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U.S. Marines Toys for Tots program in Guernsey County Brings Holiday Cheer to Local Children

Posted By Mike Chadsey, Director of Public Relations, Friday, December 16, 2016

On Wednesday, December 14th at the Ascent Resources field office in Cambridge, OH more than 30 local families were able to stop by and bring home a little holiday magic, thanks to Ascent Resources. The effort in Cambridge was led by the Southeast Ohio Coordinator, Deborah Oberlin and the team at Ascent.

“Ascent Resources stepped up in a big way to sponsor and host this year’s toy distribution,” said Oberlin. “They collected over $8,000 in toys, games and dolls for needy families in Guernsey County from vendors and Ascent staff to show they care about their community and its residents.”

Also stopping by was U.S. Congressman Bill Johnson who helped parents select toys for their little ones. Upon learning that the effort was still short in funds, Johnson donated the remaining balance needed for renting a box truck to be used to pick up the collected toys, ensuring no detail was overlooked. Congressman Johnson said, “The Marine Toys for Tots Foundation does great work, and it’s great to see Ascent Resources give back to the community by leading an effort to make sure that more local children will get toys – and hope – for Christmas.  Just to play a very small role in this effort is very rewarding and brings a lot of joy to my heart.” 

“We are grateful to have a community partner like Ascent Resources in town that shows what this time of year is all about,” said Cambridge Area Chamber of Commerce President and CEO Jo Sexton. “They’ve really helped provide some local families with joy this Christmas.” 

Internally, the effort was led by Joe Steele at Ascent. Joe helped rally his colleagues and is proud of what the staff at Ascent was able to accomplish, in terms of the time they donated and the gift contributions made. In addition, this event would not be possible without the vendor/contractor partners and their donations, and special thanks to the Target in Wheeling for helping stretch our dollar during the shopping process. This is Ascent Resources third year hosting the program and according to Joe, will be back next year even bigger and better.

The U.S. Marines Toys for Tots program has been in existence nationwide since the Christmas of 1948. Originally started by a Major Bill Hendricks in 1947 and some fellow Marines is has spread to many communities across the country. 

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Utica Shale Development Experience: Landowner and Producer Share Their Story

Posted By Mike Chadsey, Director of Public Relations, Monday, December 12, 2016
Updated: Tuesday, December 13, 2016

A few weeks back, I traveled down to White Sulphur Springs, West Virginia to attend the National Association of Royalty Owners (NARO) Appalachian Chapter, 6th annual member conference. In attendance were people from Ohio, West Virginia, Kentucky and North Carolina. During the social functions between speakers, I was able to meet many great landowners and heard some wonderful stories on what shale development has done for their families and small businesses.

One such story was presented at the conference jointly by mineral owner Alan Walter, and producer Manny Johnson. Together they presented a story on how a landowner and operator work together to produce shale gas from eastern Ohio.

Walter purchased a 150-acre tree farm in Harrison County in 1990. He bought it from a family who had owned it since the 1940s. He shared that the property had lots of issues with overgrowth of both vines and weeds. The problem took him 20 years and over $20,000 to control and finally resolve. To say that Walter was invested in his property is an understatement. During his weekly travels around the farm he found a used cable system, a few tanks, a damaged pump jack, and even 21 oils wells from the 1900s. There was such history with all of this equipment that it took him a while to dig into the records to get a proper account of the activity on his land. Jumping forward into the shale revolution, he watched as the processing plant in Scio was constructed. He recalled wondering if all of the activity would mean a new well on the farm. The answer to that question came in 2014. He was approached with a lease in April of 2011 with not much follow up action. He was contacted again in January 2014 and negotiated details through July 2014. Construction began in August 2014 and oil and gas production began in August 2015.

As Walter described the process from start-to-finish, one of the most important themes he expressed was, “stay in communication with your producer.” As he begin to lay out the details of the well pad on the property, he showed photos of a 20-foot wide, 3,000-foot long lease road where many trees were removed, and even to this day that was a hard decision for Walter to make. Now, he shared, “it’s a great road to use for my next tree harvest.” In addition over 66,000 yards of dirt was moved. The other thing he did not expect was 20 people working daily on his land (on average). After a few days he got to know the people doing work and admits he asked them questions almost every day. In total 19 acres of trees were cleared. Mr. Walter said through the entire process he had a very good experience. He was impressed by what he called an “incredible” environmental protection feel, and that the operator was going above and beyond for drainage. He said that everyone was nice and great to deal with. He concluded his remarks by suggesting that mineral/landowners have a consistent message to the operator, keep good notes, and give written questions when available. He also said don’t be surprised at the size of the equipment or the speed of the operation.

Next up was Manny Johnson:

Manny Johnson has worked in the oil patch for the last decade. First he was a production superintendent at Chesapeake and is currently an operations manager for Huntley and Huntley Energy. This story is from his time at Chesapeake. He started off his comments by saying he really enjoys working with landowners and that, “they are our partners and we truly see them as that.” He sees a harmony of an eight well pad in the middle of a tree farm—and living in St. Clairsville, it is all about maintaining relationships and the landowners are a big part. One of the key reasons his employer liked the Walter farm is that it is located in the wet gas area of the Utica play and his farm is so very close to the Scio plant. He shared that a lot of mineral owners in Ohio have wells and pipelines, but few are so close to a processing plant. One of the key points that he and his crews talk to landowners about is the building of the pad. He stopped there for just a moment to pay special attention and note that every pad has to be engineered and designed, and that he takes lot of environmental considerations into the pad location.

One story he told was when he talked with Walter about how they are using a closed loop system to limit emissions, which is something that was very important to Walter and his farm. He went on to explain that he instructs his crew and mineral owners to get to know each other and stay involved from start to finish of the entire project.

He also emphasized the importance to take spacing on the well pad into consideration, and having the ability to shut down the well remotely if needed. Johnson described how the company has a, “’stop work’ program in place. It is about getting everyone home safe at the end of the day, we spend a lot of time on preventative maintenance. That means we have to keep this well in compliance. To do so, we have weekly, monthly, quarterly, and yearly reports in Ohio to regulatory agencies.”

He ended his public comments by addressing the landowners in the room by saying, “as landowners you are encouraged to ask questions—ask to take a tour and communicate as you need to, don’t let something fester.” Lastly, he closed by saying, “as your partners we want to get out front of issues.” The company has a vested interest in the family on the land the lease, and they hope the landowners take a vested interest in the well, so that everyone will benefit.

This is just one of the many great shared success stories from the Utica. Our special thanks for NARO for the invite to attend its event and to Manny Johnson and Alan Walter for sharing their story.  

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Member Spotlight: Thomas P. Giusti, Clark Schaefer Hackett

Posted By Lyndsey Kleven, Communications Coordinator, Monday, November 28, 2016
Updated: Tuesday, November 29, 2016

The member spotlight series features legacy OOGA members who have been a member of the Association for at least 10 years. If you would like to recommend someone to be highlighted, please contact Lyndsey Kleven lyndsey@ooga.org

 

Background information:

 

Tom Giusti was born and raised in Logan, West Virginia in the heart of coal and oil and gas country. Shortly after getting his drivers license, his cousin James Ferzacca asked Tom to drive him around in his 1959 Cadillac after he experienced a health issue that caused Ferzacca to have concerns about driving, frequently. Ferzacca was an oil and gas driller who had two partners and this was how Tom got his first education in oil and gas production in southern West Virginia.  

 

Tom graduated from high school in 1960 and continued driving Ferzacca until he attended college at Marshall University. In the winter of 1965 Tom graduated from Marshall with a business degree and a specialty in accounting. Ready to enter the workforce, his plans were stalled as Tom was drafted into the U.S. Army where he spent two years as a helicopter mechanic. Tom had orders for Vietnam but did not serve because it came too near the end of his term.

 

Following his time in the U.S. Army, Tom started working at Coopers and Lybrand in Columbus in 1967 (today known as Price Waterhouse Cooper). Coopers and Lybrand wanted to hire Tom two years prior but the issue of being drafted that was inevitably going to occur put that on hold. In 1969 Tom was asked by one of the partners to work on an engagement involving clients with oil and gas production in Marietta. This pulled Tom back into the oil and gas industry as he started working on some of the accounting and tax issues related to those particular clients.

 

Work History Overview:

 

In 1974 Tom was working for Ralph Dickson and Company which is where he met Jerry Jordan. Jordan was instrumental in getting Tom involved with the Ohio Oil and Gas Association and keeping him involved with the industry. Tom, being a cross-trained accountant, worked in tax area, consults, accounting and assurance. Tom wanted to use his knowledge with the Ohio Oil and Gas Association and got involved in some of the tax issues affecting the industry.


“Oil and gas taxation is unique because there are a lot of special provisions in the industry, simply because there is a lot of risk. Consequently, you need to keep abreast of any changes.”

 

It was while he was at Ralph Dickson and Company he also met and worked with another gentleman named Neal Longanbach in 1974. They had worked contemporaneously, before.  The two developed a good working relationship and in 1979 Neal and Tom were both ready to establish their own Firm. They called it Longanbach, Giusti and Associates.

For approximately 25 years they did accounting and tax for work for operators, producers and drilling contractors. Along the way, Tom met Jerry Olds (longtime OOGA member) and Richard Meyer (deceased), and along with Neal bought a producing company they named Zenith Oil and Gas. Olds and Meyer were the industry shareholders while Tom and Neal were non industry shareholders in the company. Zenith Oil and Gas drilled a few wells over the years to supplement production it already owned.

 

“As a tax and accounting consultant you see some of these expenditures and you learn to know what they are, but it’s nice to be on the real side of that and have operations in which you yourself participate.”

 

Reflecting on the industry, Tom noted that it has its ups and downs. Throughout the years Tom has seen that once a tax stature gets legislated, you seem to never get rid of it, even if profits drop immensely from when the tax was invoked in the first place—heightening the importance to protect the industry. Specifically mentioning when the industry was under attack by Congress with the windfall profit tax, profits became ridden with a “dirty” reputation and therefore they wanted to tax the industry.

 

“It’s kind of like a yo-yo with the way pricing is set from world influences; we have to ride with the tide,” Tom quipped. 

 

Tom reads a lot and subscribes to specific publications focused in oil and gas to stay updated on the industry. He also noted that accounting and reporting issues are peculiar, aside from the tax issues. They have what his profession calls the successful efforts method and the full cost method.  There are different ways you capitalize and depreciate/deplete assets, and check them for impairment.

“There really hasn’t been much of a change lately at the federal level, there are a lot of issues at the state level, but federally there hasn’t been a lot of change.”

 

In 2005 Tom and Neal sold Longabach, Giusti and Associates to purchaser Schneider Downs, where Tom continued working until 2009. Following this Tom went to work for Fentress and Barnes until 2012, when ultimately Fentress and Barnes joined with Clark Schaefer Hackett, where Tom is employed today. He continues to do work for people in the industry and has continued to participate in wells, some royalty interest, and lease acquisitions with others.

 

In 2010 Tom coauthored a course for oil and gas taxation and reporting, along with Mike Eberhart (another OOGA member). They organized and presented a seminar for people in the industry, lawyers and CPA practitioners and had more than 170 attendees. They hosted another seminar in 2013 in which Tom was the master of ceremonies and numerous other OOGA members presented.

 

Tom has seen the industry through many changes over the years and reflected on Shale development. He felt it initially gave the industry a false sense of all the wealth. It came at a time when the prices were high and a lot of people spent a lot of money buying into the deep right acquisitions. When you look back, it has been a tough scenario for many, and still is.

 

Tom has dealt with a lot of activity relative to deep right leasing and subleasing. He’s worked on strategies to utilize the internal revenue code to the fullest extent, to optimize the tax structure to close some of these subleases and sales.

 

History with the OOGA:

 

Tom has been a member of the Ohio Oil and Gas Association since the 1980s. After meeting Jerry Jordan in the 1970s, Jerry was instrumental in getting Tom involved with the Association. He started out on the tax committee and has volunteered on various special projects.

Tom was active as the Commercial Activity Tax (CAT) was enacted in Ohio, and was very involved throughout that process. Tom attended all the meetings with the Chamber of Commerce on behalf of OOGA in 2005. He also met with numerous legislators along with Tom Stewart concerning CAT, and how it was to replace the general personal property tax and corporate franchise tax.

Tom feels that Jerry’s guidance early on within the Association led him on the path of getting the opportunity to become a trustee. Tom was elected to the OOGA Board of Trustees in 2013, where he continues to serve in this capacity. Tom also currently serves as the Chair for the OOGA Tax Committee. In 2014 Tom was inducted into the Association’s Hall of Fame and believes that was connected to the seminars he’s hosted, since he is not a producer.

 

Being a member has helped Tom’s networking in developing good relationships with law firms and banks. Tom’s skill set is very unique being that he is an accountant that is oil and gas industry specific. There are not many other accountants with this niche, especially in central Ohio.

Tom reflected on how much he has enjoyed bring involved with the people in the oil and gas industry. He finds it satisfying knowing he’s involved with an industry that is vital to everyone and as far as Tom’s concerned, it always will be. He is an advocate for the industry and enjoys being an advocate to people unfamiliar with the industry that don’t fully understand it, and prides himself to make a convincing argument that some of their illusions about the industry are incorrect.

 

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BLM Wayne National Forest Competitive Bidding Dec 13

Posted By Penny Seipel, Vice President of Public Affairs, Monday, November 21, 2016
Updated: Wednesday, November 23, 2016

As many of you have likely already heard, The Bureau of Land Management will be offering up for lease 1,600 acres located in the Wayne National Forest.  The competitive bidding process will take place on December 13, 2016 beginning at 8:00 AM EST via internet only.  There will be a total of thirty five parcels up for bid that day with the acreage in the Wayne National Forest comprising thirty three of those parcels. 

If you are interested in participating in the competitive leasing process you will need to register at www.energynet.com/index.pl. If you are interested in watching the competitive bidding process you will also need to register. 

Important facts to know in advance:

Each acreage block will be open for only three hours (with start and stop times clearly delineated on the website) and bidding will close consecutively for the parcels so that bidders will know if they if they are the highest bidder before the next block closes. 

Information on the exact time of the bidding process for the lease will be available on the website up to ten days in advance of the scheduled sale.

Parcels are sold in the entire acreage block and rounded up to the next whole acre. A list of acreage blocks can be found in this BLM Notice of lease sale as well as more comprehensive information about the leasing process and restrictions on the acreage blocks.

Minimum bid is $2.00 per acre and minimum increments for bidding thereafter are $1.00 per acre.

You cannot withdraw a bid once the system determines that you are the high bidder.

Winners will know if they have successfully acquired the lease by the end of the lease sale.

If you are the highest bidder, fees due include the minimum bonus bid of $2.00 per acre or the highest bid if greater, a first year’s advance rental of $1.50 per acre and a non-refundable administrative fee of $160.  Winning bidders must provide how they will make payment by 4:30 PM EST on the day the auction closes. 

There are a number of restrictions for drilling in the Wayne National Forest which is also dependent on each acreage block. If your company is interested in bidding on any of these parcels, we would encourage you to review those restrictions in the BLM Notice of lease sale pamphlet.

Happy Bidding! 

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Trump, Republicans Enjoy Historic Election Night

Posted By Brian Hickman, Director of Government Affairs, Operations Managing Director, Monday, November 14, 2016
Updated: Wednesday, November 16, 2016

In the most historic presidential election since 1948, Republican Presidential Nominee Donald J. Trump defeated the Democratic Nominee Hillary Clinton in a shocking upset.

Several factors culminated into creating the environment for a Trump victory. These factors included heightened voter turnout in rural areas (which overwhelmingly support Trump), lower voter turnout in urbanized areas and Democrats as a whole, and undecided voters, who ended up supporting Trump by roughly a 2-1 margin. 

In his acceptance speech in the early hours of Wednesday morning, President-Elect Trump noted that “Now it’s time for America to bind the wounds of divisions. It is time for us to come together as one united people.”

Trump went on to say that, “the forgotten men and women of our country will be forgotten no longer,” while citing a need to “reclaim our country’s destiny.”

At the state level, the Republican majority in the Ohio House of Representatives grabbed another seat to bring their total to 66 out of a total 99 seats. Jay Edwards, candidate for the 94th House District, was successful in gaining the seat while incumbent Republicans on the ballot held their respective seats.

The Ohio Senate also gained a seat on election night, which brings the republican majority’s total to 24 seats out of 33. Republican Frank Hoagland was successful in his attempt to oust Senator Lou Gentile in the 30th Senate District. Current State Rep. Stephanie Kunze and former State Rep. Matt Dolan were the other Republicans in perceived tight Senate races. However, both cruised to being elected to the Ohio Senate.

Incumbent Republican Chief Justice Maureen O’Connor, along with two newcomers, have won election to the Ohio Supreme Court. Judge Pat DeWine, a current justice on Ohio’s 1st District Court of Appeals, bested his Democratic challenger Judge Cynthia Rice, by a 56%-44% tally. Judge Pat Fischer is currently ahead of Democrat Judge John O’Donnell by roughly 24,000 votes. The outcome of this race will come down to provisional ballots when it is all said and done.

Finally, voters spoke yet again on a local charter amendment issue supported (again) by the Community Environmental Legal Defense Fund (CELDF). Again, the amendment failed by a (again) large margin of almost 11%. This is the sixth time their effort has failed. The cost to the taxpayers in Youngstown is now at a staggering $95,000 after having been required to place all of six issues on the ballot.

 

For a full election report, be on the lookout for the next edition of the OOGA bulletin.

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Member Spotlight: David Ballentine, Northeast Ohio Oilfield Service, Inc.

Posted By Lyndsey Kleven, Communications Coordinator, Monday, October 31, 2016
Updated: Tuesday, November 1, 2016

The member spotlight series features legacy OOGA members who have been a member of the Association for at least 10 years. If you would like to recommend someone to be highlighted, please contact Lyndsey Kleven lyndsey@ooga.org

 

Background information:

 

David Ballentine was born and raised in the Mantua/Shalersville Township area in Portage County. He attended Crestview High School and has stayed around the area much of his life. Dave was raised on a dairy farm and knew pretty early on that farming was not going to be his chosen career path. Originally Dave didn’t know a lot about the oilfield business, as he had no ties to the industry. In 1975 Frontier drilled a couple wells on his family’s farm and as a young child he explored around the wells.

 

After graduating from high school Dave went to Ohio Diesel Tech in Cleveland Ohio and became a certified diesel mechanic in 1983. He then started working for a guy named Robert Bossow who owned many different businesses. One of Bossow’s ventures included a dozen investment wells he drilled around his shop in Freedom Township. Dave was hired as his mechanic but soon after Bossow purchased 22 miles of railroad track Dave’s business intelligence really shone through.

 

Bossow found himself with 22 miles of slag (after the steel and ties were sold off) and nothing to do with it. Dave was at lunch in a spot he frequented in Garrettesville and overheard some guys from Lomak Petroleum Inc. talking about how they needed to find slag for all their lease roads.

 

Dave introduced himself and proclaimed, “I’ve got all the slag that you could possibly need.”

 

This lead to a great deal of business for Bossow and Dave, and in 1984 they put in all of the lease roads for 186 wells that Lomak Petroleum Inc. owned. This was essentially what got Dave in the door of the oilfield.

 

“I originally started as Bossow’s mechanic and once I put the lease roads in, I started out being ‘just some kid,’ to a guy that made him a good profit getting rid of all the slag. I went from zero to hero in a matter of no time at all, which was my stepping stone to do other things.”

 

In working with Lomak, Dave made connections and learned of the shortage of water trucks the industry was facing. He convinced Bossow to buy some water trucks, so they got six trucks and had twelve drivers and operated 24 hours a day. They started Bossow Oil Management, got a UIC number and stayed very busy.

 

In 1986 Dave decided he was going to go into business on his own and sat down with Bossow to tell him his intentions. Dave planned to buy his own trucks from a company bankruptcy, but Bossow offered for Dave to purchase Bossow Oil Management since he was truly the original founder. The two were good friends; Dave bought Bossow Oil Management with supplementary financing from Bossow.

 

Work History Overview:

 

In 1985 Dave had started a production company B&B Oilfield Service and had almost up to 100 wells at one time. Managing the production and still running the Bossow Oil Management water trucks, Dave took ownership of the business and it became Northeast Ohio Oilfield Services, Inc. During the process Dave drilled a couple wells for Bossow with Dick Davis acting as Dave’s mentor as he was starting out. Davis also helped Dave with his first disposal well in 1986.

 

“Back then there were so many people that were always willing to help you or offer suggestions. It was a whole different business back then. Everyone was looking for help, they were busy.”

 

B&B Oilfield Service consisted of primarily Northeast Ohio production wells in Portage and Trumbull Counties. Dave focused on this aspect for the next few years, buying wells from companies that purchased them solely for tax benefits. Before the Persian Gulf War, oil was cheap and then skyrocketed as an effect. Dave started to sell of the majority of his production as the war was ending. Since then he’s only had 4-5 producing wells. In the 1980s Dave got his first disposal well, and acquired a handful (6-8) more throughout the years.

 

When the industry was facing a downturn in 1989, Dave bought some dump trucks and semi-tractors and started multitasking by doing a bit of aggregate hauling. In 1990 Dave stopped renting shop space from Bossow and built his own facility, which is where he still operates out of today. Northeast Oilfield Service generally operates with eight employees, including Dave’s son Marcus.

 

“We’ve been very fortunate over the years. We have a great customer base that have been loyal customers to me since the day I got in business, and we still work for them and have great relationships. Don Kreager has also been a great mentor, helping me complete all my disposal wells and guiding me into the shale age.”

 

Dave’s children were involved with the business as they were growing up. His daughter Amanda got an accounting degree from the University of Akron and worked for Dave while she was in college and as a full-time accountant a few years following. He has another daughter Jessica who is an ultra sound technician at Akron Children’s Hospital. Marcus was always more interested in the trucking side, and recently bought the dump trucks from Dave last fall, so Dave and his son still often work together.

 

“The part about the oilfield that is so enjoyable for me is that fact that the people are very friendly. It’s like your second family. It’s such a wonderful community of people to be involved with that would do anything for you to help you. Which is why I’ve always loved the oil and gas industry, the people are so fantastic.”

 

History with the OOGA:

 

Dave has been a member of the Ohio Oil and Gas Association since he started working for Bossow Oil Management in 1984. He was involved on the UIC workgroup and has served on the OOGA Board Of Trustees since 2014.

“The Association does a lot of good things. It has changed some over the years, but it’s always trying to help the local producers and now the shale producers. If you’ve got a problem you call the Association and they help you resolve whatever issues you may have.”

Dave feels now its even more important for OOGA to be involved as the industry has become more political over the years. Dave praised the Energy In Depth program in helping advocate for the industry. Energy In Depth has been helpful attending public meetings and in dealing with protestors at community meetings or specific work sites. Dave recognized this as the kind of program that stands out, is helpful, and doing something for the members of the Association.

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Getting the Next Generation Engaged in the Oilfield

Posted By Mike Chadsey, Director of Public Relations, Monday, October 24, 2016

How just one day can, turn “I like” into “I love” for the oil and gas business

Recently, on a cool Saturday morning OOGA President David Hill and I took students from the geology programs of Muskingum University and Kent State University on a series of oilfield site visits. The idea behind the trip came from a couple of talks David and I gave at Kent State (my alma mater) and Muskingum (David’s alma mater) awhile back. At the conclusion of the discussion and questions the idea of showing the students what was happening in the field was an opportunity neither they nor us could pass up. This is the second time we have hosted this trip. The first was just with Kent State, while this year we were able to add Muskingum. Hopefully from here, it continues to grow.

First location:

We started with visiting a PDC Energy Utica Shale production pad just on the outskirts of Senecaville in the heart of both Guernsey County and the shale gas play. David was able to show the students how the well was put into production, the equipment on site to manage that production as well as the state of the art technology used to make it all work. 

Second location:

David took us all to one of his Clinton Sandstone wells. He was able to show the students at this location the technology used to make this well pump and function. Here he took the opportunity to discuss the difference in wells from the first location to the second. We then moved further into the farmer’s field to check out the tanks and meters he had on site. 

Third location:

Lastly, David showed us his Class 2 Injection well. As he shared with the group, “you can’t have production without injection”. Here we watched as one of the delivery trucks unloaded and then we moved into the pump house to see how the fluid was moved from the tanks down the wellbore. Here everyone was able to see how the entire site functioned. Then we moved outside and down the hill to look at the well head. Here David was able to show how everything was managed as he pointed out to the equipment and gages. 

Then it was off to lunch (and to warm up as the cool turned to cold as the day progressed) to discuss what our guest saw today as well as what is happening in the industry. Many of the questions surrounded when will the industry come back and what will it look like when it does. The very inquisitive bunch asked about internships, who was active in Ohio, how do they get involved and what are some of the best classes to study.

Afterwards as everyone said their thanks and good byes and made their way outside to make the trek back home, I asked David what he thought of the day and what motivates him to spend a Saturday missing his grandson’s playoff football game to do this. Check out his President’s comments in the next bulletin to see his response. 

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OOGA Member Alert

Posted By Penny Seipel, Vice President of Public Affairs, Monday, October 10, 2016
Updated: Tuesday, October 11, 2016

As part of the development of the Obama Administrations “Methane Rules” for existing oil and gas sources, the US Environmental Protection Agency (US EPA) is preparing to conduct an information collection request (ICR) from the production, gathering, processing and pipeline segments of the oil and gas industry.  

In preparation, the US EPA has developed a mailing list for each industry segment included in the ICR as outlined below:

  • Production: List of production well operators.
  • Gathering and Boosting: List of parent companies expected to have gathering and boosting facilities.
  • Processing; Compression; Underground Storage; LNG: List of individual facilities within each sector.
  • Pipeline: List of State-level pipeline companies.

Currently, the Agency is requesting that companies register for the online database so that they can review their information and correct any potential errors.  US EPA acknowledges that some of the information may be outdated or inaccurate or that the individual who is listed as the company’s contact may not be the appropriate person to receive the ICR.

If you or your company are included in this database, you will be required to complete the information collection request so it would benefit you to verify the accuracy of the information.  Once the initial ICR is sent out, respondents will only have 30 days to complete the initial survey.

The EPA is specifically requesting that companies add any missing production well operators, parent companies of gathering and boosting facilities, and individual facilities or pipeline companies for the other industry segments into the mailing list.

Please note that even some individual domestic well owners are included on the US EPA’s list.

US EPA is currently seeking approval from the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) for this ICR.  Once it is finalized, there will be two parts to the ICR.  Part 1 will collect corporate and operator-level contact information as well as counts for key equipment (e.g. wells, tanks, and compressors) at each facility owned or operated by that operator. Part 2 will collect detailed unit-specific information on emission sources at selected facilities as well as information on emission controls or management practices used to reduce emissions at the selected facilities.

The ICR seeks a broad range of information such as how equipment and emissions controls are, or can be, configured, and what installing those controls entails, including the associated costs. This information will help the agency determine how best to address methane emissions from the oil and gas industry, including through rulemaking to reduce emissions.

The agency is seeking information on numerous sources and activities, including natural gas venting that occurs as part of existing processes or maintenance activities, such as well and pipeline blowdowns, equipment malfunctions and flashing emissions from storage tanks. EPA also is seeking information on existing low-producing wells.

This website provides links to the revised ICR and other supporting documents.

OOGA is currently working with the Independent Petroleum Association of America to submit comments.  If members would like to comment on the revised ICR before OIRA, comments must be submitted by October 31, 2016. 

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EID Report: Sales Tax Revenues Grow 65 Percent in Utica Shale Counties

Posted By Guest Blog: Jackie Stewart, Energy In Depth Ohio, Monday, October 3, 2016
Updated: Tuesday, October 4, 2016

Since Utica Shale development took off in 2011, companies have been investing a tremendous amount of capital in eastern Ohio. Billions of dollars have been spent developing well sites, creating much-needed infrastructure, standing up regional headquarters for service companies, and constructing hotel and restaurant chains. In addition, landowners and municipal governments have benefited from lease payments.

These investments across the board have resulted in an uptick in sales activity, and therefore have created a surge in sales tax revenues. According to data obtained from Ohio Department of Taxation’s sales tax distribution website, EID research shows that over the past five years shale counties have realized a 65 percent boost, thanks in large part to the investments made by the oil and gas industry.

During the same time frame, the counties without shale development realized a 37 percent increase in their sales tax revenues. In other words, shale counties had nearly twice the boost that non-shale counties had, underscoring the importance of oil and gas development to these revenues.

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Methodology

EID analyzed the Ohio sales tax distributions in shale counties over the time horizon of FY2011-FY2015, as this is the most up-to-date data available.

We analyzed each year-over-year percentage change during that time period for the selected shale counties as compared to the rest of the counties’ allocations to determine if there was a relationship between oil and natural gas activities and growth rates in sales tax revenues in the identified shale counties.

We identified shale counties, as the shale counties which have experienced the most oil and natural gas activity as it relates to production of wells and related services. For this research, we included Belmont, Carroll, Columbiana, Guernsey, Harrison, Jefferson, Monroe, and Noble counties. It is important to note that several other counties have also experienced oil and gas activities, such as Mahoning, Trumbull, and Washington counties. However, these eight counties have been the core of the development in Ohio.

Top Level Findings

Our research shows a direct correlation between activity from oil and gas investment and sales tax revenues. Shale counties realized a 65 percent boost over five years, as compared with the overall state counties which realized a 37 percent increase over the same period of time. In fact, even last year, when pundits were quick to call the Utica shale exploration a so-called “bust”, shale counties still outperformed the statewide year-over-year percentage change, demonstrating that oil and natural gas investment has had a lasting positive impact on the communities where it occurred.

As EID previously reported, the sales tax allocation that the state pays to each county is only a small fraction of the overall sales tax actually paid by consumers. In fact, the state of Ohio keeps the majority of sales tax revenues for their general fund. Here’s how that works: a business in Carroll County pays 6.75 percent in sales tax revenue so a $100.00 sale requires $6.75 in sales tax. The business sends that $6.75 to the state of Ohio and the state takes $5.75 and returns $1.00 to the county where the business is operating. The reason this is important to note is that a 65 percent boost in sales tax to Belmont, Carroll, Columbiana, Guernsey, Harrison, Jefferson, Monroe, and Noble counties, is in fact a boost to the entire state, because the state of Ohio keeps the vast majority of the tax collected; only a small fraction is returned to the counties.

In short, thanks to shale, Ohio’s statewide coffers have grown by millions.

County Breakdowns

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Looking closer at the data, it was evident how oil and gas activity is directly correlated with higher revenues, giving a hand-up to some of the hardest hit counties in Ohio. Take a look at Monroe County, for example, where sales tax revenues jumped over 320 percent over the past five years. That’s because Monroe County has some of the best production Utica shale wells in the state. Harrison County, where MarkWest has stood up a corporate office and invested over $2.5 billion to date in Ohio, and is employing local residents in the community, also saw a 252 percent boost.

It’s not just drilling activities driving the economy; it’s the ripple impact from the industry that has inspired confidence into these areas. Communities like St. Clairsville, Ohio, where hotels, Starbucks, retail centers, and more have come right along with the staggering well production from Utica shale wells.

To put this into perspective, if the entire state of Ohio realized the same growth rate in sales tax revenues of these nine shale counties, Ohio would have experienced over a billion dollars in sales tax revenues going directly to the counties. The state of Ohio would have realized over $6 billion in additional taxes to the state’s coffers, over the past five years.

So, to echo a new report released from the US Chamber of Commerce entitled “What if America’s Energy Renaissance Never Actually Happened?”— if the American energy renaissance never actually happened over the past five years, these nine counties in eastern Ohio would have not realized the millions in tax receipts they have experienced and the state would have missed out on millions more.

As Rep. Johnson, a member of the House Energy and Commerce Committee, recently stated,

“The bottom line is this: The energy renaissance that has happened in the Marcellus and the Utica shale—that is what has brought Ohio back, in my opinion. “

EID’s new report underscores (yet again) that the Keep It in the Ground activists are completely out of touch with the people who live and work in Ohio. We challenge these groups to debate our findings and try to contest the obvious positive correlation between investment from shale and sales tax revenues that benefits both the entire state, as well as the counties directly.

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