Nationall Association of Division Order Anallysts APRIIL // MAY // JUNE 2014

NADOA G R O W T H T H R O U G H E D U C A T I O N N a t i o n a l A s s o c i a t i o n o f D i v i s i o n O r d e r A n a l y s t s

Volume MMXIV • No 2 wwwwww.N.NAADDOOAA..oorrgg

NADOA 2014 Officers Contents President Mary Sons Feature 1st Vice President Articles Nancy Cemino, CDOA Unclaimed Property – California, Florida ...... 6 nd 2 Vice President New Wyoming Royalty Brenda Pirozzolo, CDOA Reporting Policies and Seminar...... 7 Treasurer Legal Update – Cheryl Hampton North Dakota Supreme Court Decisions ...... 8 Corresponding Secretary Legal Watch – Oklahoma...... 10 Sharon Siemer, CDOA Legislative Watch – Colorado...... 11 Legislative Update – Recording Secretary Nevada and Federal Fracturing rules ...... 12 Jason Lucas Institute ...... 13 The NADOA News Magazine Marcellus Shale Issues ...... 25 is a quarterly publication of the National Association of Division Order Analysts PO Box 2300 In This Lees Summit MO 64063 Subscription: By membership to Issue NADOA, at $75.00 per year. President’s Corner ...... 2 News Magazine Editor Membership Recognition Nominations ...... 3 Rona L. Erickson, CDOA Certification ...... 4 Kaiser-Francis Oil Company Test Your Knowledge ...... 5 [email protected] Decimal Points ...... 5 918.491.4319 Counterpart Connection ...... 34 Publisher New Members ...... 37 Cockrell Enovation Interaction ...... 41 FortWorth,TX 2014 NADOA Board and Committee Chairs...... 42 [email protected] 817.336.0571 Calendar of Events ...... 44

On the Cover: Navy Pier night skyline Photo courtesy of Choose Chicago

All rights reserved. No part of this publication may be reproduced/copied without written permission. Editorial disclaimer: The contents of this newsletter are intended for member use only and any other use without permission from the NADOA Board of Directors is strictly prohibited.Articles published herein represent the view of the authors; publication neither implies approval of the opinions expressed nor accuracy of the facts stated and NADOA accepts no liability for misprints.

G R O W T H T H R O U G H E D U C A T I O N – APRIL/MAY/JUNE 2014 1 President’s Mary Sons Corner 2014 NADOA President

Hello fellow NADOA members! We’ve made it through the first quarter of 2014. It's time for warm weather and outdoor activities. Late spring and summer are my favorite times of the year because it means being outdoors with my family and going to the lake. I would prefer an ocean beach, but in northeastern Oklahoma, I will settle for a lake!

Thank you to all of those who have renewed your membership thus far. To those of you who are new to NADOA this year…WELCOME! By the way…have you added a photo to your profile on the website? If not, please do!

The different NADOA Committees are in high gear to make this another great year. I appreciate the efforts of all the committee volunteers. They really do work hard to make this organization the best it can be and to meet the needs of the members. Please thank these people every chance you get!

I would like to thank Sandi Rupprecht, Education Chair, as well as Jason Lucas and the firm of Steptoe & Johnson for a successful Regional Seminar in Oklahoma City on April 22. A special thank you also to Chesapeake for providing the meeting space for the seminar.

With our Annual Institute coming almost a month earlier than last year, the Institute Committee has had a shorter amount of time to prepare, but they are doing a great job. I think you will find that the Program Committee has put together a solid, varied program for you this year. We have had members suggest that NADOA offer classes on Wednesday, so we are giving that a try this year and offering two different ½ day calculation workshops. There is every reason we should have a great turnout for Institute in Chicago, September 3 – 5. Chicago is easily accessible and offers reasonable, direct flights from many cities. The hotel venue is in the heart of downtown Chicago, close to Lake Michigan, Navy Pier, Magnificent Mile and the Chicago River. We hope you are making plans to join us for “Learning Today….Leading Tomorrow”.

For those of you who use Facebook, remember that NADOA has a group page. This could be a good way for members to communicate or share pertinent industry news. Let’s see how many “likes” we can get for the page. The last time I looked, we were at 103.

I would like to bring your attention to the Model Form Division Order which was adopted by NADOA in September of 1995. An example of this form is available on our website and is used by many companies as their standard DO form. As a reminder, please note that if you or your company makes any changes to this form by adding, revising or removing any language, you will need to remove the header “NADOA Model Form Division Order (Adopted 9/95)”.

Remember, the NADOA Board is here to serve YOU, the members, so if there is anything that I or the board can help you with, please contact us.

2 N A T I O N A L A S S O C I A T I O N O F D I V I S I O N O R D E R A N A L Y S T S MEMBERSHIP RECOGNITION AWARDS Each year NADOA honors members of our organization through during the past year. the Membership Recognition Awards. The awards are given to members who are nominated by their fellow NADOA members in Please read over the categories on the form below and if you know three categories: Interaction, Education and Lifetime an NADOA member who you feel fits one of these qualifications, Achievement. The Interaction Award is given to a member or please use the form to nominate that person. Be sure to fill out the organization which has shown leadership in promoting our section detailing the person’s/company’s contributions and services. profession to the community. The Education Award is given to a member who has gone above and beyond to promote education by All nominations are due no later than May 16, 2014. Once the giving of their time and talents to the betterment of our profession. nominations are received, the Membership Recognition committee The Lifetime Achievement Award is given to a member who has will review the nominations and determine the final candidates for shown outstanding leadership in the division order profession submission to the NADOA Board for a final vote. through contributions to the industry during his/her career. Awards will be given to the recipients at the 2014 Annual Institute In addition to honoring members, NADOA also presents a in Chicago in September. Corporate Award, which is presented to the group/company that has contributed significantly to NADOA’s growth and If you have any questions please contact Norma Dooley at 817- development, the Division Order profession and/or the industry 335-2222 or by email at [email protected]. 2014 Nomination Form for NADOA Membership Recognition Awards I would like to nominate ______for the award(s) marked below: ______Interaction Award: Presented to the NADOA member or affiliated organization who has demonstrated leadership in the promotion of the profession to the industry and the community. ______Education Award: Presented to the NADOA member who has achieved a level of unusual distinction in NADOA’s education activities, as demonstrated by their contribution of time and service to the betterment of Division Order professionals. ______Lifetime Achievement Award: Presented to the NADOA member who has exemplified the Division Order profession through demonstrated leadership contributions to the industry and the profession during his/her career. ______Corporate Award: Presented to the group/company that has contributed the most to NADOA’s growth and development, the Division Order profession, and/or the industry during the past year. Please detail the nominee’s involvement in NADOA, the services they have performed and/or contributions they have made (You may attach a separate sheet if necessary). ______

Nominator: ______(Please Print) (Daytime Phone) ______(Signature) Send nominations to: Member Recognition Awards Committee, c/o Norma Dooley, Wagner Oil Company, 500 Commerce Street, Suite 600, Fort Worth, TX 76102, or email to [email protected] 3 G R O W T H T H NR oOmUinGaHtionEs DwUillC bAeT aIccOeNpted– thrAouPgRhIL M/MaAyY 1/J6,U 2N0E124 014 CANDIDATES FOR CERTIFICATION Publication of the following “Certified Division Order Analyst” applicant(s) fulfills the requirement as stated in the Voluntary Certification Policy, III C.2 which states: “…applicant’s name will be published in the NADOA Newsletter or other official publication of NADOA.” This allows the NADOA membership an opportunity to present objections to the certification of the applicant. Any objection to the certification of the applicant must be in writing and signed by a NADOA member or non-member who qualifies his knowledge and objection of the applicant. All such letters will be considered confidential and must be received by the NADOA Certification Committee at the following address within thirty (30) days following the last day of the month in which the Newsletter or other official publication of NADOA was published: NADOA Certification Committee P O Box 2300 Lees Summit, MO 64063 If the objection warrants denial of the certification or temporary withholding of certification, the applicant will be notified by Certified Mail. CANDIDATES FOR CERTIFICATION Adam Joel Hueske ...... Katy, TX Dawn Renee Podrazik ...... Midland, TX

CANDIDATES FOR RECERTIFICATION Christopher Anderson ...... Oklahoma City, OK Janet Taylor ...... Denver, CO Linda Chance ...... Houston, TX Trisha Templer ...... Houston, TX Holly Frankenfield ...... Houston, TX Deborah Tugwell ...... Houston, TX Lisa Greer ...... Plano, TX Sonja Turner ...... Tulsa, OK Donna King ...... Oklahoma City, OK Sherry Werth ...... Oklahoma City, OK Robert Schow ...... Houston, TX

CDOA Exam We will be offering the CDOA Exam at the NADOA Institute this September. Please submit your application forms as soon as possible so that you can be approved and your name published in our NADOA News Magazine. The exam will be offered on Wednesday, September 3 at 8:00 AM in the Missouri Room in the Sheraton Chicago Hotel and Towers, Chicago, IL.

If you want to reserve a seat to take the exam, please contact:

Brenda Pirozzolo Certification Chairman [email protected] Office: 972-354-8114

4 N A T I O N A L A S S O C I A T I O N O F D I V I S I O N O R D E R A N A L Y S T S TEST YOUR KNOWLEDGE CDOA STUDY QUESTIONS

1. The State of Michigan has established ______4. Under Pennsylvania law, fee simple title and acre spacing for all wells in Michigan. therefore oil and gas rights to a cemetery plot is a. 40 held by: b. 160 a. The grantor c. 320 b. The grantee d. 640 c. Estate of the deceased d. Heirs of the deceased 2. Most states now have abandonment periods for escheat of ______years. 5. Under Oklahoma SB168, which of the a. 1 to 3 following would be considered a subsequently b. 3 to 5 created interest? c. 5 to 7 a. An overriding royalty d. 7 to 10 b. Lease fee royalty c. Lease federal royalty 3. The term coalbed methane has been used by the d. A and C industry for many years, but coalbed methane actually contains: Answers bottom of page 11. a. Only methane b. Only condensate c. Methane, ethane, butane, pentane, carbon dioxide, and nitrogen d. Liquid coal

NADOA Decimal Points

Updated 2014 NADOA News Magazine Deadlines Making a good Special Institute Edition...... May 26 thing even better Third Quarter...... August 1 Shelby Welch is heading up a project to Fourth Quarter ...... November 7 index NADOA News Magazine Feature Articles. This should prove to be a very useful search option and research tool for the magazines archived on the NADOA website once complete.

G R O W T H T H R O U G H E D U C A T I O N – APRIL/MAY/JUNE 2014 5 Unclaimed Property California holder will be subject to the requirements of the new law. If account information is available, we strongly encourage New provisions of the California Unclaimed Property you to provide it, regardless of the value of the property. Law will take effect on July 1, 2014. The changes When property submitted without identifying defined in Assembly Bill 212 are summarized below. information is claimed from the SCO, holders may be Aggregate Reporting Threshold Lowered asked to further assist owners during the process. This bill lowers the minimum threshold amount for Holders of unclaimed property valued at less than $50 aggregate reporting of unclaimed property from will continue to be exempt from the general requirement $50 to $25. Specifically, this bill requires a holder of to send due diligence notices to owners prior to unclaimed property to include in his or her report to the escheating property to the State. Controller the name and last known address of the Service Charge apparent owner(s) of any escheated property, except Holders other than banking or financial institutions may travelers checks and money orders, valued at $25 or impose a service charge of up to two dollars for the cost more. of sending a due diligence notice on properties of $50 or When a holder has filed a Holder Notice Report prior to more. Holder must show assessed fees on both the July 1, 2014 and the corresponding Holder Holder Notice Report and the Holder Remit Report. Remit Report is due after July 1, 2014, the holder will Further information regarding due diligence letter only be required to provide the name and last known requirements is available on the website. address of the apparent owner(s) for properties valued at $50 or more. However, all future reports filed by the For complete reporting instructions, updated forms and free reporting software, please visit our website at www.sco.ca.gov. J. Mark Gresham CDOA, CMM Florida O IL &GAS R OYALTIES The annual unclaimed property reports for the 2013 report year were due by April 30, 2014. Florida has a free online reporting system. To access the application, visit the website at www.fltreasurehunt.org and select the Buying Minerals & Royalties since 1977 “Report & Remit Unclaimed Property” link. A step by in Texas ‹ Oklahoma ‹ New Mexico step guide may be obtained at: and Other States https://www.fltreasurehunt.org/files/OnlineFilingTutorial.pdf

Member: NADOA ‹ HADOA ‹ NARO ‹ OK-NARO ‹ AMERICAN ROYALTY COUNCIL (ARC)

P.O. Box 662 Wharton, Texas 77488-0662 979.532.1485 [email protected]

6 N A T I O N A L A S S O C I A T I O N O F D I V I S I O N O R D E R A N A L Y S T S New Wyoming Royalty Reporting Policies Effective Date March 1, 2014 make royalty payments in a specified number of days Division Orders and W-9 after production and sales without reference to meeting any specific criteria pursuant to the release of those All companies with interest in state mineral leases shall payments on the part of the State. The payment period submit two official division orders for execution. One as specified in State leases has been extended to the last division order will be signed and returned to the day of the month following the month of production for submitting company. The second division order will be oil and the last day of the second month following the filed in the appropriate lease file and the royalty burden month of production for gas. No royalty monies will be recorded in the Leasing and Royalty Compliance attributable to State leases may be suspended. System. Royalties must be remitted, irrespective of whether the It is the obligation of the lessee to make its particular State of Wyoming has signed the Division Order(s). purchaser(s) or agent(s) aware of this royalty obligation if they are the party that will be remitting royalties. State oil and gas leases obligate lessees or their agents to

State of Wyoming Royalty Reporting Seminar

The Wyoming Office of State Lands and Investments has • Division Orders invited all State of Wyoming Oil and Gas Royalty Reporters and Operators to attend a free seminar in June • eRMA 2.0 Agreement Policy 2014. The meeting will involve discussion of the finalized and approved royalty reporting polices and in- • Suspension of Production Operations depth training on how to use the eRMA 2.0 system. The meeting will take place at the Hershler Building 3- • Required Monthly Support Media W, 122 West 25th Street, Cheyenne, WY 82002-0600. Seminar dates are June 2 and 3, 2014 or June 9 and 10, 2014. It is anticipated that the meeting will start at 9:00 • Natural Gas Flaring Policy am and end at 4:00 pm with a 1 ½ hour break for lunch each day. It is recommended that you bring a laptop and • Unit and CA reporting your own copy of the policies, which can be found on the following website link. Listed below are policies • Wyoming Royalty Payment Act which will be presented during the meeting. • Use of eRMA 2.0 for reporting and https://lands.state.wy.us/index.php/component/conten amendments t/article/96-royalty-compliance/380-royalty- compliance-final-and-approved-policy This information will be presented by the Royalty Compliance Supervisor of the Office of State Lands and Investments, Billie Hunter; you will also get the chance to meet the auditor assigned to your company as they • Mineral Reporting Policy will all be attending the meeting. Please contact Ms. Hunter with any questions at 307-777-6641 or • Royalty Free On Lease Fuel [email protected].

G R O W T H T H R O U G H E D U C A T I O N – APRIL/MAY/JUNE 2014 7 Legal Update North Dakota by Kimberly A. Backman North Dakota Supreme Court Determines Ownership of Minerals under the Shore Zone of Navigable Waters

On December 26, 2013, the North Dakota Supreme joined the Union in 1889, it took title to the beds of the Court settled the issue as to who owns the mineral Missouri River up to the ordinary high water mark on interests under the shore zone, the area between the each bank, including the shore zone. After admission to ordinary high water mark and ordinary low water mark the Union, North Dakota was free to allocate the shore of navigable waters, as between the State of North zone lands according to state law. However, the State Dakota (“State”) and riparian landowners. In Reep v. could not totally abdicate its interest to private parties State, 2013 ND 253, 841 N.W.2d 664, the Court held because it held that interest in trust for the public. that the State owns the mineral interests under the shore zone to the high water mark. The Court concluded that the State owned the mineral interests under the shore zone of navigable waters upon Eleven owners of land next to navigable waters in North statehood under the equal footing doctrine and that the Dakota (“upland owners”) sued the State seeking a language of the anti-gift clause precludes construing the declaration that the upland owners own the mineral language of N.D.C.C. § 47-01-15 from granting the interests under the shore zone of navigable waters. On riparian owners title to the low water mark. cross-motions for partial summary judgment, the district court granted the State partial summary judgment. In The Court, however, also held the State could grant title doing so, the court concluded that as part of its title to to minerals to the low water mark in certain situations. the beds of navigable waterways, the State owned the The Court noted that “As a rule of construction, upland minerals in the shore zone and that this public title owners receiving grants or conveyances from the State excludes ownership and any proprietary interest by take to the low water mark under language of N.D.C.C. riparian landowners. § 47-01-15, subject to restrictions of the public trust doctrine and except when the deed provides otherwise.” On appeal to the North Dakota Supreme Court, the As a result, ownership of mineral interests under the upland owners argued that riparian owners next to shore zone may be different for individual upland owners navigable waters have “full interests” in the shore zone in the same tract, with some owning to the low water under N.D.C.C. § 47-01-15, subject to the State’s mark and others to the high water mark. obligation to protect the public’s right to use the navigable waters. N.D.C.C. § 47-01-15 essentially While not specifically discussed in the opinion, an provides that except when a grant indicates differently, example of where upland owners might own title to the riparian owners take to the low water mark. The State, low water mark would be where the State foreclosed on a in turn, argued that title to the beds of navigable waters, landowner mortgage, then later sold the surface reserving as it did at the moment of statehood, continues to a one-half mineral interest. Here, unless the deed extend from high watermark to high watermark under provides otherwise, it is possible the grantee would the equal footing doctrine and its ownership was acquire title to the low water mark as to the mineral thereafter governed by State law, including the anti-gift interest specifically granted by the State. Presumably, the clause of N.D. Const. art. X, 18. The State argued that same would occur where the State sold grant lands the anti-gift clause prohibits construing N.D.C.C. § 47- (Sections 16 and 36) reserving a one-half mineral interest 01-15 as a grant of minerals under the shore zone to to the State and conveying a one-half mineral interest to private entities. the grantee. Under the equal footing doctrine, when North Dakota As a result of the Reep decision, if there are no conveyances from the State, the State of North Dakota

8 N A T I O N A L A S S O C I A T I O N O F D I V I S I O N O R D E R A N A L Y S T S owns title to 100% of the minerals up to the ordinary instances where the State’s high water mark delineation high water mark. However, while the Reep decision extends beyond the meander line and extinguishes the clarifies the State’s ownership as to the low water mark riparian owner’s patented lands, the State’s determination versus the high water mark, the decision did not of the location of the ordinary high water mark will be determine the location of the ordinary high water mark. challenged. In Wilkinson v. State of North Dakota by and For mineral ownership and royalty payment purposes, through the Board of University and School Lands, Case the Reep decision is only the first step in resolving title No. 53-20120CV-00038 (District Court, Williams matters along the shore zone. County), both the location and the State’s methodology used to determine the high water mark is currently being In June of 2008, the North Dakota Board of University litigated. Thus, at the present time, absent a stipulation and School Lands authorized a survey project to of interest among all affected parties or a quiet title delineate the high water mark on the Missouri River and judgment confirming the location of the ordinary high the Yellowstone River. While the State survey project has water mark for each producing spacing unit, royalty now been completed, it appears likely that in those payments continue to be suspended in most instances.

Johnson v. Finkle Further Defines Application of the Duhig Rule in North Dakota

Johnson v. Finkle is the most recent case to be decided by v. Charlson controls and as a result she owns one-fourth the North Dakota Supreme Court regarding application of the minerals. 301 N.W.2d 144 (N.D. 1981). of the Duhig rule in North Dakota. 2013 ND 149, 837 N.W.2d 132. The Duhig rule, adopted by the North In Gilbertson, the Court declined to apply Duhig when Dakota Supreme Court in 1971, essentially provides that the grantee owned an interest in the property prior to the where a grantor purports to both convey a mineral disputed conveyance. Three siblings each owned a one- interest and reserve a mineral interest, if the Grantor third interest in 95% of the minerals. Two of the siblings does not own enough minerals to satisfy both the grant conveyed their interest to the third sibling, reserving 50% and the reservation, the grant must be satisfied first. of the mineral interests. The Court in Gilbertson held the grantee had actual notice that the grantors did not The Court has since revisited the Duhig rationale in own 100% of the minerals because she owned a portion many cases. In this most recent case, Axel and Norma of the minerals. The Court also limited Gilbertson to the Anderson (the “Andersons”), owned the entire surface specific facts of the case wherein the grantee, prior to the estate and one-half of the minerals under various tracts disputed conveyance, owned an outstanding mineral of land. In 1957, the Andersons entered into a contract interest in the property. In Johnson, Finkle argued that for deed with Henry Johnson, which included a because Henry Johnson was an owner of the property description of the property and further stated “The under the 1957 contract for deed, he owned an grantor reserves a ¼ mineral interest, including gas and outstanding mineral interest in the property prior to the oil, in the above described premises as of the date of this warranty deed. contract.” In 1962, the Andersons conveyed the property, including the mineral interests, by warranty The Court distinguished the facts in Johnson from the deed. The warranty deed included the language facts in Gilbertson, noting that in Gilbertson, the grantee reserving a one-fourth mineral interest. was clearly aware that the grantors did not own 100% of the minerals. Here, Henry Johnson did not have legal The heirs of Henry Johnson (the “Johnsons”) brought a title to the property prior to the 1962 warranty deed. quiet title action to determine ownership of the one-half Under the contract for deed, he was an equitable owner mineral interest. The district court ruled that Duhig until the warranty deed perfected his right. Because his applied, that the deed was unambiguous, and quieted equitable ownership under the contract for deed was title to one-half of the minerals in their favor. On unable to vest an outstanding mineral interest in Henry appeal, Finkle, (the heir of the Andersons), argued Duhig Johnson, the Court held that the rationale in Gilbertson does not apply and instead the rationale from Gilbertson did not apply in this case.

G R O W T H T H R O U G H E D U C A T I O N – APRIL/MAY/JUNE 2014 9 Ultimately, the Court decided that the Duhig rationale of the contract for deed were completed and the warranty applied and determined that the Johnsons are the owners deed was entered. of the one-half mineral interest. The Andersons did not own a large enough mineral interest to satisfy both their Kimberly A. Backman is an attorney with Crowley Fleck grant to Henry Johnson and to the reserved one-fourth PLLP in Bismarck, North Dakota, where her practice mineral interest, so the grant must be satisfied first. focuses mainly on oil and gas law and title examination. Therefore the Andersons did not reserve any interest. Kimberly is licensed in North Dakota and Montana. She can be reached at [email protected] or 701- On petition for rehearing, Finkle argued that a delay 223-6585. rental stipulation that had been executed by Henry Johnson and Axel Anderson, wherein they were described These materials are not individualized legal advice. It is understood as “present owners,” created an outstanding ownership that each case is fact-specific and that the appropriate solution in any interest in Henry Johnson. The Court denied the case will vary. The presentation of these materials does not establish petition for rehearing, determining that the delay rental any form of attorney-client relationship with the author or Crowley stipulation did not change the outcome. The delay Fleck PLLP. While every attempt was made to insure that these rental stipulation did not transfer legal title to Henry materials are accurate, errors or omissions may be contained therein, Johnson and full title did not vest in him until the terms for which any liability is disclaimed. Legal Watch Oklahoma In March 2013, a class-action lawsuit was filed by several standard practice throughout the state. Jeff Wilson, the prominent landowners in northwest Oklahoma (London vice president of governmental affairs at the Oklahoma Land & Cattle LLC vs. Sandridge Exploration and Independent Petroleum Association, says a county permit Production) against Oklahoma energy giants Sandridge is all the permission oil companies need “Because they’re and Chesapeake Energy, contending water lines were laid temporary.” without permission or financial compensation. The water lines’ thick, stiff plastic tubing is a nuisance Hydraulic fracturing and modern oil and gas drilling use for landowners who say the pipelines show up without a lot of water, a commodity that’s in short supply in warning, often blocking mailboxes, gates and entrances northwestern Oklahoma’s booming oilfield. To get the to pastures, are laid across driveways and are sometimes water needed, energy companies often lay temporary pulled so tight they have broken fence posts and pipelines atop private property. Temporary water lines mailboxes. When people try to drive over the line, it can snake throughout Woods County and much of catch on vehicles or drag. It’s impossible to mow around northwest Oklahoma, which bustles with oil and gas the water lines, so the grass between the road and the activity from the tight Mississippi Lime shale, one of the fence grows tall. Since lines are not identified by the state’s most productive plays. company using them, landowners don’t even know who to contact when there is a problem. Although the pipelines run across land owned by private citizens, Oklahoma counties have an easement along In the spring of 2013, after nonstop complaints from roads maintained by the county, which can be used by landowners, the District 2 Commissioner in Woods public utilities for pipelines. Oil companies use these County, Randy McMurphy, added a stipulation to his strips of land also; companies fill out a permit, pay the district’s permit: oil and gas companies had to get county a fee ($250 per mile is standard) and lay the permission from the landowner before they could install temporary water lines in the counties’ easements. Water new water lines along county roads. A 1982 opinion by pipelines installed on the side of the roads are a key way then Oklahoma Attorney General Jan Eric Cartwright oil and gas companies transport water for hydraulic appears to support this view, indicating that these water fracturing since the lines are less costly than trucking. lines aren’t “common carriers,” a term used to describe Seeking water line permits from county clerks is public utilities like railroads, telephone or electric lines,

10 N A T I O N A L A S S O C I A T I O N O F D I V I S I O N O R D E R A N A L Y S T S or big state-regulated oil and gas pipelines. The attorneys are the highest legal authority in counties, so Association of County Commissioners was also when they approve of an action their word is final,” concerned with McMurphy’s decision; although applying Ward says. “Your hands are pretty much tied at that only to District 2 in Woods County, it runs contrary to point.” state statutes that require county commissioners to vote as a board on such changes, says the association’s Despite the uncertainty, Commissioner McMurphy executive director Gayle Ward. Complicating matters believes energy companies are still laying water lines — further, an assistant district attorney in Woods County just without permits. approved McMurphy’s permit change. “District By Rona Erickson Legislative Watch Colorado bill would dramatically increase oil and gas fines The Colorado legislature is considering a bill that would The bill would require the Colorado Oil and Gas increase maximum daily fines from $1,000 to $15,000 Conservation Commission “to hold a hearing if an oil and wouldn’t cap the number of days fines could be and gas company is responsible for ‘gross negligence’ or if levied. House Bill 1356 was introduced in April by Rep. there is a pattern of violations.” “The commission could Mike Foote, D-Lafayette, and Sen. Matt Jones, D- bar the company from getting new drilling permits for Louisville. new wells, or suspend existing permits until the company complies with regulations and pays penalties, according The new bill has the backing of the Colorado Oil & Gas to the proposal,” the Denver Business Journal article said. Association, according to a report by Cathy Proctor of the Denver Business Journal. By Rona Erickson The current law specifies a violation of the “Oil and Gas Conservation Act” is punishable by a maximum daily CDOA 1. A penalty of $1,000 and the total penalty is capped at 2. B $10,000 for violations that don’t result in a “significant STUDY waste of oil and gas resources, do not damage correlative 3. C rights, and do not result in a significant adverse impact on public health, safety, or welfare.” The bill increases QUESTION 4. A the maximum daily penalty to $15,000 and repeals the cap on the maximum total penalty. ANSWERS 5. D

G R O W T H T H R O U G H E D U C A T I O N – APRIL/MAY/JUNE 2014 11 Legislative Update Nevada proposes new fracturing rules SB390 was passed by Nevada’s legislature and signed into comment on its proposed rules. law by the governor on June 10, 2013. Pursuant to the Act, public workshops for the Amendment of Regulations According to Kevin Vorhaben of Noble Energy, “These for Oil and Gas Wells, Wells Intended for Hydraulic innovative proposed rules support the use of proven Fracturing as set forth in Chapter 522 of the Nevada horizontal holes and hydraulic fracturing technologies to Administrative Code and for Geothermal Wells were held safely develop Nevada’s discovered and undiscovered oil and in March 2014 and the Nevada Division of Minerals of the gas resources.” Vorhaben called the regulations “tough” and Commission on Mineral Resources accepted online public “thorough.” Federal Fractures Proposed federal fracturing rules draw one million comments

Interior Secretary Sally Jewell told Congress on April 3 that Environmental concerns about hydraulic fracturing are a more than a million public comments were submitted on key element, although the government and industry also proposed rules to tighten oil and gas drilling on federal don’t want to block America’s shale boom. There is concern land. The new rules were proposed in May 2012 and that federal rules will try to impose a one-size-fits-all would be the first big update for drilling on federal and approach that won’t work in varying geologies found across Indian land in three decades. Jewell said the Bureau of the country. Some states have suggested the federal Land Management is reading through the public government model rules on state programs that already comments. “It’s a very live process,” she told the Houston address fracturing and other concerns. Chronicle. Jewell also repeated her oft-stated position that fracturing “can be done safely and responsibly.”

12 N A T I O N A L A S S O C I A T I O N O F D I V I S I O N O R D E R A N A L Y S T S NADOA Institute

Learning Today...Leading Tomorrow INSTITUTE REGISTRATION Registration has begun! There are convenient links on the NADOA website (www.NADOA.org). Cost for NADOA members is $595.00 and $725.00 for non-members. Deadline is August 1, 2014; late registration prices will increase $100 for each. http://www.nadoa.org/wa_institute_register.html

Hotel registration is also available now. Cost per night is $189.00 plus tax. Deadline to make reservations at the Institute rate is August 1, 2014. https://www.starwoodmeeting.com/StarGroupsWeb/booking/reservation?id=1402188869&key=4011 We are looking forward to seeing you all in Chicago for a great 2 days of learning. Lucretia Jones and Luanne Johnson, CDOA Hotel Co-Chairs PAYMENT By: Debbie McKee, Registration Co-Chair For your convenience, the Registration form for the upcoming NADOA Institute is posted on the website (www.nadoa.org). You do not have to pay through pay pal if you wish to pay with a company check; however, a registration form must be completed for each person who is attending Institute and a copy of the completed registration form(s) attached to the corporate check when it is mailed to: NADOA Institute Registration C/O Chris Tucker, Contract Administrator PO Box 2300 Lees Summit, MO 64063

Please note: If you are bringing a guest/spouse to the Wednesday Welcome Reception and/or Thursday Night “Dueling on the Pier” you must fill in their name on the form so we can make them a name tag. Name tags are required to attend all events. You can also attach a personal check for $150.00 per guest/spouse as most companies do not cover these expenses, but if the guest/spouse fee is included in the company check that is fine too. PLEASE NOTE: NO REFUNDS WILL BE GIVEN UNLESS YOUR REQUEST IS RECEIVED IN WRITING BY 8/1/14. If you have any questions, contact Debbie McKee at 405-418-2835 or Michal Picquet at 405-228-8773 REGISTRATION VOLUNTEERS NEEDED If you are interested in helping with Registration, volunteers are needed on Wednesday, September 3, 2014. Registration will be open from 1:00 to 6:00 PM. If you would like to take advantage of this opportunity to meet new people and get involved with NADOA, please contact Debbie McKee at [email protected] or Michal Picquet at [email protected]. Hope to see you in Chicago!

G R O W T H T H R O U G H E D U C A T I O N – APRIL/MAY/JUNE 2014 13 20142014 NADOANNAADOA ANNUALANNUUAAL INSTITUTEINSTTITITUTTEE REGISTRATIONREGISTTRRATTIOION SeptemberSeptember 3 –5,–5, 20142014 PleasePl e a s e completec o m plete thisthis formform andand returnreturn toto thethe addressaddress belowbelow alongalong withwith youryour checkcheck mademade payablepayable to:to: NADOANADOA NADOANADOA INSTITUTE INSTIT UTE REGISTRATIONREGISTRATION C/OC/O Chris Ch ris Tucker,T ucker, ContractCo ntract AdministratorAdministrator PO Box B ox 2300 LeesLees Summit,Summi t, MOMO 6406364063 SheratonSheraton ChicagoChicag o HotelHo tel & TowersTowers IFIF YOUYOU HAVEHAVE SSPECIALPECIAL DDIETIET OnlineOnline hotelho tel registrationregis t ration linklink 301 EastEast NorthNorth WaterWater St.St. NEEDSNEEDS PPLEASELEASE IINDICATENDICATE avaiavailablelable on www.www.nadoa.orgnadoa.org oror Chicago,Chicago, ILIL 6061160611 calalll 1-888-625-5144 ATTENDEESATTTEENDENDEEES ARE RESPONSIBLERESPONSIIBLBLE FORFOR BELOWBELOW THEIRHEIR OWNOWN HOTELHOTEL ACCOMODATIONSACCOMODATIONS Rate:Rate: $ 189.189.0000 (p(pluslus tax)taxx)) perper nightnight CDOA 1616 CreditsCredits PlPleaseease referencerreeffeerre en c e NADOANNAADOA whenwwhhen CMCMM,M, CPLTA,CP LTA, CPL/RPL/RLCP L/RPL/RL creditscredits pendingpending mamakingkiinng reservationsrreeserrvvvaattiions to to receiverreece ive Hooteltel ReservationReservation Deadline Deadline 8//1/141/14 discountscounteded raterratate

NAMENAME ______

COMPANYCOMPANY ______

ADDRESSADDRESS ______

CITY,CITY, STATE,STA T E, ZIPZIP CODE ______

E--MAILMAIL ADDRESS/PHONEADDRESS/PHONE NUMBERNUMBER ______

RegistrationRegistration – NADOANADOA MemberMember (I(Includesncludes BreakfastBreakffaaststs, LunchesLunches, WeWednesdaydnesday WeWelcomelcome ReReceptioncepttiion & $ 595.0.000 ThurThursThursdaysday EventEvent)ent) ...SPECSPECIALIAL DIETDIET TYPETYPE:______

RegistrationRegistration – NoNonn-NANADOADOA MemberMember (I(Includesncludes BreakfastBreakffaaststs, LuncLuncheshes, WeWednesdaydnesday WeWelcomelcome ReReceptioncepttiion $725.0.000 & ThursdayTThhurrssddaay EventEvent)t)…SPECSPECIALIAL DIETDIET TYPETYPE:______

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WILWILL YOUYOU BE BE ATTENDING?ATTENDING? WEDNESDAYWEDNESDAY NIGHTNIGHT WEWELCLCOMOMEE RECEPTIONRECEPTION (6 pmpm toto 8 pmpm _____ YESYES ____NO____NO ThurThursdaysday Night Night “D“Duelingueling on o n thethe Pier”Pier” (6(6 pmpm to 1010 pm)pm) ______YESYES ______NONO

LATELATE REGISTRATION REGISTRATION COSCOSTT ((RRegiegistered/Receivedsterered/ed/ed/RReceived afaftafterter AugustAugust 1, 1, 20142014)4)

Memembersbers $695.00

NoNonn-MeMembersmbers $825.00.00

TotalTotal for for InstituteIInsns titututee RegistrantRegigissttrrant $ GUESTGUEUESST REGISTRATION:REGIGISSTTRRRAATTIION: PLEASEPPLLEEAASSEE NOTENOTE THETHE FLATFFLLLAAT RATERRAATTEE FORFOR A GUESTGUEGUESST TOTO ATTENDATTTEEENDND INSTITUTEIINSNSTTIITUTUTEE HOSPITALITYHOSHOSPPPIITTAALITY EVENTSEVVEENTNTSS IS $150.00$150.00 REGARDLESSREGGAARDLEESSSSS OF WHETHERWHWHEE TTH HHE EERR OROR NOTNNOO T THEYTTH HEYHEY ATTENDATTTENENENDD BOTHBOTTHH THETTHHHEE WEDNESDAYWWEDEDNNESESESDDDAYAY ANDAN D THURSDAYTTHHUURSRSRSD DDAYAY NIGHTNNIIGGHHT EVENTS.EVENTTSSS..

SPOSPOUSE/GUESTUSE/GUEST NAMENAME ______

WednesdayWednesday ReceptionReception 6pm6pm to 8pm8pm andand ThursdayThursday NightNight Event “DuelingDueling ono n thethe Pier”Pie r” 6pm6pm toto 10pm10pm $150.0.000

TotalTotal for for Spouse/GuestSpouse/pouse/GGuest

TOTALTOTAL ENCLOSEDENCLOSEEDD $______REREGISTRATIONGISTRATION USEUSE ONLY:ONLY:

TotalTotal CheckCheck Amount______Amount______CheckCheck #______CheckCheck Date______Date______Payor______Payorayor______NO REFUNDSREFUNDS WILLWWIIIL L L BEBE GIVENGIVENVEN UNLESSUUNNNLLESS REQUESTREQUUEEST RECEIVEDRECCEEIVVEED BY 8/1/148/8/1/1/1/1414

14 N A T I O N A L A S S O C I A T I O N O F D I V I S I O N O R D E R A N A L Y S T S Program The 2014 education program for Institute is shaping up. Some of our favorite speakers will be returning along with a few new faces. For the first time, NADOA will be offering two Wednesday afternoon classes; one on Beginning Division Order Calculations taught by Alyce Hoge and Sherry Robinson and one covering Advanced Division Order Calculations taught by veteran DO Analysts Sarah Broyles and Donna Reeves. These two classes are in addition to the regular Thursday and Friday classes. Please note the Wednesday classes incur an additional charge to attend and you must pre-register for these classes. Topics we will cover on Thursday and Friday are: • Oklahoma PPI and Legislative issues • The Eagleford Shale • Escheat, B-Notices and Mismatched TIN’s • Geology for Non-Geologists • Ohio, Michigan, Pennsylvania & West Virginia Probate, Trusts and Legislation • Oklahoma Probate and Trust Issues • Texas & Louisiana Probate and Trust Issues • Apportionment and Entireties Clauses • Unclaimed Property: What’s New and How to Stay out of Jail • A Title and Regulatory Perspective on Arkansas Fayetteville Shale & the Arkoma Basin • Texas Pooling and NPRI’s • North Dakota in a Nutshell; Title, Probate, Trusts & New Legislation • Federal Lands from a Mineral Owner’s Perspective • It takes Geology, Engineering, Land and Land Admin to Drill a Well. • Colorado, Utah, New Mexico & Wyoming Probate and Legislative Issues • Title Opinions and Curative; Ideas to Effectively Work an Opinion - a panel discussion We also have three special keynote speakers you won’t want to miss: Steven Antry speaking on “Insights from a Serial Energy Entrepreneur”; Alyce Hoge presenting “Using Technology to Boost your Career” and Helen Sharkey sharing her personal experience, “Low Man on the Totem Pole – How I Became a White Collar Criminal”. We hope to see you in September for Learning Today…Leading Tomorrow Sandi Rupprecht, Program Co-Chair

GREETERS NEEDED! If you are planning on attending NADOA’s 41st Annual Institute in Chicago September 3 -5 and would like to volunteer to be a greeter during registration on Wednesday, September 3, please contact Betty Davidson at 713-739-6622 or bdavidson@cima-energy or Brenda Pirozzolo at 972-354- 8114 or [email protected].

Being a greeter is a great way to help your organization and meet other NADOA members.

G R O W T H T H R O U G H E D U C A T I O N – APRIL/MAY/JUNE 2014 15 NADOA 2014 ANNUAL EDUCATIONAL INSTITUTE Chicago, illinois

Learning Today...Leading Tomorrow

SPONSOR DONATION FORM

Thank you for your sponsorship. Your donations help with the cost of our speakers, hospitality functions, conference publications, including a compilation of our speakers’ presentations, as well as to cover general fund- administrative costs.

We have attached suggested contribution levels. However, please keep in mind that these are suggestions – all contributions will be recognized. This financial support helps reduce the costs to all attendees and allows NADOA to present a professional, quality educational event.

If you would like to apply your sponsorship to a specific category, you may indicate that preference below.

CATEGORY AMOUNT

General Donation (includes administrative costs, door prizes, etc.)

Education / Speaker

Hospitality Functions

Publications

SPONSOR INFORMATION

Company

Address

City, State, Zip

Phone Number

Contact Person

To assure that your name will be published in the NADOA Institute Brochure, please return your donation, along with this form to NADOA no later than May 5, 2013. Corporate sponsorships received after this date will be published in subsequent publications.

PLEASE RETURN THE FORM AND CONTRIBUTION TO: NADOA PO BOX 2300 LEES SUMMIT, MO 64063

For questions, please contact:

Terri Anderson Debbie Clymer Corporate Donations Co-Chair Corporate Donations Co-Chair [email protected] [email protected] 972-248-6400 Ext 18 972-673-2471

16 N A T I O N A L A S S O C I A T I O N O F D I V I S I O N O R D E R A N A L Y S T S NADOA CORPORATE SPONSORS

We are getting closer to our 41st Annual Institute in Chicago, Illinois September 3 -5! The NADOA Institute provides industry awareness, educational opportunities and sets the standard for what is expected of a Division Order DOUBLE Analyst. We rely on the generosity of $1000-$1,999 our corporate sponsors each year to help bear the financial burden of staging the Institute. These donations go towards the cost of speakers, hospitality functions, administrative costs, door prizes and much more. TRIPLE $2,000- SINGL E Corporate financial support helps $3,499 $100-$999 reduce the cost to all attendees as well. Without corporate donations, the Institute would not be possible. Listed below are the companies that have already donated to this year’s Institute. Thank you so much! It isn’t too late HOME RUN to become a corporate sponsor of this $3,500-$4999 year’s Institute; please contact Debbie Clymer at 972-673-2471 or Terri Anderson at 972-248-6400, Ext 18 as soon as possible. Thank you for your time and support and I hope to see you in September!

41st Annual NADOA Institute Sponsors:

Legacy Royalties Southwestern Energy Enerplus Resources P2ES Holdings Linn Energy Occidental Energy Marketing Inc Anadarko Petroleum Corporation Noble Royalties SADOA Chapparal Energy Devon Energy Quorom Business Solutions WPX Energy Production LLC Denbury Resources Inc. Extex Land & Administration LLC Truth Resources LP

Submitted by Debbie Clymer

G R O W T H T H R O U G H E D U C A T I O N – APRIL/MAY/JUNE 2014 17 INSTITUTE

18 N A T I O N A L A S S O C I A T I O N O F D I V I S I O N O R D E R A N A L Y S T S Hospitality Thursday Night: Dueling at the Pier

We have planned an exciting offsite Thursday night event at the Navy Pier. Imagine yourself sitting down for a luxurious evening meal within a one-acre lush botanical garden. The Crystal Gardens is a six-story glass atrium with lush foliage, hanging twinkle lights and dancing leapfrog fountains. The backdrop of this gorgeous atrium is the original 1929 Ferris wheel on the Navy Pier, Lake Michigan and the gorgeous Chicago skyline. During and after dinner we will be entertained by dueling pianos so have your favorite requests ready as we’ll be singing, laughing and dancing the night away. What better way to enjoy an evening than with fun entertainment and dinner with friends? This relaxing and entertaining event is sure to be the talk of the 2014 Institute!

Michele Lawton Vincent Parasco

Join us in Chicago for this year’s NADOA Join us in Chicago! Institute Golf Tournament. Take advantage of a great opportunity to network with other industry professionals, win some big prizes and have fun!

Highlights Lunch provided Shuttle service from conference hotel Big prizes

For more information contact: NADOA INSTITUTE Brandon Ward Phone: 918-236-2663 GOLF TOURNAMENT E-mail: [email protected]

Date: September 3, 2014 Registration is available online at Time: 11:00 am www.nadoa.org

Harborside International Golf Center If you are interested in sponsoring 11001 South Doty Avenue East this event, please see the sponsorship Chicago, Illinois 60628 form on the following page.

G R O W T H T H R O U G H E D U C A T I O N – APRIL/MAY/JUNE 2014 19 SPONSORSHIP FORM

It is again time for the Annual NADOA Institute Golf Tournament. We want to make this the best event NADOA has ever seen, but we need your help. The tournament is scheduled for Wednesday September 3, 2014. This tournament provides NADOA members and their guest with a unique opportunity to make contacts within our industry and provides our sponsors with a tremendous amount of exposure directly to their target audience. We are very thankful to the individuals and companies that have helped sponsor this event each year. All sponsorship money goes directly to the golf tournament. Gifts will be given away at the meeting afterwards; stick around for the fun!

If you would like to sponsor this year’s event, please complete and return this form with a check payable to “NADOA” and mail to Associated Resources, Inc. at 15 East 5th Street, Tulsa, OK 74103.

Thank you for your support, should you have any questions please feel free to contact Brandon Ward at [email protected] or (918) 236-2663.

______Platinum Sponsor - $1,500.00 – Includes: Team of 4 golfers, Tee Sponsor (see below). Announcement and verbal appreciation by speaker at the meeting after Golf Tournament, Gift(s) in your name given away in a raffle after tournament at meeting ($830 – example: golf clubs, range finders, golf bags…etc).

______Gold Sponsor - $1,250.00 – Includes: Team of 4 golfers, Tee sponsor (see below), Gift(s) in your name given away in a raffle after tournament at meeting ($580 – example: golf clubs, range finders, golf bags…etc).

______Silver Sponsor - $1,000.00 – Includes: 4 golfers, Tee sponsor (see below), Gift in your name given away in a raffle after tournament at meeting ($330 – example: golf clubs, range finders, golf bags…etc).

______Transportation Two (2) Sponsorships Available - $650.00: This sponsorship opportunity will provide transportation to and from the Golf Course and the Hotel for all Golfers. Your company name and logo will be displayed in the transportation vehicle.

______Beverage Cart Sponsor - $600.00 – Only two (2) available. First come, First serve. Includes company logo on the beverage cart.

______Tee Sponsor - $150.00: Your Company name/logo will be posted on a sign in a visible location on one of the tee boxes.

______Additional Sponsorship: Golf Balls, Golf Tees, Golf Towels, Ball Markers, etc. with your company logo on these for each golfer participating (72 golfers).

Sponsorship name to be displayed:______(If applicable, please e-mail your company logo to [email protected])

Thank you,

NADOA Institute Golf Committee Brandon L. Ward, Chris Ramsey, Josh Lowery

20 N A T I O N A L A S S O C I A T I O N O F D I V I S I O N O R D E R A N A L Y S T S The CLOCK keeps ticking and ticking…… so start planning for NADOA 2014 today!!!!!

So many choices and so little time! By: Deneise Wardrup and Cheryl Hampton

NADOA 2014 is headed to Chicago, known to be one of the biggest and best cities ever. Along with having the opportunity to increase your knowledge you might work in some time to visit one or more of the following: theaters, museums, famous art galleries, astounding architecture, sporting events, parks, a lakefront beach and so much more!! Chicago is certain to be a place for the entire family. Listed below are a few suggestions that everyone could enjoy:

Navy Pier This lakefront playground is full of exciting things to see and do. The Navy Pier extends nearly a mile out into Lake Michigan. This Chicago landmark offers an array of family-oriented events and entertainment. Located on the 50+ acres are shops, restaurants, theater and much more. It’s certain to be of interest to those of all ages and a short walk from the Sheraton Chicago Hotel and Tower.

Lincoln Park Zoo First let us say – this zoo is free of charge to all. The zoo is located on approximately 35 acres and was founded in 1868 making it one of the oldest zoos in the United States. The zoo’s exhibits include a wide variety of animals consisting of polar bears, gorillas, monkeys and other species totaling nearly 1,100 animals. The Lincoln Park Zoo is located at 2001 North Clark Street, Chicago, IL 60624 and their hours for September are 10:00 am – 5:00 pm Monday-Sunday. For further information call: 1-312-742-2000

Cloud Nine “The Bean” Don’t miss seeing this. This sculpture is made up of 168 stainless steel plates welded together, yet has no visible seams because it is so highly polished. Cloud Nine weighs over 110 tons and is 66 feet long and 33 feet high. The mirrored surface provides an amazing reflection of the city skyline. It took one year to complete and cost $23,000,000.00. And, to clean this magnificent sculpture all you need is 40 gallons of Liquid Tide twice a year. This is a beautiful piece of art you don’t want to miss. You can locate “The Bean” at the Millennium Park in the Loop community.

Shedd Aquarium The aquarium contains over 25,000 fish and holds 5,000,000(+/-) gallons of water. The aquarium opened in May, 1930. This is a very impressive tourist destination and offers numerous exhibits including 1,500 species (including fish, marine mammals, birds, snakes, amphibians and insects). It is certain you will also enjoy seeing some of the other animals such as Beluga Whales, Sea Lions, Penguins, Pacific White-sided Dolphins and Zebra Sharks, just to name a few. The aquarium is open daily (except they are closed Christmas Day). You can avoid waiting in line by purchasing tickets online. The Shedd Aquarium is located at 1200 S. Lake Shore Drive, Chicago, IL 60605. For additional information you may contact (312-939-2438).

G R O W T H T H R O U G H E D U C A T I O N – APRIL/MAY/JUNE 2014 21 Hancock Observatory (soon to be known as): 360CHICAGO A must see tourist attraction that was completed in 1970. Included within this massive structure are 172,000 square feet of retailers such as: Best Buy, The North Face, Hanig’s Footwear, “The Cheesecake Factory” and the Signature Room. There are also 700 privately owned luxury residential condominiums and 897,000 square feet of commercial office space. If you are up to the challenge you can take the 1,632 steps from the main lobby to the observatory on Level 94 or, like some of us, you might find the elevator a less stressful option. The observation deck is located some 1,000 feet above Lake Michigan and allows you to view 360° into four different states. The construction period during the 36 month time included some 5,000,000 man hours to complete, was built to ONLY have 5-6 inches of sway in a 60 mph wind and tested to withstand winds of 132 mph. The Hancock Observatory/360 CHICAGO is located at Michigan Avenue and the Magnificent Mile.

Willis Tower (formerly Sears Tower) Just imagine what it feels like to stand on air!!! The Skydeck allows you to stand 1,353 feet in the air. The Ledge has glass boxes that extend out 4.3 feet from the Skydeck. You can visit the Skydeck 365 days a year. The iconic building is the tallest in the Western Hemisphere, encompassing more than 4.5 million square feet including the Skydeck and the 103rd floor glass viewing platform. Don’t miss getting a view of Chicago from this amazing design. The location is: 233 South Wacker Drive, Chicago, IL 60606.

Millennium Park During the time you are in Chicago, try to visit Millennium Park. Hard to believe this beautiful world-renown public urban park was once an industrial wasteland. Located in the “Loop” community of Chicago near the city’s Lake Michigan shoreline you will find Fountains, Theaters, Wrigley Square, Millennium Monument and an Ice Rink as well as many other attractions the whole family could enjoy. The Park covers 24.50 acres and is located near many popular restaurants and shopping choices. The Park is located at 201 E. Randolph Street, Chicago, IL 60601. If you would like more information you can go online at: www.explorechicago.org

Wrigley Field This is a must see if you have time. Wrigley Field was built in 1914 and is host to Major League Baseball. Wrigley Field will be celebrating its 100th season in 2014. If you are a baseball fan (whether it’s the Chicago Cubs or not) you will be excited to know during our visit the Chicago “Wrigley Field” will be hosting several games. For ticket information along with dates and times go online to www.Wrigley-Field-Chicago.com. You can locate this highly recognized baseball field at: 1060 West Addison Street, Chicago, IL

Buckingham Fountain The fountain is considered as Chicago’s front door. The fountain operates daily from 8:00 am to 11:00 pm from mid-April through mid-October. During the winter, the fountain is decorated with festival lights. You will enjoy the beauty of the water show that occurs every hour and lasts for 20 minutes. During the show the center jet shoots up vertically to 150 feet and after dusk the shows are choreographed with lights and music. The last show begins at 10:00 pm. Not only will you enjoy the show but just looking at the structure will be fascinating. The fountain is constructed of Georgia pink marble and contains 1,500,000 gallons of water. The bottom pool of the fountain is 280 feet in diameter and is considered one of the largest fountains in the world. You can locate the fountain in Grant Park, 337 E. Randolph Street, Chicago, IL. The above suggestions are only the tip of the iceberg of what you can see and what you can do in Chicago. If you have the opportunity to stay a little extra time just to take in some of the history and sites it will be worth every minute. In the upcoming “Institute Magazine” we will provide suggestions for shopping and dining. We think you will find it very interesting when you see some of the choices. Personally, I’ve never experienced a Food Tour, Wine Tour or Brewery Tour. We will also provide information on obtaining a Chicago CityPASS card that will give you admission to see 5 must-see tourist attractions. You will be provided the information on purchasing the CityPASS that will be full of savings to you should you desire to take time to visit some of these memorable attractions.

22 N A T I O N A L A S S O C I A T I O N O F D I V I S I O N O R D E R A N A L Y S T S NADOA 41st ANNUAL INSTITUTE Information Booth Please come by the Information Booth at the NADOA 41st ANNUAL INSTITUTE in Chicago, IL Sept 3-5, 2014 We will have plenty of brochures available and ideas for fun things to do. LET US HELP YOU enjoy this lovely city.

Brenda Pirozzolo, Information Co-Chair

SPOT THE NADOA CONTEST

As an incentive to visit local venues while in Chicago attending the 41st Annual Institute, be on the lookout for the word NADOA at a well-known Chicago eatery. The first person to identify the location, photograph the inscription and send it to Mary Sons in September will receive a gift card prize. If you are in the picture too, even better! (Board members and others present at the inscription are not eligible to participate.) Clues will be given in the 2014 NADOA News Magazines and at Institute.

Second clue: When the moon hits your eye like a big pizza pie, that’s amore…but if there’s no moon, the lights from the Magnificent Mile can help light your way to the NADOA!

G R O W T H T H R O U G H E D U C A T I O N – APRIL/MAY/JUNE 2014 23 24 N A T I O N A L A S S O C I A T I O N O F D I V I S I O N O R D E R A N A L Y S T S Marcellus Shale A Brief Overview of Mineral Life Estates in the Marcellus Shale: The Right to Lease, The Open Mine Doctrine and The Problem with Payments

© 2014 Maxwell Bayman, Esq. the right to develop the minerals, which includes the right of ingress and egress of the surface to conduct operations, About the Author: Maxwell Bayman, J.D., University of (2) the “executive” right, that is, the right to execute an oil Oklahoma College of Law (2013); B.A., Texas A&M and gas lease and (3) the right to receive the benefits of a University (2010); Member, Texas Bar Association; valid oil and gas lease, e.g., the bonuses, royalties and delay Member, NADOA. Mr. Bayman is a Division Order rentals.2 Unfortunately, the creation of a life estate in the Analyst at Noble Energy, Inc. He focuses on reviewing title minerals confounds all three. In most states, neither the life and calculating divisions of interest for the company’s tenant nor the remaindermen can be said to exclusively operations in the Marcellus Shale. The views expressed hold any one of these rights. herein are solely those of the author and do not necessarily reflect those of Noble Energy, Inc., its partners, or its It’s important to keep in mind that the freedom of affiliates. contract applies to all aspects of real property and oil and gas law. So the instrument creating the life estate ordinarily Synopsis: controls the life tenant’s powers with respect to developing, 3 The Marcellus Shale Play possesses one of the largest leasing and benefitting from the mineral estate. Where the formational depositories of natural gas in the United granting instrument fails to expressly allocate these States.1 As a result of recent innovations in drilling ownership rights, the law steps in and typically prohibits techniques, the industry’s once-ubiquitous belief in the the unilateral exploitation of the mineral estate by either the economic impracticability of production in the Marcellus life tenant or the remaindermen. Thus, under the general has, over night, evolved into an accepted paradigm of rule, neither the life tenant nor the remaindermen may act gainful operations for oil and gas producers. In light of the alone in executing an oil and gas lease when the grantor of Marcellus’ sudden profitability, landowners and producers the life estate failed to contemplate the right to do so in the alike have necessarily scrambled to obtain leases to the granting instrument. mineral estates situated within the play. The explosive rate The purpose of this rule is derived from the legal of leasing transactions concomitantly increased the need for foundations underlying estates in land. The creation of a professional land title review in Ohio, Pennsylvania, and life estate grants the life tenant a present interest in the West Virginia. minerals, subject to the life tenant’s duty not to commit This article seeks to aid professionals in the title review “waste.” The term waste has been defined as a “permanent process by identifying common principles and issues arising harm to real property . . . not justified as a reasonable out of conventional and legal life estates. The scope of this exercise of ownership and enjoyment by the possessory article is limited to the identification of life estates, the tenant and resulting in a reduction in value of the [future] 4 prohibition of a life tenant’s waste, the requirement of interest . . . .” With respect to a life tenant’s exploitation joinder, the applicability of the open mine doctrine as an of the minerals, the general rule “is that a life tenant may exception to joinder and the common problems associated not dispose of the corpus of the estate,” to do so constitutes 5 with payments. The nuances detailed below provide the waste. Rather, the minerals are “to be preserved for the 6 examiner a good, non-legal, starting point when remaindermen.” encountered with life estates in the Marcellus. Life estates create an apparent conflict between the PRELIMINARY OBSERVATIONS OF A LIFE real property law principles prohibiting waste and the oil ESTATE’S EFFECT ON OIL & GAS OPERATIONS and gas law principles favoring development of natural resources: the life tenant cannot exclusively execute an oil An individual who owns the fee simple interest in a and gas lease without committing waste, while conversely, mineral estate generally holds three important rights: (1) the remaindermen have no present interest in the minerals

G R O W T H T H R O U G H E D U C A T I O N – APRIL/MAY/JUNE 2014 25 and therefore cannot execute an oil and gas lease until the is unclear. In fact, one commentator noted “[t]his is the life estate terminates. In effect, neither party can lease the fact situation which has given rise to the greatest minerals during the pendency of the life estate.7 Without controversy.”13 Thus, the analyst must be sure to consult more, a producer would have to wait, potentially decades, with their legal department before assuming the allocation for the termination of the life estate before obtaining a method under these circumstances. lease. As aptly noted by one court, the common law Oil and gas law remedies this problem by validating payment scheme creates consequential problems of its own. leases executed with the consent of the life tenant and the Specifically, “[h]ow are the interests of the remaindermen to remaindermen. This rule of joinder affords the parties an be . . . protected during the lifetime of the life tenant? opportunity to jointly develop the minerals, which [And] who is to pay the taxes that will be required by effectively bypasses any concerns of waste. As a result, the reason of the payment of royalties?”14 Similarly, why must life tenant and the remainderman are generally regarded as the remaindermen bear the loss of time-decay on the necessary parties to the lease.8 In summary, the execution corpus? These concerns go beyond the scope of this paper. of a lease by either without the joinder or ratification of the However, as to the first question, payments received are other is usually invalid, while the execution of a lease by generally protected by the life tenant’s duty to preserve the both parties creates a valid working interest. funds as corpus for the benefit of the remaindermen. Should the life tenant misappropriate the funds, the Generally, where a working interest is appropriately remainderman will usually have standing to file suit for obtained after creation of the life estate the allocation of damages. payments accruing under the lease depend upon the circumstances of the transaction. Where both the life There is an important exception to the general rule tenant and the remaindermen “have signed the same lease, of joinder known as the “open mine doctrine.” The open the question [of allocation] must be met unless the mine doctrine is essentially a rule of non-liability in favor of allocation is agreed to therein or elsewhere.”9 In other the life tenant. The doctrine’s basic function is to permit a words, if both the life tenant and the remaindermen sign life tenant’s unilateral development of “open mines” that the same lease, the lease itself may expressly provide the came into existence prior to creation of the life estate method by which payments shall be allocated between the without being liable to the remaindermen for waste. parties. This is the most prudent practice in resolving the Accordingly, where the property produced oil or gas prior issue of payments. to the creation of the life estate, the life tenant is entitled to continue exclusive development of the oil and gas, Sometimes the parties will execute their own notwithstanding the remaindermen’s objections.15 The separate leases. “Normally the rights of each are effect is that all royalties, bonuses and income derived from determined by the lease which he [or she] signed. Thus, the open-mine-lease belong to the life tenant.16 where the remainderman leased his remainder interest for a 1/8 royalty, expressly advising the lessee that he would have The open mine doctrine rests on the principle that to deal separately with the life tenant,”10 and the life tenant a life tenant may “enjoy the land in the same manner as it executes a separate lease with a different royalty, the lessee was enjoyed before the creation of the life estate.” 17 Ergo, “is obligated to pay both royalty amounts as expressly where the property is subject to an oil and gas lease prior to contracted.”11 the creation of the life estate, the life tenant will hold the exclusive right to receive the benefits under that particular Where the joinder lease is silent on the allocation lease in the same manner as the grantor enjoyed such of payments, the life tenant is usually benefitted with the benefits. In some jurisdictions, the open mine doctrine right to receive income from the interest accruing on the only applies to leases in effect at the creation of the life corpus during his or her lifetime, but burdened with the estate and cannot extend to subsequent leases executed by duty to preserve the aggregate amount of the royalties in an the life tenant individually.18 While other jurisdictions interest bearing account to be paid to the remaindermen emphasize the grantor’s decision to lease the minerals and upon termination of the life estate. Because the life tenant infer the apparent intent from such action as indicating the possesses the present interest in the minerals and bears the grantor’s desire to authorize the life tenant’s execution of burden of preventing waste, it logically follows the life subsequent leases after the termination of the grantor’s tenant is the proper payee of all amounts deemed as open-mine-lease. “corpus.”12 However, the application of the law in this area

26 N A T I O N A L A S S O C I A T I O N O F D I V I S I O N O R D E R A N A L Y S T S An understanding of the core concepts that form lease is silent as to the allocation of payments, the life the foundations of these principles will help the practitioner tenant receives the interest accruing on lease payments and in reviewing both title and payment issues commonly the corpus of the payments eventually goes to the associated with mineral life estates. The nuances detailed remaindermen upon death of the measuring life.25 below provide a cross-jurisdictional road map for the Although the default method of allocating payments is well- professional charged with this very important, yet often settled, it does little to assist the division order analyst in confusing, analytical task. The information contained determining the proper payee under joinder leases. herein is not intended resolve, or designed to address, Arguably, where the lease is silent as to allocation, the life specific issues of fact or law. Readers must be vigilant to tenant should be the proper payee. This is because the life use the content provided herein for general, non-legal tenant is seised of the right to present possession of the informational purposes only. Any specific issues of fact or mineral estate. It reasonably follows that if payments made law, the resolution of which are pending, accruing, or under joinder leases are considered part of the corpus of the remain unknown to the reader, should be independently mineral estate, then the life tenant has the right of present researched. Of course, the most beneficial research will be enjoyment of the payments subject to the life tenant’s duty acquired by retaining legal counsel, licensed to practice law to conserve the corpus. However, given the lack of clarity in the applicable jurisdiction. in this particular area, it is strongly urged that the analyst consult with their legal department in these situations. PENNSYLVANIA The question regarding allocation of proceeds Creation of Life Estates, Prohibition of Waste and the becomes somewhat less perplexing when both the life Requirement of Joinder tenant and remaindermen execute separate leases.26 Notably, because the parties have the right to contract to Pennsylvania defines a life estate as “an estate whose the allocation of proceeds, the lease itself may contemplate duration is limited to the life of the party holding it, or the parties’ entitlement to lease payments and provide the some other person.”19 No specific words are necessary to method by which the proceeds must be allocated. create a life estate. Thus, a life estate arises when “the will or instrument creating the interest, viewed as a whole, The Open Mine Doctrine manifests the intent of the transferor to create an estate measured by the life or lives of one or more persons.”20 Pennsylvania endorses the Open Mine Doctrine as Normally, the life tenant’s unilateral development of the another exception to the general rule prohibiting waste. minerals, “either personally or through a lessee . . . Under the doctrine, “a life tenant may operate oil and gas constitutes waste.”21 wells, mines and quarries if they were opened before his life estate began.”27 Even if the grantor’s lessee had not Pennsylvania law permits an exception to the physically drilled a well on the leased premises, the lease general rule prohibiting waste when the granting itself constitutes a sufficient opening of the mine.28 instrument evidences the grantor’s intent to permit a life Consequently, the life tenant may, by reason of the pre- tenant’s development of the minerals. In Doverspike v. existing lease, begin physical development of the minerals Chambers, the court held that a life tenant need not obtain and retain all benefits derived therefrom.29 consent from the remainderman to lease the minerals where the instrument creating the life estate evidences the The creation of a life estate, in light of an open grantor’s clear and unambiguous intent to vest the life mine, can be said to indicate the grantor’s intent to permit tenant with such power.22 Therefore, the general rule in future development of the minerals by the life tenant where Pennsylvania is that a life tenant cannot exploit the mineral the life tenant and the grantor are the same person. In estate without the joinder of the remaindermen unless general, courts will construe a deed or reservation so as to permitted to do so through express provision in the interpret and effectuate the parties’ intent.30 The same is granting instrument.23 true when applying the open mine doctrine; the grantor’s intent remains paramount.31 Accordingly, Pennsylvania Payments Under Leases Created After Life Estate Begins treats an open mine as derivative evidence of the grantor’s intent to vest the life tenant with the sole executive right to Where a lease comes into existence after creation of subsequent leases, when the result of the conveyance is to the life estate, either through joinder of the life tenant and reserve a life estate in the grantor. In those cases, where an remaindermen or through subsequent ratification24 and the open-mine-lease expires without actual production, the life

G R O W T H T H R O U G H E D U C A T I O N – APRIL/MAY/JUNE 2014 27 tenant’s “granting of a second lease [will] not terminate the In West Virginia, a “life estate” is a freehold estate, applicability of the Open Mine Doctrine.”32 “which is held by the tenant for his own life or the life or lives of one or more other persons . . . .”38 A grantor may There is an exception to the open mine doctrine create a life estate by reservation as well as by grant.39 No under Pennsylvania’s Uniform Principal and Income Act particular words are necessary,40 “[a]ny language in a (“PUPIA”) for interests held in trust. The legislative conveyance which sufficiently shows the grantor’s intention comments to the Act indicate its purpose “is to abolish the will suffice.”41 An unambiguous instrument will be applied ‘open mine doctrine’ as it may apply to the rights of an according to its terms and in keeping with the plain, income beneficiary and a remainder beneficiary in receipts ordinary and accepted meaning of the language used.42 from the production of minerals from land owned or leased Because a life tenant cannot commit waste “unless by 33 by a trust.” The PUPIA allocates certain receipts as trust special permission of the owner to do so,”43 the granting income for the benefit of the “income beneficiary” and instrument determines the parties’ rights where the grantor other receipts as trust principal for the benefit of the expressly vests the life tenant with the executive right or 34 “remainder beneficiary.” In general, royalties, bonuses, other rights to develop the minerals. shut-in payments and more-than-nominal delay rentals are distributed sixty-six and two-thirds percent (66.66%) to Not surprisingly, where the instrument is silent to principal and the balance to income.35 Nominal delay such rights, the law provides the life tenant must “spare and rentals are distributed one-hundred percent to income.36 preserve the corpus” while the remaindermen must await The PUPIA does not affect life tenancies not held in trust. termination of the life estate before exercising any rights of Therefore, a life estate not vested as a beneficial interest ownership.44 Accordingly, West Virginia courts hold that a created by the terms of a trust should be analyzed under the life tenant cannot enter into an oil and gas lease without general rule of joinder subject to the open mine doctrine. joinder of the remaindermen, “to do so constitutes waste of the corpus of the estate . . . .”45 Joinder occurs when both Payments Under the Open Mine Doctrine the life tenant and the remaindermen consent to the lease. The remaindermen may consent to the life tenant’s lease by In Cronan v. Castle Gas Co., the court recognized subsequently executing a ratification.46 But what if the that the open mine doctrine vis-à-vis pre-existing leases remaindermen fail to ratify the lease until after the life “entitles the life tenant to continue operation of the opened tenant’s death? Is the lease still valid? One prominent oil mine and retain the proceeds of such operation.”37 The and gas treatise determined that the lease would be valid, court’s holding indicates the life tenant’s exclusive right to even though the ratifications were executed after the death all benefits under the open-mine lease, including bonuses, of the life tenant.47 In effect, the remaindermen may delay rentals and royalties. consent to a life tenant’s lease by ratification either before or The Bottom Line after the life tenant’s death.

Look first to the granting language of the Payments Under Leases Created After the Life Estate instrument creating the life estate; if the grantor Begins unambiguously intended to vest the life tenant with the Where “there is development not authorized under executive right and any benefits under a lease, then joinder any lease or authority in existence at the beginning of the is not required. Next, look for any “open mines” on the life tenancy,” the life tenant must hold the royalty payments property. If the open mine doctrine applies, the life tenant in account with the life tenant receiving the interest shall receive all the proceeds from development operations. accruing thereon for the continuance of the life estate and Failing those two things, the lease must be obtained the corpus of the royalty going to the remaindermen upon through joinder of the life tenant and remaindermen. the death of the life tenant.48 Similarly, in Mairs v. Central Where the joinder lease expressly contemplates the method Trust Co. the court held, “[w]here a well is not open at the of allocation for lease payments, the lease will control the time the life estate commences only interest on the royalty parties’ right to payments. goes to the life tenants and the principal goes to the WEST VIRGINIA remainderman.”49

Creation of Life Estates, Prohibition of Waste and the Again, the same concerns outlined in Pennsylvania Requirement of Joinder apply when determining the proper payee of payments under joinder leases in West Virginia. Where the lease is

28 N A T I O N A L A S S O C I A T I O N O F D I V I S I O N O R D E R A N A L Y S T S silent, the practical application of the law is uncertain and remaindermen. Unfortunately, the court did not directly the analyst should consult their legal department for further address this issue. As discussed below, subsequent cases instruction. Where the joinder lease expressly contemplates indicate the West Virginia’s reluctance to extend the the allocation of payments between the life tenant and the grantor’s perceived intent beyond the original open-mine- remaindermen, the lease controls the parties’ right to lease. payment. Following the Koen case, the courts seemed to reign The Open Mine Doctrine in their interpretation of the grantor’s apparent intention in executing an open mine lease. In 1919, the court held in The rule requiring consent of both the life tenant Minner v. Minner that the life tenant “must not open new and remaindermen does not apply to open mines. An mines or wells for the purpose of withdrawing the minerals “open mine” can be a well that existed before creation of beneath the surface, for to do so constitutes waste of the the life estate and that continues producing hydrocarbons corpus of the estate . . . .”55 The court effectively found after creation of the life estate. In Weekley v. Weekley, the that the grantor’s open-mine lease permitted the drilling of court noted that “[i]f, at the time of the creation of the life new wells under that particular lease only because the mine estate, either by grant or reservation, there is an open mine was effectively opened when the lease was executed—prior on the property to which the reservation relates, then the to the life estate. Likewise in Mairs v. Central Trust Co., life tenant is entitled to the rents and royalties derived the court affirmed the life tenant’s duty to refrain from 50 therefrom during his life.” The court reasoned that the opening new mines, but concluded that “[w]here a well is life tenant “may work an open mine [and] develop the not open at the time the life estate commences only interest 51 same to exhaustion.” Professionals must exercise care on the royalty goes to the life tenants and the principal goes when analyzing long-term leases held by production, as the to the remaindermen.”56 open mine doctrine dictates the division of interest on royalty payments affected by life estates. Thus, “if the wells were open at the date of the termination of the preceding estate of inheritance,”57 the life Similarly, an open mine constructively exists where tenant may continue to work only those wells to the grantor executed a lease before creating the life estate. exhaustion. Upon termination of the open-mine-lease, the Courts consider the grantor’s lease as an open mine even life tenant may not unilaterally execute a new lease; to do so though it had not been developed by the lessee/producer at would be to open a new mine on the premises. Therefore, the time the life estate was created. Although the lease one could feasibly argue that West Virginia courts only itself does no more than convey the mere right to open the permit the life tenant to open new wells under an existing mine, the grantor’s participation in the leasing transaction open-mine lease, but would denounce the opening of new constitutes a constructive development of the mineral wells under a subsequent lease executed by the life tenant estate. Thus, “[a] mine lawfully leased to be opened is an after the open-mine lease expires. Although, in situations 52 ‘open mine.’” Such a lease will be treated as if it had where the existence of an open mine remains unclear, the opened the mine at the time of its execution—that is, most prudent practice is to obtain leases where both the 53 before the creation of the life estate. remaindermen and the life tenant joining in the transaction. There remains slight uncertainty as to whether a life tenant may unilaterally execute new leases after the Payments Under the Open Mine Doctrine open-mine-lease terminates. In Koen v. Bartlett, the court held, “if the mine is ‘open’ when [the life tenant] comes in, The effect of the open mine doctrine is that all then we conclude that the [grantor] . . . has, by his actions, royalties and delay rentals derived from the lease belong to which speak louder than words, manifested his intention the life tenant.58 This includes rents and royalties derived that it may be worked.”54 The “open mine” in that case was from undeveloped and held-by-production leases.59 the grantor’s prior execution of an oil and gas lease. The Though, it is unclear whether bonuses are subject to the court emphasized that the grantor’s decision to lease the open mine doctrine.60 minerals before creating the life estate derivatively evidenced the intention to authorize the life tenant’s The Bottom Line continued development of the oil and gas. Under this line First review the language of the instrument creating of reasoning, the court ostensibly held a life tenant may the life estate. The words of the instrument control where execute future leases without consent or joinder of the the grantor expressly identifies the rights among life tenants

G R O W T H T H R O U G H E D U C A T I O N – APRIL/MAY/JUNE 2014 29 and remaindermen. If there is an open mine, the life execute a lease of their own or ratify the life tenant’s lease.67 tenant is entitled to all rents and royalties; though, it is unclear whether the open mine doctrine applies to bonuses Payments Under Leases Created After the Life Estate received. If the instrument creating the life estate is silent Begins as to the parties’ right to develop and there are no open Where a valid lease arises after the creation of the mines on the premises, a lease will only be valid when life estate, the allocation of payments should be made executed by both the life tenant and the remaindermen. “If according to the language in the instrument. If the lease is the life tenant and the owner of the future interest join in a silent, the bonus, rents and royalties are treated as monetary lease and make an agreement on the method of dividing assets to be preserved for the benefit of the remaindermen. the lease proceeds, their agreement in this matter [should] The life tenant receives the income derived from investing be given effect.”61 the royalties during his or her lifetime and the corpus goes 68 OHIO to the remaindermen upon death of the life tenant. An Ohio court noted that while this payment solution appears Creation of Life Estates, Prohibition of Waste and the to be just, it is not without its own consequential problems. Requirement of Joinder Namely, “absent a trust or judicially supervised management . . . how are the interests of the remaindermen In Ohio, a life estate is “a freehold estate which is with respect to the corpus . . . to be protected during the 62 held by the tenant for his own life.” The life tenant is lifetime of the life tenant?”69 entitled to the full use and possession of the property with the exception that a life tenant is not permitted to engage As mentioned earlier, these questions go beyond the in conduct which would result in a “diminution of the scope of this paper; however, the court’s well-founded value of the future estate.” 63 In other words, the life tenant concerns are not unsolvable. Because the royalties are an cannot commit waste. “asset to be preserved,” it appears the duty of preservation and investment falls on the life tenant. It logically follows The general rule is that a life tenant’s exclusive that if the life tenant is bound to refrain from committing execution of an oil and gas lease constitutes waste, unless waste and charged with the affirmative duty to preserve the authorized by the instrument creating the life estate or corpus, then the life tenant is the proper payee who holds 64 through subsequent ratification by the remaindermen. the funds for the benefit of the remaindermen. Should the Thus, a life tenant effectively commits waste when a life tenant fail to satisfy the duty to preserve the royalties lessee/producer enters upon the land and develops the during his or her lifetime, the remaindermen are sufficiently minerals pursuant to an oil and gas lease executed by the protected by Ohio’s remedies at law.70 Again, the analyst life tenant without the consent or ratification of the must tread lightly in these cases and consult with their legal remaindermen. Similarly, a life tenant who personally department before allocating proceeds. develops the minerals without the consent of the remaindermen commits waste. Ohio law can be somewhat The most effective resolution of the issue is to have unforgiving to a life tenant found liable for waste. the parties’ agree by contract to the division of lease Specifically, Ohio statutes provide that if a life tenant proceeds. A producer can accomplish this through the commits waste, he or she may be required to forfeit their joinder lease itself or through subsequent modification or interest in the property to the remaindermen.65 amendment of the joinder lease.

In cases where a life tenant unilaterally executes an The Open Mine Doctrine oil and gas lease, the lease itself is not immediately void, rather, it acts to vest the lessee/producer with rights from Ohio courts recognize the open mine doctrine as an one-half of the necessary parties. An Ohio court recently exception to the general rule. The holder of a life estate is cited Professor Eugene Kuntz’s treatise as an authority on entitled to the rents and royalties from any well existing at 71 the issue, noting “the lessee of the life tenant alone . . . does the creation of the life tenancy. There arises the question not have the right to enter and develop the property . . . as to whether the open mine doctrine should be extended [but] such a lessee would undoubtedly acquire the right to to include new wells drilled by reason of a preexisting enter and develop if consent is secured from the owner of the lease—that is, where the grantor executed an oil and gas complementary interest.”66 In sum, development cannot lease prior to the life estate, which continued to remain in occur under the life tenant’s lease until the remaindermen effect but undeveloped after creation of the life estate. The

30 N A T I O N A L A S S O C I A T I O N O F D I V I S I O N O R D E R A N A L Y S T S Ohio courts addressed this issue in the affirmative, so long The Bottom Line as the grantor’s lease remains in effect.72 It does not matter whether the wells are drilled before or after the creation of Always review the granting language of the the life estate so long as they are drilled under a contractual instrument creating the life estate first. If the instrument right which arose before the creation of the life estate.73 authorizes the life tenant’s future execution of leases, then Therefore, the life tenant is entitled to all payments arising joinder of the remaindermen is not required. Failing that, from any new wells drilled during the continuance of the the producer must obtain the consent or ratification of both life estate by reason of the grantor’s lease. This right the life tenant and remaindermen in order to acquire a valid consequently terminates when the open-mine-lease working interest. If, however, the open mine doctrine terminates.74 applies, the life tenant shall receive all rents and royalties from development operations so long as the open-mine- In light of the life tenant’s right to develop an lease remains in effect. Upon termination of the open- open-mine-lease, it should also be emphasized that the mine-lease the life tenant is without power to unilaterally open mine doctrine only protects the life tenant’s actions execute new oil and gas leases. under that particular lease. Any subsequent leases executed by the life tenant without the written consent of the CONCLUSION remaindermen are void. This was made clear in Foster v. This analysis of mineral life estates in the Marcellus Foster, where the court held a life tenant may not “convey shale play is intended to equip division order analysts with a new oil and gas leases notwithstanding the existence of oil quick and concise reference for common payment problems and gas leases placed upon the premises . . . at the time of associated with a life estate’s effect on divisions of interest. the conveyance of the life estate . . . .”75 Therefore, a life There will, of course, be fact-specific situations where the tenant may not execute new oil and gas leases under a professional requires more information and even more claim that the open-mine-lease evidences the grantor’s situations where the law’s application is unclear. In those intent to permit continued leasing transactions by the life cases, the analyst should note the issue and reference their tenant. Unlike Pennsylvania, Ohio courts will not “attempt legal department for resolution. In any event, to discern the intention of the grantor of the life tenancy understanding the basic principles of each jurisdiction will under such a fact situation.”76 greatly improve a practitioner’s review of title and simplify Similar to Pennsylvania, Ohio’s legislature enacted their search for more information. the Uniform Principal and Income Act (UPIA) which ______abolished the open mine doctrine with respect to interests held in trust.77 Under the UPIA, royalties, shut-in 1 See Kevin L. Colosimo & Daniel P. Craig, Compulsory Pooling payments, bonuses and more-than-nominal delay rentals and Unitization in the Marcellus Shale: Pennsylvania’s Challenges are distributed ninety percent (90%) to principal with the and Opportunities, 83 PA BAR ASSN. QUARTERLY 47, 48 (2012). balance allocated to income,78 while nominal delay rentals 2 See Joseph Shade & Ronnie Blackwell, Primer on the Texas Law are allocated entirely to income.79 A life estate that is not of Oil & Gas, 18-19, Matthew Bender & Co., Inc., 2013 otherwise vested as a beneficial interest under the terms of (discussing the attendant rights of a fee simple mineral owner). any trust—the “no frills” life estate, if you will—should be 3 See Doverspike v. Chambers, 357 Pa. Super. 539 (Pa. Super. Ct. analyzed under the general rule of joinder subject to the 1986); Weekley v. Weekley, 126 W. Va. 90 (W. Va. 1943); Foster open mines doctrine. v. Foster, 1980 Ohio App. LEXIS 13928 (Ohio Ct. App., Coshocton County July 31, 1980). Payments Under the Open Mine Doctrine 4 Moore v. Vines, 474 S.W.2d 437, 439 (Tex. 1971). 5 18-283 Dorsaneo, Texas Litigation Guide § 283.03. For purposes of the open mine doctrine, the life 6 Id. tenant is treated as the “owner” entitled to payment of the 7 See Dickson v. Chesapeake ACE Acquisition, et al., Ohio Court rents and royalties.80 Because Ohio does not extend the of Common Pleas, Noble, Case No. 212-0051, page 3 (Order open mine doctrine to permit a life tenant to individually denying Motion for Summary Judgment) (Rendered February 6, execute new oil and gas leases after expiration of the 2013). grantor’s original lease, the life tenant will not be entitled to 8 See Shade & Blackwell supra note 2. any bonuses. 9 Francis M. Dougherty, et al., Successive Owners, 55 TEX. JUR. OIL AND GAS, § 135, West Group, 2012. 10 2-5 WILLIAMS & MEYERS OIL AND GAS LAW § 512.2,

G R O W T H T H R O U G H E D U C A T I O N – APRIL/MAY/JUNE 2014 31 Accounting For Proceeds of Lease Development, Matthew Bender 32 Id. at 387. and Co. (2013). 33 20 Pa. C.S. § 8151. 11 Brent Chicken, Esq., Life Tenant and Remainderman Oil and 34 See 20 Pa. Con. Stat. § 8102 (defining “income beneficiary” Gas Leasing and Apportionment of Production Proceeds, on file and “remainder beneficiary.”). with author. 35 20 Pa.C.S. § 8151. 12 Note, in some jurisdictions, the life tenant may receive one- 36 Id. hundred percent of certain payments under the lease, while 37 Cronan, 354 Pa. Super. at 385. certain other payments constitute “corpus” to be preserved for 38 Weekley v. Weekley, 126 W. Va. 90, 92 (W. Va. 1943). the remaindermen. See Davis v. Bond, 158 S.W.2d 297 (Tex. 39 Id. 1942) (life tenant entitled to all delay rentals, but bonus and 40 Id. royalties are to be invested as corpus, with interest thereon paid 41 Id. to the life tenant, and the corpus distributed to the 42 See Weekley, 126 W. Va. at 91 (Syllabus Point 2) remaindermen upon death of the life tenant.). 43 W. Va. Code § 37-7-1. 13 WILLIAMS & MEYERS OIL AND GAS LAW supra note 10. 44 See Koen v. Bartlett, 41 W. Va. 559, 566 (W. Va. 1895). 14 Foster v. Foster, 1980 Ohio App. LEXIS 13928, 13-14 (Ohio Compare Musgrave v. Musgrave, 86 W. Va. 119, 144 (W. Va. Ct. App., Coshocton County July 31, 1980). 1920) (“The reversioner cannot go in and tear up the surface by 15 See Nutter v. Stockton, 626 P.2d 861, 862 (Okla. 1981) (“The mining or other operations materially interfering with the ‘Open Mine Doctrine’ permits a life tenant to receive all the tenant’s use and enjoyment of the surface, unless he has reserved profits from a mining operation on his land when the mineral the right to do so . . . .” (emphasis added)). lease was granted prior to and extends into his tenancy.”). 45 Minner v. Minner, 84 W. Va. 679, 682-683, 100 S.E. 509, 511 16 See Francis M. Dougherty, et al., Open Mine or Well Doctrine (W. Va. 1919). Exception, 55 TEX. JUR. OIL & GAS § 30 (2012); see also McGill 46 Id. v. Johnson, 799 S.W.2d 673 (Tex. 1990). 47 See 2-5 WILLIAMS & MEYERS OIL AND GAS LAW, § 512.2, fn. 17 Williams & Meyers, Oil and Gas Law, § 513, Development by 1, Life Estates and Future Interests, Accounting for Proceeds of Lease Life Tenant Without Consent of Owner of Future Interest: Herein or Development, Matthew Bender & Company, Inc., (2013) (it of the Open Mine Doctrine, Matthew Bender & Company, Inc., is “implicit in the [Powers v. Union Drilling] holding that the (2013). lease was effective as to the life tenant and the remaindermen 18 Moore v. Vines, 474 S.W.2d 437 (Tex. 1971); Foster v. Foster, who ratified the lease after the life tenant died.”) (citing Powers 1980 Ohio App. LEXIS 13928, 5-6. v. Union Drilling, 194 W. Va. 782 (W. Va. 1995)). 19 Estate of Kinert, 693 A.2d 643, 645 (Pa. Cmwlth. 1997). 48 Weekley, 126 W. Va. at 92-93 (referencing Wilson v. Youst, 43 20 Estate of Hewitt, 554 Pa. 486, 495 (Pa. 1998). W. Va. 826; Ammons v. Ammons, 50 W. Va. 390; and Eakin v. 21 Williams & Meyers, Oil and Gas Law, § 512.1, Life Estates Hawkins, 52 W. Va. 124). and Future Interests, Leasing and Development, Matthew Bender 49 Mairs v. Central Trust Co., 127 W. Va. 795, 805 (W. Va. & Company, Inc. (2013); see Cronan v. Castle Case Co., Inc. 354 1945). Pa. Super. 381, 385 (Pa. Super. 1986). 50 Weekley, 126 W. Va. at 92-93; see also Koen v. Bartlett, 41 W. 22 Doverspike, 357 Pa. Super. at 545-46. Va. 559. 23 Cronan v. Castle Gas Co., 354 Pa. Super. 381, 385 (Pa. 51 Id. Super. 1986); see Doverspike, 357 Pa. Super. at 545-46. 52 Musgrave, 86 W. Va. at 125. 24 See generally Findley v. Warren, 244 Pa. 64, 66 (Pa. 1914) 53 Id. (“Whether any or all of the remaindermen recognized, approved 54 Koen, 41 W. Va. at 566. or ratified the lease made by the life tenant does, in the opinion 55 Minner, 84 W. Va. at 683 (emphasis added). of the court, affect the defendants’ liability to the plaintiffs.”) 56 Mairs, 127 W. Va. at 805. 25 See Bruner Estate, 363 Pa. 552, 558 (Pa. 1950) (citing Blakley 57 Minner, 84 W. Va. at 683. et al. v. Marshall, 174 Pa. 425). 58 See Weekley, 126 W. Va. at 92-93; see also Koen, 41 W. Va. 559 26 See discussion of payment allocations in Preliminary (“[I]t is settled law that the rents of an open mine are income Observations above. and go to the tenant for life.”); Mairs, 127 W. Va. at 805 (where 27 Cronan, 354 Pa. Super. at 385 (referencing Crozer’s Estate, 336 open mine exists, “a life tenant is entitled to receive the royalty Pa. 266 (1939). as issues and profits of the land.”) 28 Id. 59 See Weekley, 126 W. Va. at 92-93. 29 See id. 60 See id. (noting that if an open mine exists, “the life tenant is 30 Brookbank v. Benedum-Trees Oil Co., 389 Pa. 151 (1957). entitled to the rents and royalties derived therefrom during his 31 See Cronan, 354 Pa. Super. at 386 (citing Brookbank, 389 Pa. life.” (emphasis added)) (Notably, the case is silent as to 151). bonuses).

32 N A T I O N A L A S S O C I A T I O N O F D I V I S I O N O R D E R A N A L Y S T S 61 Williams, supra note 10. held, “[a]s to the disposition of the royalties held in escrow 62 Bush v. Bush, 1988 Ohio App. LEXIS 1752, 4-5 (Ohio Ct. awaiting the resolution of this controversy, we hold that App., Muskingum County Apr. 27, 1988) payment should be consistent with the compromise position 63 Foster v. Foster, 1980 Ohio App. LEXIS 13928, 5-6 (Ohio Ct. reached by Milliken [and] Fourth Central Trust Co. v. Woolley.” App., Coshocton County July 31, 1980). See Foster, 1980 Ohio App. LEXIS 13928 at 16-17. 64 Foster, 1980 Ohio App. LEXIS 13928, 6. 69 Foster, 1980 Ohio App. LEXIS 13928, 13-14. 65 Ohio Rev. Code Ann. § 2105.20. 70 See e.g., Ohio Rev. Code Ann. § 2105.20. 66 See Dickson v. Chesapeake ACE Acquisition, et al., Ohio Court 71 See Siley v. Remmele, 1987 Ohio App. LEXIS 6063, 3-4 (Ohio of Common Pleas, Noble, Case No. 212-0051, page 5 (Order Ct. App., Washington County Mar. 6, 1987). denying Motion for Summary Judgment) (Rendered February 72 See Breece v. Breece, 19 Ohio Dec. 734, 736-737 (Ohio C.P. 6, 2013) (citing 1-8 Kuntz, Law of Oil and Gas § 8.4) (emphasis 1909); see also Foster, 1980 Ohio App. LEXIS 13928, 13-14. added). 73 Breece, 19 Ohio Dec. at 736-737. 67 See id. 74 See Siley, 1987 Ohio App. LEXIS 6063, 4 (“[T]he life tenant 68 See Foster, 1980 Ohio App. LEXIS 13928, 12. The court in takes the land with the right to the royalties of all wells drilled Foster analyzed a “compromise position” in dividing payments on the land at the time it is taken, and all wells that may be accruing under leases executed after termination of an open- drilled on the land under the contract existing at the death of the mine lease. Under the compromise position, “the royalties, testator.” (emphasis added)). rents and bonus payments derived from a new lease . . . are 75 Foster, 1980 Ohio App. LEXIS 13928, 15-16. treated as an asset to be preserved for the remaindermen, but the 76 Foster, 1980 Ohio App. LEXIS 13928, 15-16. life tenant is granted during his lifetime the income derived 77 See Ohio Rev. Code Ann. §5812 et seq. from investing the royalties derived from the lease.” See id. at 78 See Ohio Rev. Code Ann. § 5812.34(A)(3). 12 (citing Fourth Central Trust Co. v. Woolley, 31 Ohio App. 79 See Ohio Rev. Code Ann. § 5812.34(A)(1). 80 259 (1928); see also Milliken Trust Co. v. Jarvis, 34 Ill. App. 2d  See Breece, 19 Ohio Dec. at 736. 180). After outlining the compromise position , the Foster court      

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G R O W T H T H R O U G H E D U C A T I O N – APRIL/MAY/JUNE 2014 33 Counterpart Jeff Kliewer, Connection Local Association Coordinator

APPALACIAN BASIN ASSOCIATION OF DIVISION challenges facing mineral owners. In addition, the executive director ORDER ANALYSTS (ABADOA) of NARO, Jerry Simmons, gave the group an update on the status of matters being monitored or acted upon at the national level. Association Based in the Pittsburgh, Pennsylvania Area Serving NY, OH, PA, WV NARO-LA will have speakers addressing Louisiana issues in a break- out session at the NARO-TX 2014 Convention scheduled for June 11- 13 at the Lake Conroe La Torretta Lake Resort in Montgomery, TX.

For more information regarding ALTDOA, please contact Deborah Walker, Independent Consultant at [email protected] For more information about ABADOA, please contact ABADOA or (318) 798-2631. President, Jason Lucas at [email protected] ………………………………………… For a Membership Application, Membership Renewal and By-Laws, CAPITAL ASSOCIATION OF PROFESSIONAL please visit our website at www.abadoa.org. ………………………………………… DIVISION ORDER ANALYSTS (CAPDOA) Association based in the Oklahoma City, OK Area ARKLATEX ASSOCIATION OF DIVISION ORDER ANALYSTS (ALTDOA) Today the energy industry lives in a glass house and countless Association based in the Shreveport, LA Area (Inactive) organizations want to throw stones at the helm of complacency. Division Order professionals have a direct impact on the perception Although the local ALTDOA has been inactive of late, two of NADOA’s of each letter and each phone call and the ability to correctly alight members, Malissa Blackburn (Secretary) and Deborah Walker (VP) perception even if for only a single royalty owner. A theme that has are charter members of NARO-LA. NARO-LA held a very successful been absorbed this year was “going back to basics”. At our last Spring Conference, “From Dirt to Dollars,” in Shreveport on April 6 at CAPDOA meeting on April 15, the CAPDOA community sat down and El Dorado Resort and Casino. The capacity crowd heard locally had a long discussion about where our direct impact is. Mr. Drew renowned professionals address subjects of current interest, including Hopkins, manager of owner relations and call center at Chesapeake surface issues, area plays, unitization in Louisiana, recent legislation Energy, enthusiastically reaffirmed a passion in each person toward affecting royalty payments, the value of mineral ownership, fracking the goal of communicating to our owners in a way that shows We issues, the status of local mineral ownership litigation and future

34 N A T I O N A L A S S O C I A T I O N O F D I V I S I O N O R D E R A N A L Y S T S Care. He challenged us to look at how our company communicates DENVER ASSOCIATION OF DIVISION ORDER with owners and to become more passionate about this connectivity. ANALYSTS (DADOA) It is easy to be complacent when discussing someone else’s problem Association based in the Denver, CO Area but it is another thing to fix their problem and give them a customer DADOA’s March luncheon was held at Maggiano’s on the 17th. Our service experience that changes their perception. It is CAPDOA’s presenter, Robert Shutzius, a Reservoir Engineer Manager at mission to continue to instill continued education and to “think about Anadarko, presented: “The Looming Battle Over Hydraulic Fracturing how we think.” It should excite us each day to share our passion with in Colorado and What You Need to Know.” those individuals that seek our help. This was a timely presentation as Colorado is facing extreme fracking We have an exciting educational seminar planned on June 17 in legislation this year and our members have been asking for more Oklahoma City where we will discuss some of these perceptions and information on how to explain our industry to people who are outside attempt to better the community through education, service and higher of it. expectations for our own selves. DADOA has also started a Facebook page and a Twitter account: For more information regarding future meetings and CAPDOA, please @DADOA5280. Both of these forums are a great way to stay informed contact Chris Remmert at [email protected] or (405) of oil and gas news both locally and nationally. 228-8552 or visit our website at www.capdoa.org We are also pleased to announce that the board approved four ………………………………………… scholarships for Institute this year and we are inviting our members DALWORTH ASSOCIATION OF DIVISION ORDER to nominate their favorite charity to be considered for our end-of-year ANALYSTS (DALWORTH) donation. Association serving the Dallas/Fort Worth Area For more information regarding DADOA, please visit our website at DALWORTH held its April 8 association meeting at Pappasitos’ www.dadoa.org. Restaurant in Arlington. Our guest speaker was NADOA President ………………………………………… Mary Sons. She spoke about the evolution of NADOA and the vision of HOUSTON ASSOCIATION OF DIVISION ORDER the board for 2014. Mary also shared information about the upcoming ANALYSTS (HADOA) NADOA Institute which will be held in Chicago the first week of September. Mary pointed out the highlights of Chicago and the location Association based in the Houston, TX Area of the venue where the conference will be held. It looks to be another The new year is shaping up to be a huge success for HADOA. wonderful conference! Membership is at an all-time high and growing. We added more than 100 new members in the first quarter of 2014. The DALWORTH Spring Seminar will be held on Wednesday May 14, and it will be hosted once again by Compass Royalty Management. First The Board worked hard to find speakers that are of interest to our Vice President Vickie Coles has been busy scheduling our speakers for members. We try to cover all topics that affect our industry. Our first this year’s event. Details about the Spring Seminar can be found on the quarter speakers were as follows: DALWORTH website. February 2014 Luncheon: Our next association meeting will be our summer luncheon which is Speaker: Russell Schetroma scheduled for July 16. The location for the luncheon will be Topic: Industry Updates, Focus on Fracing. announced by the end of May. Our Scholarship Committee Chairperson Brenda Pirozzolo will be awarding the 2014 DALWORTH scholarships March Luncheon and ½ Seminar: at the July luncheon. Luncheon: Speaker: Jim Dewbre, VP of Land, Southwestern Energy For information regarding DALWORTH, please visit our website at Topic: Ethics www.dalworth.org or contact Tanya Ward at [email protected] Time: 11:45 a.m. to 12:45 p.m. or at (972) 673-2493. ………………………………………… 1/2 Day Seminar: Speaker: Alexander J. "AJ" Yoakum, Attorney, Kilburn Law Firm, PLLC Topic: Title Examination and Sheriff's Deeds Time: 1 pm. to 2 p.m.

G R O W T H T H R O U G H E D U C A T I O N – APRIL/MAY/JUNE 2014 35 Speaker: Tanner M. Sylkes, CPL, Staff Landman, EP Energy PERMIAN BASIN ASSOCIATION OF DIVISION Topic: Receiverships in Texas: Land and Legal Consideration for ORDER ANALYSTS (PBADOA) Horizontal Development Time: 2 pm. to 3 p.m. Association based in the Midland, TX Area PBADOA held its annual spring seminar on March Speaker: Renee Dupre, Sr. Attorney, Anadarko Petroleum Corporation 27 at the Midland Horseshoe Arena in Midland, Topic: Legislative Updates in Louisiana regarding Unleased Mineral TX. Topics covered included the following: Interests Time: 3:15 pm. to 4:15 p.m. • “Why is the Permian Basin Horizontal HADOA would like to recognize the 2014 board members for working Drilling Bringing Such Growth to Midland/Odessa?” “How do hard to make each luncheon a success. We hope that you will Horizontal Pooling, Allocation Wells, Production Sharing continue supporting HADOA by attending the monthly luncheons, Agreements and Regulatory Requirements Affect the Division suggesting speakers and topics that may be an interest to our HADOA Order Analyst” by Peggy Worthington, Business Development Members. Manager at Bold Energy III, LLC • "WI/NRI Calculations for the Division Order Analyst" by Marsha Your membership, education and feedback is important to us! Breazeale with Land Focus Education • “Nuts and Bolts of Pooling” by David Smith, Attorney for For additional information regarding HADOA please view our website: Stubbeman, McRae, Sealy, Laughlin & Browder, Inc. www.HADOA.org. • “Title and the Curative Process” by Percy Engineer, President of Eight Energy, Inc. ………………………………………… MID-AMERICA ASSOCIATION OF DIVISION PBADOA also held a great luncheon on April 16 at the Midland Petroleum Club where John Bowman, a Senior Division Order Analyst ORDER ANALYSTS (MAADOA) for Concho Resources, Inc., gave an in-depth presentation on the Duhig Association based in the Wichita, KS Area Rule. We look forward to one more luncheon on May 21 before we break for the summer. Due to a scheduling problem, we have moved the Annual Educational Seminar to October. More information will be For more information regarding PBADOA, please visit our website at www.pbadoa.org. released in the next issue. ……………………………………… Ryan Hoffman of the Kansas Corporation Commission will SOONER ASSOCIATION OF DIVISION ORDER present our June meeting. He will discuss information about the ANALYSTS (SADOA) KOLAR system, Kansas’ online information center for intents and Association based in the Tulsa, OK Area other forms required to be submitted to the Commission concerning oil and gas. The system certainly expedites the filing SADOA started its year at its of forms but can lead to questions when things are “different.” February luncheon with Jennifer We will be looking forward to having helpful hints to maneuver Greenwell of Nadel and Gussman giving attendees a clearer the system. The website is www.kcc.ks.gov/conservation for understanding of the ins and outs of those of you working with Kansas properties. Of course, you gas marketing. Jane Kapral, Director, Deloitte & Touche LLP in its Audit may call any MAADOA member if you have questions on Kansas. and Enterprise Risk Services area, provided insight at the April luncheon about the things a company needs to consider before investing Here is to spring before we hit summer and high 100’s! in a new production revenue accounting system. SADOA’s Board decided this year to offer a scholarship to one of its members to attend Diana Richecky, MAADOA Secretary, the NADOA Institute. Many interested members registered for the April [email protected], (316) 267-1331 drawing. As summer nears, SADOA’s committee is planning for its ………………………………………… annual Summer Seminar to be held June 24 and 25 at OSU-Tulsa. Check our website for further details as the date approaches. Best wishes for a great spring! For more information regarding SADOA, please visit our website at www.oksadoa.org. ………………………………………

36 N A T I O N A L A S S O C I A T I O N O F D I V I S I O N O R D E R A N A L Y S T S NADOA Welcomes the following new members: American Energy Partners January Provenzano, CPL Chaparral Energy 301 NW 63rd Suite #600 Phone: 412-200-7594 701 Cedar Lake Blvd Oklahoma City OK 73116 Email: [email protected] Oklahoma City OK 73114 David Mobley Gloria Cook Phone: 405-608-5409 Lauren Wesorick Phone: 405-426-4412 Email: [email protected] Phone: 412-208-5382 FAX: 405-425-8412 FAX: 412-774-2573 Email: Anadarko Petroleum Corporation Email: [email protected] [email protected] 1099 18th St Suite #1800 Denver CO 80202 Babst Calland Chesapeake Energy Stefanie Josephson 603 Stanwix Street PO Box 18496 Phone: 720-929-6810 Pittsburgh PA 15222 Oklahoma City OK 73154 Email: Chris Hall Amy Cornforth-Long [email protected] Phone: 412-394-5400 Phone: 405-935-2182 Email: [email protected] Email: [email protected] Brandon Wathke Phone: 720-929-6000 Scott McKernan Adam Eppes Email: Phone: 412-394-5400 Phone: 405-935-1687 [email protected] Email: [email protected] Email: [email protected]

Anadarko E&P Onshore LLC Bank of America Tammy Garvin 1201 Lake Robbins Drive 901 Main Street TX1-492-17-01 Phone: 405-935-2186 Woodlands TX 77380 Dallas TX 75202-3714 Email: [email protected] Cameron Dillmann Ragenia Lowery Phone: 832-636-3181 Phone: 214-209-2332 Adrian Gascon Email: FAX: 214-209-3082 Phone: 405-935-7254 [email protected] Email: [email protected] Email: [email protected]

Associated Resources Inc Bill Barrett Corp Lindsey Miller 15 East 5th Street Suite #200 1099 18th St Ste 2300 Phone: 405-935-4394 Tulsa OK 74103 Denver CO 80202 Email: [email protected] Tara Miller Lisa Rutherford Phone: 918-236-2670 Phone: 303-312-9100 Lindsay Norman Email: [email protected] Email: Phone: 405-935-3896 [email protected] Email: [email protected] Eva Gay Pike Phone: 918-236-2640 BP America Production Company Philip Renner Email: [email protected] 501 Westlake Park Blvd. Phone: 877-245-1427 Houston TX 77079 Email: [email protected] Associated Resources Inc Melody Murta, CDOA 5334 S Toledo Phone: 281-366-8351 Chesapeake Energy Tulsa OK 74135 FAX: 281-366-7584 6100 N Western Ave Jan Sabos Email: [email protected] Oklahoma City OK 73118 Phone: 918-630-6394 Melissa Pierre Email: [email protected] Cabot Oil & Gas Corporation Phone: 405-935-2848 PO Box 4544 Email: [email protected] Atlas Energy Houston TX 77210 1000 Commerce Drive Suite #400 Kristin Morton Stephan Spencer Pittsburgh PA 15275 Phone: 281-589-4645 Phone: 405-935-2866 Eric Deiseroth Email: [email protected] Email: [email protected] Phone: 412-275-2479 Email: [email protected] CGI 14800 Landmark Blvd Ste 300 Brendan Lucas Dallas TX 75254 Phone: 412-489-0006 Amanda Blackburn Email: [email protected] Phone: 972-788-0400 [email protected]

G R O W T H T H R O U G H E D U C A T I O N – APRIL/MAY/JUNE 2014 37 Chesapeake Energy Corporation Continental Resources Inc Eland Energy 6201 N Classen Blvd PO Box 269091 13455 Noel Rd Ste 2000 Oklahoma City OK 73118 Oklahoma City OK 73126 Dallas TX 75210 Bindu Patel Abby Lynn Davis Wes Skipwith Phone: 405-935-3907 Phone: 405-234-9279 Phone: 214-368-6100 Email: [email protected] Email: [email protected] Email: [email protected]

Citation Oil & Gas Corp. Anna Hibbard EnerVest Ltd 14077 Cutten Rd Phone: 405-234-9279 1001 Fannin St Suite #800 Houston TX 77069 Email: [email protected] Houston TX 77002 Naomi Hata Pam DiValerio Phone: 281-891-1579 Sarah Mixon Phone: 713-970-1817 Email: [email protected] Phone: 405-234-9279 Email: [email protected] Email: [email protected] Coffeyville Resources Refining and Enterprise Products Marketing LLC Shelly Ramirez 210 Park Ave Suite #1600 10 E Cambridge Circle Suite #250 Phone: 405-234-9279 Oklahoma City OK 73102 Kansas City KS 66103 FAX: 405-234-9279 Brandon Finkhouse Kevin Bever Email: [email protected] Phone: 405-606-5438 Phone: 877-584-2420 Email: [email protected] FAX: 913-982-0505 Denbury Email: [email protected] 5320 Legacy Dr EQT Corporation Plano TX 75204 625 Liberty Ave Ste 1700 COG Operating LLC Marc Holmes Pittsburgh PA 15222 One Concho Center Phone: 972-673-2000 Kelly Camp 600 W Illinois Avenue Email: [email protected] Phone: 412-553-5700 Midland TX 79701 Email: [email protected] John Bowman Devon Energy Phone: 432-683-7441 333 W Sheridan Ave EXCO Resources Email: [email protected] Oklahoma City OK 73102 12377 Merit Drive Suite #1700 Brooke Baum Dallas TX 75251 ConocoPhillips Phone: 405-552-3448 Mary J (MJ) Baker PO Box 7500 Email: [email protected] Phone: 214-210-8384 Bartlesville OK 74005 FAX: 214-706-3424 Paige Lemmons Kelly Heaton Email: [email protected] Phone: 918-661-7415 Phone: 405-228-8402 Email: [email protected] Email: [email protected] Mark Essary Phone: 214-368-2084 ConocoPhillips Jason Ogilbee Email: [email protected] 315 S Johnstone Ave POB-08-860B Phone: 405-228-8835 GGMD Bartlesville OK 74004 Email: [email protected] PO Box 335 Maribel Orduna Roswell NM 88202 Phone: 479-871-1911 Travis Patty Martha Charboneau Email: Phone: 405-264-2060 Phone: 575-420-9359 [email protected] Email: [email protected] Email: [email protected]

ConocoPhillips Eagle Energy Exploration LLC Hess Corporation 315 Johnstone Avenue 9 East 4th Street Suite #200 1501 McKinney Plaza Office Building 880A Tulsa OK 74103 Houston TX 77010 Bartlesville OK 74004 Kathy Griffin, CPLTA Tracey Perdue Michael Rogers Phone: 918-746-1350 Phone: 713-496-4000 Phone: 918-661-9310 FAX: 918-746-1379 Email: [email protected] Email: [email protected] Email: [email protected]

Becky Jackson Phone: 918-746-1350 Email: [email protected]

38 N A T I O N A L A S S O C I A T I O N O F D I V I S I O N O R D E R A N A L Y S T S Horizon Resources LP Laredo Petroleum Newfield Exploration Company 2929 Allen Parkway Suite #1900 15 W 6th St Suite #1800 1001 17th St Suite #2000 Houston TX 77019 Tulsa OK 74119 Denver CO 80202 Barbara Lynch Riana Vincent Roland VandenBroeck Phone: 713-522-5800 Phone: 918-513-4570 Phone: 303-382-4419 Email: Email: Email: [email protected] [email protected] [email protected]

Hunt Oil Company LPC Crude Oil Marketing LLC Occidental Oil and Gas Corporation 1900 N Akard St PO Box 3821 PO Box 27570 Land Administration Dallas TX 75201 Midland TX 79702 Houston TX 77227 Jessica Grant Talia Mills Minh A Nguyen Phone: 214-978-8475 Phone: 432-686-3939 Phone: 713-985-6370 Email: [email protected] Email: [email protected] Email: [email protected]

IBM Merit Energy Company PetroQuest Energy, L.L.C. 521 S Boston Avenue 13727 Noel Rd Suite #1200 400 E Kaliste Saloom Rd Suite #6000 Tulsa OK 74103 Dallas TX 75240 Lafayette LA 70508 Joseph (Joe) Votruba Megan Franklin Ann Voitier Phone: 918-925-7142 Phone: 972-628-1633 Phone: 337-232-7028 Email: [email protected] FAX: 972-628-1933 Email: [email protected] Email: Independent [email protected] Pioneer Natural Resources 200 Eugenie Drive PO Box 3178 Duson LA 70529 Mewbourne Oil Company Midland TX 79702 Christopher Roy PO Box 7698 Nicki Scoggins Phone: 337-280-4466 Tyler TX 75711 Phone: 432-571-3237 Email: [email protected] Christie Osburn Email: [email protected] Phone: 903-561-2900 Jones Energy Inc FAX: 903-561-8909 PostRock Energy Corp 807 Las Cimas Parkway Suite #350 Email: [email protected] 210 Park Ave Suite #2750 Austin TX 78746 Oklahoma City OK 73102 Jan Dowler, RPL Midstates Petroleum Sonya Vanderburg Phone: 512-590-6018 321 S Boston Suite #1000 Phone: 405-702-7450 FAX: 512-328-5394 Tulsa OK 74103 Email: [email protected] Email: [email protected] Jacquelyn (Jackie) Frick Phone: 918-947-8550 Premier Natural Resources Tara Nash Email: 5727 S Lewis Suite #200 Phone: 512-328-2953 [email protected] Tulsa OK 74105 Email: [email protected] Dianne Gray MorningStar Partners LP Phone: 918-392-3232 J-W Operating Company 400 West 7th St Email: 15505 Wright Brothers Drive Fort Worth TX 76102 [email protected] Addison TX 75001 Caylee Copeland Kelly Kessler, CPL Phone: 817-334-7800 QEP Energy Phone: 972-788-8727 Email: [email protected] 6100 South Yale Suite #900 Email: [email protected] Tulsa OK 74136 New Dominion LLC Donna Clow J-W Operating Company 1307 S Boulder Ave Phone: 918-488-1716 PO Box 226406 Tulsa OK 74119 Email: [email protected] Dallas TX 75222 Mike Cosgrove Tracy McRae Phone: 918-587-6242 Denton Smith Phone: 972-233-8191 Email: Phone: 918-237-4563 FAX: 866-477-7188 [email protected] Email: [email protected] Email: [email protected]

G R O W T H T H R O U G H E D U C A T I O N – APRIL/MAY/JUNE 2014 39 Samson Resources Stephens Production Company XTO Energy PO Box 21038 623 Garrison Ave 810 Houston St Tulsa OK 74121 P O Box 2407 Fort Worth TX 76102 Crystal Chapin Fort Smith AR 72902 Sandra Dias Phone: 918-560-6466 Myla Hendrix Phone: 817-885-2013 Email: [email protected] Phone: 479-783-4191 Email: [email protected] FAX: 479-783-4195 Samson Resources Email: [email protected] Prince Ekpe 2 W 2nd St Phone: 817-870-2800 Tulsa OK 74103 Texas Scottish Rite Hospital for Crippled Email: [email protected] Vanessa Hunter Children Phone: 918-583-1791 2222 Welborn St Harry Fuqua Email: [email protected] Dallas TX 75219 Phone: 817-870-2800 Judi Chapman, RPL, CMM Email: [email protected] Catherine (Cathy) Sposato Phone: 214-559-7632 Phone: 918-591-1070 FAX: 214-559-5006 Brenna Johnson Email: [email protected] Email: [email protected] Phone: 817-885-3748 Email: Jessica Thomas Debra (Debbie) Rucker [email protected] Phone: 918-583-1791 Phone: 214-559-8668 Email: [email protected] Email: [email protected] Shelley Meyer Phone: 817-870-2800 Shell The Caffey Group Email: PO Box 576 8851 Camp Bowie W Suite #100 [email protected] Houston TX 77001 Fort Worth TX 76116 Laura Hill Sheri McCandless Aaron Norwood Phone: 281-544-5017 Phone: 817-348-9766 Phone: 405-885-2507 Email: [email protected] Email: Email: [email protected] [email protected] SM Energy 1775 Sherman Street Ste 1200 Unit Petroleum Company Caroline Passmore Denver CO 80203 7130 S Lewis Ave Suite #1000 Phone: 817-870-2800 Yousef Essaili, RPL Tulsa OK 74170 Email: Phone: 303-830-5804 Patrick Mazza [email protected] Email: [email protected] Phone: 918-493-7700 Email: [email protected] Silvia Perez Southwestern Energy Phone: 817-870-2800 2350 N Sam Houston Pkwy E Suite #125 Libby Stubbs Email: [email protected] Houston TX 77032 Phone: 918-477-3937 Rachel Calvo Email: [email protected] David Rainey Phone: 281-618-2748 Phone: 817-885-1600 Email: [email protected] WPX Energy Inc Email: [email protected] PO Box 3102 MD-44 Monica Radloff Tulsa OK 74101 Chris Schwind Phone: 281-618-4700 Sara Quinton Phone: 817-870-2800 Email: [email protected] Phone: 539-573-0153 Email: [email protected] Email: [email protected] Southwestern Energy Kristin Tarbush 2350 N Sam Houston Pkwy E 8th floor Danta Wilson Phone: 866-886-2613 Houston TX 77032 Phone: 539-573-6073 Email: Diane Walters Email: [email protected] Phone: 281-618-4063 [email protected] FAX: 281-618-4757 Email: [email protected]

40 N A T I O N A L A S S O C I A T I O N O F D I V I S I O N O R D E R A N A L Y S T S NADOA Interaction NAPE 2014 Winter NAPE was a huge success in February, 2014. NADOA’s booth was staffed by Kathy Keith and Nora Marquez, both from Linn Energy. We appreciate their hard work in this effort and for representing NADOA so effectively in the dazzling Valentine themed booth. The booth was in a busy area and we gave away approximately 300 Merger and Acquisition books. Thanks Kathy and Nora!

NARO-OK 2014 Convention The NADOA booth was a hit at NARO OK on May 17 & 18 in Norman, OK. We had Tammy McVey and Travis Patty, both from Devon, and Peggy Balch and Nancy Shedlowe, both from Chaparral, manning the booth on Thursday. Mary Sons, NADOA President, was kind enough to transport and help set up the booth on Thursday morning. She was also a welcomed visitor to NARO and they were so pleased to have NADOA represented. Ida Lemaster manned the booth on Friday. Also on Friday the sponsors of the booths were recognized and were asked to say a few words to the 275-300 NARO members attending. Ida addressed the crowd before lunch on Friday as NADOA Representative and discussed the history, organization and purpose. Also included were a couple of fun questions about bunny rabbits since it was Easter weekend. As always, the Merger and Acquisition Books were in great demand and we gave away approximately 225. We also were blessed with umbrellas from SADOA which were gone by Thursday. A GREAT BIG THANK YOU to SADOA for furnishing those popular umbrellas. We all agree the days spent at NARO OK were beneficial and fun.

Ida Lemaster, Interaction Chair

G R O W T H T H R O U G H E D U C A T I O N – APRIL/MAY/JUNE 2014 41 2014 NADOA Board President Mary D. Sons Independent [email protected] 1st Vice-President Nancy Cemino, CDOA Enervest LTD [email protected] 2nd Vice-President Brenda Pirozzolo, CDOA CGI [email protected] Treasurer Cheryl Hampton Freeport-McMoRan Oil & Gas [email protected] Corresponding Secretary Sharon Siemer, CDOA Anadarko Petroleum [email protected] Recording Secretary Jason Lucas Steptoe & Johnson PLLC [email protected] Director - CAPDOA Peggy Balch, CDOA Chaparral Energy LLC [email protected] Director - DALWORTH Angela Korthauer Compass Royalty Management [email protected] Director - DADOA Sandi Rupprecht Enerplus Resources (USA) Corp. [email protected] Director - HADOA Nora Marquez, CDOA Linn Energy [email protected] Director - SADOA Ida Lemaster Premier Natural Resources [email protected] Director - PBADOA Jeff Kliewer Concho Resources Inc. [email protected] Director - ABADOA Bonnie Didrickson, CDOA Atlas Energy [email protected] Board Advisor Lisa Buffaloe, CDOA Memorial Resource Development LLC [email protected] NADOA Administrator Chris Tucker [email protected] NADOA 2014 Committee Chairs COMMITTEE Chairman and/or Company Name Email Address Co-Chairman Advertising Dawn Podrazik Concho [email protected] Certification Brenda Pirozzolo, CDOA CGI [email protected] Webinar Donna Reeves Occidental Energy Marketing, Inc. [email protected] Webinar Luanne Johnson, CDOA Anadarko Petroleum [email protected] Education Sandi Rupprecht Enerplus Resources (USA) Corp. [email protected] Ethics Peggy Balch, CDOA Chaparral Energy LLC [email protected] Finance Nancy Cemino, CDOA Enervest Ltd. [email protected] Forms/Merger & Acquisitions Angela Korthauer Compass Royalty Management [email protected] Historian Sharon Baugh EXCO Resources [email protected] Institute Co-ordinator Jean Hinton Newfield Exploration Company [email protected] Interaction Ida Lemaster Premier Natural Resources [email protected] Local Association Liaison Jeff Kliewer COG Operating LLC [email protected] Long Range Planning Bonnie Didrickson, CDOA Atlas Energy [email protected] Membership Sharon Siemer, CDOA Anadarko Petroleum [email protected] Membership Recognition Norma Dooley Wagner Oil Company [email protected] News Magazine Rona Erickson, CDOA Kaiser-Francis Oil Company [email protected] Photography Noemi Peralta, CPLTA COG Operating LLC [email protected] Site Selection Brenda Pirozzolo, CDOA CGI [email protected] Website Noemi Peralta, CPLTA COG Operating LLC [email protected] Website Jennifer Lujano COG Operating LLC [email protected]

42 N A T I O N A L A S S O C I A T I O N O F D I V I S I O N O R D E R A N A L Y S T S Extraordinary depth in mineral title

THE PROOF 7,000 mineral title opinions in multiple plays in 2013 200 energy attorneys cross­trained to understand IS IN THE title in 22 states NUMBERS One of the largest due diligence teams nationwide More than 100 years of experience in energy law 20­attorney Division Order Title Opinion Team Leader in unitization permits filed in the Utica Shale

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G R O W T H T H R O U G H E D U THISTCHAIST ISISI ANAONN ADVERTISEMENTADV–E RTIASEPMRENILT/MAY/JUNE 2014 43 www.nadoa.org

Calendar of Send notice of events to be included on Calendar of Events to Rona Erickson, NADOA News Magazine Editor, [email protected] or Jeanette Garnica-Rivas, [email protected]. Information may also be submitted to 2014 Education Chair Events Sandi Rupprecht, [email protected].

Date Location Event Sponsor Contact Information

2014 Houston, TX and Petroleum Land Petroleum Education www.petroleumeducation.com Oklahoma City, OK Management Certification Workshops/University of Houston/Oklahoma City University Programs Class Instruction and Online Instruction available http://msb.okcu.edu./professional-development/on-campus-courses/petroleum-land-management-online-new/

2014 Fort Worth, TX Petroleum Land Management Certificate Program neeleyexec.tcu.edu or MBA for Energy Professionals [email protected] For information on Texas Christian University Petroleum Land Management Certificate Program, visit their website http://neeley.tcu.edu/Centers/Tandy_Center/Course_Catalog/Energy_Sustainability.aspx. MBA: www.neeley.tcu.edu/EnergyMBA

May Oklahoma City, OK Intro to PLM Petroleum Education Workshops/OCU www.petroleumeducation.com May Oklahoma City, OK Basic Contracts Petroleum Education Workshops/OCU www.petroleumeducation.com

May 14 Addison, TX Dalworth Spring Seminar Dalworth / NADOA www.dalworth.org

May 15-16 Lake Buena Vista, FL Natl. Holder Workshop NAUPA www.unclaimed.org

Jun 6-7 Loveland, CO Rockies Conference Rockies NARO www.naro-us.org

Jun 9 Midland, TX Online Division Order Land Training LLC www.landtraining.net Certificate Program

Jun 11-12 Denver, CO Fundamentals of Titles, University of Tulsa www.cese.utulsa.edu Deeds, Conveyances & Leases

Jun 11-13 Montgomery, TX TX State Convention Texas NARO www.naro-us.org/texas

Jun 17 Oklahoma City, OK Annual Seminar CAPDOA www.capdoa.org

Jun 24-25 Tulsa, OK Summer Seminar SADOA www.oksadoa.org

Jun 26-27 Bismarck, ND ND State Convention North Dakota NARO www.naro-us.org

Aug 20-22 Houston, TX Summer NAPE AAPL www.napeexpo.com

Sep 3-5 Chicago, IL NADOA Institute NADOA www.nadoa.org

Sep 24-26 Nashville, TN NALTA Conference NALTA www.nalta.org

Oct 2 Oklahoma City, OK OK Oil & Gas Trade Show SOER / OERB www.okoilexpo.com

Oct 9 Albuquerque, NM NARO National Convention NARO www.naro-us.org

Dec 10-12 Denver, CO NAPE – Rockies AAPL www.napeexpo.com

2014 NADOA Board Meetings

June 6-7 Chicago, IL Sheraton Chicago Hotel & Towers Sep 2-3 Chicago, IL Sheraton Chicago Hotel & Towers Nov TBA

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