Comments continued from http://osageblog.blogspot.com/2015/05/osage-shareholder-matters-may-2015.html
Have any of the individual Headright owners that post to this forum considered hiring an attorney in an effort to stop the implementation of the devastating new CFR's? I think we should discuss the possibility of filing a class action lawsuit against the BIA or DOI. The MC has not shared any information with us regarding their plans and they are divided on this matter. Are their any attorneys among us that could advise us here?
As an Osage Headright holder, I am willing to be named as one of the Plaintiffs. I have spoken with a dozen more family members who are also Headright holders who are willing to participate in legal action. I would be interested in knowing what Dan Reneke's opinion is. If you know how to contact him, please do so. We have already suffered financial damages due to the announcement of the new CFR's that occurred on May 11,2015 and which damage might be reflected in our next quarterly checks. One reason our most recent checks were as high as they were is due to the short-lived bump in production from the recent Burbank activity. This "flush" production will decrease over time.
Some Osage County producers are shutting down and preparing to abandon their wells and leases due to the fact that it is not possible for them to comply with all of the new requirements between now and the July 10, 2015 deadline. What supply store has tens of thousands of the new valves in inventory this day and age. How can the few roustabout companies and vacuum trucks left in Osage County manage to perform the necessary work on all of the tank batteries in Osage County within this time frame? What bonding company is willing to and able to issue tens of millions of dollars of surety bonds within these next few weeks? It's not possible. The Feds are imposing regulations that a very few large oil and gas companies can comply with. The majority number of producers in Osage County are small entities with very limited resources especially now with the low price for oil and gas production. They are considered "poor-boy" operators trying to survive in a very bad climate. Fines start July 11, 2015, as the Superintendent enjoyed reminding the producers in her letter dated June 5, 2015. Shame on her and her arrogant attitude. We should picket her office sun-up to sun-down. The least she could do is take a few on-line classes and learn a little something about the oil and gas business; or she might consider meeting with some of the producers who could explain the business to her from their perspective.
Thank you Osageblogger for your thoughts on the legal issue. There are a few (not many) Osage producers who's oil and gas companies are Osage Indian Owned. Just wondering if their status as an Osage owned entity might have standing.
This is becoming so intolerably wretched, I know, but I still think it is in the Shareholders best interest to work with the producers and to call to encourage the Minerals Council to work with the Osage oil and gas producers to move forward with an injunction concerning this matter. I personally believe that a joint legal action between the MC and the Osage Oil Producers will produce the strongest possible legal front in turning back this regulatory nightmare. Killing the oil business in Osage County like this with a devastating avalanche of burdensome, overweening, capricious and arbitrary regulations, from my point of view, is in absolute violation of what is in the LEGAL best interests of the Osage Nation and the Shareholders for whom the Secretary of the Interior owes a legal fiduciary obligation and that includes all of the agencies, departments, bureaus, and instrumentalities umbrellaed under her.
See An Open Letter to the Shareholders from Paul S. Revard for your review is now located at http://edigital.iserver.net/osages/letter_to_shareholders.pd
The above blogger suggested contacting Dan Reinecke who was the consultant during the NEGREG process leading up to the new CFR's. Reinecke was clueless about Osage County and testified that transportation charges that purchasers currently subtract from producers oil sales were unwarranted because Cushing was ONLY 12 miles away. Really. This guy was no expert and was fired by the OMC.
This situation appears to me to be capable of wiping out nearly all of the mid to smaller oil and gas producers in Osage County as of July 11, 2015 and what will be left behind if they are all forced to walk away will be a disaster of incredible and untold magnitude throughout the entirety of Osage County! This just cannot happen or everyone will lose top to bottom. This is a frightening situation that is developing and something must be done to stop it on an immediate basis. If all these thousands of wells throughout Osage County are just abandoned and left uncapped, will it be left up to the Osage Nation and the Minerals Council to pay for capping them?
The plugging liability will probably first be placed on the Lessee who will be out of business and long gone. I would think that since the mineral estate is held in trust by the DOI, they should be responsible for plugging the wells using the original $5,000.00 bond funds now in place for each lease and then using US tax payers' funds for the millions of dollars of plugging expense. Also remember, an Osage County operator may not plug a well without BIA approval for which a producer cannot obtain now without an environmental impact study which may take another year or two. Since the wells are capable of production the application Form 139 for plugging should not be approved by the Superintendent.
I anticipate that several thousand wells will very soon be abandoned. Who's going to check on the wells every day to make sure they are not leaking or sabotaged? The producers might be upset enough to damage the wellbores prior to abandonment so that the Feds can't utilize them. Any new potential buyer will have to be very cautious. There may be unemployed pumpers and contractors, employees, etc. that may get an attitude and find a creative way to exit the leases for the last time. I'm not promoting this but I am familiar with some of these folks and wouldn't be surprised. They might drop junk in the wellbore that would be non-recoverable. Millions of dollars of equipment will start disappearing. The County Sheriff will be very busy. With no field employee over-sight, it will be a cake-walk for the thieves even in broad daylight. If the producers are smart, they will strip their leases of equipment prior to exiting.
If the Osage Tribe offered the new leases to another operator, the new lessee/owner would probably expect assurance from the Osage Tribe that the wellbore(s) have integrity. Good luck with that!
During the Fed's evaluation of the new CFR's, do you think they considered the above repercussions? They should have. Maybe it was their plan all along to create this mess in retaliation to the $380,000,000 settlement. I can't help but think the Superintendent is enjoying this turmoil.
I am (Name) and I have a matter of the utmost importance to bring to your immediate attention.
As of June 5, 2015 with a letter written to all of the oil and gas producers in Osage County, Oklahoma by Bureau of Indian Affairs, Osage Agency Superintendent Robin Phillips, a new Code of Federal Regulations will become effective on July 10, 2015. I am writing to you to make you fully aware of the harmful and potentially devastating effects these new CFRs will have if and when they go into effect, upon the small to medium oil and gas producers and their businesses, the businesses in Osage County that will feel the loss of the income and the loss of royalty income generated and paid to the Headright owners who benefit from the Federally administrated and managed Osage Mineral Estate Trust by the Secretary of the Interior and the Bureau of Indian Affairs.
To begin, Osage County has approximately 14,000 wells producing 12,000 barrels per day or less than a barrel a day per well. Most of the wells in production are referred to as stripper wells. 60% of the oil and gas business in the county is handled by small oil producers who cannot afford the increases in business costs demanded by these new CFRs. In addition, the lead time from June 5th to July 10th is only a matter of 35 days to become compliant; a shockingly short lead time to be certain, causing such a terrible hardship that many may have to go to the extreme limit of abandoning their wells to avoid the fines for violations that will go into effect on July 10, 2015.
Please consider these communications that have appeared on the online Osage Blog at http://osageblog.blogspot.com/2015/05/osage-shareholder-matters-may-2015.html and http://osageblog.blogspot.com/2015/06/osage-shareholder-matters-june-2015.html
Suggested Form Letter -- Part 2 “As an Osage County oil and gas producer, I received a letter from the Superintendent dated June 5, 2015 advising all producers that we need to be incompliance with the new CFR’s on or before July 10, 2015; she threatened us with fines and penalties if we have not met the requirements by that date. I am not able to meet the requirements by the deadline and possibly might not ever be able to do so. I have spoken with several other producers who are also not going to be able to comply. Five weeks’ notice to make the changes to our leases and to come up with the cash required for the additional bonding requirements is unachievable for a significant number of us. In Galen Crum’s press release, he misrepresented the facts concerning the bonds. It is true that the premium amount for the bond is minimal (approx. $250.00/year); however, for me to obtain the bond from my insurance company, my bank has to issue a letter-of-credit in the amount of the bond ($5,000.00) which is then pledged to the insurance company issuing the bond. My bank also requires that I establish a certificate of deposit in the same amount to be used as collateral for the letter-of-credit. In other words, each bond will cost me $5,250.00 cash. Most of us small producers cannot afford to bond several dozen wells each within this time frame and maybe never be able to do so. The cost to make the valve changes on each of our batteries is also very expensive and even if we had the extra funds to comply (which I don’t), we could not get the work performed on all our tank batteries prior to the July 10, 2015 deadline. A typical two-tank battery will require replacement of seven valves. Even if a supply store had in-stock the thousands of valves necessary to accommodate all of Osage County, the roustabout companies which have survived could not service all of our properties prior to the deadline. The producers are not going to be able to comply to the new CFR’s for these reasons and many more. If the Superintendent follows through with her threat to fine and penalize us effective July 11, 2015, we’re doomed. I anticipate thousands of wells will soon be abandoned in Osage County with many of the producers facing the possibility of filing for bankruptcy protection, myself included, to be sure. I wish the Shareholders good luck. I am also a Shareholder who is very saddened by the current situation.”
“Some Osage County producers are shutting down and preparing to abandon their wells and leases due to the fact that it is not possible for them to comply with all of the new requirements between now and the July 10, 2015 deadline. What supply store has tens of thousands of the new valves in inventory this day and age. How can the few roustabout companies and vacuum trucks left in Osage County manage to perform the necessary work on all of the tank batteries in Osage County within this time frame? What bonding company is willing to and able to issue tens of millions of dollars of surety bonds within these next few weeks? It's not possible. The Feds are imposing regulations that a very few large oil and gas companies can comply with. The majority number of producers in Osage County are small entities with very limited resources especially now with the low price for oil and gas production. They are considered "poor-boy" operators trying to survive in a very bad climate.”
Suggested Form Letter -- Part 3 “I anticipate that several thousand wells will very soon be abandoned. Who's going to check on the wells every day to make sure they are not leaking or sabotaged? The producers might be upset enough to damage the wellbores prior to abandonment so that the Feds can't utilize them. Any new potential buyer will have to be very cautious. There may be unemployed pumpers and contractors, employees, etc. that may get an attitude and find a creative way to exit the leases for the last time. I'm not promoting this but I am familiar with some of these folks and wouldn't be surprised. They might drop junk in the wellbore that would be non-recoverable. Millions of dollars of equipment will start disappearing. The County Sheriff will be very busy. With no field employee over-sight, it will be a cake-walk for the thieves even in broad daylight. If the producers are smart, they will strip their leases of equipment prior to exiting. The plugging liability will probably first be placed on the Lessee who will be out of business and long gone. I would think that since the mineral estate is held in trust by the Department of the Interior, they should be responsible for plugging the wells using the original $5,000.00 bond funds now in place for each lease and then using US tax payers' funds for the millions of dollars of plugging expense. Also remember, an Osage County operator may not plug a well without BIA approval for which a producer cannot obtain now without an environmental impact study which may take another year or two. Since the wells are capable of production, the application Form 139 for plugging should not be approved by the Superintendent. If the Osage Nation offered the new leases to another operator, the new lessee/owner would probably expect assurance from the Osage Nation that the wellbore(s) have integrity. Good luck with that! During the Fed's evaluation (The Bureau of Indian Affairs) of the new CFR's, do you think they considered the above repercussions? They should have.”
If 60% of the mid to small oil and gas producer’s businesses fail and 50% of the businesses in Osage County are oil and gas related, this will be economically devastating to the largest county in the State of Oklahoma.
Please be aware of this catastrophe about to take place beginning on July 10, 2015 and do what you can on an immediate basis to turn it back as soon as possible.
Thank you for your immediate attention to this all-important matter.
Truth be known that is exactly the underlying cause of changes in the CFR's to begin with. An inside agreement between the Osage Nation and the DOI. This has been the plan since the new government was thought of anyway.
I hope you are not saying I am fear mongering. That was not my intent. I was simply wondering if some producers did "abandon" their leases if perhaps the ON may jump in. I am not judging if it is a good idea or a bad one, only time will tell if it happens. With the Chief looking at how other tribes do business it just popped into my mind if that may be something he was considering.
Not likely to happen. The ONES, LLC is also subject to the new CFR's. They would have to spend millions of dollars for bonding and probably millions more to meet the other CFR requirements. They would also be required to purchase the leases which would a significant amount of funds, even at minimum bids. I don't think Chief Standingbear could get approval for the amount of capital that would be required. Even if he could, the economics would not support the investment, in my opinion.
The chief has 2 headrights in his family I've heard, that's alot to loose, him being a lawman, seems like he'd be right in the middle of all this Makes one wonder what hes thinking to do about it. Anyone talking to him? Doesn't this involve the ON too? Ray McClain what's your thinking on what's happing? I know you back up Galen, but right now I not to crazy about him or his ideas.
Not just that anything thus far the Nation has touched has gone South..remember the OLLC and the 20,000000 that is gone and that was our Money in the Name of our Government. And as a Member of the Tribe we have the right to know why the Board Members are not being prosecuted, in the Private Sector this would happen and the Board members woukd be replaced. The five Man Board, and lord knows what else we do not know about..all in the Name of Sovereignty for our People...Hog wash...now they want to get there hands on our Oil and make a profit by Purchasing and selling the oil at a higher price after its been stored. What a conflict of interest..what a conflict of interest. When you look at what is happening across the Board..the economy is going south and the Casino Revenue is down. If the olny market for work in the area is oil, people are going to move. Plain and simple. Now this was predictable.
I have close to three headrights does not matter, not enough money is going to boost the economy. Tulsa got the Raspberry of the Year being the worst town to visit... Like I said not enough money can fix broken. Government can't create jobs People do..I am for Crum. If your not crazy for him call him or are you afraid? Ray McClain is a cool cat. Sometimes he is soft on some issues but for the most I appreciate his intellect and or knowledge. The M.C and the M.E are a seperate agency from the Nation Governed by the same laws as the Nation or any law abiding member. We have to abide by our Constitution. The ON Government cannot come in and tell them what to do, The Federal Government holds the trust not the O.N. The 1906 act requires only 8 council members and a Chief and AP Chief...The Chief being a tie Breaker..that being said..it looks to be we are heading to Fed. Court again...
According to one source at the OFFR at https://www.facebook.com/groups/234024393278360/ Ray McClain is recovering from surgery. Ray we wish you well and a speedy recovery. It looks like it's all hands on deck for a while and we will continue to need your input.
Don't disparage Galen too much. I heard he has the head honcho's phone number over at the BIA on speed dial. Hopefully, he's burning up the phone wires as we write, to stop this catastrophe from taking place on July 10, 2015.
Yes. This was predicted back in 2006 before the ON Constitution was even voted on in a duly authorized election by the OGRC and the 31st Council. Like I said verbatim to Hepsi Barnett over the phone with regard to the Osage Mineral Estate, "If you keep working the edges on this thing, eventually you will work them loose." It looks like to me that my prediction is coming true but it gives me no pleasure to say, "I told you so." I really don't know what it takes to convince those running the new government past and present to approach what they are doing with tremendous caution. Change isn't always good. Sometimes, it can be destructive.
The first thing they have to do about that ONES, LLC is to make sure that it has proper legal placement under the law. The ON Constitution mandates that all administration and development of the Mineral Estate is to take place under the auspices of the ON Minerals Agency created by it. The Minerals Council has been placed by the ON Constitution as the elected officials, designated to run the Minerals Agency, as per the 1906 Allotment Act as amended. Anything including any office, department, bureau, corporation, etc. that you can think of associated with minerals in Osage County therefore, must be captured and under the direct administrative control of the Minerals Council. Now that's my reading of this and a clarification on the placement of ONES, LLC should be sent over to the ON Supreme Court for a decision as soon as possible before any more funding is given to them. As I understand it, they were given $100,000 and promptly went out and bought a building. What a real estate purchase has to do with spending on minerals business development escapes me entirely.
Thank you Osageblogger my sentiments as well, change is not necessarily good but in this case Change is needed in the worse way at both ends...and I do remember before 2006 that this was predicted...all under the auspicious guise however you want to cut it still comes out the same, dirty..underhanded and a huge conflict of interest, everyone playing hop scotch on the Boards as well, creates even a broader form of cronyism. 100,000 more reasons the M.C to Act today and not tomorrow. I called what the One's was up to and especially because the Chief endorsed this Shell co.is a biiger Conflict and illegal as all heck.
PERSPECTIVE: The Washington Post Article: http://www.washingtonpost.com/business/economy/after-plunge-in-oil-prices-hope-fades-for-group-of-long-beleaguered-workers/2015/06/10/e64980c0-0485-11e5-bc72-f3e16bf50bb6_story.html
Comment: The problem isn't just in the Osage it's throughout the country. Wells are being shut down in other Oklahoma counties and other states due to oil prices and middle east flow control so the shutting down of wells is not just the Osages problem.
CHANGING OF THE CFR'S IS THE PROBLEM and it needs to be corrected as soon as possible and we need to get educated leaders in the seats on the Mineral Council and quit putting in followers and opportunists!
So, tell us something new that has not been already purported on this site already, with a solution? The unemployment numbers by this Administration are under reported..I happen to think the fear mongering of the CFR'S is way out of control, yet now we top Russia as being the largest domestic exporter. And it is time for the M.C to behave as an organization with BYLAWS...with this big Change so should the M.C change as well. And make these BYLAWS effective and retro. No member can sit on the Council two years in a row. Member Council will be paid by the Minutes. 100.00 dollars per meeting. Any inkind gift will be recorded and reported. The Shareholder's want representation and we are sure to be headed to Court once again for the failure of Management of the M.E. and I will say again why is it we do not have a full bodied Petroleum office? This required at all levels..Osage Shareholder's demand exceptionalism for fiscal responsibility.
The URL is published for you to go there, read what you find there and then come back to the Osage Blog and comment on it. There is such a thing as reprint rights in the real world that must be observed. Fair use is one thing for a sentence or two but it gets thin after that. Please respect the writer's rights where it concerns printed material from other web sites. Thank you.
Keeping our eye on the ball, this discussion is about the effect the new CFRs will have GOING FORWARD on the oil and gas producers with an official notification (letter from the BIA dated June 5, 2015 to the date that the new CFRs go into effect on July 10, 2015) and a total lead time of 35 days and as a result, what effect it will have on the headright income after July 10, 2015. Again, referring to the new CFRs document, 25 CFR Part 226 itself at http://bloximages.newyork1.vip.townnews.com/tulsaworld.com/content/tncms/assets/v3/editorial/0/b9/0b900c39-93e7-5adf-b7f8-f8ab9cecdf6a/554fe7a4f17ba.pdf.pdf Could you do it? Is it even humanly possible even if you had six months to come into compliance? Remember that up until June 5, 2015, the new CFRs were classified as "proposed" and nothing more. Do you go about completely reorganizing the way you handle your business on the basis of proposed laws, rules and regulations at the Federal level that may never become a reality? No? Good. I should hope not.
To the ananymous poster who posted at 10:42 AM, Galen Crum is one of the two Council Members who supports and is in favor of the deadly CFRs. The two should be recalled in my opinion. I've been trying to locate the Council Members' bylaws but have not found them. Do any of you know if the MC has bylaws? Can Council Members be recalled? It is unfortunate that the elected Mineral Council Members do not have to be qualified for the position. The Mineral Estate should be managed by experienced oil and gas professionals and not by individuals who are elected by popularity.
Now your seeing my point. Management on so many levels and not just pencil pushers..no lawyer is going to the nessasary to rid the redundancies and inefficiencies and incompetence. We have to be the driver a step up to the podium for the Shareholder's. More like get up to speed with a 21st management team...the Monopoly on the croynism is straight out there..and the BIA and the lack of man power, just understaffed is just mind boggles if you know what I mean. The dramma needs to go, a criteria set with a standard. This is a billion dollar Estate, it cannot run by itself and no communication to the Shareholder's.
These changes to the CFR'S was coming down the pike before the HPP case settled and I am one supporting the CFR'S as well. But I do believe there should be a grace period..we have our opinions and I support Mr Crum. He's been most outspoken, had the negotiations period included the Producers during this period maybe a clause could have been built in for the smaller producers could have had a set period to come to compliance. Then again its been over three years since these changes were in the makes, so my question to the producer is a common sense question, I'm not a Producer yet I did the diligence and know what these vlaves can cost, why did they not prepare for this?
To the blogger @ 9:35a asking why the producers didn't prepare for this, first of all, over the 8 months of meetings with public comment periods, the producers vociferously opposed the valve requirement - a requirement straight out of BLM rules that apply to North Dakota. Thus the producers thought, just maybe, the final rules would omit the requirement. So it made no sense to go out and spend money that a producer might not have to fulfill a rule that might not even happen. These CFR's are a travesty for everyone. Ask Bad Brad's how their business has been lately?
I am for that, with her Husband on another Board the OSA..no two family members will be sitting on boards side by side..not just that, I do believe she is Valuable, I want her in the Legal Dept. If we get up a Running bodied Petroleum office, she is the Voice. I like her. Though my feelings on how she handled herself on several occasions was misguided as I coin..she could be a Great asset. You may disagree but I am a great Talent scout for understanding behavior and how people work..and putting there interest before mine now that is leadership. You build roads when you put a persons value before yours. It works, I have five children all a success story..why are you trying to throw her off the bus? More or less. To get noticed?
To Poster at 8:13 am, Thank you for your Reply., my opinion. As I've stated I own oil elsewhere, that being said..why would the Federal Government omit the valve change? Why would the Producer not understand, that this was a bone of contention with many Shareholder's and the M.C members. They had to be updated (the Valves). This issue is not about what the Producers had to be required to do, it is about proof and integrity of the M.E for the benefit of the Shareholder's. You can look at Bakken in a different approach as to how they got paid by the Millions because they had performed to industry standard with the proper Battery Tank Valves cuurent to industry Standard. Thats how they got paid. Lets take a lesson from that page. Ask not what others can do for us but ask ourselves what we can do for ourselves. The Ute is not the Way. And the way I see it, why was the Producer's hope not for a Valve change? This isn't just a problem for the producer at this Juncture, where is the BIA and its administration at? As far as I can see they are out of Compliance as well, still understaffed. Another day late and and dollar short..
I agree, the Ute is not the answer. And this is why, the Chief is operating in conflict contrary to the benefit of the Shareholder's,because he is a Agent to the M.E first,not to the Nation. He is Lobbying why? This needs to be looked into right away?
To the poster at 9:38AM, the Bakken has no relevance to Osage County. None. Their wells come in for thousands of barrels per day. High pressure wells. Osage County has 14000 wells making 12000 barrels/day. Less than a barrel/day/well. The unnecessary cost of replacing valves on aging tank batteries is ludicrous. The only valve that matters is the valve from the bottom of the stock tank that the purchaser ties into to take the oil. When the purchaser is done, the valve is closed and resealed. End of story. Just another way for the BIA to kill the marginal oil industry that's left in the County!
Crum would would be Chair, Yates Compliance officer and Abbott as well. Remember this is Hyperthetical. Cynthia would also be in charge of Advertising as well as work in legal. This is just the tip of what a organization does and in Unison with a motto. This is so long over due..
HYPERthetical is right. HAHAHAHAHA!!!!!!!!!!!! Put in the three guys who will have completely destroyed the Osage Mineral Estate as of July 10, 2015? Who are you kidding? Yourself?
Mineral's Council Meeting is now live on the internet: Agenda -- https://www.osagenation-nsn.gov/news-events/news/minerals-council-june-12th-agenda https://www.osagenation-nsn.gov/multimedia/live-media
Presentation from Edwards Environmental to help with the contaminates; hydrocarbon spills, salt water injection spills to remediate and rehabilitate the soil.
What? Did I hear this correctly that the BIA Osage Agency Superintendent, Robin Phillips, is refusing to attend the Mineral Council Meetings? WTH? Isn't she paid to handle Minerals Business associated with the Mineral Estate Trust and expected to attend these meetings? Isn't she shirking her work responsibilities leading to willful neglect of duty? Because the Minerals Council is hostile toward her? These are hostile times and we need someone solid of substance who can stand up to this mess that is being made by the BIA in association with these new CFRs in Osage County. Good for the Minerals Council for a no-confidence vote on Robin Phillips continuing on as the Osage Agency Superintendent.
I can't believe I just heard that the BIA is blaming the lack of permits for workovers on the Osage Producers Association appeal to the workover process. The BIA is amazing. They create an unworkable permit process that allows no permits and blames the OPA for appealing the piece of garbage permitting process that the BIA created. The BIA ought to go in the sanitation business because what they are creating has a lot of relevance to that industry.
Talee went on about the fomenting disaster to the entire County. Has the Governor been called yet to apply for economic disaster relief? Workovers are now being appealed in court by Drummond and the oil producers for some reason not given by the Assistant Superintendent who is in attendance from the BIA. As a result only two new wells have been given permits to be drill this year? This is looking worse and worse by the day.
The meeting is over. We'll have to listen to the second half when it becomes available for on demand listening at https://www.osagenation-nsn.gov/who-we-are/minerals-council/meeting-information
You tellin us that head BIA gal is going to be MIA from now on to those mineral meetings? What the hell kind of candy a**ed operation are they running over there at the agency now? Get somebody in there who can handle themselves in the line of fire. They created this mess and they can't run away now.
An interesting word choice, "hostile," like it's a hundred and fifty years ago and Kit Carson talking, "Just to think of that dog Chivington and his dirty hounds, up at Sand Creek," Carson commented contemptuously to Army Inspector Col. James Rusling after returning from battle. "His men shot down squaws, and blew the brains out of little innocent children. You call such soldiers Christians…? And Indians savages? What do you suppose our Heavenly Father, who made both them and us, thinks of these things? I tell you what, I don’t like a hostile Redskin any more than you do. And when they are hostile, I’ve fought ‘em, hard as any man. But I never yet drew bead on a squaw or a papoose, and I despise the man who would. I’ve seen as much of ‘em as any man livin’, and I can’t help but pity ‘em, right or wrong. They once owned this country…. But now they own next door to nothing, and will soon be gone." Would her characterization of "hostile" fall within the parameter of what would qualify as a bigoted remark toward the Osages who have every right to be upset with her professional actions in since June 5th of this month? There are a lot of words out there that express the same thing but not quite with this ugly and demeaning a connotation. It gives one pause for thought doesn't it.
She is defenately helping DC take food and shelter away from the sqauws and their children and seems to be enjoying herself. She is not qualified for the position she holds and she knows it but doesn't want to admit it to anyone. She can't take the heat. This position should be to assist the producers fir the benefit of the Shareholders. She does the oposite. I think the Mineral Council should be able to choose the Superintendent they feel like they can work with. The BIA should provide a dozen candidates for the MC to choose from after several interviews with each.
Better yet, the Osage Tribe should boot the BIA off the reservation.
"Hostile" just means any critic of the current administration's boneheaded policies. These political appointees aren't qualified for the offices they hold, having been raised to positions of high authority without learning essential management skills. The new CFR's harm the Osage instead of helping. A good manager would want to work with those affected to come up with a "win-win" solution and by taking a reasonable approach would defuse these "hostilities".
The latest information coming in is that Kinder Morgan, the largest buyer of natural gas, is no longer going to pay the royalty amount direct to the Federal Government. As of July 1, 2015, they will be paying the gas producer direct at the Highest Posted Price rate, not the Henry Hubb gas futures price and it will be up to the gas producer to pay the royalty amount to the Federal government. Imagine all the gas producers paying the BIA one by one and then imagine where this is going to go. This isn't the case for oil yet but precedent has been set here with Kinder Morgan and you know where this will probably go next. It will be a wonder if the Osages ever get paid a royalty again. WHAT A MESS! Please send in your form letter as shown above or one of your own to the Federal Congressional Delegations from every state where you live, the BIA at every level and the U.S. Congressional Indian Committees in the House and the Senate TODAY. See the form letter in three parts above along with the contact information above for U.S. Congressional Delegation, the BIA and the Congressional Indian Committees. We need every man, woman and child to send these letters off today to blanket these Federal government offices with these requests as soon as possible. Never forget the "power of one." ONE by ONE WE CAN EACH DO WHAT WE CAN to STOP THIS from HAPPENING.
They are the fourth largest buyer of natural gas and because the Federal Government has hinted of a rate increase the company would be subjective to valuation technique. Putting their money where their best buck will get them. Has nothing to do with what is going on with the Osage. Remember, they buy from everyone.
They will still be paying the oil producers directly and not paying the royalties to the BIA and that will mean a lot more work on the part of everyone involved. Wednesday is the start of the training sessions for the producers and a number of them don't even know there will be a change to the new CFRs as of July 10, 2015. This is just one train wreck after another.
The blogger at 4:23PM is wrong. It has everything to do with Osage gas. KM is the largest purchaser in Osage County and doe not want to be responsible for the royalty calculations based on the new CFR's. They don't want the liability. Thus they are dumping the royalty obligation onto the producer. Because royalties are due on the 25th of the month, imagine if the purchaser does not pay until the 30th? A lot of producers won't have the cash to meet their royalty obligation. Fines up to $100,000 are possible if royalties are late in being paid. A train wreck in the making. Rumor is the oil purchasers will follow KM's path by the end of the year. Producers will fold like a cheap suit.
The new CFRs specify that natural gas is tied to the index price of the gas ($/MMBtu) for Oklahoma Zone 1 published by the Department of the Interior’s Office of Natural Resources Revenue. http://www.onrr.gov/Valuation/allzones.htm I can't see that it has anything to do with Henry Hub. That index price is higher. http://www.eia.gov/dnav/ng/hist/rngwhhdm.htm
I checked into it and this is correct. The index is Oklahoma Zone 1 that is referred to in the CFRs. This, I presume, may have something to do with why KM is no longer going to pay royalties after July 1, 2015. Having to juggle indexes to determine the price to be paid to the gas producers in Oklahoma may contribute to the reason, I don't know. If anyone can post a better clarification, I welcome it.
See "Poor Management by BIA Has Hindered Energy Development on Indian Lands" and the report at http://www.gao.gov/products/GAO-15-502 On the other hand, the Federal government still has a lot of clout with a lot of funds available from a legal standpoint where the Mineral Estate is concerned and defending our interests against all comers. One individual was speaking about retaining the mineral rights to his property. He stated that it's one thing to have the mineral rights reserved and another to be able to bring the minerals out of the ground. Without the Federal government to back us up, I doubt we will be able to stand "to" alone.
Osageblogger, I absolutely agree with you. This is exactly what I have been saying all along. The BIA has much more clout, funding, technical resources, and legal resources, and most of all, the responsibility via the 1906 Act, to manage our Mineral Estate. Granted, the BIA hasn’t done that properly in the past, but they seem to be trying to get things straightened up. With everyone in sight clawing for a piece of the action, we wouldn’t stand a chance without the Feds. The old ways of doing things are too deeply embedded and they must change. If this individual you speak of wanting to retain his mineral rights is an Osage Shareholder, Ted Turner and Gentner Drummond will probably be sponsoring a square dance in his honor this Saturday night. That would be a huge step in the direction of breaking the Osage Mineral Trust----and that would be FOREVER. The infamous ‘HPP’ that very few really understand, and mostly the lack of accountability, have cost the Shareholders millions upon millions of dollars over the years. The new CFR’s will stop this nonsense of us merrily handing over part of our money due for our royalties each month. This horrendous anti-CFR propaganda campaign we have been forced to endure for the last year has caused a great division within our Tribe, and has nearly destroyed any semblance of respect and cooperation between our Minerals Council and the BIA. Just one of the many examples of the fear-mongering techniques being used is the statement in the form letter recently posted is the reference to “tens of thousands of valves” that must be replaced. I really doubt that 10,000 valves even currently exist in Osage and Kay county combined, and it goes on, and on, and on, including alluding to the world price of oil and the recent downturn in our Headright checks being tied somehow to the new CFR’s. Ridiculous!! Nearly everything else listed in that letter is about as ridiculous. This must stop, and stop it will, come July 10. For a Shareholder to sign this letter would be tantamount to shooting one’s self in the foot. For a Shareholder to actually contribute cash to this propaganda campaign would simply be buying more bullets for the other foot. Borrowing from your statement above, ‘Without the Federal government (BIA) to back us up, I’M SURE we would not be able to stand "to" alone.’ That would just be yet another step toward losing our Federal Trust Status.
Sorry Ray but your ignorance on issues never ceases to amaze me. There are nearly 1500 tank batteries in Osage County. For the average 2-200 barrel stock tank battery with a gun barrel and a salt water tank, an average of 7 valves need to be replaced. That works out to 10,500 valves that have to be replaced with "sealable" types. That costs money, time and just as importantly, feasibility of even being able to change out some of the valves due to age etc. Your lock-step allegiance to the CFR's and Galen's soliloquy just never ends.
Ray, the Shareholders royalty checks will definitely be reduced by the implementation of the CFR's due to the producers' capital leaving Osage County. Surely, you don't think that there will be a flood of new operators attracted to the county to replace the ones being forced out? The bonding requirement will be the most significant hardship for the producers. Most of the small to middle-size operators will not be able to obtain the bonds prior to July 10, 2015 and may not ever be able to. They will have to come up with $5,000.00 cash as collateral for the bonds on each of their wells.
To the Producer at 8:47 AM---1. A typical 2-tank battery will have 7 valves. When I pumped several Osage leases in the 50’s and 60’s, there would already be 2 sealable valves on the bottom of each tank, one for sales, and one for recirculation and treatment. I would bet my next SS check that no one can show me a functioning tank battery that is equipped with valves at the bottom of any stock tank that is not set up the same way. The oil purchasers have always required this to prevent theft of oil during an oil run. That leaves only 3 little 2 inch valves at the top of the tanks that might need to be replaced—two inlet valves and a bypass valve between tanks. I am told that there is now some kind of strap-on valve sealing attachment kit available to the industry that will make non-sealable valves instantly sealable. So the onetime expense of valves just went to probably less than $200. And I would think that this might be an item that some time could be negotiated for. I never cease to be amazed by all this anti-CFR propaganda, and needing 10’s of thousands of new valves in Osage county is the most ridiculous statement I’ve heard yet. That statement in that letter has nothing to do with my ignorance. It must be something on your end.
To the Producer at 9:00 AM-----The bonding will no doubt be a major expense for some. But if you think about it, the $5000 CD is only required once per well, not annually, and it will always be there if the producer stays in compliance, and will be available when he sells the lease. It even draws interest, (for whatever that is worth.) Almost like a savings account. The $250 per year is a minimal expense of doing business when the well is bringing in about $20,000, less normal operating expenses. Maybe this is an item that some time can be negotiated on. I agree---it will be tough. But it is also tough to plug abandoned wells with no funding at all available to work with.
And "hear"we go again. I am of the sound mind to respect John McCains opinion for the most.That being said..the GAO report is spot on. And I beleive I had already commented on the subject on a prior or two posts previously. And Osageblogger is correct. At the BIA agency they are trying to get things straightened up? Ah, redundancies and inefficiencies still exist..They to have had three years to come to compliance and yet we still don't know anything about what criteria are they trying to meet by what standard and by who's authority or supervision? Still understaffed by far? And they are still having issues, I am dealing with and on a personal issue not related to this subject and I can't get a response until, I call them back three or four times. But I will say this there is effort and they get a C+. And I will not put this on or all, on Robin Philips, she has her orders. There's always going to be the escape goat, but lets put the Blame squarely where it goes. There's a lot of blame and how corrupt we are within. This is telling..in so many words will the truth be finally exposed, will we realize the potential we have been missing? In short who are the players and who were the takers? Our success should be built on a collaborative . Had the Shareholder's been comprised in matters of the Estate would we insisted oversite and compliance from the BIA to the MC. It's called transperency. I do not want to speculate at this point on the Drummned Case or for tha matter Ted Turner..Balance brings cohesiveness. We should have had a eye on the ball. We shouldn't be where we are at, we should be way ahead by many years. Change could not come sooner. Apllied knowledge and techniques is long over due. Thanks Ray McClain for your post. Telling it like it is. Hope you are well Sir. And to the above poster who disagreed with my comment about the applied Royalty Rate, there just giving back all of the Responsibility back to the Producer...not just the Osage..You can't argue with an Accountant.
Ray, as an Osage County operator, I will not be able to comply with the new bonding requirement and will be forced out of Osage County after July 10, 2015. I will be abandoning 8 producing wells and almost thirty shut-in wells that have potential and which was the reason I purchased the leases. I promise no one will be able to re-enter the wells after they are abandoned.
Also, the 120 day period that a producer has to re-establish production is not sufficient. Consider a lease that has one producing well making a couple of BOPD that developed scale to the point that the well cannot produce due to the scale build-up. The producer is required to submit a Form 139 to treat the formation for the scale issue. As you should know, an operator cannot obtain BIA approval within 120 days, therefore, the BIA will be terminating that lease.
Any Producer would not hide their Identity as to who they are and if this were the case we would sure to know who you are by all record accounts so why hide your identity now?
Ray, I'm glad you're back. Excellent discussion. Let's run the numbers for the O&G producer with 38 total wells. So what is it? A $5,000 CD per well up to 25 = $125,000 plus the $250 for the bond = $6,250 for a total of $131,250. WOAH! That's quite a stack of money to have available on a 35 day notice. As I understand it, because of the Donalson lawsuit, banks aren't short term bridge loaning money because of the cloud on the title to the property until it is removed by the lawsuit being finally dismissed, dropped or settled in court. The subtext I've been getting here all along is, if a producer doesn't have the money to do business in Osage County, they shouldn't be there in the first place. My counter to that is they are there producing because it is less expensive to do business in Osage County than elsewhere and it you close the gap with these new CFRs, and 60% of the mid to small producers leave, you will be denuding the Shareholders out of 60% of the income from the number of barrels of oil taken out of the ground on a monthly basis. I'm talking production here only and not the price of oil that you all are beginning to turn to and lean on like it's a crutch every chance you get. Putting forth a "government line" scenario over and over again doesn't make it ak reality. Acting like these factors are not affecting the situation is disingenuous from my point of view. Now that Kinder Morgan is putting off the royalty payment onto the producers for natural gas, the reporting requirement will increase even further and that's something the BIA never figured into the mix, I would be willing to bet, and neither did the pro-new-CRFs team. If the oil buyer goes the way of the natural gas buyer, things will be even worse. The dominos of unintended consequences are starting to fall Ray, and I believe there is no doubt about it. The bottom line will be affected. What the Shareholder wants to know is what is to the good and when will my checks get higher due to the increase in oil and gas production? The VERY least the BIA could have done is to meet with the oil and gas producers and give them a firm six months lead time to come into compliance and then assess whether or not these regs are too burdensome for the men and women who do the work of oil production in Osage County. There is a human factor here Ray and you need to factor that into your assessment of the situation. You're worried about shooting yourself in the feet. I'm worried about both legs coming off at the knee if the oil business dries up and blows away in Osage County. You want accountability and so do I. All you guys that are for killing off the oil business in Osage County with your blinders on relative to these new CFRs will be held accountable just like the BIA and blamed for it if everything "goes South." The checks are dropping, Ray, and if they drop even further due to a loss of oil and gas production from current production prior to July 10, 2015, in Osage County down 40%- 60%, the numbers will show it and then you'll have to come up with another explanation than the drop in the price of oil.
Please read the GAO report & give your feedback. BIA, just what the doctor ordered? Maybe the Minerals Council will find the time to address this at their next meeting. http://www.indianz.com/News/2015/017852.asp
I just received the Operation Report from the Acting Superintendent for the week ending June 12th. Only one completion and no new drills. That's actually one more well than I expected.
Hey Ray. How does one completion and no new wells sit with you? I hate it. For you to continue to state that the new CFR's are good for the County is , to use the phase, "guilty of smoking your own dope." Producers can go across the County line to Kay or Pawnee. Why screw around with the new rules? Osage County is going to the dogs. More proof. Chaparral is the largest producer in the County and they are selling off all properties except Burbank because the new rules make those properties unprofitable.
This is the most important word on this web page so far; unprofitable. Are the new CFRs making Osage County unprofitable to bring oil and gas out the ground. If the answer is yes then the new CFRs need to be suspended by a temporary stay and the BIA will have to be reassess the situation. Imagine if 40-60% of the producers abandon their wells and then imagine the consequences to the land owners. You're playing with fire here people and what we want is drill baby drill not burn baby burn.
How in the world is the BIA going to be set up to verify the amount of every single sale of natural gas purchased by Kinder Morgan from every gas producer for the purposes of determining the royalty, on a lease by lease basis, owed by that producer so as to ascertain that the royalty amount paid by each and every one of them is accurate? This whole process seems out of control to me going in. I can't even imaging what it will be like going out. Does anyone ever ask themselves over at the BIA if what they're doing is doable?
I heard Kinder Morgan is going to be paying Highest Posted Price to the natural gas producers and not the higher benchmark rate called for to be paid royalty on in the new CFRs. If the money is now going to be paid to and in the hands of the gas producer, how will the BIA verify this sale amount with every producer on every lease on every unit of gas sold? http://www.eia.gov/dnav/ng/NG_PRI_FUT_S1_M.htm OMG! Here we go again... GALEN!!!!!!!!!!!
I will admit upfront I am not educated in the petroleum/oil extraction industry. Being a Shareholder and reading these posts make it even more confusing. At the last Minerals Council meeting it was stated only 2 wells were permited and drilled in 2015. Some say the cause is the BIA / CFR. Some say in is the oil price drop. If it is attributed to the BIA in anyway, why wasn't the Osage Agency Superintendent attending the meeting and answering questions? To be fair to her, why can't the Council furnish her with an outline of questions that will be asked of her and be expected for her to answer. Even when asking her assistant "will the Superintendent be at the next meeting", why can any member take control, ask for a 5 minute recess, request the assistant call her on her cell phone and get an answer? The days of 'Gettin Back to you' and 'We will see' has to end in Mayberry, right Opie, Andy, Barrnie and Aunt Bea. Isn't there Skype or Go To Meeting.com available in Pawhuska? I'll bet the Superintendent would be 'Hostile' and demand answers if her checks were cut in half. If however, the drop in our checks is attributed to the price drop in oil, then why are we talking about producers leaving Osage County to drill elsewhere? Isn't the price of oil the same 2 counties or 2 states away? As best as I can read this, drilling production is up and more than 2 wells are being permited elsewhere ( http://www.eia.gov/petroleum/drilling/pdf/dpr-full.pdf ). Can the council post a more specific agenda with questions that will be asked and needing to be answered? I heard 5 minutes spent talking about dirt at the last meeting but not one word about the dozen or so 'Motion to Dismiss' the Donelson Law Suit ! 8 months and counting. If we are counting on the BIA/DOI for 'Fire Power', show us some results or atleast some interest. It is getting harder to listen to these meetings, sounds like listening to CSPAN on a transistor radio... P.S. Good to see you back Ray...
Good Idea..but what about those questions that still go unanswered regardless? And in this day and age of technology no answer should go unanswered, why can't the Superintendent say when she does not have a correct answer to give, say at the Next meeting I will have an answer. Thats more plausible..but the old ways are not working and things needed to get caught up with technology. And everyone has an excuse..has to go..
The woman is paid to attend the meetings. If she can't stand the heat she should resign. Get someone in there with the gravitas to be able to handle the situation with the power to make decisions in the field, not bow and kowtow to the wishes of some legal person in Washington, D.C.
As far as I know, in the meeting, one member of Council displayed concern that her questions that had been submitted sometime before the last meeting would not be answered by the Supervisor on Friday. The bad thing about all this is that I've heard from more than one source, that the CFRs aren't happening on the ground in Pawhuska, so to speak, but back in Washington, D.C. People who live there are ambitious, often coming in from around the country to make a place and a name for themselves in that high level political environment. These are not people who live here in the County. We don't break bread with them and we don't go to church with them. Our kids don't know their kids and don't play with them. We don't work with them and they don't patronize our businesses with their business. We need to remember that before we let these Washington D.C. people who we don't even know, tear out lives apart and separate us from one another here in the County where we work, play and live together with one another. This is most important and not to be forgotten along the way.
OK. Just to take the edge off a bit, I have a story that comes from Ron Turcotte who rode Secretariat to an unparalleled win of the Triple Crown. He was the jockey and at the Belmont Ball while squiring a gorgeous blonde woman heads taller that he was he said, "I told her I'm taller when I stand on my wallet."
This devastating CFR is straight from Washington, the leader worships a different God than we do, he hates fossil fuels and he is getting revenge against our Tribe for the $380,000,000.00 settlement. The producers are the first to take the fatal bullet but the bullet continues and ends between our Osage Shareholders' eyes. Lights out for sure. Good bye royalty checks. New wallpaper and collector items. It's too bad we Shareholders are not more supportive of our producers. Ray is obviously drinking from the same cool-aid pitcher as is Councilman Crum and Councilman Yates, with all due respect.
Please support the producers in their litigation (please donate to their defense fund). Please show support for our Mineral Council Members in their legal battle to save the mineral estate from this devastating federal action.
Contrary to Ray's comments, the US Federal Government is not here to help us, they are our vindictive adversaries. How the hell do you think we ended up on a reservation in the first place. Think how well their oversight was during the 1920's and 30's. More murders per capital than any place on the face of the earth. Really Ray? The Feds are our worst enemy. We need to fight back and try to save our Nation.
Tomorrow is the first seminar to be held in Pawhuska sponsored by the Federal Government on how they plan to destroy or Mineral Estate. I suggest that each of us Shareholders attend this first dose of medicine they are administrating rectally. Please attend and have a list of questions for the administrators. They will be dictating to all of us how we are to comply with the new rules and regulations that we haven't even seen yet. The Superintendent has not provided the producers or Shareholders with a copy of the new regulations as of this date which are to be implemented July 10, 2015. She provided a link to a website for us to look at but I haven't been able to download it yet and there is only a few weeks left before the boom comes down. Ray calls this propaganda but in real time and real life it is a death sentence from what I've heard. Please attend the meeting. Oh, I just now remembered, we Shareholders have not been invited to the seminar that affects us the most. I am a Shareholder and haven't been invited. Have you? Let's crash their party! Let's show up, uninvited, with lots of questions!
BUREAU OF INDIAN AFFAIRS PUBLIC INFORMATIONAL SESSIONS LEASING OF OSAGE RESERVATION LANDS FOR OIL AND GAS MINING 25 CFR Part 226 The Bureau of Indian Affairs (BIA) invites the public to attend informational sessions on the new oil and gas mining regulations for the Osage Mineral Estate that were published in the Federal Register on May 11, 2015. The new regulations will become effective on July 10, 2015. The Public Information Sessions will be held at the Wah-Zha-Zhi Cultural Center located at 1449 W. Main, Pawhuska, OK 74056, at the following times: June 17, 2015 1:00 pm - 5:00 pm June 18, 2015 10:30 am - 2:30 pm June 18, 2015 5:00 pm - 9:00 pm June 23, 2015 5:00 pm - 9:00 pm June 24 2015 1:00 pm - 5:00 pm June 25,2015 10:30 am - 2:30 pm The new regulations may be found at: www.gpo.gov GPO.GOV
I don't trust our federal government enough to go to their website. They should mail the death sentence (CFR's) to all parties affected; the Mineral Council, producers, Shareholders and surface owners.
Are any of you bloggers surface owners? Let's hear from your perspective.
How do you feel about the Osage producers abandoning their wells when the CFR's are implemented forcing them out of business?
The producers will be leaving thousands of wells unplugged and abandoned with no funds or incentive to restore the surface locations. I am an Osage County producer and Shareholder that will be insolvent July 11, 2015. I will be out of business, especially when the fines and penalties are imposed by our Superintendent. I will not have the funds to plug my wells or to restore the surface. Please join us tomorrow at the seminar and ask the instructor their plans in this regard.
If the new CFRs do force a lot of producers out of business and a large number of wells are left unplugged, then the Osage Nation should work with the Governor to seek federal disaster assistance. The affected owners of the surface land won't be able to cover these costs and will likely sue the BIA as trustee of the Minerals Estate, and a settlement is likely to further reduce royalty payments.
The BIA, as trustee of the Minerals Estate, is the responsible party that intentionally created this crisis and should be held liable for the consequences. The surface owners should attend today's seminar and ask the BIA representative if they have a plan in place to secure the wells effective July 11, 2015.
This happening in North Dakota, fracking and where are we at? Zero and the BIA is looking like the Persona non Grata and not the Hero or for that matter the Matter. http://www.indianz.com/News/2015/017871.asp
Producers should submit their hardship reasons right away as it appears that there might be a way to submit them to the BIA Regional Office for further review, if I heard this statement correctly.
"...and a settlement is likely to further reduce royalty payments." I don't think so. Litigation and settlement costs will be left up to the BIA to cover, just like the Donalson lawsuit. They can't get into the Mineral Estate Trust account for items like this because it is set aside for the Headright owner's quarterly payments, the MC drawdown and the gross production taxes. The BIA is a separate legal entity from the Mineral Estate Trust altogether.
The thing you need to ask yourselves is, from the time of Thomas Jefferson when the first Osage Delegation went to Washington, how well have we fared at the hands of the United States government at any time throughout history? Why would this time period be any different than in the past?
What I don't get is why the BIA pulls workovers off the table with an appeal and won't pull the new CFRs off the table with an appeal or a request for a moratorium and despite three standing resolution votes of the MC against them.
2 meetings question as simple as " Will Robin Phillips be attending Minerals Council Meetings" Still no answer, stay tuned. Producers MUST comply but BIA can't even answer a simple question ( Yes or No ) Any word on the 'Motion to Dismiss' the Donelson Law Suit? No new well but the Shareholders are getting the 'Shaft'...
Best Question asked in this meeting so far " Is the BIA representing the Mineral Estate Shareholders or the Land Owners"? Notice the question went unanswered !
Excellent point of Councilwoman Stephanie Erwin that the BIA is regulating us right out of the oil business which is in violation of the fiduciary obligation owed to the Shareholders. Good for you Stephanie! Keep the pressure on 24/7 until they behave themselves.
While on break, I was told years ago, the Catholic Church and others are receiving Shareholders checks. See Charles Pratt Interview for list of other Entities in possession of Osage headrights ( http://osagenews.org/en/article/2015/03/09/questionable-headright-payments-still-issue/ ). I was told when they were threatened to be ' Booted ' off the roles, lawyers started coming out of the woodwork. Now that the checks may dry up, has anyone heard a peep or hymn for these recipient's? Refresh my memory...
Of course their attorneys came out of the woodwork. They own these headrights and would be expected to defend this personal property right that they are in possession of. Charlie passed away and I don't know if anyone is still pursuing the legal case at this point.
Yes it is called Fletcher Case. Attorneys for the plaintiffs in the Fletcher Case include Indian & Environmental Law Group, PLLC; Sneed Lang, PC; and Shield Law Group PLC. Proctor is the owner of Shield Law Group. Also, On the list of Entities look at # 21 - First Assembly of God-Kalamazoo, where is their offer of legal help? Or is it In God We Trust but Shareholders ' Show Me the Money '.
Can we discuss this at another time or down below in another thread, please? This thread is for what is happening in the Minerals Council meeting. Thank you.
Upon request to the BIA, time to get into compliance within the 90 day period with suspension of fines during that period. Motion for resolution has failed.
Does anyone get the feeling as I have said we will go back to Court for the BIA’S failure to represent once again...They know this and are not going to be so forth coming, would be like putting the Cart before the horse..how I see this entire situation is their is a Great threat to our Sovereignty, just because they hold the Trust does not give them the right to impose, they work for us the Shareholder's any other outcome would be Hostile to the Estate. Forget the GAO report, not. Get the GAO down here and get a serious Audit from an accounting perspective but assess the Demographics inside and out.
Something comes to mind? In the process this tug a war between the Producers and the BIA, held Hostage by the Donelson case? What is holding up the Dismissal? Who's on the "Hook"for the abandoned wells? However we have huge issues and my gut says this Office, the Pawhuska Office the BIA is in way over their heads...we need to be working with Washington at this point.
Ironhawk- Charles Wickstrom asks to be granted a new one year lease for 10 leases from the Encana assignment that has finally come through. Resolution passes.
OK. Here it is. Resolution on a no-confidence vote on Robin Phillips continuing to serve as BIA Agency Superintendent for reasons stated on the letter not going out to the Minerals Council before it being sent to the Oil and Gas Producers as to the effective date of the new CFRs.
The Osage Producers Association had a private meeting with the BIA officials, including Mike Black and Vanessa Ray Hodge from D.C, on May 12th. The OPA asked specifically if the BIA would allow for a grace period to comply with the new regs. They unanimously stated "absolutely not." So the chances of the BIA complying with the OMC's resolution to give a grace period seem slim.
So the villains here over at the BIA also include Vanessa Ray-Hodge in the Solicitor's office and Mike Black BIA Bureau Director? http://www.bia.gov/WhoWeAre/BIA/Leadership/index.htm
One important factor for the protection of the Shareholder royalty interest is verification of the royalty amount if the producers are going to be paid directly for natural gas as of July 1, 2015 and the same will be true if oil payments to the oil producers goes the same way. What is the BIA's plan to verify these sales and calculate all of the individual amounts from roughly 500 oil and gas producers in Osage County. Until this matter has been decided and resolved, the BIA should call for a temporary stay or moratorium of the effective date of the new CFRs. That's it people right there before this whole thing goes roiling completely out of control.
What a real sad meeting. The acting Superintendent showed up and did her best. If you picked up the underlying theme from the BIA I think it goes like this; Minerals Council, we (the BIA) will consider your resolutions. We the BIA make the rules and pass the laws. You the Minerals Council can spend Shareholders funds and pass all the resolutions you want, some may even make you feel good and powerful. In the end, it is us (the DOI/BIA) that make laws and impose fines. Robin may or may not be gone, it just depends on how she is playing upper level office politics. Her checks won't stop or be reduced but Shareholders are affected. And yes the Minerals Council can pass a resolution to hire oil and gas experts but if you didn't hear or read BIA operations reports, not many well are being drilled, oil prices are down and no one is mentioning the looming Donelson Law Suit. Hiring experts is kinda like hiring a good mechanic a week after the bank repossessed your car. The BIA knows the Shareholders can sue them and probably win! The truth be told, half of us reading this will never live to see the settlement. As far as the BIA, half of their employees will be retired before the settlement is paid and the other half will be promoted or gone before the US Congress appropriates the funds for the settlement. At this point the Minerals Council might want to look into the TERA process, the Indian Tribal Energy Development and Self-Determination Act Amendments. I think we need to narrow down the best way to Self-Determination. This is a very serious time and it will call for hard choices. Passing resolutions and screaming ' fiduciary obligation ' may feel good at the time but in the long run no one cares about the Shareholders but the Shareholders.
The experts are being hired to help inform the MC Attorney with the legal action for injunctive relief at the Federal level against the new CFRs going forward that are smothering the oil and gas business in Osage County under an avalanche of unneeded, unnecessary and unworkable regulations that are in violation of their fiduciary obligation to protect, preserve, defend and promote the Osage Mineral Estate and the income generated from it.
To the poster at 1:29PM, yes the villains include Vanessa Ray Hodge and Mike Black. They are the true authors of the new regs and Robin Phillips is taking her marching orders from them. In fact, Vanessa Ray Hodge was confrontational with the OMC at their last meeting for criticizing the new regs.
To me it says another, its more than that..there is a monopoly going on. They are protecting their agenda..and intersst and couldnt be more clear,build build in North Dakota and South Dakota..put all kind of Regs to the Osage who are not prepared...and not to allow thr Producers in the Negotiations for better vetting or insight, however its like I said we can keep going back to Court but when are we going to run our M.E like a business?
Saw Eddy Red Eagle stand up and give them a piece of his mind. He was heroic in the moment and got a handshake and applause for it. He told the BIA they are no where near ready (to put these CFRs in effect)... "VIDEO: The Osage News was prohibited from taking video at the BIA-hosted public meeting to discuss the revised regulations for oil and gas mining on the Osage Reservation...." See this video clip at https://www.facebook.com/OsageNews
Good for the Osage News for having the guts to stand up to this oppression of not being able to videotape these meetings. They should be available to all of the oil and gas producers to see on demand. What is this?
Gee, I guess add The First Amendment to the BIA's Laundry List "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances". Was Ms Phillips in attendence?
I was there, Mr Red Eagle did us proud! Interesting that the BIA could "forbid" an Osage Nation News organization from taping a public meeting on Osage Nation owned land. I don't get it. Perhaps if the Osage News had given this a little thought they would have stayed. The OPA was also asked to leave but they stayed and taped the whole thing. Hats off to them. Can someone tell me how in the world the BIA could have ANY SAY in who could cover this event or who could tape it?
Wouldn't you say The BIA has been warned in as much, by Eddy Red Eagle. And there is no doubt the BIA is not blind sighted by the fact that a injunction is being filed. The way I see it we will be in Court again but this time the Court is going to look at this and not let it languish for 12 yrs again. The Court is goIng to bring the Hammer down...incompetence at the Highest level.
I see your point. Our land, our Cultural Center, our oil and gas producers, our sovereignty and they get to call the shots on what is video taped and what isn't? Go figure. Hats off to producers is right. I hope they taped today's meeting too.
Don't forget that the first of the BIA information sessions on the new CFRs is this afternoon, June 17, 2015 1:00 pm - 5:00 pm. If you attend please take your smart phones or tablets and give us a report here on the Osage Blog. It will be greatly appreciated.
I attended the seminar Wednesday. The DOI/BIA attitude is that the CFR's are final and will not be changed or challenged. Everything is subject to the Superintendent's discretion. They could not answer half of the questions because they do not understand the questions. They are clueless about the oil and gas operations. They don't know a gunbarrel from a stock tank or gas separator or even know what a Rockwell valve or Ballon valve is. They want to prevent the oil from being stolen from a tank battery by requiring all of these new valves be utilized, but fail to realize that the hatch on top of the tank that the pumper opens to gauge the tank daily is the largest opening which does not require a seal. This is the easiest access for an oil thief.
These idiots are clueless and vindictive. They are definitely getting revenge for the $380,000,000.00 settlement. It's so obvious.
If the OMC and OPA do not get relief in the Federal court, the producers and shareholders are doomed, to be sure.
I too was very impressed with Eddie Red Eagle, Jr. for his eloquent comments to the panel. A soft spoken plea for this group to postpone this action until, at least the fist of the year, which would allow time for the Feds to address the problems identified with the roll-out of these new CFR's. He received a deserved standing ovation. Very simple, plain spoken, statement as to why the Feds are making a big mistake by the implementation of this devastating CFR.
Moreover, the attitude of the federal government representatives were very condescending and adversarial. I am struggling to refrain from using language not appropriate for this blog, and for this reason, I'll just sign-off.
Wow, thank you for the update I do appreciate your time and opinion...well folks there you have it. I and others are beginning to see the forest for the trees..and what is undeniably the truth as I suspected.
The Osage Blog is now TWO YEARS old today, June 18th, 2015! A BIG THANKS to all of you who are making the Osage Blog an active communication tool for Osages all over the world.
Thank You for all your hard work & excellent product. Be proud for giving us a place to voice our concerns and for a ' Job Well Done '. ' HAPPY BIRTHDAY' *‹(•¿•)›*
I'm only registered as a 1/8th Osage blood (could be a 1/4 depending...?) , but as Eddie Red Eagle, Jr. was speaking yesterday, I felt like all of that 1/8th Osage blood rushed to my heart all at once, and just for a moment, I experienced being a full blood. I'm very proud to be a member of the same Tribe as Eddie Red Eagle, Jr.
During the Wednesday seminar, Chairman Waller attended as did Councilman Crum. Chairman Waller listened as the DOI/BIA described his authority was being stripped of being able to negotiate royalty amounts on new leases and his ability to allow seismic operations on acreage not under a current oil and gas lease.
Councilman Crum attended, probably to obtain information so that he could report back to Ted Turner and Gentner Drummond.
To answer your question above, the DOI/BIA new CFR's state that the royalty rate cannot be less than 20%. Shane Matson of Spyglass asked the panel that if his company wanted to make a 200-300 million dollar exploration project in the Osage but needed the royalty reduced by a little bit to make it economical, do the new CFR's prevent the Mineral Council from negotiating a lower royalty rate. The panel replied that the Mineral Council no longer has the authority to reduce the rate even if it was in the best interest of the Mineral Estate to do so.
As for the seismic matter, the new regulations prevent a producer from shooting seismic on lands not currently under their leases. The problem with this is that for the seismic data to be accurate and of any use, it is necessary to have your seismic lines start 1/2 mile past the acreage you want to evaluate. So if I had a 160 acre tract (1/2 mile long) that I wanted to evaluate, I need to shoot a seismic line 1-1/2 miles long. I will no longer be able to evaluate my acreage because I do not have a lease on the extra mile of the seismic line. So, no more seismic evaluations after July 10, 2015. How the hell is that in the best interest of the Mineral Estate?
When we shoot seismic, it's not actually measuring "seismic activity", rather we send sound waves to the basement rocks and record the time it takes for the return signal to be recorded on the surface. This is primarily used to identify the subsurface structures and dip of the geological horizons. It does assist us in picking the location that could yield oil and gas reserves and is a very useful tool. It minimizes the risk of drilling a dryhole. We will no longer be able to obtain permits to shoot seismic on the acreage adjoin our leases. The panel didn't understand the concept or procedure. This is just crazy stupid.
Thank you I know there are different techniques and figured as much..just wanted to narrow it for a few without really going into detail..but I get it this is just insane..a piece of paper with wording is not going to fix broken. In other words feeling the squeeze. Incompetence is not an excuse for not having someone at the helm with experience in this field. You would think the BIA would have the Estate in its ineterest.
"Importantly, the agreement also provides dispute resolution provisions to reduce the likelihood of future litigation." Really? Where the heck are they? Somebody might want to dredge up a few of them right now. http://www.justice.gov/opa/pr/united-states-and-osage-tribe-announce-380-million-settlement-tribal-trust-lawsuit
I sure would like to know as well..kind of scathing my head. This is no Joke folks...My ears are kind of perking up to what Senator Barraso has to say lately.
when you have a meeting such as this with the federal government every single mineral Council board member should have been present. they were elected to protect, market and grow the mineral state on behalf of the shareholders. this current board is incompetent and fail to serve the shareholders, the Osage Nation and the Osage oil producers. there she goes have blinded them. They were paid nicely to represent the shareholders and have failed after duties and should be fired.
I agree that the Mineral Council should have had 100% attendance and they should have been the most active in asking questions and explaining the hardship being imposed on their producers. I bet they will be getting an ear-full from the Shareholders when the next couple of quarterly checks are issued.
Thats what I have been saying. We need a working body...By laws. .and pay them 75$ a meeting. Like I said we should be years ahead of ourselves and this is where we are at...we should be expecting nothing but exceptionalism. If we keep on electing the same people over and over this is the result. The M.C has not been transperent. Oh you bet there is a lot that can be done to shore up the inefficiencies and redundancies, recall.
Talee was at the 1st one. ALL of them have the responsibilities to be there and represent the shareholders. but the truth be known Yates and Crum support the Bureau of Indian Affairs and the new Regulations. The other problem is none of the MC board other than Yates have any oilfield knowledge or experience so they would know what questions to ask anyway. One day the shareholders will wake up and elect people with experience or they'll keep getting incompetency.
No excuse, then you do your job and research as many of us have for quite the years, to attain a lot about this industry. Some of have alot of smarts in just their pinky alone..so tell me when is a question ever stupid...? most questions spawn in meetings like this from each other and what information you can walk away with, regardless, will be beneficial use in the future. It's like cutting your nose off to spite your face..Remember you all are being watched for performance..by all of us..And what I see is laziness and disrespect and regard to the Shareholder's.
A word from Housekeeping...please keep your comments in line with the topic you are responding to by clicking on the reply button at the bottom of the thread...thank you!
Comments continued from http://osageblog.blogspot.com/2015/05/osage-shareholder-matters-may-2015.html
ReplyDeleteHave any of the individual Headright owners that post to this forum considered hiring an attorney in an effort to stop the implementation of the devastating new CFR's? I think we should discuss the possibility of filing a class action lawsuit against the BIA or DOI. The MC has not shared any information with us regarding their plans and they are divided on this matter. Are their any attorneys among us that could advise us here?
As an Osage Headright holder, I am willing to be named as one of the Plaintiffs. I have spoken with a dozen more family members who are also Headright holders who are willing to participate in legal action. I would be interested in knowing what Dan Reneke's opinion is. If you know how to contact him, please do so. We have already suffered financial damages due to the announcement of the new CFR's that occurred on May 11,2015 and which damage might be reflected in our next quarterly checks. One reason our most recent checks were as high as they were is due to the short-lived bump in production from the recent Burbank activity. This "flush" production will decrease over time.
DeleteSome Osage County producers are shutting down and preparing to abandon their wells and leases due to the fact that it is not possible for them to comply with all of the new requirements between now and the July 10, 2015 deadline. What supply store has tens of thousands of the new valves in inventory this day and age. How can the few roustabout companies and vacuum trucks left in Osage County manage to perform the necessary work on all of the tank batteries in Osage County within this time frame? What bonding company is willing to and able to issue tens of millions of dollars of surety bonds within these next few weeks? It's not possible. The Feds are imposing regulations that a very few large oil and gas companies can comply with. The majority number of producers in Osage County are small entities with very limited resources especially now with the low price for oil and gas production. They are considered "poor-boy" operators trying to survive in a very bad climate. Fines start July 11, 2015, as the Superintendent enjoyed reminding the producers in her letter dated June 5, 2015. Shame on her and her arrogant attitude. We should picket her office sun-up to sun-down. The least she could do is take a few on-line classes and learn a little something about the oil and gas business; or she might consider meeting with some of the producers who could explain the business to her from their perspective.
Thank you Osageblogger for your thoughts on the legal issue. There are a few (not many) Osage producers who's oil and gas companies are Osage Indian Owned. Just wondering if their status as an Osage owned entity might have standing.
DeleteThis is becoming so intolerably wretched, I know, but I still think it is in the Shareholders best interest to work with the producers and to call to encourage the Minerals Council to work with the Osage oil and gas producers to move forward with an injunction concerning this matter. I personally believe that a joint legal action between the MC and the Osage Oil Producers will produce the strongest possible legal front in turning back this regulatory nightmare. Killing the oil business in Osage County like this with a devastating avalanche of burdensome, overweening, capricious and arbitrary regulations, from my point of view, is in absolute violation of what is in the LEGAL best interests of the Osage Nation and the Shareholders for whom the Secretary of the Interior owes a legal fiduciary obligation and that includes all of the agencies, departments, bureaus, and instrumentalities umbrellaed under her.
DeleteSee An Open Letter to the Shareholders from Paul S. Revard for your review is now located at http://edigital.iserver.net/osages/letter_to_shareholders.pd
DeleteThe above blogger suggested contacting Dan Reinecke who was the consultant during the NEGREG process leading up to the new CFR's. Reinecke was clueless about Osage County and testified that transportation charges that purchasers currently subtract from producers oil sales were unwarranted because Cushing was ONLY 12 miles away. Really. This guy was no expert and was fired by the OMC.
DeleteThank you for the Reminder.
DeleteYou're welcome.
DeleteThis situation appears to me to be capable of wiping out nearly all of the mid to smaller oil and gas producers in Osage County as of July 11, 2015 and what will be left behind if they are all forced to walk away will be a disaster of incredible and untold magnitude throughout the entirety of Osage County! This just cannot happen or everyone will lose top to bottom. This is a frightening situation that is developing and something must be done to stop it on an immediate basis. If all these thousands of wells throughout Osage County are just abandoned and left uncapped, will it be left up to the Osage Nation and the Minerals Council to pay for capping them?
DeleteThe plugging liability will probably first be placed on the Lessee who will be out of business and long gone. I would think that since the mineral estate is held in trust by the DOI, they should be responsible for plugging the wells using the original $5,000.00 bond funds now in place for each lease and then using US tax payers' funds for the millions of dollars of plugging expense. Also remember, an Osage County operator may not plug a well without BIA approval for which a producer cannot obtain now without an environmental impact study which may take another year or two. Since the wells are capable of production the application Form 139 for plugging should not be approved by the Superintendent.
DeleteI anticipate that several thousand wells will very soon be abandoned. Who's going to check on the wells every day to make sure they are not leaking or sabotaged? The producers might be upset enough to damage the wellbores prior to abandonment so that the Feds can't utilize them. Any new potential buyer will have to be very cautious. There may be unemployed pumpers and contractors, employees, etc. that may get an attitude and find a creative way to exit the leases for the last time. I'm not promoting this but I am familiar with some of these folks and wouldn't be surprised. They might drop junk in the wellbore that would be non-recoverable. Millions of dollars of equipment will start disappearing. The County Sheriff will be very busy. With no field employee over-sight, it will be a cake-walk for the thieves even in broad daylight. If the producers are smart, they will strip their leases of equipment prior to exiting.
If the Osage Tribe offered the new leases to another operator, the new lessee/owner would probably expect assurance from the Osage Tribe that the wellbore(s) have integrity. Good luck with that!
During the Fed's evaluation of the new CFR's, do you think they considered the above repercussions? They should have. Maybe it was their plan all along to create this mess in retaliation to the $380,000,000 settlement. I can't help but think the Superintendent is enjoying this turmoil.
What I find disconcerting is why the silence from the M.C and the Chief? Almost deafening.
DeleteSo what you're also suggesting is that Osage County could look like Kuwait after the Iraqis pulled out during the first Gulf War? OMG!!!!!!!!
DeleteOsage Defense Fund
Deletec/o Osage Producers Association
P.O. Box 635
Hominy, OK 74035
Good idea. Send money to now and RUSH! Holy Hoppin' Hoot!
DeleteSuggested Form Letter -- Part 1
DeleteName
Address
Dear (To Whom it May Concern):
I am (Name) and I have a matter of the utmost importance to bring to your immediate attention.
As of June 5, 2015 with a letter written to all of the oil and gas producers in Osage County, Oklahoma by Bureau of Indian Affairs, Osage Agency Superintendent Robin Phillips, a new Code of Federal Regulations will become effective on July 10, 2015. I am writing to you to make you fully aware of the harmful and potentially devastating effects these new CFRs will have if and when they go into effect, upon the small to medium oil and gas producers and their businesses, the businesses in Osage County that will feel the loss of the income and the loss of royalty income generated and paid to the Headright owners who benefit from the Federally administrated and managed Osage Mineral Estate Trust by the Secretary of the Interior and the Bureau of Indian Affairs.
To begin, Osage County has approximately 14,000 wells producing 12,000 barrels per day or less than a barrel a day per well. Most of the wells in production are referred to as stripper wells. 60% of the oil and gas business in the county is handled by small oil producers who cannot afford the increases in business costs demanded by these new CFRs. In addition, the lead time from June 5th to July 10th is only a matter of 35 days to become compliant; a shockingly short lead time to be certain, causing such a terrible hardship that many may have to go to the extreme limit of abandoning their wells to avoid the fines for violations that will go into effect on July 10, 2015.
Please consider these communications that have appeared on the online Osage Blog at
http://osageblog.blogspot.com/2015/05/osage-shareholder-matters-may-2015.html
and
http://osageblog.blogspot.com/2015/06/osage-shareholder-matters-june-2015.html
Suggested Form Letter -- Part 2
Delete“As an Osage County oil and gas producer, I received a letter from the Superintendent dated June 5, 2015 advising all producers that we need to be incompliance with the new CFR’s on or before July 10, 2015; she threatened us with fines and penalties if we have not met the requirements by that date.
I am not able to meet the requirements by the deadline and possibly might not ever be able to do so. I have spoken with several other producers who are also not going to be able to comply. Five weeks’ notice to make the changes to our leases and to come up with the cash required for the additional bonding requirements is unachievable for a significant number of us.
In Galen Crum’s press release, he misrepresented the facts concerning the bonds. It is true that the premium amount for the bond is minimal (approx. $250.00/year); however, for me to obtain the bond from my insurance company, my bank has to issue a letter-of-credit in the amount of the bond ($5,000.00) which is then pledged to the insurance company issuing the bond. My bank also requires that I establish a certificate of deposit in the same amount to be used as collateral for the letter-of-credit. In other words, each bond will cost me $5,250.00 cash. Most of us small producers cannot afford to bond several dozen wells each within this time frame and maybe never be able to do so.
The cost to make the valve changes on each of our batteries is also very expensive and even if we had the extra funds to comply (which I don’t), we could not get the work performed on all our tank batteries prior to the July 10, 2015 deadline. A typical two-tank battery will require replacement of seven valves. Even if a supply store had in-stock the thousands of valves necessary to accommodate all of Osage County, the roustabout companies which have survived could not service all of our properties prior to the deadline.
The producers are not going to be able to comply to the new CFR’s for these reasons and many more.
If the Superintendent follows through with her threat to fine and penalize us effective July 11, 2015, we’re doomed. I anticipate thousands of wells will soon be abandoned in Osage County with many of the producers facing the possibility of filing for bankruptcy protection, myself included, to be sure. I wish the Shareholders good luck. I am also a Shareholder who is very saddened by the current situation.”
“Some Osage County producers are shutting down and preparing to abandon their wells and leases due to the fact that it is not possible for them to comply with all of the new requirements between now and the July 10, 2015 deadline. What supply store has tens of thousands of the new valves in inventory this day and age. How can the few roustabout companies and vacuum trucks left in Osage County manage to perform the necessary work on all of the tank batteries in Osage County within this time frame? What bonding company is willing to and able to issue tens of millions of dollars of surety bonds within these next few weeks? It's not possible. The Feds are imposing regulations that a very few large oil and gas companies can comply with. The majority number of producers in Osage County are small entities with very limited resources especially now with the low price for oil and gas production. They are considered "poor-boy" operators trying to survive in a very bad climate.”
Suggested Form Letter -- Part 3
Delete“I anticipate that several thousand wells will very soon be abandoned. Who's going to check on the wells every day to make sure they are not leaking or sabotaged? The producers might be upset enough to damage the wellbores prior to abandonment so that the Feds can't utilize them. Any new potential buyer will have to be very cautious. There may be unemployed pumpers and contractors, employees, etc. that may get an attitude and find a creative way to exit the leases for the last time. I'm not promoting this but I am familiar with some of these folks and wouldn't be surprised. They might drop junk in the wellbore that would be non-recoverable. Millions of dollars of equipment will start disappearing. The County Sheriff will be very busy. With no field employee over-sight, it will be a cake-walk for the thieves even in broad daylight. If the producers are smart, they will strip their leases of equipment prior to exiting.
The plugging liability will probably first be placed on the Lessee who will be out of business and long gone. I would think that since the mineral estate is held in trust by the Department of the Interior, they should be responsible for plugging the wells using the original $5,000.00 bond funds now in place for each lease and then using US tax payers' funds for the millions of dollars of plugging expense. Also remember, an Osage County operator may not plug a well without BIA approval for which a producer cannot obtain now without an environmental impact study which may take another year or two. Since the wells are capable of production, the application Form 139 for plugging should not be approved by the Superintendent.
If the Osage Nation offered the new leases to another operator, the new lessee/owner would probably expect assurance from the Osage Nation that the wellbore(s) have integrity. Good luck with that!
During the Fed's evaluation (The Bureau of Indian Affairs) of the new CFR's, do you think they considered the above repercussions? They should have.”
If 60% of the mid to small oil and gas producer’s businesses fail and 50% of the businesses in Osage County are oil and gas related, this will be economically devastating to the largest county in the State of Oklahoma.
Please be aware of this catastrophe about to take place beginning on July 10, 2015 and do what you can on an immediate basis to turn it back as soon as possible.
Thank you for your immediate attention to this all-important matter.
Sincerely,
(Name)
I wonder if the ON through the ONE's LLC will try to "take over" these abandoned wells? With the proper approval process from the MC of course.
ReplyDeleteTruth be known that is exactly the underlying cause of changes in the CFR's to begin with. An inside agreement between the Osage Nation and the DOI. This has been the plan since the new government was thought of anyway.
DeleteFear mongering. Hog Wash!
DeleteI hope you are not saying I am fear mongering. That was not my intent. I was simply wondering if some producers did "abandon" their leases if perhaps the ON may jump in. I am not judging if it is a good idea or a bad one, only time will tell if it happens. With the Chief looking at how other tribes do business it just popped into my mind if that may be something he was considering.
DeleteNot likely to happen. The ONES, LLC is also subject to the new CFR's. They would have to spend millions of dollars for bonding and probably millions more to meet the other CFR requirements. They would also be required to purchase the leases which would a significant amount of funds, even at minimum bids. I don't think Chief Standingbear could get approval for the amount of capital that would be required. Even if he could, the economics would not support the investment, in my opinion.
DeleteThe chief has 2 headrights in his family I've heard, that's alot to loose, him being a lawman, seems like he'd be right in the middle of all this Makes one wonder what hes thinking to do about it. Anyone talking to him? Doesn't this involve the ON too? Ray McClain what's your thinking on what's happing? I know you back up Galen, but right now I not to crazy about him or his ideas.
DeleteNot just that anything thus far the Nation has touched has gone South..remember the OLLC and the 20,000000 that is gone and that was our Money in the Name of our Government. And as a Member of the Tribe we have the right to know why the Board Members are not being prosecuted, in the Private Sector this would happen and the Board members woukd be replaced. The five Man Board, and lord knows what else we do not know about..all in the Name of Sovereignty for our People...Hog wash...now they want to get there hands on our Oil and make a profit by Purchasing and selling the oil at a higher price after its been stored. What a conflict of interest..what a conflict of interest. When you look at what is happening across the Board..the economy is going south and the Casino Revenue is down. If the olny market for work in the area is oil, people are going to move. Plain and simple. Now this was predictable.
DeleteI have close to three headrights does not matter, not enough money is going to boost the economy. Tulsa got the Raspberry of the Year being the worst town to visit... Like I said not enough money can fix broken. Government can't create jobs People do..I am for Crum. If your not crazy for him call him or are you afraid? Ray McClain is a cool cat. Sometimes he is soft on some issues but for the most I appreciate his intellect and or knowledge. The M.C and the M.E are a seperate agency from the Nation Governed by the same laws as the Nation or any law abiding member. We have to abide by our Constitution. The ON Government cannot come in and tell them what to do, The Federal Government holds the trust not the O.N. The 1906 act requires only 8 council members and a Chief and AP Chief...The Chief being a tie Breaker..that being said..it looks to be we are heading to Fed. Court again...
DeleteAccording to one source at the OFFR at https://www.facebook.com/groups/234024393278360/ Ray McClain is recovering from surgery. Ray we wish you well and a speedy recovery. It looks like it's all hands on deck for a while and we will continue to need your input.
DeleteSpeedy recovery Ray McClain.
DeleteMore information on ONES, LLC:
Deletehttps://www.osagenation-nsn.gov/who-we-are/energy-services-llc-board
http://onesllc.com/livesite/
Oops not you Rauk, I got your back. The person above my post. Next time I will better Identify who I am talking about.
DeleteDon't disparage Galen too much. I heard he has the head honcho's phone number over at the BIA on speed dial. Hopefully, he's burning up the phone wires as we write, to stop this catastrophe from taking place on July 10, 2015.
DeleteYes. This was predicted back in 2006 before the ON Constitution was even voted on in a duly authorized election by the OGRC and the 31st Council. Like I said verbatim to Hepsi Barnett over the phone with regard to the Osage Mineral Estate, "If you keep working the edges on this thing, eventually you will work them loose." It looks like to me that my prediction is coming true but it gives me no pleasure to say, "I told you so." I really don't know what it takes to convince those running the new government past and present to approach what they are doing with tremendous caution. Change isn't always good. Sometimes, it can be destructive.
DeleteThe first thing they have to do about that ONES, LLC is to make sure that it has proper legal placement under the law. The ON Constitution mandates that all administration and development of the Mineral Estate is to take place under the auspices of the ON Minerals Agency created by it. The Minerals Council has been placed by the ON Constitution as the elected officials, designated to run the Minerals Agency, as per the 1906 Allotment Act as amended. Anything including any office, department, bureau, corporation, etc. that you can think of associated with minerals in Osage County therefore, must be captured and under the direct administrative control of the Minerals Council. Now that's my reading of this and a clarification on the placement of ONES, LLC should be sent over to the ON Supreme Court for a decision as soon as possible before any more funding is given to them. As I understand it, they were given $100,000 and promptly went out and bought a building. What a real estate purchase has to do with spending on minerals business development escapes me entirely.
DeleteThank you Osageblogger my sentiments as well, change is not necessarily good but in this case Change is needed in the worse way at both ends...and I do remember before 2006 that this was predicted...all under the auspicious guise however you want to cut it still comes out the same, dirty..underhanded and a huge conflict of interest, everyone playing hop scotch on the Boards as well, creates even a broader form of cronyism. 100,000 more reasons the M.C to Act today and not tomorrow. I called what the One's was up to and especially because the Chief endorsed this Shell co.is a biiger Conflict and illegal as all heck.
DeletePERSPECTIVE: The Washington Post Article:
Deletehttp://www.washingtonpost.com/business/economy/after-plunge-in-oil-prices-hope-fades-for-group-of-long-beleaguered-workers/2015/06/10/e64980c0-0485-11e5-bc72-f3e16bf50bb6_story.html
Comment: The problem isn't just in the Osage it's throughout the country. Wells are being shut down in other Oklahoma counties and other states due to oil prices and middle east flow control so the shutting down of wells is not just the Osages problem.
CHANGING OF THE CFR'S IS THE PROBLEM and it needs to be corrected as soon as possible and we need to get educated leaders in the seats on the Mineral Council and quit putting in followers and opportunists!
So, tell us something new that has not been already purported on this site already, with a solution? The unemployment numbers by this Administration are under reported..I happen to think the fear mongering of the CFR'S is way out of control, yet now we top Russia as being the largest domestic exporter. And it is time for the M.C to behave as an organization with BYLAWS...with this big Change so should the M.C change as well. And make these BYLAWS effective and retro. No member can sit on the Council two years in a row. Member Council will be paid by the Minutes. 100.00 dollars per meeting. Any inkind gift will be recorded and reported. The Shareholder's want representation and we are sure to be headed to Court once again for the failure of Management of the M.E. and I will say again why is it we do not have a full bodied Petroleum office? This required at all levels..Osage Shareholder's demand exceptionalism for fiscal responsibility.
DeleteRE: PERSPECTIVE: The Washington Post Article:
DeleteThe URL is published for you to go there, read what you find there and then come back to the Osage Blog and comment on it. There is such a thing as reprint rights in the real world that must be observed. Fair use is one thing for a sentence or two but it gets thin after that. Please respect the writer's rights where it concerns printed material from other web sites. Thank you.
Keeping our eye on the ball, this discussion is about the effect the new CFRs will have GOING FORWARD on the oil and gas producers with an official notification (letter from the BIA dated June 5, 2015 to the date that the new CFRs go into effect on July 10, 2015) and a total lead time of 35 days and as a result, what effect it will have on the headright income after July 10, 2015. Again, referring to the new CFRs document, 25 CFR Part 226 itself at http://bloximages.newyork1.vip.townnews.com/tulsaworld.com/content/tncms/assets/v3/editorial/0/b9/0b900c39-93e7-5adf-b7f8-f8ab9cecdf6a/554fe7a4f17ba.pdf.pdf
DeleteCould you do it? Is it even humanly possible even if you had six months to come into compliance? Remember that up until June 5, 2015, the new CFRs were classified as "proposed" and nothing more. Do you go about completely reorganizing the way you handle your business on the basis of proposed laws, rules and regulations at the Federal level that may never become a reality? No? Good. I should hope not.
DANG!!
ReplyDeleteYou said it John! Welcome to the Osage Blog.
DeleteWelcome SirJohn...What are you in shock about? Can we clarify any question you might have or do you have a piece you care to share?
DeleteTo the ananymous poster who posted at 10:42 AM, Galen Crum is one of the two Council Members who supports and is in favor of the deadly CFRs. The two should be recalled in my opinion. I've been trying to locate the Council Members' bylaws but have not found them. Do any of you know if the MC has bylaws? Can Council Members be recalled? It is unfortunate that the elected Mineral Council Members do not have to be qualified for the position. The Mineral Estate should be managed by experienced oil and gas professionals and not by individuals who are elected by popularity.
ReplyDeleteNo there are not bylaws from what I can tell, but we voted them in and out they can go as been reporting in earlier blogs.
DeleteNow your seeing my point. Management on so many levels and not just pencil pushers..no lawyer is going to the nessasary to rid the redundancies and inefficiencies and incompetence. We have to be the driver a step up to the podium for the Shareholder's. More like get up to speed with a 21st management team...the Monopoly on the croynism is straight out there..and the BIA and the lack of man power, just understaffed is just mind boggles if you know what I mean. The dramma needs to go, a criteria set with a standard. This is a billion dollar Estate, it cannot run by itself and no communication to the Shareholder's.
DeleteThese changes to the CFR'S was coming down the pike before the HPP case settled and I am one supporting the CFR'S as well. But I do believe there should be a grace period..we have our opinions and I support Mr Crum. He's been most outspoken, had the negotiations period included the Producers during this period maybe a clause could have been built in for the smaller producers could have had a set period to come to compliance. Then again its been over three years since these changes were in the makes, so my question to the producer is a common sense question, I'm not a Producer yet I did the diligence and know what these vlaves can cost, why did they not prepare for this?
DeleteTo the blogger @ 9:35a asking why the producers didn't prepare for this, first of all, over the 8 months of meetings with public comment periods, the producers vociferously opposed the valve requirement - a requirement straight out of BLM rules that apply to North Dakota. Thus the producers thought, just maybe, the final rules would omit the requirement. So it made no sense to go out and spend money that a producer might not have to fulfill a rule that might not even happen. These CFR's are a travesty for everyone. Ask Bad Brad's how their business has been lately?
DeleteI am for that, with her Husband on another Board the OSA..no two family members will be sitting on boards side by side..not just that, I do believe she is Valuable, I want her in the Legal Dept. If we get up a Running bodied Petroleum office, she is the Voice. I like her. Though my feelings on how she handled herself on several occasions was misguided as I coin..she could be a Great asset. You may disagree but I am a great Talent scout for understanding behavior and how people work..and putting there interest before mine now that is leadership. You build roads when you put a persons value before yours. It works, I have five children all a success story..why are you trying to throw her off the bus? More or less. To get noticed?
DeleteCynthia is one of the sane ones on the OMC. If anyone should be recalled, it should be Galen Crum and Andrew Yates.
DeleteTo Poster at 8:13 am, Thank you for your Reply., my opinion. As I've stated I own oil elsewhere, that being said..why would the Federal Government omit the valve change? Why would the Producer not understand, that this was a bone of contention with many Shareholder's and the M.C members. They had to be updated (the Valves). This issue is not about what the Producers had to be required to do, it is about proof and integrity of the M.E for the benefit of the Shareholder's. You can look at Bakken in a different approach as to how they got paid by the Millions because they had performed to industry standard with the proper Battery Tank Valves cuurent to industry Standard. Thats how they got paid. Lets take a lesson from that page. Ask not what others can do for us but ask ourselves what we can do for ourselves. The Ute is not the Way. And the way I see it, why was the Producer's hope not for a Valve change? This isn't just a problem for the producer at this Juncture, where is the BIA and its administration at? As far as I can see they are out of Compliance as well, still understaffed. Another day late and and dollar short..
DeleteI agree, the Ute is not the answer. And this is why, the Chief is operating in conflict contrary to the benefit of the Shareholder's,because he is a Agent to the M.E first,not to the Nation. He is Lobbying why? This needs to be looked into right away?
DeleteTo the poster at 9:38AM, the Bakken has no relevance to Osage County. None. Their wells come in for thousands of barrels per day. High pressure wells. Osage County has 14000 wells making 12000 barrels/day. Less than a barrel/day/well. The unnecessary cost of replacing valves on aging tank batteries is ludicrous. The only valve that matters is the valve from the bottom of the stock tank that the purchaser ties into to take the oil. When the purchaser is done, the valve is closed and resealed. End of story. Just another way for the BIA to kill the marginal oil industry that's left in the County!
DeleteCrum would would be Chair, Yates Compliance officer and Abbott as well. Remember this is Hyperthetical. Cynthia would also be in charge of Advertising as well as work in legal. This is just the tip of what a organization does and in Unison with a motto. This is so long over due..
DeleteHYPERthetical is right. HAHAHAHAHA!!!!!!!!!!!! Put in the three guys who will have completely destroyed the Osage Mineral Estate as of July 10, 2015? Who are you kidding? Yourself?
DeleteBad Brad's too? Oh NO!!!!!!!!
DeleteI wonder if Galen Crum has Ted Turner's and Gentner Drummond' s number in his speed dial too.
ReplyDeleteMighty good question.
DeleteMineral's Council Meeting is now live on the internet:
ReplyDeleteAgenda -- https://www.osagenation-nsn.gov/news-events/news/minerals-council-june-12th-agenda
https://www.osagenation-nsn.gov/multimedia/live-media
Presentation from Edwards Environmental to help with the contaminates; hydrocarbon spills, salt water injection spills to remediate and rehabilitate the soil.
DeleteWhat? Did I hear this correctly that the BIA Osage Agency Superintendent, Robin Phillips, is refusing to attend the Mineral Council Meetings? WTH? Isn't she paid to handle Minerals Business associated with the Mineral Estate Trust and expected to attend these meetings? Isn't she shirking her work responsibilities leading to willful neglect of duty? Because the Minerals Council is hostile toward her? These are hostile times and we need someone solid of substance who can stand up to this mess that is being made by the BIA in association with these new CFRs in Osage County. Good for the Minerals Council for a no-confidence vote on Robin Phillips continuing on as the Osage Agency Superintendent.
DeleteI can't believe I just heard that the BIA is blaming the lack of permits for workovers on the Osage Producers Association appeal to the workover process. The BIA is amazing. They create an unworkable permit process that allows no permits and blames the OPA for appealing the piece of garbage permitting process that the BIA created. The BIA ought to go in the sanitation business because what they are creating has a lot of relevance to that industry.
DeleteTalee went on about the fomenting disaster to the entire County. Has the Governor been called yet to apply for economic disaster relief? Workovers are now being appealed in court by Drummond and the oil producers for some reason not given by the Assistant Superintendent who is in attendance from the BIA. As a result only two new wells have been given permits to be drill this year? This is looking worse and worse by the day.
DeleteIn Executive Session for the moment. Will return soon...
DeleteGarbage in...garbage out! Sanitation business is right. The whole County will be in the garbage dumpster if injunctive relief isn't had and soon.
DeleteI keep checking and they're still not back.
DeleteWhere the heck are they? Is the meeting over with?
DeleteThe meeting is over. We'll have to listen to the second half when it becomes available for on demand listening at https://www.osagenation-nsn.gov/who-we-are/minerals-council/meeting-information
DeleteYou tellin us that head BIA gal is going to be MIA from now on to those mineral meetings? What the hell kind of candy a**ed operation are they running over there at the agency now? Get somebody in there who can handle themselves in the line of fire. They created this mess and they can't run away now.
DeleteAn interesting word choice, "hostile," like it's a hundred and fifty years ago and Kit Carson talking,
Delete"Just to think of that dog Chivington and his dirty hounds, up at Sand Creek," Carson commented contemptuously to Army Inspector Col. James Rusling after returning from battle. "His men shot down squaws, and blew the brains out of little innocent children. You call such soldiers Christians…? And Indians savages? What do you suppose our Heavenly Father, who made both them and us, thinks of these things? I tell you what, I don’t like a hostile Redskin any more than you do. And when they are hostile, I’ve fought ‘em, hard as any man. But I never yet drew bead on a squaw or a papoose, and I despise the man who would. I’ve seen as much of ‘em as any man livin’, and I can’t help but pity ‘em, right or wrong. They once owned this country…. But now they own next door to nothing, and will soon be gone."
Would her characterization of "hostile" fall within the parameter of what would qualify as a bigoted remark toward the Osages who have every right to be upset with her professional actions in since June 5th of this month? There are a lot of words out there that express the same thing but not quite with this ugly and demeaning a connotation. It gives one pause for thought doesn't it.
Quote above by William Norman Grigg, https://www.lewrockwell.com/2012/05/william-norman-grigg/another-federal-massacre-of-indians/ Sorry.
DeleteShe is defenately helping DC take food and shelter away from the sqauws and their children and seems to be enjoying herself. She is not qualified for the position she holds and she knows it but doesn't want to admit it to anyone. She can't take the heat. This position should be to assist the producers fir the benefit of the Shareholders. She does the oposite. I think the Mineral Council should be able to choose the Superintendent they feel like they can work with. The BIA should provide a dozen candidates for the MC to choose from after several interviews with each.
DeleteBetter yet, the Osage Tribe should boot the BIA off the reservation.
"Hostile" just means any critic of the current administration's boneheaded policies. These political appointees aren't qualified for the offices they hold, having been raised to positions of high authority without learning essential management skills. The new CFR's harm the Osage instead of helping. A good manager would want to work with those affected to come up with a "win-win" solution and by taking a reasonable approach would defuse these "hostilities".
DeleteGreat leaders bring integrity and credibility and I'm not seeing it or feeling it..
DeleteNeither am I.
DeleteThe latest information coming in is that Kinder Morgan, the largest buyer of natural gas, is no longer going to pay the royalty amount direct to the Federal Government. As of July 1, 2015, they will be paying the gas producer direct at the Highest Posted Price rate, not the Henry Hubb gas futures price and it will be up to the gas producer to pay the royalty amount to the Federal government. Imagine all the gas producers paying the BIA one by one and then imagine where this is going to go. This isn't the case for oil yet but precedent has been set here with Kinder Morgan and you know where this will probably go next. It will be a wonder if the Osages ever get paid a royalty again. WHAT A MESS! Please send in your form letter as shown above or one of your own to the Federal Congressional Delegations from every state where you live, the BIA at every level and the U.S. Congressional Indian Committees in the House and the Senate TODAY. See the form letter in three parts above along with the contact information above for U.S. Congressional Delegation, the BIA and the Congressional Indian Committees. We need every man, woman and child to send these letters off today to blanket these Federal government offices with these requests as soon as possible. Never forget the
ReplyDelete"power of one." ONE by ONE WE CAN EACH DO WHAT WE CAN to STOP THIS from HAPPENING.
Does Kinder Morgan buy any Osage County gas? How much gas?
DeleteThey are the fourth largest buyer of natural gas and because the Federal Government has hinted of a rate increase the company would be subjective to valuation technique. Putting their money where their best buck will get them. Has nothing to do with what is going on with the Osage. Remember, they buy from everyone.
DeleteThey will still be paying the oil producers directly and not paying the royalties to the BIA and that will mean a lot more work on the part of everyone involved. Wednesday is the start of the training sessions for the producers and a number of them don't even know there will be a change to the new CFRs as of July 10, 2015. This is just one train wreck after another.
DeleteThe blogger at 4:23PM is wrong. It has everything to do with Osage gas. KM is the largest purchaser in Osage County and doe not want to be responsible for the royalty calculations based on the new CFR's. They don't want the liability. Thus they are dumping the royalty obligation onto the producer. Because royalties are due on the 25th of the month, imagine if the purchaser does not pay until the 30th? A lot of producers won't have the cash to meet their royalty obligation. Fines up to $100,000 are possible if royalties are late in being paid. A train wreck in the making. Rumor is the oil purchasers will follow KM's path by the end of the year. Producers will fold like a cheap suit.
DeleteThe new CFRs specify that natural gas is tied to the index price of the gas ($/MMBtu) for Oklahoma Zone 1 published by the Department of the Interior’s Office of Natural Resources Revenue.
Deletehttp://www.onrr.gov/Valuation/allzones.htm
I can't see that it has anything to do with Henry Hub. That index price is higher.
http://www.eia.gov/dnav/ng/hist/rngwhhdm.htm
I checked into it and this is correct. The index is Oklahoma Zone 1 that is referred to in the CFRs. This, I presume, may have something to do with why KM is no longer going to pay royalties after July 1, 2015. Having to juggle indexes to determine the price to be paid to the gas producers in Oklahoma may contribute to the reason, I don't know. If anyone can post a better clarification, I welcome it.
DeleteSee "Poor Management by BIA Has Hindered Energy Development on Indian Lands" and the report at http://www.gao.gov/products/GAO-15-502
ReplyDeleteOn the other hand, the Federal government still has a lot of clout with a lot of funds available from a legal standpoint where the Mineral Estate is concerned and defending our interests against all comers. One individual was speaking about retaining the mineral rights to his property. He stated that it's one thing to have the mineral rights reserved and another to be able to bring the minerals out of the ground. Without the Federal government to back us up, I doubt we will be able to stand "to" alone.
Osageblogger, I absolutely agree with you. This is exactly what I have been saying all along. The BIA has much more clout, funding, technical resources, and legal resources, and most of all, the responsibility via the 1906 Act, to manage our Mineral Estate. Granted, the BIA hasn’t done that properly in the past, but they seem to be trying to get things straightened up. With everyone in sight clawing for a piece of the action, we wouldn’t stand a chance without the Feds. The old ways of doing things are too deeply embedded and they must change. If this individual you speak of wanting to retain his mineral rights is an Osage Shareholder, Ted Turner and Gentner Drummond will probably be sponsoring a square dance in his honor this Saturday night. That would be a huge step in the direction of breaking the Osage Mineral Trust----and that would be FOREVER.
DeleteThe infamous ‘HPP’ that very few really understand, and mostly the lack of accountability, have cost the Shareholders millions upon millions of dollars over the years. The new CFR’s will stop this nonsense of us merrily handing over part of our money due for our royalties each month.
This horrendous anti-CFR propaganda campaign we have been forced to endure for the last year has caused a great division within our Tribe, and has nearly destroyed any semblance of respect and cooperation between our Minerals Council and the BIA. Just one of the many examples of the fear-mongering techniques being used is the statement in the form letter recently posted is the reference to “tens of thousands of valves” that must be replaced. I really doubt that 10,000 valves even currently exist in Osage and Kay county combined, and it goes on, and on, and on, including alluding to the world price of oil and the recent downturn in our Headright checks being tied somehow to the new CFR’s. Ridiculous!! Nearly everything else listed in that letter is about as ridiculous. This must stop, and stop it will, come July 10. For a Shareholder to sign this letter would be tantamount to shooting one’s self in the foot. For a Shareholder to actually contribute cash to this propaganda campaign would simply be buying more bullets for the other foot.
Borrowing from your statement above, ‘Without the Federal government (BIA) to back us up, I’M SURE we would not be able to stand "to" alone.’ That would just be yet another step toward losing our Federal Trust Status.
Sorry Ray but your ignorance on issues never ceases to amaze me. There are nearly 1500 tank batteries in Osage County. For the average 2-200 barrel stock tank battery with a gun barrel and a salt water tank, an average of 7 valves need to be replaced. That works out to 10,500 valves that have to be replaced with "sealable" types. That costs money, time and just as importantly, feasibility of even being able to change out some of the valves due to age etc. Your lock-step allegiance to the CFR's and Galen's soliloquy just never ends.
DeleteRay, the Shareholders royalty checks will definitely be reduced by the implementation of the CFR's due to the producers' capital leaving Osage County. Surely, you don't think that there will be a flood of new operators attracted to the county to replace the ones being forced out? The bonding requirement will be the most significant hardship for the producers. Most of the small to middle-size operators will not be able to obtain the bonds prior to July 10, 2015 and may not ever be able to. They will have to come up with $5,000.00 cash as collateral for the bonds on each of their wells.
DeleteTo the Producer at 8:47 AM---1. A typical 2-tank battery will have 7 valves. When I pumped several Osage leases in the 50’s and 60’s, there would already be 2 sealable valves on the bottom of each tank, one for sales, and one for recirculation and treatment. I would bet my next SS check that no one can show me a functioning tank battery that is equipped with valves at the bottom of any stock tank that is not set up the same way. The oil purchasers have always required this to prevent theft of oil during an oil run. That leaves only 3 little 2 inch valves at the top of the tanks that might need to be replaced—two inlet valves and a bypass valve between tanks. I am told that there is now some kind of strap-on valve sealing attachment kit available to the industry that will make non-sealable valves instantly sealable. So the onetime expense of valves just went to probably less than $200. And I would think that this might be an item that some time could be negotiated for. I never cease to be amazed by all this anti-CFR propaganda, and needing 10’s of thousands of new valves in Osage county is the most ridiculous statement I’ve heard yet. That statement in that letter has nothing to do with my ignorance. It must be something on your end.
DeleteTo the Producer at 9:00 AM-----The bonding will no doubt be a major expense for some. But if you think about it, the $5000 CD is only required once per well, not annually, and it will always be there if the producer stays in compliance, and will be available when he sells the lease. It even draws interest, (for whatever that is worth.) Almost like a savings account. The $250 per year is a minimal expense of doing business when the well is bringing in about $20,000, less normal operating expenses. Maybe this is an item that some time can be negotiated on. I agree---it will be tough. But it is also tough to plug abandoned wells with no funding at all available to work with.
DeleteAnd "hear"we go again. I am of the sound mind to respect John McCains opinion for the most.That being said..the GAO report is spot on. And I beleive I had already commented on the subject on a prior or two posts previously. And Osageblogger is correct. At the BIA agency they are trying to get things straightened up? Ah, redundancies and inefficiencies still exist..They to have had three years to come to compliance and yet we still don't know anything about what criteria are they trying to meet by what standard and by who's authority or supervision? Still understaffed by far? And they are still having issues, I am dealing with and on a personal issue not related to this subject and I can't get a response until, I call them back three or four times. But I will say this there is effort and they get a C+. And I will not put this on or all, on Robin Philips, she has her orders. There's always going to be the escape goat, but lets put the Blame squarely where it goes. There's a lot of blame and how corrupt we are within. This is telling..in so many words will the truth be finally exposed, will we realize the potential we have been missing? In short who are the players and who were the takers? Our success should be built on a collaborative . Had the Shareholder's been comprised in matters of the Estate would we insisted oversite and compliance from the BIA to the MC. It's called transperency. I do not want to speculate at this point on the Drummned Case or for tha matter Ted Turner..Balance brings cohesiveness. We should have had a eye on the ball. We shouldn't be where we are at, we should be way ahead by many years. Change could not come sooner. Apllied knowledge and techniques is long over due. Thanks Ray McClain for your post. Telling it like it is. Hope you are well Sir. And to the above poster who disagreed with my comment about the applied Royalty Rate, there just giving back all of the Responsibility back to the Producer...not just the Osage..You can't argue with an Accountant.
DeleteRay, as an Osage County operator, I will not be able to comply with the new bonding requirement and will be forced out of Osage County after July 10, 2015. I will be abandoning 8 producing wells and almost thirty shut-in wells that have potential and which was the reason I purchased the leases. I promise no one will be able to re-enter the wells after they are abandoned.
DeleteAlso, the 120 day period that a producer has to re-establish production is not sufficient. Consider a lease that has one producing well making a couple of BOPD that developed scale to the point that the well cannot produce due to the scale build-up. The producer is required to submit a Form 139 to treat the formation for the scale issue. As you should know, an operator cannot obtain BIA approval within 120 days, therefore, the BIA will be terminating that lease.
Any Producer would not hide their Identity as to who they are and if this were the case we would sure to know who you are by all record accounts so why hide your identity now?
DeleteRay, I'm glad you're back. Excellent discussion. Let's run the numbers for the O&G producer with 38 total wells. So what is it? A $5,000 CD per well up to 25 = $125,000 plus the $250 for the bond = $6,250 for a total of $131,250. WOAH! That's quite a stack of money to have available on a 35 day notice. As I understand it, because of the Donalson lawsuit, banks aren't short term bridge loaning money because of the cloud on the title to the property until it is removed by the lawsuit being finally dismissed, dropped or settled in court. The subtext I've been getting here all along is, if a producer doesn't have the money to do business in Osage County, they shouldn't be there in the first place. My counter to that is they are there producing because it is less expensive to do business in Osage County than elsewhere and it you close the gap with these new CFRs, and 60% of the mid to small producers leave, you will be denuding the Shareholders out of 60% of the income from the number of barrels of oil taken out of the ground on a monthly basis. I'm talking production here only and not the price of oil that you all are beginning to turn to and lean on like it's a crutch every chance you get. Putting forth a "government line" scenario over and over again doesn't make it ak reality. Acting like these factors are not affecting the situation is disingenuous from my point of view. Now that Kinder Morgan is putting off the royalty payment onto the producers for natural gas, the reporting requirement will increase even further and that's something the BIA never figured into the mix, I would be willing to bet, and neither did the pro-new-CRFs team. If the oil buyer goes the way of the natural gas buyer, things will be even worse. The dominos of unintended consequences are starting to fall Ray, and I believe there is no doubt about it. The bottom line will be affected. What the Shareholder wants to know is what is to the good and when will my checks get higher due to the increase in oil and gas production? The VERY least the BIA could have done is to meet with the oil and gas producers and give them a firm six months lead time to come into compliance and then assess whether or not these regs are too burdensome for the men and women who do the work of oil production in Osage County. There is a human factor here Ray and you need to factor that into your assessment of the situation. You're worried about shooting yourself in the feet. I'm worried about both legs coming off at the knee if the oil business dries up and blows away in Osage County. You want accountability and so do I. All you guys that are for killing off the oil business in Osage County with your blinders on relative to these new CFRs will be held accountable just like the BIA and blamed for it if everything "goes South." The checks are dropping, Ray, and if they drop even further due to a loss of oil and gas production from current production prior to July 10, 2015, in Osage County down 40%- 60%, the numbers will show it and then you'll have to come up with another explanation than the drop in the price of oil.
DeletePlease read the GAO report & give your feedback. BIA, just what the doctor ordered? Maybe the Minerals Council will find the time to address this at their next meeting. http://www.indianz.com/News/2015/017852.asp
DeleteI just received the Operation Report from the Acting Superintendent for the week ending June 12th. Only one completion and no new drills. That's actually one more well than I expected.
ReplyDeleteHey Ray. How does one completion and no new wells sit with you? I hate it. For you to continue to state that the new CFR's are good for the County is , to use the phase, "guilty of smoking your own dope." Producers can go across the County line to Kay or Pawnee. Why screw around with the new rules? Osage County is going to the dogs. More proof. Chaparral is the largest producer in the County and they are selling off all properties except Burbank because the new rules make those properties unprofitable.
DeleteWho's stonewalling who?
DeleteThis is the most important word on this web page so far; unprofitable. Are the new CFRs making Osage County unprofitable to bring oil and gas out the ground. If the answer is yes then the new CFRs need to be suspended by a temporary stay and the BIA will have to be reassess the situation. Imagine if 40-60% of the producers abandon their wells and then imagine the consequences to the land owners. You're playing with fire here people and what we want is drill baby drill not burn baby burn.
DeleteHow in the world is the BIA going to be set up to verify the amount of every single sale of natural gas purchased by Kinder Morgan from every gas producer for the purposes of determining the royalty, on a lease by lease basis, owed by that producer so as to ascertain that the royalty amount paid by each and every one of them is accurate? This whole process seems out of control to me going in. I can't even imaging what it will be like going out. Does anyone ever ask themselves over at the BIA if what they're doing is doable?
DeleteI heard Kinder Morgan is going to be paying Highest Posted Price to the natural gas producers and not the higher benchmark rate called for to be paid royalty on in the new CFRs. If the money is now going to be paid to and in the hands of the gas producer, how will the BIA verify this sale amount with every producer on every lease on every unit of gas sold?
Deletehttp://www.eia.gov/dnav/ng/NG_PRI_FUT_S1_M.htm
OMG! Here we go again... GALEN!!!!!!!!!!!
I will admit upfront I am not educated in the petroleum/oil extraction industry. Being a Shareholder and reading these posts make it even more confusing. At the last Minerals Council meeting it was stated only 2 wells were permited and drilled in 2015. Some say the cause is the BIA / CFR. Some say in is the oil price drop. If it is attributed to the BIA in anyway, why wasn't the Osage Agency Superintendent attending the meeting and answering questions? To be fair to her, why can't the Council furnish her with an outline of questions that will be asked of her and be expected for her to answer. Even when asking her assistant "will the Superintendent be at the next meeting", why can any member take control, ask for a 5 minute recess, request the assistant call her on her cell phone and get an answer? The days of 'Gettin Back to you' and 'We will see' has to end in Mayberry, right Opie, Andy, Barrnie and Aunt Bea. Isn't there Skype or Go To Meeting.com available in Pawhuska? I'll bet the Superintendent would be 'Hostile' and demand answers if her checks were cut in half. If however, the drop in our checks is attributed to the price drop in oil, then why are we talking about producers leaving Osage County to drill elsewhere? Isn't the price of oil the same 2 counties or 2 states away? As best as I can read this, drilling production is up and more than 2 wells are being permited elsewhere ( http://www.eia.gov/petroleum/drilling/pdf/dpr-full.pdf ). Can the council post a more specific agenda with questions that will be asked and needing to be answered? I heard 5 minutes spent talking about dirt at the last meeting but not one word about the dozen or so 'Motion to Dismiss' the Donelson Law Suit ! 8 months and counting. If we are counting on the BIA/DOI for 'Fire Power', show us some results or atleast some interest. It is getting harder to listen to these meetings, sounds like listening to CSPAN on a transistor radio... P.S. Good to see you back Ray...
ReplyDeleteGood Idea..but what about those questions that still go unanswered regardless? And in this day and age of technology no answer should go unanswered, why can't the Superintendent say when she does not have a correct answer to give, say at the Next meeting I will have an answer. Thats more plausible..but the old ways are not working and things needed to get caught up with technology. And everyone has an excuse..has to go..
DeleteThe woman is paid to attend the meetings. If she can't stand the heat she should resign. Get someone in there with the gravitas to be able to handle the situation with the power to make decisions in the field, not bow and kowtow to the wishes of some legal person in Washington, D.C.
DeleteAs far as I know, in the meeting, one member of Council displayed concern that her questions that had been submitted sometime before the last meeting would not be answered by the Supervisor on Friday. The bad thing about all this is that I've heard from more than one source, that the CFRs aren't happening on the ground in Pawhuska, so to speak, but back in Washington, D.C. People who live there are ambitious, often coming in from around the country to make a place and a name for themselves in that high level political environment. These are not people who live here in the County. We don't break bread with them and we don't go to church with them. Our kids don't know their kids and don't play with them. We don't work with them and they don't patronize our businesses with their business. We need to remember that before we let these Washington D.C. people who we don't even know, tear out lives apart and separate us from one another here in the County where we work, play and live together with one another. This is most important and not to be forgotten along the way.
DeleteOK. Just to take the edge off a bit, I have a story that comes from Ron Turcotte who rode Secretariat to an unparalleled win of the Triple Crown. He was the jockey and at the Belmont Ball while squiring a gorgeous blonde woman heads taller that he was he said, "I told her I'm taller when I stand on my wallet."
ReplyDeleteThis devastating CFR is straight from Washington, the leader worships a different God than we do, he hates fossil fuels and he is getting revenge against our Tribe for the $380,000,000.00 settlement. The producers are the first to take the fatal bullet but the bullet continues and ends between our Osage Shareholders' eyes. Lights out for sure. Good bye royalty checks. New wallpaper and collector items. It's too bad we Shareholders are not more supportive of our producers. Ray is obviously drinking from the same cool-aid pitcher as is Councilman Crum and Councilman Yates, with all due respect.
ReplyDeletePlease support the producers in their litigation (please donate to their defense fund). Please show support for our Mineral Council Members in their legal battle to save the mineral estate from this devastating federal action.
Contrary to Ray's comments, the US Federal Government is not here to help us, they are our vindictive adversaries. How the hell do you think we ended up on a reservation in the first place. Think how well their oversight was during the 1920's and 30's. More murders per capital than any place on the face of the earth. Really Ray? The Feds are our worst enemy. We need to fight back and try to save our Nation.
Tomorrow is the first seminar to be held in Pawhuska sponsored by the Federal Government on how they plan to destroy or Mineral Estate. I suggest that each of us Shareholders attend this first dose of medicine they are administrating rectally. Please attend and have a list of questions for the administrators. They will be dictating to all of us how we are to comply with the new rules and regulations that we haven't even seen yet. The Superintendent has not provided the producers or Shareholders with a copy of the new regulations as of this date which are to be implemented July 10, 2015. She provided a link to a website for us to look at but I haven't been able to download it yet and there is only a few weeks left before the boom comes down. Ray calls this propaganda but in real time and real life it is a death sentence from what I've heard. Please attend the meeting. Oh, I just now remembered, we Shareholders have not been invited to the seminar that affects us the most. I am a Shareholder and haven't been invited. Have you? Let's crash their party! Let's show up, uninvited, with lots of questions!
ReplyDeletePlease ask this; http://www.indianz.com/News/2015/017852.asp
DeleteBUREAU OF INDIAN AFFAIRS
DeletePUBLIC INFORMATIONAL SESSIONS
LEASING OF OSAGE RESERVATION LANDS FOR OIL AND GAS MINING
25 CFR Part 226
The Bureau of Indian Affairs (BIA) invites the public to attend informational sessions on the new oil and gas mining regulations for the Osage Mineral Estate that were published in the Federal Register on May 11, 2015. The new regulations will become effective on July 10, 2015.
The Public Information Sessions will be held at the Wah-Zha-Zhi Cultural Center located at 1449 W. Main, Pawhuska, OK 74056, at the following times:
June 17, 2015 1:00 pm - 5:00 pm
June 18, 2015 10:30 am - 2:30 pm
June 18, 2015 5:00 pm - 9:00 pm
June 23, 2015 5:00 pm - 9:00 pm
June 24 2015 1:00 pm - 5:00 pm
June 25,2015 10:30 am - 2:30 pm
The new regulations may be found at:
www.gpo.gov
GPO.GOV
I don't trust our federal government enough to go to their website. They should mail the death sentence (CFR's) to all parties affected; the Mineral Council, producers, Shareholders and surface owners.
DeleteThen my guess is you would rather stay in the dark, because the report is scathing to say the least.
DeleteAre any of you bloggers surface owners? Let's hear from your perspective.
ReplyDeleteHow do you feel about the Osage producers abandoning their wells when the CFR's are implemented forcing them out of business?
The producers will be leaving thousands of wells unplugged and abandoned with no funds or incentive to restore the surface locations. I am an Osage County producer and Shareholder that will be insolvent July 11, 2015. I will be out of business, especially when the fines and penalties are imposed by our Superintendent. I will not have the funds to plug my wells or to restore the surface. Please join us tomorrow at the seminar and ask the instructor their plans in this regard.
If the new CFRs do force a lot of producers out of business and a large number of wells are left unplugged, then the Osage Nation should work with the Governor to seek federal disaster assistance. The affected owners of the surface land won't be able to cover these costs and will likely sue the BIA as trustee of the Minerals Estate, and a settlement is likely to further reduce royalty payments.
DeleteThe BIA, as trustee of the Minerals Estate, is the responsible party that intentionally created this crisis and should be held liable for the consequences. The surface owners should attend today's seminar and ask the BIA representative if they have a plan in place to secure the wells effective July 11, 2015.
DeleteThis happening in North Dakota, fracking and where are we at? Zero and the BIA is looking like the Persona non Grata and not the Hero or for that matter the Matter. http://www.indianz.com/News/2015/017871.asp
DeleteProducers should submit their hardship reasons right away as it appears that there might be a way to submit them to the BIA Regional Office for further review, if I heard this statement correctly.
Delete"...and a settlement is likely to further reduce royalty payments." I don't think so. Litigation and settlement costs will be left up to the BIA to cover, just like the Donalson lawsuit. They can't get into the Mineral Estate Trust account for items like this because it is set aside for the Headright owner's quarterly payments, the MC drawdown and the gross production taxes. The BIA is a separate legal entity from the Mineral Estate Trust altogether.
DeleteThe thing you need to ask yourselves is, from the time of Thomas Jefferson when the first Osage Delegation went to Washington, how well have we fared at the hands of the United States government at any time throughout history? Why would this time period be any different than in the past?
ReplyDeleteBecause we now have a Greedy Government, The Nation.
DeleteYou got that right.
DeleteThe Minerals Council Meeting is tomorrow at 10:00 A.M. CSDT, in the Council Chambers. A number of important matters will be on the Agenda.
ReplyDeleteMC Meeting is now live on the internet.
DeleteMC Meeting Agenda is located at https://www.osagenation-nsn.gov/news-events/news/minerals-council-meeting-agenda-june-17-2015
DeleteActing Superintendent is now giving the report for missing Superintendent Robin Phillips and answering questions initially submitted to her.
DeleteThank you Osageblogger.
DeleteWorkover permits and problems caused by Programmatic EAs that are now being appealed.
DeleteOK! Grace period is being discussed of a 90 day grace period to work with the producers! This sounds like some progress is being made going forward.
DeleteWhat I don't get is why the BIA pulls workovers off the table with an appeal and won't pull the new CFRs off the table with an appeal or a request for a moratorium and despite three standing resolution votes of the MC against them.
DeleteNeed for a blanket 90 day grace period by the BIA is being discussed as to the new CFRs.
DeleteTalee wants an indefinite period of suspension of the new CFRs to go into effect immediately. Meeting is now in Executive Session.
Delete2 meetings question as simple as " Will Robin Phillips be attending Minerals Council Meetings" Still no answer, stay tuned. Producers MUST comply but BIA can't even answer a simple question ( Yes or No ) Any word on the 'Motion to Dismiss' the Donelson Law Suit? No new well but the Shareholders are getting the 'Shaft'...
DeleteWell at least she's not calling us hostiles.
DeleteBest Question asked in this meeting so far " Is the BIA representing the Mineral Estate Shareholders or the Land Owners"? Notice the question went unanswered !
DeleteExcellent point of Councilwoman Stephanie Erwin that the BIA is regulating us right out of the oil business which is in violation of the fiduciary obligation owed to the Shareholders. Good for you Stephanie! Keep the pressure on 24/7 until they behave themselves.
DeleteGood point. No fiduciary obligation is owned to the land owners unless they are Osage and their land is restricted.
DeleteWhile on break, I was told years ago, the Catholic Church and others are receiving Shareholders checks. See Charles Pratt Interview for list of other Entities in possession of Osage headrights ( http://osagenews.org/en/article/2015/03/09/questionable-headright-payments-still-issue/ ). I was told when they were threatened to be ' Booted ' off the roles, lawyers started coming out of the woodwork. Now that the checks may dry up, has anyone heard a peep or hymn for these recipient's? Refresh my memory...
DeleteOf course their attorneys came out of the woodwork. They own these headrights and would be expected to defend this personal property right that they are in possession of. Charlie passed away and I don't know if anyone is still pursuing the legal case at this point.
DeleteYes it is called Fletcher Case. Attorneys for the plaintiffs in the Fletcher Case include Indian & Environmental Law Group, PLLC; Sneed Lang, PC; and Shield Law Group PLC. Proctor is the owner of Shield Law Group. Also, On the list of Entities look at # 21 - First Assembly of God-Kalamazoo, where is their offer of legal help? Or is it In God We Trust but Shareholders ' Show Me the Money '.
DeleteHow could you possibly know whether or not they have made an attempt to intervene? Don't be silly.
DeleteCan we discuss this at another time or down below in another thread, please? This thread is for what is happening in the Minerals Council meeting. Thank you.
DeleteSorry...
DeleteMeeting is live again.
DeleteOrphan well grant is being discussed.
DeleteApplication for grant to be submitted by vote of the Council.
DeleteDirection to the BIA, by a resolution, on a 90 day grace period for implementation discussed. Changed to withholding the fines for 90 days.
DeleteUpon request to the BIA, time to get into compliance within the 90 day period with suspension of fines during that period. Motion for resolution has failed.
DeleteDoes anyone get the feeling as I have said we will go back to Court for the BIA’S failure to represent once again...They know this and are not going to be so forth coming, would be like putting the Cart before the horse..how I see this entire situation is their is a Great threat to our Sovereignty, just because they hold the Trust does not give them the right to impose, they work for us the Shareholder's any other outcome would be Hostile to the Estate. Forget the GAO report, not. Get the GAO down here and get a serious Audit from an accounting perspective but assess the Demographics inside and out.
DeleteWorkovers being discussed and the BIA to get moving on approvals to the producers. Resolution passed.
DeleteOil and gas experts to be hired and discussion on resolution. Resolution passes.
DeleteSomething comes to mind? In the process this tug a war between the Producers and the BIA, held Hostage by the Donelson case? What is holding up the Dismissal? Who's on the "Hook"for the abandoned wells? However we have huge issues and my gut says this Office, the Pawhuska Office the BIA is in way over their heads...we need to be working with Washington at this point.
DeleteIronhawk- Charles Wickstrom asks to be granted a new one year lease for 10 leases from the Encana assignment that has finally come through. Resolution passes.
DeleteOK. Here it is. Resolution on a no-confidence vote on Robin Phillips continuing to serve as BIA Agency Superintendent for reasons stated on the letter not going out to the Minerals Council before it being sent to the Oil and Gas Producers as to the effective date of the new CFRs.
DeleteOh come on. The woman can't even show up to the Mineral Council meetings. GOOD! Motion passes.
DeleteMotion to adjourn passes. The meeting is over.
DeleteThe Osage Producers Association had a private meeting with the BIA officials, including Mike Black and Vanessa Ray Hodge from D.C, on May 12th. The OPA asked specifically if the BIA would allow for a grace period to comply with the new regs. They unanimously stated "absolutely not." So the chances of the BIA complying with the OMC's resolution to give a grace period seem slim.
DeleteSo the villains here over at the BIA also include Vanessa Ray-Hodge in the Solicitor's office and Mike Black BIA Bureau Director?
Deletehttp://www.bia.gov/WhoWeAre/BIA/Leadership/index.htm
One important factor for the protection of the Shareholder royalty interest is verification of the royalty amount if the producers are going to be paid directly for natural gas as of July 1, 2015 and the same will be true if oil payments to the oil producers goes the same way. What is the BIA's plan to verify these sales and calculate all of the individual amounts from roughly 500 oil and gas producers in Osage County. Until this matter has been decided and resolved, the BIA should call for a temporary stay or moratorium of the effective date of the new CFRs. That's it people right there before this whole thing goes roiling completely out of control.
DeleteTo Poster@1:29pm ah, I see all kinds of conflicts and wow. The picture speaks a thousand words...Ah I call discrimination and foul on the BIA..
DeleteNot all of the 500 have gas leases.
DeleteWhat a real sad meeting. The acting Superintendent showed up and did her best. If you picked up the underlying theme from the BIA I think it goes like this; Minerals Council, we (the BIA) will consider your resolutions. We the BIA make the rules and pass the laws. You the Minerals Council can spend Shareholders funds and pass all the resolutions you want, some may even make you feel good and powerful. In the end, it is us (the DOI/BIA) that make laws and impose fines. Robin may or may not be gone, it just depends on how she is playing upper level office politics. Her checks won't stop or be reduced but Shareholders are affected. And yes the Minerals Council can pass a resolution to hire oil and gas experts but if you didn't hear or read BIA operations reports, not many well are being drilled, oil prices are down and no one is mentioning the looming Donelson Law Suit. Hiring experts is kinda like hiring a good mechanic a week after the bank repossessed your car. The BIA knows the Shareholders can sue them and probably win! The truth be told, half of us reading this will never live to see the settlement. As far as the BIA, half of their employees will be retired before the settlement is paid and the other half will be promoted or gone before the US Congress appropriates the funds for the settlement. At this point the Minerals Council might want to look into the TERA process, the Indian Tribal Energy Development and Self-Determination Act Amendments. I think we need to narrow down the best way to Self-Determination. This is a very serious time and it will call for hard choices. Passing resolutions and screaming ' fiduciary obligation ' may feel good at the time but in the long run no one cares about the Shareholders but the Shareholders.
DeleteThe experts are being hired to help inform the MC Attorney with the legal action for injunctive relief at the Federal level against the new CFRs going forward that are smothering the oil and gas business in Osage County under an avalanche of unneeded, unnecessary and unworkable regulations that are in violation of their fiduciary obligation to protect, preserve, defend and promote the Osage Mineral Estate and the income generated from it.
DeleteTo the poster at 1:29PM, yes the villains include Vanessa Ray Hodge and Mike Black. They are the true authors of the new regs and Robin Phillips is taking her marching orders from them. In fact, Vanessa Ray Hodge was confrontational with the OMC at their last meeting for criticizing the new regs.
DeleteTo me it says another, its more than that..there is a monopoly going on. They are protecting their agenda..and intersst and couldnt be more clear,build build in North Dakota and South Dakota..put all kind of Regs to the Osage who are not prepared...and not to allow thr Producers in the Negotiations for better vetting or insight, however its like I said we can keep going back to Court but when are we going to run our M.E like a business?
DeleteSaw Eddy Red Eagle stand up and give them a piece of his mind. He was heroic in the moment and got a handshake and applause for it.
DeleteHe told the BIA they are no where near ready (to put these CFRs in effect)...
"VIDEO: The Osage News was prohibited from taking video at the BIA-hosted public meeting to discuss the revised regulations for oil and gas mining on the Osage Reservation...."
See this video clip at https://www.facebook.com/OsageNews
Good for the Osage News for having the guts to stand up to this oppression of not being able to videotape these meetings. They should be available to all of the oil and gas producers to see on demand. What is this?
DeleteGee, I guess add The First Amendment to the BIA's Laundry List "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances". Was Ms Phillips in attendence?
DeleteAh oh...just wow...
DeleteYes, she was and Eddy directed his comments right to her.
DeleteI was there, Mr Red Eagle did us proud! Interesting that the BIA could "forbid" an Osage Nation News organization from taping a public meeting on Osage Nation owned land. I don't get it. Perhaps if the Osage News had given this a little thought they would have stayed. The OPA was also asked to leave but they stayed and taped the whole thing. Hats off to them. Can someone tell me how in the world the BIA could have ANY SAY in who could cover this event or who could tape it?
DeleteWouldn't you say The BIA has been warned in as much, by Eddy Red Eagle. And there is no doubt the BIA is not blind sighted by the fact that a injunction is being filed. The way I see it we will be in Court again but this time the Court is going to look at this and not let it languish for 12 yrs again. The Court is goIng to bring the Hammer down...incompetence at the Highest level.
DeleteI see your point. Our land, our Cultural Center, our oil and gas producers, our sovereignty and they get to call the shots on what is video taped and what isn't? Go figure. Hats off to producers is right. I hope they taped today's meeting too.
DeleteDon't forget that the first of the BIA information sessions on the new CFRs is this afternoon, June 17, 2015 1:00 pm - 5:00 pm. If you attend please take your smart phones or tablets and give us a report here on the Osage Blog. It will be greatly appreciated.
ReplyDeleteAny report on today's Session?
DeleteI attended the seminar Wednesday. The DOI/BIA attitude is that the CFR's are final and will not be changed or challenged. Everything is subject to the Superintendent's discretion. They could not answer half of the questions because they do not understand the questions. They are clueless about the oil and gas operations. They don't know a gunbarrel from a stock tank or gas separator or even know what a Rockwell valve or Ballon valve is. They want to prevent the oil from being stolen from a tank battery by requiring all of these new valves be utilized, but fail to realize that the hatch on top of the tank that the pumper opens to gauge the tank daily is the largest opening which does not require a seal. This is the easiest access for an oil thief.
DeleteThese idiots are clueless and vindictive. They are definitely getting revenge for the $380,000,000.00 settlement. It's so obvious.
If the OMC and OPA do not get relief in the Federal court, the producers and shareholders are doomed, to be sure.
I too was very impressed with Eddie Red Eagle, Jr. for his eloquent comments to the panel. A soft spoken plea for this group to postpone this action until, at least the fist of the year, which would allow time for the Feds to address the problems identified with the roll-out of these new CFR's. He received a deserved standing ovation. Very simple, plain spoken, statement as to why the Feds are making a big mistake by the implementation of this devastating CFR.
Moreover, the attitude of the federal government representatives were very condescending and adversarial. I am struggling to refrain from using language not appropriate for this blog, and for this reason, I'll just sign-off.
Wow, thank you for the update I do appreciate your time and opinion...well folks there you have it. I and others are beginning to see the forest for the trees..and what is undeniably the truth as I suspected.
DeleteThe Osage Blog is now TWO YEARS old today, June 18th, 2015! A BIG THANKS to all of you who are making the Osage Blog an active communication tool for Osages all over the world.
ReplyDeleteThank You for all your hard work & excellent product. Be proud for giving us a place to voice our concerns and for a ' Job Well Done '.
Delete' HAPPY BIRTHDAY' *‹(•¿•)›*
Well, thank you! We really appreciate it.
DeleteThank you Osageblogger. Happy Birthday!
DeleteI'm only registered as a 1/8th Osage blood (could be a 1/4 depending...?) , but as Eddie Red Eagle, Jr. was speaking yesterday, I felt like all of that 1/8th Osage blood rushed to my heart all at once, and just for a moment, I experienced being a full blood. I'm very proud to be a member of the same Tribe as Eddie Red Eagle, Jr.
ReplyDeleteWow! That's quite a compliment. I'm certain he will appreciate it.
DeleteDuring the Wednesday seminar, Chairman Waller attended as did Councilman Crum. Chairman Waller listened as the DOI/BIA described his authority was being stripped of being able to negotiate royalty amounts on new leases and his ability to allow seismic operations on acreage not under a current oil and gas lease.
ReplyDeleteCouncilman Crum attended, probably to obtain information so that he could report back to Ted Turner and Gentner Drummond.
This isn't a good report.
DeleteIs the BIA taking over the negotiation of royalties and authorization of seismic prospecting? What role is left for the MC?
DeleteTo answer your question above, the DOI/BIA new CFR's state that the royalty rate cannot be less than 20%. Shane Matson of Spyglass asked the panel that if his company wanted to make a 200-300 million dollar exploration project in the Osage but needed the royalty reduced by a little bit to make it economical, do the new CFR's prevent the Mineral Council from negotiating a lower royalty rate. The panel replied that the Mineral Council no longer has the authority to reduce the rate even if it was in the best interest of the Mineral Estate to do so.
DeleteAs for the seismic matter, the new regulations prevent a producer from shooting seismic on lands not currently under their leases. The problem with this is that for the seismic data to be accurate and of any use, it is necessary to have your seismic lines start 1/2 mile past the acreage you want to evaluate. So if I had a 160 acre tract (1/2 mile long) that I wanted to evaluate, I need to shoot a seismic line 1-1/2 miles long. I will no longer be able to evaluate my acreage because I do not have a lease on the extra mile of the seismic line. So, no more seismic evaluations after July 10, 2015. How the hell is that in the best interest of the Mineral Estate?
More from the information sessions next Tuesday:
DeleteJune 23, 2015 from 5:00 pm - 9:00 pm
Thats a problem if you can't measure the seismic activity, all realative to on site inspection. How are you going to know where to drill?
DeleteExcellent question.
DeleteWhen we shoot seismic, it's not actually measuring "seismic activity", rather we send sound waves to the basement rocks and record the time it takes for the return signal to be recorded on the surface. This is primarily used to identify the subsurface structures and dip of the geological horizons. It does assist us in picking the location that could yield oil and gas reserves and is a very useful tool. It minimizes the risk of drilling a dryhole. We will no longer be able to obtain permits to shoot seismic on the acreage adjoin our leases. The panel didn't understand the concept or procedure. This is just crazy stupid.
DeleteThank you I know there are different techniques and figured as much..just wanted to narrow it for a few without really going into detail..but I get it this is just insane..a piece of paper with wording is not going to fix broken. In other words feeling the squeeze. Incompetence is not an excuse for not having someone at the helm with experience in this field. You would think the BIA would have the Estate in its ineterest.
Delete"Importantly, the agreement also provides dispute resolution provisions to reduce the likelihood of future litigation." Really? Where the heck are they? Somebody might want to dredge up a few of them right now.
ReplyDeletehttp://www.justice.gov/opa/pr/united-states-and-osage-tribe-announce-380-million-settlement-tribal-trust-lawsuit
I sure would like to know as well..kind of scathing my head. This is no Joke folks...My ears are kind of perking up to what Senator Barraso has to say lately.
Deletewhen you have a meeting such as this with the federal government every single mineral Council board member should have been present. they were elected to protect, market and grow the mineral state on behalf of the shareholders. this current board is incompetent and fail to serve the shareholders, the Osage Nation and the Osage oil producers. there she goes have blinded them. They were paid nicely to represent the shareholders and have failed after duties and should be fired.
ReplyDeleteI agree that the Mineral Council should have had 100% attendance and they should have been the most active in asking questions and explaining the hardship being imposed on their producers. I bet they will be getting an ear-full from the Shareholders when the next couple of quarterly checks are issued.
DeleteWho has been and who hasn't been in attendence at the Information Sessions for the last three days? Names please.
DeleteOf the members of the Mineral Council, I mean.
DeleteThats what I have been saying. We need a working body...By laws. .and pay them 75$ a meeting. Like I said we should be years ahead of ourselves and this is where we are at...we should be expecting nothing but exceptionalism. If we keep on electing the same people over and over this is the result. The M.C has not been transperent. Oh you bet there is a lot that can be done to shore up the inefficiencies and redundancies, recall.
DeleteAt Wednesday afternoon's meeting, Chairman Waller and Galen Crum were in attendance. I do not know if any Council Members attended yesterday.
DeleteTalee was at the 1st one. ALL of them have the responsibilities to be there and represent the shareholders. but the truth be known Yates and Crum support the Bureau of Indian Affairs and the new Regulations. The other problem is none of the MC board other than Yates have any oilfield knowledge or experience so they would know what questions to ask anyway. One day the shareholders will wake up and elect people with experience or they'll keep getting incompetency.
DeleteNo excuse, then you do your job and research as many of us have for quite the years, to attain a lot about this industry. Some of have alot of smarts in just their pinky alone..so tell me when is a question ever stupid...? most questions spawn in meetings like this from each other and what information you can walk away with, regardless, will be beneficial use in the future. It's like cutting your nose off to spite your face..Remember you all are being watched for performance..by all of us..And what I see is laziness and disrespect and regard to the Shareholder's.
DeleteA word from Housekeeping...please keep your comments in line with the topic you are responding to by clicking on the reply button at the bottom of the thread...thank you!
ReplyDeleteThis thread is now closed. Go to: http://osageblog.blogspot.com/2015/06/osage-shareholder-matters-june-ii-2015.html
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