uh Virginia Gas and Oil board to order
this is March the 21st we're in Big
Stone Gap and their offices and we would
like for everyone to please mute or turn
off your cell phones as these
proceedings are being recorded
uh the first item on the docket is we're
a review and approve the remote
attendance resolution for any board
members that was not attending the
meeting remotely
we have any questions or we have a
motion
did we receive those from folks we
received one from Mr praker and I signed
it okay
after we went through that yes
so we have a motion to approve uh motion
to approve in a second
second any discussion
the board acts uh Miss Gilmer you want
to call the road
Mr Harris uh yes Mr Ratliff yes Mr
Jensen yes Miss Surratt yes Mr Prather
okay we'll do that
okay thank you now I would ask the
boards to introduce themselves starting
with Miss threat please I'm Rita Surat
public member I'm Gus Jansen a public
member
I'm Donnie Ratliff I'm represent Cole
and service your chairman I'm Bill
Harris a public member
we have a quorum
next the board will receive public
comments if there's anyone that wants to
address the board
no one signed up I don't see anyone so
we'll
go Mr Schwartz if you don't mind Mr
Mullins has an early court date and we'd
like to skip down and pick up key Rock's
petition number nine first and least
that would be fine with me or okay
gentlemen if you want to come forward
I want to swear
we're doing nine first key Rock
would you introduce yourself first
please so we Brady bones represent
t-rock energy okay Morgan pay key Rock
Energy okay Mark Alderman K-Rock energy
thank you Mr alamed and Mr Pate you
swearing in front of your testimony it's
the truth the whole truth and nothing
but the truth yes ma'am I do you may
proceed Mr well
thank you
Mr Pate could you please state your name
uh by Senator employed in your job
description please Morgan Pete I'm
employed by keyrock energy and I'm a
geologist and as key Rock Energy uh
authorized to conduct business in the
Commonwealth of Virginia yes and they
have filed a bond uh with this
department is that correct yes and
you're familiar with the application
that we're talking about today this
would be vgov
22-1220-4254 yes
and this is for a Kobe methane will is
that correct yes and this is located in
the Nora gas field yes and how many
acres does this proposed unit contain
482.
and can you explain to the board what
key Rock plans to do if this application
is granted uh we will drill into the uh
mine works for the purpose of producing
Gob gas and generating carbon credits
and after the after these carbon credits
are generated what do you do with them
uh sell them on the open market
and What entity uh oversees those suits
California Air Resource Board all right
and what seam of coal is the coal bed
methane produced from Jawbone
and have you obtained leases for a
portion of this unit
yeah and is that uh with intervest yes
sir and just so that the board recalls
uh this is a situation where intervest
has the entire proposed unit leased but
they uh they have only released two key
Rock portion that they offered
there was some discussion of that last
night or last month
uh and how is the interface conform to
this procedure uh certified mail return
receipt for a question and has the
notice uh with the associate
documentation been filed with this board
yes and what percentage of the unit does
uh key Rock have under lease from
intervest
88.8 and so the the percentage that
kirok does not have is that 11.2 percent
yes and are all those owners listed on
exhibit B3 of the application yes and as
we stated all the owners on B3 are
already under lease with intervest is
that correct yes
and were there discussions with
intervest and their counsel Mr Scott as
to how to handle these owners there was
and after those discussions it was
decided to apply for pooling of their
interests yes and intervest was not
interested in any type of sublease or
handling uh uh handling directly with
key Rock on the the least of this 11.2
percent they were not
and how were these Unleashed owners uh
informed of this proceeding certified
mail return receipt requested and uh
there were some owners for whom the
certified mail was not claimed is that
correct yes and would that be Yates
Chapel Church Alma McKinney Melissa Ann
Atkins and Nicholas Allen Adkins that's
correct and the head of key Rock uh try
to notify these uh owners who didn't
pick up the mail we were in in the
Dickinson starts
and are there any unknown owners in this
petition that you're aware of no
and you're seeking to pool 100 today is
that correct yes and you're requesting
that the board pool all of the owners is
listed on exhibit B yes
now are you also requesting the board
establishment for a procedure parties
listed on exhibit B3 shall have uh
several options uh listed uh given to
them for how they might participate yes
and are those options contained in the
proposed order that's been submitted to
this board under uh paragraph nine yep
yes
and the lease terms if there were to be
a voluntary lease would those be the
same terms as which you've offered uh uh
the least to intervest yes okay
and what's the proposed depth of this
wheel uh 550 feet and what are the
estimated reserves uh 1030 mmcs
and you're familiar with the projected
whale cost is that correct yes and uh
what is the uh the projected well cost
in this matter approximately 227 000.
and are you asking the board to create a
sealed Gob unit uh to further pool that
unit yes and the pooling uh by interface
would be voluntary is that correct yes
and then the the remaining owners would
have one of these options listed in the
proposed order correct
and are you asking the board to name key
rock as the operator of this unit yes
and in your opinion if the board grants
uh the application day would it prevent
waste promote conservation and protect
correlative rights yes that would be our
questions for Mr Pike any questions for
Mr Spade um quick question I hope it's
quick it's actually about carbon credits
we really haven't talked a lot about
that for the reward can you kind of give
them
sort of an overview I don't know if it
can be brief about how this system works
and how it should work with
for True proposal
uh so in 2014 California uh adopted a
program
whereby
operators or companies could
flare gas for mines
they they put the program in two
categories active minds and abandoned
mines under abandoned mines their
protocol applies
basically a production decline curve
which
perhaps the amount of gas that a mine
can generate or that you can earn in a
credit Sense
on an active mind there is no cap they
what California Air Resource Board their
protocol does is allow operators to mine
operators oil and gas operators whoever
who has the rights you can sit up on a
vent you could drill horizontally into
the mine in advance of mine
most any way you could access the gas in
a mine if you can bring it up to the
surface and flare it monitor it meter it
uh under their protocol uh
deep records of it it generates carbon
credits now flaring is burning off but
that you can flare it
um you could put it into the pipeline if
it were pipeline quality for the credits
I think or you could use it to generate
electricity any any California ARB
approved instruction device would
qualify to generate credits but burning
into the atmosphere that's that's
allowed and that you get carbon credits
for that yes okay
um man I thought that was the program
and I'm okay yep I'm not going to put on
my environmentalist had at the moment
but I'm just curious about how
um it's a very uh strict and rigorous
program uh the protocol for active and
abandoned Minds I want to say is a
hundred pages and the majority of it is
the equations that go behind how do you
meter the gas how do you report it
um and basically what they do is you
take the metric tons of CH4 that you
burn convert it through their equations
to metric tons of CO2 the a single
metric ton of CO2 is a carbon credit
once the project goes through
verification process the verifiers will
approve it it then goes ACR the American
carbon registry for review they review
it and then it goes to California Air
Resource Board for final review and the
California Air Resource Board will issue
the credits um and we go in and we sell
them on the open market
and in a general sense credits right now
are going for about 18 per credit
um a single credit amounts to
approximately three mcf of gas
so this you earn a little bit more at
the moment than you would selling into a
pipeline
oh yeah okay
okay thank you any other questions yeah
just a couple questions the um the lease
terms that you mentioned in your
testimony I don't think are listed in
the applications you put on the record
the least terms that you offered that
you would offer that be the same as
Enterprise these terms uh we would offer
the same shut in royalty
um off the top of my head I don't
remember it but if uh Mr Jackson if you
look on uh the least terms that would be
helpful to be contained under Section
9.2 of the proposed order which would be
12 and a half percent uh royalties
multiplied by the ratio of the acre to
the tract
was that a separate letter is that what
you're referring no sir this is in the
proposed order uh that we submitted to
the board
yeah the order is different from the
application yes sir yes yeah you didn't
revised no sir
yes sir again okay that's right we did
not revise our application okay
yes I I wasn't sure technically if the
order is part of their
foreign
would be approved by the
staff at the AG's Office later on
correct in that process
oh we've had everybody looking at it so
these orders whenever I read them I'm
thinking but we haven't done that yet so
these are always objective it's just
projected yes sir or proposed
um
no I'm sorry I didn't mean to cut a crew
here questions yeah the uh the other
question I had is uh concerning a loss
between the thought there just a second
I think uh one of the questions the
board had last month and we've asked the
Attorney General's office to look into
was the concept of actually pooling a
party that's already been leased and I
think Mr Lansing is going to weigh in on
that and give the board some guidance on
that today
yes sir uh I've had an opportunity to
look over this and discuss it with
colleagues uh with Brad Boyd uh who's
also discussed this in turn with uh with
Phil and I've discussed this with one of
my colleagues in the real estate section
um we're fine with this Arrangement uh
we understand it is a little unusual uh
normally the arrangement is that you
would uh you would pull together parties
who can't come up with an agreement in
this case of course they they've had
this this lease with intervest
um but uh code section
45.2-1620a lays out three circumstances
uh under which force pooling can be
allowed uh and we're satisfied that this
uh that this situation satisfies uh A1
A2 is kind of the normal scenario where
you're forced pulling people together
who haven't come up with an arrangement
but A1 under Section 45.2 is simply two
or more separately owned tracks are
embraced in a drilling unit which of
course is the case here
um and uh so we we have no concerns with
this arrangement
thank you Mr Clans any other questions
yeah I just had one more uh you talked
about the carbon credits having to go
through a vigorous process for approval
sir can you give somebody what
percentage of these credits get approved
by this California whatever uh
California Air Resource Board yeah sure
generally overall throughout the country
and then what's in what's uh key Rock's
history with that have they had any
applications rejected in the past the
type of arrangement Iraq has never had
any credits invalidated
um on any project we have been doing
this since 2014 we have
uh one very large project in Illinois
uh that accounts for the better part of
100 to 130 000 credits a year
um and consists of 15 mines we probably
have another 25 to 30 active and
abandoned mines across the country
um and we post we submit projects for
verification and credits I would say at
a rate of
15 a year that's pretty close
um and we have never had an invalidation
or any issues one of the things we have
to be very aware of when we operate is
that any violation that we receive as a
company on a project could endanger that
project
um the verifiers look for that the
verifiers call Regulators
um they make sure everything is above
board so so far K-Rock has 100 success
rate
um
there are other companies in the country
that do this environmental credit
Commodities is one nextera is one Ruby
Canyon there are a few
I don't think to my knowledge any
abandon or active mind project yet has
been invalidated I had I do know that
one project was halted
um on an ownership basis uh one person
owned one half of the mine one person
owned another it was an abandoned mine
and the error Resource Board did not
know how to effectively take both
projects on that one mine uh the Air
Resource Board does allow multiple
operators to operate on an active mine
so that's not an issue
um so as far as I know there's never
been an invalidation for any company for
this
for active or abandoned mines yeah okay
appreciate that
um
you have another witness no sir against
oh let me back up and do what I should
have done to start with this this is a
petition for t-rock to established key
Rock one seal God production unit
consisting of
482.1210 acres for drilling development
production of cobed methane gas and a
seal golf area
this is vgov
22-1220-4254 and this was continued from
the February docket item
uh anyone have any other questions
the board operates on a motion
I'll move that we approve the
petition
we have a motion we have a second
we have a motion we have a second any
discussion
this Gilmore will you pull the board
Mr chairman
uh yes
uh Mr chairman this is Bruce Prather uh
I got on the conversation a little late
but I've listened to it can I vote on it
yes sir
okay we'll just add my name to the uh
Miss Gilmer's pulling the board right
now Mr Price
okay thank you
Mr Harris yes Mr Ratliff abstain Mr
Jansen yes Mr strap yes Mr Franklin
yes
thank you that petition's approved next
to this item docket number 10 a
petitioner P Rock energy for well
location exception for key Rock number
one located in the North quadrant the
candidate Manchester District of Dickson
County applicant requests Virginia
against all board to enter in order to
enable wealth
number key Rock number one to be drilled
is depicted on the Plaid attached is
exhibit a and that the applicant be
granted the right to produce methane gas
from the mind out job on scene
uh in Contour deepmind 41. which appears
on the well work permits submitted by
the inspector for for unit K1 this is
docket item vgov
22-2012 or 12 20 excuse me
42.55
you may proceed Mr Moss
thank you Mr Allen but we would call Mr
Pate
Mr Pate uh you've uh can you please
state your name by whom you're employed
in your job description please Morgan
State Employee my key Rock Energy
geologists and you recently just gave uh
testimony in regards to uh application
number 4254 is that correct yes and all
the answers that you gave in response to
application 4254 which your answer would
be the same for 42.55 yes all right and
so that testimony to be incorporated
thank you
and so uh keyrock is asking for an
exemption from the thousand feet uh
requirement uh for distance of a whale
is that correct yes and the uh the
whales that you are asked that uh uh
you're petitioning uh to have an
exemption from there would be interest
well number
vc3753 is that correct yes uh intervest
operating LLC well number p332
that correct yes and intervest operating
LLC wheel number
vc-3619 is that correct yes now the
distances uh from the uh uh for the
thousand feet one is 816 the first world
is 816 feet is that correct yes uh the
p332 is at 985 feet from the proposed
wheel yes and uh vc3619 that's 974 feet
is that correct yes now the uh the
distance required is a thousand feet uh
you may recall last month there was
discussion with the board about uh why
you would need an exemption uh for this
location has key Rock taken into account
the the topography uh drainage ditches
distances to the public road and the
removal of underground coal pillar oh
yes and has there been mapping submitted
uh to staff uh showing uh the location
and also these other features that would
necessitate key Rock to request this
exemption yes and so you were asking
based on that you're asking that uh the
proposed location of this will be proved
yes sir
that would be our questions Mr chair any
questions from the board
yeah just uh one that's can you um
sort of elaborate on what the technical
basis is you develop one of these civil
God units of the placement of the well
itself what are the driving factors
involved with that underground is there
a certain specific part of a mind that
you're trying to intersect uh can you
can you get some details on that what
what those considerations sure
um in general terms we prefer to be up
depth as possible as high up dip in any
any sealed area we also prefer to be in
an intersection of coal pillars and not
between the pillar and the edge of the
mine wall for example and we also very
much prefer to be in an area where the
pillars have not been removed by mining
we tend to drill into roof collapses and
swells and that's the end of that in
Virginia compared to Illinois the state
is very mountainous and rugged and the
topography had a very large influence on
where this well was located we tried
multiple spots inside the Sky Barrier
over the probably a month and a half two
months and
we just couldn't make them work
somewhere too close to railroads some
were too close to houses the location
that we are submitting today is along an
existing intervest Access Road
um
that's already built
and
in our opinion is in one of the better
spots in this Gob area
thank you you're welcome any other
question
anything further instruments no sir Lord
operates almost
well
second thank you Miss Gilmore will you
pull the board Please Mr Harris yes Mr
Ranson Mr Johnson yes Mrs yes
yes
mathematicians approved Mr Mullins next
is a petition from item number 11
petition from drock energy to update the
board on the status of petition
application for an existing lower Banner
carbon creative with Association of
deepmind 26.
loans you may pursue
and Mr chair what uh key rock is
currently in the uh having the title ran
uh on that property there has uh there
are numerous numerous tracks that have
to be run it's my understanding that
that is in progress and that key Rock
would uh request uh some additional time
to complete that title work
with next month be too soon
we are right now probably
15 to 20 percent complete I believe we
have 17 tracks in total to cover
um
that's very difficult to say I I would
say next month would probably be too
soon
we'll put it on the May docket we can
definitely have you a good update on the
main docket let's let's put that on the
May docket to revisit
anything further than small no sir I
just like to thank you Lord uh We've
it's been a it's been an interesting
month uh dealing with the proposed
orders and we we appreciate the sports
Indulgence especially of health staff
thank you we have one question chance
the uh the current operation associated
with that lower Banner mine over there
is it still in active production right
now I believe so it it's that mind
cycles uh it'll go through
four or five months of production and
then the gas methane concentration and
the flow will will drop and we'll turn
it off for a few months and then it will
come back it's very cyclical but it
tends to run
say between March and August is this for
whatever reason the mines preferred time
to outgas
does the staff have an opinion as to
whether
this operation should be allowed to
continue actively until they have
received a permit and a board order
through this body here should they be
setting that in until such time
and it's been in existence so you know
at this point duplicated permitted that
should satisfy you know Fair
requirements
then prior to all of this so we're
bringing it in
the same manners the other so that it's
you know under the board of jurisdiction
so we don't have a problem with it you
know operating can we get this done
okay the discussion with folks that you
know drock any other questions
chairman
okay
what what effect I mean about six eight
years ago
in uh around the Washington DC area
and I was living in Abingdon at that
time and I felt that earthquake
that would an earthquake have an effect
on an abandoned mine
I mean would it increase the gas or
would it decrease the gas or would it
have to be looked at again
in the event something like this
occurred again
I don't know
um
I can say that I personally think that a
lot of the gas we receive out of this
mine is coming off a fault line
and I think that contributes to the
cyclical nature I don't know how an
earthquake would affect the production
I could say I hope it increased it
earthquake that I'm talking about
it affected the whole
coal area in Western Virginia
and then and what I'm what I'm wondering
about is what effect is an earthquake I
mean I realize that uh you know if
you've got a seven or an eight uh
earthquake you've got something pretty
large on your hands
but uh you know and maybe a minor
earthquake wouldn't affect this but what
would happen if you did have a major
earthquake I mean the one we had six
eight years ago
at least where he's had Tremors in our
area in the coal area
and I'm just wondering do
or what effect does an earthquake have
on
your production does it increase it or
decrease it I don't know if we've ever
seen an increase or decrease due to an
earthquake but if there were pillared
areas in the mind that had not collapsed
yet I would assume that an earthquake
had caused a collapse and then I would
follow that and say that that would
probably hurt our Productions
although I'm not sure if if it depend on
in depth you know
you know barrier
yep
thank you any other questions Mr
chairman could I say something you
haven't worked with our department of
geologists and art enrichment or
Charlottesville one of the things about
an earthquake it's a surface phenomena
you don't actually
have the movement underground it doesn't
generally affect the mind it affects the
surface surface movement
right so that's that's the
interpretation I've gotten for my
geology people I have questions been
asked before
thank you any other questions you're
coming
Skillman
pull the board please
we just we're moving into the made.com
oh okay yes I approve that move
I understand Mr Jensen yes Mrs Surratt
yes Mr Craig
yes
thank you that's been moved to the May
docket thank you thank you thank you for
accommodating my schedule thank you
we have item number three a petition
from Pocahontas gas LLC rep pooling
under the Oakwood kobed bed thing gas
Fields number one and two to address
mapping updates and update track acreage
this is unit y33 docket number vog
UE
BtoB
95-10 24-0524-02
all parties interested please come
forward
Mark Schwartz and Kelly Berry
you you
May proceed but we need to swear in Miss
Berry first
Miss Mary do you swear in affirm that
your testimony is the truth the whole
truth and nothing but the truth
I do
you make proceed me
thank you Kelly could you state your
name for us please
my name is Kelly Berry and who you work
for
I work for Pocahontas gas LLC
who is the applicant on this petition
it is Pocahontas gas LLC
and is this an existing uh Colbert
methane producing unit
yes it is uh and it was pooled
previously under Oakland one is that
correct
that is correct
and the reason we're back here today I
think I think actually there are two
reasons one is there have been some
mapping changes that we need to account
for
yes
and in addition uh you're asking that
the board re-pooled the unit under
Oakwood 2 to facilitate Degas in advance
of one-wall mining
yes what did you do to tell people
that we were going to have a hearing
today
uh we mailed a copy of the petition to
each owner
by certified mail with a return receipt
requested and we also published a notice
in the Virginia Mountaineer
okay when did you publish
uh we published March 9th 2023 and and
when did you mail
uh we mailed February 23rd 2023
and have you provided the the division
uh with proof or your certificate with
regard to mailing and uh your proof of
publication
yes we have
and with the updated mapping and title
information could you tell us as as of
the present time uh what percentage of
the cobit methane do you have under on
either own or have under lease
67.0125 percent
and you're seeking to pool uh what
percentage
32.9875 percent
um do you want to add any respondents to
your uh application today
no
do you want to dismiss any people today
no
I think uh I think I asked this but I
just want to confirm that the current
operator of this unit is is what company
the current operator is Pocahontas gas
LLC who was also the applicant today
yes
and is is Pocahontas gas still
authorized to do business in the
Commonwealth
yes still registered with the Department
of Mines minerals and energy and and the
division
yes
and does it still have a blanket Bond on
file for its operations
yes okay
um
the the the the the
um changes with regard to mapping cause
the percentage of interest of the uh
several Less stores to change
that's correct did all of their
interests change to some extent
yes
so if the board were to approve this
application uh they would need to give
all of the um
all of the respondents and another
election opportunity
yes that's correct okay
let's go to
um
PDF page
I think it's 13. get that up here
PDF page 13 actually I'm sorry let's go
to PDF page 14. uh
and that's a map correct
yes and what does it show
this reflects the location of this unit
within the Oakwood field
okay and and in addition to showing the
boundary the eight the boundaries of
this 80 acre Oakwood unit uh does it
also show some uh projected uh
activities Underground
um yes okay and what are those
uh this shows the projected locations of
the one South and two South panels to be
mined okay and and within and and
obviously based on uh this map uh the
the unit uh in question uh
intersects those or is is located within
the mining area of that of the panel
between or of those two panels correct
yes
and then let's go back to
um
let's go back to myself it's PDF page
um
a PDF page five
and that is is a different map and this
is what we call exhibit a and it shows
the unit and it shows uh tracks within
the unit correct
yes okay and and then this this page PDF
page five is followed by something that
we call attract identifications
that's correct and this this and the
track identifications
corresponds to the numbers that we see
on on the map uh PDS PDF page five did
you get a call from
any of the respond or get calls from any
of the respondents before uh today's
hearing with questions about this
application
uh yes we received a call from Wayne
Davis okay and uh let's go to the
tracked ID page which is uh which is
Pages six and seven it looks like Mr
Davis is a Surface owner of track 4A
correct
yes and then if we go to the next page
it looks like uh Mr Davis
uh has
actually a page eight
of the PDF it looks like Mr Davis has a
royalty interest in track two is that
correct
that is correct
and and there are two entries for him
does that mean that he acquired his
interests at two different times
uh yes the the interest that is
reflected as uh G underneath the
ownership of track two would be an
interest that he inherited and the
interest that is reflected as H .2
uh underneath the ownership for track
two is an interest that was deeded
um to he and his wife okay and it looks
like they got the interest by deed on
420 of 2010
that is correct and when did they
inherit
the other interest roughly that that was
in 2008. okay and this unit was
originally pulled in 1995 correct
that is correct so their predecessors Mr
Mr Davis predecessors in interest that
he purchased from or inherited from
already had a royalty interest that had
been pulled uh in this 80 acre unit
correct
that's correct okay uh to your knowledge
as were they did they receive royalties
his predecessors and interest
yes
okay and how about Mr Davis has he been
receiving uh royalty
yes he has okay
uh
the let's go back to the the exhibit a
page five so if we look at page five
um map the track four a is down toward
the
um
so it would be the this well it's
definitely the Eastern portion of the
unit over to the South and it shows
several Well locations correct
that's correct okay and that's the
surface tract that uh Mr Mr Davis owns
interesting yes yes it is okay are any
of those three Wells drilled
uh why 33c is a drilled Frack will okay
and the two other Wells are y-33 J and K
correct
yes those are proposed Wells okay uh
based on uh conversations that you and
other people from your company have had
with Mr Davis uh well let me back up
are those Wells permitted
no they are not okay I have permanent
applications for uh 33j and Kate even
been filed
no they have not okay
based on conversations that you and
other people in your company have had
with Mr Davis uh
you've made a decision as to whether or
not to proceed with the current proposed
locations as shown on uh page number
five
uh no those locations are planned to be
moved to another tract
would it be safe to say that you're
planning on moving those uh to the east
yes
the roads that I mean the lines the pink
lines on on this map if the board is
able to see them in color are those
roads
yes those are existing roads okay
and some of those existing roads
portions of those existing roads are
already on the surface track correct
yes they are okay now when we if we look
above the surface track to two track two
the tract in which
um Mr Davis and others obviously have a
royalty interest there are no current
Wells at least uh Pocahontas Wells on
that track correct
there are not and they're an unproposed
that's correct all right
um
notes Here uh
now with this uh application let's go to
PDF page 10 okay
yes
that's a well-cost estimate correct
yes it is okay have you have you
submitted a revised Testament to
um
to Sarah and and the division today I
think probably
um
yes okay you're planning to submit a
revised estimate yes oh it hasn't gone
out yet okay
um and the revisions to the estimate
um did you catch an issue with regard to
the estimated total depth
uh yes that was revised to reflect a
more accurate uh depth average depth of
gobwells being drilled in this area okay
and what is the average of the existing
walls that you have in the area
1838 feet okay so the revised exhibits
see that you're going to be submitting
to to uh
um the board or to the division is going
to have as an estimated total depth
1838 feet instead of 1482 feet
that's correct
and then I think we also caught an error
in the um
in the in the Exhibit C that was filed
and that would be that uh we must by
mistake included a sales line
uh at
thirty thousand dollars
yes and that would be a gathering charge
and shouldn't have been in this in this
estimate correct
that's correct
and so what we're submitting to the the
board to correct this uh
corrects the estimated total depth and
then adjusts the drilling contract and
other entries to account for roughly
another 400 feet but also deletes the
sales line labor correct
that's correct
and and even having made those uh
adjustments uh well well let me ask you
what is the total of the revised
estimate
the total of the revised estimate is 510
534 dollars
so basically by increasing the depth uh
in spite of the fact that the sales line
has been removed the the well cost only
changes by
400 roughly
yes okay that's correct okay now once
you change your well-cost estimate
Exhibit C you also needed to adjust
and revise the next page which is 11
which is your estimate of allowable cost
by panel
that is correct okay and and have you uh
have you prepared and and do you intend
to submit that they revised exhibit and
month
yes okay and and your revised exhibit M
just to skip to the bottom line uh the
uh combination of costs for y33 from one
to South
now we total what number
the combined allocated costs
One South and two south attributable to
unit y33 would be two million eight
hundred twenty nine thousand three
hundred ninety five dollars and thirty
cents
that's an increase I think of something
on the order of you know roughly two
thousand dollars
yes
in terms of of
the proposed lease terms for people who
might be deemed to have been leased and
obviously we'll probably have some of
those
um although not for sure but what what
would those terms be
those terms would be uh paid at five
dollars per acre per year with a
five-year prepaid term and 12 and a half
percent or one-eighth royalty
it looks like escrow is not required for
this unit is that correct
that's correct
so you'll be able to pay
um you know if the application is is
approved you'll be able to pay with
regard to you know consistent with the
new mapping uh for Frac production uh
which will continue for some period of
time and then once uh the uh the sealed
Gob or the uh active production from
these units uh you've provided a
division of interest for one South and
two south and the royalty payments will
be made and consistent with those
percentages on exhibit B3 right
that's correct and people who uh you
know who are being fooled uh can use the
percentages that are stated in exhibit
B3 uh opposite their names and addresses
to multiply those percentages times the
estimated allowable cost and they'll
come up with the uh the required uh
deposit against participation if they
choose to participate
that's correct
your opinion that uh allowing uh or
re-pooling this unit
uh to provide for uh under under Oakwood
two is is a further way to protect uh
minors and and Mining operations by
degassing in advance of mining
yes and is it your opinion that if you
combine the ownership interests and the
leasehold interest that Pocahontas has
acquired with the rights of the people
who are being pooled under this if this
if this application is is granted if you
combine those uh the correlative rights
of all owners of The Colbert methane
here will be protected
yes
I think that's all I have Mr chairman
any questions from Mrs Schwartz
just uh one question of clarification on
the whales are involved in this
reproving application the page
I see my page here
this only applies to Wells y33 e j g h i
j and k
to the three Frack whales that already
drilled that are represented on
page five
y-33 a b and c those those aren't
impacted by this order at all correct
it's just the other Wells
correctly except to the extent that
we've done some remapping so we're going
to have to go back to the beginning of
time and adjust the percentages and
bring them forward
in terms of royalty farming
yeah I understand that so okay but other
than other than that those pre-existing
freckles are not affected by this order
okay is that is that what you were or am
I not
yeah I think so I I just want to make
sure why they weren't listed on the uh
the order itself if they will be in fact
okay if their their percentages are
going to change also
those three Wells
the percentages while they are Frack
Wells because the mapping has changed
their frac es will change okay
once there is production from the panels
the percentage will shift out of the
frackwell production column into the
division of interest in the two panels
okay so there's a it's
yes their percentages will change but
they're
interest in the Frack wells will remain
the same I mean they'll still have a
royalty interest but it is a bit of a
moving Target because of the mapping
otherwise I would just say no okay
okay I will also add that well well y33a
is plugged and y33b and c will also be
plugged when mining uh requires us to
plug those
okay there are two active Minds that
were paying royalties on it or not mines
two active Wells that we're paying
royalty sign at the moment
correct
okay just want to clarify that okay yes
any other questions
I have a couple on Exhibit C uh Mr
Schwartz
uh Miss Gilmer has noted that the will
name in the field is listed as template
I assume when you resubmit that
AFE you'll uh correct those
yes we can remove the word template yes
thank you and uh this would trigger an
offer for participation all over again
right
yes yes sir
and could you just briefly
uh discuss the mapping change what units
are we looking at
approximately
which tracks then the main thing changes
all tracks within the unit
okay
and my last question is when Mr Davis
acquired this
the previous landowner got the royalty
payments
and there was no
he did he he didn't buy the previous
royalty payment so going forward from
the date of the document being executed
he would receive royalties from that day
forward and not retroactively right
that's correct
anyone have any other questions
the board operates on a motion
I'll move for approval
second we have a motion and a second any
discussion
Ms Gilmer will you pull the board Please
Mr Harris yes
Mr Jameson yes Mrs yes and Mr Prather
yes
that petition is approved as presented
Mr swords next we have a petition for
Pocahontas for re-pulling under Oakwood
kobed methane gas field number two unit
BB 33 docket numbers
pgob04-0817-1318-02 Mr Schwartz you may
proceed thank you uh Mr chairman if I
could uh
adopt or include Kelly's testimony from
the prior hearing with regard to her
employment and the operator and and
compliance with Virginia the Virginia
code and regulations in terms of its
operations in Virginia and Skip through
that on this I'd appreciate it that'll
be incorporating thank you Kelly could
you state your name for us again though
Kelly Berry
and you're here in this in this instance
uh as a representative speaking to a
petition uh to uh reprool unit BB 33 is
that correct
that's correct okay and as if my memory
serves correctly we're here for one
reason with regard to BB 33 and that is
to allow production under Oakwood 2. is
that correct
that is correct so we don't have a
remapping issue we don't have percentage
changes and we don't have to deal with
all of that
no
after you uh mailed and published with
regard to and we'll come back to that
but with regard to this application did
you receive any calls from the
respondent
no as I and we only have one respondent
here is that correct
that's correct okay
um so
to start what did you do to notify Mr
Stillwell uh and and others potentially
uh that we were going to have a hearing
today
uh we mailed a copy of the petition via
certified mail with returned receipt
requested and we published notice in the
Virginia Mountaineer
and when did you mail
February 23rd 2023
and uh when did you publish
March 9th 2023
and have you provided the division uh
with your certificates or certificate
with regard to mailing and proof of
publication
yes we have
and what is the percentage of interest
that the applicant either owns or has
acquired uh in this unit
98.7625 percent
and you're seeking to pool what what
interests
1.2375 percent
and let's let's look at we're only
missing a couple of other courses before
we look at mapping
um
do you want to add any respondents today
no and I assume you haven't been able to
reach an agreement with Mr Stillwell so
you don't want to dismiss him
correct
um you know let's go to uh the mapping
and he PDF page
um
number six attract identifications
that shows that Mr Stillwell owns fee
with regard to track number five on the
map is that right
that is correct it shows his acreage and
the percentage that you gave us just a
moment ago
yes okay now if we go back to page five
uh and we look at
um
as the mapping tracked five is a looks
like a square off to the southeast
corner of the unit is that right
that's correct and part of that square
is in this unit BB 33 and part of his in
the units of the city east
yes okay and then if we look at uh the
projected development under Oakwood two
um go to page uh this this was 14. we
have this the same map basically or or a
similar map uh that we just saw in the
with regards to the previous docket item
showing One South development and two
South development and the location of
Wells within the projected panel right
yes okay what are the existing producing
wells in BB 33
that is BB 33 and BB 33a okay and and
what are the additional Wells that are
proposed of
at this time
the additional well
well posed
um are
let me get back up here
BB 33 c d g and H
and have you uh and you obviously when
you filed this
um you provided a cost estimate correct
yes
and it was the same estimate based on uh
averages at that time or or estimates at
that time that we've just discussed with
regard to y33
yes
and is it your uh intention to submit a
revised uh uh Exhibit C uh as we've as
you testified in in reference to uh y33
yes
Mr chairman I'd like to incorporate that
testimony if I could
it will it will be done we'll
incorporate that
okay and and just to summarize the
changes the depth is going to change to
the average of the the four or five
Wells that you have at the moment
correct correct yes and the uh then the
template is going to go away and you're
going to put in the well names or at
least uh you know I guess you would put
Noel names and then the Oakland two
field would go in correct
yes
and the date's going to change at the
top and at the bottom and the and the
total is going to change slightly
that's correct okay
did you incorporate
the revised well-cost estimate into
exhibit m
uh a revised exhibit M for uh this unit
BB 33.
yes
you did that let me find Mike
and when you did that did the total
participation number for BB 33 combining
panels One South and two South did it
change slightly
yes it did change slightly okay what
will the new number be in your revised
exhibit uh BB 33
the total
um allocated
cost for unit BB 33
um
attributable to One South and two South
panels is 2 million eight hundred forty
nine thousand five hundred one dollars
and ninety eight cents
so roughly two thousand dollar increase
and and that number then uh you go back
to for example just to illustrate if we
go back to a page in
um
three if we go into page two exhibits
um page number PDF page 10 if Mr
Stilwell wants to know what his
participation cost would be uh his
participation cost in one South is uh
the percentage stated below
um or opposite his name for one South in
that column and his percentage of is for
two south is the percentage stated uh in
that column opposite his name and he
would multiply that times the total
allocated cost for b33 to come up with a
dollar figure if you wanted to
participate
that's correct okay
um is it your opinion that
um
the wells contemplated in uh BB 33 in
the as shown on the the map at pH uh PDF
page 14. are a reasonable way to try to
degas the coal in advance of mining
yes
and if we combine the interest that the
applicant has acquired either by
ownership or or by agreement and lease
with a pulling order uh pulling Mr
Stillwell's interest in the uh book with
two gas
will his well well frankly will the
rights have all owners the correlative
rights of all owners be protected
yes
that's all I have Mr chairman
any questions from the board
Mr uh Miss Mary you have the same
problem on exhibit B as the other one
under well name in the field you've got
template okay as long as those will be
updated and provided thank you any other
questions
anything further Mr Schwartz no
board operates on a motion
I'll move for approval
any discussion
schema where you pull the board Please
Mr Harris uh yes Mr Ratliff yes Mr
Jameson yes Mrs yes
yeah
thank you Mr Schwartz that's approved as
presented
appreciate it thank you thank you
next item on the docket is petition for
intervest operations LLC for re-pulling
unit number
538420 docket number vgov 22-06
21-4242-01 all parties interested please
come forward
Tim Scott Larry Reeves and James Ayers
for intervest operating LLC
we need to swear in your
your witness Mr Scott
what was the other website
James Ayers James
Ayers
it's uh airs a-y-e-r-s sorry
Mr Ayers Mr Reeves do you swear in his
firm that your testimony is the truth
the whole truth and nothing but the
truth
yes got it
Mr Scott you may proceed
thank you Mr chairman Mr Reese please
get your name behind your employee or
job description uh Larry Reeves I'm
employed by intervest operating as a
landman and you're familiar with this
application pending before the board yes
sir and is this unit located in the
Court North called that gas field yes it
is how many acres this unit contain
58.8 acres and intervest has a
substantial part of this unit under
lease and or under ownership is that
correct yes sir are there any
respondents listed on exhibit V3 that
we're going to dismiss in the
application today no and do we have
unknown parties in this unit
yes and um I believe the uh the only
respondent is an unknown party is that
correct yes and how were the parties
respondent notified of this hearing of
publication in the Bluefield newspaper I
believe this was the Dickinson star is
that right
I know this is for County okay I'm sorry
Bluefield Daily Telegraph sorry is that
correct Mr Reed yes okay and we filed
proof of publication with the board yes
we have and is there an escrow
requirement for this unit no
um is Enterprise authorized to transact
business in the Commonwealth yes and is
there a bond on file with the board yes
there is um what lease terms would you
offer it to any Unleashed parties or the
person listed on exhibit B3
of five dollars an acre per year for a
five-year paid up lease okay and do you
think this is a reasonable compensation
for at least in this area yes and what
percentage of the uh unit does intervest
have in the release
uh
[Music]
97.47142857 and again this does include
acreage in which intervests is the fee
simple owner of the minerals is that
right yes it does and what percentage of
the of the unity seeking school today
2.52857143 and you're asking the board
as your pool is the only party list on
the B3 is that correct yes and an
interesting name the operator for this
unit is that also correct yes sir and if
um we were able to reach an agreement
with the individuals listed on exhibit
V3 with errors what um
what would be the address used for any
uh party making an election under an
order entered by the board
intervest operating LLC
408 West Main Street Abingdon Virginia
24210
attention Kevin Miller vice president
land and should this be the address for
all Communications with regard to this
any pooling order yes
that's all I have for Mr Reeves
any questions
commissioner Reese
is this one clarification can you
clarify why this is deemed a reprooling
as opposed to a fully application
we had previously pulled this well
um do you remember the date he was in
June of 2022
since that time we have
um
we have discovered that there was a
tracked Mist at that point so therefore
pre-cooling
and that percentages of the lead versus
families change as well yeah right yes
yes sir
so which is a new track which is it
about on your product
yes new tracks from what was initially
submitted
can you identify which track that is
track five from on the plot
okay thank you
you may proceed Mr Scott
thank you uh Mr Ayers please get your
number whom you're importing your job
description yes James there is intervest
operating and uh landman and are you
familiar with this application book any
import Awards yes and what's the precise
deficit as well uh 3200 are you also uh
familiar with the proposed or estimated
reserves of this unit yes and what would
that be 900 mmcf and are you also
familiar with the uh well sponsored
explosive units yes what's the estimated
draw hole cost
[Music]
uh 699 541 and you participated in
preparation AFV is that correct and in
your opinion
um if this application is granted would
it be remote conservation prevent waves
and protect relative rights yes
that's all I have for Mr Ayers
any question from Mr Ayers
anything further Mr Scott
this application
pardon
is it you submitted for approval well
I'm sorry that's all I have thank you
enjoying the crowd the board operates on
any questions
board operates on a motion
motion for approval
second no motion and second any
discussion
let's get on where you pull the board to
see Mr Harris yes Mr Ratliff abstain Mr
Jensen yes Vince yes Mr Prather
yes
Mr Scott in your petitions approved is
presented
thank you Mr chairman
uh
next is item number six a petition from
intervests operating LLC for pooling
unit BC
60001 docket numbers vgov 23-03
21-4256 all parties interested please
come forward
Mr chairman we're going to ask us to
continue to April we had uh
several respondents who did not receive
notice then we can get that accomplished
before the April hearing
thank you Mr Scott that'll be posted on
the April don't be
moving to item seven the petition from
interest operating LSC for pooling VG or
it's VCI
600010 docket numbers vgov
23-0321-4257 all parties interested
please come forward
again Tim Scott Larry Reeves and James
Ayers for intervest operating LLC
you may proceed Mr Scott
thank you Mr chairman Mr Reeves again
your name behind the Implement your job
description please
uh Larry Reeves employed by intervest
operating LLC as a landman did you
participate in preparation this
application yes sir and um where is this
unit located what what field uh
Northfield and how many uh acres does
this unit contain
58.77 acres and again uh intergraph does
have a substantial portion of this unit
under lease is that correct yes sir are
we going to dismiss any parties
respondent listen on exhibit V3 no and
how is notice provided to the parties
of this hearing today the same
publication through the Bluefield Daily
and um because we do have unknown owners
is that correct yes and have you
provided proof of publication to the
board yes we have and is there an escrow
requirement for this unit
no and again it's intervest authorized
the transaction business in the
Commonwealth yes and uh there is a
blanket Bond on file department is that
correct yes and if you were able to
reach an agreement with the parties
let's not considered B3 what terms would
you offer uh five dollars per year per
acre for a five-year Plato police and
you consider this to be reasonable
compensation for at least in this area
yes sir okay
what percentage of the uh of the
universe intervest time and release
99.28285714 percent
and this again includes acreage in which
intervests has a few simple interest in
minerals is that right yes what
percentage of the unit are you seeking
to pool today
0.71714286 and are you requesting the
board to pull down these parties
listeners D3 yes and the interestingly
Ambi operators Edition is that correct
yes and with any order that would be
entered by the board if applications
approved today what would the address
used for making any elections under that
order
intervest operating LLC 408 West Main
Street Abingdon Virginia 24210 attention
Kevin Miller vice president land and
this is the address for all
Communications regarding any word
presented by the board is that correct
yes sir
that's all I have for Mr Reeves
a question for Mr Reeves
Mr Reeves did you say that there would
not be an escrow requirement for this we
have unknowns and locateables so will
there be an escrow or not
there went on
how do they how do you not how do you
why do you not need a escrow if you're
who are you going to pay
all of the unknowns are now beings is it
Department of Treasury I'm not sure that
address yes okay so you're going to pay
them you're gonna
do it that way because the unclaimed
Department division in Richmond
okay
the Expo we use for uh Mr Johnson's for
the uh conflicting claimants
correct correct
yes sir
any other questions
um Mr Scott you may proceed
thank you uh Mr Ayers set your name
again your behind your employer job
description uh James Ayers in our best
operating LLC and landman and you
participate in this application is that
right yes and you're familiar with this
deficit as well yes and also the
estimated reserves for this unit
uh 990 mmcf are you also familiar with
the proposed well cost yes and you
participate in the profession of the FID
Fae that was or AFV that was submitted
with our application is that right
correct and what's the estimated draw
hole costs for this unit
254 902 and the estimated completely
will cost
738 Thousand Seven dollars and in your
opinion if the board grants our
application today would it promote
conservation and prevent waste and
protect close rights yes
that's all that happens here
any questions from the board
anything further Mr Scott
that's all I have on this one Mr
chairman board operates on a motion
a move for approval of the request
we have a motion in a second any
discussion skill where you pull the
board please
Mr Harris yes
abstain Mr Jansen yes Mrs yes and Mr
Printer
yes
approved as presented Mr Scott next is a
petition from intervest operating LLC
for polling unit BCI
530642 docket numbers bgov
23-0321-4258 all parties interested
please come forward
again Tim Scott Larry Reeves and James
Harris from intervest operating LLC you
may proceed Mr Scott
thank you Mr chairman
let's read one more time your name to
whom you're importing your job
description please uh Larry Reeves
employed by intervest operating LLC as a
landman and you're familiar with this
application yes sir and you helped
prepare the application is that right
yes I do and where is this unit located
uh Nora Kobe of guest room and how many
units how many acres does this unit
contain
58.77 acres and again energast has a
substantial part of this unit under
lease is that right yes and that's based
on leases and also ownership of the
minerals is that correct yes sir okay
are there any parties responding we're
going to dismiss in this application
today uh no and how was notice of this
hearing provided the respondent system
on a good V3
publication in the newspaper
Dickinson sorry and we also uh mailed is
that correct yes and we provided it's a
proof of mailing and proof of
publication to the board we do okay
is there an escrow requirement for this
unit
and there's International
Commonwealth yes and again is there a
blanket Bond on file with the Department
yes and again what lease terms would you
offer any party who would
um who would um determine the least with
you all uh five dollars per acre per
year for a five-year paid up lease and
again it's just a reasonable
compensation for a week in this area yes
and what percentage of the of the unit
is under release presently to the
internet
86.47 again that does include
acreage that is uh owned and feasible by
you all is that correct yes and what's
the percentage of the immunity sequence
pool today
thirteen point five three percent we
were asking the board to pull those
parties that are listening to the D3 yes
and that interesting name be operated
from this unit is not also okay yes and
there's any elections were made under
the order if it's if our application is
granted today what would the address
used for making such elections
uh intervest operating LLC 408 West Main
Street Abingdon Virginia 24210 attention
Kevin Miller let me get that's the
address for all Communications for any
order anybody the board is that right
yes sir okay
that's all I have for Mr Reeves any
question from Mr Reeves
hearing on you may proceed Mr Scott
thank you Mr Ayers One Last Time your
name uh your job description James
there's intervest operating LLC you're
familiar with this application is that
correct yes you also help participate
you participate in preparation of the
applications that also correct correct
are you familiar with the proposed
effort as well yes and also the closed
uh of the estimated resource of this
unit 721 nmcs and you again you
participate in preparation of the AFE is
that right yes so you're familiar with
the will cost yes what's the estimated
draw hole cost uh 254 422 and the
estimated completed will cost
690 107 and again if the board grants
our application today would it prevent
waste promote conservation and protect
relative rights yes
that's all I have for Mr Ayers any
questions
Mr chairman go ahead uh I do have a
question about the unknown unlocatable
Act that we're not escrowing uh I must
have missed something somewhere along
the way but
what happens to this money now it goes
to the state
and it stays there until these folks are
found instead of in escrow okay uh have
I been sleeping for the last two or
three years I don't remember
us doing that
previously to this did we have we done
that before
okay it was um
really
I don't know exactly the name okay the
general assembly passed a bill that the
unknown and locatables would go go there
okay go to the Department of Treasury
and we are continuously working on
sending money to the Department of
Treasury there's still some out there
that need to be resolved but it's a
continuous process okay okay I mean it
kind of makes sense but I just I missed
something along the way thank you
yes Mr Harris the other the other part
of that equation is just because we've
listed an MS um the party respondent on
B3
um there still is an ongoing effort to
locate these parties and if they are
located then information will be
transmitted both to the board and to the
Department of Treasury for disbursement
of those funds to which they're entitled
okay sounds good thank you then
any other questions
hearing on the board operates on a
motion
I'll move for approval of the
petition have a second second any
discussion
scale or you pull the board please
Mr Harris yes Mr Rattler Bob Stone Mr
Jameson yes Mr red yes Mr Prather
yes
Mr Scott your petition's approved as
presented thank you
thank you very much
next item on the dock at the board will
receive an update from the board and
division on activities from his staff
chairman I don't have anything uh to
update off everything it's a long
business is normal
but yeah we do have a meeting next month
that
I'm expecting to receive
um three conditions from interface and
then we risked and then we had one today
that was continued so we have four on
the dock of gray but as of right now
okay thank you
the last item we'll review the minutes
and approve them from the February
meeting
for a promotion
most people approved
second any discussion
it's still more where you pull the board
Please Mr Harris yes yes
yes
thank you anything else for the good
order
if not we will adjourn thank you