American Oil and Gas Reporter - February 2021 - 40

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law, " Moncla recounts. " He made excuses
about the estimate and claimed we did not
prove that it would help. "

n
s
n
y
s
y
❒

A Better Estimate
HB 29 aimed high, Moncla acknowledges, but LOGA intends to keep pushing
a similarly ambitious measure in 2021
because such policy will be a win/win
for both the industry and the state.
" We swung for the fences, but
Louisiana has 20,000 shut-in wells, 2,200
of which were shut in last year, " he
reports. " If that pace continues, the state
is going to wonder what happened to its
severance revenues. But with a little incentive, a bunch of small operators may
do 10 workovers each to get wells back
on production, and after six months, the
state will start making money from wells
that were not bringing in anything. "
To help the Louisiana Legislative
Fiscal Office see how much small incentives could benefit the state, Moncla
says, LOGA looked for a third-party
expert who had a strong reputation with
government agencies. Ultimately, the
association turned to economist Greg
Upton at Louisiana State University's
Center for Energy Studies to forecast
such an incentive's likely effects on
state revenue.
" We are going to swing for the fences
again, " Moncla explains. " We thought
the fiscal estimate for last year's bill was
way off. This can help preempt that. "
After all, Louisiana's 12.5% severance
tax-which Moncla indicates is the highest
rate in the Lower 48-has not prevented
the state from hemorrhaging severance
tax revenue. " Look at Louisiana's severance tax intake for the past three years, "
he relates. " It went from $328 million in
2018 to $285 million in 2019 and $152
million last year. In 2014, the tax raised
$680 million. Louisiana is taking that
$500 million drop on the chin. "
Other Issues
Moncla notes that Upton also appears
likely to play a role in analyzing policy
about which LOGA is far less enthusiastic.
That is because lawmakers charged the
LSU economist to find ways to boost the
state's declining royalty revenues.
" Given the scenarios he has to play
with under his marching orders, the only
way to do it will be to increase the severance tax on gas wells, " Moncla predicts.
" We already are fighting that. "
Meanwhile, since recent decades have
demonstrated Louisiana to be fertile
ground for legacy lawsuits and litigation
dealing with coastal erosion, LOGA's top
legislative priorities often include tort reform. But although LOGA remains
40 THE AMERICAN OIL & GAS REPORTER

adamantly against using lawsuits to
squeeze hundreds of millions of dollars
from oil and gas companies, Justiss says
reform is unlikely given the former trial
lawyer in the governor's mansion.
" Governor Edwards is a smart guy,
but he has a firm commitment against
tampering with peoples' right to pursue
any damages they believe they have suffered, " Justiss reflects. " He does not want
to come anywhere close to touching that. "
Moncla says conversations with lawmakers largely have persuaded him there
is little appetite to push bills dealing with
legacy or coastal lawsuits this year.
Nonetheless, he says, that need not prevent
LOGA from going back to the proverbial
laboratory while it waits for the political
landscape to change.
" Even though we know our current
governor would veto it, I would like to
have some legacy or coastal erosion language teed-up and ready to go, " Moncla
outlines. " If the governor changes but
our legislature stays much the same, we
should be able to move it quickly. "
Federal Frustrations
The initial days of Joe Biden's presidential administration have not lifted
LOGA members' spirits, Justiss admits.
A decision to revoke permits for the Keystone Pipeline constitutes a shot across
the bow regarding new infrastructure, he
assesses, and squelching federal leasing
not only has implications for prospects
in federal waters off Louisiana's coast,
but also for operators who historically
have amassed tracts of land for modest
vertical wells in Louisiana's Kisatche
National Forest.
" The Keystone move is not going to
keep any oil in the ground, but it probably will create localized shortages
while that crude is transported by rail-
which is not as efficient or safe, and
has a bigger carbon footprint, " Justiss
says. " Most people probably picture
the leasing decision as Biden's way to
keep 'Big Oil' out of places such

Yosemite National Park, but the reality
is it will keep small and medium-sized
producers in North-Central Louisiana
from exploring in areas they have worked
for generations. "
Moreover, Moncla says, many in the
industry assume Biden's early moves are
only the beginning of concerted efforts
to limit fossil fuel production and consumption. But before LOGA members
get too discouraged, Moncla urges them
to remember history.
" Our industry enjoyed good years during both the Clinton and Obama administrations, and there is no reason we
cannot have good years under Biden, " he
argues. " Pushing the green agenda may
well lower our production enough that,
when demand increases as the world
comes out of COVID, oil prices may
spike. Trying to stop us from producing
may help prices rebound. "
To fossil fuel opponents, such rebounds
seem more like a feature than a bug,
Justiss suggests. " They never seem to
have a problem with high oil and gas
prices, " he considers. " Renewables look
more competitive in that scenario, and it
is easier to demonize oil and gas producers
when they are making profits. "
Nevertheless, at a time in which both
federal and state coffers are desperate
for funds, Moncla calls it shortsighted to
cut off a significant revenue stream.
Noting that federal royalties constitute
the United States' second-largest revenue
stream, he points out that blocking their
flow will not only send fewer dollars to
Washington, but Baton Rouge too.
" When the United States needs money, Washington prints it, but Louisiana
cannot do that, " he observes. " For every
barrel of oil and Mcf of natural gas that
comes from federal waters, the feds
share some of the royalties with
Louisiana, Texas and Mississippi. This
is a big source of revenue for Louisiana
that is dedicated money for coastal
restoration. Taking it away will strike a
blow against restoration efforts. "
❒

Rising Phoenix Royalties Acquires DJ Basin Rights
DALLAS-Rising Phoenix Royalties
has announced its third Denver Julesburg
Basin oil and natural gas royalty acquisition within its current mineral fund. The
purchase, from an undisclosed seller, encompasses 15 proved developed producing
wells with upside potential, located in
the Niobrara Shale in Weld County, Co.,
Rising Phoenix says.
" This direct from seller acquisition was
a transaction where a son, via power of
attorney, coordinated the sale of his mother's

mineral rights, " relates Rising Phoenix
Vice President Janie Widman. " Depending
on an individual's or family's life situation,
selling mineral rights can be a financially
wise option to settle estates, immediately
pay off debt or fund retirement. "
" In many cases the mineral sale lump
sum payment translates to 'instant financial
freedom' that is truly life changing for
the seller, " Widman adds.
Kerr-McGee Oil and Gas Onshore LP
is the well-site operator.
❒



American Oil and Gas Reporter - February 2021

Table of Contents for the Digital Edition of American Oil and Gas Reporter - February 2021

Contents
American Oil and Gas Reporter - February 2021 - 1
American Oil and Gas Reporter - February 2021 - Cover1
American Oil and Gas Reporter - February 2021 - Cover2
American Oil and Gas Reporter - February 2021 - Contents
American Oil and Gas Reporter - February 2021 - 4
American Oil and Gas Reporter - February 2021 - 5
American Oil and Gas Reporter - February 2021 - 6
American Oil and Gas Reporter - February 2021 - 7
American Oil and Gas Reporter - February 2021 - 8
American Oil and Gas Reporter - February 2021 - 9
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American Oil and Gas Reporter - February 2021 - 11
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American Oil and Gas Reporter - February 2021 - 15
American Oil and Gas Reporter - February 2021 - 16
American Oil and Gas Reporter - February 2021 - 17
American Oil and Gas Reporter - February 2021 - 18
American Oil and Gas Reporter - February 2021 - 19
American Oil and Gas Reporter - February 2021 - 20
American Oil and Gas Reporter - February 2021 - 21
American Oil and Gas Reporter - February 2021 - 22
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American Oil and Gas Reporter - February 2021 - 24
American Oil and Gas Reporter - February 2021 - 25
American Oil and Gas Reporter - February 2021 - 26
American Oil and Gas Reporter - February 2021 - 27
American Oil and Gas Reporter - February 2021 - 28
American Oil and Gas Reporter - February 2021 - 29
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American Oil and Gas Reporter - February 2021 - 33
American Oil and Gas Reporter - February 2021 - 34
American Oil and Gas Reporter - February 2021 - 35
American Oil and Gas Reporter - February 2021 - 36
American Oil and Gas Reporter - February 2021 - 37
American Oil and Gas Reporter - February 2021 - 38
American Oil and Gas Reporter - February 2021 - 39
American Oil and Gas Reporter - February 2021 - 40
American Oil and Gas Reporter - February 2021 - 41
American Oil and Gas Reporter - February 2021 - 42
American Oil and Gas Reporter - February 2021 - 43
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American Oil and Gas Reporter - February 2021 - 45
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American Oil and Gas Reporter - February 2021 - 56
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American Oil and Gas Reporter - February 2021 - Cover3
American Oil and Gas Reporter - February 2021 - Cover4
https://www.nxtbook.com/nxtbooks/aogr/202102
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