2019 Q4

2019 Q4

National Association of Division Order Analysts October / November / December 2019

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NADOA N a t i o n a l A s s o c i a t i o n o f D i v i s i o n O r d e r A n a l y s t s G R O W T H T H R O U G H E D U C T I O N

Volume MMXIX • No 4

www.NADOA.org

NADOA 2019 Officers President Jason Lucas 1st Vice President Luanne Johnson, CDOA 2nd Vice Presiden t Lewis Box, CDOA Treasurer Jeff Kliewer, CDOA Corresponding Secretary Jennifer Lujano Recording Secretary Michelle Harris, CDOA The NADOA News Magazine is a quarterly publication of the National Association of Division

Contents Feature

Articles

Legal Update – North Dakota........................................ 5 Legislative Update – Texas.............................................. 8 Unclaimed Property Updates........................................ 10

In This

Issue

Order Analysts PO Box 44009 Denver CO 80201

President’s Corner. .................................................1 Decimal Points.......................................................2 Certification...........................................................3 2020 Institute.........................................................4 2019 NADOA Board/Committee Chairs...............21 Calendar of Events. ..............................................23

Subscription: By membership to NADOA, at $75.00 per year. News Magazine Editor Rona L. Erickson, CDOA Kaiser-Francis Oil Company [email protected] 918.491.4319 Associate Editor

April Luedecke, CDOA [email protected]

Graphic Design Paul Beach

On the Cover: Fort Worth Omni Hotel

All rights reserved. No part of this publication may be reproduced/copied without written permission. Editorial disclaimer: The contents of this newsletter are intended for member use only and any other use without permission from the NADOA Board of Directors is strictly prohibited.Articles published herein represent the view of the authors; publication neither implies approval of the opinions expressed nor accuracy of the facts stated and NADOA accepts no liability for misprints.

President’s

Corner

Jason Lucas 2019 NADOA President

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G r o w t h T h r o u g h E d u c a t i o n - O c t o b e r / N o v e m b e r / D e c e m b e r 2 0 1 9

NADOA

Better together.

Decimal Points

We’re integrating industry leading land and accounting systems to deliver the best in class field-to-finance solution.

Rona Erickson, CDOA Editor

April Luedecke, CDOA Associate Editor

Cheryl Hampton Associate Editor

If you have a suggestion for someone to act as a Regional Reporter to help NADOA keep abreast of current legislation and legal issues for your region, please submit the name or the name of the firm.

BOLO

2020 NADOA Article Deadlines

VENDORS

CUSTOMERS

OWNERS

First Quarter........................February 14

NAME RECORDS

Second Quarter. .........................May 15

LESSEES

LEASE COST CENTER

Special Institute Edition. .............July 10

LEASES

Third Quarter. .......................August 21

INVOICES

PAYMENTS

ACCOUNTSPAYABLE

Fourth Quarter................. November 13

ACCOUNTSRECEIVABLE

PAYMENTSTATUSUPDATES COMMON IDsONLESSEES+OWNERS

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2

N a t i o n a l A s s o c i a t i o n o f D i v i s i o n O r d e r A n a l y s t s

CANDIDATES FOR CERTIFICATION Publication of the following “Certified Division Order Analyst” applicant(s) fulfills the requirement as stated in the Voluntary Certification Policy, III C.2 which states: “… applicant’s name will be published in the NADOA Newsletter or other official publication of NADOA.” This allows the NADOA membership an opportunity to present objections to the certification of the applicant. Any objection to the certification of the applicant must be in writing and signed by a NADOA member or non-member who qualifies his knowledge and objection of the applicant. All such letters will be considered confidential and must be received by the NADOA Certification Committee at the following address within thirty (30) days following the last day of the month in which the Newsletter or other official publication of NADOA was published NADOA Certification Committee P O Box 44009 Denver CO 80201 If the objection warrants denial of the certification or temporary withholding of certification, the applicant will be notified by Certified Mail.

CANDIDATES FOR RECERTIFICATION

John Massie – Denver, CO Dea Mengers – Oklahoma City, OK

Daniel Peach – Oklahoma City, OK

Congratulations to the following new CDOAS!!

If you are a CDOA whose certification expires January 1, 2020, you should receive your Re-Certification Application electronically by the end of January. If you do not receive your Application, please contact Darryn McGee, CDOA at [email protected]. TIME TO RECERTIFY?

Nicholas Brewer – Houston, TX Daniel Dovalina – Denver, CO Evan Hanes – Houston, TX

2019 CERTIFICATION COMMITTEE

Chairman

Eli Murray, CDOA

[email protected]

Recertification Credits

Sherry Werth, CDOA

[email protected] Roan Resources

Recertification Applications Darryn McGee, CDOA

[email protected]

Protege Energy LLC

Applications & Publications Yolanda "Yoli" Bazan, CDOA [email protected]

Hilcorp

Review Manual/Forms

Lewis Box, CDOA

[email protected] Comstock Resources

Testing

Bonnie Didrickson, CDOA

[email protected]

Policies

Megan McKee, CDOA

[email protected]

Range Resources

3

G r o w t h T h r o u g h E d u c a t i o n - O c t o b e r / N o v e m b e r / D e c e m b e r 2 0 1 9

NADOA 2020 ANNUAL EDUCATIONAL INSTITUTE Hilton – Shreveport, LA September 23 – 25, 2020

SPONSOR DONATION FORM Thank you for your sponsorship. Your donations help with the cost of our speakers, hospitality functions, conference publications, including a compilation of our speakers’ presentations, as well as to cover general fund- administrative costs. We have attached suggested contribution levels. However, please keep in mind that these are suggestions – all contributions will be recognized. This financial support helps reduce the costs to all attendees and allows NADOA to present a professional, quality educational event . If you would like to apply your sponsorship to a specific category, you may indicate that preference below.

CATEGORY

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General Donation (includes administrative costs, etc.) Education / Speaker Hospitality Functions

Publications Door Prizes

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SPONSOR INFORMATION

Company Address

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To assure that your name will be published in the NADOA Institute Brochure, please return your donation, along with this form to NADOA no later than May 15, 2020. Corporate sponsorships received after this date will be published in subsequent publications. PLEASE RETURN THE FORM AND CONTRIBUTION TO: NADOA PO BOX 1656 Palm Harbor, FL 34682 For questions, please contact: Vicki Danielson Melissa Fontana Corporate Donations Co Chair Corporate Donations Co Chair

[email protected] 713-417-7330

[email protected] 713-629-4490 Ext 115

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N a t i o n a l A s s o c i a t i o n o f D i v i s i o n O r d e r A n a l y s t s

Legal

Update These materials reflect only the personal views of the author and are not individualized legal advice. It is understood that each case is fact-specific, and that the appropriate solution in any case will vary. Therefore, these

materials may or may not be relevant to any particular situation.  Thus, the author and their law firm cannot be bound either philosophically or as representatives of their various present and future clients to the comments expressed in these materials. The presentation of these materials does not establish any form of attorney-client relationship with the author or their law firm. While every attempt was made to insure that these materials are accurate, errors or omissions may be contained therein, for which any liability is disclaimed. North Dakota North Dakota Supreme Court Concludes that a Pugh Clause Controls over the Habendum and Continuous Drilling Clauses

In Robert Post Johnson & A.V.M., Inc. v. Statoil Oil & Gas LP, 918 N.W.2d 58 (N.D. 2018), the North Dakota Supreme Court interpreted an oil and gas lease to resolve a conflict between the habendum and continuous drilling clauses and the Pugh clause. The habendum and continuous development clauses were part of a form oil and gas lease and the parties

separately negotiated a Pugh clause that was added to the lease. At the expiration of the three-year primary term, production in paying quantities was occurring in only three of eight units that included lands covered by the disputed lease. The Plaintiffs argued that the Pugh clause terminated the lease as to the lands within

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G r o w t h T h r o u g h E d u c a t i o n - O c t o b e r / N o v e m b e r / D e c e m b e r 2 0 1 9

the five non-producing units upon expiration of the three-year primary term. The Defendants asserted that the lease remained in force and effect as to the five non-producing units due to continuous drilling operations. The Court explained that the general rule is that “an oil and gas lease is indivisible by its nature.” Id., at 61. However, a Pugh clause severs the oil and lease “from units where drilling operations or production are not occurring [, but] to make a lease divisible, the Pugh clause must be clear and explicit.” Id., at 61- 62. In Johnson, the Pugh clause provided: “Notwithstanding anything to the contrary, on expiration of the primary term of the lease, the lease shall terminate as to any part of the property not included within a well unit or units, as established by appropriate regulating authority, from which oil or gas is being produced in paying quantities and shall also terminate as to 100’ below geologic

strata or formations from which production has not occurred during the primary term.”

Id ., at 60-61. The Defendants argued that the continuous drilling operations provision saved the portions of the lease included within the five units that were not producing in paying quantities based upon the North Dakota Supreme Court’s decision in Egeland v. Cont’l Res., Inc., 616 N.W.2d 861 (N.D. 2000) (concluding that “because the Pugh clause was silent to the method of extension, no conflict existed regarding the Pugh clause’s interaction with the habendum and continuous drilling operations clauses of the lease”). The Court distinguished Egeland because the Pugh clause in Johnson specifically stated that “the lease will terminate at the expiration of the primary term for any part of the property not included within a well unit from which oil or gas is being produced in paying quantities.” The absence of any language in the Pugh clause to incorporate or reference the habendum or continuous drilling clause was fatal to Defendants argument that the lease was

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