Dear Members, Points of Interest - OCAPL€¦ · luncheon. August 28th is the Sporting Clays...
Transcript of Dear Members, Points of Interest - OCAPL€¦ · luncheon. August 28th is the Sporting Clays...
Page 1
VOLUME 13, ISSUE 6 JULY/AUGUST 2015
President’s Letter
2014 Tax Info 3
Questions from the 4field
IndustryAffairs 5-7
BellaFoundation8-10
NominationForms11-13
WeekendTakeoff14-15
Dear Members,
Summertimeisalmostoverandallthekidsareheadingback
toschool.Ihopeyouenjoyedtheseasonandinviteyoutojoin
ourMondayluncheonsandmembershipmeetingsresuming
September14th.TheMondaynightmeetingisasocialand
willofferourmembersascreeningforearlysignsofType2
Diabetes.TravisBrownwithMahaffey&Gorewillspeakatthe
luncheon.
August28thistheSportingClaysTournament.I’llbethere
withmyshotgunsodon’tmakemeangryorgetinmyway!I’m
joking,butIreallyshouldpracticebeforehand.I’veonlyused
mygunoneothertimeanditwastwoyearsago.
TheWeekendTakeOffissetforSeptember25,26&27that
Beaver’sBend.Tami,Leslieandtheircommitteehaveagreat
lineupofspeakersandCandy,GloriaandDavehavealwaysfed
uswell.Thereismoreinformationcontainedinthisnewsletter
alongwitharegistrationformifyouwouldliketojoinus.
AlsoonSeptember26thfrom1:00to4:00pmwearelooking
forvolunteerstoworkattheFoodBank.Ifyouareinterested
inhelping,pleaselettheCommunityAffairsCommitteeknow
andtheywillgiveyouinstructionsonhowtopre-register
onlinewiththeFoodBank.
TheAAPLConventioninNashvillewasalotoffunandI’m
gladIwasabletoattend.Twoofourmembersearnedthe
topawards:JackRichards,LifetimeAchievementAwardand
JulieWoodard,LandmanoftheYearAward.MaritaMorris
wonBestMemberCommunication,MichaelFlehartywon
BestNewsletter(LargeOrganization)andLindseyFixley
andMelissaMillerwon(forthesecondyearinarow)Best
CommunityServiceAward.IhopetopresentMarita,
Michael,LindseyandMelissatheirtrophiesatourawards
meetingonNovember9th.Wehadtomovetothe2nd
MondayofthemonthbecausetheHistoryCenterhada
schedulingconflict.
It’stimeforustonominateofficers,twoexecutiveboard
positions,andthespecialawardsforLandmanoftheYear
andtheWilliamMajor’sDistinguishedService.Mike
WalkerchairstheNominationandAwardsCommitteeand
withinthisnewsletterarethreenominationforms.Weneed
theOfficernominationsbySeptember1standthespecial
awardsbyOctober1st.Pleasetakethetimetoparticipateby
completingandreturningthenominationformsinatimely
matter.
WehavealotofthingsplannedtherestoftheyearandI’m
lookingforwardtoseeingeveryonesoon.
Respectfully,
Amy Jo Love2015OCAPLPresident
Points of Interest
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SportingClaysTournament–SilverleafShotgunSports
EducationalLuncheon–SPEAKER-TravisBrown,Mahaffey&Gore
MondayNightMeeting–SOCIALMEETING–NOSPEAKER–REDSKYSPONSOREDDIABETESSCREENINGAVAILABLE
WeekendTakeOff
EducationalLuncheon–SPEAKER–TBA
MondayNightMeeting-SPEAKER–WeldonWatson,ChairoftheEnergy&NaturalResourcesCommittee,OKHouseofRepTOPIC–“CurrentLegislativeIssuesaffectingourIndustry”
VolunteerEvent–PumpkinDecoratingwithYouth
EducationalLuncheon–SPEAKER–TBA
FieldLandmanSeminar
CHANGEOFDATETO2NDMONDAYDUETOVENUECONFLICT!!!!!MondayNightMeeting–AWARDSNIGHT–LandmanoftheYearandWilliamMajorsDistinguishedServiceAwards(WHOWILLYOUNOMINATETHISYEAR?!)
VolunteerEvent-ThanksgivingDinnerwiththeBoysandGirlsClub
CHRISTMASPARTY–SkirvinHiltonHotel
Sept.14th
Sept.25-26th
Oct.5th
Oct.15th
Nov.2nd
Nov.5th
Nov.9th
Nov?
Dec.7th
August28th
Page 3
OKLAHOMA CITY ASSOCATION OF PROFESSIONAL LANDMEN 73-1099493
FINANCIAL INFORMATION FOR YEAR ENDED 12/31/2014
BALANCE SHEET
ASSETS
CASH $164,168.76 TOTAL ASSETS $164,168.76 LIABILITIES ACCOUNTS PAYABLE $0 EQUITY EQUITY AT 1/1/14 $210,442.50 CURRENT YEAR INCOME/LOSS $ 46,273.74 EQUITY AT 12/31/14 $164,168.76 TOTAL LIABILITIES & EQUITY $164,168.76 PROFIT & LOSS REVENUES DUES/MEMBERSHIPS $159,407.60 MEETINGS, EDUCATION, SOCIAL EVENTS $553,393.75 NEWSLETTER/WEBSITE ADVERTISEMENT $ 9,025.00 INTEREST $ 32.19 TOTAL REVENUES $721,858.54 EXPENSES DONATIONS/GRANTS $ 84,851.59 RENT $ 6,447.96 POSTAGE $ 190.00 PRINTING & PUBLICATIONS $ 8,968.65 ADVALOREM TAX $ 63.52 AAPL DIRECTOR EXPENSES $ 3,928.25 AWARDS $ 1,561.24 CONTRACT LABOR $ 27,430.00 INSURANCE $ 2,754.00 MEETINGS, EDUCATION, SOCIAL EVENTS $627,295.76 PROFESSIONAL FEES $ 1,075.00 SUPPLIES $ 527.19 TECHNOLOGY $ 25.50 TELEPHONE/INTERNET $ 1,427.69 OCAPL TRAVEL $ 1,585.93 TOTAL EXPENSES $768,132.28 CURRENT YEAR INCOME/LOSS $ -46,273.74
OKLAHOMA CITY ASSOCATION OF PROFESSIONAL LANDMEN 73-1099493
FINANCIAL INFORMATION FOR YEAR ENDED 12/31/2014
BALANCE SHEET
ASSETS
CASH $164,168.76 TOTAL ASSETS $164,168.76 LIABILITIES ACCOUNTS PAYABLE $0 EQUITY EQUITY AT 1/1/14 $210,442.50 CURRENT YEAR INCOME/LOSS $ 46,273.74 EQUITY AT 12/31/14 $164,168.76 TOTAL LIABILITIES & EQUITY $164,168.76 PROFIT & LOSS REVENUES DUES/MEMBERSHIPS $159,407.60 MEETINGS, EDUCATION, SOCIAL EVENTS $553,393.75 NEWSLETTER/WEBSITE ADVERTISEMENT $ 9,025.00 INTEREST $ 32.19 TOTAL REVENUES $721,858.54 EXPENSES DONATIONS/GRANTS $ 84,851.59 RENT $ 6,447.96 POSTAGE $ 190.00 PRINTING & PUBLICATIONS $ 8,968.65 ADVALOREM TAX $ 63.52 AAPL DIRECTOR EXPENSES $ 3,928.25 AWARDS $ 1,561.24 CONTRACT LABOR $ 27,430.00 INSURANCE $ 2,754.00 MEETINGS, EDUCATION, SOCIAL EVENTS $627,295.76 PROFESSIONAL FEES $ 1,075.00 SUPPLIES $ 527.19 TECHNOLOGY $ 25.50 TELEPHONE/INTERNET $ 1,427.69 OCAPL TRAVEL $ 1,585.93 TOTAL EXPENSES $768,132.28 CURRENT YEAR INCOME/LOSS $ -46,273.74
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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: In some counties, documents are not properly in-dexed. Are improperly indexed or misindexed instruments, such as an Oil and Gas Lease, considered to be constructive notice, or does the document constitute constructive notice only when it is properly indexed? – W.S.
A: In Oklahoma, the law appears to be uncertain. The Oklahoma Supreme Court noted in the 1922 case of Hodges v. Simpson, there are two lines of authority. One line holds that where one has an instrument and it is in proper form and he/she has delivered the instrument to the County Clerk’s Office, the holder of the instrument has performed all acts that the law requires of him and he/she is not responsible for any mistakes made by the recording officer in recording the instrument. The failure of the County Clerk will not work to the prejudice of the grantee or a subsequent assignee. The Oklahoma court adopted this line of authority in Hodges v. Simpson. Some other states, in what is considered to be the modern
view, hold that delivery of the instrument to the recording officer is not sufficient and that the failure of the County Clerk to properly perform his/her duties and correctly record the instrument can be attributed to the holder of the instrument and those claiming rights under him. These courts hold that a subsequent purchaser has the right to rely on the record as shown in the County Clerk’s records.
In the 1985 case of Will Rogers Bank and Trust Company v. First National Bank of Tahlequah, the Oklahoma Supreme Court seemingly adopted the modern trend. In Will Rog-ers, the Supreme Court held that a judgment lien was held to be unperfected when it was not properly indexed under the name of each debtor shown in the judgment . The court held that the erroneous recording and misindexing of the judgment rendered the judgment lien, to be unperfected on the debtor’s realty in Cherokee County. It held that the title of a bona fide purchaser, who had no notice of the judgment lien, is superior to the right of the judgment lien creditor whose lien was not properly indexed. In this 1985 case, the court did not distinguish or even discuss the earlier Hodges v. Simpson case.
Therefore, at this point, the law is certainly uncertain as to whether a misindexed oil and gas lease constitutes construc-tive notice. In the event that a land professional should determine that a document is not correctly indexed, then it should be brought to the attention of the County Clerk’s Of-fice so as to avoid any conflict or litigation in the future.
Note: If you have any title questions you want answered, email your questions to [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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Saudi Arabia may go broke before the US oil industry bucklesIt is too late for OPEC to stop the shale revolution. The cartel faces the prospect of surging US output whenever oil prices rise
By AmbroseEvans-Pritchard,www.telegraph.co.uk,August5,2015
Iftheoilfuturesmarketiscorrect,SaudiArabiawillstartrunningintotroublewithintwoyears. Itwillbe inexistentialcrisisbytheendofthedecade.ThecontractpriceofUScrudeoil fordelivery inDecember 2020is currently $62.05, implying a drastic change in the economiclandscapefortheMiddleEastandthepetro-rentierstates.TheSaudistookahugegamblelastNovemberwhentheystoppedsupportingpricesandoptedinsteadtofloodthemarketanddriveoutrivals,boosting theirownoutput to 10.6mbarrelsaday (b/d)intotheteethofthedownturn.BankofAmericasaysOPECisnow“effectivelydissolved”.ThecartelmightaswellshutdownitsofficesinViennatosavemoney.
If the aim was to choke the US shale industry, the Saudis havemisjudged badly, just as theymisjudged thegrowing shale threatat every stage for eight years. “It is becoming apparent that non-OPECproducersarenotasresponsivetolowoilpricesashadbeenthought,atleastintheshort-run,”saidtheSaudicentralbankinitslateststabilityreport.
“Themainimpacthasbeentocutbackondevelopmentaldrillingofnewoilwells,ratherthanslowingtheflowofoilfromexistingwells.Thisrequiresmorepatience,”itsaid.OneSaudiexpertwasblunter.“Thepolicyhasn’tworkedanditwillneverwork,”hesaid.By causing theoil price to crash, the Saudis and their Gulf allieshavecertainlykilledoffprospectsforaraftofhigh-costventuresintheRussianArctic,theGulfofMexico,thedeepwatersofthemid-Atlantic,andtheCanadiantarsands.ConsultantsWoodMackenziesaythemajoroilandgascompanieshaveshelved46largeprojects,deferring$200bnofinvestments.TheproblemfortheSaudisisthatUSshalefrackersarenothigh-cost.Theyaremostlymid-cost,andas I reported fromtheCERAWeekenergy forum in Houston, experts at IHS think shale companiesmaybeabletoshavethosecostsby45pcthisyear-andnotonlybyswitchingtacticallytohigh-yieldingwells.Advancedpaddrilling techniquesallow frackers to launchfiveortenwellsindifferentdirectionsfromthesamesite.Smartdrill-bitswithcomputerchipscanseekoutcracksintherock.Newdissolvableplugspromisetosave$300,000awell.“We’vedrivendowndrillingcostsby50pc,andwecanseeanother30pcahead,”saidJohnHess,headoftheHessCorporation.ItwasthesamestoryfromScottSheffield,headofPioneerNaturalResources.“Wehavejustdrilledan18,000ftwell in16daysinthePermianBasin.Lastyearittook30days,”hesaid.TheNorthAmerican rig-count hasdropped to 664 from 1,608 inOctoberbutoutputstillrosetoa43-yearhighof9.6mb/dJune.Ithasonlyjustbeguntorollover.“ThefreighttrainofNorthAmericantight oil has kept on coming,” said Rex Tillerson, head of ExxonMobil.
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Saudi Arabia may go broke before the US oil industry buckles It is too late for OPEC to stop the shale revolution. The cartel faces the prospect of surging US output whenever oil prices rise
By Ambrose Evans-Pritchard, www.telegraph.co.uk, August 5, 2015
If the oil futures market is correct, Saudi Arabia will start running into trouble within two years. It will be in existential crisis by the end of the decade.
The contract price of US crude oil for delivery in December 2020 is currently $62.05, implying a drastic change in the economic landscape for the Middle East and the petro-rentier states.
The Saudis took a huge gamble last November when they stopped supporting prices and opted instead to flood the market and drive out rivals, boosting their own output to 10.6m barrels a day (b/d) into the teeth of the downturn.
Bank of America says OPEC is now "effectively dissolved". The cartel might as well shut down its offices in Vienna to save money.
If the aim was to choke the US shale industry, the Saudis have misjudged badly, just as they misjudged the growing shale threat at every stage for eight years. "It is becoming apparent that non-OPEC producers are not as responsive to low oil prices as had been thought, at least in the short-run," said the Saudi central bank in its latest stability report.
"The main impact has been to cut back on developmental drilling of new oil wells, rather than slowing the flow of oil from existing wells. This requires more patience," it said.
One Saudi expert was blunter. "The policy hasn't worked and it will never work," he said.
By causing the oil price to crash, the Saudis and their Gulf allies have certainly killed off prospects for a raft of high-
cost ventures in the Russian Arctic, the Gulf of Mexico, the deep waters of the mid-Atlantic, and the Canadian tar sands.
Consultants Wood Mackenzie say the major oil and gas companies have shelved 46 large projects, deferring $200bn of investments.
The problem for the Saudis is that US shale frackers are not high-cost. They are mostly mid-cost, and as I reported from the CERAWeek energy forum in Houston, experts at IHS think shale companies may be able to shave those costs by 45pc this year - and not only by switching tactically to high-yielding wells.
Advanced pad drilling techniques allow frackers to launch five or ten wells in different directions from the same site. Smart drill-bits with computer chips can seek out cracks in the rock. New dissolvable plugs promise to save $300,000 a well. "We've driven down drilling costs by 50pc, and we can see another 30pc ahead," said John Hess, head of the Hess Corporation.
It was the same story from Scott Sheffield, head of Pioneer Natural Resources. "We have just drilled an 18,000 ft well in 16 days in the Permian Basin. Last year it took 30 days," he said.
The North American rig-count has dropped to 664 from 1,608 in October but output still rose to a 43-year high of 9.6m b/d June. It has only just begun to roll over. "The freight train of North American tight oil has kept on coming," said Rex Tillerson, head of Exxon Mobil.
He said the resilience of the sister industry of shale gas should be a cautionary warning to those reading too much into the rig-count. Gas prices have collapsed from $8 to $2.78 since 2009, and the number of gas rigs has dropped 1,200 to 209. Yet output has risen by 30pc over that period.
Until now, shale drillers have been cushioned by hedging contracts. The stress test will come over coming months as these expire. But even if scores of over-leveraged wild-catters go bankrupt as funding dries up, it will not do OPEC any good.
The wells will still be there. The technology and infrastructure will still be there. Stronger companies will mop up on the cheap, taking over the operations. Once oil
Page 6
Hesaidtheresilienceofthesisterindustryofshalegasshouldbeacautionarywarningtothosereadingtoomuch intotherig-count.Gas prices have collapsed from $8 to $2.78 since 2009, and thenumberofgasrigshasdropped1,200to209.Yetoutputhasrisenby30pcoverthatperiod.Untilnow,shaledrillershavebeencushionedbyhedgingcontracts.Thestresstestwillcomeovercomingmonthsastheseexpire.Butevenifscoresofover-leveragedwild-cattersgobankruptasfundingdriesup,itwillnotdoOPECanygood.Thewellswillstillbethere.Thetechnologyandinfrastructurewillstillbethere.Strongercompanieswillmopuponthecheap,takingovertheoperations.Onceoilclimbsbackto$60oreven$55-sincethethresholdkeepsfalling-theywillcrankupproductionalmostinstantly.OPECnowfacesapermanentheadwind.EachriseinpricewillbecappedbyasurgeinUSoutput.TheonlyconstraintisthescaleofUSreservesthatcanbeextractedatmid-cost,andthesemaybebiggerthanoriginallysupposed,not tomention theparallelpossibilities
inArgentinaandAustralia,orthepossibilityfor“cleanfracking”inChinaasplasmapulsetechnologycutswaterneeds.MrSheffieldsaidthePermianBasin inTexascouldaloneproduce5-6mb/dinthelong-term,morethanSaudiArabia’sgiantGhawarfield,thebiggestintheworld.SaudiArabia is effectively beached. It reliesonoil for 90pcof itsbudgetrevenues.Thereisnootherindustrytospeakof,afullfiftyyearsaftertheoilbonanzabegan.
Citizens pay no tax on income, interest, or stock dividends.Subsidizedpetrolcoststwelvecentsalitreatthepump.Electricityisgivenaway for 1.3centsakilowatt-hour.SpendingonpatronageexplodedaftertheArabSpringasthekingdomsoughttosmotherdissent.TheInternationalMonetaryFundestimatesthatthebudgetdeficitwillreach20pcofGDPthisyear,orroughly$140bn.The‘fiscalbreak-evenprice’is$106.Farfromretrenching,KingSalmanissprayingmoneyaround,givingaway$32bninacoronationbonusforallworkersandpensioners.HehaslaunchedacostlywaragainsttheHouthisinYemenandisengagedinamassivemilitarybuild-up-entirelyreliantonimportedweapons-thatwillpropelSaudiArabiatofifthplaceintheworlddefenceranking.TheSaudiroyalfamilyisleadingtheSunnicauseagainstaresurgentIran, battling for dominance in a bitter struggle between SunniandShiaacrosstheMiddleEast.“Rightnow,theSaudishaveonlyonethingontheirmindandthatistheIranians.Theyhaveaveryserious problem. Iranian proxies are running Yemen, Syria, Iraq,andLebanon,”saidJimWoolsey,theformerheadoftheUSCentral
Saudi Arabia may go broke before the US oil industry buckles It is too late for OPEC to stop the shale revolution. The cartel faces the prospect of surging US output whenever oil prices rise
By Ambrose Evans-Pritchard, www.telegraph.co.uk, August 5, 2015
If the oil futures market is correct, Saudi Arabia will start running into trouble within two years. It will be in existential crisis by the end of the decade.
The contract price of US crude oil for delivery in December 2020 is currently $62.05, implying a drastic change in the economic landscape for the Middle East and the petro-rentier states.
The Saudis took a huge gamble last November when they stopped supporting prices and opted instead to flood the market and drive out rivals, boosting their own output to 10.6m barrels a day (b/d) into the teeth of the downturn.
Bank of America says OPEC is now "effectively dissolved". The cartel might as well shut down its offices in Vienna to save money.
If the aim was to choke the US shale industry, the Saudis have misjudged badly, just as they misjudged the growing shale threat at every stage for eight years. "It is becoming apparent that non-OPEC producers are not as responsive to low oil prices as had been thought, at least in the short-run," said the Saudi central bank in its latest stability report.
"The main impact has been to cut back on developmental drilling of new oil wells, rather than slowing the flow of oil from existing wells. This requires more patience," it said.
One Saudi expert was blunter. "The policy hasn't worked and it will never work," he said.
By causing the oil price to crash, the Saudis and their Gulf allies have certainly killed off prospects for a raft of high-
cost ventures in the Russian Arctic, the Gulf of Mexico, the deep waters of the mid-Atlantic, and the Canadian tar sands.
Consultants Wood Mackenzie say the major oil and gas companies have shelved 46 large projects, deferring $200bn of investments.
The problem for the Saudis is that US shale frackers are not high-cost. They are mostly mid-cost, and as I reported from the CERAWeek energy forum in Houston, experts at IHS think shale companies may be able to shave those costs by 45pc this year - and not only by switching tactically to high-yielding wells.
Advanced pad drilling techniques allow frackers to launch five or ten wells in different directions from the same site. Smart drill-bits with computer chips can seek out cracks in the rock. New dissolvable plugs promise to save $300,000 a well. "We've driven down drilling costs by 50pc, and we can see another 30pc ahead," said John Hess, head of the Hess Corporation.
It was the same story from Scott Sheffield, head of Pioneer Natural Resources. "We have just drilled an 18,000 ft well in 16 days in the Permian Basin. Last year it took 30 days," he said.
The North American rig-count has dropped to 664 from 1,608 in October but output still rose to a 43-year high of 9.6m b/d June. It has only just begun to roll over. "The freight train of North American tight oil has kept on coming," said Rex Tillerson, head of Exxon Mobil.
He said the resilience of the sister industry of shale gas should be a cautionary warning to those reading too much into the rig-count. Gas prices have collapsed from $8 to $2.78 since 2009, and the number of gas rigs has dropped 1,200 to 209. Yet output has risen by 30pc over that period.
Until now, shale drillers have been cushioned by hedging contracts. The stress test will come over coming months as these expire. But even if scores of over-leveraged wild-catters go bankrupt as funding dries up, it will not do OPEC any good.
The wells will still be there. The technology and infrastructure will still be there. Stronger companies will mop up on the cheap, taking over the operations. Once oil
climbs back to $60 or even $55 - since the threshold keeps falling - they will crank up production almost instantly.
OPEC now faces a permanent headwind. Each rise in price will be capped by a surge in US output. The only constraint is the scale of US reserves that can be extracted at mid-cost, and these may be bigger than originally supposed, not to mention the parallel possibilities in Argentina and Australia, or the possibility for "clean fracking" in China as plasma pulse technology cuts water needs.
Mr Sheffield said the Permian Basin in Texas could alone produce 5-6m b/d in the long-term, more than Saudi Arabia's giant Ghawar field, the biggest in the world.
Saudi Arabia is effectively beached. It relies on oil for 90pc of its budget revenues. There is no other industry to speak of, a full fifty years after the oil bonanza began.
Citizens pay no tax on income, interest, or stock dividends. Subsidized petrol costs twelve cents a litre at the pump. Electricity is given away for 1.3 cents a kilowatt-hour. Spending on patronage exploded after the Arab Spring as the kingdom sought to smother dissent.
The International Monetary Fund estimates that the budget deficit will reach 20pc of GDP this year, or roughly $140bn. The 'fiscal break-even price' is $106.
Far from retrenching, King Salman is spraying money around, giving away $32bn in a coronation bonus for all workers and pensioners.
He has launched a costly war against the Houthis in Yemen and is engaged in a massive military build-up - entirely reliant on imported weapons - that will propel Saudi Arabia to fifth place in the world defence ranking.
The Saudi royal family is leading the Sunni cause against a resurgent Iran, battling for dominance in a bitter struggle between Sunni and Shia across the Middle East. "Right now, the Saudis have only one thing on their mind and that is the Iranians. They have a very serious problem. Iranian proxies are running Yemen, Syria, Iraq, and Lebanon," said Jim Woolsey, the former head of the US Central Intelligence Agency.
Money began to leak out of Saudi Arabia after the Arab Spring, with net capital outflows reaching 8pc of GDP annually even before the oil price crash. The country has since been burning through its foreign reserves at a vertiginous pace.
The reserves peaked at $737bn in August of 2014. They dropped to $672 in May. At current prices they are falling by at least $12bn a month.
Khalid Alsweilem, a former official at the Saudi central bank and now at Harvard University, said the fiscal deficit must be covered almost dollar for dollar by drawing down reserves.
The Saudi buffer is not particularly large given the country's fixed exchange system. Kuwait, Qatar, and Abu Dhabi all have three times greater reserves per capita. "We are much more vulnerable. That is why we are the fourth rated sovereign in the Gulf at AA-. We cannot afford to lose our cushion over the next two years," he said.
Standard & Poor's lowered its outlook to "negative" in February. "We view Saudi Arabia's economy as undiversified and vulnerable to a steep and sustained decline in oil prices," it said.
Mr Alsweilem wrote in a Harvard report that Saudi Arabia would have an extra trillion of assets by now if it had adopted the Norwegian model of a sovereign wealth fund to recyle the money instead of treating it as a piggy bank for the finance ministry. The report has caused storm in Riyadh.
"We were lucky before because the oil price recovered in time. But we can't count on that again," he said.
OPEC have left matters too late, though perhaps there is little they could have done to combat the advances of American technology.
In hindsight, it was a strategic error to hold prices so high, for so long, allowing shale frackers - and the solar industry - to come of age. The genie cannot be put back in the bottle.
The Saudis are now trapped. Even if they could do a deal with Russia and orchestrate a cut in output to boost prices - far from clear - they might merely gain a few more years of high income at the cost of bringing forward more shale production later on.
Yet on the current course their reserves may be down to $200bn by the end of 2018. The markets will react long before this, seeing the writing on the wall. Capital flight will accelerate.
The government can slash investment spending for a while - as it did in the mid-1980s - but in the end it must face draconian austerity. It cannot afford to prop up Egypt and maintain an exorbitant political patronage machine across the Sunni world.
We purchase producing and non-producing mineral rights, royalties, overriding royalties, and working interests.
H. Huffman & Co. is a non-operating Oklahoma company which has been in business for more than 65 years and owns interest in 28 states.
Please contact us for consideration to purchase your oil and gas interests you are interested in divesting.
3 0 1 N W 6 3 R D S T R E E T , S U I T E 5 1 0 • O K L A H O M A C I T Y O K • 7 3 1 1 6 - 7 9 2 7 P H O N E : ( 4 0 5 ) 8 4 8 - 3 3 8 8 • F A X : ( 4 0 5 ) 8 4 8 - 3 6 8 9
R C L A R K @ H H U F F M A N C O . C O M • S E L L I S @ H H U F F M A N C O . C O M
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IntelligenceAgency.MoneybegantoleakoutofSaudiArabiaaftertheArabSpring,withnetcapitaloutflowsreaching8pcofGDPannuallyevenbeforetheoil price crash. The country has since been burning through itsforeignreservesatavertiginouspace.Thereservespeakedat$737bninAugustof2014.Theydroppedto$672 inMay.At currentprices theyare falling byat least $12bnamonth.KhalidAlsweilem,a formerofficialat the Saudicentral bankandnowatHarvardUniversity, said thefiscaldeficitmustbecoveredalmostdollarfordollarbydrawingdownreserves.TheSaudibuffer isnotparticularly largegiventhecountry’sfixedexchangesystem.Kuwait,Qatar,andAbuDhabiallhavethreetimesgreaterreservespercapita.“Wearemuchmorevulnerable.ThatiswhywearethefourthratedsovereignintheGulfatAA-.Wecannotaffordtoloseourcushionoverthenexttwoyears,”hesaid.Standard&Poor’slowereditsoutlookto“negative”inFebruary.“Weview SaudiArabia’s economyasundiversifiedandvulnerable toasteepandsustaineddeclineinoilprices,”itsaid.MrAlsweilemwrote inaHarvard report that SaudiArabiawouldhaveanextratrillionofassetsbynowifithadadoptedtheNorwegianmodelof a sovereignwealth fund to recyle themoney insteadoftreatingitasapiggybankforthefinanceministry.ThereporthascausedstorminRiyadh.“Wewereluckybeforebecausetheoilpricerecoveredintime.Butwecan’tcountonthatagain,”hesaid.OPEChaveleftmatterstoolate,thoughperhapsthereislittletheycouldhavedonetocombattheadvancesofAmericantechnology.Inhindsight, itwasastrategicerror toholdpricessohigh, forso
long,allowingshalefrackers-andthesolarindustry-tocomeofage.Thegeniecannotbeputbackinthebottle.TheSaudisarenowtrapped.EveniftheycoulddoadealwithRussiaandorchestrateacutinoutputtoboostprices-farfromclear-theymightmerelygaina fewmoreyearsofhigh incomeat thecostofbringingforwardmoreshaleproductionlateron.Yetonthecurrentcoursetheirreservesmaybedownto$200bnbytheendof2018.Themarketswillreactlongbeforethis,seeingthewritingonthewall.Capitalflightwillaccelerate.Thegovernmentcanslashinvestmentspendingforawhile-asitdidinthemid-1980s-butintheenditmustfacedraconianausterity.ItcannotaffordtopropupEgyptandmaintainanexorbitantpoliticalpatronagemachineacrosstheSunniworld.SocialspendingisthegluethatholdstogetheramedievalWahhabiregime at a time of fermenting unrest among the Shia minorityof theEasternProvince,pin-prick terroristattacks from ISIS,andblowbackfromtheinvasionofYemen.DiplomaticspendingiswhatunderpinstheSaudisphereofinfluenceinaMiddleEast suffering itsownversionof Europe’sThirtyYearWar,andstillreelingfromtheafter-shocksofacrusheddemocraticrevolt.WemayyetfindthattheUSoilindustryhasgreaterstayingpowerthanthericketypoliticaledificebehindOPEC.
Shale oil output wanes as U.S. producers retreat in bear marketRakteemKatakey,www.worldoil.com,August13,2015
NEWYORK(BloombergBusiness)--The$60billionofoil-industryspendingcutsthisyearwon’tbeenoughascrudelanguishesnearasix-yearlow.Theworld’s biggest producerswill need to trim investments by afurther$26billiontomeetsacrosanctdividendpayments,accordingtoJefferiesGroupLLC.Capitalspendingwillhavetofall 10%nextyear,BancoSantanderSAsays.
-ContinuedatOCAPL.org
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]
Page 8
OCAPL recently teamed up with the Bella Foundation SPCA for a pet adoption outreach at the Farmer’s Market. This event was put on with several other rescue groups around the metro. In total, 2/3rd of the dogs and cats that were at the event got adopted. Thank you to everyone that participated!
OCAPL recently teamed up with the Bella Foundation SPCA for a pet adoption outreach at the Farmer’s Market. This event was put on with several other rescue groups around the metro. In total, 2/3rd of the dogs and cats that were at the event got adopted. Thank you to
everyone that participated!
OCAPLmemberOliverTobinandhiswifeNicholeadopting2dogsattheevent!
Over 35 years of experience in providing efcient and
skilled land services.
For more information Contact Robert Rice at 405.513.5581
Headquartered in Edmond, OklahomaExperience in
Mid-Continent, Utica, Permian, Marcellus, Rocky Mountain, Eagle Ford and Bakken Regions
Page 9
OCAPL recently teamed up with the Bella Foundation SPCA for a pet adoption outreach at the Farmer’s Market. This event was put on with several other rescue groups around the metro. In total, 2/3rd of the dogs and cats that were at the event got adopted. Thank you to everyone that participated!
LindseyFixleyandTomMylesholdingapetupforadoption
Interpret ExtractAnalyze
Page 10
OCAPL recently teamed up with the Bella Foundation SPCA for a pet adoption outreach at the Farmer’s Market. This event was put on with several other rescue groups around the metro. In total, 2/3rd of the dogs and cats that were at the event got adopted. Thank you to everyone that participated!
“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
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Rocky Mountain Office: 621 17th Street, Suite 1555
Denver, CO 80293 (720) 627-6181
Fax (720) 627-6182
OCAPLvolunteersFu-MeiBacon,AllanHauckandLindseyFixley
OCAPLvolunteersDebbieWoodandFu-MeiBacon
Page 11
OKLAHOMA CITY ASSOCIATION OF PROFESSIONAL LANDMEN
OFFICER NOMINATION FORM
The OCAPL Nominating Committee is seeking nominations for OCAPL Vice-President, Treasurer, Secretary, AAPL Director and 2 Executive Committee Members. The term of service for each position is shown below.
All nominees must be active members of OCAPL.
Nominations may be for all or less than all of the positions listed below.
DEADLINE FOR SUBMITTING NOMINATIONS IS SEPTEMBER 1, 2015.
POSITION SERVICE PERIOD
Nominee for Vice President Jan – Dec 2016 ________________________________
Nominee for Treasurer Jan – Dec 2016 ________________________________
Nominee for Secretary Jan – Dec 2016 ________________________________
Nominee for Executive Committee Jan 2016 – Dec 2017_____________________________
Nominee for Executive Committee Jan 2016 – Dec 2017 ___________________________
SUBMITTED BY: SIGNATURE ____________________________________
PRINT NAME ___________________________________
DATE ________________________________________
(ANONYMOUS NOMINATIONS WILL NOT BE CONSIDERED)
Please return this form as an attachment to Mike Walker: [email protected]
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OCAPL Award Nomination Form
LANDMAN OF THE YEAR
Nomination Deadline: October 1, 2015 This award is presented to recognize an outstanding landman for his or her contribution to the land profession, the petroleum industry, OCAPL and the community. The recipient shall be an active OCAPL member. Nominee: ___________________________________ List two, three or more attributes that distinguishes this individual in the categories above and return by email. _____________________________________________________________________________________ _______________________________ _____________________________________________________________________________________ _______________________________ _____________________________________________________________________________________ _______________________________ In lieu of using this form, you can simply e-mail me back with a nominee 's name, and list the attributes you think makes the individual deserving of this award. Please submit your nomination today. Submitted by: ___________________________ Print Name: ___________________________
Return to: Mike Walker [email protected] Nomination Deadline: October 1, 2015
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OCAPL Award Nomination Form
WILLIAM (BILL) MAJORS DISTINGUISHED SERVICE AWARD
Nomination Deadline: October 1, 2015 This award is presented to an OCAPL member, active, associate, life or honorary, who has made and exceptional contribution in one or more of the following categories: OCAPL, the land profession, the petroleum industry and the community. Nominee: ___________________________________
List two, three or more attributes that distinguishes this individual in the categories above and return by email. _____________________________________________________________________________________ _______________________________ _____________________________________________________________________________________ _______________________________ _____________________________________________________________________________________ _______________________________ In lieu of using this form, you can simply e-mail me back with a nominee's name, and list the attributes you think makes the individual deserving of this award. Please submit your nomination today. Submitted by: ___________________________ Print Name: ___________________________
Return to: Mike Walker [email protected] Nomination Deadline: October 1, 2015
Page 14
11th ANNUAL WEEKEND TAKE OFF September 25, 26 & 27, 2015
Event: Continuing Education Seminar Location: Beavers Bend State Park ~ Broken Bow, Oklahoma ~ Casa Bodega, hospitality cabin Credits: This program is pending AAPL approval for the following accreditation:
CPL Continuing Education Credits 9 RPL Continuing Education Credits 9 Ethics Credits 1
TOTAL CREDITS: 10 Registration: $275.00 per person ~ Deadline September 4, 2015 ~ registration at www.ocapl.com
This event is limited to approximately forty participants ~ early registration is encouraged Includes: Two nights’ accommodations in luxurious vacation homes (www.ceyasoon.com) ~ all meals
~ refreshments ~ study materials ~ poker run ~ door prizes ~ boating ~ and more Event Contact: Tami Wheeler 405.360.6191, [email protected] Schedule: Friday, September 25 4:00pm-5:00pm
Registration ~ Use this time to find, settle in cabins then return for speakers and dinner
5:00pm-7:00pm Dennis McAfee & Brandi Smart Quanta Pipeline Services
~ Environmental Issues facing the oil and gas industry
7:00pm-8:00pm Dinner 8:00pm-9:00pm Dave Hampton
Hampton & Milligan ~ Your ONRR – BLM’s new system
Saturday, September 26 8:00am-9:00am
[Breakfast] Trae Gray Landowner Firm
~ Water Rights
9:00am-10:00am Frank Hinton Elias, Books, Brown and Nelson, PC
~ Wellbore Assignments
10:00am-11:00am Candy Robinson Edge Energy Management, LLC
~ Ethics Presentation
11:00am-1:00pm Jami Poor MAP
~ Anadarko Basin
12:30pm-1:00pm Lunch 1:00pm-2:00pm Travis Brown
Mahaffey & Gore, PC ~ Verifying validity of the oil & gas lease
HBP from marginal wells 2:00pm-6:30pm Free Time ~ Use this opportunity to explore the resort
area, take a siesta, or take a float on our reserved pontoon boat
6:30pm-8:30pm Larry Coshow Zacale Resources
~ Open Mic Night – industry related questions and discussion
8:30pm– 9:30pm Dinner ~ Announce poker run winners & door prizes
Sunday, September 27 9:00am
Checkout
Page 15
WEEKEND TAKE OFF 2015
Beavers Bend State Park September 25, 26 & 27, 2015
REGISTRATION FORM (Due by September 4, 2015)
Name: Company: Address: Phone: E-Mail: RLP/CPL #:
* * * * * * * * Registration Cost (per person) $ 275.00
TOTAL PAYMENT ATTACHED $ Please mail completed form along with a check payable to OCAPL for the amount shown above to: OCAPL P.O. Box 18714 Oklahoma City, OK 73154
Registration is on a first come, first served basis so your prompt attention is required. Registration is now open. Attached please find revised information to include this year’s speakers and schedule. The fun begins seven weeks from tomorrow - John
Page 16
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)AdRequirments:-31/4widex41/2tall
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PaymentisduepriortopublicationCONDITIONS:Alladvertisingcopyissubjecttotheap-provalofOCAPL.Wherecopy isnot furnishedby thedeadlinedate,thespacereservedwillbemovedtothenextissuesubjecttoavailability.Advertisingisacceptedintheorderinwhichitisreceiveduntilallspaceisfilled.
OklahomaCityAssociationofProfessionalLandmenOffice
Teresa PortwoodOCAPLOfficeP.O.Box18714OklahomaCity,[email protected]:www.ocapl.org
NextNewletterDeadline:September10,2015
2015NewsletterChair:MichaelFleharty
PreparedbyDustinBurton
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NEXT MEETING NOVEMBER 4, 20�3NEXT MEETING SEPTEMBER 14, 2015