Issuu

The Voice of the

Independent Since 1959

NEWS

January 2021

GO-WV Board Members Announced Ben Sullivan of Diversified Gas & Oil Corporation and Tom Westfall of Mountaineer Gas Corporation will be serving as co-presidents of the newly formed Gas and Oil Association of WV, Inc.(GO-WV). Other members of the GO-WV board, in alphabetical order, are: Maribeth Anderson, Antero Resources Corporation; John Bane, EQT Corporation; Jim Crews, MPLX;

Carrie Crumpton, CNX Resources Corporation; Ryan Cunningham, Cunningham Energy, LLC; Doug Douglass, Reserve Oil & Gas Inc.; Kevin Ellis, Antero Resources Corporation; Jon Farmer, Arsenal Resources; Michael Forbes, Greylock Energy; Marc Halbritter, Blue Racer Midstream; David Haney, D.G. Haney, Inc.; Holly Hannold, XTO Energy Inc.; Ben Hardesty,

Alta Energy; Jason Harshbarger, Eastern Gas Transmission & Storage; Jon Hildreth, Roy G. Hildreth & Son, Inc.; Paul Hunter, Williams; Jess Isner, Pillar Energy, LLC; Lloyd Jackson, Jackson Management Company; Brittant LaPorta, TC Energy; Rhett Metz, Energy Transfer; Christine Mitchell, Dominion Energy; Kelly Moss, Apex Pipeline Services, Inc; GO-WV Board Continued on page 9

Fourth Circuit Court Provides Industry Win On December 1, 2020, the Fourth Circuit Court of Appeals gave a significant victory to our industry with its decision in Young v. Equinor, Appeal No. 19-1334. In its opinion, the Fourth Circuit held that the method of calculating the deduction of post-production expenses stated in Equinor’s lease with the Youngs satisfied the third prong of the test set out in the 2006 Tawney decision by the West Virginia Supreme Court of Appeals. Tawney established a three-prong test to determine the enforceability of a clause allowing the deduction of post-production expenses in the calculation of royalties. In order to satisfy each prong of this test, a royalty clause must include: (1) an express statement that expenses are deductible; (2) a specific description of each type of deductible expense; and (3) a description of the method used to calculate the amount of expense to be deducted. The royalty clause in the Equinor lease states “[t]o pay Lessor on all volumes of gas actually sold from said land, fourteen percent of the

net amount realized by Lessee, computed at the wellhead.” In considering the method of royalty calculation, the Fourth Circuit observed that the reality of modern gas sales requires the deduction of post-production expenses from the value-added downstream price. According to the Court, this “work back” method of royalty calculation prevents lessors from unfairly increasing their royalty stream without bearing their proportionate share of the costs necessary to achieve the highest downstream sale value. The Fourth Circuit concluded that the third component of the Tawney test may be satisfied by a straight-forward formula identifying which and how much of the post-production expenses are deducted from the royalty calculation. A lease complies with this standard if it includes provisions that identify the following: • Royalty rate. • Pool of gross sales proceeds used in the royalty calculation.

•

Lessee’s proportionate ownership of the pool of gross sales proceeds. • Specific categories of post-producWilliam Herlihy tion expenses Spilman Thomas deducted & Battle, PLL from the gross sales proceeds to determine the net amount subject to the royalty. • Deducted expenses are reasonable and actually incurred. Appellees may file a request that the Fourth Circuit reconsider its Equinor decision by December 29, 2020. Alternatively, they may file a notice of appeal before December 31, 2020. If Appellees do not chose either alternative, then this decision by the Fourth Circuit becomes final and binding. The full decision may be accessed by clicking on the following link: Young v. Equinor.

INSIDE

Ben Sullivan / 2 Jeff Isner / 3, 5 Charlie Burd / 4 Michael Forbes / 6 Industry Events / 6 Kathy Hill / 7 PTTC Events / 7 Tim Bigler / 9 Greg Kozera / 10 Thomas Downs / 11 Industry News / 13 Mark Clark / 14 Advertising Contract / 16-17

Ben Sullivan IOGA President

2021 Scholarship Deadline is March 19, 2021

2020-2021 OFFICERS BOARD MEMBERS Ben Sullivan President Maribeth Anderson Vice President/Program Chair Jim Pritt Secretary-Treasurer/Commerce Committee Chair J. Kevin Ellis Immediate Past President Doug Douglass Director/Vice Chair Producer Issues Comm. and Finance & Taxation Comm. Jon Farmer Director/Producers Issues Committee Chair Michael Forbes Director/Membership Committee Chair David Haney Director/Safety Committee Chair Jon Hildreth Director/Membership Committee Vice Chair Jeff Isner Director/ Comm. & Educ. Comm. Chair Bob Radabaugh Director/Environmental Committee Chair Eric Vir Director/Commerce Committee Vice Chair Chris Weikle Director/ Govt. Affairs Comm. Chair Marc Monteleone Finance & Taxation Committee Chair

Jeff Isner Communication and Education Committee Chair

New Advertising Opportunities for Oil and Gas Industry in 2021

Welcome to a new advertising opportunity in 2021! The Independent Oil and Gas Association of West Virginia (IOGAWV) and the West Virginia Oil and Natural Gas Association (WVONGA) have merged to become the Gas and Oil Association of WV, Inc. (GO-WV). This merger means that your ad in the GO-WV monthly newsletter will continue to reach the entire natural gas and oil industry in a single publication. The 2021 newsletter two-page advertising contract can be found on pages 16 and 17. Ad fees must be paid in full by check or credit card

prior to publication. The deadline to place advertising is generally the Friday prior to the last full week of the month. For example, the deadline for the February issue is January 22, 2021. For those with multi-month contracts, you can change ad content, but need to clearly mark your artwork as to the month of publication (i.e., Acme Inc. ad, January, March and August or Acme Inc. ad, January-June and Acme Inc. ad July-December). Ads must be summited according to sizes shown in the contract and should be 300-dpi resolution and can be either .jpg or .pdf format. Prior

advertisers with either IOGAWV or WVONGA should submit re-sized ads for the GO-WV newsletter. You can be assured this merger will give you the opportunity to expand your outreach to this important market and keep your company name, products and services at top-of-mind awareness for your current and potential customers. Please direct any questions regarding advertising opportunities to Dee Beane at the GO-WV office at (304) 344-9867 or email her at dbeane@iogawv.com.

Charlie Burd Executive Director, IOGA

From the Burd’s Nest: Something Old, Something New... As I look back on 2020, it’s almost surreal. It was the year that saw the onslaught of the COVID-19 virus emerge from nowhere and morph into a global pandemic that indiscriminately destroys lives and economies. It’s a virus that has touched virtually each of us is some way--and mostly not good!!! In the face of this catastrophic event, the oil and natural gas industry did what it does best: met the challenges straight on and continued to produce and supply energy to our nation while, at the same time, helping in every way possible to assist our communities, our first responders, our charitable agencies and those individuals in greatest need. This sense of community is what makes each of us proud to be part of this wonderful industry. As I begin 2021, I do so with much excitement and anticipation. Over the last many years, and especially since the initiation of horizontal shale production, there has been much discussion on how the oil and gas industry has transformed. The advancement in technology to drill horizontally has been a game changer. I liken it to the addition of lights to baseball fields back in 1935 at Cincinnati’s Crosley Field. That marriage of technology transformed baseball and the game has never looked back on that development. In early June 2020, I was made aware that leadership from both IOGA and WVONGA were exploring the possibility of a merger. This was not the first time in my 18-year tenure with IOGA that a potential merger had been discussed. In fact,

I was informed it had been discussed just prior to my hiring in 2002; again in 2017, and then upon the vacancy at WVONGA created when Anne Blankenship left to once again practice law. As they say, the third time is the charm and with the stars in alignment, the process advanced to each association soliciting its voting members in November. On December 3, 2020, the oil and natural gas industry in West Virginia took a giant leap of faith with the marriage or reuniting of IOGA and WVONGA into the Gas and Oil Association of WV, Inc.- or GOWV. These two strong organizations with common memberships, goals and aspirations voted overwhelmingly to merge. These two strong associations will now go all out to seek common ground from which to stand united in purpose to achieve even greater successes in the areas of safety, legislative, regulatory and environmental stewardship. There is a rhyme that originated in England during the Victorian Era that is said to symbolize luck for a bride on her marriage: Something old, something new, something borrowed, something blue, and a sixpence in her shoe. Each item in this rhyme is said to be good-luck token for the bride (GO-WV). Carried simultaneously, they are said to create a happy marriage. In the case of GO-WV: • “Something old” symbolizes continuity and trust from the past.

•

“Something new” means optimism and hope for what lies ahead. • “Something borrowed” represents a melding of the traditions from IOGA and WVONGA. • “Something blue” symbolizes the strength in our blue natural gas flame. And finally, • “A sixpence in the shoe” symbolizes our combined unity of purpose and financial strength. While this may all sound just a bit hokey….is it not an appropriate analogy? While there is likely to be a pothole or two to navigate around from time to time, it seems to make sense that the merging of two very like-minded associations was inevitable. Given the devotion of the combined leadership and the strong committee structure that will be put in place, GO-WV will unite the industry in a common purpose and seek on its own a pathway to greater successes that will benefit the association, its members and their employees, the communities in which it operates and the State of West Virginia. This article closes with my most humble thanks for being selected to be the Executive Director of GOWV. This is a responsibility that will never be taken lightly and, as I have demonstrated for the past 18 plus years, I will work to better the Association and represent it and its members with honor. Remember, I too am part of that “Something old” symbolism--as I hope to bring with me immense continuity and trust.

Jeff Isner Communication and Education Committee Chair

2021 Scholarship Deadline is March 19, 2021 In 1997, the Independent Oil and Gas Association of West Virginia, Inc. (IOGA) established its Scholarship Program in an effort to become more involved in higher education in West Virginia. The Scholarship Program was specifically created to reward the outstanding scholastic achievements of high school seniors whose parents work in the oil and natural gas industry for IOGA membership companies. The Association also awards deserving high school “student employees” who have completed a required number of working hours at an IOGA member company. Beginning in 2020, two annual one-time, $1,000 scholarships are sponsored by ConServ Incorporated. They are for students who are

choosing a career path that benefits the oil and gas industry in a vocational/technical field such as, but not limited to, welder, truck driver, well tender, electrician, mechanic, etc. Since the Scholarship Program’s inception, IOGAWV has awarded a total of $180,500 in scholarships to these very deserving students. Complete eligibility rules for both scholarship types begin on page 18 or at http://iogawv.com/about/ scholarship.aspx and will be sent to all member companies. The completed application, including all required forms and information, must be signed by the high school counselor and postmarked no later than March 19, 2021. IOGAWV will accept completed applications

Homestead Communications

getting YOUR message to the right people through award-winning public relations homestead communications po box 13604 | charleston, wv 25360 304.984.0308 | homesteadcommunications@frontier.com

between Jan. 2, 2021 and March 19, 2021. From all the applications received, an IOGAWV Scholarship Review Committee will award a number of one-time only scholarships. Here is a quick glance at those rules: 1. Applicant must be a West Virginia high school senior. 2. Applicant must be a dependent of an employee/retiree of an IOGA Company in good standing OR be employed by an IOGA Company in good standing (Student employee must have worked a minimum of 400 hours is the past calendar year. Validation of hours worked and a letter of recommendation from the employer must be provided). 3. Applicant must enroll in a four-year West Virginia college or university or a community college/vocational-technical school. 4. Applicant must compose an essay answering the question asked on the application form. 5. Application must be signed by the high school counselor. 6. The completed application and all documentation requested must be postmarked no later than Friday, March 19, 2021. IOGA will accept completed applications postmarked between Jan. 2 and March 19, 2021. From all the applications received, an IOGA Scholarship Review Committee will award a number of one-time only scholarships. Should you have any questions, please contact Dee Beane at 304344-9867 or dbeane@iogawv.com.

Michael Forbes Membership Chair

IOGA Board Welcomes One New Member in December Please join the IOGA Board of Directors in welcoming this member elected in December:

Tilka, Stephen M. ASO Stephen Tilka 10095 Ashton Upland Road Ashton, WV 25503 Phone: (304) 962-4696 smtilka@hotmail.com

Industry Events

Plan for Upcoming Events January 19-20, 2021 PTTC: TIBCO Spotfire for Oil & Gas Professionals Beginner’s Course Online Platform Info: PTTC February 2-3, 2021 PTTC: TIBCO Spotfire for Oil & Gas Professionals Intermediate Course Online Platform Info: PTTC February 23, 2021 PTTC: Introduction to Helium Exploration & Production Online Platform Info: PTTC April 19-20, 2021 SPE Regional Meeting Nemacolin Woodlands Farmington, PA Info: www.spe.org

May 3-4, 2021 WVMA: MMDC Waterfront Place Morgantown, WV Info: www.wvma.org May 15-18, 2021 IOGCC Annual Business Meeting Skirvin Hilton Oklahoma City, OK Info: http://iogcc.ok.gov/events August 1-3, 2021 IOGAWV Summer Meeting The Greenbrier White Sulphur Springs, WV Info: www.iogawv.com

Kathy Hill Ergon

Monthly Appalachian Basin Crude Oil Prices

PTTC Events

PTTC Hosting Three Winter Webinars The Petroleum Technology Transfer Council is planning three webinars in January and February. Full information is on page 6, and registration is limited, so sign up today. The first course, TIBCO Spotfire for Oil & Gas Professional - Beginner’s Course, will introduce TIBCO Spotfire features relevant for oil and gas professionals. Participants will learn the fundamentals of importing data, creating visualizations, calculating custom properties, and exporting results by building a simple production database and interactive bubble map of the Niobrara Formation in the DJ Basin. By the end of the course, participants will be able to create: (1) Rate-Time and Cum-

Time bar, scatter, and line charts; (2) summary tables by well, operator, township, and county; (3) IP and Cum Volume bubble maps with GOR indicators; and (5) rules-ofthumb for exporting quick, readable visualizations for Microsoft PowerPoint. The second course, TIBCO Spotfire for Oil & Gas Professional - Intermediate Course, will introduce existing TIBCO Spotfire users to more advanced features relevant for oil and gas professionals. Participants will learn how to connect to SQL databases; create data connections and sources within their Spotfire library; scrub and extract data sets via data transformations and regular expressions; and use mark-

ing, filtering, text areas, hierarchies, and binned columns to create more dynamic visualizations. In addition, attendees will learn how to use TERR data functions for enhanced mapping capabilities and simple decline curve analysis. The Introduction to Helium Exploration and Production course will introduce oil and gas professional to the fundamentals of helium exploration and production in the United States. Attendees will learn about helium generation, migration, and trapping; testing for helium enrichment, mineral leasing in helium reservoirs, and helium gas separation and processing. The TIBCO courses are %650 per person, and the helium course is $195 per person.

Tim Bigler Direct Energy

Nymex Natural Gas Futures Contract 12-Month Forward Strip Average Prices Through 12/29/2020

GO-WV Board Continued from page 1 Michael Poole, Highlands Drilling, LLC; Jim Pritt, Putnam Natural Gas; Bob Radabaugh, S & R Gas Ven-

Oil and gas industry license plates available! Click here.

tures Ltd.; Ben Sullivan, Diversified Gas & Oil Corporation; Mark Veltri, Crestwood Midstream Partners LP;

Eric Vir, Northeast Natural Energy; and Chris Weikle, Southweatern Energy Company.

Greg Kozera Learned Leadership LLC

Can We Still Dream? Successful people have told me, “You need to have a dream in order to make a dream come true.” In the Old Testament of the Bible, Proverbs 29:18 says, “Where there is no vision, the people perish.” This was written several thousand years ago. 2020 is over. Nothing we do or say can change anything that happened this past year. We can change our future even in a COVID world. What is your dream or vision? Our vision tells us where we are going. Where do you see yourself in a year? For the oil and gas industry, 2020 has been a year we would probably rather forget. In the middle of all of challenge and chaos we might find the beginnings of opportunity. I recently learned the Shale Crescent USA Region of West Virginia, Ohio and Pennsylvania is now providing 35% of the United States gas supply. Based on the work I’m involved with, we are seeing industry come back to this region and some companies here are looking to expand. This can mean increased demand for

natural gas. One of the challenges is very few people are promoting natural gas and its benefits as a fuel and a feedstock. After getting beat up so badly, have we forgotten how to dream? Back some years ago I had. In 1999, I asked the seniors of my boys high school soccer team the question, “Gentlemen, what is your dream? Where do you see yourself at the end of this season?” Our team had never won a championship or been to the state tournament. There were no classes in high school soccer back then. The answer I expected was, “If we had a winning season and beat a couple of the AAA schools on our schedule.” The answer I received was, “Coach, we want to play for the state title.” I was stunned. I almost told the seniors this was unrealistic and suggest they aim a little lower. Instead I said, “Okay, we have a lot of work to do.” The seniors’ vision of playing for the state championship changed everything because they really believed it was possible. Who are we to

What makes us different is what makes you better. Specialists in a broad array of

oil and gas tax, assurance, accounting, revenue, and consulting services.

Arnett Carbis Toothman

actcpas.com

800.924.0729

west virginia

with confidence

llp

pennsylvania

Charleston New Castle Bridgeport Pittsburgh Buckhannon Meadville ohio Morgantown Columbus

tell anyone they can’t achieve their dream? They practiced harder and with more focus because that is what was required. It was an emotional dream that excited the team. After every practice I would jump into the air and yell, “What’s the dream?” The boys would scream, “To play for the state championship!” To achieve their dream, they would need to beat two teams in the playoffs we had never beaten. We never focused on the problem or obstacle. We focused on what we could control. A dream can be powerful. This dream changed many lives in the past 20 years, including mine. Those young men gave me the ability to dream again! The 1999 team defeated both schools we had never beaten and achieved the dream of playing for the state championship. Once the barrier of going to the state tournament was broken, every team that followed knew it was possible. Since 1999, going to the state tournament is normal. The dream now is to win the state championship; it has now happened five times. I told stories of the 1999 and subsequent teams, inspiring hundreds of audiences all over the country, including foreign audiences through a translator. People love stories, especially true stories. Are you courageous enough to dream high and have a vision that inspires you in 2021? COVID will still be with us. Hopefully the new vaccines will help us to get back to a new normal. The CEO of Advantage Media (my publisher), Adam Witty, was concerned about his 73-year-old father and COVID. His father told him, “Son, your mother and Dreams? Continued on page 11

Thomas Downs WeatherBELL Analytics

WeatherBELL’s 2021 Winter Outlook Our late winter forecast remains the same. Above normal temperatures, overall, are expected along the East Coast with the best chances for colder than normal weather across the Upper Midwest. As we pointed out last month, we were confident there would be another cold push sometime early December accompanied by snow and that played out as expected. For the January to February period we expect moderating conditions as the winter goes on along the East Coast, though don’t be surprised if March is cold and stormy. The Upper Midwest and Canadian Prairies are still the regions most likely to see extended cold snaps this winter despite a relatively warm start to the winter season.

For more information about WeatherBELL’s services and to get the hot-off-the-press forecast updates, please visit our website www.weatherbell.com or contact us at sales@weatherbell.com.

Dreams? Continued from page 10eatherBELL Analytics I are going to take appropriate precautions, but we aren’t going to stop living. If my choice is to be locked in my house for six months or dead, I might rather be dead.” In my opinion, 2021 is time to get back to living. We need to use common sense, follow appropriate guidelines and get vaccinated when the opportunity presents. We need to think not if we can but how we can. We can do a lot including live meetings and family gatherings if we follow guidelines and take precautions. We can’t let our guard down. Like our in industry, we can drive a million miles safely but the next miles we drive are the most important ones. Anytime we let our guard down an accident can happen. If 2021 is a great year for you, what will your life look like on December 31, 2021? How will your

relationships be? Will you and your spouse be more deeply in love? Will you have a great relationship with your children? Will you have more friends? What about your health? Will you be fitter and have more energy? Will you run your first half-marathon? Will you be happier and healthier? What actions do YOU

need to take to make this happen? What will your personal finances look like? Will your net worth be greater? What do you need to do in your job or in your business so you have a stronger financial position? Successful business people tell me they have prospered under DemoDreams? Continued on page 12

R.L. Laughlin & Co., Inc

“Providing Gas Measurement Services since 1970”

Site Automation Meter Sales Gas Analysis

 Electronic Chart Integration  Meter Installations  Calibrations & Repairs

NOW SERVING YOU IN 3 LOCATIONS: 125 State Rt. 43 Hartville, OH 44632 330-587-1230

5012 Washington St., W. Charleston, WV 25313 304-776-7740

1205 Buckhannon Pike Nutter Fort, WV 26301 304-969-0033

Dreams?

Continued from page 11

cratic and Republican administrations. Your success is determined by you and your team. I encourage you to write down specific measurable goals in critical areas of your life like the examples above. Focus on what you can control, not the barriers. We need balance in our lives. We also need to know what is really important to us. If we focus on our job, business or finances and neglect our relationships and health we may not be able to enjoy the wealth we accumulate. At Shale Crescent USA we are working on our 2021 written vision and goals. We know bringing good jobs to this region is more important now than ever. Our vision is to see businesses in the region expand and see other companies choose to come here to take advantage of our location on top of the energy and feedstock and in the middle of the largest economy in the world. Shale Crescent USA’s research gives companies hard data to justify expanding in this region. We expect to have live conferences in 2021 to generate new prospects. Several projects are expected to start construction in 2021. Companies located here can create shorter supply chains, greatly reducing emissions like CO2 compared to products with long supply chains coming from halfway around the world. You make this possible because of abundant economical natural gas. YOU, not renewables, provide the only workable solution to reduce global emissions. More on this is a future article. Make a fresh start and choose to make 2021 a great year for you, your family and your business. Dream high. Be creative. Believe. Write down your vision and focus on what you can control. All things really are possible. Thoughts to ponder.

Industry Intelligence. Focused Legal Perspective. HIGH-YIELDING RESULTS.

Meet our attorneys at babstcalland.com.

Whether it’s a state or federal regulatory matter, local land use or zoning challenge, acquisition of title and rights to land, or jointly developing midstream assets, we help solve complex legal problems in ways that favorably impact your business and bring value to your bottom line.

CHARLESTON, WV I PITTSBURGH, PA I HOUSTON, TX I SEWELL, NJ STATE COLLEGE, PA I WASHINGTON, DC

Industry News

UGI Announces Intent to Acquire W.Va.-based Mountaineer Gas UGI Corp. signed an agreement to acquire Mountaintop Energy Holdings LLC, which owns Mountaineer Gas Co., the largest gas distribution company in West Virginia, UGI announced Dec. 30. The deal has an enterprise value of $540 million, according to the company release. The definitive agreement includes the assumption of about $140 million of debt. The companies expect the deal to close in the second half of 2021. "Mountaineer offers a secure platform for growth with predictable, regulated investment opportunities over the next several decades to improve the safety and reliability of the distribution system, serve new customers on the system, decrease methane and greenhouse gas emissions ... and build on a long history of providing excellent customer

service," UGI said. The agreement marks a "highly strategic and complementary investment in a single-state utility adjacent to UGI's existing utility footprint," the buyer said. The acquisition is expected to increase UGI's regulated utility rate base by nearly 14% and its customer base by about 30%, according to the release. Such a move is consistent with the company's "strategy to focus growth investments on natural gas and renewable energy solutions opportunities," it said. The deal would also help UGI meet its financial targets, including 4% annual dividend growth and between 6% and 10% growth in earnings per share. About 90% of Mountaineer's 215,000 customers are residential,

while the remaining 10% includes commercial and industrial clients. The fully regulated company also has nearly 6,000 miles of pipelines. "We see significant investment opportunities to continue, if not accelerate, the replacement of over 1,500 miles of bare steel pipelines and expand the reach of natural gas in West Virginia to both unserved and underserved areas," UGI President and CEO John Walsh said. "We expect Mountaineer's rate base to grow by a compound annual growth rate of approximately 10%-12% over the long term." The deal is subject to regulatory approval, including from the Public Service Commission of West Virginia. Goldman Sachs & Co. LLC is advising UGI while Latham & Watkins LLP is acting as legal counsel.

Remember to practice these safety measures to prevent the spread of COVID-19 to yourself and your family, coworkers, friends, neighbors and others:

• Practice “social distancing” • Avoid contact with people who are sick • Wash your hands often with soap and water for at least 20 seconds (it’s longer than you think — try saying the Pledge of Allegiance twice or sing “Happy Birthday” twice, too) • Use an alcohol-based hand sanitizer (at least 60% alcohol) if soap and water are not available • Avoid touching your eyes, nose, and mouth with unwashed hands

Mark Clark Spilman Thomas & Battle, PLLC

Will 2021 Be Better? WOW, just wow! As we close the book on 2020, only a small percentage of Americans are calling last year a success or fun or productive or anything positive (except for the stock market returns and even that was a roller coaster ride). Our memories of 2020 will include a worldwide pandemic that created economic disruption across the board, cancelled conferences, concerts and sporting events, working from home, virtual Zoom meetings, social distancing, masking up, a never ending political campaign, a seemingly unending presidential transition and, of course, ongoing depressed commodity prices for oil and gas. A couple of bright spots (other than the stock market) in 2020 include the record setting development of multiple vaccines to combat the Covid-19 pandemic and the merger of the Independent Oil and Gas Association of West Virginia, Inc. and the West Virginia Oil and Natural Gas Association, Inc. as the Gas and Oil Association of WV, Inc. While there is likelihood for movement back towards a pre-pandemic lifestyle as a result of the vaccines, it will not happen as rapidly as many of us would like. The merger creating Gas and Oil Association of WV, Inc. (“GO-WV”) brings a more unified voice to promote all aspects of the oil and natural gas industry in West Virginia and brings improved finances needed to support and implement the objectives of GOWV. A single association speaking for the entire oil and gas industry is expected to streamline and enhance communications within the industry

and with West Virginia government agencies and legislative bodies. The coming year should be an exciting time for GO-WV members under the continued leadership of Charlie Burd as Executive Director. While no one expects the health and economic upheaval that the global pandemic generated in 2020 to recur in 2021, uncertainty in commodity markets and the regulatory climate will persist. For example, as of the end of December, control of the U.S. Senate remains uncertain until the winners of the two Georgia seats are determined in runoff elections on January 5, 2021. As discussed in last month’s article, the prospects of any quick statutory or regulatory revisions rests with control of the Senate. If both Georgia senate seats are won by Democrats, the negative statutory and regulatory impact on the oil and gas industry may be much more significant than if even one seat is won by a Republican. From a more positive perspective because of the results of the November election, the West Virginia Legislature may be more able to address important issues promoted by GO-WV. Perhaps more importantly, the courts may be a source of some positive outcomes for the industry. Courts at both the federal and state level have become more conservative primarily as a result of the appointments by the Trump Administration and the advice and consent of the U.S. Senate. In an article by William Herlihy in this edition, he reports on a the Fourth Circuit Court of Appeals decision, Young v.

Equinor, that represents a significant victory for producers regarding calculation and payment of royalties in the context of post-production expenses. We will continue to closely monitor new statutory and regulatory initiatives of the Biden Administration. Likewise, we are following the court challenges to federal rules that became effective during 2020, such as the Navigable Waters Protection Rule (replacing the former Clean Water Rule) that became effective June 22, 2020, the Council on Environmental Quality rulemaking to relax National Environmental Policy Act requirements that became effective September 14, 2020 and the Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources Review - subparts OOOO and OOOOa that became effective September 14, 2020, and Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources Reconsideration that became effective November 16, 2020. We are hopeful for a return to in person meetings and more normal social interactions during the course of 2021. Similarly, we hope for improved economic conditions that result in higher oil and natural gas prices and limited or no additional regulatory burdens on the industry. Of course, there will be some surprises along the way, but we wish you a happy and healthy 2021. If you questions regarding this article, please contact Mark Clark at mclark@spilmanlaw.com.

GO-WV Advertising Contract

300 Summers Street, Suite 820 Charleston, WV 25301 Phone (304) 344-9867 Fax (304) 344-5836