American Oil and Gas Reporter - May 2019 - 100

ConventionSection: Kentucky Oil & Gas Association
a well," Watts says.
Bond amounts under state law vary
by legal distinctions for deep and shallow
wells, which are those less than 6,000
feet deep or above the base of the lowest
portion of the Devonian Brown Shale,
whichever is deeper, the bill text states.
If an operator fails to post the required
bond, the DOG can require a well to be
plugged and abandoned, or it can refuse
a request to transfer ownership of a
shallow well, the bill says.
In lieu of an individual bond, shallow
well operators can file blanket bonds of
$20,000 for 1-25 wells, $30,000 for 26100 wells, and $150,000 for 101-500
wells, the bill states.
Watts mentions that HB 199 does not
affect the state's bonding regulations pertaining to deep wells.

Administrative Hearings
HB 199 also provides cleanup language
to SB 249 passed in 2018, which improved
the Kentucky Energy and Environment
Cabinet's shallow well hearing and notification process by transferring oil and
gas hearings from the state attorney general's office to the cabinet's Office of
Administrative Hearings, Watts says.
"Historically, there may have been situations where hearings were conducted
with a hearing officer who had little to
no knowledge of the oil and gas industry.
SB 249 was passed to improve the shallow
well hearing process to account for this
inadequacy and install subject matter experts from the cabinet who could properly
evaluate the cases," Watts says.
The cleanup language places underground injection control hearings under

the cabinet's Office of Administrative
Hearings as well, he mentions.
Hughes thanks the Kentucky EEC for
its partnership on HB199 as well as the
Kentucky Public Service Commission
for its assistance with the Oil and Gas
Workgroup's subcommittee on farm taps.
In addition to successfully promoting
passage of HB 199 and SB 249, he says,
KOGA engaged key state and federal
stakeholders, including U.S. Energy Secretary Rick Perry, Senate Majority Leader
Mitch McConnell, R-Ky., and administrators of the Environmental Protection
Agency and the Pipeline and Hazardous
Materials Safety Administration. He says
KOGA's efforts were aimed at pushing
back against state and federal regulations
that increased compliance costs without
any environmental benefits.
❒

Kentucky Operators Quietly At Work
HENDERSON, KY.-While unconventional resource development grabs headlines in other parts of the United States,
operator members of the Kentucky Oil
& Gas Association continue to work quietly at home to find ways to produce as
efficiently as possible amid tentative oil
and gas prices and limited drilling interest
from outsiders.
"Given the ups and downs of the past
few years, even with oil prices ticking up

to around $70 and natural gas prices
holding steady because of an overabundance of production, we work to maintain
an optimistic viewpoint of where we are
going in the future," says KOGA President
Mark Hughes.
With eastern Kentucky productive of
gas and western Kentucky mainly oil, the
state has been overshadowed by activity
in the Marcellus and Utica shales to the
east and the Illinois Basin in the west, but

KOGA Annual Meeting - Lexington, Ky.
Sunday, June 9
Noon-4 p.m. Exhibitor Move-In (optional),
Embassy Suites at Coldstream Park

Monday, June 10
10 a.m. Exhibitor Move-In
Registration Open
1-4 p.m. Board Meeting and Lunch
5-6:30 p.m. Opening Exhibitor Reception
6:30 p.m. Dinner and Auction

Tuesday, June 11
8-9 a.m. Exhibitor Spotlight Breakfast Reception
9-10:45 a.m. Technical Session
Diversified Gas & Oil in Kentucky, Presented by Brad Gray, DGOC
New Projects: Exploration in the Basins,
Presented by Tommy Cate, Fireborn Energy; and Jim Brooker, Brookston Resources
10:45-11 a.m. Break with Exhibitors
11 a.m.-Noon Technical Session

Geological Interpretation while Horizontal
Drilling, Presented by Will Gilliam
Mineral Rights in Kentucky, Presented by
John Henderson, Stoll Keenon Ogden
Noon-1:30 p.m. Lunch
Keynote Speaker (Tentative): Skip Elliott,
U.S. Pipeline and Hazardous Materials
Safety Administration
Award Presentations
1:30-2:45 p.m. General Session
Legislative Update: HB 199, Presented by
Bill Barr, BlackRidge Resource Partners
Kentucky Sale & Use Tax in Oil & Gas
Exploration and Production, Presented
by John Henderson and Erica Horn, Dean
Dorton
2:45-3 p.m. Break with Exhibitors
3-4 p.m. General Session
Kentucky Geological Survey Update on
New Software Program, Presented by
Carrie Pulliam, KGS
4-5 p.m. Closing Reception with Exhibitors

100 THE AMERICAN OIL & GAS REPORTER

things are improving with commodity
prices beginning to float upward, says
KOGA Executive Director Ryan Watts.
"The gas and oil markets are so volatile
that it is difficult to invest that extra
capital right now," he says. "However,
our state still has plenty of opportunities
to explore and operate. We want to encourage new and existing operators that
Kentucky is ideal for new investment."
Lower initial costs of doing business
make the state a favorable place in which
to operate, agrees Hughes, principal in
Hughes Land LLC in Henderson.
"Kentucky's oil and gas industry has
supported the nation's pursuit of energy
independence for more than a century,
resulting in continued low energy costs
for consumers," Hughes says. "As a
result, Kentucky continues to be a favorable place to operate."
Federal Overreach
While plans are still being made, the
focus of KOGA's 83rd annual convention,
June 10-11 at the Embassy Suites at
Coldstream Park in Lexington, Ky., will
revolve around the state being a favorable
place for members and others to do business, Watts says.
"We basically want to open Kentucky
to be more business friendly as far as the
regulatory climate is concerned, and to
encourage operators from out of state to
invest and operate here," he says. "We
are looking beyond those traditional oil

American Oil and Gas Reporter - May 2019

Table of Contents for the Digital Edition of American Oil and Gas Reporter - May 2019