senior V.P. Communications Teresa Yoder V.P. - Finance Ellis Ebel Director of Operations/HR Lauren Burnett Director of Events

15 Senator Schumer is introduced to the Senate rules

17 IEA plan for net zero emissions will leave consumers to suffer

Bud Ground Director of Regulatory Affairs

25

Madison Miller Committee Coordinator & Policy Analyst

Chairman changeover to occur at Annual Meeting

Annie Parks Membership & Marketing Coordinator Marcy Ayers Partners Program Consultant Valerie Flaherty Receptionist

29 Understanding the ins and outs of pollution insurance coverage

33 Energy Index: Oil and gas industry recovery continues in Oklahoma

This newsletter is produced by

35 OERB announces officers, adds two board members

500 N.E. 4th St. Oklahoma City, OK 73104 405-942-2334 contact@okpetro.com www.thepetroleumalliance.com

July | 3

With WTI touching prices not seen since 2014 and natural gas prices just shy of $4.00 per mcf, we welcome the second half of 2021 with optimism for increased Oklahoma oil field activity and a continued uptick in jobs.

December 2020 marked a multi-generational bottom for full-time Oklahoma oil and gas extraction employment. One must look back to the 1980s to find comparable destruction.

Now we build back.

In the first six months of 2021, the Oklahoma oil and gas industry added almost 2,000 jobs with the Oklahoma rig count hovering around 27 — a 170% increase off the rig count bottom.

Together, we’ll hear from industry leaders and outside experts on the regulatory, legislative and economic fronts and plan as an association how to help members capture opportunities.

We know this phase of the commodity cycle is different than what we have experienced since the shale revolution kicked off in 2003. Among the answers we will seek from our top-shelf speakers line up: What will be EPA Region 6’s approach for the oil and gas sector? What trends, outlooks, and issues are on the minds of Federal Reserve bankers? What’s in store for Oklahoma’s economy? What are our elected state leaders priorities? How will congressional action and inaction affect you? What successes has OERB captured for funders over the past year?

What must we as an industry and companies of every size tackle to survive and thrive? How do the state’s top producers see the future?

A

LETTER

THE

The time is right time for us to come together August 5-7 for our Annual Meeting at the Four Seasons Resort and Club at Las Colinas to talk about the future.

FROM

PRESIDENT

B ROO K A .

SIMMONS

Check out the speakers line up and schedule on page 25.

Our Annual Meeting is a perfect venue to network, capture business and share your priorities and vision with elected Alliance leaders and staff!

By now you’ve likely already flipped through our 2021 legislative update, which was wrapped with this issue. Kudos to our members and staff for good legislative wins! More victories are just around the corner.

Inside, we highlight David D. Le Norman’s successful piloting of The Alliance through stormy seas and his role in the evolution of your trade organization since 2019. We also cover the June 1 hand-off to chairman Blu Hulsey plus new board members and officers at both The Alliance and OERB. With emerging regulatory items like the lesser prairie chicken listing, an update from the U.S. Senate floor, detail on Oklahoma’s recovery, and plenty more, we hope this issue finds you well.

See you at the Annual Meeting!

July | 5

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2 3 STATE ROUNDUP 1 | Wyoming Wyoming looks to boost oil, gas jobs in directing funds to DUCs, P&A projects Nearly nine months after Wyoming received $400 million from the first federal Covid-19 relief package, Gov. Mark Gordon plans to disperse the remaining $12 million to help complete oil and gas wells and get people back to work.

The Energy Rebound Program (ERP), created last November to attract workers to the industry, provides business relief for drilled but uncompleted oil and gas wells (DUC), plugging and abandonment projects and wells set to be re-completed. The Wyoming Oil and Gas Conservation Commission (WOGCC) will administer the program. Operators could be reimbursed for up to $500,000 per project.

Although Wyoming’s economy is improving, external market factors are said to be leaving the state’s oil and gas industry behind. According to the governor’s office, there were only nine drilling rigs operating in the state as of June 8. In February 2020, more than 30 drilling rigs were in operation.

Originally published by Natural Gas Intelligence

2 | Ohio New Ohio law stops cities from banning natural gas, propane A new law in Ohio prohibits local governments from banning the use of natural gas and encourages the use of propane.

Gov. Mike DeWine signed House Bill 201 into law July 1. Ohio joins more than a dozen states that enacted similar legislation this year.

The move is in response to some large cities, mostly on the West Coast, banning natural gas hookups in new

buildings as a way to fight air pollution and mitigate the effects of climate change.

There are no cities in Ohio with such a ban, and there is no indication that any cities or townships were considering such an action. Rep. Jason Stephens, R-Kitts Hill, who sponsored the legislation, told Farm and Dairy in March when the legislation was introduced, that he thought it best to address the issues before it became an issue.

Originally published by Farm and Dairy.

3 | Texas Boycott Texas oil, and Texas will boycott you, says Gov. Abbott with new law Texas is drawing battle lines in a fight against investors and companies turning their backs on fossil fuels.

Governor Greg Abbott signed a bill into law banning state investments in businesses that cut ties with the oil and gas industry. The underlying message, according to one of the most powerful energy regulators in the state, is simple: Boycott Texas, and we’ll boycott you.

Oil and gas companies, already under pressure to funnel more cash into dividends to please shareholders, are now having to reckon with major corporations from Wall Street banks to Silicon Valley tech giants deeming climate change as a top priority when determining investments.

In May, Texas Railroad Commissioner Wayne Christian, a Republican, called on the Securities and Exchange Commission, U.S. President Joe Biden and Congress to issue rules regulating sustainability-focused investments so they don’t discriminate against oil and gas producers. In addition to being Texas’ top oil and gas regulator, the Railroad Commission is also known for being one of the industry’s most ardent supporters.

Originally published by World Oil July | 7

8 | thepetroleumalliance.com

AT THE CAPITOL

Petroleum Alliance President Brook A. Simmons, left, speaks to state lawmakers during a meeting of the Joint Committee on Utilities. The committee was formed to explore the impact of February’s record-setting winter weather on Oklahoma energy providers.

NATURAL GAS TO THE RESCUE Simmons addresses committee exploring winter storm impact Petroleum Alliance President Brook A. Simmons spoke to the state legislature’s Joint Committee on Utilities in May, offering the oil and natural gas industry’s opinion on the impacts of February’s record-setting winter weather on energy providers.

The joint committee was formed to address utility cost issues that resulted from the February storm and heard from industry stakeholders from utilities and upstream and midstream oil and natural gas companies.

“I am extremely proud of how members of The Petroleum Alliance of Oklahoma quite literally risked their lives working around the clock in sub-freezing temperatures for days on end to make sure your constituents — our neighbors, families and friends — lived,” Simmons said. “That point should not and cannot be forgotten.”

Simmons told lawmakers the hero of February’s winter blast that sent temperatures to historic lows was Oklahoma’s natural gas. The Southwest Power Pool saw a 380% increase in power generation from natural gas during the event simultaneous with a tremendous flow of natural gas to home heating during a generational weather extreme.

“As a state, we rely heavily on natural gas and it rode to the rescue when we needed it most,” Simmons said, noting that other energy providers, primarily wind energy, were not available. “Natural gas is reliable when we need it the most – we saw that in February.

When the peak demand event occurred, intermittent resources were unavailable. A dispatchable resource like natural gas was essential to picking up the slack and keeping the electricity on.”

JULY | 9

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AT THE CAPITOL

The Oklahoma legislature adjourned in May with a number of positive outcomes for The Petroleum Alliance.

EYES ON 2022 Legislative successes set stage for continued industry victories The Oklahoma legislature adjourned in May, and the legislative session closed with a number of successes for The Petroleum Alliance and its members.

Overall, The Petroleum Alliance led, monitored or engaged on 485 of the 3,235 bills filed for this session.

The governor signed 583 bills into law this year, including: • Allowing for both functional and economic obsolescence to be taken into consideration when adjusting ad valorem taxes on industry.

• Protecting critical infrastructure, including the oil and natural gas industry, from unfounded public nuisance lawsuits.

• Updates to the pipeline safety statute to ensure excavators give proper notice when digging near unmarked hydrocarbon and hazardous liquids underground facilities • The extension of the OERB’s sunset provision for another four years.

The Alliance began the 58th Oklahoma Legislature focused on working toward reforms to the Production

Celebrating success 2021 OKLAHOMA LEGISLATIVE SESSION

HIGHLIGHTS

Read more about The Petroleum Alliance’s legislative successes in our “2021 Oklahoma Legislative Session Highlights.” A complimentary copy has been provided with this edition of your Wellhead newsletter.

Revenue Standards Act (PRSA) as the organization’s top priority and will continue into the 2022 legislative session. The Alliance enters the interim work period with improved relationships with stakeholders, including with mineral owners and landowner groups.

Staff focus this summer and fall will be negotiating bill language with Alliance members, legislative champions, and stakeholders to be prepared for success on PRSA during the 2022 legislative session.

July | 11

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REGULATORY

RETURN OF THE CHICKEN Lesser prairie chicken back in the spotlight

By Brook A. Simmons The U.S. Fish and Wildlife Service has proposed listing two distinct population segments — one in New Mexico and southwest Texas and another in Colorado, Kansas, Oklahoma and the northeast Texas panhandle — of the lesser prairie-chicken under the Endangered Species Act. If that sounds familiar, it’s because the lesser prairie chicken has been the subject of controversy and litigation, particularly over the last ten years. The bird was first listed as a threatened species in 2014, settling several years of litigation by environmental organizations against the Fish and Wildlife Service in response to the agency’s 1998 determination that listing of the bird was “warranted but precluded” by other priorities.

The prairie chicken was de-listed in 2016 when consideration was given to the effect of voluntary conservation efforts being implemented by states and industry. To date, more than $60 million, much of it from the oil and natural gas industry, has been committed to fund conservation efforts, and millions of acres of land have been enrolled in voluntary conservation measures across the lesser prairie chicken’s range.

Those conservation efforts are a shining example of the positive outcomes from public-private partnerships and also show the willingness of the nation’s oil and natural gas industry to minimize the impact of exploration and development on the land and the creatures that call it home.

The lesser prairie chicken, de-listed as a threatened species in 2016, is back in the news after the U.S. Fish and Wildlife Service proposed listing two population segments of the bird under the Endangeres Species Act.

But those efforts weren’t good enough for the far-left environmental activists who have latched onto the Endangered Species Act as a way to slow and even stop the production of the oil and natural gas they loathe. It is not a coincidence that the prairie chicken’s habitat overlies some of the most active oil and natural gas fields in the nation.

Environmental groups again sued the Fish and Wildlife Service seeking to force it to list the species once again.

After several delays, the FWS entered into a settlement with those plaintiffs requiring it to publish its new listing determination by May 26, 2021 Petroleum Alliance members have long supported the public-private partnerships that fund conservation efforts for the lesser prairie chicken habitat. We remain willing to work with the U.S. Fish and Wildlife Service to minimize negative impacts on oil and natural gas development while still protecting the efforts to increase populations of the prairie chicken.

— Brook A. Simmons is president of The Petroleum Alliance of Oklahoma.

July | 13

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IN WASHINGTON

SEN. SCHUMER IS INTRODUCED TO THE SENATE RULES

By Tim Stewart Since January, our industry been watching how far, wide, and deep the Biden Administration and the Democratic Congress will overreach to carry out the new progressive agenda, a key component of which is the eradication the U.S. oil and gas industry.

This is not hyperbole. The public record is flooded with statements by Democratic leadership that they see no future for fossil fuels in their new progressive worldview. They have come at us from every regulatory and legislative angle. Tax policy remains the blunt instrument of choice and is used to go after our energy tax structure which we have relied on for decades.

Tim Stewart is president of the U.S. Oil and Fortunately, rules still apply (at least for now) and when the Gas Association and has spent 20 years in rules are applied, the brakes are applied. Just ask Senator the legislative and regulatory environment in Schumer.

Washington, D.C., specializing in natural resource The Senate Parliamentarian is the arbitrator and ruleand energy issues. The USOGA was founded in keeper of the Senate and she recently informed Senate Tulsa in 1917.

Majority Leader Chuck Schumer that his intent to use budget reconciliation repeatedly to jam through massive infrastructure, climate, social spending bills and the accompanying tax increases to pay for spending, was in fact a violation of the Senate rules. The Parliamentarian issued a ruling stating that instead there is only one more opportunity to revisit the budget this fiscal year and it must be limited in scope when it is used.

This decision ties the Senate Democrats’ hands as to how they move forward on their massive bill and simply majority vote strategy.

Budget reconciliation votes only require a simple majority vote in the Senate and are not subject to the 60-vote threshold. Assuming the GOP stays united in a 50-50 Senate, Senator Schumer must hold every single one of his Democratic votes and rely on Vice President Harris to break a tie. That also means that the scope of any infrastructure and tax bill must now default to the lowest common denominator among his caucus.

Naturally in response, the Progressive caucus led by Bernie Sanders doubled down. Their proposal is now at $6 trillion - more than twice the size of the massive Biden Administration proposal. Yet, the bigger the bill, the harder it becomes to pass and the more likely one is to lose rather than pick up votes.

Senator Schumer has a mess on his hands. Pressure is now on President Biden to cut a deal with Senate Centrists rather than Senate Progressives.

This means the infrastructure package will likely be much more modest in scope and as per the Centrists’ public statement – will be paid for without raising taxes.

It means capital gains tax is likely off the table and corporate tax rates are likely off the table too.

Most important for us, it means oil and gas tax repealers which would take away all our production tax treatment to give to renewables hundreds of billions in subsidies are much harder to justify and much harder to secure.

For now, time, the calendar, world energy markets and the Senate Rules are on our side. We are encouraged with these latest developments as it gives us greater room to maneuver while constraining the opposition. We are not by any means in the clear, but we are in a much better position as an industry than we were six months ago. We will continue the fight against bad ideas and bad policy.

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IN WASHINGTON

ROADMAP TO RUIN IEA plan for net zero emissions will leave consumers to suffer

By Brook A. Simmons The International Energy Agency has mapped out a pathway for the world to reach net zero emissions by 2050.

The plan is, in short, absurd.

In order to meet a growing political outcry to cut carbon dioxide emissions, the IEA says the world must immediately stop the exploration and development of new oil and natural gas fields, stop the sale of internal combustion-powered vehicles by 2035 and more than double investments for alternative energy development from $2 trillion to $5 trillion per year.

In a 222-page report, the IEA says the “Net Zero by 2050: Roadmap for the Global Energy Sector” is a pathway that is “narrow” but “achievable.” But the only thing the report that rivals “The Adventures of Tom Sawyer” in length accurately does is highlight the stark difference between rhetoric and reality.

Oklahomans, Americans and the rest of the world want two things when it comes to energy — reliability and affordability.

We saw that first-hand in February, when a historic winter storm brought our state to a standstill. With record low temperatures and snow and ice blanketing the Sooner State, it was the reliability of natural gas that kept homes warm and families safe.

Remember way back in 2008 when the average price of gasoline was more than $3.25 and average prices passed the $4 mark throughout June and July? That increased price at the pump hampered family household budgets, but relief came thanks to record oil and natural gas production from previously untapped natural resources across the nation.

So, while D.C. politicians pander to environmental activists who dream of a worldwide green-energy utopia, it will be American consumers left to suffer. Gasoline prices will increase. Home power and heating costs will go up. Taxes will increase to fund the development of energy sources that are, today, less reliable than proven oil and natural gas.

The impact on the American economy will be just as great.

Manufacturing plants that rely on power from coal or natural gas will have to retool. Farmers and ranchers who use natural gas-based fertilizer will have to find new ways to feed the nation and invest in the equipment to do so.

“

while D.C. politicians pander to environmental activists who dream of a worldwide green-energy utopia, it will be American consumers left to suffer.

The IEA has presented its roadmap, but it’s a map that leads to economic ruin for average Americans and the nation’s economy as a whole.

— Brook A. Simmons is president of The Petroleum Alliance of Oklahoma.

JULY | 17

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ALLIANCE

BRAWLEY, HARDING APPOINTED TO ALLIANCE BOARD OF DIRECTORS The Petroleum Alliance of Oklahoma has named two new members to its Board of Directors — John Brawley from Maverick Natural Resources and Drew Harding of Tulsa’s Unit Corporation. Brawley will also serve on the Alliance’s Executive Committee.

Brawley fills the Board and Executive Committee seat formerly held by FourPoint Energy’s Tony Cristelli following Maverick’s acquisition of FourPoint in December 2020.

Brawley currently serves as Maverick’s executive vice president and chief financial officer.

He joined the company in 2018 after serving as as SVP of capital markets, M&A, and treasurer at Sandridge Energy. Brawley has also held numerous senior leadership roles in public companies, including Drew Harding chief financial officer of both midstream and upstream companies. He also served as co-head of the Guggenheim Houston office from 2010 to 2013. Brawley holds a bachelor’s in economics and biological sciences from Rice University and an MBA from the Jesse H. Jones Graduate School of Management at Rice University.

John Brawley

Harding replaces fellow Unit executive Mark Schell, who is retiring from the company as Senior Vice President, General Counsel, and Secretary.

Harding joined the company in 2004 as a staff attorney. In 2005, he was promoted to the position of associate general counsel, and in 2020, he was promoted to vice president, general counsel and secretary. Harding received his Bachelor of Business Administration from Baylor University in 2001 and his Juris Doctorate from the University of Tulsa College of Law in 2004. He is a member of the Oklahoma Bar Association.

PETROLEUM ALLIANCE BOARD OF DIRECTORS MEMBERS CHAIRMEN EMERITUS Harold Hamm — Continental Resources, Inc. Wade Hutchings — Enerplus Ronnie Irani — RKI Energy Resources Mike McDonald — Triad Energy, Inc. Jeffrey J. McDougall — JMA Energy Company, LLC Melvin Moran — Moran Oil Enterprises John W. Pilkington — Muirfield Resources Company EXECUTIVE COMMITTEE Blu Hulsey (Chairman) — Continental Resources, Inc. Chad McDougall (Vice Chairman) — JMA Energy Company, LLC Matt Most (Treasurer) — Ovintiv, Inc. Greg Shepherd (Secretary) — Mewbourne Oil Company John Brawley — Maverick Natural Resources Robert Costello — Tapstone Energy Stephen Flaherty — Cimarex Energy Co. Kim Hatfield — Crawley Petroleum Corporation Thomas Hellman — Marathon Oil Tommie Herell Cathy Lebsack — Devon Energy Corporation David D. Le Norman — Reign Capital Holdings LLC Berry Mullennix — Panther Energy Company III, LLC Rand Phipps — Mustang Fuel Corporation Brian Woodard — Chesapeake Energy Corporation Heath Work — EOG Resources BOARD MEMBERS Justin Boyd — SPN Well Services Courtney Brackin — OMNI Environmental Solutions Joseph C. Brevetti — Charter Oak Production Co., LLC Elizabeth Brown — The Gloria Corporation Dave Deardeuff — INSURICA John Paul Dick — Pinnacle Energy Services, LLC Walt Duncan IV — Duncan Oil Properties Chuck Duginski — Chaparral Energy, LLC Luke Essman — Canyon Creek Energy, LLC Brian Exline — Red Bluff Resources David Ferris — Brownstone Energy LLC Darin Fields — Phillips 66 Drew Harding — Unit Corporation Ethan D. House — EnergyNet, Inc. Stephen Ingram — Halliburton Kevin Lafferty — Lagoon Water Midstream Rick Lewis — Lewis Oil Corp.

Valerie Mitchell — Troy Energy E&P, LLC Darrell Noblitt — Noblitt Oil & Gas, Inc. Samantha Omey — ExxonMobil Corp.

Heather Powell — Ventana Exploration & Production Kevin Ruffatto — Enbridge Energy Company, Inc. Taylor Shinn — Baker Hughes Geree Wald Morton — Plaster & Wald Consulting Corp.

Michael Walker — Enable Midstream Partners David Wood — Gulfport Energy Corporation

JULY | 19

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ALLIANCE

HULSEY ELECTED TO PETROLEUM ALLIANCE CHAIRMANSHIP Continental Resources’ Blu Hulsey has been elected to serve as chairman of The Petroleum Alliance of Oklahoma, the state’s largest trade association representing the oil and natural gas industry and one of the largest statewide oil and natural gas trade associations in the nation.

Hulsey’s appointment came following a unanimous vote of The Alliance board of directors, where the organization named its officers who will serve two-year terms beginning June 1. Other officers elected were: • Vice Chairman ­— Chad McDougall, JMA Energy Co. • Treasurer — Matt Most, Ovintiv • Secretary — Greg Shepherd, Mewbourne Oil Co. “It is an honor to have the opportunity to lead this organization, particularly in this moment in time. As our world continues to wake up from the pandemic, Oklahoma oil and gas will continue to Incoming Petroleum Alliance Chairman Blu Hulsey, center, receives a play a vital role in bettering the lives “chairman’s gavel” from outgoing Chair David Le Norman, left. The of people across Oklahoma, our nation two Alliance officers are joined by President Brook Simmons. and the world.” Hulsey said. “There has been no industry more important to our said. “He has been in leadership roles in other state than oil and gas, and that legacy will continue for producing regions of our country and has a firm decades to come. I look forward to working with the grasp of the headwinds that face our industry. I am dedicated staff at the Alliance advocating on behalf particularly encouraged by his experience navigating of the 350,000-plus Oklahomans that rely on oil and legislative and regulatory challenges related to our gas for jobs and promoting the economic and human business, including those at the federal level. Blu’s benefits our industry provides Oklahomans across our experience broadens our capabilities and expands our great state and nation. I want to thank Dave for his scope beyond the borders of Oklahoma.” outstanding leadership and look forward to building on his tremendous accomplishments for this organization.” Hulsey currently serves as senior vice president of HSE and government and regulatory affairs at Hulsey succeeds outgoing Chairman David D. Le Oklahoma City’s Continental Resources. Prior to joining Norman, founder and managing partner of Reign Continental, Hulsey served in various roles in local Capital Holdings who served as the first elected and federal government including counsel for the U.S. chairman of The Petroleum Alliance following the Senate Environment and Public Works Committee for merger of the Oklahoma Independent Petroleum Sen. Jim Inhofe in Washington, D.C. Association (OIPA) and the Oklahoma Oil and Gas Association (OKOGA). Both Le Norman and Hulsey will be recognized during a special ceremony at the organization’s Annual Meeting in August.

“Blu is well equipped to lead the Alliance,” Le Norman

A native Oklahoman, Hulsey attended Oklahoma State and received a business management degree. He also attended University of Tulsa School of Law and is licensed to practice law in Oklahoma.

July | 21

ALLIANCE

e h t f o r e d a e L

n o i t u l o v e

Le Norman’s tenure as Alliance chairman set organization’s course for future

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D

avid Le Norman assumed the role of chairman of The Petroleum Alliance of Oklahoma with extraordinary change on the horizon.

In 2019, one year after the merger of the Oklahoma Independent Petroleum Association and the Oklahoma Oil and Gas Association, Le Norman filled the void created by the completed tenure’s of OIPA Chairman Berry Mullennix and OKOGA Chairman Wade Hutchings, both of whom had served as co-chairs of the newly created Alliance.

Le Norman, the first-ever elected chairman of the Alliance, was now tasked with directing the merged organization, and, little did he know, he was facing stiff headwinds in the years to come.

Seven-months into his term, the COVID-19 pandemic brought the world economy to a standstill. The price of oil fell from $17 to negative $37 in one day.

Activity in Oklahoma’s historic oil and gas fields came to a halt. Jobs were lost. Companies were shuttered.

with Texaco, Le Norman founded Le Norman Energy in 1995 and paired the company with sister company Le Norman Partners to focus on exploration and development in southern Oklahoma and north Texas.

Both companies were sold to Denver’s Patina Oil and Gas Corp. for more than $120 million in 2002.

Le Norman joined the Patina senior staff as a senior vice president and played a significant role in growing and diversifying the holdings of the $700 million enterprise company toward its subsequent merger with Noble Energy Inc., which valued Patina at $3.5 billion in the combined company.

Le Norman followed this initial “build and monetize” strategy, building the Crusader series of companies — Hawk, Knight series, White River, LNP and TLP. These

It was a difficult time to lead an oil and natural gas trade association, but Le Norman marched forward and his two-year term as chairman laid the groundwork for future Alliance success thanks to one unwavering mantra — evolution not revolution.

“When the two groups merged, we wanted to take the best aspects from both,” said Le Norman, who completed his term in June and will be recognized during a ceremony at the Alliance’s Annual Meeting in August. “For OKOGA, that was a committee structure that provides real-time support for our members. For OIPA, it was the inclusion of producers of all sizes and an event calendar that provides opportunities for members to both get information and share information with their peers.

“I was uniquely positioned because both organizations saw me as one of them. When I became chairman, I said ‘What’s our next step?’ We need to expand who is leading the organization. We need to evolve.”

Through Le Norman’s leadership, the Alliance board of directors approved the expansion of the organization’s Executive Committee from a maximum of 15 members to 19, creating more opportunities to ensure voices from midstream, refining, the service sector and nonoperators were included in the Alliance leadership.

Throughout his term, Le Norman frequently advocated for the industry to unite, to find common ground and collaborate. He called for companies of all sizes to band together and spread the word that the Alliance was created for ALL constituents of our oil and gas community.

“That’s how you build success,” Le Norman said. “You don’t need radical changes. You just need continual improvement.”

And Le Norman is no stranger to building success.

After launching his career as a petroleum engineer

Outgoing Petroleum Alliance Chairman David Le Norman speaks at the organization’s 2021 Sine Die event in May. Le Norman completed his two-year term in June and will be recognized during the Alliance’s Annual Meeting in August. nine companies sold their assets for a combined $2.5 billion. All of these companies operated in various E&P regions across the United States with a core focus area in the Greater Anadarko Basin. Le Norman leveraged core competencies in horizontal drilling technology utilizing multi-isolation, multi-stimulation completion techniques to create value across all of these companies in various reservoirs and lithology.

Today, Le Norman leads Reign Capital Holdings, a privately-owned investment company that has created creative partnerships in energy, real estate, automotive and technology.

“The only thing good about the good old days is they’re gone,” Le Norman said. “Those who resist change will perish. We have to keep evolving, or we will get run over. It’s been an honor to serve as chairman.

Blu is well equipped to lead the Alliance and its next evolution.”

July | 23

P R O F E S S I O N A L

D E V E L O P M E N T

ONLINE

For the past 25 years, the Energy Institute of the Americas has provided professionals with energy education (in person) and development opportunities to people around the world.

Now, we are moving our professional development programs to fully online learning.

We are here to make a difference. We will build the program to meet your needs and as a member of the Alliance, you receive a 30% discount on continuing education courses.

COURSES Crisis Management Machine Learning Flow Dynamics of Horizontal Well Production Environmental, Social and Governance Leadership Diversity, Equity and Inclusion in the Energy Industry /ENERGYINSTITUTEOFTHEAMERICAS

LINK.OU.EDU/EIAOKLAHOMA

24 | thepetroleumalliance.com

C ON TA CT : L UIS VE RGARA | L UIF ER@OU . ED U

ANNUAL MEETING

CHAIRMAN CHANGEOVER TO OCCUR AT ANNUAL MEETING Outgoing Alliance Chairman David Le Norman and incoming Chairman Blu Hulsey will be celebrated during the Petroleum Alliance’s 2021 Annual Meeting, highlighting a three-day calendar of events filled with informative speakers, networking opportunities and plenty of fun.

2021 ANNUAL MEETING SCHEDULE OF EVENTS

After a one-year COVID-imposed hiatus, the Annual Meeting returns to the Four Seasons in Las Colinas, Texas, August 5-7, and registration for the event is now open.

12:00 – 11:00 PM — Exhibitor Set-Up

The Annual Meeting is the largest event of the year for Oklahoma oil and natural gas professionals and one of the largest meetings in the nation hosted by a statewide oil and natural gas trade association. It annually attracts hundreds of men and women from the upstream, midstream and downstream sectors of our state’s defining industry, offering them an opportunity to hear from industry experts and elected officials while interacting with their peers.

Speakers at the 2021 Annual Meeting include industry and government leaders, including a panel discussion with the Oklahoma Speaker of the House and Senate President Pro Tempore and economic forecasts from leading state and national economists.

Highlighting the speaker slate will be a roundtable discussion with CEOs from Oklahoma’s leading oil and gas companies who will offer their insight on what the future holds for the Mid-Con in the years to come.

THURSDAY, AUGUST 5 11:30 AM – 5:30 PM — Wildcatters Swing Golf Scramble 6:30 – 9:00 PM — Wildcatters Welcome Party 9:00 – 10:30 PM — Fireworks Show and Viewing Party

by INSURICA FRIDAY, AUGUST 6 7:30 – 9:00 AM — Breakfast 8 :00- 11:30 AM — Exhibitor Booths Open 8:30 – 11:30 AM — General Sessions 12:00 – 2:00 PM — Board of Directors Meeting 5:30 – 7:00 PM — President’s Cocktail Reception 7:00 – 8:30 PM — Chairman’s Dinner 8:30 – 11 PM — Casino Party SATURDAY, AUGUST 7 7:30 – 9:00 AM — Breakfast 8:00 – 11:30 AM — Exhibitor Booths Open 8:30 – 11:30 AM — General Sessions 12:00 – 1:30 PM — Keynote Lunch 1:00 – 5:00 PM — Exhibitor Booths Teardown

1:30 – 5:30 PM — Sporting Clays Classic The Alliance is finalizing its full slate of speakers throughout June. Confirmed speakers, to date, include: • Lee Tillman — President and CEO of Marathon Oil • Tom Jorden — President and CEO of Cimarex • Robert S. Kaplan — CEO of the Federal Reserve Bank of Dallas • Taimur Shaikh — EPA Region 6 Senior Policy Advisor on Energy • Dr. Russell Evans — Executive Director of the Steven C. Agee Economic Research & Policy Institute • Mark Snead — President and Economist at RegionTrack, Inc. • U.S. Rep. Stephanie Bice — U.S. Representative for Oklahoma’s 5th congressional district • Sen. Greg Treat — President Pro Tempore of the Oklahoma Senate • Rep. Charles McCall — Speaker of the Oklahoma House of Representatives • Derrick Morgan — Senior Vice President of Federal & Regulatory Affairs for the American Fuel & Petrochemical Manufacturers

July | 25

If your employees recently lost health care coverage, they have options.

Help them get the health care coverage they need What is a special enrollment period?

A Special Enrollment Period allows them to sign up for health care coverage outside the regular Open Enrollment window, if there’s been a qualifying event, such as a job loss, getting married, or addition to the family.

What do they need to qualify?

All they need is proof of a qualifying event, such as loss of job, marriage, addition to the family, or other life change. They can see if they qualify at bcbsok.com/SEP.

Can they get financial help?

They may be able to get a premium tax credit or other financial assistance based on their income and family size. They can see if they qualify at bcbsok.com/SEP.

How long do they have to enroll?

Blue Cross and Blue Shield of Oklahoma (BCBSOK) offers different plan options to meet budget and needs.

If your employee(s) recently lost their job and need health coverage, BCBSOK may be able to provide the coverage that’s right for them and their families.

THEY MAY EVEN QUALIFY FOR FINANCIAL HELP. Visit NeedCoverageNowOK.com

or call 844-689-2227 today.

They have 60 days from the date of their qualifying event to enroll in a health plan.

26 | thepetroleumalliance.com Blue Cross and Blue Shield of Oklahoma, a Division of Health Care Service Corporation, a Mutual Legal Reserve Company, an Independent Licensee of the Blue Cross and Blue Shield Association

610411.0620

ANNUAL MEETING

2021 ANNUAL MEETING SPONSORS DIAMOND SPONSORS amshot BITCO Cimarex Energy Continental Resources Devon Energy EOG Resources INSURICA Marathon Oil Merit Auto Group Ovintiv US Fleet Tracking PLATINUM SPONSORS Messer-Bowers Insurance NFP Corporate Benefits Reign Capital Holdings LLS GOLD SPONSORS BCBS of Oklahoma CompSource Mutual Insurance Company CUDD Energy Services Enable Midstream EnergyNet, Inc Flex-Chem Halliburton J. Price Energy Services Lagoon Water Midstream Purple Wave Auction SPN Well Services Thru Tubing Solutions Unit Corporation SILVER SPONSORS Baker Hughes Chesapeake Energy Chickasaw Nation Crawley Petroleum Corporation CVR Refining DCP Midstream Enlink Midstream Gore Nitrogen Healthcare Highways JMA Energy Company KOCH Industries INC LeadersLife Insurance Company M&M Supply Co. Maverick Natural Resources, LLC

Mewbourne Oil Company OERB ONEOK Phillips 66 Red Bluff Resources Select Energy Services TC Energy University Silkscreen BRONZE SPONSORS Altamira Canyon Creek Energy CUDD Energy Services DEPA Marathon Petroleum Midship Pipeline Mustang Fuel Corporation Pinnacle Energy Services Plaster & Wald Consulting Corp.

Superior Pipeline Valero Williams ITEM SPONSORS BCBS of Oklahoma Baker Hughes Basic Energy Services BITCO CompSource Mutual Insurance Company Crawley Petroleum Corporation CUDD Energy Services CVR Refining Flex-Chem Gore Nitrogen INSURICA J. Price Energy Services JMA Energy Company Messer-Bowers Insurance NFP Corporate Benefits Reign Capital Holdings LLS SPN Well Services Thru Tubing Solutions SPORTING CLAYS CLASSIC SPONSORS Crawley Petroleum Corporation GOLF HOLE SPONSORS Basic Energy Services BITCO Thru Tubing Solutions

July | 27

Dividends cannot be legally guaranteed and are subject to approval by the BITCO Board of Directors. Historically, BITCO has never failed to declare/pay a dividend in accordance with approved dividend plans. Insurance contracts are underwritten and issued by one or more of the following: BITCO General Insurance Corporation and BITCO National Insurance Company, rated A+ (Superior) by A.M. Best, A2 Stable by Moody’s, and A+ Strong by Standard and Poor’s.

Contact the Petroleum Alliance of Oklahoma office at 405-942-2334 or you can find a BITCO agent near you by visiting BITCO.com today.

A Safety Group Dividend Plan available to Members of the Petroleum Alliance of Oklahoma for over 12 years Benefit from coverages and services customized to the energy industry.

As an added benefit to your Association membership, you may be eligible to participate in the Petroleum Alliance of Oklahoma Safety Group Dividend Plan. Your participation in this plan affords you the following benefits: • BITCO’s broad coverages including property, inland marine, general, property, inland marine, general, umbrella and pollution liability, and commercial auto • Competitive rates • Local claims service • Possibility of a dividend each year BITCO offers customers programs for:

Oklahoma City Branch 1601 NW Expressway Suite 700 Oklahoma City, OK 73118 405-847-6000

• Oil or gas lease operators • Oil lease contractors • Well servicing contractors • Drillers • Miscellaneous oilfield service companies Providing specialized coverage and risk control services for members of the energy industry for over 70 years, BITCO has a long-term commitment to the oil and gas industry. As a member of the Old Republic General Insurance Group, the largest segment of Old Republic International, BITCO provides our insureds with the financial strength and stability of one of America’s 50 largest shareholder owned insurance organizations, that also ranks among the Fortune 500 list of the nation’s biggest companies.

28 | thepetroleumalliance.com

www.BITCO.com

PARTNER SPOTLIGHT

OPTIONS TO CONSIDER Understanding the in’s and out’s of pollution insurance coverage

By Jay Bowers & Mark Wendell

O

ne of the things all of our members have to address as they go about running their businesses is the purchase of insurance. Much like taxes, we have to consider our options once a year and, if truthful, it is a task that is most likely viewed with as much excitement as filing your taxes. While the resulting impact on your pocket book is always somewhat of a concern, there are other things that need to be considered as you make the decision of who your agent should be and what insurance company you place your coverage with.

Just as important is the type of coverage you buy and how it will respond when you have to file a claim. A key part of the protection you purchase is pollution liability coverage. Different insurance carriers offer different types of policies to address the exposures related to pollution related claims. How are you protected from pollution incidents? Do you know what coverage you have and how it works?

To help answer these questions we thought we might share the insights of the carrier The Petroleum Alliance endorses as their preferred provider and one of their agency representatives — BITCO Insurance Companies and Jay Bowers of Messer-Bowers Insurance.

1. Start with knowing what you are up against Knowing what coverage you have is a great place to start, but is it what you need? While most insurance coverage has been standardized over the years, pollution coverage remains an enigma for most policyholders. Odds are you bought it because it was either a requirement or because it was highly recommended by your agent. But how does it work in the event of an incident? Many have found out the hard way that the coverage they paid for can fall short rather quickly.

John W. “Jay” Bowers, IV, CIC is the leader of the Energy Practice at Messer-Bowers Co. He is a graduate of Oklahoma State University and lives in Enid with his wife Kara and their two children.

Mark Wendell is the Onshore Oil and Gas Program Manager/Assistant Vice-President of Underwriting for BITCO Insurance Companies. BITCO is part of Old Republic General Insurance Group, the largest business segment of Old Republic International which is one of America’s 50 largest shareholder-owned insurance businesses and currently ranks among the Fortune 500 list of the nation’s biggest companies.

In order to figure out if you have adequate pollution protection, you first need to know what your needs are in order to address them. Do you carry pollutants on a truck? Do you own locations that handle pollutants? Heck, what is considered a pollutant? Knowing your exposure to a pollution incident is the first step to take. This exposure will vary greatly between a Lease Operator and a Contractor.

Once you have identified this exposure, consider the fallout from an incident. What will a Lease Operator do if they have a pollution incident at a well site? Who will control what happens next? What government agencies will be involved? What if it impacts a river or stream?

Continued on page 31

July | 29

PARTNER SPOTLIGHT

Continued from page 29 2. Know what you have There are many variants of pollution coverage. A conversation with your agent will go a long way. In Oklahoma, there are two common coverage forms that most consumers have in their policies. BITCO Insurance, the Petroleum Alliance’s sponsored insurance program for members, says the following about the two types of pollution coverage, and offer’s its policy holders either type: Time Element Coverage Time Element, which is often referred to as Sudden & Accidental or Reporting Pollution coverage, applies to bodily injury, property damage and environmental damage only if it is caused by a pollution incident: 1.

on or from an insured site or work site; and

2. was discovered by you or any of your employees, your operating agent or any of its employees, your pumper-gauger or any of its employees, your sub-contractors or any of its employees or any other applicable person, within 30 days of the beginning of the pollution incident; and

3. reported to BITCO within 90 days after the discovery; and 4. occurs during the policy period.

It’s important to note that once these time triggers have elapsed, there is no pollution coverage for that incident and therefore no defense of suit or payment under this policy will be afforded. Once the 30 day discovery and 90 day reporting period is over, it is as if there is no pollution coverage at all.

Claims-Made Pollution Coverage This is a stand-alone pollution policy that is broader in coverage due to the lack of a Time Element requirement. The policy simply states that this insurance applies to damage from a pollution incident which commences on or after the Retroactive Date shown in the insurance policy (usually the first date coverage is purchased under this for from BITCO). The Retroactive Date is the first date BITCO provides coverage and remains the same as long as the insured renews coverage annually with no interruption. Any pollution incident beginning prior to the Retroactive Date is not covered as would be expected. There are NO Time Element limitations in BITCO’s Claims Made Pollution policy, but the pollution claim has to be made during the policy period.

When comparing the two, it is easy to see that a tighter time trigger for coverage may not be advisable, especially for contractors or lease operators who know that anyone can be named in a lawsuit, usually after an amount of time that would not allow coverage under a Time-Element policy.

3. Do something before it is too late If you are unsure what coverage you have, now is the time to ask. A pollution loss can cause financial hardship and well as loss of standing in your community. The Petroleum Alliance provides a leading insurance program with BITCO Insurance. It is available through select appointed Agencies or the program’s sponsoring Agency, Messer-Bowers Company. BITCO has been a long standing supporter of the Petroleum Alliance, and has offered a group safety dividend program for members for over 17 years.* *Dividends cannot be legally guaranteed and must be declared by the BITCCO Board of Directors. Historically, BITCO has never failed to declare/pay a dividend in acceptance with approved dividend plans.

July | 31

32 | thepetroleumalliance.com

ENERGY INDEX

OIL AND GAS INDUSTRY RECOVERY CONTINUES IN OKLAHOMA The slow and steady march back to prepandemic levels of activity continues for Oklahoma’s oil and natural gas industry.

Data from the most recent Oklahoma Energy Index (OEI) show industry employment is holding steady as increased oil and natural gas prices offer the state’s oil and natural gas producers opportunities to cautiously expand production activities.

“Rig activity is slowly returning as prices improve,” Petroleum Alliance of Oklahoma President Brook A. Simmons said. “While we are still far from the levels of activity we have seen in years past, the slow but steady addition of drilling rigs to the Oklahoma landscape is a welcome sign of an industry in recovery.”

Oklahoma’s oil and natural gas fields averaged 20 active drilling rigs per week in April, up from 17 active rigs per week in March. Today, the state’s rig count stands at 27 and Oklahoma is expected to pass the 30rig mark in the early days of summer.

That increased rig activity and steadying employment in the industry helped push the Index higher using data compiled from April reports. The Energy Index now stands at 87.6, an increase of 1.5% from the previous month but 11.5% less than one year ago.

Economist Russell Evans, who compiles the Oklahoma Energy Index (OEI), said complicating the long-term outlook for the state’s defining industry is the still unresolved inflation expectations from extraordinary rounds of federal stimulus dollars designed to support

household incomes.

“The Oklahoma economy is nearing full health in many ways even as policy continues to provide nearly unprecedented levels of income support,” said Evans, executive director of the Steven C. Agee Economic Research and Policy Institute. “In the short run, this provides support for the energy sector as it literally provides the fuel for a rapidly expanding economy. In the long run, however, policy will be tested as officials hope to accomplish the rarest of policy feats — a soft landing of an overheating economy back to its sustainable, full-employment level of production.”

The OEI is a comprehensive measure of the state’s oil and natural gas economy established to track industry growth rates and cycles in one of the country’s most active energy-producing states. The OEI is a joint project of The Petroleum Alliance of Oklahoma and the Steven C. Agee Economic Research and Policy Institute.

July | 33

34 | thepetroleumalliance.com

OERB

OERB ANNOUNCES OFFICERS, ADDS TWO BOARD MEMBERS The Oklahoma Energy Resources Board (OERB) is announcing a new slate of officers and two new board members.

David Le Norman was elected as the Chairman of the Board of Directors and Kristin Thomas was elected as the Vice-Chairman.

Le Norman is managing partner of Reign Capital Holdings LLC. He has more than 30 years of experience in the oil and natural gas industry. Thomas is Senior Vice President of Public Relations at Continental Resources, where she’s worked since 2011, helping build the company’s national prominence as a leading oil producer. Both will serve two-year terms.

The board also elected Shilpa Abbitt of Caliber Resource Partners as secretary and David Ferris of Brownstone Energy as treasurer.

“We are pleased to have Mr. Le Norman as our new chairman,” said OERB Executive Director Mindy Stitt. “His passion for our mission and our state is secondto-none. Along with Ms. Thomas and the other new officers we are excited to continue expanding our programs and do even more great work in Oklahoma.”

David Le Norman

Kristin Thomas

Shilpa Abbitt

Le Norman takes over the chairman role from Mike McDonald, who completed his term as Chairman but will remain on the board.

“Mike McDonald was a tireless leader who spent countless hours working on behalf of our board,” Stitt said. “As a diligent Greg Shepherd Aaron Ketter David Ferris steward of the oil and natural gas industry’s funding, he developed several efficiencies that led to cost savings while serving even more landowners and educators.”

The OERB is also adding two new members to the board of directors, Greg Shepherd and Aaron Ketter.

Shepherd is the District Exploration Manager for Mewbourne Oil Company, where he works alongside a team of geologists, landmen and engineers with a focus on oil and natural gas prospects across western Oklahoma. He has been in the company in various capacities since 2003.

Ketter holds the position of Vice President of the Mid-Continent and South Texas Business Unit for Devon Energy.

His multi-discipline teams are responsible for creating and executing the corporate strategy encompassing financial performance, capital program, and business development opportunities.

The OERB is governed by an unpaid 21-member board and is funded by more than 2,500 producers and thousands of royalty owners across Oklahoma through a voluntary one-tenth of 1 percent assessment on oil and natural gas production. Since 1993, the agency’s purpose is to conduct environmental restoration of abandoned well sites and to provide energy education in Oklahoma.

July | 35

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DREW HARDING G E N E R A L C O U N S E L AT U N I T C O R P O R AT I O N A N D N E W LY APPOINTED MEMBER OF THE P E T R O L E U M A L L I A N C E B OA R D OF DIRECTORS

1 2

Who’s your favorite Oklahoman?

Troy Aikman.

3 4

Mountains or beach?

Mountains.

5

What’s your favorite drink?

In a nod to my former boss and Alliance board member, Mark Schell, gin and tonic at the moment.

6

Favorite college team?

Baylor Bears.

7

In one sentence, what do you actually do all day in your job?

Assess and manage risk.

8 9

Favorite band in junior high?

Boyz II Men.

10 11 12

If you could eat one food the rest of your life, what would it be?

Sushi.

Have you met anyone famous?

Tom Landry and Lou Holtz. Not sure if they count as famous but that is as close as I can get.

Name of your pet?

Currently N/A. We’ll see how long we can keep it that way with our two boys.

What was your first job?

Coaching tennis.

What was your first car?

Jeep Cherokee.

13 14

What was your favorite TV show as a child?

Saved by the Bell.

15

What is your favorite thing about working in the oil and gas industry?

Well, it is rarely boring.

16

What is your favorite holiday?

Halloween, but I do not like to dress up. It’s a time of year thing for me.

17

What is the best gift you have ever received?

My amazing wife got me a pair of George Cleverly shoes in the model they made for Winston Churchill.

18

What is the first thing you would do if you won the lottery?

Hopefully some level of responsibility and good stewardship would be involved, but truth be told, I would hit up the 81657 zip code on Zillow pretty quickly.

19 20

What’s the number one item you would save from your burning house?

Hopefully not too cliché, but my Bible—we’ve been through a lot together.

Last movie you saw at the theater?

The Great Gatsby—not the original but the 2013 remake. Either way, it was a long time ago. Does anyone else wonder how movie theatres are still a thing?

What’s your favorite app?

I enjoy a nice little scroll through Insta to see what the people are doing.

If you could have dinner with one person, alive or dead, who would it be?

Winston Churchill.

December | 37

PARTING SHOT

The oil and natural gas industry powers Oklahoma — even at the state Capitol! A solid reminder for all the legislators looking out those windows.

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POWE R ON , OKL AHOMA THANK YOU TO THE OIL & NATURAL GAS INDUSTRY FOR KEEPING OUR STATE RUNNING

Without the oil & natural gas industry, Oklahoma would be lost in the dark. Merit Auto Group stands proud with our neighbors who put so much at stake each day to keep the community’s lights on.

CHICKASHA | DUNCAN | FAIRVIEW MERITAUTO.COM

July | 39

THE PETROLEUM ALLIANCE OF OKLAHOMA 500 N.E. FOURTH ST. OKLAHOMA CITY, OK 73104

Prsrt Std U.S. Postage Paid Permit No. 1541 Okla. City, OK