i Minutes of Meeting Oklahoma Energy Resources Board March 10, 2015 A meeting of the Oklahoma Energy Resources Board was held Tuesday, March 10, 2015 at 10:00 am. at the of?ces of McAfee Taft, 1717 South Boulder Avenue West #900, Tulsa, OK 74119. Notice of regular meeting and tentative agenda was posted for public view at the OERB main of?ce and at McAfee Taft on Friday, March 6, 2015. MEMBERS PRESENT: Terry Adamson, Mark Aebi, Bill Gifford, Tom Goresen, David House, Wade Hutchings, Ronnie Irani, Rob Johnston, David Le Norman, Danny Morgan, Tim Munson, Julie Musselman, Garrett Phelan and John Pilkington. MEMBERS ABSENT: Phil Cook, Rusty Johnson, Tony Maranto, Mike McDonald and Will Whitley. MEMBERS RESIGNED AND NOT REPLACED: J.D. Holbird and Clay Gaspar. OTHERS PRESENT: Mike Terry (OIPA President), Phil Spurlin (Beacon Environmental) and Holly Gray (Brothers CALL TO ORDER Chairman Munson called the meeting to order at 10:00 a.m. ATTENDANCE In the absence of Secretary Musselman (arrived late), Johnston called the roll and reported that a quorum was present. MINUTES Morgan motioned to approve the minutes from the November, 2014 and January, 2015 Board meetings. Pilkington seconded the motion and the motion passed by a vote of 15 and 0 nay. Director?s Report - Stitt gave the Director?s report (attached). COMMITTEE REPORTS ADMINISTRATIVE COMMITTEE No report. ACCOUNTING COMMITTEE In the absence of Chairman Johnson, Stitt reported that the latest deposit for OERB was $1,506,862.32, bringing the current balance to $20,425,151.67. The unencumbered cash balance is $11,945,624.89. The latest deposit for SOER was $153,445.47. The current cash balance for SOER is $1,706,695.54 with an unallocated FY14 budget of $481 .37 and unallocated FY15 budget of 15,000.00. The estimated remaining unallocated cash balance is $1,260,217.02. Stitt reviewed the Proposed Audit Process (attached) with the Board stating that the Accounting Committee met and recommends these procedures be made of?cial. Morgan added that the Committee basically documented what is already being done to give the assessment auditor written OERB Board Minutes. page 2 guidelines to follow. MOTION: Morgan motioned to adopt the Proposed Assessment Audit Process as recommended by the Committee. Irani seconded the motion and the motion passed by a vote of 15 and 0 nay. SOER COMMITTEE Chairman Irani gave a brief history of transition and progress. Irani stated that it has almost been two years since the Marginal Well Commission was merged with the OERB and became the Committee for Sustaining Oklahoma?s Energy Resources, or SOER. Irani added that the transition has gone extremely well and said that he considers SOER no longer to be in transition. The three main focuses have been the Expo, which brought in good revenue last year; the Digital Oilfield, which had good attendance even with the downturn in the industry; and the workshops, which have increased in numbers. Irani commended Stitt, Baez and the staff for a job well done and stated that there is growing reserve for times of low production. Irani proposed three additional SOER Committee members with the Board. Bourdon Enable Midstream Partners, LP Dr. Chandra Rai Dean of Melbourne School of Petroleum Geological Engineering Richard Luht GE Global Research MOTION: Irani motioned to accept Bourdon Dr. Chandra Rai and Richard Luht to the SOER Committee as recommended. Johnston seconded the motion and the motion passed by a vote of 15 and 0 nay. Irani stated that the original committee members have three-year terms. However, once their first term ends, the terms should be staggered to prevent all terms from expiring at the same time. Irani added that his term as chairman of SOER ends on June 30 and he is recommending Tim Munson to replace him. Irani will continue to serve on the SOER Committee in the Research and Technology area. Irani related that he is working with a Houston based software company to possibly provide software to small producers. If a partnership could be worked out, it would be the first SOER Research and Technology venture. Wellbitz is currently offering OIPA member companies a free three-month trial to work with their software. If the software is purchased after the trial, it will only cost $50 per month. By using the trial software, the companies can provide feedback regarding ways to enhance and improve the software. Irani asked Baez to give her report (attached). Johnston related that students pursuing a career in the industry might be questioning their decision to do so due to the current downturn. The fact that the downturn in the industry is part of a normal cycle should be explained to the students and young people in the industry. Johnston suggested that both SOER and OERB communicate this on their websites. Munson agreed that the OERB needs to convey that the current economic status is part of an historical cycle and is very normal. Johnston added that it is a good time to get in to the industry due to the fact that when it recovers those that entered will be prepared. SCHOLASTI OUTREACH COMMITTEE Chairman Morgan stated that the Committee met on Monday and is excited about the new year. Morgan asked Schaeperkoetter to give her report OIZRB Board Minutes. page 3 (attached). ENVIRONMENTAL Chairman Adamson asked Spurlin to give his report (attached). Spurlin reviewed his report with the Board. Morgan asked Spurlin to explain ?dropped? and ?on hold? projects. Spurlin explained that in cases where a project is dropped, it may be due to ?nding a responsible party and in the case of an ?on hold? project it usually means they are waiting for permission from the landowner or an operator release. Sowers reviewed the project/site reports with the Board (attached). Sowers stated that the number of sites restored so far for this year have increased from last year. Le Norman asked if the OERB tracks sites that have been turned back due to ?nding a responsible party etc. Sowers and Spurlin both answered that the OERB does not follow these sites. Spurlin added that Beacon occasionally checks on dropped projects to see if anything has changed that might allow them to restore the site. Johnston mentioned that he noticed construction costs were trending down and asked why. Sowers stated that the OERB has been receiving better bids due to an increase in the number of bidders, which is due to the decrease in oil and gas activity. Spurlin added that part of the decrease in cost was due to the increase of larger projects, which causes less travel to restore projects. Adamson thanked Brothers Company for working with the Committee to produce updated environmental restoration commercials. PUBLIC EDUCATION COMMITTEE In the absence of Chairman McDonald, Munson asked Harrison to give her report (attached). Harrison related that she would be showing the new environmental restoration videos with the Board. Harrison showed the new :60 and :30 environmental commercials that focus on restoration of several landowners? sites. These commercials will begin airing this month. The Board had very positive comments regarding the new commercials. Harrison shared some of the results of the latest ?brand tracking? study that was conducted in December. Morgan asked what the oil and gas industry ranked second to in the recent study. Harrison said she believed it was agriculture. Johnston asked of the people that were negative about the industry, what issues were they concerned about. Harrison answered that environmental issues were the number one complaint, including earthquakes. Another negative perception was ?greed?. Hutchings asked about the timing of the new commercials. Gray said that the commercials that focus on air, water and land should be ready to review sometime in May. Johnston asked Gray to elaborate on the new environmental stewardship video. Gray stated that video features Austin Holland. Tim Baker and Amberlee Darold, who acknowledge there is an increase in seismic activity. However, the industry is cooperating and providing fault data to researchers, so they can better understand the geology of Oklahoma. Johnston recommended that the OERB acknowledge these issues and then address them, or the negative industry stats will increase. The general consensus was that a collaborative effort of collecting data and monitoring data to reach Pub Ed Report March 10, 2015 a Our ?Work Together? energy independence campaign is still on hold due to the layoff environment. 0 The new brand tracking study has been completed. Results showed: 0 79% say the oil natural gas industry is either the single most important or second most important to Oklahoma?s economy. 77% say they have a very positive or somewhat positive View of the industry. This is a slight decrease from 2013, which was at 79%. The industry is viewed most favorably by: Males, people over the age of 65, Republicans and people getting their news from television or the newspaper. Oklahomans with less favorable views tend to be: Females (especially those under 45 years old), 25?44 year olds, Democrats, Independents and people getting their news online. Roughly half of Oklahomans believe the industry is voluntarily cleaning up the environment. There has been a significant increase in the number of Oklahomans viewing energy as an environmental issue since 2013. Those with a negative view of the industry are more likely to cite environmental concerns, earthquakes and hydraulic fracturing as the cause than in 2013. We are working on research targeting ?millennials? for this study we targeted likely voters in Oklahoma, ages 21?26, at least 2 years (48+ hours) of college or continuing education. We completed both in person and online focus groups, split by favorable/neutral and negative/neutral towards energy industry. We are striving to understand how they feel toward the industry, where they get their information, what is important to them, and how we can reach them. 0 is complete and has launched. Videos to show: 0 We have the new Environmental Restoration videos to share with you today: the :60 second commercial, and one of the :30 second commercials. OERB Board Minutes, page 4 eventual conclusions was the right action to take. Gray added that collaboration was the largest part of the new campaign. Musselman asked how long it was expected to take before conclusions were drawn. Irani cautioned not to draw conclusions too quickly. Le Norman stated that collaboration doesn?t look like denial, which is a good thing. Hutchings warned of not relying on facts from a year ago to draw conclusions and said that research is still underway and it is too early to form any conclusions. Le Norman added that wells were being stimulated even back in the 50?s. Hutchings stated that wastewater injection appears to be the main focus of researching seismic activity according to a Stanford study. Munson asked what the scope of the study was and how far back the conclusions begin. Hutchings answered that although unsure; he believes the broad conclusions began in the 90?s in terms of showing where they can retrieve accurate data. Goresen added that injection is now done ten times more than in earlier years. Morgan suggested that the educational video inform people about seismic activity, being careful not to state anything that someone might misconstrue and attempt to use in a court case. Irani stated that the Committee would be screening this video. Hutchings added that the best thing to do is just stick to the facts. Johnston asked if the Stanford study separated injection from fracking. Hutchings stated that it focuses on water injection and the increase in seismic activity. Harrison stated the new OERB website has launched. Old Business None. New Business- Stitt reviewed the proposed Slate of Of?cers with the Board and added that other names can be submitted prior to voting at the May Board Meeting. Mun son related that the Scholastic Outreach Committee had a new project coming up that will be an after school program for high school students and asked Schaeperkoetter to further explain. Schaeperkoetter stated that three schools will be piloted this fall. The program will cover areas such as how we ?nd oil and natural gas, how we use oil and natural gas and the economics of the industry. The program will include ?eld trips, competitions to win scholarships and possible job shadowing opportunities. ADJOURNMENT There being no further business to come before the board, Le Norman motioned to adjourn the meeting and Irani seconded the motion. The motion passed by a vote of 14 and 0 nay and the meeting adjourned at 11:05 AM. Respectfully Submitted, [gala 1/ Musselman, Secretary OERB Board Meeting Roll Call Date: 52 45 Adamson Aebi PRESENT v/ ABSENT Cook PRESENT Gifford PRESENT Goresen PRESENT House PRESENT Hutchings PRESENT lrani PRESENT Johnson PRESENT Johnston PRESENT Terry ABSENT Bill ABSENT Thomas ABSENT David ABSENT Wade D. ABSENT Ronnie ABSENT Rusty ABSENT Robe? ABSENT Quorum (10): Yes/ No Le Norman David PRESENT ABSENT Maranto Tony PRESENT ABSENTW McDonald Mike PRESENT ABSENT Morgan Danny PRESENT ABSENT Munson Tim PRESENT 4: ABSENT Musselman /?Julie PRESENT ABSENT Phelan Garrett PRESENT ABSENT PilkingtonJr. John ABSENT Whitley Will PRESENT ABSENT OERB Board Meeting Roll Call Date: 3/i0/J5 Adamson PRESENT Aebi ?2 PRESENT 2 Cook PRESENT Gifford PRESENT 4 Goresen PRESENT 4 House PRESENT Hutchings PRESENT 4 lrani /f PRESENT Johnson PRESENT Johnston/x PRESENT -, Terry ABSENT Mark ABSENT Phil ABSENT ,4 Bill ABSENT Thomas ABSENT David ABSENT Wade D. ABSENT Ronnie ABSENT Rusty ABSENT Robert ABSENT Quorum(10): No Le Norman David PRESENT 54 ABSENT Maranto Tony PRESENT ABSENT McDonald Mike PRESENT ABSENT Morgan Danny PRESENT 4 ABSENT Munson Tim PRESENT 4 ABSENT Musselman Julie PRESENT ABSENT Phelan Garrett PRESENT l4 ABSENT Pilkingto Jr. John PRESENT ABSENT Whitley wm PRESENT ABSENT 69% WW Cheml Standage - From: meetingnotices@sos.ok.gov Sent: Wednesday, November 26, 2014 11:32 AM To: Cheryl Standage Subject: Open Meetings Confirmation ?eeting Notice Confirmation CHERYL STANDAGE OKLAHOMA ENERGY RESOURCES BOARD (OERB) 500 NE. 4TH ST., #100 OKC, OK 73104 405-601-2865 This message confirms your meeting notice posting with the Secretary of State. DATE AND TIME OF POSTING: WEDNESDAY, NOVEMBER 26, 2014 11:32 AM INFORMATION POSTED A REGULAR MEETING HAS BEEN SCHEDULED FOR: TUESDAY MKR 10, 2015 10:00 AM AT You may View and print the web postings of your body's meeting notices by visiting our website at: your meetings page. Cheml Standage From: meetingnotices?sos.ok.gov Sent: Wednesday, February 25, 2015 9:22 AM To: Cheryl Standage Cc: MeetingNotices?sos.ok.gov Subject: Open Meetings Confirmation CHERYL STA DAGE OKLAHOMA ENERGY RESOURCES BOARD (OERB) - SCHOLASTIC OUTREACH COMMITTEE 500 NE. 4TH ST., #100 OKC, OK 73104 800-664?1301 This message con?rms your meeting notice posting with the Secretary of State. DATE AND TIME OF POSTING: WEDNESDAY, FEBRUARY 25, 2015 9:21 AM INFORMATION POSTED A REGULAR MEETING HAS BEEN SCHEDULED FOR: MONDAY, MAR 09, 2015 3:00 PM AT OERB LARGE CONFERENCE ROOM 500 NE 4TH ST. OKC, OK You may View and print the web postings of your body's meeting notices by visiting our website at: your meetings page. Chegl Standage From: meetingnotices@sos.ok.gov Sent: Wednesday, February 25, 2015 9:21 AM To: Cheryl Standage Cc: MeetingNotices@sos.ok.gov Subject: Open Meetings Confirmation CHERYL STANDAGE OKLAHOMA ENERGY RESOURCES BOARD (OERB) - ENVIRONMENTAL RESTORATION COMMITTEE 500 NE. 4TH ST., #100 OKC, OK 73104 800-664-1301 This message con?rms your meeting notice posting with the Secretary of State. DATE AND TIME OF POSTING: WEDNESDAY, FEBRUARY 25, 2015 9:20 AM INFORMATION POSTED A REGULAR MEETING HAS BEEN SCHEDULED FOR: TUESDAY, MAR 10, 2015 8:30 AM AT MCAFEE TAFT 1717 SOUTH BOULDER AVENUE WEST #900 TULSA, OK 74119 You may View and print the web postings of your body's meeting notices by visiting our website at: your meetings page. CheII'zl Standage From: meetingnotices@sos.ok.gov Sent: Wednesday, February 25, 2015 9:20 AM To: Cheryl Standage Cc: MeetingNotices@sos.ok.gov Subject: Open Meetings Confirmation CHERYL STANDAGE OKLAHOMA ENERGY RESOURCES BOARD (OERB) 500 NE. 4TH ST., #100 OKC, OK 73104 800-664-1301 This message confirms your meeting notice posting with the Secretary of State. DATE AND TIME OF POSTING: WEDNESDAY, FEBRUARY 25, 2015 9:20 AM INFORMATION POSTED THE REGULAR MEETING SCHEDULED FOR: TUESDAY, MAR 10, 2015 10:00 AM AT TULSA - LOCATION TBD HAS BEEN CHANGED TO: TUESDAY, MAR 10, 2015 10:00 AM AT TULSA - MCAFEE TAFT 1717 SOUTH BOULDER AVENUE WEST #900 TULSA, OK 741 19 THE AMENDED REGULAR MEETING SCHEDULED FOR: TUESDAY, SEP 08, 2015 10:00 AM AT TULSA - LOCATION TBD HAS BEEN CHANGED TO: TUESDAY, SEP 08, 2015 10:00 AM AT TULSA - MCAFEE TAFT 1717 SOUTH BOULDER AVENUE WEST #900 TULSA, OK 741 19 You may View and print the web postings of your body's meeting notices by visiting our website at: your meetings page. OERB Board Meeting March 10, 2015 McAfee aft 1 71 7 South Boulder Avenue West #900 Tulsa, OK 74119 500 NE 4?'1 Street, Suite 100 Oklahoma City, Oklahoma 73104 (405) 942-5323 1-800-664-1301 NOTICE OF REGULAR MEETING To: Members of the OERB and other interested parties From: Tim Munson, Chairman Time: 10:00 am, Tuesday, March 10, 2015 (Agenda posted Friday, March 6, 2015) Location: McAfee Taft, 1717 South Boulder Avenue West #900, Tulsa, OK 741 19 Tentative Agenda 1. Call to Order Chairman Tim Munson 11. Introduction of guests and roll call 111. Minutes of previous meeting 1V. Director?s Report - Mindy Stitt V. Committee Reports: A. Administrative Committee Update, discussion and possible vote(s) on administrative issues. Accounting Committee Update and financial report. Review, discussion and possible vote(s) regarding procedures for auditing remittance of assessments. SOER Committee Update, discussion and possible vote(s) on SOER issues. Scholastic Outreach Committee Update, discussion and possible vote(s) on scholastic outreach issues. Environmental Restoration Committee Update, discussion and possible vote(s) on environmental issues. Public Education Committee Update on marketing/advertising campaign. Discussion and possible vote(s) on public education issues. VI. Old Business. VII. New Business. A. Slate of of?cer nominees Adjournment. REPORT March 10, 2015 Since the last board meeting, the staff made presentations for the Oklahoma City Petroleum Land Title Association, the Osher Life Long Learning Institute (continuing education course for Senior Citizens put on by OSU) and the TU Energy Management Student Association. Included is a summary report of work orders issued to construction contractors for phase restoration work since January 13, 2015. For this period, the OERB issued 25 work orders for a total of $750,431.00, the largest being issued to Dirt X, Inc. in the amount of $122,790.00. Respectfully submitted, WSK Mindy Stitt, Executive Director Oklahoma Energy Resources Board Phase Construction Contracts Work Orders Issued January 13, 2015 - March 10, 2015 Work Order Date Amount Contractor Projectls) County 1114/15 $54,000.00 Dozer Service, Inc. Woolverton Pottawatomie 1l14l15 $51,198.00 Been Dozer Service Atwater Fundis Pottawatomie 1i14i'15 $92,182.00 M.K. Excavation Adkins G. Okfuskee 1114f15 $23,749.00 Dirt X, lnc. Martin LG 13 Seminole 1:14115 $55,003.00 Construction 8: Hauling Baxter Jean, Chandler J. Pontotoc 1113i15 $39,500.00 Dozer Service. Inc. Gray Bob Pontotoc ?1315 $14,600.00 Azlin Backhoe Sewice, Inc. Berend, Humphrey Pottawatomie 1113l15 $17,200.00 8. Dozer Service, Inc. Alderson, First Baptist Church (Port) Pottawatomie 1112915 $17,250.00 Dozer Service, Inc. Laird, Sweeney Pottawatomie 1I13l15 $17,120.00 A Construction Hauling Shawnee Plaza Mission LLC Potlawatomie tits/15 $17,525.00 Porters Contracting Services, Inc. Damme, Thomas Thurman Creek Jones W., Mary R. Seaver Rev. Trust, 1l13l15 $5,900.00 Porters Contracting Services, Inc. Wood R. Creek 21215 $28,000.00 MK. Excavation Cantrell 3, Hayes Dan, Littleax Washington 2iZ4l15 $12,975.00 8: Reclamation Service Pontotoc Sprigging Pontotoc 2124i15 $16,660.00 MK. Excavation Stephens County Sprigging Stephens 21'24l15 $18,900.00 Dozer Service, Inc. Pottawatomie County Sprigging Pottawatomie Pottawatomie 8- Seminole Counties 324/1 $12,600.00 Reclamation Senrice Sprigging Pottawatomie Seminole 2l24l15 $15,525.00 8? Reclamation Senrice Seminole County Sprigging Seminole 2l24l15 $10,899.00 Chickasha Sod Grass Farm, lnc. Grady County Sprigging Grady Carlton T. 2, McRay, Robinson Roger 2121015 $14,040.00 Versatile, Inc. dba Fn'tzler Dozer Service (Lincoln) Lincoln Logan 2i?24i?1 5 $15,457.00 Versatile, Inc. dba ritzler Dozer Service Reynolds Keith Lincoln 2/24/15 $15,480.00 Versatile, Inc. dba Fritzler Dozer Service Emde Lincoln 2l'24l15 $18,900.00 Versatile, Inc. dba Fn'tzler Dozer Service Foutch Payne 2l5l15 $42,978.00 Dirt X, Inc. Burden S. Okfuskee 25115 $122,790.00 Dirt X, Inc. Laird Pottawatomie Total: $750,431.00 OERB Financial Summary - February 2015 Assessment Deposit Current Cash Balance $1,506,862.32 $20,425,151.67 FY-2014 Budget Paid to Date Outstanding Encumbrances Administrative $3,364,938.55 $2,464,502.30 $7,306.13 Public Education $7,750,000.00 $6,737,843.56 $223,718.00 Environmental $7,750,000.00 $7,714,899.28 $34,508.45 Reserve $6,952,093.53 Total $25,817,03208 $16,917,24514 $265,532.58 FY-2015 Budget Paid to Date Outstanding Encumbrances Administrative $3,946,484.63 $695,832.35 $579,169.19 Public Education $8,275,000.00 $4,396,135.92 $3,266,462.34 Environmental $9,000,000.00 $4,349,000.10 $4,368,362.67 Reserve $5,631,848.47 Total $26,853,33310 $9,440,968.37 $8,213,994.20 Unencumbered Cashl Receipts vs. Disbursements - Last 25 Months $2,900 000 00 $2,600,000 00 $2 700,000 00 82.600 000 00 $2.500, 000 00 52.400.000.00 $2 300,000 00 $2 200 000 00 $2,100,000 00 52,000,000 00 $1 900,000 00 $1.800 000 00 $1,700,000 00 $1,600,000 00 $1 500 000 00 $1,400,000 00 51.300000 00 31 200,000 00 $1 100 000 00 $1,000,000 00 $900,000 00 $300,000 CID $700 000 00 $600,000 00 $500,000 00 $400,000 00 $300 000 00 $200 000 00 $100,000 00 $0 00 LL (.0 LL. mass:Egmosammsascasaoasmm mum muwuu-hLA-h 379715 3-2014 Administrative Workshoos Expos Conferences Misc. Education Total FY-2015 Administrative Workshops Expos Conferences Research Technology Misc. Education Total SOER Financial Summary - February 2015 Budget $314,517.56 $60,000.00 $334,000.00 $105,000.00 $813,517.56 Budget $293,459.83 $75,000.00 $428,000.00 $15,000.00 $90,000.00 $901,459.83 SOER Fee $153,445.47 Transferred from Clearing Account $0.00 Current Cash Balance $1,706,695.54 Paid to Date $303,306.21 $50,106.63 $387,798.07 $71,825.28 $813,036.19 Paid to Date $165,330.05 $23,715.46 $234,880.66 $0.00 $16,055.14 $439,981.31 Estimated Outstanding $0.00 $0.00 $0.00 $0.00 $0.00 Estimated Outstanding $128,129.78 $51,284.54 $193,119.34 $0.00 $73,944.86 $446,478.52 Estimated Remaining Unallocated Balance Remaining Budget $11,211.35 $9,893.37 $33,174.72 $481 .37 Remaining Budget $0.00 $0.00 $0.00 $15,000.00 $0.00 $15,000.00 $1,260,217.02 $360.00) on $350,000 00 $340,000 00 $330.0?) CD $320,000 00 $310,000 120 $330,000 00 $290,000 00 5280.000 00 $210 003.03 $200,000 00 $240,000 00 $230,000 00 $220,000 00 $210,000 00 saddomm 5190.000 on $100,000 00 $170113 00 $160,000 00 $150,000 00 $40,000.00 8130.000 00 $120,000.00 $110 one 00 3100002100 590000.00 380.000 00 370.000 to 560.000 DO $50.00!) CD $400120 $10,000 on $0 on V5 ?14599 Receipts vs. Disbursements - Last 25 Months at no El 390 vwer L?qaj L-JBW mucous Del-um r1 71.48111 mm in ri-Gw 1? 1-698 V1430 in non VI. 360 sL-uer 914195 9 Haw 914!? l?Unl? 379715 Proposed Assessment Audit Process 2/9/15 The Oklahoma Tax Commission (OTC) colleCts a one tenth of one percent assessment from the ?rst purchasers of crude oil and natural gas that is subject to the state's Gross Production Tax. This assessment is due and payable on the last day of the month following the month of production. Payment can also be made quarterly if the amount does not exceed $25 per quarter. After collection, the OTC deposits the monies with the Oklahoma State Treasurer, which houses the Energy Resources Revolving Fund (ERRF) pr the OERB. The OTC also collects a fee in the amount of thirty-?ve hund 91?: of one cent 0035) on each barrel of petroleum liquid and ?fteen of one Wt w. 0001 5) on each one thousand (1,000) cubic feet (Met) of natural gas, including casiisghead gas.1 Speeduced from each well in the State of Oklahoma except for oil and gas prodenn exempt fronte?m payment of gross production tax. The fee 18 remitted to the OTC 1_ same manner as is pmeted by law for the payment of gross production tax. However, the fee shall net be required to be paid until the accrued amount due from any person required to remthe gee reaches Twenty? five Dollars 00), except that any amount accrued for any calendar shall be paid by January 3 1 st of the following year. After collection, the @mdeposus the mm with the Oklahoma State Treasurer, which houses the Sustaining hm?b?nergy Regitexees revolving fund. . 5.: In addition to collections, the OTC ?a provfg?es?the Eeard with information on gross production collections that canbe used to a the purchaser remittance of the OERB and SOER assessment. The swell provide-fess to its Gross Production Payment System to an individual authorizeeby the BOW for the sit-rinse of audit research to aid 1n locating OE RB and/or SOER assessmehg that been paid properly. The assessments are subject to the OT Administrative Febeemyrded bytaw. The Board 18 responsible for taking apprOpriate legal actions t9 gellecmny as went not paid or which was not properly paid. he foiiewmg procedur'ee- Will be fottowed 1n the process of auditing the assessments paid through ?ee OTC: 1. An Indrw?eal authefized by the board (Assessment Auditor) will acquire from the OTC the oil and gas net values for the OERB (GPE) and oil and gas production net volumes for SOER. 2. The Assessment Auditor will enter the OTC information into databases for each and will print audit reports for review. 3. A review of each audit report will place a purchaser/operator (remitter) into one of three categories: a. No Material Issues The audit report shows a zero balance or close to zero balance. b. No Payment The audit report appears to show the remitter is paying the gross production tax to the OTC, but they have not paid the OERB and/or SOER assessment for that calendar year. c. Apparent Issues The audit report appears to show the remitter has underpaid or overpaid the OERB and/or SOER assessment. 4. Depending on what the audit report shows, the Assessment Auditor will follow these procedures: a. No Material lssues No additional action is necessary. b. No Payment i. .. 125 1.1- 00 If it is a ?rst occurrence, send a letter requesting In the letter explain the assessment and the fact that it appears the has not received payment of the assessment and the remitter is, therefore 0113:? eff coWance If the remitter does not respond to the letter within 60 days ai?ni the amd?M?ue 18 more than $25. 00 for the OERB and/or 00 for ,notify the Exer- Director. The Executive Director will ?e?termme if the 1ssue wi'lT be taken to the board for review, addressed 1n anothm mproprrate manner or addressed through legal action. If the remitter (1er m1; empond to the letter within 60 days and the amount due 13 less than $25. 0$?e the OERB and/or 00 For SOER, document and treah the apparent amohm- $1.16 until the $25. 00/$5. 00 threshold 15 met, or it hae heen ?eeyems since the; ?first occurrence letter was 1111.1. a letter requesting payment. If the remitter does not respomto the second letter within 60 days notify the 5?73- ..4, Director will determine if the 1ssue will be taken t9 $16 boar her review, lie?dressed 1n another appropriate manner, or throug mgal action. Ifit 1s .1. aegithe amount due IS less than $25. 00 for the OERB and/or 03.; he SOER,doci1ment and track the apparent amount due until the n?old IS met, or it has been live years since the first occurrenee" lettereeas sent, whichever occurs first. At that time. send a letter requestii?rg payment. If the remitter does not respond to the letter within 60 days not@ the Executive Director. he Executive Director will determine if .the lssue' mill be taken to the board for review, addressed 1n another appropriate manner, or addressed through legal action. T?figiis?repeat occurrence, and the original amount due is more than $25.00 for the OERB and/or $5.00 for SOER, notify the Executive Director. The Executive Director will determine if the issue will be taken to the board for review, addressed in another appropriate manner, or addressed through legal action. 6. Apparent Issues i. If (after further review/research) it appears the remitter has underpaid the OERB (GPE) assessment, send a letter requesting payment if the balance is $25.00 or ii. iv. more: or the apparent amount due is at least five percent of the total amount paid, whichever is higher. If (after further review/research) it appears the remitter has underpaid the SOER assessment, send a letter requesting payment if the balance is $5.00 or more, or the apparent amount due is at least two percent of the total amount paid, whichever is higher. If (a?er further review/research) it appears the remitter has overpaid the OERB and/or SOER assessment, ask for the remitter to provide pr0per documentation substantiating the overpayment. Once the remitter has prayided the proper documentation and they have in fact overpaid the assessment notify the remitter that they can take a credit on their next assessment. Menus) as long as the periods are properly designated. - - If 1t appears the remitter has overpaid the assessment buta?er further review/research it is determined they actually owe additional meney follow the procedures for underpayment rt"- SOER REPORT OERB BOARD REPORT SOER March 10, 2015 FY-15 WORKSHOPS - Registered to attend: 599 Attendees to date: 396 Revenue Received to Date: 537,010 0 12 dates remaining for FY2015 FY-16 (OCT. 2015) OKLAHOMA OIL GAS Expo Committee work is well underway. EXPO will be held on October 8, 2015. 0 Total number of booth/sponsor registrations to date: 150 1 Legacy 0 13 Platinum, 27 Gold, 43 Silver - Gross revenue to date $293,000 ANNUAL PLANNING RETREAT The SOER Advisory Council?s annual planning retreat will be held Sunday, April 19th-Monday, April 20th. This retreat will provide time for all advisory council members to brainstorm on SOER activities to grow and focus attention toward in FY16. DIGITAL OILFIELD CONFERENCE The digital conference was held February 18 19. We had more than 20 Speakers at the conference. Just over 180 attended the conference. STORE Workbook sales continue to grow and shipping processes are going well. We also added a $5.00 flat rate shipping charge to offset a portion of shipping costs. Average shipping is $8.00 per package. - We are constantly searching for new technology or research to post on our website. We can also post events for regional organizations. MIDSTREAM PARTNERS L. Bourdon President and Chief Executive Officer Bourdon joined Enable Midstream Partners, LP, in February 2014 as its first President and Chief Executive Officer. Prior to Enable Midstream, Bourdon was group senior vice president of NGL Natural Gas Marketing, Petrochemical, Refined Products Marine Services at Enterprise Products Partners, LP. He joined Enterprise as senior vice president of NGL Supply Marketing in 2003 and served in various senior management positions during his tenure there. Before Enterprise Products, Bourdon served as senior vice president and chief commercial officer for Orion Refining Corporation. He also has held senior leadership positions at En*Vantage, Gas Transmission and Valero Energy Corporation. Bourdon started his career with The Dow Chemical Company as a mechanical engineer and went on to serve in economic strategic planning, commercial and product management roles prior to leaving for Valero. He has served in various industry organizations including the Gas Processors Association, the Propane Education and Research Council, and Petrochemical Feedstock Association of the Americas. He is a member of Tau Beta Pi and Pi Tau Sigma and Sigma Chi Fraternity. Bourdon holds a Bachelor of Science degree in mechanical engineering from Texas Tech University and an MBA from the University of Houston. Dr. Chandra Rai - Bio Dr. Chandra S. Rai joined Mewbourne School of Petroleum and Geological Engineering in late 1999, where he currently is Eberly Chair Professor and Director of the petroleum engineering school. During his tenure as a director, the school has seen a ?ve folds increase in undergraduate enrollment, upgrading of all the undergraduate teaching laboratories, donation of drilling simulator and addition of net six faculty members. Prior to joining the University of Oklahoma, he was with Amoco Production Company for eighteen years and with BPAmoco for one year in various technical and management positions. At Amoco he was member of the team responsible for doing in the broad area of rock physics and petrophysics. He was awarded the highest award by Amoco for technical contributions. He was associated with the development of rock properties database, on-site core characterization system, and rock modeling software. This effort resulted in awarding of ten US patents. At the University of Oklahoma, he along with Dr. Sondergeld started two consortia one in the area of rock physics and other in characterization of unconventional reservoirs. The rock physics consortium has been in existence for the last fifteen years and the unconventional reservoir consortium is in its fourth year. Dr. Rai and Dr. Sondergeld are also reSponsible for operating a state-of?the? art petrophysics laboratory that has extensive rock characterization capabilities. He has published/presented close to 100 papers. He served as board member of from 2007 to 2010. His current interests are in shale gas/oil, reservoir Characterization, petrophysics, and seismic characterization of rocks. Richard Luht - BIO Richard Luht is with GE Global Research in Oklahoma City. He joined GE in November 2014 as a Program Manager for Well Construction and Well Production Technology. Richard started in the industry in 2000, with Schlumberger. While at Schlumberger, he served in various roles from Sustaining Engineer to Operations Manager. Richard joined BP Exploration Alaska in 2007 as a Project Services Manager. He worked his way up through several positions and served as an Upstream Technology Program Manager in Houston prior to joining GE. Richard has a BS in Mechanical Engineering from the University ofAlaska Fairbanks. OERB BOARD REPORT Scholastic Outreach March 10, 2015 CURRICULUM AND WORKSHOPS 0 2014-2015 New Teachers Trained (all curricula): 816 Total Teachers Trained (all curricula): 12,730 Upcoming workshop locations: Okmulgee and Lawton. The summer and fall workshops will be open for registration at the end of March. HOMEROOM Close to 1,600 teachers are signed up for the website resources. The website is averaging 3,000 visits per month and 60% are return visitors. 0 The staff is beginning to plan the next round of Lab Time with Leo episodes. These episodes will be filmed from March 16-20. PETRO PROS 2014-2015 Presentations: 96 presentations reaching 3,554 students PETROLEUM SCHOLARS PROGRAM Scholarship application period is now closed. 348 applications have been received. PETROTECH PROGRAM Students currently in classes (receiving certification): 38 in Oklahoma City and 23 in Tulsa The program is in need of new instructors for the following classes: Well and Production Data Management, PowerTools and OTHER Fueling Futures: An after school program to be launched in fall 2015 Newspapers in Education Sponsorship (Spring 2015) Mustang STEM Advisory Committee (2014-2015) Tulsa Regional STEM Alliance Partner (2015?2017) Oklahoma Education and industry Partnership Program (Summer 2015) Sam Noble ExplorOolgy Program Sponsorship (2015?2016) Oklahoma STEM Center Grant Partner (Summer 2015) STEM Community Conference Planning Committee (Summer 2015) Environmental Assistance Corporation March 10, 2015 Mr. Terry Adamson Chairman, Environmental Restoration Committee Oklahoma Energy Resources Board RE: Executive Summary The following Executive Summary reviews the projects as turned in to the OERB and status of each. SUMMARY for February. 2015 . Received 35 new projects. 0 Completed 25 projects with 74 sites for a total construction cost of $398,583. - Committed $67,935 for construction based on new bids received for 16 projects with 27 sites. FY-2015 PROJECT OVERVIEW: Received 210 projects with 267+ sites. . Completed 185 projects with 543 sites. CUMULATIVE PROJECT OVERVIEW Projects Sites Total Received 8,098 18,140+ Dropped 1,616 1,871 On Hold 139 225 Completed 5,626 14,322 Active 717 1 ,722+ Total cumulative environmental spending through 2128/15: $93,684,419.89. STATUS OF ACTIVE PROJECTS Projects Sites Under Construction 87 304 Phase 1/2 Complete 205 993 Waiting on ROE 230 230+ Phase 1/2 Backlog 195 195+ PROJECT SAFETY SUMMARY . BEACON personnel worked 2,596 hours on OERB projects in February with no safety related incidents. - Construction contractors reported no safety related incidents on OERB projects in February. 841 East 33rd Street Edmond, Oklahoma 73013 (405) 330-8688 FAX (405) 330-8668 Environmental Restoration Committee Report March 10, 2015 Oklahoma Energy Resources Board Page 2 BUDGET REVIEW: Fiscal Year 2013-2014 Environmental Budget: 7,750,000 Non?restoration (environmental advertising, 000 8 misc) 8 (421,000) Consulting services, laboratory and expenses through 2/28/15 (2,331,112) Construction invoices through 2/28/15 8 (4,972,049) Committed construction 8 (4,999) Balance as of 2/28/15 5 20,840 Fiscal Year 2014-2015 Environmental Budge_t: 9,000,000 Non-restoration (environmental advertising, 000 8 misc) (900,000 Reserved for Kelly Pits (200,000 Consulting services, laboratory and expenses through 2/28/15 (1,658,778 Construction invoices through 2/28/15 (2,799,951 Committed construction (2,202,175) Balance as of 2/28/15 5 1,239,096 Sincerely, G. Phil Spurtin, RPG President cc: Mindy Stitt I Landowners I Jan?12 .. Feb-12 Mar?12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sap-12 Oct?12 Nov?12 Dec-12 Jan-13 Feb?13 Mar-13 .. Apr-13 May-13 n-13 Jul-13 Aug-13- Sep-13E- Oct-13- Nov-13i- Dec-13- Jan-14* Feb?14* Mar-14 Apr? 14 May-14 Jun-14 Jul?14 Aug-14 Sap-14 Oct-14 Nov?14 Dec-14 Jan-15 Feb-15 Call-ins From Landowners and Projects Submitted by f?v?p-?f?w-P?w nun?m Total Projects/Sites Restored (Fiscal Year) 920 829 Projects I Sites ?scal year to date $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 I Total Construction Costs (Fiscal Year) 2011 I Amount Spent *=fnscalyearto date COMMUNICATIONS REPORT OERB BOARD REPORT Communications March 10, 2015 THE FOLLOWING NEWS RELEASES WERE PREPARED AND DISTRIBUTED: January 5 How Technology is Revolutionizing the Oilfield (MCDOC) March 3 Re-launches with New, Updated Functionality NEWSPAPER COVERAGE (press clippings received since last report ?led ?Jan. 13, 2015): Dec. issue NADOA Magazine OERB Economic Impact Report Dec. 11 The Thomas Tribune - Oklahoma reaches 14000 well site restorations Dec. 16 Blackwell Journal Tribune - Nine Blackwell teachers bring new curricula to classrooms January 1 Sulphur Times Democrat Free supplies help Sulphur teachers bring in exciting new curricula January 2 Coweta American - Coweta teachers attend OERB fall workshop January 6 The Oklahoman Offers Geology Curriculum January 7 Medford Patriot Star - XTO Energy donates $25,000 to OERB for new Oklahoma math curriculum January 8 Madill Record - Free supplies help two Kingston teachers January 10 Edmond Sun Edmond teachers fuel up on supplies January 11 Ardmoreite - Area teachers expand their knowledge with OERB lessons January 15 -The Review Mid Continent Digital Oilfield Conference scheduled Feb. 18?19 in Tulsa January 15 Drumright Gusher - Oilfield Conference Set for Feb. 18-19 January 15 ?Tulsa Business Legal News - Digital oilfield conference set January 16 Elk City Daily News - Digital oilfield conference set January 16 Oklahoman - Oil conference dates are set January 22 Prague Times OERB well site restorations January 22 ?Journal Record - Digital conference set January 25 Tulsa World - Digital oilfield conference set January 28 - Sayre Record and Beckham County Democrat Oklahoma reaches 14000 well site restorations February 2 Journal Record Answered Prayer February 6 ?Journal Record - Digital tracking gets cheaper, more common in oil field February 8 ?Tu sa World - Mid-Continent Digital Oilfield Conference Set February 18 Journal Record Driven by Data February 20 ?Journal Record - Digital technology helps keep marginal wells flowing February 24 -?Journal Record - Direction Needed February 25 Stillwater News Press - OERB undoing past damage February 26 Sand Springs Leader - Mandi Cloud: Limestone Technology Academy Total: 27 print COMMUNICATIONS REPORT Radio Coverage: Melvin Moran interview with Joe Wertz on NPR Statelmpact 2014 FINAL COVERAGE SUMMARY In 2015, the OERB has been included in 118 newspaper stories and 1 radio interview PLANNING: The OERB 2014 Annual Report has been mailed The Annual Legislative Update has been completed and mailed to all elected officials The February 2015 Explorations newsletter has been sent electronically Redesigned launched in early February. Environmental Stewardship Campaign testimonial videos: "land? is underway Marketing efforts for the SOER Expo have begun. Social media efforts on OERB Facebook, OERB Advancing Facebook and Twitter. The new restoration campaign commercials are finalized; will be sharing them with you today THE JOURNAL RECORD Feb. 2, 2015 Answered prayer: -cleans up old oil ?eld for Earlsboro church BYSARAHTEHHY-WBO maJoum Rm EARLSBOBO - Steven nature is look- ing forward to the end of a construc- tion project just 100 feet from First Baptist Church. where he is a deacon On a sunny. warm January morning. two backhoes scraped the red earth. moving dirt into piles. Weathered heats ol'tcrap iron and blocks afold concrete sat near the heavy equipment. rusting oil tanks a Sew hundred ?eet may. Theprojectisone-z restoration program. Oil and gas pro- ducers help ?uid the cleanup e?ors through a voluntary: oneoench of 1-per- cent tax-per-barrel paid on oil and pi production. The site near the Earlsboro chunch in similar to about 200 others in the area, said SteveSower-s. (i -nvi- momenta] director. The site will cost about $16,000 to moon; In the 19203 and 19305, thousands of wells were in Seminole County. The focus was getting oil out of the ground. and the state didn?t have envi Stun MINMMHIIM and: mum?! manhunt-retailing momma-mews ronmental protections Highly salty waste-water, a byproduct of oil and gas production was emptied onto the ground. creating erosion and saltwater scarsontheland. lnthem. the Oklahoma Corporation Commission added regulations requiring produced water to be kept in tanks and hauled to disposal wells. At the Earlsbom church site. the -'will also add gypsum and other soil amendments In the eroded land. Each year. the omnization cleans up about 750 sites. The OCC must ?rst recommend the site to the Agency ?eld inspectors identify sites, and sn?? members research the walk to con?rm the site is abandoned, with no responsible company to pay for cleanu Since the program began in 199 has cleaned up more than ?.000 sites around the state. for a total cost of about $90 million. 1116 Earlsboro church site is about 100 feet from the playground behind the building. Rasure said church-going children weren't allotted to go near the site. though the area wasn't fenced. However. adolescents from town wound ride dirt bikes and all-terrain vehicles around the concrete blocks and uneven terrain Raeure said he?s glad mm is cleaningupdte site, ofrhe ?nancial obligation to me the Iran to a grass ?eld. The church will likely build a parking lot or a new build- ing to replace the 1929 structure where services are held weekly. ?It has really been a blessing to here it done. with no expense to the individ? ual.? Rasure said. Sfillwalcr Feb. 25. 2015 mm lulu-II: nah-n! Fit-nun Dllnak nil In?- Inpyw?h Injols ova-rum Minimum- Mull 8mm. ninth mmum?mlnw?. OERB undoing past damage Agency cleans up remnants of oil, gas industry If MRI-lilo 'I'haoilandguindnn? hunn'nDI?NAllmtaa Bill-lam [Inn In um of Hum-n DII- bank's Innu- n't Iuppurt ?got-{Ion Hon I than up pug-at Mind by In. outnum- Enlrn Rmumu Build. ?39 mponnibla parties ain?t be found. S?llwata' lul'dent New Dilbeck ap- ?I?hepndun?onoom? Rune: ?eldintha 1950:: he amid. OERB: mum See Duns, paw A5 WHIIED 1hr: 0km: Exam Resources Board works with land overrun to and clear In Ihendnned all ?:1pr and tank battery mes. Harem-before (left) and alter Many so Ittered with ?his Ila tHa property near Payne Canny. >Cleans ?Weddhe?a pleendwith?nmult andwouldn?thesitata aftheaitas 91'3deme mif?mm wun'tnvan'labln. ?swell-eihdaanup mi?mda?lbya one-mthuflpemant Warmer-south OERBEnvimrmn- ?Maud Rava?ow- thumb Ira-Engine! least 2-3 mm ilwludingi?lin Payne Cmtyand?vein Bi?watar.1hmelocal 'ecizhadaprioe tag Ingram inthn works. OERBest'rmntaa blonh,reatypipes. WMBOrn?mof Onlegrahlakaaham- buthunlera ?sherman andotharlakauneu behaldlinble?rrenvi? any one With an drandmed well rt damage canard register at mutton Il" call (800)-664-1301. Witter: J.- . ANNUAL BRIEFING Created in 1993, the Oklahoma Energy Resources Board?s mission to educate Oklahomans about the oil and natural gas industry and restore abandoned and orphaned well sites continues today. Now in our 21st year, the OERB con- tinues to thrive and expand our programs through the voluntary contributions from the state?s oil and natural gas producers and royalty owners. Student Education Every year, the education program grows and adds exciting new free materials for teachers. In 2014, the OERB spent more than $4 million on its education programs, educating Oklahoma students about everything from geological rock formations to the dangers of playing on or near well sites. The OERB also trained 1,353 teachers in 2014 at 76 workshops across the state. Those teachers received $621,645 in free classroom supplies and $373,000 in free ?eld trips to one of nine Oklahoma museums. Over the course of the year, eight new ?Lab Time with Leo? video labs and two virtual ?eld trips were completed for OERBHomeRoom.com, making video labs now available for all ages and subjects. The OERB also partnered with 4-H in creating three geology guide- books and an activity book that will be distributed to each of the 77 county o?ices. 95% of Dklahoma school districts had teachers attend an OERB Workshop Due to 2014 legislation ending the use of Common Core in Oklahoma classrooms, all of the OERB curricula were updated with the PASS standards. The curricula will be updated to the new science standards, as well. Teachers can choose which version ?ts their needs and download it at OERBHomeRoom.com. Restoration The OERB marked yet another milestone in well site res? toration in 2014. The 14,000th site was recently complet- ed in Logan County near Guthrie, as always, at no cost to the landowner. On average, two to three well sites are being restored each day. In late 2014, the OERB More Illa". launched a new Environmen- $90 tal Stewardship campaign. spent restoring The focus of this project is abandoned well sites to promote all the ways the oil and natural gas industry is a good steward of Oklaho? ma?s air, land and water resources. There is also a focus on worker safety. The project launched with a series of fact sheets and testimonial videos featuring experts and hard-working Oklahomans. The fact sheets and videos are available at For a complete list of well sites completed by county, please refer to the back of this letter. Public Education In 2014, the OERB, in conjuction with the Steven C. Agee Economic Research and Policy Institute at Oklahoma City University, released an updated eco? nomic impact study which is available on The study found the industry and its indirect impacts are responsible for of every 5 jobs in the state, and it provides $65 billion in gross state product and $48.1 billion in employee/self-employed earnings. The state budget apportioned $513 million in ?scal year 2013 from the gross production tax. The largest recipient of these apportions is education, with $583 million going to support local school districts. The OERB also launched two new advertising cam- paigns focused on energy independence. The ?rst targeted moms and the second targeted ?key in?u- encers?- or people, mostly males, age 40 and over. The OERB also completely revitalized its ?agship website, To view our latest campaigns or to download the 2014 Economic Impact Study, visit EMPOWERING OUR NATION. OERB Proposed Slate of Officers May 2015 Chairman Danny Morgan Vice Chairman Phil Cook Treasurer Rusty Johnson Secretary Julie Musselman