36
VOLUME 13, ISSUE 4 APRIL 2015 President’s Letter NewMembers 3 “Earthquakes” 5-17 Questions from the 18 field Industry Affairs 19-21 Mar. Meeting Pics 23,24 Legislative Affairs 25,26 Directors Report 28 Dear Members, April has been a busy month and our monthly meetings and education luncheons are over until September. Looking forward to May, we have the fishing and golf tournaments and Lindsey Fixley is organizing two community projects. Lindsey needs volunteers for both projects so if you have time to help please contact her at [email protected]. The education luncheon on April 6th was interesting and entertaining with both George Snell and Tim Dowd speaking on the differences between Texas and Oklahoma title and probates. They handed out a pamphlet on a collaboration project which compares oil and gas law in 18 states plus Federal lands that can be purchased from the AAPL Website. Bhavin mentioned at our last board meeting that AAPL is discounting online continuing education by 50% and printed materials by 25% through the end of this year. If you need credits or want to order publications, now would be the time. Mr. John Richels, CEO of Devon, spoke at the Monday night meeting and I thoroughly enjoyed his presentation. I definitely left feeling better about our sluggish industry than when I arrived. I’d like to thank Mr. Richels for taking time out of what must be a very busy schedule to come and speak to our members and guests. You probably received an email regarding Senate Bill 213 that was prepared by Henry Hood. Mr. Hood was kind enough to speak to our board last Wednesday about the Bill and I want to thank him for his input. The Bill was killed in the House earlier that day, so no changes will be made during this legislative session. The AAPL Awards Committee announced the winners at their March board meeting and OCAPL is honored to be the recipient for five of their distinguished awards. They are: Best Newsletter (Large Association): Michael Fleharty, Chair Best Member Communication: Marita Morris Group Community Service: Lindsey Fixley, Melissa Miller and Stephanie Gannaway, Co-chairs Landman of the Year: Julie Woodard Lifetime Achievement: Jack Richards Congratulations to all of the winners! I’m proud of your achievements and awards! These awards will be formally presented at the AAPL Convention in Nashville, June 16–20, 2015. I hope to see many of you there. This will be my first year to attend and I’m looking forward to it. This newsletter contains a new article “Getting to Know a Member” created by our Public Relations Co-Chairs, Clarke Richards and Grant Raney. I was lucky enough to be the first candidate and I hope you enjoy it. Clarke and Grant are looking for the next candidate! Also, we have the second “Question from the Field” answered by Tim Dowd in this issue. I encourage everyone to submit questions to Teresa. Last thing I want to mention is the website. It’s coming along nicely and I think everyone will be pleased with the finished product. We will be in transition from April 10th - April 21st and during this period no changes or additions can be made to the membership information. We will still be online, but will only have the search feature functioning. As soon as we “go live,” Teresa will send you an email. I can’t wait! Again, thanks to Dan Dickensheet and Aaron Ivey for leading this transition. Respectfully, Amy Jo Love 2015 OCAPL President Points of Interest

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Page 1: President’s Letter Points of Interest April Newsletter.pdf · some areas, seismographs are densely enough situated that shocks of 1.5 and larger are systematically cataloged. Some

Page 1

VOLUME 13, ISSUE 4 APRIL 2015

President’s Letter

NewMembers 3

“Earthquakes” 5-17

Questions from the 18field

IndustryAffairs 19-21

Mar. Meeting Pics 23,24

LegislativeAffairs25,26

Directors Report 28

Dear Members,

AprilhasbeenabusymonthandourmonthlymeetingsandeducationluncheonsareoveruntilSeptember.LookingforwardtoMay,wehavethefishingandgolftournamentsandLindseyFixleyis organizing two community projects. Lindsey needsvolunteersforbothprojectssoifyouhavetimetohelppleasecontactheratLindsey.Fixley@aep-lp.com.

TheeducationluncheononApril6thwasinteresting and entertaining with both George SnellandTimDowdspeakingonthedifferencesbetweenTexasandOklahomatitleandprobates.Theyhandedoutapamphletonacollaborationprojectwhichcomparesoilandgaslawin18statesplusFederallandsthatcanbepurchasedfromtheAAPLWebsite.BhavinmentionedatourlastboardmeetingthatAAPLisdiscountingonlinecontinuingeducationby50%andprintedmaterialsby25%throughtheendofthisyear.Ifyouneedcreditsorwanttoorderpublications,nowwouldbethetime.

Mr.JohnRichels,CEOofDevon,spokeattheMondaynightmeetingandIthoroughlyenjoyedhispresentation.IdefinitelyleftfeelingbetteraboutoursluggishindustrythanwhenIarrived.I’dliketothankMr.Richelsfortakingtimeoutofwhatmustbeaverybusyscheduletocomeandspeak to our members and guests.

YouprobablyreceivedanemailregardingSenateBill213thatwaspreparedbyHenryHood.Mr.HoodwaskindenoughtospeaktoourboardlastWednesdayabouttheBillandIwanttothankhimforhisinput.TheBillwaskilledintheHouseearlierthatday,sonochangeswillbemadeduringthislegislativesession.

TheAAPLAwardsCommitteeannouncedthewinnersattheirMarchboardmeetingandOCAPLishonoredtobetherecipientforfiveoftheirdistinguished awards. They are:

• Best Newsletter (Large Association): Michael Fleharty, Chair• Best Member Communication: Marita Morris• Group Community Service: Lindsey Fixley, Melissa Miller and Stephanie Gannaway, Co-chairs• Landman of the Year: Julie Woodard• Lifetime Achievement: Jack Richards

Congratulationstoallofthewinners!I’mproudofyourachievementsandawards!TheseawardswillbeformallypresentedattheAAPLConventioninNashville,June16–20,2015.Ihopetoseemanyofyouthere.ThiswillbemyfirstyeartoattendandI’mlookingforwardtoit.

Thisnewslettercontainsanewarticle“Getting to Know a Member”createdbyourPublicRelationsCo-Chairs,ClarkeRichardsandGrantRaney.IwasluckyenoughtobethefirstcandidateandIhopeyouenjoyit.ClarkeandGrantarelookingforthenextcandidate!Also,wehavethesecond“Question from the Field” answered by Tim Dowd inthisissue.Iencourageeveryonetosubmitquestions to Teresa.

Last thing I want to mention is the website. It’s comingalongnicelyandIthinkeveryonewillbepleasedwiththefinishedproduct.WewillbeintransitionfromApril10th-April21standduringthis period no changes or additions can be made tothemembershipinformation.Wewillstillbeonline,butwillonlyhavethesearchfeaturefunctioning.Assoonaswe“golive,”Teresawillsendyouanemail.Ican’twait!Again,thankstoDanDickensheetandAaronIveyforleadingthistransition.

Respectfully,

Amy Jo Love2015OCAPLPresident

Points of Interest

Page 2: President’s Letter Points of Interest April Newsletter.pdf · some areas, seismographs are densely enough situated that shocks of 1.5 and larger are systematically cataloged. Some

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HAPLWebcast-ChesapeakeandDevonLocations

FishingTournament–LakeTexhoma

CommunityAffairsVolunteerEventwithSkylineUrbanMinistries

CommunityAffairsVolunteerEventwithBellaFoundation

GolfTournament-OakTreeandGaillardiaCountryClubs

YPEEnergyForum-OKCGolfandCountryClub

SportingClaysTournament–SilverleafShotgunSports

EducationalLuncheon–SPEAKER-TBA

MondayNightMeeting–SOCIALMEETING–NOSPEAKER

WeekendTakeOff

EducationalLuncheon–SPEAKER–TBA

MondayNightMeeting-SPEAKER–WeldonWatson,ChairoftheEnergy&NaturalResourcesCommittee,OKHouseofRepTOPIC–“CurrentLegislativeIssuesaffectingourIndustry”

EducationalLuncheon–SPEAKER–TBA

MondayNightMeeting–AWARDSNIGHT–LandmanoftheYearandWilliamMajorsDistinguishedServiceAwards(WHOWILLYOUNOMINATETHISYEAR?!)

CHRISTMASPARTY

Sept. 14th

Sept.25-26thOct. 5th

Nov.2nd

Dec. 7th

April21stMay 2nd

May16thMay 18th

August 28thJuly23rd

Page 3: President’s Letter Points of Interest April Newsletter.pdf · some areas, seismographs are densely enough situated that shocks of 1.5 and larger are systematically cataloged. Some

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AAPL MEMBER *

Johnson,Scott BlueBaronEnergy,LLC [email protected]

Rodrigue,Randall RWR,Inc. [email protected]

*Bechtold,Carolyn GHKExploration,LP [email protected]

*Pinson,M.Zane Independent [email protected]

*Pratt,Holly HollyPratt,Inc. [email protected]

*Garretson,Douglas Deen&GarretsonLaw [email protected]

Pinson,DavidB. ContinentalLandResources,LLC [email protected]

Morales,Tony Stuart&Clover,PLLC [email protected]

*Gruber,RobertF. Enos&HansAttorneys [email protected]

Page 4: President’s Letter Points of Interest April Newsletter.pdf · some areas, seismographs are densely enough situated that shocks of 1.5 and larger are systematically cataloged. Some

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HEFNER MAKES FORBES 30 UNDER 30 LIST

Whenyoutypetheword“Forbes”intoGoogle,oneoftheveryfirsttermsthatauto-populates,usuallyabove“400”or“Billionaires”oreven“Magazine,”is“30Under30.”Injustitsfourthyear,Forbes’annuallistofthe30biggestyounggame-changersasselectedbytopluminariesineachcategoryhasquicklybecomeaphenomenonandMr.RobertA.HefnerVhasbeennamedtothe2015Forbes30under30listforEnergy&Industry.Hefner(29)isanOklahoma-CitynativeandthefifthgenerationofanenergyfamilythatemergedfromtheSpindletopoildiscoveryof1901.AftercollegeheraisedfundsforagreentechnologycalledOzonix,whichprovidesnovelfracturestimulationandfluidrecyclingservicesbyeliminatingtheneedforharmfulchemicals.Roberthassincespecializedinacquisitionsanddivestitures,consultingforFortune500companies,brokeringmilliondollardeals,andnowguidingacquisitionsofanexplorationcompanyaimedatdeployingmorethan$100MMinthecontinentalUnitedStates. Hereyouwillfindtheyoungdisruptors,

innovatorsandentrepreneursontheirannuallistingofthe30under30.Forbeseditorsandreportersworkedwithpanelsofexpertjudgestochoosethefield’sbrighteststarsundertheageof30 from more than 10,000 nominations. In sum theyrepresenttheentrepreneurial,creativeandintellectualbestoftheirgeneration.

Interpret ExtractAnalyze

Page 5: President’s Letter Points of Interest April Newsletter.pdf · some areas, seismographs are densely enough situated that shocks of 1.5 and larger are systematically cataloged. Some

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“Earthquakes”: A Seismic Correlation Study 

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“Earthquakes”: A Seismic Correlation Study by @RobertHefnerV

Updated on January 7, 2015 to include the University of Colorado’s findings on chemical surfactants deployed during the hydraulic fracturing process as well as the new Poland Township, Ohio study.

I’m honored that the first iteration of this paper received positive feedback. Forbes Energy contributor @DavidBlackmon said it “should be required reading”. After some discussion, and requests for a more in-depth discussion of injection wells, I’m proud to offer this second iteration.

This paper will give you an answer two energy issues being discussed today in America: is there a correlation between hydraulic fracturing and seismic activity and does increased wastewater from fracture stimulation operations correlate to increased seismic activity? This paper will also briefly explore the environmental impacts of hydraulic fracturing.

For the non-industry reader, hydraulic fracture stimulation or “fracking” (“HF”) is a process that occurs during the completion stage of an oil/gas well. The EPA defines HF as “the process of directing pressurized fluids containing any combination of water, proppant, and any added chemicals to penetrate tight formations, such as shale or coal formations, that subsequently require high rate, extended flowback to expel fracture fluids and solids during completions”.

This process lasts a matter of hours, not weeks or years. That is to say, HF doesn’t continue on down the road and cause seismic events years later; you should see a correlation between HF and seismic activity almost instantly.

Further, this analysis refuses to use the term “earthquakes” because they are, by definition, “a shaking or trembling of the earth that is volcanic or tectonic in origin”. A large number of epicenters across the United States, which the media is attempting to link to HF, do not occur along any faulted [tectonic] structure. Therefore, they are impossibly due to HF. So, let’s broaden our scope to seismic events.

PART I, HYDRAULIC FRACKING (“HF”) Historically, has HF caused (or induced) seismic activity?

HF was pioneered in 1947. Since that time, this completion technique has been used in over 1.2 million wells. From 1900-1928, Oklahoma was the world’s largest producer of oil and gas. Subsequent to 1928, Oklahoma remained one of the top producing regions in the world. Geologically, Oklahoma is one of the oldest and most faulted States in the nation. National media outlets have started focusing special attention to Oklahoma due to the large spike in seismic events having been featured in the LA Times1,Time Magazine2, other major publications and even an entire segment on the Today Show3. So, it appears Oklahoma is the perfect test candidate for testing whether or not HF causes seismic activity.

Historically, Oklahoma appears dormant for nearly 30 years (1947-1980s); during that time over 291,000 wells were completed.

(CONTINUED NEXT PAGE)

                                                            1 http://www.latimes.com/science/sciencenow/la‐sci‐sn‐oklahoma‐earthquakes‐fracking‐science‐20140703‐story.html 2 http://time.com/84225/fracking‐and‐earthquake‐link/ 3 http://newsok.com/today‐show‐whats‐causing‐hundreds‐of‐oklahoma‐earthquakes/article/4920654 

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“Earthquakes”: A Seismic Correlation Study 

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Note: Seismographs were installed at some U.S. universities and at geomagnetic observatories of the U.S. Coast and Geodetic Survey in the early twentieth century, and these recorded the larger U.S. earthquakes (typically magnitude 5 and above), but smallershocks were still cataloged on the basis of macroseismic information. Seismographs got more sensitive and more numerous with time, so that by the 1960's shocks of M ~ 3.8 and larger in the conterminous U.S. would likely have been detected instrumentallyand cataloged. Prior to the early 1970's, responsibility for this monitoring outside of California lay with agencies of the U.S. Department of Commerce (U.S. Coast and Geodetic Survey; National Oceanic and Atmospheric Administration), but in the early 1970's most civilian seismological monitoring by the U.S. government was consolidated in the USGS. Monitoring capability has improved since the 1970's, so that at present we are detecting earthquakes of 2.5 and larger in most of the conterminous U.S. Insome areas, seismographs are densely enough situated that shocks of 1.5 and larger are systematically cataloged.

Some might argue a delayed correlation but, as we noted earlier, HF only lasts hours, not weeks or years. Further, the scale of seismic events is greatly skewed in comparison when you add in the 2000s. Properly put into proportion, the graph below looks quite a bit different. Oklahoma is now completing less than ¼ the amount of wells from its peak in 1981, and seismic activity is all the sudden spiking without any real rhyme or reason.

0

5

10

15

20

25

 ‐

 5,000

 10,000

 15,000

 20,000

 25,0001947

1949

1951

1953

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1957

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1963

1965

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1969

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1975

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1981

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1999

Oklahoma Earthquakes, 1947‐1999 Approved Wells

0

100

200

300

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800

 ‐

 5,000

 10,000

 15,000

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1947

1950

1953

1956

1959

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1965

1968

1971

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1977

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1983

1986

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1995

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2013

Earthquakes Oklahoma Wells

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“Earthquakes”: A Seismic Correlation Study 

3 | P a g e   

Has HF caused (or induced) seismic activity during the Modern-era?

The modern-era can be defined post-Devon Energy’s acquisition of Mitchell Energy in 2002 and shortly before. George Mitchell’s company spent the better part of the 90’s attempting to utilize facture stimulation to unlock shale gas in the Barnett before stumbling upon the “slick water frack” and, thus, beginning the Shale Revolution as we know it today. A star was born and Oklahoma City’s Devon Energy was smart enough to realize its potential and take it to the next level by combining horizontal drilling with the new slick water fracks designed by Mitchell’s team. Since the modern era began with George Mitchell’s Barnett Shale in North Texas, let’s look for a correlation between HF and seismic activity there.

As you already knew, or now know, every well drilled into the Barnett formation from 2000-2008 utilized fracture stimulation as part of the completion technique. Ironically, there are zero seismic events during those eight years; there was actually an inverse (negative) relationship between the number of wells and seismic events from 2000-2007 and 2009-2013 – only one year, 2008, show any potential correlation (increase in number of wells and increase in number of seismic events).

The next figure shows total permits awarded in Oklahoma during the same timeframe as the Barnett Shale graph above. As you can easily see, there is no correlation between wells permitted. In fact, we see inverse relationships in 2003, 2005, 2006, 2007, 2009, 2011, 2012, 2013 and 2014.

0

5

10

15

20

25

30

35

40

0

500

1000

1500

2000

2500

Barnett Shale (Tarrant & Wise Counties, TX)

Seismic Events > 1.0 Total Permitted Wells

Page 8: President’s Letter Points of Interest April Newsletter.pdf · some areas, seismographs are densely enough situated that shocks of 1.5 and larger are systematically cataloged. Some

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“Earthquakes”: A Seismic Correlation Study 

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  The  second  chart  focused  only  on  horizontally  completed  wells  in  Oklahoma.  This  time,  the  chart indicating a seemingly delayed correlation if you ignore the first seven years (2000‐2007).   

 

0

100

200

300

400

500

600

700

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0

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3000

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7000

State of Oklahoma

Seismic Events > 1.0 mag Permitted Wells

0

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0

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3500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

State of Oklahoma, Horizontal Data

Seismic Events > 1.0 mag Horizontal Completions

Page 9: President’s Letter Points of Interest April Newsletter.pdf · some areas, seismographs are densely enough situated that shocks of 1.5 and larger are systematically cataloged. Some

Page 9

“Earthquakes”: A Seismic Correlation Study 

5 | P a g e   

Note: The charts are including all recorded earthquakes greater than 1.0 magnitude, which is very generous to opponents of HF. The earthquake magnitude scale is logarithmic; that is to say, the magnitude scale is really comparing amplitudes of waves on aseismogram, not the strength (energy release) of the earthquakes. Since strength (energy release) is really the more relevant comparison. For every degree of magnitude, the quake is 31.622 times stronger. So, a 4.0 magnitude earthquake is 31,622 times more powerful than a 1.0 magnitude earthquake – you would need 31,622 magnitude 1.0 quakes to equal the energy release of one single 4.0, or 1,000 magnitude 1.0 earthquakes to equal one single 3.0 earthquake (which most people can’t even feel). A 3.9 orlesser magnitude earthquake will produce roughly the same amount of damage as an EF1 tornado (a reference most Midwesterners will understand).

Now, this is not to say that there is NO correlation between HF and felt seismic activity because there certainly is. As Columbia University’s Roger Anderson states, “hydrofracking by its nature causes tiny earthquakes, because it involves fracturing of rock—but these are largely imperceptible, as the process takes place in relatively weak, shallow shales that crack before building up much strain.”

The Oklahoma Geologic Survey (OGS) has suggested two separate events were triggered by HF: theEalgeton #1-29 (2013) and the Picket Unit B #4-18 (2011). More recently, Skoumal et al published their research, directly linking HF to seismic events in Poland Township, Ohio (2015) and the environmentalists went nuts. The authors of the study, Skoumal and Brudzinski, subsequently published in the National Review Online, “The Fracking Fracas over Earthquakes”, aimed to calm the sensationalized response. As they state “an outright ban [on fracking] wouldn’t be appropriate… if you’re right on top of it [a 3.0 earthquake], it’s like a milk jug falling off a counter, and that’s it. A 3.0 is not a danger to anybody.” As we just read above, it would take 1,000 of these earthquakes to equal the energy release of one single 4.0 magnitude earthquake. It is, thus, readily acknowledged herein that HF has been linked to rare cases – so rare that earthquake expert Clliff Fohlich told National Review Online he is aware of “maybe ten other instances on the planet” where HF triggered an earthquake. The science has certainly begun to mount to that end. So much so that Harvard University’s Chair of Earth & Planetary Sciences Department stated just last week that “[f]racking is probably not a direct cause of associated earthquakes.” As the Barnett and Oklahoma charts on pages 2-4 illustrate, those rare exceptions certainly aren’t the rule and we shouldn’t treat them that way either.

“If you’re right on top of it [a 3.0 magnitude earthquake], it’s like a milk jug falling off a counter, and that’s it. A 3.0 is not a danger to anybody.”

We’ve chosen to focus on Oklahoma and Texas for relevant case studies to show that HF isn’t to blame for increased seismic activity – at least generally. What about all those areas in the United States absent of oil and gas activity? What is causing their significant increases?

The State of Idaho, which is an oil and gas powerhouse, has seen a significant increase in seismic activity. In case you missed my attempt at humor, Idaho ranks 42nd in energy production by EIA’s most recent data, yet we are reading “Central Idaho Rocked by Hundreds of Earthquakes”. We even saw an abnormally large 8.0 magnitude earthquake rock Alaska’s Aleutian Islands (you’d need 32 MILLION earthquakes the size of the one reported in Poland Township, Ohio to equal the energy release of that single earthquake). Again, no oil and gas activity is present in either area, so it’s more likely that we are experiencing a greater trend – earth is waking up and becoming more tectonically active.

[A Quick Tangent] Environmental Impacts of HF

Whether intentionally or not, media outlets routinely strike fear into their uneducated, innocent readership when discussing fracture stimulation. They list the ingredients of a frack as “water, chemicals and sand” without providing any basis for what that mixture actually looks like. While technically truthful, the reality is that 99.5% of the mixture is made up of Water and Sand, with a very small 0.1% to 0.5% being chemical in nature. Admittedly, the Wall Street Journal – a pro free market paper – still gets this grossly wrong in their article, “Energy Companies Try New Methods to Address HF Complaints”.

Freshwater Use Further, they use phrases like “millions of gallons”, again without providing any context. When compared to other uses of fresh water, HF is dwarfed in comparison. As reported by Energy In Depth, “The Facts on Hydraulic Fracturing and Water Use”, a single frack uses about 4 million gallons of

Page 10: President’s Letter Points of Interest April Newsletter.pdf · some areas, seismographs are densely enough situated that shocks of 1.5 and larger are systematically cataloged. Some

Page 10

 

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Page 11: President’s Letter Points of Interest April Newsletter.pdf · some areas, seismographs are densely enough situated that shocks of 1.5 and larger are systematically cataloged. Some

Page 11

 

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Page 12: President’s Letter Points of Interest April Newsletter.pdf · some areas, seismographs are densely enough situated that shocks of 1.5 and larger are systematically cataloged. Some

Page 12

“Earthquakes”: A Seismic Correlation Study 

8 | P a g e   

Earthworksaction.org takes the fear-mongering to the ultimate level making statements such as, “Many fracturing fluid chemicals are known to be toxic to humans and wildlife, and several are known to cause cancer.”

What did the University of Colorado’s first-of-its-kind research say? The University of Coloradopublished that they analyzed surfactants from HF fluids found from Colorado, Louisiana, Nevada, Pennsylvania and Texas. “The results showed that the chemicals found in the fluid samples were also commonly found in everyday products, from toothpaste to laxatives to detergent to ice cream.” They go on to further state, “What we have learned in this piece of work is that the really toxic surfactants aren’t being used in the wells we have tested.” The science is continuing to mount on the side of hydraulic fracturing being a safe technology.

HF Conclusion

Keeping in mind HF operations last a matter of hours and seismic activity should ensue shortly (days, not years) thereafter, I believe we can now put to bed the idea that “HF” is causing felt seismic activity.

Even though we know with a large degree of certainty that HF doesn’t induce seismic events, the anti-fracking hysteria is spreading across the United States. Republicans in Louisiana that have moved to ban HF, New York has banned HF using debunked research - one study cited was immediately disavowed by the executive director of the publishing organization well in advance of New York’s decision touting peer-reviewed science which also appears to be in violation of ethical conduct. New York now faces a major lawsuit, which could find punitive damages in favor of mineral owners’ rights being infringed upon, and the Southern Tier trying to secede from New York and be absorbed by Pennsylvania as they fight for their economic life – admittedly a long shot.

The City of Denton, Texas also passed a HF ban November 4, 2014. This ban is somewhat unique to all others since it was originally placed on the ballot as an initiative by those who took issue with how close gas wells were to their homes. Of course, after it was found on the ballot, environmental and earthquake fears began to swirl. The Denton HF ban will lead to economic damage, loss of property rights, and legal problems that could be very costly to Denton taxpayers as the head of the Barnett Shale Energy Education Council suggests. Regardless, the vote was overwhelmingly passed (60%-40% in favor) and it only cost $70,000 to strike that kind of fear into the hearts of innocent constituents – not even $700,000 backed by numerous university studies could sway them. It might sound like – and it might be – a conspiracy theory, but it is also plausible that Russians are pouring money into anti-fracking groups in the United States to quash as much U.S. shale gas production as possible. Time will tell about Russian involvement but I have taken notice that the largest organized anti-fracking groups in the U.S. can be found in shale gas areas Barnett (i.e. Denton) & Appalachia (i.e. New York, West Virginia, Pennsylvania, Ohio) rather than shale oil areas but I digress.

What’s the bottom line? Fear is a powerful motivator and you don’t have to spend very much money to strike fear into the public regardless of what the science says. Politicians should know better than the populous, however. They are professionals elected to educate themselves on the issues concerning their constituencies. As you’ve just read, your politicians should also have read. Any hyper-aggressive regulation of hydraulic fracturing supported or proposed by any politician should highlight them as a phony, sell-out politician who is in someone’s back pocket. They think of you as an idiot, incapable of understanding the numerous studies presented to you herein. Secretary of Interior Sally Jewell,nominated by President Obama, might sum it up best when she stated “There is a lot of misinformation about fracking. I think localized efforts or statewide efforts in many cased don’t understand the science behind it… [they are] the wrong way to go”.

There is a seemingly delayed correlation in our last graph on page 4, which needs to be evaluated however. It’s one that implicates a potential culprit for increased seismic activity – disposal injection wells.

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PART II – Disposal Injection Wells

For those not familiar, disposal injection wells and HF are completely separate events in completely separate wells. Meanwhile thousands of sites – similar to StateImpact – report “disposal of drilling wastewater used in HF has now been scientifically linked to earthquakes” and suggest that disposal and HF are so closely tied together they are one and the same. They also write about disposal wells as if they are something new – they are not. Disposal wells, or class II injection wells, have been directly linked to seismic events as early as 1968 in Denver, CO as this article in Science Magazine reads. It’s nothing new and we’ve learned a great deal already about their impacts. At least Time Magazine did a decent job of discussing the subject in their article dated May 1, 2014 titled “The Science Link Between HF and Earthquakes”.

Disposal wells exist due to EPA Regulations of the oil and gas industry. The EPA requires that the oil and gas industry dispose of all produced fluids (fluid that comes out of the well) and treat it as hazardous waste. So, when fluid comes to the surface [out of a formation underground], the oil and gas industry then trucks or pipes it to a disposal well where it’s then re-injected back into the earth to be disposed of safely and prudently. While the fluid injected back into the earth does contain some frack fluid, the majority comes from existing fluid residing within the reservoir prior to drilling and completion (i.e. non-frack fluid). So, HF is a process used while completing an oil or gas well and a disposal well is a completely separate well that is used to dispose of produced fluids from multiple oil and gas wells. In many cases, a single disposal well services tens of oil and gas wells.

While some cases have been directly linked to disposal wells, they are a relatively small percentage. Out of over 140,000 currently active Class II injection wells, only a handful of wells have been associated with induced seismic activity. Not all of those injection wells are disposal wells either; approximately 60% of the active injection wells in Oklahoma are wells used for enhanced oil recovery, not disposal. Further, Oklahoma’s oil and gas regulatory body, the Oklahoma Corporation Commission, has stated “In most of the cases examined thus far [since 2011], there have been either no injection wells operating in the area of interest [seismic activity], or the focus of the events were at depths that varied greatly from the operational depths of the injection wells in question.” Columbia University’s 2012 report storied by OhioQuakes Probably Triggered by Waste Disposal Well actually placed a probability on the chance of an injection well causing a seismic event in a dormant fault at 1:200 or 0.5% chance. An examination of another major producing shale play, the Bakken, indicates that we have a long way to go in explaining exactly what causes these seismic events because Unlike in other oil-producing states, North Dakota experiences little or no seismic activity.

Still, steps are actively being taken on the State level to ensure that seismic events are more closely monitored and located off-fault. Of course, not all the faults in the United States are known and that is one reason why some wells have caused seismic activity. Ohio, for example, experienced a cluster of seismic events due to injection wells drilled into unknown, dormant faults. Since, Ohio has put into place new permit conditions: companies that drill within three miles of a known fault or area of seismic activity greater than 2.0 magnitude are required to install seismic monitors that are linked to ODNR (Ohio Department of Natural Resources) – full story on the event can be found here. Unfortunately the story fails its readers with the ever-present lack of understanding between HF and disposal injection wells.

ODNR actually published a study back in 2012 that stated the ingredients that must be present to induce a seismic event:

a fault must exist within the crystalline basement rock, that fault must already be in a near-failure state of stress, an injection well must be drilled deep enough and near enough to the fault and have a path of

communication to the fault, and the injection well must inject a sufficient quantity of fluids at a high enough pressure and for an

adequate period of time to cause failure, or movement, along that fault (or system of faults)”

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What was the Ohio Department of Natural Resources’ conclusion? “All the evidence indicates that properly located Class II injection wells will not cause earthquakes” since “Geologists believe it’s very difficult for all conditions to be met to induce seismic events”.

SMU released a report as well, in conjunction with the University of Texas at Austin, on the link between injection wells and “earthquakes”. Their report indicates that there are more than 2,400 injection wells in the Fort Worth Basin (Barnett Shale area) and noted that the vast majority do not have seismic activity associated with them. Still, they were reluctant to rule disposal wells out of the equation even though Texas’ regulatory body, the Railroad Commission of Texas, found no data that linked hydraulic fracturing to earthquakes and no significant correlation between seismic activity and injection wells. You can read more on the SMU-UT study, “What’s Causing Texas Earthquakes? SMU Study Explores Injection Wells from Drilling”.

More recently (July 4, 2014), geologists from Cornell University, together with the University of Colorado and the United States Geological Society (USGS), issued a study titled Sharp Increase in Central Oklahoma Seismicity since 2008 Induced by Massive Wastewater Injection. This peer-reviewed study states, “fluid migration from high-rate disposal wells in Oklahoma is potentially responsible for the largest swarm” and “Our earthquake relocations and pore pressure models  indicate that four high‐rate disposal  wells  are  capable  of  increasing  pore  pressure  above  the  reported  triggering  threshold throughout the Jones swarm. Although thousands of wells operate aseismically, four of the highest-rate wells are capable of inducing 20% of 2008-2013 central US seismicity.” This study doesn’t come to any direct, concrete conclusion that these four, high-rate wastewater injection wells are to blame for increased seismic events in Oklahoma other than in title of the study, which doesn’t appear to be appropriately named. Of course, The Lost Ogle (an Oklahoma satirical blog) writes, “researchers from Cornell University and the University of Colorado released a study confirming what logic and reason have told us for the past few years: Oklahoma’s earthquakes are caused by HF, or more specifically, wastewater from HF” and the LA Times writes “Study links Oklahoma earthquake swarm with HF operations.” Can you see what’s wrong with this kind of journalism? First, nowhere does the study say anything about HF being linked to wastewater injection wells. Second, the study shows that four wells potentially triggered a swarm of seismic activity with no clear, definitive statement that is the case. Of note, the study showed that fluid migration from disposal injection wells could possibly travel up to 19 miles from the well site and documented that the 2010 earthquake swarm ruptured an “unmapped” fault.

Regardless, we are beginning to see some clear conclusions from all these studies – (a) don’t inject into known faults and (b) increase monitoring of wells in areas of known seismic activity so we might be able to have better data to study. It wouldn’t be crazy to suggest shutting down class II injection wells that end up drilling into unmapped faults either.

HF increases wastewater disposal volumes, so we should stop HF, right?

This argument has started to surface lately: HF increases wastewater volumes that are pumped into disposal injection wells, a handful of disposal injection wells induced seismic events, and therefore HF is bad. From the studies done on wastewater thus far, this couldn’t be further from the truth. In 2012, Duke University released an extensive report on wastewater generation and disposal from natural gas wells in Pennsylvania.

(CONTINUED NEXT PAGE)

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“Earthquakes”: A Seismic Correlation Study 

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only a statistical few disposal injection wells have induced seismic activity, and that hydraulic fracturing actually decreases the amount of wastewater that needs to be disposed of via injection wells per unit of oil and gas produced. You also realized that other non-energy states like Idaho are seeing significant increases in seismic activity that obviously can’t be linked to oil and gas activity. So, what do we do?

Arkansas & New York have displayed exactly what not to do; Arkansas banned disposal injection wells altogether while New York banned HF altogether. California is now considering the same while the City of Denton, TX voted to ban HF in their most recent election. I’m proud to say that Oklahoma is taking a more reasonable approach with their “wait-and-see” strategy. The Oklahoma Corporation Commission says they are “keeping an open mind” about ongoing research, correctly stating “we are having to manage perceived risks”. Meanwhile, Oklahoma Governor Mary Fallin has signed into law a bill that requires operators of injection wells to report daily, instead of monthly, injection volumes – a measure that takes effect in September 2014.

In short, should we ban fracking on a local, statewide or regional basis? Repeating Obama’s own Secretary of Interior, “I would say that is the wrong way to go.” We need to use common sense: (a) stop hyper-aggressive legislation by exposing those responsible, (b) prevent injection wells from being located in known fault areas and (c) increase monitoring on wells located in known areas of seismic activity. Eventually, research should be able to exactly state the causes and we can draft the proper legislative action at that time, if needed.

Sources (not hyperlinked): United States Geological Society (USGS) Oklahoma Geological Society (OGS) Oklahoma Corporation Commission (OCC) Railroad Commission of Texas (RRC) DrillingInfoUS Energy Information Administration (EIA) EnergyInDepth University of Oklahoma Columbia University Southern Methodist University University of Texas at Austin Duke University University of Colorado American Chemical Society

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About the Author  

Mr. Robert A. Hefner V  is a recent selection to the 2015 Forbes 30 under 30  list for Energy &  Industry and  the  fifth  generation  of  an  energy  family  that  dates  back  to  the  world‐famous  Spindletop  oil discovery in 1901.  

Since April 2014, Mr. Hefner has served as Land Manager for Sierentz Exploration & Production, an up‐and‐coming  exploration  company  looking  to  deploy  more  than  $75MM  on  early‐stage  exploration projects  across  the  lower  48  onshore.  He  has  been  published  in  The  Wall  Street  Journal  for  his investment  in  a  fracture‐stimulation  and  flowback  technology,  called  Ozonix,  alongside  some  well‐known individuals like the CEO of 7Eleven and former NFL quarterbacks Drew Bledsoe and Troy Aikman; hosted on local radio shows like Oklahoma Innovations and published with the Oklahoma Independent Petroleum Association (OIPA) for his insight on the energy industry.  

Robert  received his Bachelor of Business Administration  in Entrepreneurship & Venture Management from  the University of Oklahoma. He  is a Certified Professional Landman  (CPL)  through  the American Association of Professional Landmen (AAPL) and President of the ADAM‐OKC Energy Network, which is a business organization focused on facilitating acquisitions and divestitures among its member companies. He and his wife, Kellie, were also blessed with twin boys in May 2014.   

Page 18: President’s Letter Points of Interest April Newsletter.pdf · some areas, seismographs are densely enough situated that shocks of 1.5 and larger are systematically cataloged. Some

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QuestionsfromtheField

TimothyC.DowdELIASBOOKSBROWN&NELSON

Editor’s Note: Each month this column will be de-voted to answering oil and gas title questions.

Q: I encounter many limited liability companies. Sometimes the Deed or Assignments are executed by a Manager, Managing Member, Vice-President, Chief Financial Officer, etc. Who is the proper officer to execute conveyances on behalf of a limited liability company in Oklahoma? - T.W.

A: A limited liability company in Oklahoma is capable of holding title to real property, which includes oil and gas interests.

The Oklahoma Bar Association Title Examination Standards recite that an instrument executed on behalf of a limited liability company in which the signatory party is identified as “Manager and Member,” “Member Manager,” or “Managing Member” is considered as satisfying the provisions of the statute. If a person signs in a capacity other than the above three, it is necessary to secure the Articles of Organization of the limited liability company to determine that the party signing the conveyance has the title set forth and has the authority to execute on behalf of the limited liability company.

Note: Ifyouhaveanytitlequestionsyouwantanswered,[email protected].

Questions from the FieldTimothy C. Dowd

ELIAS BOOKS BROWN & NELSON

Editor’s Note: Each month this column will be devoted to answering oil and gas title questions.

Q: I examined an Oil and Gas Lease dated July 1, 1984, covering tracts in Sections 1, 2, 3, 4, 5 and 6. I have also examined copies of Oklahoma Corporation Commission Completion Reports (Form 1002) for the Smith 1-1 Well drilled in the SE/4 and the Smith No. 2 Well located in the NE/4 of Section 1.

During the primary term of the lease, two wells were drilled on the lands in Section 1. The first well, which is denoted as the Smith 1-1 Well, was commenced on October 13, 1984 and drilled in the S/2 SE/4 (which is not part of the leased tract). The Smith 1-1 was completed in a formation, which was established as a 160-acre drilling and spacing unit for the SE/4.

A second well, denoted as the Smith No. 2 Well, was drilled in the NE/4 of Section 1 (part of the leased tract) on April 24, 1986, and completed in the Hartshorne formation. The Hartshorne formation has not been established as a drilling and spacing unit for the NE/4 of Section 1.

Does the drilling of the Smith 1-1 Well in a drilling and spacing unit of 160-acres cause the lease to terminate outside the SE/4? What is the impact of the Smith No. 2 Well Well on the extension of the Smith 1-1 lease?

A: Title 52 O.S. 87.1(b) recites: "In case of a spacing unit of one hundred and sixty (160) acres or more, no oil and/or gas leasehold interest outside the spacing unit involved may be held by production from the spacing unit not more than ninety (90) days beyond expiration of the primary term of the lease." (This statute is frequently described as the “Statutory Pugh Clause”).

Unfortunately, there is no case law and only one law review article that construes this statute and its impact on wells drilled. The only guidance is the wording of the statute. In this situation the oil and gas lease would not have been extended solely by virtue of production from the spacing unit and the well drilled in the SE/4, but the lease was

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Light At The End Of The Tunnel? US Rig Count Collapse Is Close To Done... For NowByJosephTriepke,oilpro.com,April4,2015While a cloud of uncertainty hangs over the drilling and completionbusiness,onethingisbecomingclear.TheUSlandrigcountisbeginningto bottom.Whether this apparent bottomwill turn out to be a layoveron a longer journey downwards or a true cyclical trough remains to bedetermined. The layover vs. finaldestinationquestion hingesonWTIprice,which isdelicatelybalancedgivenUSoilstorageandproductiontrends.Butfornow,thereisalightattheendofthetunnelfortheUSrigcount.Thepast twoweekshavebeen thebestweeksof theentireyearso far intheUSdrillingmarket.Afterfallingjust20rigslastweek,theUSlandrigcountfellonly17thisweek-minormovescomparedtothe80-90weeklyrig lossesofmid-1Q.Aclearpatternofstabilization isemergingaftertheindiscriminateriglay-upsofthefirstquarter.Lookingatitanotherway,wecanobserveasignificantinflectionintheUSlandrigcountbytrackingtherolling4-weekaverageintherateofchange.Theaveragehasimprovedfrom80rigslostperweektojust35thisweekandfurther gains are now baked in for the weeks ahead.Sowhilea light is formingat theendof thetunnel, it isstillahazyone.1Qresultconferencecallsare justweeksawaynow,andweexpecttohearwordofdeepeningcapexandopexcuts fromcompaniesacross theO&Gspectrum.Weekly Rig Count StatisticsTheUSlandrigcountfelljust17rigsthisweek.Therigcountdescenthasslowed significantly in recentweeks. From theNovember peak, US landdrillingisdown871rigs,-46%.Althoughtheweeklydeclineshaveslowed,therigcountnowstandsabout71rigsbelowthebottomweexpectedbackinearlyFebruary.Weexpecttoseearelativelystagnantrigcountoverthenext

severalmonths,withgradualdriftlowerintoatrough.InCanada,springbreak-updeclinesarematuring,butCanadiancontractorsarebracingforalongerthannormalperiodofseasonalweakness,whichisbeingexacerbatedbythecommodity-pricedrivenslowdownthisyear.Webelievetherigcountcollapseisinitslateinnings(aslongascrudeoilpricesholdnearcurrent levels).Themagnitudeofweeklydeclines likelypeaked in February and will begin to lessen into April and eventuallystabilizeduring2Q.A regional summary of rig counts by key basins is below.With 285 rigsworking,thePermianisstillthemostactivebasin,anditlostonly5rigslastweek.TheEagleFord,with137rigsrunning,isthesecondmostactivebasin,anditwasactuallyflatweek/week.With91rigsrunning,theBakkensaw6morerigsgoidlelastweek.Predictivevaluecanbefoundinchartingrollingaverageweeklyrigcountchanges.Normalizingweek-to-weeknoise,thisexerciseexposeswhetherupordownrigcounttrendsareintensifying,weakening,orinflecting.Belowarethreechartswewillbewatchingcloselyfordirectionalcluesintheweeksahead.Thesechartsshowthecollapseindrillingdemand,butshowsomepositiveinflectionsastheycapturetheslowingrateofdeclineinUSdrilling.

Biggest Deal Since Exxon Bought Mobil: Shell To Buy BG Group For $70bnByJeffReed,oilpro.com,April8,2015After rumors circulated yesterday afternoon, this morning bringsconfirmationofthelargestM&Atransactioninoveradecadeintheoilandgas sector. ShellwillacquireBGGroupfor$70billion.It’sthebiggestdealinthesectorsince1998,whenExxonacquiredMobil.Shellwillpaya50%premiumtoBGGroup’sclosingsharepriceof$13.56onTuesday.Aswenotedyesterday,thisepicdealisforE&PlikewhatHalliburton’s$35bnpurchaseofBakerHugheswasfortheoilservicesspacelastyear.Thatis,itconsolidatestwoofthesector’sgiants.IncludingtheShellbidforBGGroup,globalM&AvolumeintheO&Gsectorstandsat$112billionsofarin2015.That’salmostdoublethe$61.4billionoverthesameperiodlastyear.ThedealisindicatesthatsectorconsolidationandM&Aactivityisheatingupinthisphaseofthedowncycle.What Shell GainsIfcompleted,thepurchasewilladd25%toShell’sO&Greservesand20%toproduction.Shellsaid italsoexpectssynergiesofabout$2.5bn -someheadcountreductionswillbe inevitable.Shares inBGGroupsoared38%Wednesdaymorning,whileShellsharesslippedalmost6%.Shell said thata key rationale forpursuing thedealwas theaccelerationofitsgrowthstrategyinglobalLNGanddeepwater.Shellalsopointedtoacomplementaryfit in 15countriesandthat~$2.5billion/yearofsynergieshavebeen identifiedso far.ThemapbelowfromShell’spresentationthismorningvisuallycapturesthemagnitudeofthedeal.Deal MetricsHere’sasummaryofthemetricsofthedeal:

Page �

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• 0.4454ShellBsharesand383pincashperBGshare• RepresentsavalueperBGordinaryshareof1350p,apremiumof52%• ValuesBGequityat£47.0billion• BGshareholderstoown19%ofShell• TransactionunderpinnedbyintrinsicassetvalueofBG• Mildlyaccretivetoearningspersharein2017andstrongly accretivefrom2018• Accretivetocashflowfromoperationspersharefrom2016Where BG Group Stands NowFormerStatoilCEOHelgeLundassumedthereinsofBGGrouponFebruary9-threeweeksaheadofschedule-insteadofthepreviouslyannounceddateofMarch2,afterStatoilreleasedhimfromhiscontractualobligations.TheannouncementcameafterBGGroupsaiditwaswritingdownthevalueofitsO&Gassetsbyalmost$9billionamidtheplungeinoilprices.Inafter-hourstradingonTuesday,Shell’sUS-listedsharesweremore-or-lessunchanged,whilesharesBGGrouptradinginLondongainedmorethan6%onTuesday.YTD,Shellsharesaredownmorethan7%,whileBGsharesareup5%.LundisnowtaskedwithreassessingBGGroup’scollectionofgas-weightedassets in countries including Tanzania, Australia and Egypt. Anotherchallengeheisfacingispresentedbythecompany’ssignificantpresenceinBrazil’soffshorearenainpartnershipwithstate-ownedPetrobras,whichisinthethroesofacorruptionscandalthatpromptedtherecentresignationsoftheCEOandfiveotherexecutives.Where Shell Stands NowForShell’spart,thecompanysaidinJanuarythatitwillcurtailitsspendingbymorethan$15billionandfreeze itsdividend,asthecompany’sprofitshavebeenhitbythe~60%plungeinoilpricessinceJune.CEOBenvanBeurden saidduring thequarterly conferencecall that theAnglo-Dutchmajorwouldrespondtothedeclineinoilpricesby“steppingupourdriveforstrongercapitalefficiency.”Perthisstrategy,heannouncedthecompanyiscurtailingitsspendingby

morethan$15billionoverthenextthreeyears.VanBeurdensaidthatearly-stageprojectswouldbedelayedandthatsteeperspendingcutswouldbeimplementedifrenderednecessarybythepriceenvironment.“TodaywearetakingstepstopreserveShell’sfinancialflexibilityandthisincludes a freeze in dividends, and the slowdown in capital spending in2015,makingthetoughchoicesonShell’srichpetroleumfunnel...Butatthesametime,wehavetobecarefulnottooverreacttospotprices.Sowearemaintainingadownwardpressureoncapital spending.Wehaveplans inplacetodaytofurtherreduceourspendingifneedbe,butatthesametime,wearecontinuingwithaveryattractivesuiteofprojectswhichareunderconstructionandwearepreservingwherewecan,”vanBeurdensaidduringtheJanuarycall.Management CommentsBenVanBeurden,ShellCEO:“Bold,strategicmovesshapeourindustry.BGandShellareagreatfit.Thistransactionfitswithourstrategyandourreadontheindustrylandscapearoundus.”“At the start of 2014, Shell embarked on an improvement programme,includingdivestmentsandtherestructuringofunderperformingbusinesses,whilstatthesametimedeliveringprofitablenewprojectsforshareholders.Thisprogrammeisdelivering,atthebottomline.”“BGwill accelerate Shell’s financial growth strategy, particularly in deepwaterand liquefiednaturalgas:twoofShell’sgrowthprioritiesandareaswherethecompanyisalreadyoneoftheindustryleaders.Furthermore,theadditionof BG’scompetitive naturalgaspositionsmakes strategic sense,aheadofthelong-termgrowthindemandweseeforthiscleaner-burningfuel.”“This transaction will be a springboard for a faster rate of portfoliochange,particularly inexplorationandother longtermplays.Wewillbeconcentratingonfewerthemes,andata largerscale,todriveprofitabilityandbalancerisk,andunlockmorevaluefromthecombinedportfolios.”“Overtime,thecombinationwillenhanceourfreecashflowpotential,andourcapacitytoundertakesharebuybacks,whereIexpecttoseeasubstantialincrease in pace.”JormaOllila,ChairmanofShell:“ThisisanimportanttransactionforShell,accelerating thedeliveryof our strategy for shareholders. The resultwillbe a more competitive, stronger company for both sets of shareholdersintoday’svolatileoilpriceworld.BGshareholderswillreceivesignificantvaluethroughthepremiumbeingofferedfortheirshares.TheywillbecomeshareholdersinShell,accessinganattractivedividendpolicy,ashareinthesignificant synergies and the compelling upside and enhancedoperatingcapabilityofthecombinedgroup.Webelievethatthecombinationisintheinterestsofbothourcompaniesandtheirshareholders.”HelgeLund,CEOBGGroup:“TheofferfromShelldeliversattractivereturnsto shareholdersand has strong strategic logic. BG’sdeepwaterpositionsandstrengthsinexploration,liquefactionandLNGshippingandmarketingwill combinewellwith Shell’s scale,developmentexpertiseandfinancialstrength. The consolidated business will be strongly placed to develop

Page ��

St. John, Griffin & Krieg, PLLCSt. John, Griffin & Krieg, PLLCAttorneys at Law

Civilized Indian Oil & Gas Lease AcquisitionsCivilized Indian Oil & Gas Lease AcquisitionsSurface Damage DisputesSurface Damage Disputes

OCC MattersOCC MattersTitle OpinionsTitle Opinions

1219 Classen Drive 1219 Classen Drive Oklahoma City, OK 73103Oklahoma City, OK 73103

Phone: (405) 242Phone: (405) 242--27002700

INTERESTED IN PURCHASING

Producing & Non-Producing Minerals; ORRI; Oil & Gas

InterestsPlease Contact

Patrick Cowan, CPLCSW Corporation

P.O. Box 21655Oklahoma City, OK 73156-1655

(405) 755-7200; Fax (405) 755-5555

Email: [email protected]

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the growth projects in BG’s portfolio. The transaction will take time tocomplete,duringwhichmyteamandIwillremaincommittedtoBGandourshareholders,andtosafelydeliveringour2015businessplan.”Shell files lawsuit against Arctic drilling protestersPostedonApril 7, 2015at 8:15pmby JenniferA.Dlouhy inArctic, Legalissues,FuelFix.comWASHINGTON—ShellfiledalawsuitinfederalcourtTuesdayseekingtokicksixGreenpeaceactivistsoffoneof itschosenArcticdrillingrigsandblocktheadvocacygroupfromboardingmoreofitsvessels.Thecomplaint,lodgedinafederaldistrictcourtinAlaska,comesonedayaftertheactivistsgrappledtheirwayontoShell’scontractedPolarPioneerdrillshipwhileittraveledacrossthePacificOceantowardtheUnitedStates.Armed with food, hammocks, sleeping bags and other supplies, theprotesterscould remaincampedouton the rig fordays—using tweets,videosandpicturesfromtheexercisetobolsteracampaignagainstShell’splanstodrillnewwellsintheChukchiSeanorthofAlaskathissummer.“Themessage isgettingoutthere,”Greenpeaceactivistssaidon a website documenting the protest. “Shell’soil rigshouldnotbeallowedanywherenearArcticwaters;it’sthewrongchoiceinthefaceofclimatechange,andanoilspilldisasterwaitingtohappen.Andwewon’t letShellsilentlyslipinto the Arctic.”Greenpeace has said that the six protesters will not interfere with thenavigationoroperationoftherigandtheheavy-liftvesselBlueMarlinthatiscarryingitacrossthePacificOcean.ButShellspokeswomanKellyopdeWeeghinsistedthat“theseactsarefarfrompeacefuldemonstrations.”“Boarding amoving vessel on the high seas is extremely dangerous andjeopardizesthesafetyofallconcerned,includingboththepeopleworkingaboard and the protesters themselves,” op de Weegh said. ”While werecognizetherighttovoiceanobjectiontoourplannedAlaskaexplorationprogram,wecan’tcondoneGreenpeace’sunlawfulandunsafetactics.”Greenpeace USA’s executive director, Annie Leonard, called the lawsuit“Shell’slatestattempttokeeppeoplefromstandingupfortheArctic.”“WeknowShellcan’tbetrustedtodrill intheArctic;threeyearsago,thecompanynearlycausedamajoraccidentinAlaska,andthisyearitwantstogobackandtryagain,”Leonardsaid.“Shellknowsthatifthegovernmentwon’tstopit,thenpeoplearoundtheworldwillraisetheirvoicesinprotest.That’swhyit’shiredanexpensivearmyof lawyersandaPRteamtokeepwhat its doing secret.”Greenpeace’sship,Esperanza,hasbeentrailingthePolarPioneerformorethan20days,aftertherigleftMalaysiainearlyMarch.ThePolarPioneerandShell’sothercontractedArcticdrillship,theNobleDiscoverer,arebothdestinedforportsinWashington,wheretheywillmakefinalpreparationsforthecompany’splanneddrillingcampaignthissummer.Shellwonasimilarcourtorderin2012tokeepprotestersfromencroachingonitsrigsandsupportvessels,monthsafteractivistsspentfourdaysatopthederrickoftheNobleDiscoverer.Shelllateraskedthecourttovoluntarilydismissthe2012litigationafteritsKullukdrillingunitranagroundonanAlaskanislandanditbecameclearitwouldbeawhilebeforethecompanyresumedArcticdrillingoperations.

ThenewlawsuitasksforanimmediateinjunctiontoprotectShell’smaritimevesselsandotherassetsassociatedwith itsArcticdrillingcampaign from“unlawfulandunsafeinterferencebyGreenpeace”whiletheyareintransittothePacificNorthwest,inport,travelingtothecompany’soilandgasleasesintheChukchiSeaandconductingdrillingoperationsnorthofAlaska.Inthepetition,ShellsaysthesixGreenpeaceactivists—includingonefromtheUnitedStates—“willfully,recklesslyandillegally…boardedtheBlueMarlinonthehighseasapproximately750milesnorthwestofHawaiiandthereafterscaledandnowillegallyoccupythePolarPioneer.”Theactionsshowed“acallousdisregardfortherightsandsafetyofthemselvesandofothers,”Shellsays.ShellnotesthattwoGreenpeacememberswereinjuredwhentheSpanishNavyinterceptedthemlastyearneartheRepsoloilshipRowanRenaissancein a separate action.ShellalsodescribesthehistoryofsomeoftheactivistsnowonboardthePolarPioneer,whohailfromsixdifferentcountries.TheU.S.volunteerhasreportedlybeenarrestedat least twice inpriorGreenpeaceactions, Shellnotes.AndShellsays, JohnoSmith,a 31-year-old fromNewZealand, isa“self-identifiedcontractclimberandundercoverninja.”The company tells the court that if Greenpeace’s activities are leftunsanctioned, theywill cause “irreparable harm”andmonetarydamagesbydelayingorpreventingShellfromtransportingitsvessels,suppliesandpersonneltotheChukchiSeaforplannedoildrillingduringafewice-freemonths this summer.“Greenpeace is well aware that even short delays in the Arctic can stopexplorationfortheseason,”Shellsaysinitslawsuit,“andhasusedthattacticsuccessfullyagainstothercompanies.”

“Our Goal is to provide the best petroleum land services to our clients as is possible, to do it with integrity, confidence and efficiency, to treat all persons with respect and courtesy, to always act in a professional manner and to enjoy and grow in our

Leasing •Expert Negotiations •Value Creation •Market Expertise •Professional Mineral Owner Relationships •Timely processing of documents Acquisitions/Divestitures •Title Examination •Due Diligence •Property and Environmental Inspection •Contract Analysis •Document Preparation •Reporting

Regulatory Application, Hearings and Permit-ting •Filing of State Regulatory Applications associated with the drilling of wells and water usage •Preparation of Notice lists and well proposals •Process Management •Expert witness testimony •Federal, State and local permitting •Seismic permitting •Preparation of Federal Application Permit to Drill •Preparation of communization agreements •Strategic planning

Providing Professional Land Services since 1986

Additional Land Services •Federal, BIA, and State bidding and lease acquisition •Mineral and Working Interest acquisition •ARC-GIS Mapping •Document Preparation •Prospect Management •Settlement of Surface Damages •Right-of-Way Acquisition •Water Use Agreements

Texas Office: P.O. Box 1323

Canadian, TX 79014 (806) 323-6677

www.rkpinson.com Members of AAPL | OCAPL | TAPL | DAPL | HAPL

Title Services •Prospect Strategy •Value Enhancement •Detailed Title Examination •Cursory Title Examination •Comprehensive Ownership Reports •Title Curative •Document Imaging •Surface and Seismic Examination for Permitting

Corporate Office: 10201 Buffalo Ridge Road

Edmond, OK 73025 (405) 359-6727

Fax (405) 359-6728

Rocky Mountain Office: 621 17th Street, Suite 1555

Denver, CO 80293 (720) 627-6181

Fax (720) 627-6182

Penterra will undertake every aspect of land work with an eye toward accuracy, thoroughness, professionalism, discretion, and promoting a positive image within the industry and community. We commit our passion and skill to driving your venture forward while exceeding your expectations.

Prospect Management, Scheduling and Reporting, Due Diligence, Mapping, Lease Checks/Area Checks, Title Research & Curative, Division Order Preparation, Abstract/Runsheet Compilation, Interested Parties List, Permit/Option/Lease Acquisition, Working Interest/Net Revenue Interest Calculation, Right-of-Way Acquisition, Surface Lease Acquisition and Damage Settlement, Mineral and Conservation Research, Federal, State, State Agency, Indian Lands Research, Unit Dissolution Research and Application

O K L A H O M A O F F I C E : L O U I S I A N A O F F I C E :

Kyle Nevels David L. Dauterive, CPL John Schieber James P. Maloney

Charles L. Hill III, CPL Mark W. Lipari

417 W. 18th St., 1700 Kaliste Saloom Rd Suite 101 Bldg. 5 Edmond, OK 73013 Lafayette, LA 70508 Phone: (405) 726-2762 Phone: (337) 706-8650 Fax: (405) 726-2768 Fax: (337) 706-8655

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PENNSLYVANNIA, OHIO, NEW YORK, NORTH DAKOTA, COLORADO

www.penterraservices.com

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You may know Ms. Amy Jo Love as your OCAPL President or acquaintance, but what you may not know is that Amy is a mom of two children and “Nana” to five grandchildren. We’ve had the pleasure of interviewing Amy about her career and life beyond leasing, running title, and the other day to day activities that we all run across as Landmen.

GETTING TO KNOW A MEMBER

Q. Amy, you are a big Thunder fan. Who is your favorite player and why?

A. Nick Collison (go Kansas!)

Q. What compelled you to become a Landman and how long have you been in the industry?

A. I started in 1985 with Tonkawa Land as a land secretary/tech. I worked for Hamilton Brothers in the early 80s in drilling and production but once I understood the land side, I was hooked!

Q. What are your hobbies besides the stereotypical hobby of a Landman?

A. Spending time at the lake with my family and friends. I also love to travel and have taken two of the five grandchildren to Hawaii when they finish first grade. Kylie to Honolulu, Bella to Maui and Hunter is on deck in 2016!

Q. Everyone has one. What is your biggest pet peeve?

A.OMG Thank you! I have two:

1) Don’t less and except a tract (or tracts) then ADD it back into a legal description!

2) Don’t make quarter-quarter calls a go-go when they all can be combined to a single quarter (or a much smaller tract description)!

Q. What is your favorite restaurant in Oklahoma? It can be a hole in the wall, food truck, or one of the new trendy places.

A. I don’t get to eat out in OKC much because I work so far away from my home, but when I do it’s LaLuna and Packards.

Q. We do so many things right within OCAPL but what is one area or thing that you would like to improve?

A. Thank you again! It’s uploading photos for the online directory. I’ll get back on this band wagon after we launch the new website.

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Aaron Meek & Dave HamptonHampton and Milligan

Wearecurrentlynearingtheendofthelegislativesession.I

willfocusthisupdateonthemostimpactfulbillsthathave

beenmovedforwardinthelegislativeprocessandappearto

havegarneredlegislativesupport.

ManyofyoumayhaveseenthedisclaimerregardingSB213

thatappearedon the frontpageofOKCountyRecords.com

(KellPro)inearlyApril.Thisbillwouldrequirecountyclerks

tomaketheirelectronicrecordsavailabletothepublicatthe

statutoryfeeof$0.25perpageor$0.15perpageforproviding

more than 3,500pages inelectronic format.Countyclerks

arguethatthisbillwouldnegativelyimpactarevenuestream

that is particularly important to rural counties without

providinganalternative fundingmechanism.There isalso

concernthatthebillmightimpacttheavailabilityofrecords

on OKCountyRecords.com. Henry Hood, one of the chief

proponentsofthebill,submittedaMemorandumonApril

7,2015,toOCAPL’smembershiparguingthatthebillwould

ensure that county clerks charge the statutory rates for

electronic recordsandwouldallowcompetition toKellPro

intheprovisionofthoserecords.Thebilldiedincommittee

thisweek,butisstillarelevanttopicfordiscussion.

HB2177/SB807, the 2011 Shale ReservoirDevelopmentAct,

whichwouldallowmultiunithorizontalwells tobedrilled

in any formation, including conventional formations,

designatedassuitableformultiunithorizontaldevelopment

by the OCC. Both bills seemed to be progressing last

month;however,theyhaverunintoheadwindsfromsmall

producersworriedthatthebillswillallowlargeproducersto

drillhorizontallythroughtheirconventionalplays,draining

production fromsmallproducers’verticalwells.TheOIPA

hasdecidedtoopposethebillsunlessanamendmentisadded

requiring 63% approval from all working interest owners

beforehorizontaldrillingcanoccur.SeeOIPA’s position paper

onthebills. They contend that this compromise amendment

willbalancetheneedsoflargeandsmallproducers.

HB2178 passed the House 74-23 and passed the Senate

EnergyCommittee.The bill allowsmunicipalities toenact

Page �0

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ideAl for energyOakview Professional Pointe

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reasonable restrictions on drilling operations, including

placementofsurfacelocations,butonlyifthoserestrictions

arenotinconsistentwithregulationssetforthbytheOCC.A

similarSenateversionofthisbillincluding“taking”language

isSB809,BrianBingman,R-Sapulpa,whichhaspassedthe

Senate.

A different approach to the municipal overregulation

issue is embodied in SB468, Bryce Marlatt, R-Woodward.

Under this bill, anymineralownerwhosemineral interest

isreduced invalueby60%ormorebya localgovernment

regulation would have the right to obtain compensation

from that localgovernment for thediminution invalueof

themineralinterest.Thisbillwouldlikelymakeitcostlyfor

localgovernmentstoenactprohibitivedrillingregulations.

ThebillhaspassedtheSenate.

SB470,BryceMarlatt,R-Woodward,removestherequirement

tocompoundinterestannuallyoncertainpaymentsthatare

nottimelymadeundertheProductionRevenueStandards

Act;provides thatwhere title has beenunmarketable for

2+ years, the operator may presume the accrued proceeds

tobeabandoned;providesthat interest isnotappliedon

proceedsthatarenottimelypaidwhentheownerelectsto

takeinkindorwheretheownercannotbelocated.Thisbill

has passed the Senate.

Asthesessioncontinuestoprogress, itwillbecomemore

apparentwhichbillsandwhichversionsofsimilarbillsare

likelytopass.Ifyouknowoflegislativeorregulatoryactivity

that youwould like the Legislative Affairs Committee to

analyzeanddiscuss,pleaseletusknowbycontactingAaron

Meek [email protected](405)235-5620.

SUPERIOR TITLE

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OCAPL is teaming up with the Young Professionals in Energy on Saturday, May 16th, to lend helping hands at the Bella Foundation's pet adoption event. It will be an outdoor event with over 200 dogs looking for a forever home. This event is collaboration between several rescue groups. Volunteers will perform various tasks such as walking the dogs, and helping setup.

When: Saturday, May 16th

Time Shifts: 9-12am, 12-3pm, 3-6pm - Please let us know what shift you would like

when emailing to sign up.

Where: Midtown (NW 10th and Hudson)

Why: To help our community!

If you are interested in volunteering, please email Fu Mei Bacon at FuMeiBacon @ReaganResources.com or

Lindsey Fixley at [email protected]

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GreetingsMembersofOCAPL,

Inmyabsence,BhavinNaikgraciouslyagreedtoattendtheAAPLQuarterlyBoardofDirectorsMeetingonbe-halfofOCAPLinCharleston,SConMarch14,2015.ThefollowingisasummaryofitemsthatIwantedtosharewith each of you.

• AAPLStaffReport:o Ourveryown,TomHavenstrite,ledataskforcethatlookedattheorganizationalstructureofAAPLandNAPEandsuccessfullyconstructedandpresentedanewstructuretotheBoardthatwasapproved.Changestothejobdescriptionsofeachpositionwerealsomodified.o Upcoming2015-2016AAPLBODmeetings: 6/16-6/17-Nashville,TN 9/11-9/13-ParkCity,UT 12/4-12/6-NewOrleans,LA 3/18-3/20-Tucson,AZ

• NAPEReport:o NAPERockies-Incomedown1.25%,resultinginalosstoAAPLof$62,000.o NAPEEast-reductioninattendanceresultedinalossduetoliabilityforhotelcancellations.

• BusinessItems:o Treasury:o Increaseintotalassetsof2.34%ascomparedtoDecember31,2013.Revenuesdecreased.97%dueinlargemeasuretodecreasedrevenuefromNAPEdistributionsandmanagementfees.Expenseshavedecreased8.64%inlargemeasuretoasignificantdecreaseinadvertisingexpense.o Education:o AllAAPLEducationclasses,seminarsandonlinecourseswillbediscountedat50%betweennowandDecember31,2015.Allbooksandvideoswillbeofferedata25%discountaswell.o AnAccreditationCommitteewillbeformedtooverseeallUniversityprograms.ThisCommitteewillconsistof7members,1fromtheEducationTrust,1ExCommandtheexisting2ndVP.MotionwasapprovedandchangeswillbemadetotheBy-LawsfortheEducationTrustwhichwillbepresentedtotheBoardattheAAPLAnnualMeetinginJune.o CertificationCommitteemadeamotiontomodifythedefinitionof“LandProfessional”,“Landwork”and“Landman”,toaddLandmenwhodetermineownershipinmineralstobequalifiedforconsiderationasaRPLorCPL.The2ndmotiontoincreasetherequiredcredityearstoqualifyforRPLandCPLwastabledandnotdis-cussed during the Board Meeting. o Awards:o Wearesoexcitedtohavebeentherecipientofmanyofthisyear’sawards!WehavesuchawonderfulmembershiphereinOKCanditisamazingallofthewonderfulwaysinwhichwearemakingapositiveimpactinourcommunity.ThefollowingawardsweregiventoOCAPLandwillbeformallypresentedattheAnnualMeet-inginNashville: BestNewsletter(LargeAssociation) BestMemberCommunication(MaritaG.Morris) GroupCommunityService(OCAPLCommunityAffairsCommittee) LandmanoftheYear-JulieWoodard LifetimeAchievement-JackRichards

Respectfullysubmitted,

JulieE.Woodard2014-2015 Director

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OCAPL VOLUNTEER EVENT!!

OCAPL is teaming up with Skyline Urban Ministry on Saturday, May 2nd, to lend a helping hand! We need 40 volunteers to help sort and organize their

facility. We will get further instructions upon arrival. 

When: Saturday, May 2nd  Time: 9-12 pm  Where: 500 SE 15th OKC, OK 73129  Why: Because they need our help! 

If you are interested in volunteering, please email Lindsey Fixley at [email protected]

 

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http://www.okypenergyforum.org

Thursday, July 23rd

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Platinum Level - $5000 ◦ Includes 8 tickets ◦ Company logo over Networking Social & Expo ◦ Company logo on website and programs ◦ Option for up to 24’ exhibition booth in a prime

location providing access to attendees during both breaks and the networking hour

◦ Booth is in visibility of the speaker and keynote sessions

Gold Level - $2000 ◦ Includes 4 tickets ◦ Company logo on website and programs ◦ Option for up to 14’ exhibition booth in a tier 1

location during both registration and the networking hour.

Silver Level - $1000 ◦ Includes 2 tickets ◦ Company logo on website and programs ◦ Option for an 8’ exhibition booth during both

registration and the networking hour

Bronze Level - $500 ◦ Includes company logo on website and program ◦ Option for a banner

Networking Hour Sponsor - $3000 (1 available)

◦ Company logo over break-time refreshments ◦ Includes company logo on website and program

Meeting Bag Sponsor - $2500 ◦ Company logo on Meeting Bag, which will hold all

event materials ◦ Includes company logo on website and program

Lanyard Sponsor - $1500 ◦ Company logo on lanyard for attendee ticket ◦ Includes company logo on website and program

Logo Item Sponsor - $1500 ◦ Choice of one company logo item in the Meeting

Bag ◦ Includes company logo on website and program

Meeting Break Sponsor - $1500 (2 available) ◦ Company logo over break-time refreshments ◦ Includes company logo on website and program

***All company sponsors, regardless of level, will be recognized in the Closing Remarks.

More information or questions? Contact Emily Woner 405.552.4967 [email protected]

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10:00am Booth setup opens 12:00 – 1:00 Registration 1:00 – 1:15 Opening Remarks 1:15 – 2:00 Opening Topic 2:00 – 2:30 BREAK #1 / EXPO 2:30 – 3:30 Speaker Session 3:30 – 4:00 BREAK #2 / EXPO 4:00 – 4:45 Keynote Speaker 4:45 – 5:00 Closing Remarks 5:00 – 7:00 Networking Social

and Exposition

HOSTS The Society of Petroleum Engineers (SPE) is joined this year by American Association of Petroleum Geologists (AAPG), Society of Exploration Geophysicists (SEG), Oklahoma City’s Association of Professional Landmen (OCAPL), Oklahoma City Association of Petroleum Lease & Title Analysts (OCAPLTA), Oklahoma Independent Petroleum Association (OIPA), and Young Professionals in Energy (YPE) for the fourth annual Energy Forum! EVENT PURPOSE We hope to engage young professionals, working in all disciplines of our industry, on topics that currently play a role in our professional world. Our topics have been selected with the hopes of enhancing knowledge of the business and developing a successful career; the panel discussions and exposition have been designed to engage the audience and encourage open discussion and networking. INTENDED AUDIENCE This event is open to all interested professionals, but is designed for young professionals working in Oklahoma’s energy industry; this includes local interns and college students in petroleum-related fields. Expected attendance is 350 professionals.

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Sponsorship Commitment Form

Sponsor Name__________________________________________________________________

Address_______________________________________________________________________

City_______________________________, State_________________, Zip _________________

Contact Name__________________________ Contact Phone____________________________

Contact Email_____________________________________

SPONSORSHIP SELECTION Please select level of sponsorship. Further details can be found in the Sponsorship Packet.

_____ Platinum Level Sponsorship ($5,000) _____Booth? (Y) (N)

_____ Gold Sponsorship ($2,000) _____Booth? (Y) (N)

_____ Silver Sponsorship ($1,000) _____Booth? (Y) (N)

_____ Bronze Sponsorship ($500) _____Banner? (Y) (N)

_____ Meeting Bag Sponsorship ($2,500)

_____ Lanyard Sponsorship ($1,500)

_____ Corporate-Logo Item Sponsorship ($1,500)

_____ Networking Hour Sponsorship ($3,000)

_____ Meeting Break Sponsorship ($1,500)

All checks should be made payable to: OKC Society of Petroleum Engineers –YP

Please send your donation and a copy of the completed commitment form directly to our Sponsorship Coordinator at the following address on or before Monday, May 4th:

Corey Massey 101 N. Robinson, Suite 110 Oklahoma City, Oklahoma 73102

For questions, please contact: Emily Woner: [email protected], 405.552.4967

Corey Massey: [email protected], 405.772.1041

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Page 35

President *Love,Amy [email protected] *Watkins,Nick [email protected] *Rice,Robert [email protected] *Beavers,Matt [email protected] *Miles,Lindsey [email protected] *Walker,Mike [email protected](thruJune) *Woodard,Julie [email protected](afterJune) *Miles,Lindsey [email protected] *Walker,Mike [email protected] *Fixley,Lindsey [email protected] Gannaway,Stephanie [email protected] McGee,Jordan [email protected],Chair Enteshary,Cameron [email protected] Jennings,Brandon [email protected] McCurdy,Sam [email protected] Carlozzi,Brian [email protected] *Brooks,Jeff [email protected] Hardegree,Jerrod [email protected] Oliver,Jim [email protected] Graham,David [email protected] Cope,Richard [email protected] Wickham,Diana [email protected] Ellis,Sandy [email protected] *Naik,Bhavin [email protected] Kammerer,Brandon [email protected] Parks,Colt [email protected] Sweeney,Mont [email protected] Meek,Aaron [email protected] Hampton,Dave [email protected] Love,Bethany [email protected] Noble,Lars [email protected] Campo,Jennifer [email protected] Fleharty,Michael [email protected] Vawter,Brandt [email protected] Hennigan,Bryan [email protected] Long,Steve [email protected] Richards,Clarke [email protected] Raney,Grant [email protected] Askins,Carrie [email protected] *Woodard,Julie [email protected] Richards,Jack [email protected] Noblitt,Darrell [email protected] Reed,Shannon [email protected] Dickensheet,Dan [email protected] Ivey,Aaron [email protected] Wheeler,Tami [email protected] Anderson,Leslie [email protected] Orr,Dillon [email protected] Portwood,Teresa [email protected]

2015OCAPLOfficers*ExecutiveOfficers

andCommitteeChairman AdvertisingPriceListfortheOcaplRecord

Advertisement Price:_______QuarterPageAdd@$500forfull year(10issues)Ad Requirments:-31/4widex41/2tall

-AdsneedtobesubmittedinPDForJPGwithatlease150dpiresolution

PaymentisduepriortopublicationCONDITIONS:Alladvertisingcopyissubjecttotheap-provalofOCAPL.Wherecopy isnot furnishedby thedeadlinedate,thespacereservedwillbemovedtothenextissuesubjecttoavailability.Advertisingisacceptedintheorderinwhichitisreceiveduntilallspaceisfilled.

OklahomaCityAssociationofProfessionalLandmenOffice

Teresa PortwoodOCAPLOfficeP.O.Box18714OklahomaCity,[email protected]:www.ocapl.org

NextNewletterDeadline:JUNE 14, 2015

2015NewsletterChair:MichaelFleharty

[email protected]

Prepared by Dustin Burton

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NEXT MEETING NOVEMBER 4, 20�3NEXT MEETING SEPTEMBER 14, 2015