thank you
okay it's 10 o'clock so I'll call the
meeting to order May the 16th 2023 in
this Virginia Gas and Oil board meeting
uh
and we are in the Virginia energy
offices in Big Stone Gap
I would ask everyone to mute or silence
your cell phones and these meetings are
being recorded
and I would start the meeting with
introductions and I would begin with
Miss suray I'm Rita Surat public member
I'm Donnie Ratliff representing Cole and
service your chairman I'm Bill Harris a
public member
Gus Jansen a public member thank you
the board will review the remote
attendance resolution for board members
that's attending remotely and we have
Miss Quillen
so all of those that agree to allow Miss
Quillen to participate remotely
would indicate When Miss Gilmer calls
the road
yes Mr Harris yes and Mr Jansen yes
we have that approval so miss Quillen
welcome to the meeting
um we have
oh we have uh Willie on here
okay yeah I'm on here
all right I'm sorry
we have Mr Cochran is participating
remotely and we need a motion to allow
him to participate remotely
and I so move
oh second Miss Gilmer Mr ramp yes Mr
Atlant yes Mr Harris yes and Mr Jameson
yes
we have approval so welcome uh
the board will receive public comments
we have anyone online or
present
seeing none we'll move on we have a
petition for key Rock Energy LLC for
creation of a seal Gob unit and pooling
unit ky2 docket number vgov 23-0516-24
excuse me strike that four two six four
all parties interested please come
forward and introduce yourself
yes sir thank you Mr chair Freddie
Mullins representing key Rock Energy LLC
Rock Energy
and Miss Gilmore you need to swear in
Morgan
your testimony is the truth the whole
and nothing but the truth yes ma'am you
may proceed Mr Collins thanks
Mr Payne could you please state your
name by whom you're employed and your
job description
geologists and key Rock Energy LLC is
authorized to conduct business in
Commonwealth of Virginia is that correct
yes sir and key Rock has filed a bond
with the Department of energy is that
also correct yes
and you're familiar with the application
uh vgov docket number
23-0516-4264 yes sir and you're familiar
with that application yes and this is
for a full bed methane well is that
correct correct and is this uh well
located in the North coal bed gas field
yes and do you know how many acres this
proposed unit covers 186.
all right could you explain to the board
a little bit about what t-rock plans to
do if this application is Grand
we will drill into the find out still
got very deep mine 41 for the purpose of
flaring gas and generating uh sellable
cargo credits and that's for generated
marketing carbon tax credits yes sir and
What entity are those carbon credits uh
uh what Market do you transact goes in
uh the California Air Resource Board
governs the protocol of the carbon
credit generation and the credits are
sold on the market
and what theme of coal is the Colbert
methane produced from the job obviously
and this particular proposed unit has
keyrock obtained leases you have
obtained leases for this entire unit is
that correct
yes and the owner of the gas is
interfaced is that correct correct and
how is intervest informed of this
proceeding
uh registered milk
and has that has noticed uh with that
documentation been filed with this board
yes and to the best your knowledge
on the application yes
thanks to your knowledge are there any
unknown owners in this unit
and so he Rock has 100 of the unit under
lease is that correct yes and you know
the proposed depth of this will
and what about the estimated reserves
for this well
about 600 MMC it
and are are you familiar with projected
well cost
yes sir and there's actually uh there's
been an exhibit filed with this
application AFE has been filed is that
correct yes and do you remember the
estimated drop hold
180 000. and are you asking this board
to create a sealed Gob drilling unit and
to further pull that unit yes and in
this particular situation the pool would
be voluntary is that correct correct
and there's not any escrow requirements
because of the voluntary nature of folks
and are you asking the board's name
keyrock as the operator for this unit
yes
and in your opinion if the board grants
a k-rock's application would it prevent
ways to promote conservation and protect
and correlated rights yes
and that would be our evidence Mr chair
any questions from the winners
uh just a couple of questions here
the uh so this one is a 100 at least and
it's all in advance so you don't have to
address the carbon credits in your
application is that you place them there
that's our position this would be like
the others that we filed first not uh
not to be confused with key Rock number
one which did have those other issues
that we worked through right
okay
um
second question is on your reserve
estimation even though there's
nobody in this that can volunteer
participant or as any if this patient
writes just the way you've been
calculating can you give me some
background of your methodology of how
you can calculate your resource which of
these units of course um so there's two
ways that I could go about this
um we have studied
all the other projects of this type
through EPA data and it appears to uh
that well at this time in the mind
produces about 12 of the terminal gas at
the moments and then you take that
forward by you know that's per year take
that forward by 10 years the only other
way we have to estimate this is to look
at similar minds we have in the
production active Minds with job areas
of similar size and about the same thing
um and that's what I did for this one I
have directly compared dmi41 still got
various to American Eagle Affinity
effectively Pocahontas still got various
uh and more or less applied ratio and
calculate that 400 for 10 years okay so
this is a double correct this is the
fourth unit we will establish within the
amount of 0.1
when I was just trying to relate maybe
oversimplifying it a little bit
this Anchorage is about 486 Acres with
600 mcf which gives you about 1.2
million cm per acre calculation and this
would be the lowest one that we've seen
so far we started out with one that was
a lot larger acreage had a lot larger
larger reservist with about 2.6 so we're
twice as much in this unit as we are
opponents to a unit basically right next
door to it there's a reason for that
variation
the the unit being number one
uh biggest one would have been ky4 koi
we know from internal discussions of
Paramus that some of these sealed areas
are at least partially flooded ky4 is
definitely one of them they still got
married for the other large units um for
erock number one well
I have no no idea about the flooding uh
but I do know that that unit is
immediately adjacent to their
impoundment area in the mine where
they're disposing of water
um
I tried to imply or apply a calculation
based on flooding so if the mine tells
me
30 of this got various flooded I I don't
have the the resources to go in and
Define the flood area but I can say well
that cuts your reserves down by three so
that's according methodology and that
that's for us get that there
one more question there's a you've
presented this map I think in all the
applications on it's at math on page 34.
you know it's the large map that shows
the entire mind boundary it's got its
yellow and gray colored in it the that
map
can you give me some background on what
the purpose of this map is for
it doesn't really
I don't think it's reference anywhere in
the application and the legend just
identifies the inside deepmind 41 and
outside the email 41.
I'm not sure what the gray colors you
see this map here let's talk about it
right there is an early inner best
acreage map that that was included in
the intervest leads however after
running time it uh intervests in that
early lease map did not exhibit
everything they had aggressively so is
this map have any value in the
application
whatever and I can answer that Mr
Jackson whatever I was first uh filing
these applications I was encouraged to
file any type of landmass that we gave
and so that's uh that's why we've
included out of abundance of Commerce
and I was just trying to understand what
the gray represented versus the yellow
since it was interesting here but we
will
um we will have discussions we have one
more sub-gob area we would like to bring
in front of the board uh that title has
been finished
and we will have discussions with
intervest about revising that lease map
to bring their anchors forward and we've
seen that at people like 26 too yeah it
would be what would be useful at least
maybe the last one you're doing here for
a while but to maybe do a composite map
to show you all five units within the
Mind boundary oh this this map would
have been a good one to do that on so we
could get a representation of where
they're at individually in relationship
with each other yeah sure okay that's
all the questions I had
thank you Mr Johnson and Mr Mullins we
have a result of a revised exhibit uh
yes sir that was submitted yes you want
to explain
the uh the original exhibit I was I
prepared it I went through the
Department's uh interactive map and
pulled uh the information from that uh
on the items that were changed there
wasn't actually any information
available on the interactive map it
would show the well but it did not give
uh the file number
and so miss Gilmore was good enough to
have staff look at that and and give me
the additional information then we filed
it thank you any other questions
do you have anything further Mr Mullins
no sir
the board acts on a motion
motion to approve I have to say second
emotional secondary discussion
Skillman we pull the board
yes Mr rattling Mr Harris yes Mr Jameson
yes and Mrs Whelan
yes
oh with Mr Cochran yes
thank you
the application is approved as presented
Mr Mullins
the next item on the docket is key Rock
Energy will update the board on the
status of the petition and permit
application for existing lower abandoned
carbon credits associated with D Minor
26 this item was continued from the
march of March 2023 Borden hearing you
may proceed Mr Mullins
Mr Payne has uh do you have some
information to convince forward uh
I think um
about a week and a half ago we are
standing at 80 complete on title across
the entire still got variable the map I
gave you the red outline in the silk
golf area that we're pulling from in
Vietnam 26.
Those portions of that job area shaded
yellow are under leaves by innervis
the portions that are shaded blue are
the best of my ability mapping what has
been completed so far but I'm a caution
the board I'm not a surveyor so there
are some inaccuracies in my mapping
however on an acreage basis we are at
least 80 complete with title and I
suspect title will finish in the next
month
I do not know if I will be able to bring
a petition or creation of goblin in
front of the board in June for this
because it's taking my surveyor quite a
while to detox
but I lose the fact that the title work
will be finished by the June meeting
so you're suggesting we put this on
docketed new line I think we could
probably have this completed by July
and we're hopeful I need to get a date
for Miss Gilmer what will be the cutoff
date
for the July meeting I'm actually going
to be gone for 12 days out of the
country
will not be answering my cell phone
during that time so we're going to try
to have it filed for the July meeting
okay
okay yeah we don't anticipate painting
royalties on this project
and at least until November or December
um and as you can see from the acreage
tallies
intervest is less than a 50 owner that's
still got married
paid application for the carbon credits
on this on the site where the production
we've done so far right sir you had
approval for that
we started operating on this site uh
under a letter from the previous
director
which I believe was like
and yes this site has generated credits
um I believe we have paid to date
at least two royalty checks internet
perhaps three
but not to any of the other Unknown
People
so can you give some background on how
much production you've made out of this
since you started in weapons carbon
credits the revenues associated
this is a this particular project is
very practical in nature the Mind tends
to produce in four or five months perks
and then it'll shut itself down there'll
just be no methane
um we shut it in for a few months it'll
kick back on and produce well
I want just and this is all going for
memory I've been away from this project
in the production sense for over a year
I want to say that the mind has
generated between three and sixty
thousand credits per uh reporting period
the credits have sold I would say on
average for
16 to 1750 per credit
and so that would put us somewhere in
the neighborhood
800 000.
um the royalty Tech intervests 12 and a
half percent off of that would
be going through but I'm not calculated
about you know seventy eighty thousand
earlier yeah that's bad per year I just
want to give CSM how how this was going
it compared positions really the only
one you've got to this stage looking at
your projects at this point it's
incorrect we are also concurrently
running title on other silk guy berries
that beat mine 26. um this line is very
gassy but the nature of this particular
job area
you can see or will at the very bottom
of the map we're pulling from the very
top of the slope and so
it's just contaminated you know when the
Mind feels like pushing gas to us it's a
good project when we try to pull gas
what we end up doing is pulling air into
the sort of so this one's a little I
guess considerably different from the
sealed dogs that we're doing it deep on
what you want this is an unsealed a
large boundary correct or a parts of
Earth well see my understanding is they
they simply took large concrete blocks
and stacked them up in the slope and
push dirt against it so it is sealed in
the sense that you can't go under it but
as far as air is concerned it can So
within the underground mine area there
are other distinctive areas that you can
Define as a unit going forward that's
how you come up to this I was trying to
understand how that works uh these so in
all the details of the mining so yes
this this unit is based solely on the
Underground seals that they have in
place at the end of the body yes
okay but we can address other things on
that when you get the final application
you can maybe update us a little more
detailed on the history of what's taking
place up to that point yes
forward
thank you any other questions
uh Miss Gilmer when we have
uh exhibits handed out in the meeting
and then we have revisions handed out in
the meeting is there any way
that we can share those on the screen so
that those that's calling in have an
opportunity to see those documents
prior too
those that are submitted here today
would have to I would have to be able to
expand them ahead of time so I could
show so we just need the operators to
inform us if they're going to offer any
revised exhibits or new exhibits so you
can scan them in and then we can share
them on the spring
I think we need to do that going forward
thank you Mr balance do you have
anything else no sir thank you thank you
the board received an update on division
activities from staff
we have any updates
new
will entertain a motion to approve the
April 2023 minutes
if everyone's had an opportunity to
review the minutes that's your name
whatever motion went a second I'll
second in discussion skillmore will you
hold the board Please Mr Speaker yes Mr
Atlas yes Mr Harris yes Mr Jansen yes
Mrs quailin
I I was saying because
okay and Mr Cochran yes
thank you
anything else for the good of the order
if not we'll we'll adjourn thank you
thank you
thank you Eric for attending