OFFICE OF MINERAL RESOURCES   Seal of the State Mineral Board

 

State Mineral and Energy Board Meeting

Agenda and Reports  

December 11, 2019

Board Meeting Agenda
Lease Review Report
Nomination & Tract Report
Audit Report
Legal & Title Report
Docket Review Report
 

NOTICE

 

The State Mineral and Energy Board Meeting scheduled to be held on November 13, 2019 at 9:30 a.m. has been cancelled due to the inability to establish a quorum.  Any matters on the agenda will be addressed at the December 11, 2019 meeting including the awarding of bids.  

 

Opening of the Bids will be held at 8:30 a.m.

on November 13, 2019.

 

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Lease Sale Results

 

Tract and Nomination Report

Tract and Nomination Report members work closely with staff from the Leasing Section of the Geology and Land Division to evaluate nominations for state mineral leasing.

Each month, members receive a Tract Evaluation Report and a map from Leasing Section staff with the total number, category and location of nominations received by staff for future state lease sales. Leasing Section staff determines and recommends to the composite State Mineral and Energy Board whether or not to advertise such tracts for mineral lease sale and, after advertisement, reviews any letters of protest received as to the offering of the advertised tracts for mineral lease.   Proposed tract withdrawal recommendations are reviewed by the staff, as well as any other business concerning tracts nominated for mineral leasing.

Lease Review Report

Lease Review Report members work closely with staff from the Tract Evaluation and Lease Development Section and Lease Maintenance Section of the Geology and Land Division.  They review oil and gas activity on state mineral leases to ensure that lessees are prudently developing and producing them and are in full compliance with the terms and conditions.

Staff monitors oil and gas activity on state mineral leases daily.  District geologists, operating pursuant to State Mineral and Energy Board (Board) guidelines, work with lease maintenance personnel in reviewing every state mineral lease at least once a year; analyzing lease production, lease operations, operator plans of development, local geology and surrounding oil and gas activity.

Each month, Board members receive a Fact Finding Booklet from staff containing a plat, lease data, and correspondence from lessees for each lease reviewed, along with staff recommendations.  This recommendation to the Board may be whether operators of a lease should further develop a lease, appear before the Board, receive additional time to develop the lease, or release acreage back to the State instead of development.

Audit Report

Audit Report members work closely with staff from the Mineral Income Division, especially the Audit Director, to ensure timely and accurate payment of revenue from oil and gas leasing activities and production.

Staff members closely monitor mineral income to the State utilizing computerized records, prepare and transmit invoices for late royalty payment interest and penalties, and perform audits and transmit billing letters as necessary.  Division staff inform and make recommendations to the State Mineral and Energy Board as to lessee requests for payment plans, penalty waivers and recoupments, as well as placing lessees on demand for royalty nonpayment or underpayment.  The Audit Report members and the Board review the information and decide on a course of action.

Legal and Title Controversy Report

The Legal and Title Controversy Report members work closely with the Petroleum Lands Director of the Petroleum Lands Section to investigate, review and present recommendations on legal issues concerning title to state mineral acreage, mineral lease maintenance, and operations.

The Petroleum Lands Director, with staff's support, compiles and transmits information and recommendations on a monthly basis to Board Members on legal matters as varied as lease amendments, late assignment penalties, force majeure notice, late release penalties, operation agreement formation and amendments, consent letters, escrowing funds pending unit formation, certain geophysical permit matters, title disputes and royalty disputes giving rise to legal proceedings, pending litigation, and compromise/settlement offers and agreements.  Other OMR staff members provide input and recommendations as needed and after review, the Legal and Title Controversy Report staff presents the recommendations to the Board for resolution by agreement or by instituting suit.

The Attorney General and the General Counsel of the Department of Natural Resources advise the State Mineral and Energy Board, as well as private counsel retained by the Board as needed.  When the Board is named as a party in a lawsuit, authority to compromise or settle the lawsuit is secured from the Board.

Docket Review Report

Docket Review Report members work closely with staff from the Docket Section of the Petroleum Lands Section, as well as the Petroleum Lands Director, to review items submitted for State Mineral and Energy Board  (Board) consideration.

Docket Section staff receive numerous items for the Board's consideration at its monthly meetings including, but not limited to, unitization agreements, amendments of unitization agreements, lease amendments, compromise and settlement agreements, consent letters, operating agreements, amendments of operating agreements, designations of participating areas, acts of correction of state leases, deferred gas production agreements, amendments of deferred gas production agreements, reinstatements and amendments of unitization agreements, confirmations and re-establishments of unitization agreements, unit production sharing agreements, pooling and unitization agreements, requests for approval of state agency mineral leases, and transfers of interests (assignments).

Other OMR staff members, in addition to Docket Section staff, provide evaluation and recommendations as needed and the monthly docket is finalized for presentation by the Petroleum Lands Director to the Board for action.