foreign
you ready
okay it's today's July the 18th 2023 uh
this is the Virginia Gas small board and
we are at the Virginia energy
headquarters in Big Stone Gap and this
is the July 4th meeting
uh if uh the first item on the docket is
the board will approve
or review the remote attendance
resolution for the board members that
are contacted with us remotely do we
need to call a roll and establish a
forum first
skimmer will you call roll please
Mrs quillin
yes Mr Prather
yes
yes Mr Harris yes Mr Rattler yes Mr
Jensen yes Mr Cochran
Sarah I'm sorry to interrupt but yes I
think to comply with foia the way we
ought to be counting roll is
we will only initially count role of
people who are physically present and
for anyone who's joining remotely will
count them in the role once they've been
formally admitted into the meeting by
resolution
okay
all right
having said that and understand that in
the minutes would reflect the comments
um the first one we would consider is uh
Mr Cochran
who is uh attending remotely due to
being 60 miles or more away from this
location
so we have a motion to accept Mr Cochran
to the meeting
have a second
second
we have a motion and a second any
discussion Ms Gilmore you call the role
of those present please
Mr Ed yes Mr Harris yes yes and Mr
Johnson yes thank you that is approved
the next one is Mr Prather
who is uh also more than 60 miles away
from this location we have a motion to
approve uh Mr appraiser to participating
remotely
a promotion to approve second
any discussion
all in favor Miss Gilmore would you
avoid one more time please Mr yes Mr yes
Mr rat yes Mr Jameson yes okay that one
is approved the next one is Miss Quillen
who is attending remotely due to some
health issues do we have a motion to
accept Miss Quillen into the meeting
in a second the second any discussion
here in the Mr Gilmore will you hold the
board one more time please
Mr Harris yes Mr rattler
you're James
very good now everyone's in the league
any questions
we are recording the proceedings so we'd
ask everyone to mute or turn off your
cell phones
and now that we're all in the same room
we'll ask Mrs threat if she would start
introducing herself and we'll introduce
the board members
February public member
I'm Donnie Ralph I represent Cole
yes Jansen public member
Miss quillin
a public member
and Mr Prather
and Mr Carr
uh Willie Cochran I'm the Virginia
energy member
thank you
the first item on the agenda or the
second item on the agenda is to receive
public comments
we have anyone
online
since there's no one here
seeing no one will go to the report from
the First Bank and Trust our escrow
agent for the national board uh for the
quarterly report from April to June 23.
good morning
I'm assuming that everyone already has a
copy of the presentation
this is for the second quarter
of 2023
the agenda
for the presentation is on page two
so starting with page three
this is our summary for the second
quarter
we started out with a beginning balance
of 5 million one hundred thirty three
thousand four hundred and forty three
dollars and 22 cents
we had deposits received of thirty one
thousand nine hundred forty six dollars
and seventy four cents
we earned interest from the money market
and The Cedars CDs of fifteen thousand
one hundred eleven dollars and eight
cents
these were deducted from the accounts of
five thousand one hundred and twenty
eight dollars and ninety nine cents
total distributions for the quarter were
forty five thousand two hundred eighty
seven dollars and ten cents
leaving us an ending balance of June the
thirtieth of five million one hundred
thirty thousand eighty four dollars and
ninety five cents
in 2023 so far we've processed five
treasury dockets for a total of six
hundred thirty nine dollars and eighty
six cents
we processed 14 other dockets
for a total of one hundred and four
thousand one hundred thirty three
dollars and fourteen cents
we've issued over 125 checks so far this
year and they range from Seven cents to
over twenty eight thousand dollars
70 of those checks were issued for less
than one hundred dollars
and 30 of those were for less than one
dollar
starting on page five this is a list of
all of the outstanding checks as of June
30th
and as you all are well aware the list
is long
and that goes all the way through
to page
29.
we have a little over ninety two
thousand dollars outstanding right now
the next several pages are our check
statement for 2023 and this is a long
list as well but if you remember back
five years ago we had dockets that had
1500 checks on those dockets
so we have several outstanding checks
still that will be astuted to the state
but the dollar amount is low so it's
less than three thousand dollars that
will be Associated this year
on page 37 the next several pages are
the balance sheet and this is as of June
30th
so this list each individual account
their beginning balance
any deposits received
the money market interest The Cedars
CD's interest
the fees that were deducted from each
account
any distributions any transfers to the
no W9 spreadsheet
audit costs which server none
Corrections and then the ending market
value
for each individual account
and that goes through page 46.
and starting on page 47 is a list of all
of the names that are on the no W9 list
so these people were on previous dockets
but had not submitted their W-9
so there's several pages of those
and it lists beginning market value for
each one of them interest received fees
deducted distributions and then the
ending market value for each individual
person
and as of June 30th there was over forty
thousand dollars sitting in that account
was 431 lines
on the spreadsheet not necessarily names
but
individual line items
page 58 is our annual distributions
report
so this shows each year what was brought
in in royalty and working income any
distributions that were made and the net
contributions to the account
so 2023 we've brought in over seventy
thousand dollars and dispersed out a
hundred and four thousand
page 59 is the investment of the funds
right now all of the money is sitting in
the money market account
all of the CDs have now matured
so at this point we're ready to reinvest
back the million dollars
that we had previously reinvested
over a year ago I guess
um
so if everybody is on board with
reinvesting the same way I think we did
250 000 for three months 250 000 for six
months
250 000 for nine months and 250 000 for
12 months
at the best possible CD rates that we
could get
I need Mr chairman
go ahead
makeup for the 369 and 12 months
one million dollars correct
correct
okay
we have a motion
well we have a second uh I'd like to
second but I want to discuss it first
yeah okay go ahead
well I I just I wanted to get the second
in place but I know there's usually
discussion before vote but I'm not sure
what the discussion would be I just
wanted to look at the rates
uh but I didn't want the motion to die
before we
I would push rather than three six nine
and twelve
I don't know that there's an immediate
need in the next three or six months it
could capture more bang for the buck if
we extend that timeline now that was my
comment
but whatever the pleasure of the board
Donnie would you repeat that
I would rather than do three months six
months nine months and 12 months
I don't know that there's an immediate
need for that money
and I would suggest that we not invest
three and six months that we push it out
further to uh
to gain a better interest rate
does that make sense yeah what did this
Crystal Ball show
the CD rates are up wrong
so um
what are what do you suggest that I
amend that timeline that we invested
just on
um nine and 12 months CDs
that that's not to the board but I just
I just think that we
we're wasting an opportunity to do three
and six but
Mr Harris
we can amend a motion
I guess I'm in my motion to
um call for the the
um investment in nine month and 12-month
CDs
for a million dollars divided equally
yes
okay we have an amended motion we have a
second to that
uh I'm still studying the rates I mean
I'm I'm on board for
still sacking in the motion but I'm just
not sure
that we've got the right now if we have
the right numbers yeah okay
um
if you look at the last pages the
slideshow
it gives you the CD rates
and the three months range from 5.25 to
5.35
not a change in the six months
the nine months the lowest one that I
saw on nine months was 5.20 and they
range to 5.35
12 months and 18 months
the interest rates are a little bit
higher
they range out to 5.5 for both of those
I like that better yeah the payouts have
not been
I guess we'd have to look back and see
what the payouts have been
uh relative to the amount that's there
but didn't you say that in the last
quarter that the payout was about 120
000.
the total paid out for 2023 has been a
hundred and four thousand
yeah the past several years have been
averaging about a million a half but I
don't think we're going to be anywhere
near that this year
at the rate we're seeing applications
come in at this time yeah relative to
what's in there really what's in there
correct
you still have four million dollars in
cash
yeah and we always invest more than a
million if the board is comfortable with
doing more than a million
the million has just been a standard
that we had been investing over the last
couple of years
well that was due to the low interest
rate right yeah and since the interest
rates have
but out there 18 months
um
I mean uh anybody else have an input on
that
I'd be comfortable with putting two
million dollars in for 12 months
if the rates were at the rate were
totally disbursements right now unless
something we see something changing
correct
now let me just do worst case worst case
is
now this is a fixed rate so this this
rate won't go down but if we have to
take it out early we here's a penalty in
the but the penalty is
we won't get Maybe
we may get three percent instead of how
do they handle the the penalty
the penalties are you lose the interest
on the CDs
but the principles
I'm sorry
we wouldn't invest for two million
dollars
uh wait a minute okay and I got two
different answers there so let's say we
put in 2 million for 12 months or 18
months and after 12 months we realized
oh that was too much we need some of
that back and we take out 1 million so
we would suffer a penalty in the
um so instead of getting 5.5 percent
we'd get only two percent or we'd lose
the whole 5.5 percent on that one
million how would that work
you would lose the interest on that CD
okay but we still get the principal back
yes yes
oh okay yeah
it's 50 years yeah Donnie just mentioned
that yeah that 5.5 is the same for 12
and 18. so
yeah we'd be better off at 12. so do we
have
do we have it
do we have an amendment to the amendment
well that's one way
man
would you withdraw your motion and
whistle
I withdraw my
um Amendment uh
I guess I guess for the 9 and 12 months
and
we can entertain a new motion
to invest in the 12 months
the 2 million for 12 months
okay we've withdrawn that motion now we
are you making the motion now that we
put 2 million for 12 months
yes
we have a motion on the floor do we have
a second okay I'll second that now any
discussion
you're hearing none is is uh well go
ahead it's two million the right amount
is that I mean I certainly wouldn't do
more is that
based on the last three years of what's
gone out I think we're safe
yeah I wouldn't uh push it too much I
don't know I wouldn't I'm not saying
more I'm just saying yeah I tend to be
conservative on those kind of things so
yeah okay
I'm happy any other comments
a skillmore will you pull the board
please
Mrs quailin
yes
Miss Mrs sarab yes Mr Harris yes Mr
Atlas yes Mr Jensen yes and Mr Cochran
yes
so that is approved
thank you
two million dollars invested for 12
months
yes
we will get those purchased over the
next couple of days
and
that'll get us a better interest rate
than what we've been getting okay we
have one more question well you're on
the line uh yes mainly I'll just uh just
I want to make sure I understand how
your summary works
under page three the distribution is
total of 45
287.10 for the quarter
under the
accounts as you list those out the total
there that was distributed and I'm
assuming that's for the whole quarter
was only 26 54 554 and 05 is the rest of
distributions part of the outstanding
checks
you're looking at the balance sheet for
the distributions right okay so that
balance sheet is only for the month of
June okay that's only the month of June
okay that clears it up but I was unsure
about that
okay the summary Pages for the whole
quarter but
okay balance sheet is only for the month
of June okay so we probably load some
other accounts over the last three
months other than just the one that's
shown here where is that yeah without
going back and look at the other one
that without going back and looking at
the other ones but I'm pretty sure
there's been several accounts that have
closed over the quarter okay
just uh one of the questions I think
this is probably more for the staff
but on these accounts
um and I just looked at a couple of them
on the very first page there on page
37 for instance there's a free account
0031 is for the whale y9 which I think
has been plugged and released what's the
process once a whale has been since
there's no longer anything produced in
that well there's been no new deposits
how do we clear that account out at some
point in time there's no well left there
anymore in that unit
but what happens there does the operator
need to file
do they need to be told to file or how
does that work when there's no more
wells in the unit typically the operator
will on their own this has been sold out
for several months
I will let uh Kelly with cnx or
Pokemon's gas know that that
we're expecting in the send-in a
petition for disbursement
okay and then the the other question I
had was just um
I just looked at the Little Wheel there
the P35 whale that that wheel is
producing obviously but there's been so
no deposits on the last two reports so
how often do deposits get made by the
operators in the reports are they behind
six months eight months 12 months or
two months or how does that work send
them in monthly
okay
okay I'm gonna do a disbursement that
sometimes will put a hold on the account
so that it doesn't overlap with the
disbursement right so that possibly
could be what they're getting ready to
do there but I don't know for sure yeah
I think we have a few discussions about
this the past is it a big deal to maybe
add to this respite the status of the
wells associated with the units if
there's any there are active Wells
or they
shut in or are they
've been plugged and released because I
think I bought this up before that there
were some other ones have been plugged
and released
at some point in time
so that we know that there should be
being addressed in a short term way
we could ask
that status on there
we could add that that's shouldn't be a
problem
so sometimes the uh amount of gas you're
producing doesn't make a profit to the
operator
but with the prices up and down the way
they are right now
some of these Wells won't produce any
income because they aren't making any
income for the operator
right
sure I understand that Mr President
we've got we got some deposits here for
a penny so yeah
anything further seconds that's it
Miss Manning we certainly appreciate
your efforts what you do for the board
anyone have any other questions
or Miss Manny
there ain't none you're free to go
unless you want to okay stay on and join
the party thank you
have a good day thank you thank you the
next item on the doctor's petition from
Key Rock Energy LLC modification of
location exception found on docket
number
22-1018-4250 it's unit ky4 docket number
vgov
22-18-4250-01 all parties interested
please come forward
okay
Brady moans representing key Rock Mr
Raton Morgan represent key Rock You may
proceed you need to swear in Mr Bates
do you swearing that your testimony is
to treat the whole truth and nothing but
the truth yes ma'am you may received
thank you Mr Ali Mr Clayton please state
your name and and how you're employed
Morgan Pete I'm a senior geologist for
key Rock Energy and key Rock Energy LLC
is it authorized to conduct business
into Commonwealth of Virginia yes and
there's a bond on file uh with this
department yes and you're familiar with
this modification of wheel location
exception that we're here on today yes
and that like I said that involves a
modification of a previously granted
well exception yes well location
exception
is the unit uh that this well recovers
it located in the North coal bed or coal
bed cash field yes sir how many acres
does it contain 527.
and can you tell the board a little bit
uh about what key Rock would plan to do
if the oil location exception was
granted uh we would proceed was drilling
a well into the sealed area of deepmind
41 for the purpose of gas production
clearing that gas to generate
environmental offsets carbon credits and
those would then be marketed yes sir and
what SEMA coal is the coveted methane
produced from the jaw bone and the key
Rock has obtained leases for the unit
correct yes 100 intervest all right and
how is intervest informed of this
proceeding that we're here on today a
certified mail return receipt requested
and that documentation has been filed
with this board yes and there's no
unknown owners in the unit of service
and what percentage of the unit does key
Rock uh currently have under lease 100
and that has already previously been
pulled by this board is that correct yes
what's the proposed depth of this well
and it's uh a revised location 1080 feet
and what are the estimated reserves 1023
mmcf and you're familiar with projected
well cost this modified uh well-cost yes
sir and did you participate in the AFV
that's been filed with this application
yes and what's the estimated dry whole
cost
approximately 197 000. and this board
previously Grant a location exception
dated uh by order dated November 10
2022. is that correct yes and can you
tell the board why key Rock is now
seeking a modification of that
previously granted location exception
the first well drilled into this field
area in countered roof problems and a
mine flood
and so
we're moving the location to a higher
part of the mine and is the proposed the
proposed uh revised well location is it
425 feet from intervest operating LLC
well number
bc3618 yes
and as key Rock requesting this board to
enter in order to enable key Rock number
four to be drilled as depicted on the
application that's been filed yes sir
and is the proposed revised well
location necessary to effectively and
efficiently drain the portion of the
common sources underlying the unit yes
and is it fair to say that that cannot
adequately and efficiently be done
without an exception to the distance
limitations and spacing rules yes sir
and that would be our evidence Mr chair
anything further
no sir
any questions from the board
um just to clarify here the exhibit on
page five the exhibit a
those those qr4a
the degree at bc43
and the exhibit on page seven
does not show the 4A but it shows the 4
is that correct am I missing something
new it should shows that it will be at
44 and which exhibit was that Mr Jansen
on page five exhibit a
days ago
those two right four a in bc43
and the two
page seven
in unit BC Point here there is no
proposed well it's those one in I guess
the way you've already drilled which was
in df44 is that correct absolutely bf44
was the one that was previously drilled
yesterday so it's not what pose anymore
it's already been real it's already been
real is that well plugged some things
that plug back we are waiting the imsha
approval to plug it okay so does this
exhibit need to be revised so the
original location and the new propose
location if if that's the pleasure of
the board will begin reflecting both
those Well locations probably should we
collect both of them wear your flat
you're selling two separate clouds kind
of thing
you show up on this one so far away well
this exhibit the attitude page seven
you may also want to include that on the
exhibit l
show the proposed location in the
existing location according
all right just to make sure Mr Jensen
that we're doing with the board request
you want an exhibit that shows the one
that was attempted and failed right and
then you want one where we're proposing
it down
yes sir two locations
for both those exhibits
and I'm assuming that the general
location map is showing the new location
exhibit page 11.
there's nothing reference here of
anything on that you may need to start
showing offsetting wells in there
correct
Miss Gilmore would tell you we weren't
sure what exactly we needed to file this
is a new type of application so we'll be
glad to to get you what you need
typically the channel location maps show
all the wells that encompassed on the
map typically along with your proposed
location
sure yes sir
yeah and I think we also asked for
previously to
like the exhibit on page 17 you were
going to start showing all the units
that have been approved
debated by the board
as far as the key Rock Wells right all
the units are associated with this month
so we have a reference of all the units
in the area
that would be in the form of a basically
a full mind map that showed each
individual unit yeah
that's what we talked about before I
don't know how they did it since you've
had agreed to date
anything else that's all I had
any questions from anyone else
we have a do we have a motion to approve
a draft order this petition
I'll make that motion
wait got a motion we have to say
that's subject to the changes uh yes
any discussion
hearing on Mr Gilmore we pull the board
please
[Music]
this is quailin
yes
Mr Prather
yes
yes Mr Harris yes Mr Ratliff I'm stink
Mr Jensen yes and Mr Cochran yes
thank you you have approval for that
draft order
the next item on the docket is
petitioned from Key Rock Energy LLC for
modification
location accepted felon docket number
22-1115-4253 the unit is K5
uh
take Wi-Fi I'm sorry docket numbers bgob
22-1115-4253-01 all parties interested
please come forward
Freddie miles represent key Rock Energy
LLC
keyrock energy you may proceed in
response and Mr Page you've previously
been sworn yes sir and could you please
state your name and your employment for
the board we're going to thank
geologists for key Rock Energy
and Iraq energy LLC is authorized to
conduct business in the Commonwealth of
Virginia yes and there's a bond on file
with this department to that effect is
that also correct yes and you're
familiar with the application that's
currently before this board yes and this
is for a revision to a previously
granted a well location exception yes
sir and that's for a colbed methane well
yes and is that located in the North
coal bed gas field yes and how many
acres does this unit contain 234
and can you explain to the board what
key Rock will plan to do uh if this uh
well location exception is granted but
we will drill into the sealed works of D
Minor 41 for the purpose of uh flaring
gas off the mine to generate carbon
credit and those would be marketed yes
sir and what scene of coal is the covet
methane produced from the Jawbone scene
and for this particular unit uh the has
key Rock obtained leases uh for the
entire unit yes intervest owns 100 and
the intervest is being informed of this
proceeding yes sir and you don't have
any unknown owners in the unit no sir
and this unit has uh 100 of this unit's
already been pulled is that correct yes
and what is the proposed depth of this
welding about 950 feet and what are the
estimated reserves 586 mmcf and you have
participated in the preparation of an
AFE file with this application
concerning the cost of the well yes sir
and what is the estimated dry oil cost
approximately 202 000. now the board has
previously granted a location exception
for the proposed t-rock number five by
order dated March 10 2023 is that
correct yes and why is key Rock seeking
a modification of that well location
exception
uh after drilling our first oil and
encountering water and adverse mine
conditions we met with the mine and uh
jointly agreed that it might be wise to
move this location slightly higher
updated and this proposed well location
exception it's 999 feet from intervest
operating LLC well number
vc-3971 yes and you're asking uh key
rock is asking board to enter in order
to enable it to enable key Rock to drill
key Rock number five is presented in the
application yes
and is the proposed revised wheel
location necessary to effectively and
efficiently drain a portion of the
common sources of Supply underlying the
unit yes and that it can automatically
be uh efficiently drained without an
exception to the distance limitations of
spacing rules correct
and taking into account Mr jansen's uh
comments from the last petition we do
not have the information that he
requested in this application do we as
far as the revised uh exhibits we do not
you we are willing to supply those of
course and the first number five permit
um the previously approved well will not
be drilled is not and so it will not
show up as a proposed failed will it'll
just be shown as relocated uh I believe
the permit application itself was
rejected in all items that that
application have been updated to reflect
the new location or are being updated
okay
and that would be our evidence Mr radlin
thank you
anything cousin
any questions from the board
uh just one question just curious there
also sounds like there would be safety
issues as well
uh they're definitely right and uh
you're definitely correct both in the
sense of drilling
um
and flaring mine gas uh part of the
permit application as we go through this
is an approved MSHA plan so key Rock and
Paramount are working jointly and have
submitted a plan to imsha that details
all the safety procedures uh for both
the drilling and the flaring of this
well and that entire plan will be
attached to the permit application
very good I just wanted to get that on
the record thank you you're welcome
thank you miss school anything else
experiences no you're kidding me no I'm
fine with the application that people
make the same reviews as a requirements
infections
thank you
we have a motion to approve a draft
order on this petition
substitute objectives subject to the
changes
including those changes yes yeah in our
second
so let's coordinate the motion
yes in our second famous for a second
any discussion
hearing none Miss Gilmore were you all
the board please
yeah yeah Mr Prather
Mr Branch yes Mr Harris yes Mr Ratliff
Bob Stone Mr Jansen yeah
and Mr Cochran yes
thank you Mr Bones that's
that draft orders approved as presented
thank you Mr Ralph we also like to thank
staff like I said this is a this was a
new type of petition that actually
created a petition type for us for this
so we we very much appreciate their help
one other question for key rock related
to the d926 application that you're
currently working on do you have a
status be completed yes sir we completed
title I have sent title to um Bill seals
at ATS to to map out the entire sealed
area uh with percentages and names and
I'm hoping he has that to Mr Mullins by
the end of the week sometime sooner than
later we had
anticipated trying to have it ready for
the August board
probably September probably one week the
title is complete um and it's being
mapped out right now
thank you you're welcome the cutoff for
the August meeting was at five o'clock
on the 14th so and right now we have no
petitions so we will not meet in August
okay
all right we appreciate that the board
will receive an update from staff
thankfully
you know updates
anything
we need to approve the event meeting
we have a motion
to approve the minutes from June
motion to approved we have a second
any comments
uh all those in favor let's do this one
different
all those in favor
thank you
if no one else has anything for the good
of the order
we will adjourn the meeting
thank you all thank you thank you thank
you