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7/30/2019 Apresentacao P 7

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Marginal Wells Presentation

Presented by a member of the Marginal Well Commission


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What is the Marginal Well Commission?

In the 1980s, a group of oil and natural gas industry producers formedan association called Save Our Strippers.In 1992, the Oklahoma Legislature created the Commission onMarginally Producing Oil and Gas Wells. Senate Bill 684, now Title 52O.S. Section 700.Marginal oil or gas is produced from low-volume stripper wells defined by the IOGCC as producing less than 10 barrels of oil or 60,000cubic feet of gas per day.The Marginal Well Commission is the only organization of its kind in thenation.Funded by a voluntary fee of $.0035 on each barrel of crude oilproduced in the state and $.00015 of every 10,000 cubic feet of naturalgas produced. Requests for refunds can be made during the first 3months of the calendar year. Last year, less than 1% of the budgetwas refunded.


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What is the Marginal Well Commission? (Cont.)

Mission Statement:

The mission of the Commission on Marginally Producing Oil andGas Wells is to serve the Governor, Legislators, oil and gasindustry and public by defining, identifying, and evaluating theeconomic and operational factors that affect marginally producingoil and gas wells, and to assure that appropriate efforts are made

to extend the life of these wells so energy can be economicallyprovided to all citizens of the State of Oklahoma.


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Nine commissioners appointed by the Governor Represent large and small producers, royalty owners and theOsage Indian Nation.3 year terms that begin January 1 of the 1 st year of appointmentand end December 31 of the 3 rd year No limit to the number of consecutive terms that can be served


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The current Commissioners are as follows:

Charles Chuck Davis Represents: Oklahoma Mineral Owners Association

Attorney-at-LawBill Gifford Represents: Mid-Continent Oil and Gas AssociationDCP Midstream, LP

Hearne Williford II, Secretary Represents: Oklahoma Independent Petroleum AssociationWilliford Resources, LLC

Stan Noble Represents: Oklahoma Corporation Commission District #1Noble Resources, Inc.

James Beyl Represents: Oklahoma Corporation Commission District #2

Perkins Energy CompanyDavid K. Moore, Chairman Represents: Oklahoma Corporation Commission District #3Latigo Drilling Corp.

Thomas F. Dunlap Represents: Oklahoma Corporation Commission District #4Tripledee Drilling

Paul Bruce Represents: Osage County Amvest Osage, Inc.

David Guest, Vice Chairman Represents: National Association of Royalty OwnersGuest Petroleum, Inc.


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What does the Marginal Well Commission do

to help?

Research and collect information on the number,location and operational conditions of marginallyproducing oil and gas wells in the statePropose legislation, regulatory and operationalremedies that will extend the life of the marginallyproducing well

Advisory Council members from many different areasof the industry and community come together to offer expertise, issues and strategies to the Commission.They meet 3 times a year.


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What does the Marginal Well Commission doto help? (Cont.)

Provides information:Workshops held throughout the state to provideoperators with information on new technology and other issues that affect themEducation Coordinator full time staff member to helpoperators with technical problems.

Library Over 1,000 items of reference materials related tothe industryTrade Expo brings the operator and service sectors faceto face


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Website

www.marginalwells.com

History Workbooks & VideosPurpose Surveys & ReportsQuick Facts FeedbackOpportunities & Involvement LibraryCommissioners Contractors Page

Contact Staff Lease SalesEvents Pumpers ManualRegulations & Environment Equipment SalesSpeakers Bureau Stolen EquipmentNewsletters LinksOnline Store
http://www.marginalwells.com/http://www.marginalwells.com/


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Technology Trade Expos

Oklahoma City November 1996Tulsa May 1997Enid December 1997

Ardmore May 1998Norman October 1998Ponca City May 1999Tulsa May 2000Oklahoma City June 2001Tulsa June 2002Oklahoma City May 2003Oklahoma City October 2004Oklahoma City October 2005Oklahoma City October 2006Oklahoma City October 2007Oklahoma City October 2008Oklahoma City October 2009


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Workshops

# of Workshops 279

# of Attendees 9450

Cities Utilized Ada, Ardmore, Burns Flat,Drumright, Duncan, Elk City,Enid, McAlester, Moore/

Norman, OKC, Okmulgee,Pawhuska, Ponca City,Shawnee, Stillwater, Tulsa, Velma,Watonga, Wetumka, Wichita KS, WichitaFalls TX, Wilburton, and Woodward


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Newsletters

Quarterly Newsletters

Circulation of 10,500

Includes: Technology Updates, Legislative &Regulatory Updates, Workshop News, HistoricalData, You and the Environment, News onCurrent Issues and Events


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Studies

FY1994 Survey of Marginal Oil Wells State of OklahomaFY1996 Survey of Oklahoma Oil & Gas LeasesFY1996 Well Cost Analysis

FY1996 Impact of Oil & Gas Production & Drilling on theOklahoma EconomyFY1996 Localized Impacts of Oil & Gas Production &

Drilling Activity in OklahomaFY1999 The Osage Environmental AuditFY2000 Electricity Usage among Oklahoma Oil and Gas

ProducersFY2002 The Local Impact of Oil & Gas Production and

Drilling in Oklahoma

FY2002 The Economic Impact of Oil & Gas Production &Drilling on the Oklahoma EconomyFY2005 Impact of Refineries on Crude Oil Production &

Pricing in OklahomaFY2007 The Local Impact of Oil & Gas Production and

Drilling in OklahomaFY2007 The Economic Impact of Oil & Gas Production &

Drilling on the Oklahoma EconomyFY2007 A Demographic and Economic Profile of Oklahomas

Marginal Oil and Gas Well OperatorsFY2009 Breakeven Analysis


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Why is the industry important to Oklahoma?

Gross Production Tax Revenues$ 1.07 billion in fiscal year 2007 for oil andnatural gas


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GPT Oil RevenuesApportionment of Gross Production Oil Revenues for

Fiscal year 2006 (Estimated)

$65,344,736

$65,344,736$65,344,736

$18,140,024

$18,140,024$10,873,852 $10,873,852

Common Ed Technical Fund Higher Ed Capi tal Fund Okla. Tui tion Scholar ship Fund To School Distr icts

Returned to Counties for Highways Oklahoma Water Resources Board County Bridge and Road Fund


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GPT Gas RevenuesApportionment of Gross Production Gas Revenues for

Fiscal Year 2006 (Estimated)

$696,141,245

$57,984,700$57,984,700

General Revenue Fund Returned to Counties f or Highways To School Districts


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Why is the industry important to Oklahoma? (Cont.)

Jobs76,000 direct jobs245,800 impacted or supported

Economic Impact$23.8 billion into economy7% of Gross State Product


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Why is the industry important to America?

Petroleum Products Antihistamines

Antiseptics Artificial Hearts Aspirin AudiocassettesBaby StrollersBalloonsBandagesBlendersCamerasCandlesCD PlayersCDsClothingComputersContainers

Crayons

Credit Cards

DenturesDeodorantDiapersDigital ClocksDinnerwareDVDsDyesEyeglass FramesFertilizersFood PreservativesFood Storage BagsFootballsFoul Weather Gear FurnitureGarbage Bags

Glue

Golf Balls

Hair DryersHand GlidersHeart Valve ReplacementsHouse PaintInfant SeatsInkInsecticidesLife JacketsLipstickLuggageMedical EquipmentNylon RopePacemakersPantyhosePatio Screens

Perfumes

Photographic FilmPhotographsRoller BladesRoofingSafety GlassShampooShaving CreamShower CurtainsSoft Contact LensesSunglassesSurfboardsSurgical EquipmentSyringesTelephonesToothpaste

And Many More


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Why is the industry important to America?

85% of energy use comes from fossil fuels (includes,

coal, oil and natural gas)Each American consumes 3 gallons of oil and250 cubic feet of gas per day70% of nations oil comes from foreign

sourcesDuring peacetime, it costs the U.S.Military approximately $33 billion a year to protectshipments of oil exported from the middle east

$53


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Why are marginal wells important?

Marginal or stripper wells produce 17% of the U.S.domestic oil and 65% of the production in OklahomaMarginal gas wells produce 9% of the U.S. domesticgas and 10% of the production in OklahomaThere were 65,504 marginally producing wells in thestate out of a total of 119,255 wells in Oklahoma for fiscal year 2006


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Why should we care?

1. ALL wells become marginal at some point2.

ALL domestic production benefits nationalsecurity3. ALL domestic production benefits national

and local economies

4. We are dependent on petroleum products5. More production means less expensive

petroleum products


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Crude Oil & Natural Gas Sources

for the U.S.

Data is from the MonthlyEnergy Review, EnergyInformation Administrationand American PetroleumInstitute

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