Sale of Gas Rights Taxation Pennsylvania - DOC by ynh56099


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									   Independent Oil & Gas Association of Pennsylvania                      March 2004, Number 189

                               Board Looks to Membership
                                     For Guidance
        The Executive Committee of the IOGA
Board of Directors has asked that the producer                 However, several IOGA members believe
members of the association be polled on a              that eliminating the 330‘ setback would create
potentially controversial issue. POGAM has             problems by opening very small tracts to drilling,
approached the members of the Pennsylvania             while the minimum spacing would potentially
General Assembly to make a legislative change to       deprive adjacent leaseholders from developing
Act 214, the Coal and Gas Resource Coordination        larger leaseholds. Discussions on this issue include
Act.                                                   whether this would open lawsuits from landowners
                                                       and have potential negative impacts on local
        Last summer, the Department of                 ordinances attempting to mandate spacing.
Environmental Protection changed an interpretation
of Act 214 that had been in place since passage.               It is important that the members of the
Producers had been able to drill on a location less    association be heard on this issue. IOGA could
than 330‘ from a lease line if the coal owner signed   support the elimination of the 330‘ setback in
a waiver authorizing the change which included a       entirety, support altering the language of the Act to
spacing variance from 1000‘ to no less than 900‘.      meet the previous interpretation of the
However, after a review of language in the Act, the    requirements, or remain neutral as an association if
Department changed the interpretation. Under the       the opinion within the membership is severely split.
new interpretation, if a location is available on a    This issue is certainly important enough to
lease that meets the legal requirements of the 1000‘   producers to warrant full airing and consideration of
spacing and over 330‘ of the property line, that       opinions beyond the board members.
location must be developed before a ‗waived‘
location can be drilled.                                       A questionnaire will be forwarded to the
                                                       main contact of each member company to ascertain
        The POGAM proposal would eliminate the         your opinions of this proposal. Please answer by
requirement to be over 330‘ from a lease line.         return email as quickly as possible so the Board
There would be no change in the minimum spacing        may take into account all opinions and make a
distance required under the Act. Several IOGA          reasoned decision. The results of the survey will be
members are supportive of this change which is         made available in the next newsletter as well as the
consistent with drilling rules in non-coal areas.      resulting BOD decision.
Coal producers are neutral on the issue, since it
would still hold the minimum spacing requirement               Thank you in advance for participating in
of 1000‘.                                              this questionnaire.
                                                                           WINTER 2004

                                                             Greenpeace became the world‘s largest
     McGinty & Moore to                                      environmental activist organization.
   Headline Annual Meeting                                          Today Dr. Moore could be described best as
                                                             a consensus builder and voice of reason in the
                                                             environmental community. He currently authors a
        The 2004 IOGA of Pennsylvania Annual                 column for ESPN Outdoors where he is billed as the
Meeting will be held on May 19th at the Four Points          ―Sensible Environmentalist‖. His vision of
Sheraton Pittsburgh North. The theme for this                environmentalism for the twenty- first century is one
year‘s meeting is ―Getting the Word Out‖. The                of cooperation and innovation.
meeting promises to be informative, educational,
entertaining, and maybe a little bit controversial.                  In 1991 he founded Greenspirit, a
                                                             consultancy focusing on environmental policy and
    Pennsylvania Department of Environmental                 communications in natural resources, biodiversity,
              Resources Secretary                            energy and climate change. His stance for
                                                             sustainable development rather than anti-
                                                             development has caused sharp reactions from his
                                                             former colleagues in the environmental movement.
                                                             He has been referred to as an ―eco-Judas‖ and his
                                                             name now appears in Greenpeace‘s ―Guide to Anti-
                                                             Environmental Organizations‖. What ‗heresy‘
                                                             could he be promoting to earn him such attacks?
               Kathleen A. McGinty
                                                                     Come to the 2004 IOGA of Pennsylvania
will address the membership on her vision for                Annual Meeting and find out who Patrick Moore is
energy and the environment in the Commonwealth               and why he is a controversial figure! Hear for
as well as the vision of the Rendell administration.         yourselves why he is sought out to speak across the
        Secretary McGinty has served in various              globe on environmental issues and what he has to
capacities in national and international public policy       say that will impact your life and your industry.
leadership. She chaired the White House Council                      We urge every member of the Association to
on Environmental Quality and acted as Deputy                 join us at this year‘s meeting. IOGA will be
Assistant to President Clinton.                              bringing everyone current with a myriad of issues,
        Most recently, Secretary McGinty served as           problems, and solutions facing the Pennsylvania oil
vice president for asset management at Natsource             and gas industry. We will indeed be ―Getting the
LLC, a financial services firm specializing in clean         Word Out‖!
energy investments. She also served as director of
Proton Energy Systems Inc, a leading fuel cell
infrastructure company, and as an advisor for a
European venture capital firm interested in clean
         The dinner speaker for the Annual Meeting
is Dr. Patrick Moore. Dr. Moore has been a leader                             Dr. Patrick Moore
in the international environmental field for over 30                             Greenspirit
years. Dr. Moore is one of the founding leaders of
Greenpeace and served as President of Greenpeace                     The Annual Meeting edition of IOGAnews
Canada for nine years as well as seven years as a            will be out late next week with a full program and
director of Greenpeace International. He was a               discussion of the many speakers and topics for this
driving force in shaping policy and direction as             year‘s meeting.
                                                                    WINTER 2004

           Problem Solved?
         The IOGA office forwarded a memo to each
of you on January 22nd outlining the results of our
efforts to alleviate a problem producers were having
with the Pennsylvania Department of
Transportation. PennDOT had changed its
interpretation of regulations on highway occupancy
permits, determining that only public utilities were
eligible to receive occupancy permits.

         IOGA attorneys Jim Sheehan and Kevin
Moody had worked with the department to resume
issuance of these permits to producers, and on
January 22nd this was accomplished. However, we
are still working on some language changes in
PennDOT regulations on this and other global
issues with the department. As soon as these are
fully resolved, we will issue a final report in the

       Please report any problems associated with
PennDOT permitting as they happen to insure we
cover all the bases with our global issues.
                                                                    April 15-16, 2004

                                                              The North American Coalbed
                                                            Methane Forum, Inc. will hold its
                                                           Spring Session on April 15-16, 2004
                                                           at the Holiday Inn, Meadow Lands,
                                                                near Washington, PA. For
                                                             information, please contact Ihor
                                                               Havryluk at 412-798-1391 or
                                                           Dr. Kashi Aminian at 304-293-7682
                                                                        ext. 3406

                                                                          WINTER 2004

                                                            James Seif, vice president of corporate relations for
                                                            PPL. ―While environmental sensitivity is a daily
                                       January 2004         commitment at PPL, extraordinary partnerships
                                                            with government agencies and private groups allow
      Hammersley Wild Area                                  us to accomplish great things for the environment.‖

        becomes official                                    ―PGE is proud to join with the Commonwealth and
                                                            PPL in this historic opportunity for land
The word ―proposed‖ can now be removed from the             conservation in Pennsylvania,‖ said PGE Chairman
Hammersley Wild Area. DCNR recently finalized a             Thomas H. Henry. ―We shared a mutual goal – the
deal that ensures protection of the state‘s second          protection of these 13,600 acres and the creation of
largest wild area—more than 30,000 acres of state           the largest contiguous wilderness area in the state
forestland in Potter and Clinton counties.                  for future generations to enjoy.‖

DCNR obtained the oil, gas and mineral rights for           Located in Susquehannock State Forest, the 30,253-
13,600 acres of contiguous land within the proposed         acre Hammersley Wild Area is a series of wooded
Hammersley Wild Area from Allentown-based PPL               valleys containing more than 51 square miles of
Corporation and Pennsylvania General Energy,                road less land. The wild nature of the lands supports
headquartered in Warren, Pa. Although the land is           abundant wildlife, and lack of development has
owned by the state, the companies held an                   produced pristine streams with wild trout. Although
exploration and development lease that gave them            most of the area was logged in the early 1900s,
the ability to drill for gas and oil on the lands.          several acres were left untouched and now support
                                                            old growth hemlock trees three to four feet in
―There are few places we can go anymore to get a            diameter. The entire area is forested with some of
true wilderness experience—nothing but woods,               the best examples of mature woodland in the
water and wildlife,‖ Secretary DiBerardinis said.           Commonwealth.
―Hammersley Wild Area is one of those areas. But
until now, there has always been uncertainty about          The Commonwealth‘s wild area system protects
its future because of the potential for oil and gas         extensive tracts of state forestland—generally larger
drilling. Thanks to the willingness of PPL and PGE          than 3,000 acres—from development to retain the
to work with DCNR, we are ensuring the wild                 remote and wild character of the lands. The lands
nature of these lands remains protected. I commend          are open to public recreation such as hiking,
these companies for their conservation foresight and        hunting, fishing, primitive backpack camping,
environmental stewardship, which has made this              horseback riding, bicycling and wildlife watching.
partnership possible.‖                                      New public access roads, motorized vehicles,
                                                            mineral development and new rights-of-way are
The oil, gas and mineral lease for the property dates       prohibited.
back to the 1930s, when the Emporium Lumber
Company retained the rights after they sold the land        DCNR manages 16 wild areas throughout the state
to the Commonwealth. PGE acquired the rights for            totaling more than 145,000 acres; because of
the 13,600 acres from PPL in 2001 and through a             mineral ownership issues, Hammersley and Quebec
business partnership continued to work with PPL in          Run in Fayette County have been in a ―proposed‖
the future development of the property.                     status.

―The partnership with PGE and DCNR that led to                     For information on the Hammersley Wild
this agreement is the result of our mutual respect          Area, call Susquehannock State Forest at (814) 274-
and appreciation for the environment,‖ said                 3600.

                                                                 WINTER 2004

        Franklin Brine Treatment Corporation, a
local business in Franklin has recently been
purchased by Pennsylvania Brine Treatment, Inc,
based in Creekside, PA on November 15, 2003.
The Franklin facility (formerly Franklin Brine
Treatment Corporation) located on 322 East, is a
state-of-the–art-wastewater treatment facility
serving the tri-state area oil and gas companies.

        Pennsylvania Brine Treatment is permitted
to accept all fluids generated through the ordinary
course of oil and/or gas well drilling and producing
operations. The local facility was originally built
and opened in 1985 by Cabot Oil and Gas
Corporation. In 1996 they purchased the Castle
Brine plant located in Josephine, PA and expanded
operations into Indiana County and the surrounding

        Both facilities treat wastewater with
chemicals that neutralize excess acidity and convert
soluble metal ions to an insoluble solid form.
Solids are then removed to a licensed DEP
approved landfill. Pennsylvania Brine Treatment
                                                           First Day of Spring…March
operates under permits governed by the PA                            20th
Department of Environmental Protection and the

         Pennsylvania Brine Treatment currently
employs 7 people with the manager Elton W.
DeLong, Jr. being promoted to Operations
Manager. Pennsylvania Brine Treatment has two
locations, one in Franklin, PA and one in Josephine,
PA with plans to focus on expanding the Josephine
facility in the near future. They also now work in
cooperation with another brine treatment facility,
Hart Resource Technologies located in Creekside,
PA who are providing management services for the
new owners. Daily operations are Monday through
Friday, 7:00a.m. to 11:00p.m. with 24 hour
emergency service.

                                                              Easter….April 11th
                                                                      WINTER 2004

                                                          Wildcat Discoveries in the Appalachian
                                                       Trenton/Black River Trend and Planned 2004
          KENTUCKY OIL & GAS                                       Drilling in the Area
           LEASES FOR SALE
                                                     NORTH CANTON, OH – Belden & Blake Corporation
 Approx. 11,000 acres in Davies, McLean &            announced that it has successfully drilled a Trenton/Black
           Muhlenberg Counties                       River well in Chemung County, New York. On a two hour
                   AND                               test, the Curren # 1 well flo wed at 20.5 million cubic feet
                                                     (MMcf) of natural gas well was drilled to the Trenton/Black
Approximately 11,000 acres in Butle r, Grayson       River fo rmation. The Co mpany is currently installing a
            and Ohio Counties                        pipeline and expects to begin producing the well within the
                                                     next 30 days. Following a pipeline expansion scheduled for
                  CONTACT:                           complet ion this summer, the Curren #1 well is expected to
               K. Ralph Ranson                       produce between 6 and 10 MMcf of natural gas per day.
                                                     Belden & Bla ke o wns a 49.3% wo rking interest in the well.
                 Vice President
        Energy Corporation of America                Belden & Blake also announced the earlier successful
                 501 56th Street                     complet ion of a second explo ratory well in the Trenton/Black
           Charleston, WV 25304                      River trend in New Yo rk. The Harndon #1 well is on
                (304) 926-3106                       production and is currently producing at a 3.5 MMcf of natural
                                                     gas per day. The Co mpany owns a 44.6% working interest in
                       the well.

                                                     The Co mpany also announced as part of its 2004 capital
                                                     investment plan that it expects to drill 2 additional exp loratory
        PENNSYLVANIA OIL & GAS                       and up to 4 additional development wells in the immediate
                                                     area during 2004. It is expected that the gross cost of a typical
           LEASES FOR SALE                           vertical well bore will be $2.0 million.

Approximately 6,000 acres in Clearfield County       The informat ion in this release includes forward -looking
                                                     statements that are made pursuant to Safe Harbor Provisions
                  CONTACT:                           of the Private Securit ies Litigation Reform Act of 1995.
                                                     Forward-looking statements, and the business prospects of
               K. Ralph Ranson                       Belden & Blake are subject to a number of risks and
                 Vice President                      uncertainties which may cause the Co mpany‘s actual results
        Energy Corporation of America                in future periods to differ materially fro m the forward-looking
                 501 56th Street                     statements contained herein. These risks and uncertainties
           Charleston, WV 25304                      include, but are not limited to, the Co mpany‘s access to
                                                     capital, the market demand for and prices of oil and natural
                (304) 926-3106                       gas, the Company‘s oil and gas production and costs of
                       operation, results of the Company‘s future drilling activ ities,
                                                     the uncertainties of reserve estimates and environmental risks.
                                                     These and other risks are described in the Co mpany‘s 10-K
                                                     and 10Q reports and other filings with the Securities and
    BELDEN & BLAKE CORPORATION                       Exchange Co mmission.
             NEWS RELEASE
       FOR IMMEDIATE RELEASE                         Belden & Blake Corporation engages in the exp loration,
                                                     development and production of natural gas and oil, and the
            FEBRUARY 9, 2004                         gathering of natural gas in the Appalachian and Michigan
      CONTACT: Patricia A. Harcourt                  Basins (a region which includes Ohio, Pennsylvania, New
       Vice President, Administration                Yo rk and Michigan).

     Belden & Blake Reports Significant

                                                                                       WINTER 2004

                                                                      Tax Manager. Prior to join ing the company, he was employed
                                                                      by Ernst & Young in Canton, Ohio, as a Senior Manager of
                                                                      the Tax Depart ment. He is a Cert ified Public Accountant with
                                                                      extensive experience in taxation, finance, accounting and
      BELDEN & BLAKE CORPORATION                                      auditing. Mr. Peshek holds a Bachelor of Business
               NEWS RELEASE                                           Admin istration degree in Accounting from Kent State
         FOR IMMEDIATE RELEASE                                        University where he graduated with honors. His professional
              JANUARY 15, 2004                                        affiliations include the American Institute of Certified Public
                                                                      Accountants and the Ohio Society of Cert ified Public
        CONTACT: Patricia A. Harcourt                                 Accountants. He is also a member of the Ohio Oil and Gas
         Vice President, Administration                               Association.
                                                                      ―We are delighted that Belden & Blake and Appalachian and
    Belden & Blake Corporation Strengthens                            Michigan Basins continue to attract and sustain the caliber of
                                                                      talent displayed by these two professionals,‖ stated John L.
           Senior Manage ment Team                                    Schwager, President and Chief Executive Officer. ‗Their
                                                                      knowledge and expertise will co mplement this organization as
NORTH CANTON, OH – Belden & Blake Corporat ion
                                                                      we continue to successfully explore and produce oil and
recently announced that R. Mark Hackett has joined the                natural gas reserves – creating value for our shareholders,‖
company in the newly created position of Senior Vice                  continued Mr. Schwager.
President of Geoscience and Engineering. The co mpany also
announced the promotion of Robert W. Peshek to Senior                 Belden & Blake Corporation engages in the exp loration,
Vice President.                                                       development and production of natural gas and oil, and the
                                                                      gathering of natural gas in the Appalachian and Michigan
                                                                      Basins (a region which includes Ohio, Pennsylvania, New
                                                                      Yo rk and Michigan).

 R. Mark Hackett         Robert W. Peshek

Mr. Hackett is responsible for the Appalachian District‘s
geology, geophysical, drilling and engineering activit ies; the
company‘s oilfield service div ision; and strategic planning in
conjunction with the other members of the senior management
team. He has over 15 years of extensive experience in
drilling, engineering and producing operations in the
Appalachian Basin. Fro m 1997 to 2003, he was employed by
Colu mb ia Natural Resources, Inc., holding the most recent
position of Vice President of Operat ions. Fro m 1988 to 1997,
he served in various management positions at Alamco, Inc.,
including Vice President, Engineering. Mr. Hackett has a
Bachelor o f Science degree in Petroleu m Engineers, the
Independent Oil and Gas Association of West Virginia and the
Kentucky Oil and Gas Association.

Mr. Peshek was recently elected Senior Vice President of the
company by the Board of Directors. He serves as the
company‘s Chief Financial Officer as well. Previously, Mr.
Peshek held the title of Vice President of Finance for the
Co mpany since 1997, and in 1999, was appointed Chief
Financial Officer. M r. Peshek jo ined Belden & Blake in
March of 1994, in the capacity of Co rporate Controller and
                                                         associations. It has recently been awarded a
For Immediate Release:                                   ³Certificate of Recognition² from PA Senator Barry
                                                         Stout and the ³Chuck Chattaway Memorial Award²
Lee Supply Co., Inc. of Charle roi, PA is                for support in re-establishing the area¹s economic
celebrating its 50th anniversary this year. Founded      base from the Mid Mon Valley Industrial
in 1954 by Ed Lee, the father and grandfather of the     Development Association.
current owners, the company was primarily a
mining supply firm selling products to the coal          The core values of Lee Supply Co. remain the same,
industry in western PA, northern W.V. and eastern        providing quality products, at competitive prices, in
OH.                                                      a timely manner to all markets they serve. As they
                                                         enter their 50th year of business their commitment
The second Lee generation took over management           to solutions, service and supply that has led to
in 1972. They continued to service the mines as          growth and development for fifty years will
well as diversifying into the industrial, municipal      continue to be their base for the future.
and environmental markets in the mid to late 1980s.
With these new markets came new products such as         Lee Supply Company, Inc.
HDPE pipe, fittings, and specialty fabrications. That    305 1st Street
diversification has led to the company being one of      Charleroi, PA 15022
the largest suppliers of pipe and pumping systems to     1-800-353-3747
the solid waste industry in the eastern United States.

As the largest stocking distributor of HDPE pipe in
the northeast, Lee Supply is able to service and
support customers in all markets 24/7. The fleet of
over 20 company operated trucks assures on time
delivery and the trained staff of technical support
personnel is available to assist on any project.

Lee Supply¹s continued success is due to the quality
products it represents plus the overall strength of
character of the people it employs. There are over
90 employees with a combined 936 years
experience in the industry, many of those have been
with Lee for over 20 years.
                                                         From left to right: Kevi n Lee (Customer Service Rep);
                                                         Mike Lee (President, CEO); Dave Lee (VP, CFO);
Doing business in a small town means being               Shawn Lee (Fusion Equi pment Manager).
involved in promoting the prosperity of the area.
Lee Supply gets involved by supporting over 75
youth, adult, and community groups and
                                                   WINTER 2004

Publication of the Independent Oil and Gas Association of Pennsylvania
           Executive Director and Editor, Louis D. D’Amico
   IOGA-PA, 115 VIP Drive – Suite 110, Wexford, PA 15090-7906
 Phone: 724-933-7306 • Fax: 724-933-7310 •


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